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.
