The Word of Murdoch: hacking scandals, climate change denial and Rupert Murdoch’s lasting legacy

[Note: I wrote this piece in May before the News Ltd break up of its divisions, however I saw it as inevitable. I also noted that dust bowl conditions would return to the US Mid-West. Murdoch recently stated in a tweet that climate change was happening, and that the proposed cures – one assumes the “carbon tax” – worse. I believe the events in the US, Japan, Korea, the UK, Russia and around the globe are putting Murdoch’s claim to the test. – Mike @ WtD]

Earlier this week the joint British Parliamentary committee investigating the News International (NI) “phone hacking” scandal released a damning report , accusing both NI and its chairman, Rupert Murdoch of misleading parliament and “willful blindness”

The report is well worth reading, as its conclusions seriously question the ethics of both NI (the UK subsidiary of News Corporation) and Rupert Murdoch:

“Corporately, the News of the World and News International misled the Committee about the true nature and extent of the internal investigations they professed to have carried out in relation to phone hacking; by making statements they would have known were not fully truthful; and by failing to disclose documents which would have helped expose the truth. Their instinct throughout, until it was too late, was to cover up rather than seek out wrongdoing and discipline the perpetrators, as they also professed they would do after the criminal convictions. In failing to investigate properly, and by ignoring evidence of widespread wrongdoing, News International and its parent News Corporation exhibited wilful blindness, for which the companies’ directors—including Rupert Murdoch and James Murdoch—should ultimately be prepared to take responsibility…”

Both James and Rupert Murdoch – in the eyes of the UK parliament – are not fit to lead the company:

“On the basis of the facts and evidence before the Committee, we conclude that, if at all relevant times Rupert Murdoch did not take steps to become fully informed about phone-hacking, he turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications. This culture, we consider, permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International. We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company…”

I’ve worked most of my career in the private sector, and can say with some authority that the culture of an organisation is determined by its management. If a blind eye is turned to bullying, intimidation and unethical behaviour over a prolonged period then these behaviours will not only flourish, but will become “standard operating procedure”.

Enron, AiG and now News Corporation: a failure of leadership

There is truth to the old saying, “The buck stops here”.

Ultimate responsibility for the misdeeds of an organisation rest with its most senior management. Especially when those misdeeds are so pervasive and widespread. They can be excuse for ignorance. This is the media industries equivalent to the Enron scandal.

And yet like so the executives of other failed organisations, Murdoch grapples with the idea of personal responsibility. In a memo to staff of his Dow Jones employees just released, we clearly see the aging octogenarian struggling with personal responsibility:

“I recognize that for all of us – myself in particular – it is difficult to read many of the report’s findings. But we have done the most difficult part, which has been to take a long, hard and honest look at our past mistakes…”

What is fascinating is the lack personal responsibility in this blandly written PR puff-piece.

And yet the news (no pun intended) is sweeping the globe, making it impossible for Murdoch and his empire down play what is a devastating judgement.

Rupert Murdoch is unfit to lead a company.

The implications for Murdoch and News International are profound, as his interests in the UK and US are coming under further scrutiny. Indeed, Murdoch may be forced to sell off its British papers and remaining share of BSkyB. Recall Murdoch had to withdraw his bid to fully take over BSkyB in the wake of the hacking scandal.

Bad news: the evidence is piling up fast

News Corporation and Murdoch have come under increasing scrutiny over the last year. The phone hacking revelations sent a shiver of disgust across the world (righty so).

And yet as ugly as that incident was, much good came from it. Politicians and commentators started taking very a hard look at Murdoch and his empire:

•  Robert Manns’ “Bad news” digs into News Ltd’s Australian operations, examining the world view of the executives and senior journalists and finds a culture of bullying, intimidation and a “what ever it takes” approach to destroying it’s “enemies” (Greens, climate scientists, competitors)
• Dial M for Murdoch by British MP Tony Watson details how News International engaged in a systematic campaign of deleting incriminating emails and destroying computers to hide evidence related to its illegal activities.

Nor should we forget, that earlier this year it was revealed a News Corporation subsidiary – New Datacom Systems – was involved in undermining pay TV competitors by suppling “hacked” keys to the set top boxes of rival operators (and thus hurting their revenue by facilitating piracy).

In Australia, the Independent Media Inquiry has been examining the role of the media, its ability to police itself and the need for a “fit and proper persons test” for media proprietors (note, such provision did exist in Australia but was removed during the 1980s during the privatisation and deregulation mania).

The Murdoch discount and the break up of empire

Questions are being asked Murdoch’s ability to lead News Corporation, while the heir apparent – James Murdoch – has lost all credibility.

Following the release of the report, New Corp shares actually went up, no doubt confusing some people. Surely the share price should “tank” following the news that its chairman is not a fit to lead the company?

The share price increase isn’t a vote of confidence in favour of James and Rupert – it’s actually the opposite. Investors are anticipating Murdoch will soon be forced step down or relinquish personal control of News Corporation.

It won’t be the end of the News Corp – quite a number of its assets are highly profitable. But as many analysts have noted, significant parts of the “empire” underperform (the newspaper titles). Share holders and analysts have been eager for the company to dispose of them for years.

Should Murdoch retire – or is pushed to retire – it is highly likely shareholders will insist the company divest itself of such underperforming units. A great deal of the company’s newspapers and print titles are subsidized by its more profitable pay television and media units (case in point, The Australian). News Corp retains them simply because Rupert has as sentimental attachment to them.

