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Sunday 17 July 2011

Murdoch's US empire under threat after sun sets on his 'World'

The media mogul is reaping his reward for creating the 'Dark Ages' of journalism, writes Ruth Dudley Edwards

WHAT a week it's been for News International, for Rupert Murdoch's inner circle, for the British parliament, for the Metropolitan Police, for the newspaper industry and for those who think Murdoch a pernicious influence on British public life.

It was last Sunday when the 80-year-old Murdoch (chairman and CEO of the New York-based News Corporation, the second-largest global media conglomerate) -- engulfed in public outrage about the phone-hacking of the dead and the bereaved -- sacrificed the 167-year-old News of the World (NotW) and 200 journalists to save a) his bid to take control of BSkyB, the satellite broadcaster; and b) the careers of his protege, Rebekah Brooks (the chief executive of News International, one-time editor of the NotW and of the Sun) and his son James (chairman and chief executive of News Corp's international division).

"Thank you & goodbye", said the front page.

"Quite simply, we lost our way", said the editorial.

The next few days revealed that bigger fish than some NotW hacks had lost their way: the Murdoch set were wandering blindly through thickets and falling over each other as they exercised startling U-turns.

On Monday the British government referred the BSkyB bid to the Competition Commission and News Corp's share price tumbled; on Wednesday it reluctantly abandoned this hitherto all-important £7.9bn (€9bn) take-over bid.

All week, despite public, press and parliamentary clamour for her head, we were assured that Brooks's job was safe; on Friday she resigned to spend more time defending her reputation. She'll be busy.

On Tuesday, she will appear before the Culture, Media and Sport Select Committee to answer questions about alleged misleading statements to parliament by herself and ex-colleagues.

Last Thursday morning, Murdoch refused to appear before the same committee and his son procrastinated: later that day, they both capitulated.

Oh, and the three of them will soon be interviewed by detectives from a Metropolitan Police investigation into allegations of phone hacking.

There are allegedly 45 cops on the job, for the Met is smarting now that it's emerged that earlier investigations into phone hacking were -- to put it kindly -- perfunctory, leading to calls for the resignation of Assistant Commissioner Jack Yates, who last week told the Home Affairs Select Committee that his 2009 decision not to reopen the hacking investigation was "pretty crap".

What's more, it's now also in the open that journalists were paying cops for information and that Met Commissioner Paul Stephenson employed Neil Wallis, aka 'The Wolfman', as a PR consultant, after he left his job as NotW executive editor. Stephenson is in big trouble for keeping this quiet.

Brooks and Co will also be quizzed by Lord Justice Leveson, who is leading an inquiry into journalistic and police malpractice -- all tabloids and many broadsheets are now sweating in case grubby secrets surface.

This was announced on Wednesday, by British Prime Minister David Cameron, who in the space of a week has gone from being a good friend of Brooks to welcoming her resignation.

His friendship with Andy Coulson, Brooks's successor at the NotW until he had to resign in 2007 after a hacking scandal, is another millstone.

Despite Coulson's pleas of innocence, Cameron was foolish to appoint him as his communications director: he quit last January because of press pressure, but it is only now that Cameron has had to face the possibility that Coulson was lying. So Cameron's had a terrible week, as have all politicians known to have been close to News International.

The Labour leader Ed Miliband has forced Cameron into a defensive position, although Miliband was at Murdoch's summer party and is only now attacking him because it is safe to do so. The truth is that British politicians have been so scared of Murdoch that forelock-tugging was the default position: like the Camerons, the Blairs and the Browns (although Gordon Brown is in denial about this) in their time were best buddies with Brooks and the Murdoch clan.

Truly, they were all in this together. Murdoch is now on his knees and his US empire under threat from an FBI investigation into allegations that his papers hacked into the phones of 9/11 victims. Shareholders are increasingly restive.

His new PR advisers, Edelman, are calling the shots, and insisted on Brooks's departure along with that of Les Hinton, Murdoch's colleague of 52 years and publisher of News Corp's prized Wall Street Journal.

Murdoch was forced to meet and grovel to the family of murdered Millie Dowler, whose phone messages were allegedly hacked by the NotW when Brooks was its editor.

Having told the world mid-week that he had handled the crisis "extremely well in every possible way", yesterday Murdoch placed an advertisement in British national newspapers apologising and promising to make amends.

Murdoch's enemies will not weep for him, but those who care about a free and prosperous press are nervous.

If News Corp pulls out of the UK, it could be the death of the loss-making Times and The Sunday Times, two newspapers Murdoch saved in the Eighties along with most of Fleet Street, when he broke the power of the rapacious print unions. But he's brought it on himself.

As the great tabloid journalist Hugh Cudlipp said in 1988, 20 years after Murdoch acquired the Sun, it was Murdoch who initiated "the Dark Ages" of tabloid journalism, "when the proprietors and editors -- not all, but most -- decided that playing a continuing role in public enlightenment was no longer any business of the popular press ...

"It was the age when investigative journalism in the public interest shed its integrity and became intrusive journalism for the prurient, when nothing, however personal, was any longer secret or sacred and the basic human right to privacy was banished in the interest of publishing profit."

Murdoch became powerful and mega-rich through appealing to the public's lowest instincts, yet it is the public's innate decency that has brought him low.

The question now is whether US shareholders will discard the hitherto invincible Murdoch family.

Next week may be even more exciting.

Ruth Dudley Edwards

© Ruth Dudley Edwards