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2011-07-20

Murdoch’s Denials Are Tough to Believe, Former Wall Street Journal Reporter Sarah Ellison Says

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To discuss the phone-hacking scandal engulfing the Rupert Murdoch media empire from Britain to the United States, we are joined by longtime journalist Sarah Ellison. She is a Vanity Fair contributing editor and author of the book "War at the Wall Street Journal: Inside the Struggle to Control an American Business Empire," which chronicled the sweeping changes at the publication after Murdoch acquired the newspaper in 2007. Ellison spent 10 years working at the Wall Street Journal. Commenting on Murdoch denying responsibility for the scandal, Ellison says, "It’s even more difficult to really believe that when you know the way that his news organizations work... There’s a sort of myth that we all know about Rupert Murdoch, that his editors know what he wants without him even having to tell them. And so he creates a culture in which everyone is of one like mind... It’s difficult to imagine that some of the responsibility wouldn’t lie at his feet, given that it is his organization." [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: For more on the hearings, we’re joined by Sarah Ellison, Vanity Fair contributing editor and author of War at the Wall Street Journal: Inside the Struggle to Control an American Business Empire. She previously worked for 10 years at the Wall Street Journal in Paris, in London and New York. And as Rupert Murdoch took over the Wall Street Journal, well, she was an employee of his for at least a few weeks. But she chronicled everything that took place in that changeover of power. And we’re going to talk about Rupert Murdoch and his American media empire.

Welcome to Democracy Now!, Sarah Ellison.

SARAH ELLISON: Thank you for having me.

AMY GOODMAN: Before we talk about what happened at the Wall Street Journal, I want to go to these unprecedented hearings yesterday.

SARAH ELLISON: Mm-hmm.

AMY GOODMAN: Rupert Murdoch was clear, almost monosyllabic at times, saying, "No, I am not responsible."

SARAH ELLISON: Right. I think that that’s not an answer that you would learn in Leadership 101, if you were the head of an organization, no matter how big or small. I think that it’s somewhat—it’s even more difficult to really believe that when you know the way that his news organizations work. And I’ve spoken to a number of his editors who have worked for him over the years. He is on the phone with those editors on a daily basis, trading gossip. He wants to hear what the big stories are. His editors—there’s a sort of myth that we all know about Rupert Murdoch, that he—that his editors know what he wants without him even having to tell them. And so he creates a culture in which everyone is of one like mind. And so, I think that that might give him legal plausible deniability in these sorts of hearings, because I think, from a legal perspective, no matter how long it took him to answer the questions, no matter how confused he seemed at times, that’s actually a time where being aidy and sort of forgetful came in very handy, from a legal perspective, because he didn’t actually have to admit to anything. But it’s difficult to imagine not—that some of the responsibility wouldn’t lie at his feet, given that it is his organization, and up until this point, News Corp. and Rupert Murdoch have sort of been one and the same.

AMY GOODMAN: We’re going to go to break, and we’ll come back. Sarah Ellison, author of War at the Wall Street Journal: Inside the Struggle to Control an American Business Empire. She documents what happened to this American institution, the Wall Street Journal, when Rupert Murdoch took over. This is Democracy Now! Back with her in a minute.

[break]

AMY GOODMAN: Our guest is Sarah Ellison, Vanity Fair conditioning editor, author of War at the Wall Street Journal: Inside the Struggle to Control an American Business Empire.

Rupert Murdoch insisted on Tuesday that wrongdoing was not endemic in his company. He also implied he had been betrayed by colleagues, but refused to name any of them. Murdoch said he knew nothing of the cover-up of phone hacking and claimed he learned about the Milly Dowler case only two weeks ago.

TOM WATSON: Mr. Murdoch, at what point did you find out that criminality was endemic at News of the World?

RUPERT MURDOCH: "Endemic" is a very hard—is a very wide-ranging word. And I also had to be extremely careful not to prejudice the course of justice, which is taking place now. That, that has been disclosed, I became aware as it came out, those two. And then I was absolutely shocked, appalled and ashamed when I heard about the Milly Dowler case only two weeks ago.

AMY GOODMAN: Rupert Murdoch also said the disgraced Sunday tabloid, his News of the World, accounted for less than one percent of his News Corp., which employs 53,000 people around the world. Sarah Ellison, is it possible that Murdoch simply didn’t know what was going on in every corner of his vast empire, as he put it? And, of course, the Milly Dowler scandal, for those who are not following this, is the 13-year-old girl who—well, why don’t you tell it?

