By Neil Harris
WHEN Lord Hutton produced his long-awaited report into the circumstances surrounding the death of Dr David Kelly, people were surprised that his conclusions were so out of step with the evidence. Instead of exposing those who had launched a war of aggression based on lies, the only people who were to lose their jobs as a result of that report were those who had challenged the supposed basis for the illegal invasion of Iraq: the journalist Andrew Gilligan, the BBC’s director general Greg Dyke and Chair of Governors, Gavin Davies.
It is also likely that, despite its conclusions about Murdoch and News International, the parliamentary committee on culture, media and sport will only see one person jailed as a result of its hearings: the hapless Jonnie Marbles who got four weeks for throwing a custard pie at Rupert Murdoch.
Now with Lord Justice Leveson floating the idea that his report does not even need to consider individual wrong-doing, on top of his indication that it is not his priority to make findings of fact, it looks as though we are facing Hutton II. This means that unless one of the witnesses makes a foolish admission of wrong-doing on oath, the report will deal with generalities only.
However these are strange times indeed: with the “humbling” of Murdoch, the jailing of Conrad Black and the death of Robert Maxwell, we may be witnessing the end of an era. The charges of perverting the course of justice laid against Rebekah Brooks may mean the days of the megalomaniac newspaper baron and the all-powerful editor are being replaced with something a little more corporate, more 21st century. It must be puzzling for Murdoch as former friends and allies desert him and people who would once have flown across the world to talk to him do not return his calls. In a world where money and power flow through networks of contacts, oiled by corruption, this is a problem.
So how does it work? Newspapers provide “entertainment” to police officers in return for information. Charlie Brooks, husband of Rebekah, the former chief executive of News International and former editor of the News of the World is lent a police horse “Raisa” for his stables and his wife’s close friend David Cameron comes round and rides it a couple of times, chatting to Rebekah as he does. Rupert Murdoch pops in to Number 10 for talks, via a back entrance.
For over seven years the Metropolitan Police refuse to investigate the widespread hacking of mobile phones by private detectives sub-contracted to the News of the World. No one has been accused of doing anything wrong there, although in the past year both the Commissioner of the Metropolitan Police and his deputy have taken early retirement.
After winning the 2010 election Cameron employed Andy Coulson to be his Director of Communications, after he had had to resign as editor of the News of the World due to the phone hacking scandal. At the same time as being employed as a civil servant, he was still receiving private health insurance and severance pay from News International as well as owning £40,000 worth of undeclared shares in the company. No wrong-doing there either, although he had to resign from that job too.
Meanwhile News International, which already owns 39 per cent of BSkyB, wants to buy out the remaining shareholders, to own the company outright. Vince Cable, the Business Secretary is about to decide whether this is in the public interest or not when he takes a routine surgery in December 2010. Two of his “constituents” are just a bit too attractive to be taking such a close interest in him and he is flattered into boasting that he had “declared war on Murdoch and I think we are going to win”. The conversation is taped and after publication, the BSkyB decision is taken away from him by the Prime Minister, who appoints Jeremy Hunt, the minister for Culture, Media and Sport in his place.
Hunt is known to be favourable to Murdoch and his interests, long before his special advisor Adam Smith has to resign after his emails to News International executives about the decision-making process are published, showing just how friendly that relationship is. Hunt agrees the takeover of BSkyB, until it all unravels later.
Meanwhile, Mathew Freud owns Freud Communications, a highly successful public relations company which had close links to Peter Mandelson, Tony Blair and New Labour. This was a lucrative connection, bringing valuable government contracts including PR for the Millennium Dome and the Olympic torch.
In the summer of 2008, Freud flew David Cameron in his private executive jet (a Gulfstream IV) to the Greek island of Santorini for drinks on Rupert Murdoch’s yacht Rosehearty, before the whole party moved over to Freud’s yacht Elizabeth F for dinner. Also present in happier times were Charlie and Rebekah Brooks as well as the singer Billy Joel, who presumably had to sing for his supper just as Mr Cameron had. Afterwards, Cameron is back on the private jet to re-join his family in Turkey for their summer holidays.