Analysts often refer to the “Murdoch discount”. In essence, they subtract 30% from the value of shares due to Murdoch’s heavy handed control of the company, sometimes erratic judgement and sentimental attachment to the ailing newspaper arm of the company.

The “market” wants News Corp to be broken up, so as to unleash the full potential of its better performing assets. Rupert Murdoch, due to his need to control and hang onto every last part of his sprawling empire is seen as the blocker.

There is an upside to “break up” for those concerned about how Murdoch uses his media empire to further his political and ideological agenda. Such a break up would see Murdoch lose the global platform that gives voice to his prejudices, ideology and ability to wield power.

I have no issue News Corporation being a highly profitable and well managed company. But I do have take issue with how Murdoch has used News to further his political power and ideological agenda.

Should News Corp divest itself of some of its newspaper assets we will see a change in editors, the type of news reported and tone. Rather than a monolithic entity singing Rupert’s song, we will see a greater diversity. Sure, many titles will remain rabidly right wing, tabloid cess pools of denial and populist rage. But others will do doubt begin to report news in a manner different to what they do currently.

This is the creative destruction of the market, and News Corporation is overdue for a much needed dose of this medicine.

And yet Murdoch’s legacy won’t simply be that of the man who wanted it all; the kind of individual who believes the ends justified the means when it comes to amassing power.

Indeed, Murdoch will leave a legacy will touch all of us.

It will be the very air we breathe, and the atmosphere we live in.

The banality of denial: free market fundamentalism and the denial of climate change

While the finding that Murdoch is unfit to lead a company may seem unrelated to the climate change debate, many understand the central role News Corporation has played in misleading the public across the globe on climate change.

The same selective blindness, ideological zeal and bullying tactics that created a culture fostered illegal activities also created a culture hostile to the idea of climate change.

Murdoch is a free market ideologue, and his “faith” in markets and limited government is the idée-fixe permeating every corner of News Corporation. It shapes the opinion pages of The Australian and Wall Street Journal and infects how the news is reported across his vast media holdings.

Like the propaganda adjunct of a one-party state, every outlet of News Corporation endlessly repeats the same Orwellian doublespeak: the climate is always changing, climate change is not real.

But why such hostility to what is settled science?

The idea that we should act cooperatively to address climate change runs counter to the neo-conservative faith in markets. Climate change is a classic example of – in the words of Nicholas Stern – the “worst market failure” in history. Our economic activities are driving environmental instability.

To accept the scientific evidence for climate change is to accept that the market is imperfect. Thus, Murdoch – the free-market ideologue – has waged war on the idea that markets can fail.

There is the “Australian’s war on science” and my much more humble “Herald Sun war on science”. In the US, the News owned “Fox News” is a cesspool of climate change denial, while the Wall Street Journal deliberately clouds the debate by publishing the claims of climate sceptics.

Climate change denial is so entrenched and vehement within News Corporation it prompted Rolling Stone to state that “no one has done more” than Murdoch’s to spread “dangerous misinformation”.

One academic has gone so far as to claim Murdoch and his empire of disinformation has cost humanity “at least one or two decades” of mitigation efforts:

The Murdoch media empire has cost humanity perhaps one or two decades of time in the battle against climate change. Each lost decade greatly increases the eventual economic costs, the devastation to our ecosystems, and the suffering of future generations.

Do you think I’m exaggerating?

Read the real science, ask the real experts

Murdoch and his minions have cost humanity the crucial decades that would have allowed us to avoid the more serious effects of climate change. The level of suffering for future generations will be unnecessarily greater

Put in brutal terms, more people are going to die than should.

Murdoch’s place amongst that pantheon of individuals who have caused suffering on a mass scale is assured.

Such is the banality of evil.

All it takes is a cadre of loyal journalists to repeat the same lies and disinformation to mislead the public and intimidate politicians into inaction.

No one directly suffers, and yet the price is paid by future generations.

Murdoch’s lasting legacy: a broken climate

Murdoch the man has been found unfit to lead a company in the free market, while at the same time helping usher in the worst market failure in history.

History, if nothing else, has a refined sense of irony.

Murdoch’s legacy will not simply be the broken and dysfunctional culture of News Corporation.

His most lasting legacy will be the damaged climate and a world of 2 degrees plus. For decades, News Corporation has waged a pitiless and deceitful campaign against scientists and the public’s understanding of the climate change.

Murdoch charged News Corporation with a missionary zeal to spread his free-market ideology. The doctrine was preached by his army of journalists and television presenters. Across the globe the likes of Andrew Bolt, Terry McCrann, Chris Mitchell and Glenn Beck spread the Word of Murdoch.

And the Word was: the market cannot fail.

We should remember that when super-charged bush fires burn our forests to ash and devastate small communities across Australia.

We should remember Murdoch when fragile states in Africa “fail” and succumb to violence.

We should stand outside the towers of News Corporation and shame them when crop harvests fail in heartland USA as “dust bowl” conditions become the norm.

We should record the names of News Corporation journalists who mocked predictions of sea level rises when small island nations are wiped from the face of the Earth due to rising sea levels.

We should remember the names of every News Corp journalist, television personality and executive who feed us lies and disinformation.

We should not forget those who helped usher in this brave new world

And we should not forgive.