SARAH ELLISON: Well, Milly Dowler is a sort of—would need no introduction in the U.K. She’s sort of an Elizabeth Smart-type case for the Brits. She disappeared on her way home from school and was found six months later dead. And what has come out in this phone-hacking scandal is that her phone was hacked into during the time that she had disappeared by reporters from the News of the World. And when her voicemail box filled up with messages from her family and people trying to reach her, the reporters for the News of the World would then delete some of the messages, so that it could make room for more messages that they could listen to in hopes that they would find some kind of a lead to where she was or what the story could be. Of course, her family took some hope from the fact that her voicemail was being listened to and thought that that meant that she was still alive and still able to listen to her phone. So, the levels of inhumanity on that, it’s no longer—I mean, that’s what changed the story from one of journalistic ethics to basic decency. And that is really what ignited, two weeks ago, the latest round of this scandal and really caught people’s attention.

AMY GOODMAN: I mean, News of the World was deleting her phone mail messages and then covering the family’s reaction, believing that it meant that her family—that she was alive. I wanted to bring Rebekah Brooks in here, former editor of News of the World, who said she only heard of the Milly Dowler phone hacking through the media also a couple of weeks ago.

DAMIAN COLLINS: When were you first aware that Milly Dowler’s phone had been hacked?

REBEKAH BROOKS: I think it was last Monday—no, maybe the Monday before.

DAMIAN COLLINS: That was the first knowledge you had of it at all?

REBEKAH BROOKS: I heard of it when it—when the story broke—at first, broke in the media, I think, on Monday evening.

DAMIAN COLLINS: But no—nothing ever said to you while at News of the World to suggest that Milly Dowler’s phone had been hacked, that may have been carried out or authorized by an employee of the News of the World?

REBEKAH BROOKS: Of course not. No.

AMY GOODMAN: That, again, Rebekah Brooks, who was CEO of News International. Before that, she was editor of News of the World, the newspaper in question, and before that, the youngest woman editor of The Sun

SARAH ELLISON: Mm-hmm.

AMY GOODMAN: —testifying before the British Parliament. When asked whether she had been lied to by senior employees, Brooks declined to answer because, well, she was arrested this past weekend and she’s under criminal investigation.

SARAH ELLISON: Yes. I mean, I think that the clip that you just played really speaks to this question of, how is it possible that people didn’t know that this was happening? Rebekah Brooks was the editor of the News of the World at the time of the Milly Dowler phone hacking. And what—the initial excuse, or the initial explanation, that News of the World and News International came out with to explain why she didn’t know about it was that she was on vacation at the precise moment of that hacking.

AMY GOODMAN: Well, talk about, though, the criminality of the phone hacking. What exactly—we’re not just talking phone hacking, we’re talking phone tracking, what the newsroom, I think, called "pinging"—

SARAH ELLISON: Mm-hmm.

AMY GOODMAN: —where they had to get police technology to find where people are going, because they could find where their cell phones were going.

SARAH ELLISON: Right. I mean, this all falls under an umbrella of what people have referred to as the dark arts. And so, it refers to phone hacking. It refers to something called "blagging," which involves calling up a phone company or a hospital or an insurance company and pretending you are someone else to try to extract information, confidential information, about someone. These techniques have gotten more sophisticated, as you might imagine. There’s email fishing, and there are all sorts of things that you can use now with more sophisticated technology to find out confidential information about people.

The interesting thing about—well, one of the interesting things about phone hacking is that before people were really using cell phones, you could just put a tracking device outside of someone’s home and listen to their land line calls. And this is how we know stories about what Prince Charles was saying to Camilla at various points in their intimate conversations. These stories have been coming out in the British press for years, and it’s such common knowledge. I went over to report on this story earlier this year, and it takes you a couple of weeks to realize that this is something, whether it was phone hacking or these other tactics, that’s fairly common practice in tabloid British press.

AMY GOODMAN: And it extends to these shores. A lawyer for the relatives of victims of the September 11th attacks has asked the FBI and Justice Department to meet with 9/11 victim families to discuss the agencies’ preliminary inquiry into reports that News Corp., which is based here in Delaware—that News Corp. reporters may have tried to hack the phones of 9/11 victims. When Labour MP Jim Sheridan asked Rupert Murdoch about the possibility of hacking around the September 11th attacks, Murdoch said he had seen no evidence to support the allegation.

JIM SHERIDAN: Can I also ask you—it’s understood that the FBI are investigating 9/11 victims. Have you commissioned an investigation into these allegations?

RUPERT MURDOCH: We have seen no evidence of that at all, and as far as we know, the FBI haven’t either. If they do, we will treat it exactly the same way as we treat it here, and I cannot believe it happened from anyone in America. Whether someone at the News of the World or Mr. Mulcaire took it on himself to do it, I don’t know.

AMY GOODMAN: Yes, that was Rupert Murdoch around the 9/11 hacking. It wouldn’t have to be on issues of criminality just on these shores, because we do have the Foreign Corrupt Practices Act.

SARAH ELLISON: Right.

AMY GOODMAN: And that means that if a U.S. corporation does this somewhere else, it doesn’t matter. It could still be—it could still be found criminally responsible.