In the 2010 election, the Sun switched its support from Labour to Conservative, but after the Tories won Freud Communications continued to work for the new government, as though nothing had happened. By coincidence Freud is married to Elizabeth Murdoch, Rupert’s daughter and the person the Elizabeth F is named after.
In 2010 a rising and bright appeal court judge, Brian Leveson, attends a dinner at Freud’s London house. They must have got on quite well because Freud agrees to do some free PR work for the sentencing council, which Leveson chairs. They meet again twice at social occasions, the last being in January 2011.
When the phone hacking scandal finally gets out of control Cameron announces a public inquiry, headed by none other than Lord Justice Leveson. The learned judge, as well as the six independent assessors have to declare any conflicts of interest they may have to the Minister for Culture, Media and Sport, who just happened to be Jeremy Hunt, who will be giving evidence to the inquiry himself and to whom Leveson will report.
The loose group around Cameron, the Brooks and the Murdoch’s becomes known as the Chipping Norton set, as so many of its members live in luxury houses set in the countryside nearby. They certainly aren’t touched by the credit crunch. The Tatler admiringly described a day in the life of one couple as follows: “When Charlie Brooks wakes up in the morning in his barn in Oxfordshire he likes nothing better than to fly to Venice from Oxford Airport with Rebekah for lunch at Harry’s bar. Later in the day, after shopping and sightseeing, the couple fly back to London for dinner at Wiltons in Jermyn Street.”
Probably the most sought after invitation in 2011 would have been to Elizabeth Murdoch's 40th birthday bash at Burford Priory. With two luxurious marquees laid on, each a different version of a London restaurant and a jazz band playing all night, there was also a cinema showing a boxing match for sports fans.
Absolutely everyone was there, amongst them Robert Peston in conversation with his old friend Nick Jones, the general manager of News International. When the Daily Telegraph edited out Vince Cable’s remarks about Murdoch, because they wanted to ensure that his bid for BSkyB would still fail, this was leaked to Peston who published it in full on his BBC website.
Tessa Jowell, former Culture Secretary was there too, with her “estranged” husband David Mills; they had separated when she was in the Labour Cabinet and he faced accusations that he had accepted a bribe from Berlusconi, Blair’s friend. Happily reunited after a not guilty verdict, Jowell’s old department had been a client of Freud communications.
One local is described by the Mail online as: “multi-millionaire Tony Gallagher, who bought his 17th century estate near Chipping Norton from multi-millionaire Tory defector turned Labour Cabinet minister, Shaun Woodward.” Woodward is married into Lord Sainsbury’s family, the former social democrat who became the largest individual contributor to New Labour.
Gallagher owns A C Gallagher holdings, one of Britain’s largest private developers. After being questioned about contributions to the Labour Party he replied: “Frankly, whatever government of the day is in power, we always work with them, because that is the name of the game”.
Gallagher, a supporter of the Taxpayers’ Alliance and a Conservative Party contributor as well, added: “In England we work with Labour councils, Conservative councils, whatever, because in the real world that’s what you do, isn’t it?”
It is that real world that we are interested in, not the froth of parties and social gatherings. The oil that keeps all this partying going is Rupert Murdoch and as one party guest remarked: “It’s like the social wing of the Rupert Murdoch media empire. Rupert wields his influence through his newspaper and TV network. Elizabeth and Matthew feed off this by providing a link between the worlds of politics, business and show business. Their wealth means they can provide for all of them to meet in complete privacy at Burford. Behind it all is the unspoken assumption that if you are out of favour with Rupert Murdoch, you are not likely to be invited.”
If Murdoch is the power behind the parties, the key to his current interests is gaining control of BskyB. A brilliant capitalist, Murdoch’s rise has always relied on exploiting an under-used asset to fund his next great expansion.
When he bought the News of the World in 1968, he realised that the presses were idle for six days of the week, so he added the Sun the following year and consolidated. Using the extra profits, he was able to develop his newspaper empire and the political contacts that came with it. In 1980, following a meeting with Mrs Thatcher, he was allowed to buy the Times and Sunday Times, both loss-making papers at that time. In circulation terms, this breached all competition rules, but in return for his papers’ backing, the Tories turned a blind eye.
