TOPICS > Nation

How Will News of the World Scandal Affect Murdoch’s Power, Media Empire?

July 8, 2011 at 12:00 AM EDT
The News of the World phone-hacking scandal that led to the tabloid's closure this weekend deepened Friday with the arrest of former editor Andrew Coulson and new allegations of a News Corp. cover-up. Ray Suarez discusses the latest developments with The Guardian's Richard Adams and Sarah Ellison of Vanity Fair.
LISTEN SEE PODCASTS

TRANSCRIPT

JIM LEHRER: Ray Suarez takes it from there.

RAY SUAREZ: For more, we turn to Richard Adams, a correspondent for The Guardian, a British newspaper not part of Rupert Murdoch’s News Corp. The Guardian has broken many of the stories uncovering the hacking scandal. And Sarah Ellison, who’s covered this story for Vanity Fair magazine, she’s a former Wall Street Journal reporter and author of the book “War at The Wall Street Journal” about Murdoch’s purchase of the paper in 2007.

Richard Adams, Andy Coulson was already connected with the hacking scandal at the News of the World. How did he end up working for the prime minister? And is David Cameron being wounded by this now?

RICHARD ADAMS, The Guardian: Well, we have heard Cameron’s explanation as to why he gave what he calls a second chance to Andy Coulson.

Coulson claimed that he knew nothing about what had been going on, that it was the responsibility of a single rogue reporter, and that he had resigned as a matter of honor. And, in fact, we now know, and are rapidly discovering more and more, that Coulson was, in fact, heavily involved, and that presumably many other senior figures inside the News of the World and possibly News International itself were also involved.

RAY SUAREZ: But this is an unusually public and visible position for someone who was already tainted by scandal. Even resigning out of honor and saying he had nothing to do with it, he was in charge.

RICHARD ADAMS: Well, indeed. It was extraordinary. And it was extraordinary and perhaps foolish — well, we can now say it was foolish — for David Cameron to have hired him.

And David Cameron, I assume, would have no idea that this would have got worse. Otherwise, he never would have given Coulson a job.

RAY SUAREZ: Sarah Ellison, earlier in the life cycle of this story, was there a time where it looked like the News of the World had successfully ridden this out, that it was going to survive the hacking revelations, when it was just about celebrities and the royal family?

SARAH ELLISON, “Vanity Fair”: What’s interesting about this story is that there were lots of times that it seemed like things had sort of died down and that the people at News International were going to kind of get off.

It did, in fact, take the reporting of The Guardian, and particularly Nick Davies at The Guardian, to keep digging in and looking for more and more evidence of this. I mean, I think that the big turning point, as it has been referred to here, is that earlier this week, instead of just hearing about celebrities whose phones were hacked into, you were hearing about kidnapped girls who ended up dead whose phones were hacked into and soldiers who had died whose phones were hacked into.

That is all of a sudden something that really focuses people’s minds and makes it seem like a much more dangerous and damning practice.

RAY SUAREZ: And allegations, aren’t there, involving bribes paid to police of hundreds of thousands of pounds, that is, hundreds of thousands of dollars?

SARAH ELLISON: Yes, absolutely. I mean, that is actually something that “Vanity Fair” broke earlier this week, is that News International has recently handed over e-mails that — to the police that show that Andy Coulson was — was actively condoning payments to the police, not just for stories, because that happens all the time in the U.K., that people get paid for stories.

But this was actually payments for confidential information and other things that are illegal to pay the police for.

RAY SUAREZ: Richard Adams, this newspaper is known as a scourge of famous people, but was there also a chummy side to the relationship between the British national newspapers and political figures and the political parties?

RICHARD ADAMS: Absolutely.

I mean, there’s a much closer and a much more informal relationship between politicians in Britain and the media, and especially in the case of the News of the World, which, of course, is owned by Rupert Murdoch.

Murdoch has — makes no secret of his use of his newspapers for his political affiliations. For many years, from 1997 onwards, he backed the Labor Party, especially under Tony Blair. And then a couple of years ago, he switched and he put the force of his papers behind the Conservative Party.

