Perdido 03

Perdido 03

Saturday, February 11, 2012

News Corp. In Crisis Once Again

Five more News Corporation employees arrested in the Murdoch phone hacking/police bribery scandal today - bringing the total number arrested in the scandal to 30.

This time, five senior journalists at The Sun were taken into custody after News Corporation provided evidence to police that these employees had engaged in criminal activity.

The Sun is now in crisis, with employees at the Murdoch-owned paper railing against News Corporation and wondering who will be thrown under the bus next in the scandal.

The Guardian reports that Sun employees are "stunned" and "angry" about the turn of events, with News Corporation itself turning employees in to the police.

Reuters reports that News Corp. employees at The Sun feel there is a witch hunt against them by their employer who formerly celebrated their work but now is tossing them to the wolves to save his own ass.

Rupert Murdoch and his consilgiere in the scandal, Joel Klein, have flown to London together to deal with the crisis.

According to Murdoch biographer, Michael Wolff, Klein is now calling all the shots in News Corporation's scandal containment strategy.

This Bloomberg Businessweek piece on Murdoch from February 9 says pretty much the same thing.

Klein's strategy for dealing with the widening strategy seems to be three-fold:

"Take Old News Corp. Employees."

"Call Police."

"Have Police Arrest Them."

Only thing is, the strategy has now, in the words of Michael Wolff, created such internal acrimony in the company that employees are turning on each other.

Rupert and Joel Klein have flown to London not to reassure employees, as BSkyB reported, but rather to stanch the damage from the still-widening scandal.

In Wolff's estimation, the future fall-out from the scandal includes:

Murdoch faces...his son's arrest; DOJ investigation; more bribe revelations; more hacking fallout; challenge to BskyB control

That means they may be getting ready to close The Sun and fire all those employees as damage control.

Expect the older News Corporation employees to strike back against both Murdoch and Klein, dishing dirt off the record.

The Guardian has a little of that:

The mood amongst reporters is, in the words of one, "stunned" Рwhich is probably an understatement Рcoupled with a worry as to where this will end. Could a tip-fee paid five years ago now be considered a bribe? There is no shortage of anger, too. Some of it is directed at the Guardian, stemming from the newspaper's earlier expos̩ of the News of the World phone-hacking scandal, although much is aimed at the company's Management and Standards Committee that has been providing information to the police which led the Elveden squad to make all its arrests.


The scale of uncertainty is such that it is impossible to predict with confidence what will happen next. But if the Elveden investigation is not yet over: one thing is clear – a punch-drunk Sun is owned by an organisation that is at war with itself.

Michael Wolff says the Obama DOJ now has direct cause to look very closely into News Corporation here in the United States.

If the hacking, bribery and corruption perpetrated by News Corp. employees in Britain was so widespread amongst Murdoch's newspapers and many of those same British journalists eventually ended up working here in the U.S. at either the NY Post or the Wall Street Journal, there is no reason to think they were not continuing their criminality here.

And yet, as I have noted before, the Obama DOJ doesn't seem all that interested in going after Murdoch on this.

You have to wonder if Obama and Murdoch haven't made some kind of deal through intermediaries - you don't go too hard on us with the phone hacking/bribery stuff, we won't go too hard on you in 2012.

Reuters reported earlier in the week that the feds so far have found no evidence of hacking in the U.S., though the DOJ is looking into "possible violations by employees of Rupert Murdoch's media empire of a U.S. law banning corrupt payments to foreign officials such as police and law enforcement."

We'll see if that investigation goes anywhere.

So far, the only crimes the Obama DOJ seems less eager to investigate than the Murdoch scandal are the tortures ordered by Bush administration officials and the crimes committed by Wall Streeters, so I have doubts that the Obama people are going to do anything of substance here.

Still, none of that is going to help Murdoch and Klein if News Corp employees in Britain go to full scale war against them internally and start leaking damaging items to the press.

I bet Rupert isn't thinking too closely about the Cuomo-imposed teacher evaluations deadline this weekend.

He's trying too busy trying to save his own wrinkled ass.


  1. Thanks for passing this along; it couldn't happen to a nicer bunch of ghouls and suck-ups to power.

  2. What's happening to News Corp is so reminiscent of what's been happening in the DOE since mayoral control began. Common denominator- Joel Klein, moved to Bloomberg's sycophant fellow billionaire's stale to take the heat off the midget carpetbagger over the test score debacle. The ol' Mr. Burns look-alike knows where the skeletons are buried. Cathie Black was a distraction,a bit of plausible deniability.Have to figure at some point, Walcott will grow sick of the hypocrisy he's been brought to participate in, and may take a golden parachute to get out. Bloomberg is looking to avoid revelation of his under the table offshore dealings until after he's padded the nest egg just a bit more.

  3. Again,Klein's finger/footprints are all over this one. His MO in this case matches perfectly with his MO as chancellor.The fetishization of the business/"data-driven"/litigation model is coming to fruition for folks outside the schools now.Murdoch is paying Klein for a similar product to what Bloomberg wanted and got. Not exactly a sustainable model,eh?