Is this Armageddon for Murdoch and NewsCorp?

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Panda wrote:I"m going to reserve judgement on this, simply because it was a Daily Mirror Report , not the most convincing, especially since it originated from an
unknown American. As you say, the FBI will investigate and hopefully find out the truth, along with a lot if other Murdoch condoned misdemeaners.

Two Senior Staff stepping down in two days, looks like desperation is creeping in, Hinton especially after 52 yrs Service .....so much for Loyalty eh?

Troubles That Money Can’t Dispel
By DAVID CARR
Published: July 17, 2011

“Bury your mistakes,” Rupert Murdoch is fond of saying. But some mistakes don’t stay buried, no matter how much money you throw at them.

Mary Altaffer/Associated Press
The News Corporation spent $655 million to settle claims against its newspaper insert business.
Related

An Arrest and Scotland Yard Resignation Roil Britain (July 18, 2011)

Time and again in the United States and elsewhere, Mr. Murdoch’s News Corporation has used blunt force spending to skate past judgment, agreeing to payments to settle legal cases and, undoubtedly more important, silence its critics. In the case of News America Marketing, its obscure but profitable in-store and newspaper insert marketing business, the News Corporation has paid out about $655 million to make embarrassing charges of corporate espionage and anticompetitive behavior go away.

That kind of strategy provides a useful window into the larger corporate culture at a company that is now engulfed by a wildfire burning out of control in London, sparked by the hacking of a murdered young girl’s phone and fed by a steady stream of revelations about seedy, unethical and sometimes criminal behavior at the company’s newspapers.

So far, 10 people have been arrested, including, on Sunday, Rebekah Brooks, the head of News International. Les Hinton, who ran News International before her and most recently was the head of Dow Jones, resigned on Friday. Now we are left to wonder whether Mr. Murdoch will be forced to make an Abraham-like sacrifice and abandon his son James, the former heir apparent.

The News Corporation may be hoping that it can get back to business now that some of the responsible parties have been held to account — and that people will see the incident as an aberrant byproduct of the world of British tabloids. But that seems like a stretch. The damage is likely to continue to mount, perhaps because the underlying pathology is hardly restricted to those who have taken the fall.

As Mark Lewis, the lawyer for the family of the murdered girl, Milly Dowler, said after Ms. Brooks resigned, “This is not just about one individual but about the culture of an organization.”

Well put. That organization has used strategic acumen to assemble a vast and lucrative string of media properties, but there is also a long history of rounded-off corners. It has skated on regulatory issues, treated an editorial oversight committee as if it were a potted plant (at The Wall Street Journal), and made common cause with restrictive governments (China) and suspect businesses — all in the relentless pursuit of More. In the process, Mr. Murdoch has always been frank in his impatience with the rules of others.

According to The Guardian, whose bulldog reporting pulled back the curtain on the phone-hacking scandal, the News Corporation paid out $1.6 million in 2009 to settle claims related to the scandal. While expedient, and inexpensive — the company still has gobs of money on hand — it was probably not a good strategy in the long run. If some of those cases had gone to trial, it would have had the effect of lancing the wound.

Litigation can have an annealing effect on companies, forcing them to re-examine the way they do business. But as it was, the full extent and villainy of the hacking was never known because the News Corporation paid serious money to make sure it stayed that way.

And the money the company reportedly paid out to hacking victims is chicken feed compared with what it has spent trying to paper over the tactics of News America in a series of lawsuits filed by smaller competitors in the United States.

In 2006 the state of Minnesota accused News America of engaging in unfair trade practices, and the company settled by agreeing to pay costs and not to falsely disparage its competitors.

In 2009, a federal case in New Jersey brought by a company called Floorgraphics went to trial, accusing News America of, wait for it, hacking its way into Floorgraphics’s password protected computer system.

The complaint summed up the ethos of News America nicely, saying it had “illegally accessed plaintiff’s computer system and obtained proprietary information” and “disseminated false, misleading and malicious information about the plaintiff.”

The complaint stated that the breach was traced to an I.P. address registered to News America and that after the break-in, Floorgraphics lost contracts from Safeway, Winn-Dixie and Piggly Wiggly.
Related

An Arrest and Scotland Yard Resignation Roil Britain (July 18, 2011)
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Much of the lawsuit was based on the testimony of Robert Emmel, a former News America executive who had become a whistle-blower. After a few days of testimony, the News Corporation had heard enough. It settled with Floorgraphics for $29.5 million and then, days later, bought it, even though it reportedly had sales of less than $1 million.