But, then, British newspapers are more partisan than American newspapers. This is more common. But, yes, it is quite — Murdoch is a powerful figure in British politics because of that. However, as a result of this, I think he is a damaged figure and he will probably be less powerful as a result.

RAY SUAREZ: Well, Sarah Ellison, he is trying to acquire the parts of a major satellite network, BSkyB, that he doesn’t already own. That has to be reviewed by the British government. Is that acquisition in trouble now?

SARAH ELLISON: It certainly is.

Shares in BSkyB dropped, I think, more than 10 percent this week over concerns that that deal might be delayed, and in fact may not happen. There were — there was an open-comment period where everyone was going to have a chance to comment on the upcoming deal. And that was supposed to end on Friday.

Given the revelations earlier this week, there were hundreds of thousands of comments that the culture secretary needed to sift through. And so they have put that off, that decision off, until September. That leaves a lot of time for something to happen to this deal that is — that could eventually block it.

I did want to say one thing in response to the notion that there’s a very casual relationship between politics and the media in Britain. In the United States, it’s not quite the same thing, but you do have a very close relationship between certain politicians and certain members of the media.

And for something like — you can just look at FOX News here, where you have the bulk of — or certainly several potential Republican candidates who have already worked for Rupert Murdoch in the past, and some of them have decided that they want to continue to work for him, instead of running for president, if you look at someone like Mike Huckabee.

I think that, where you have those kinds can of dueling loyalties, it does get to be a sort of more complicated situation. So we’re not immune to the sort of casual relationships between these two spheres.

RAY SUAREZ: How complicated it can get, Richard, certainly extends to Rebekah Brooks, who we saw in the report, who is a close associate of Rupert Murdoch, one of his senior executives, and a close friend of Prime Minister David Cameron.

RICHARD ADAMS: Yes. I mean, that is an example of the sort of informal linkages that are less common in the U.S., but are perfectly common — Rupert Murdoch, for example, is a regular visitor to Number 10 Downing Street. He visits the prime minister’s residence at Chequers, which is the Camp David equivalent.

And Rebekah Brooks is also in the same position. She’s been a regular visitor to both those places, in a way that you wouldn’t see a U.S. president inviting similar media figures here.

RAY SUAREZ: Sarah, now that the dust is starting to settle, and the announcement has been made, and Sunday’s profits are all going to charity, why — how do you conclude that the News Corp. made this decision, to bury a 168-year-old newspaper, a very profitable property, one of the best-read newspapers in the English language, over something like this?

SARAH ELLISON: Well, the people that I have been talking to at News Corp. have said that this was something that was — that they knew was potentially in the cards for months, that they were going to maybe take this action.

I think it’s somewhat cynical, because what it allows them to do is close the newspaper, try to draw a line under this scandal, and have everyone move on. Of course, the executives who were really making the decisions about phone hacking have all left the News of the World at this point. So, the people who they are getting rid of are sort of lower-level reporters and editors.

And they’re preserving the executives who were, in fact, in major positions of power when the worst hacking was taking place. I think that what this does allow them to do — there could be — I think what it says is that we — they know something that we don’t know.

Rebekah Brooks today, when she was addressing the newsroom, made some cryptic reference to the fact that they would understand in a year why this closure needed to happen. And she made references to other shoes yet to drop.

So, some of those, we just don’t know what those are, but I do think that there’s — there are elements of — there are legal elements here that could be at play. There is something in Britain. You can have corporate criminal liability.

And so, if you have the editor in chief, Andy Coulson, breaking the law of an entity that is the News of the World, maybe there’s a way that, if you’re — if you’re shutting it down, you are sort of — you are sort of managing to corral that legal liability and keep it away from News International, although there are other things that they are facing now, like the potential for the Foreign Corrupt Practices Act to come in…

RAY SUAREZ: OK.

Sarah Ellison, I’m going to have to end it there. Thanks for joining us.

Richard Adams, good to see you.

RICHARD ADAMS: Thank you.