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Jul 20, 2011

Pity the Murdochs, innocents lost in a world of knaves and fools

The performance of Rupert and James Murdoch before a Commons committee presents News Corp shareholders with a terrible dilemma.


They didn’t know, you see. No one told them. Not that they were kept in the dark, mind, but they weren’t kept informed, either. They weren’t willfully blind, but they do regret that things “weren’t known”. They were as surprised and upset as the rest of us. And their lawyers kept making them do things they wished they didn’t. But they were very sorry. None of it was anything to do with them, but they were definitely very sorry.

Rupert and James Murdoch, strangers in their own company, mystified to discover that someone — they’re not quite sure who — had been doing terrible things and covering it up.

The performances differed, of course. Rupert played the doddery old man, Charles Foster Kane on the blasted heath. His family and entourage looked, rightly, worried whenever he opened his mouth. His incessant banging of the table and his bizarre introductory non sequitur, declaring how humbled he was — a line doubtless hours in rehearsal — seemed liked the actions of a confused nursing home resident. At one stage, he even declared he couldn’t remember his own words uttered mere days before.

James was altogether more corporate. He offered a smoother, better-coached performance, full of endless blather about process, chewing up time asking for questions to be repeated, but insisting that they were good questions, important questions, and he really wanted to answer them. But, sadly, much of the detail wasn’t quite at his fingertips.

Indeed, James never quite admitted that he knew anything about anything. And time and again, he relied on the circular reasoning that because external inquiries gave News International the all-clear, he had no reason to suspect anything was wrong. The only flaw — plainly unmentioned by either Murdoch — was that the company had crippled those external inquiries, including police investigations, by ensuring they never saw the relevant evidence.

They were helped by some soft questioning from the assembled MPs.  The chief parliamentary prosecutor of the scandal, Labour’s Tom Watson, made a withering start. He humiliated Rupert with a barrage of questions about what he knew about major elements of the scandal and kept James, desperate to assist his flailing father, silent. It made for car-crash television, and for a moment Rupert’s Old Fool act looked the real thing, as he sat motionless and silent after each question, staring in alarm at his interrogator between desperate glances at his son.

It was so bad, had it continued, Murdoch might have been out of a job within the hour, but the call was passed to other and lesser questioners.

Some extracted useful information. Conservative Philip Davies, backed up by Labour’s Paul Farrelly, tortuously drew out the critical admission from James that the company was still contributing to the legal bills of Glen Mulcaire, the slime who hacked Milly Dowler’s phone messages.  Conservative Louise Mensch reapplied the pressure after the extraordinary and disgraceful lapse in security that allowed an attack on Murdoch, demanding to know why Rupert wouldn’t take responsibility on the same basis that his deputy Les Hinton had.

Watson returned at the close for a parting shot, making James squirm with the suggestion that he release early phone-hacking litigant Gordon Taylor from his confidentiality obligations. Murdoch ducked and weaved but his answer was plain: no way would he risk allowing Taylor to tell his side of the story. Their former law firm Harbottle and Lewis has asked News International to do the same, and been refused.

The rest of the interrogation was inept or plain eccentric.

Mensch’s questions were as near as the committee got to the central issue of this hearing: whether the performance of the Murdochs before the committee could be believed, or whether it was simply designed to insulate them from responsibility. After all, the performance was based on a long-established technique used by corporate executives under siege in major scandals: memories suddenly fade, documents go missing, and bad things are determined to have happened without anyone being around to take the blame except the unfortunate underlings closest to ground zero.  Challenged over whether they were guilty of “willful blindness”, Rupert rejected it, but the phrase was a pithy summary of exactly what they offered in their own defence.

The performance of Rupert in portraying himself as above virtually all the operations of his company was particularly bizarre.  “I’m not really in touch,” he insisted, raising the question of whether being “in touch” wasn’t a basic requirement of an effective senior executive. But people never told him things — not even major decisions involving millions of pounds, he said. He claimed not to know some of the most significant figures in the scandal, long after their arrest. Forced by Davies to admit he phoned the editor of the News of the World on Saturday evenings, he claimed it was merely to ask “what was happening”, and that he was never told anything of substance in those calls. A bizarre claim from a lifelong newspaper man.

James stuck more closely to the corporate crisis management manual, saying he “couldn’t recall” (the favoured line of senior executives under interrogation), that he didn’t have the details, that it was all before his time. And having being compelled, after extended questioning, to admit that  Mulcaire continues to receive money from News International, he insisted it was merely because lawyers said he should. Challenged to cut Mulcaire free, Rupert was forced to say he would, unless he was “contractually” prevented from doing so. The media Gulliver, alas, tied down by Lilliputian legalisms.

It seems, between not being told anything, not being able to remember anything and being forced by lawyers to do things they didn’t want to do, the Murdochs were the helpless victims of an apparently endless parade of incompetent or malicious underlings. The most Rupert would admit to was “laxity”.

The contrast with Rebekah Brooks, who came on after the Murdochs, was striking. While relying on similar lines of self-acquittal, she actually made an effort to answer MPs’ questions and had the grasp of detail to do so, often at length and under heavy fire. You may not have believed Brooks when she explained how finances were managed and delegated within the company and within mastheads, but the woman had a plausible case and put it strongly. The Murdoch males presented no case at all, except their innocence in a world of knaves and fools.

The Murdochs’ performance might have worked for the purposes of the committee hearings but the dilemma it presents for News Corp shareholders and directors is a difficult one.

Based on Rupert’s performance at the committee, either he is entirely out of touch with his companies, an old man routinely given the mushroom treatment about even major decisions in his company, or he lied systematically and repeatedly to a parliamentary committee about his level of oversight. Is either acceptable for a company that insists it is all about trying to be a paragon of corporate virtue?

As for his son, listening to James’ protestations of poor memory, his carefully coached evasions and endless prattle about process, if that’s their next CEO, shareholders might think long and hard about the merits of dynastic succession. After last night, it’s no wonder Rupert wanted to hang on to Brooks.


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