But the problems continued, and keeping a lid on News America turned out to be a busy and expensive exercise. At the beginning of this year, it paid out $125 million to Insignia Systems to settle allegations of anticompetitive behavior and violations of antitrust laws. And in the most costly payout, it spent half a billion dollars in 2010 on another settlement, just days before the case was scheduled to go to trial. The plaintiff, Valassis Communications, had already won a $300 million verdict in Michigan, but dropped the lawsuit in exchange for $500 million and an agreement to cooperate on certain ventures going forward.

The News Corporation is a very large, well-capitalized company, but that single payout to Valassis represented one-fifth of the company’s net income in 2010 and matched the earnings of the entire newspaper and information division that News America was a part of.

Because consumers (and journalists) don’t much care who owns the coupon machine in the snack aisle, the cases have not received much attention. But that doesn’t mean that they aren’t a useful window into the broader culture at the News Corporation.

News America was led by Paul V. Carlucci, who, according to Forbes, used to show the sales staff the scene in “The Untouchables” in which Al Capone beats a man to death with a baseball bat. Mr. Emmel testified that Mr. Carlucci was clear about the guiding corporate philosophy.

According to Mr. Emmel’s testimony, Mr. Carlucci said that if there were employees uncomfortable with the company’s philosophy — “bed-wetting liberals in particular was the description he used” Mr. Emmel testified — then he could arrange to have those employees “outplaced from the company.”

Clearly, given the size of the payouts, along with the evidence and testimony in the lawsuits, the News Corporation must have known it had another rogue on its hands, one who needed to be dealt with. After all, Mr. Carlucci, who became chairman and chief executive of News America in 1997, had overseen a division that had drawn the scrutiny of government investigators and set off lawsuits that chipped away at the bottom line.

And while Mr. Murdoch might reasonably maintain that he did not have knowledge of the culture of permission created by Mr. Hinton and Ms. Brooks, by now he has 655 million reasons to know that Mr. Carlucci colored outside the lines.

So what became of him? Mr. Carlucci, as it happens, became the publisher of The New York Post in 2005 and continues to serve as head of News America, which doesn’t exactly square with Mr. Murdoch’s recently stated desire to “absolutely establish our integrity in the eyes of the public.”

A representative for the News Corporation did not respond to a request for comment.

Even as the flames of the scandal begin to edge closer to Mr. Murdoch’s door, anybody betting against his business survival will most likely come away disappointed. He has been in deep trouble before and not only survived, but prospered. The News Corporation’s reputation may be under water, but the company itself is very liquid, with $11.8 billion in cash on hand and more than $2.5 billion of annual free cash flow.

Still, money will fix a lot of things, but not everything. When you throw money onto a burning fire, it becomes fuel and nothing more.

@martinchacko

jude law is alleging that #notw hacked is voice mails while he was in the u.s if true #murdoch is in deep trble. #corruptmedia #phonehacking
13 minutes ago via web

Panda wrote:Some Directors are suggesting that Rupert Murdoch is no longer fit to run NewsCorp and are asking him to stand aside.

Michael Wolff Author of Murdoch"s Autobiography says Newscorp has lost all credibility and it appears James has proved not competent enough , Rupert
lost his grip possibly because he is feeling his age. The dark horse is Elizabesth Murdoch who wanted Rebekah"s resignation and is taking more interest
in NewsCorp.

wjk wrote:

Panda wrote:Some Directors are suggesting that Rupert Murdoch is no longer fit to run NewsCorp and are asking him to stand aside.

Michael Wolff Author of Murdoch"s Autobiography says Newscorp has lost all credibility and it appears James has proved not competent enough , Rupert
lost his grip possibly because he is feeling his age. The dark horse is Elizabesth Murdoch who wanted Rebekah"s resignation and is taking more interest
in NewsCorp.

And she's (Elisabeth) married to Matthew Fraud, who Clarrie now works for.

wjk wrote:Who does Clarrie work for now?
I'm so behind the times, I thought he was still there.

Panda wrote:

wjk wrote:Who does Clarrie work for now?
I'm so behind the times, I thought he was still there.

He did join another Company, can"t think of the name, maybe one of our Leslie Welch Members will oblige.

wjk wrote:

Panda wrote:

wjk wrote:Who does Clarrie work for now?
I'm so behind the times, I thought he was still there.

He did join another Company, can"t think of the name, maybe one of our Leslie Welch Members will oblige.

Lewis PR?
Just googled and came up with that?

News Corp faces global investigation into bribery
Pressure mounting in US for a full-scale inquiry into News Corporation under the Foreign Corrupt Practices Act

Ed Pilkington and Dominic Rushe in New York
guardian.co.uk, Monday 18 July 2011 19.18 BST
Article history

The US attorney general, Eric Holder, has confirmed that a preliminary investigation is under way into News Corporation’s activities. Photograph: Rick Rycroft/AP
News Corporation faces a global investigation of all its businesses to ascertain whether they engaged in the same acts of bribery revealed to have taken place in the UK between News of the World reporters and police.

