July 19, 2011 (Information Clearing House) -- Get your popcorn and a comfy spot by the tube, because Tuesday promises to be the most riveting TV since O.J. Simpson trundled down the Santa Monica freeway in a white Bronco followed by a throng of patrol cars and helicopters.
By the time this article goes to press, media titan Rupert Murdoch will have already been grilled by members of the Select Committee in the U.K.'s House of Commons. Murdoch will be joined by son James and former News of the World editor Rebekah Brooks. All three will face harsh questioning by 10 members of Parliament about their role in the ever-widening phone hacking scandal which has galvanized public attention and sent News Corps stock plunging. Although Murdoch and Co. will not be under oath--which eliminates the possibility of perjury--their answers will be put under a microscope and analysed for any discrepancy. There's no doubt that all three huddled with their lawyers until the wee-hours of the morning trying to get their stories straight. And, for good reason. If the hearings go bad for Murdoch, he'll probably be forced to step-down as CEO of News Corp. and accept a job as chairman or retire. Here's a summary from Bloomberg:
"Independent directors of New York-based News Corp. have begun questioning the company’s response to the crisis and whether a leadership change is needed, said two people with direct knowledge of the situation who wouldn’t speak publicly...
“The shell of invulnerability that Rupert Murdoch had around him has been cracked,” said James Post, a professor at Boston University’s School of Management who has written about governance and business ethics. “His credibility and the company’s credibility are hemorrhaging.” ("Murdoch Struggles for Control as Scandal Grows", Bloomberg)
Bloomberg did a follow-up on the article less than 8 hours later suggesting that if Murdoch did poorly in today's inquest, he'd probably be put to pasture. Here's a clip from the update:
"News Corp. is considering elevating Chief Operating Officer Chase Carey to chief executive officer to succeed Rupert Murdoch, people with knowledge of the situation said.
A decision hasn’t been made and a move depends in part on Murdoch’s performance before the U.K. Parliament today, said the people, who weren’t authorized to speak publicly. Murdoch would remain chairman, the people said.
News Corp. executives who watched Murdoch, 80, rehearse for his appearance were concerned about how he handled questions, according to three people, who weren’t authorized to speak publicly. Murdoch and his son James are scheduled to discuss the company’s role in the alleged phone hacking of murder victims, members of the royal family and others by the News of the World, which was closed on July 10." (Bloomberg)
So, the stakes couldn't be higher for Murdoch. Either he does well today or he gets his pink slip. It's do or die. And the questions are likely to be extremely difficult. In fact, the Guardian put together a list of potential questions that give us an idea of what to expect in today's proceedings. Here's a sample:
"When the Guardian disclosed in July 2009 that News Group had paid more than £1m to settle legal actions brought by Gordon Taylor and two associates, you told Bloomberg News that the payments had not been made: "If that had happened, I would know about it." Was that correct? If not, why did you say it? If it is correct that your son did not tell you that the company had made these payments, can you explain why he would choose to conceal that from you?
When did you become aware of the 2009 payments?
It is understood the value of these payments was in the region of £2m. Which News Corp executives or board members knew about them?
Were News Corp's audit committee, board or general counsel made aware of these payments? If not, why not? Should they have been?
When previously unknown evidence of criminality within your company becomes known to senior executives isn't it their responsibility to inform the police and regulators rather than try to cover it up?
If your son's did try to conceal evidence of criminality with secret payments rather than inform the appropriate law and regulatory authorities, what do you think of this?
Do you agree with the evidence of the senior police officer who told MPs last week that your company had "deliberately tried to thwart" a criminal investigation… "with prevarication and ... lies"?
Are News Int in holding any stories unpublished that could damage cabinet MPs and therefore used as leverage?
Does News Corp ever use security/corporate intelligence companies in its business dealings?
Have you ever personally seen or been aware of material derived from the accessing of intercepted communications?" ("Poll: Which questions do Rebekah Brooks, James Murdoch and Rupert Murdoch need to answer?, The Guardian)
Most of these are "Gotcha" questions that require carefully crafted answers to avoid legal problems in the event that a criminal case ensues. But just consider what Murdoch is being asked: "Has your organisation been bribing police officers? Have they been paying off private investigators to dig up dirt on celebrities and politicians? Have they been hiding payoffs to people whose phones were hacked from the News Corp board? Have they been obstructing justice?
These aren't softball questions that Murdoch can shrug off with a casual answer. One wrong word, and the public will demand a full-blown criminal investigation. And that appears to be the way things are headed.
On Sunday, John Yates, the London police Assistant Commissioner, resigned after it was discovered that he failed to re-open police inquiries into phone hacking allegations saying the evidence did not warrant further investigation. Yates is the second high-ranking police officer to quit due to the scandal. The first was Scotland Yard police chief Paul Stephenson, who resigned last week. According to the Mirror, "Sir Paul had been under fire for hiring a former News of the World executive as a spin doctor - and accepting a £12,000 "freebie" stay at a luxury spa."
So, now all the people who could have protected Murdoch from a wider investigation have been removed making it more likely that the digging will continue and more of Murdoch's operations will be exposed.
But what would a "thorough investigation" involve and what might it reveal?
D.D. Guttenplan has some thoughts on that matter in an article he wrote for The Nation titled "Sky Falls on Rupert Murdoch". Here's an excerpt:
"...widening revelations of the phone-hacking scandal show, News Corporation is not an ordinary commercial enterprise. Through his journalists and gossip columnists and the network of former and current police officers and law enforcement officials on his payroll, Rupert Murdoch has been operating what amounts to a private intelligence service. And the threat of personal exposure—on the front page of the Sun or Page Six in the Post—gives News Corporation a kind of leverage over inquisitive regulators or troublesome politicians wielded by no other company on earth." ("Sky Falls on Rupert Murdoch", D.D. Guttenplan, The Nation)
Repeat: "Rupert Murdoch has been operating what amounts to a private intelligence service."
Uh-huh.
The firestorm in the UK is not really about phone hacking at all. It's about Corporate fiefdoms and unelected oligarchs who control the flow of information and use that power to their own advantage. The longer the investigation goes on, the better for everyone. Transparency is the best disinfectant.
