Murdoch and the law

The Murdoch's are under deep pressure over Rupert and James' roles in alleged criminal UK phone hacking, which could see the family empire come crashing down, writes Rodney E Lever.

THE MURDOCHS are hedging their bets on the next US presidential election. It is another signal of their fear that their power within the media could one day come crashing down with all the force of an irresistible mudslide.

The younger of Rupert’s two sons, James Murdoch, is quietly throwing money at the Democrats, as well as the Republicans, who his dad has been more than generously supporting since Ronald Reagan was President.

Rupert Murdoch is still seen regularly turning up at candidate parties and fund-raising, but is showing less enthusiasm for the current Republican presidential hopefuls. Some who believed they had his support are beginning to plead more anxiously for his favour, while he has never denied the rumour that he might offer his full support to the likely Democrat candidate, Hillary Clinton.

James Murdoch has donated $2,600 of his own money to the elderly Republican Senate Minority Leader, Mitch McConnell, to help McConnell’s primary election campaign; plus another $2,400 to McConnell’s general election fund. On the other hand James has made donations to no less than five Democrat candidates and a further donation to the Republican Congressional Committee.

Unlike in Australia, where politicians try to hide the back-handed donations they receive, the United States is awash with well-publicised political generosity. The Murdoch involvement seems to have a meaning of its own that smacks of the recent revelations of the Independent Commission Against Corruption (ICAC) in New South Wales, which is where Rupert began to lift his career far beyond the level of the ordinary media magnate and far greater than the level of power once held by his own father and the Packer and the Fairfax families.

Both James and Rupert are under pressure as the criminal trials over the Murdoch media in the UK reach towards a conclusion and final verdicts on the actions of Murdoch executives and staff.

If either, or both, Murdochs were to be investigated for their own participation (if any) in the alleged illegal acts in England, the consequences could be serious for both. There are several ways in which they could be tied into offences committed by their staff.

They could be in jeopardy over the bribery of British public servants and police officers. They could be convicted in America as well as England if offences were uncovered. The American Department of Justice takes a particularly serious view about bribery of foreigners and works in conjunction with the Federal Bureau of Investigation (FBI) and the Internal Revenue Service. Its most recent achievement has been the arrest of more than 90 individuals who allegedly defrauded the 'Obamacare' medical program of more than six billion dollars.

Murdoch’s activities have been closely watched by the American corporate regulator, the FCC, which holds hundreds of pages of evidence about Murdoch’s activities. Its published archives are available to investigators and, indeed, anyone anywhere who is interested in inspecting them online.

The same organ holds a complete video of the stumbling testimony of James Murdoch to the Leveson Inquiry, where James was described as 'the hapless chairman'.

Rupert Murdoch has already admitted publicly in a secretly recorded meeting with his editorial staff that he knew of the bribery of public officials and knew that his company’s money was used to bribe officers:

'We are talking about payments for news tips from cops and that has been going on for a hundred years.'

Subsequently his senior executives at News Corp in New York began to fear that exposure of these recordings (published in Independent Australia in 2013) had threatened his entire empire. They worried that the recordings had undermined their strategy to contain the level of his knowledge of paying public officials for information.

It was after this that the decision was made to separate his newspaper companies from his more lucrative TV and movie assets into a separate company called 21st Century Fox. At this point, Murdoch was advised by his legal team never again to engage in meetings with staff without a lawyer present.

These actions, the advice and the immediate separation of the companies into two separate entities were designed to protect the more valuable movie and TV assets from investigations into its tainted UK subsidiary — News International (now News UK).

After the two companies were separated, Murdoch was named executive chairman of News Corporation and chief executive of 21st Century Fox, with an understanding that the latter would indemnify the newspapers against costs arising from criminal consequences.

The company’s biggest fear is an investigation by the US Department of Justice.

The secret recording of Murdoch’s conference with his staff in London revealed that he knew all about the phone hacking and approved of it. He also accepted that the payments to officials were made with company money.

Should an investigation begin in America, the company decided to argue to the authorities that the whole matter should be confined to the UK. No directors of the parent company in the US had any role in the actions or any knowledge of them. The senior US executives and the company directors needed to ensure their own safety and be totally separated from anything done by the newspapers.

Murdoch wrote letters to senior members of the British Parliament saying that he had no knowledge of bribery of the police, but the tapes secured and maintained by Exaro emphatically reveal that this is not the truth.

There is no greater power in the United States than the power of the Presidency. Rupert Murdoch has little to hope for under the Obama presidency. His New York Post once published a large front page cartoon of Obama portraying him swinging from a rope like an ape in the jungle.

Murdoch has to rely on his political influence in the U.S. to limit the outcome of any investigation. The company has done all it can to separate itself from activities carried out by Murdoch outside the US.

An American President has the power of a potentate when, at the end of his or her term, he or she could grant a presidential pardon to any individual convicted of a crime.

Back in Britain, the government – whether the current Tory party or the Labour Party finding its way into power again – would have a final word on whether either or both Murdochs were suitable people to control the BSkyB television company and Rupert Murdoch’s $US14 billion dollar plan for it to dominate both Germany and Italy.

The worst outcome for Murdoch, short of a term of imprisonment, would be the ability of the board of directors of 21st Century Fox to remove him from the company he had built from scratch and to leave him his with his only other influential force — his now thoroughly discredited newspapers in Australia and Britain.