With pressure mounting in the US for the launch of a full-blooded inquiry into News Corporation under the Foreign Corrupt Practices Act (FCPA), the daunting consequences of such a move are becoming evident. Mike Koehler, a law professor at Butler University who is an expert in the act, said a costly and expensive worldwide investigation into possible bribery activities on the part of the company's subsidiaries in America, Australia, Europe, India and China was now almost inevitable.

"Once the US authorities have started investigating the UK phone scandal, their next question is where else?" he said.

A full-scale FCPA investigation could also see News Corporation forced to hand over to US authorities its most sensitive legal documents, even those covered by lawyer-client privilege. US investigators have the right to call for a waiver to the privilege in order to obtain key documents including witness statements and all legal advice given to the company.

The US attorney general, Eric Holder, has confirmed that a preliminary investigation is under way into News Corporation's activities.

Several members of Congress have called on the justice department to launch investigations under the FCPA and anti-phone-hacking legislation, and Holder said he was "progressing in that regard using the appropriate federal agencies in the United States".

It is too early in the proceedings to know precisely in which direction the justice department will take its investigation, or possibly multiple investigations. A justice department spokesman said: "Any time we see evidence of wrongdoing, we take appropriate action. The department has received letters from several members of Congress regarding allegations related to News Corp and we are reviewing those."

Experts in US company law believe it is increasingly likely that an FCPA inquiry will now follow. The law was introduced in the 1970s to penalise US-based companies from profiting from the spoils of bribery and corruption in other countries.

Brad Simon, a white-collar defence lawyer with Simon and Partners who has represented several FCPA defendants, said the spate of resignations in the UK, including those of two of the most senior police officers in the country, would boost the case for an full-blown investigation.

"The US justice department traditionally responds to fast-breaking news developments and the fact that there have been resignations and arrests in the UK make it more likely than not that the US authorities will pursue this matter," he said.

In anticipation of any legal action, Rupert Murdoch has begun assembling a crack legal team to represent him before the US authorities, suggesting he is readying himself for a bitter legal battle in America as a result of the phone-hacking scandal.

At the centre of the team is Brendan Sullivan, one of America's most experienced lawyers, who during 40 years in litigation has acquired a reputation for taking on difficult and sensitive cases. He represented Oliver North, the US marine corps officer, in congressional hearings over the Iran-Contra affair.

At the time of the hearings in 1987, Sullivan was described by the Washington Post as "the legal equivalent of nuclear war". A fellow lawyer said: "He asks no quarter and gives no quarter."

Koehler said a full investigation would be likely to last for up to four years and cost News Corporation tens of millions of dollars. "The Department of Justice has a very sharp stick at its disposal," he said.

The US authorities can bring criminal charges against a firm they believe is not co-operating. Criminal charges were brought against accountant Arthur Andersen after the collapse of the energy firm Enron. The case in effect killed the accountancy firm.

Speculation has also focused on whether News Corporation employees have engaged in any phone hacking within the US. A US liberal campaigning group, ProtectOurElections.org, has put up a sum of $100,000 as a reward for any information leading to the arrest and conviction of "News Corp employees who hacked the phones of American citizens in the US, or bribed officials or others for information about Americans." The group promised to pass any hard evidence it received to the FBI.

Panda wrote:

wjk wrote:

Panda wrote:

wjk wrote:Who does Clarrie work for now?
I'm so behind the times, I thought he was still there.

He did join another Company, can"t think of the name, maybe one of our Leslie Welch Members will oblige.

Lewis PR?
Just googled and came up with that?

Doesn"t ring any Bells , but you could be right. I think after all the money the McCanns have paid him over the years, the few times he makes a Statement these days should be a Freebie.

carmen wrote:

Panda wrote:

wjk wrote:

Panda wrote:

wjk wrote:Who does Clarrie work for now?
I'm so behind the times, I thought he was still there.

He did join another Company, can"t think of the name, maybe one of our Leslie Welch Members will oblige.

Lewis PR?
Just googled and came up with that?

Doesn"t ring any Bells , but you could be right. I think after all the money the McCanns have paid him over the years, the few times he makes a Statement these days should be a Freebie.

FORMER BBC NEWS CORRESPONDENT CLARENCE MITCHELL JOINS LEWIS PR AS DIRECTOR OF MEDIA STRATEGY AND PUBLIC AFFAIRS
Wednesday, May 19th, 2010

http://live.lewispr.com/LEWISPR/2010/05/19/former-bbc-news-correspondent-clarence-mitchell-joins-lewis-pr-as-director-of-media-strategy-and-public-affairs-39390