SARAH ELLISON: I mean, there are a number of areas where this could become criminal or lead to a civil investigation. I mean, the SEC also has some jurisdiction over companies and over directors of companies, whether they are willfully blind to criminal activity. And I think that there’s—I mean, just yesterday, the independent directors of News Corporation hired their own lawyer, which is sort of an admission that their interests may very well diverge from that of Rupert Murdoch and his controlling trust that actually controls the company. So I think that we’re going to see—I don’t think that this story is going away, simply because so many people are potentially implicated in this.

AMY GOODMAN: And let’s talk about who some of those board members are. They are the New York City—former New York City schools chancellor, Joel Klein, who was very prominent yesterday. Every time James Murdoch testified, he was the one over his shoulder, sitting right between and behind the Murdochs. Viet Dinh, who was the author of the—

SARAH ELLISON: PATRIOT Act.

AMY GOODMAN: —USA PATRIOT Act, is one of the board members of News Corp.

SARAH ELLISON: Mm-hmm.

AMY GOODMAN: The significance of this, Sarah Ellison?

SARAH ELLISON: I mean, you do have very high-profile people who are on that board. And the board has notoriously been very captive to what Rupert Murdoch wants to do. He does—he and his family control 38 percent of the voting shares in News Corporation, so it is a company that is treated like a family company, but it is a—it’s a publicly traded company and therefore is subject to certain laws in this country. So, you do have—I mean, there are people like Tom Perkins, who’s a high-profile venture capitalist. You have Viet Dinh, who was actually overseeing Joel Klein, who was overseeing the investigation into this. Just one other—one last point on that, Viet Dinh, if I’m not mistaken, is the godfather to Lachlan Murdoch’s child, one of Lachlan Murdoch’s children. It just shows you—

AMY GOODMAN: Lachlan Murdoch, who’s the son, another son of Rupert Murdoch.

SARAH ELLISON: Yes, he’s actually Rupert’s oldest son. It just shows the way that the—it speaks to the culture of this organization, where it really is treated like a very cozy family company. It’s hard to see where the actual oversight is going to come from, where these relationships are so close already.

AMY GOODMAN: Which goes to the whole issue of this vast media empire that has over 1,400 holdings in the United States—among the many holdings, the New York Post, Fox, many Foxes, the Wall Street Journal. In fact, Rupert Murdoch became an American citizen, and he got a waiver, so that he could own the television and newspaper in the same town, the New York Post and Fox.

SARAH ELLISON: Right.

AMY GOODMAN: You worked at the Wall Street Journal. That is what your book is about.

SARAH ELLISON: Mm-hmm.

AMY GOODMAN: War at the Wall Street Journal: Inside the Struggle to Control an American Business Empire. As the transition happened from the Bancroft family to the Murdochs, tell us what took place. You were in Rupert Murdoch’s employ for a couple of minutes.

SARAH ELLISON: Well, what happened—you know, my introduction to that story was that when he bought the newspaper, I was actually working as a media reporter for the Wall Street Journal and was covering the story for the Wall Street Journal, so I had the pleasure of writing about the Wall Street Journal for the Wall Street Journal for some time.

What was apparent when he bought the newspaper is that he had the New York Times in his sights immediately, and he looked to the New York Times as something that he really wanted to bring down. The New York Times, for him, was like the British upper classes in the U.K. He really resented it. He thought that the organization was too self-important. He didn’t understand why the rest of the country took its cues from the New York Times. And he wanted to wrest that position from the newspaper. Previously, the Wall Street Journal had been the premier business newspaper in this country, but it really didn’t cover the arts and politics the same way that general-interest newspapers did. Rupert Murdoch really changed that entirely, so he could go after the New York Times and, I think, establish a sort of conservative counterweight to the New York Times, which he has now effectively done.

AMY GOODMAN: I mean, he wanted the position in the United States that he has in Britain. I mean, isn’t today’s parliamentary hearing—well, we’ll play more excerpts of it tomorrow, with David Cameron. Cameron wanted Rupert Murdoch at 10 Downing, and so he gets Andy Coulson, despite all the warnings of all of the papers, including the editor of The Guardian saying, "Do you know what Andy Coulson is responsible for?"

SARAH ELLISON: Exactly. I mean, it’s sort of astonishing when you look at it now, that he would—that a potential prime minister would ignore these red flags and put someone in his employ who had already resigned from a position in disgrace over this scandal. And he was informed, as you mentioned, by the editor of The Guardian, that this kind of—this kind of criminal activity had gone on.