In 1986 he engineered a dispute with the print unions and used the pretext to fire 6,000 workers, replacing them with scab “journalists” and “electricians”. Fortress Wapping was paid for out of the proceeds of selling the Sun’s old printing premises on Bouverie Street for development as upmarket offices. This move, which resulted in all his titles coming off one press, using cheap company-union labour on new technology, brought in a new period of super profits. These he used to buy papers in America, and launch Sky broadcasting, offering satellite TV at a huge loss.
This, he eventually merged into BSB, a loss-making rival satellite broadcaster, and the new BSkyB had overnight become a near monopoly. Once again the Tories turned a blind eye. It became so lucrative that Murdoch was able to fund his expansion into US television, movies and Fox, with the political contacts that followed.
Currently BSkyB is hugely undervalued, partly because Murdoch’s 39 per cent stake means no one else can buy it or take control and this keeps the share price artificially low. Even better, at a time when internet businesses, which have never made a profit, are valued in many tens of billions of dollars based solely on questionable estimates of future revenues, BskyB is a real business with real profits today. It has 10.5 million British customers tied in to contracts and paying over £250 a year each. This means its valuation of £10 billion is a bargain even based on current revenues. After buying out Virgin Media’s television interests in 2010, it has ensured its monopoly status in Britain and would like to use it to drive down the costs of football and movies, the mainstay of its channels.
Murdoch is aiming to expand into both Europe and the Far East, where his operations in India and China have stalled. The presence of José Maria Aznar, the former premier of Spain on the News Corporation board of directors is a good indication of where Murdoch’s immediate ambitions lie. All of which will cost big money, dependent on taking ownership of BskyB and then using that business to finance the expansion.
The origins of Murdoch’s current problems lie in 1992, which ironically had been a particularly good year for both him and the Sun. This was an election year, the one that John Major should have lost, his government discredited by economic failure and the early signs of corruption that would come out later. Although Labour had been leading in the opinion polls all year, the Sun had fought a vicious anti-Labour campaign ending with a notorious front page: “If Kinnock wins today would the last one to leave Britain please turn out the light”. After Major’s unexpected victory, the front page boasted “It’s the Sun wot won it!”
It was also the year of the “squidgy tapes” and “camillagate”, when the Sun published transcripts of intercepted calls between Charles and Diana and their respective lovers. While it has never been clear who bugged the phones, it was clear at the time that there was little chance of anyone being convicted as a result. Over the next 20 years there was a flurry of legislation, in which the state reasserted its monopoly of phone bugging, eavesdropping, and intercepting messages on the internet, to ensure it kept up with the new media.
At the same time the News of The World and other papers were discovering that using listening devices, eavesdropping on voicemail messages, hacking emails, corrupting police officers and blagging information from doctors or other public officials had given them a new source of stories. In effect the Murdoch press had established a private intelligence service, spying on an increasingly corrupt political elite, using the methods that a state normally reserves for itself.
Despite the convictions of the News of the World royal correspondent Clive Goodman and private eye Glen Mulcaire for hacking royal phones, there was a great reluctance by police and politicians, many with Murdoch links, to take action. At the same time there has been an equally steady stream of leaks from person or persons unknown, ensuring that the story has kept bubbling up whenever it was in danger of being forgotten. All of which bears an uncanny resemblance to the equally puzzling leak of parliamentary expenses claims, which resulted in a clear out of corrupt MP’s in 2009/10.
As new teams of police officers trawl through the accounts and emails of News International, there will be an increasing number of politicians, police and journalists wondering just what was “shredded” and what survives.
At the same time there is no threat to Murdoch’s empire, which currently has a monopoly of satellite TV, owns 7.5 per cent of ITV and 40 per cent of British newspaper sales. All of which has enabled him to continue to act as the cheer-leader of anti-union, anti-working class, imperialist interests since the days of Thatcher and Reagan.