I think what that speaks to is the perceived power and the real—the real and perceived power that Rupert Murdoch had in the U.K. And I think what one of the most important things you can see in Britain right now is how much that image has been punctured. The image of his infallibility and his power has really fallen away because what people—one of the things that gave him his power was the belief that he had it, was this sort of implicit threat that he could uncover any sort of secret from a politician that they might have, any sort of dirty laundry they might have. And I think that people now are really feeling emboldened. I’ve said before that this seems like the British version of the Arab Spring, where people feel like the police, politicians and the media have been lying to them and all sort of in cahoots with one another, and I think that that’s feeding some of the response that you see now.

AMY GOODMAN: Could an embattled Murdoch empire bring down the British empire—or, at least, David Cameron?

SARAH ELLISON: Well, David Cameron is certainly now very much at risk. I mean, you see this morning Ed Miliband, the opposition leader, is saying an apology isn’t enough, and hindsight isn’t enough. And you could very well say the same thing to Rupert Murdoch, which is that now all of these apologies, without any real admission of any responsibility, isn’t satisfying people, because I think they want to know that this won’t happen again. And they don’t—they don’t trust the people who are telling them that it won’t happen again, because they were the people who actually perpetrated it in the first place.

AMY GOODMAN: Explain what happened at the Wall Street Journal. Explain the transition, what took place, what happened to the newspaper you worked at.

SARAH ELLISON: Well, one of the first things, during the actual negotiation for the deal, Rupert Murdoch had to set up an editorial independence agreement and an editorial independence committee, which involved a number of directors who were supposed to be there for oversight in case he tried to intervene with the newspaper in any way for his commercial interest. It took four months after that deal closed for Rupert Murdoch to force out the editor, Marcus Brauchli, whom he had sort of contractually promised that he would not interfere with. And he put in his own editor in that position. That was Robert Thomson, who is now the editor of the newspaper. Marcus Brauchli resigned without informing the editorial independence committee.

And so, the changes that Rupert wanted to make came much more easily after that point, and you saw a lot of people leaving who were part of the sort of old guard. And even to this day—so, in the paper, you see stories became shorter. They became more of a general interest, covering politics, and they launched a Greater New York section, a metro section, which was a clear dart at the New York Times, trying to take over the New York Times’s dominance in this city.

AMY GOODMAN: We heard Les Hinton referred to, his dear ally—

SARAH ELLISON: Yes, mm-hmm.

AMY GOODMAN: —said he would trust him with his life.

SARAH ELLISON: Yes.

AMY GOODMAN: Publisher of the Wall Street Journal, worked for Rupert Murdoch for more than half a century.

SARAH ELLISON: Mm-hmm.

AMY GOODMAN: He has just resigned. The significance of this?

SARAH ELLISON: Well, I mean, I think he—

AMY GOODMAN: And head of Dow Jones.

SARAH ELLISON: He was the head of Dow Jones. He was the publisher of the Wall Street Journal. The significance of that is that there is no bright line between what we’re hearing about in the U.K. and what’s going on in the U.S. I don’t—no one has said that members of the Wall Street Journal are hacking into people’s phones; I don’t believe that to be the case. But the fact that someone who oversaw this kind of behavior, and either willfully ignored it or actually knew something about it, could rise to the level of being the commercial head of the most powerful business newspaper in this country should give one pause about the level of influence and the level of power that Rupert Murdoch has here.

AMY GOODMAN: And how did the newspaper change? I mean, he has the Wall Street Journal, and he has the New York Post. But the New York Post didn’t give him the cachet he wanted to change American opinion, though Fox has certainly had a tremendous effect.

SARAH ELLISON: I think that the Wall Street Journal, for him, was supposed to be the step into ultimate respectability in this country. And while the deal was going on, I remember there was a lot of talk about how this was going to finally give Murdoch the position of—the sort of the ivory tower position of respected name, which the New York Post never truly was, nor was Fox News. And he was going have the Wall Street Journal editorial page, which we know is very right-wing. And he was going to be able to use that in a way that he hadn’t been able to use that before.

Now, of course, the problem with this scandal is that it puts someone who grew up in the sort of most tawdry of newspaper cultures, in the tabloid culture in the U.K., at the top of the Wall Street Journal, and it makes the Wall Street Journal sort of seem mired in all of this. Just a few days ago, the Wall Street Journal wrote an editorial defending Murdoch and News Corporation and saying that this story was largely the result of the schadenfreude of competitors who were writing about it and hoping to bring down—hoping to bring down the company.

AMY GOODMAN: Sarah, I know you have to go on to the BBC in one second, but 10 seconds: you’re banned from going to Wall Street Journal news conferences?

SARAH ELLISON: I was banned from going to one Wall Street Journal news conference. I haven’t attempted to go to another. There hasn’t been anything that newsworthy. But although maybe they’ll have one now, and I’ll try again.

AMY GOODMAN: Well, quick, grab your phone. Sarah Ellison has been our guest. Her book is War at the Wall Street Journal: Inside the Struggle to Control an American Business Empire.

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