Every few hundred thousand years, the magnetic field of the earth reverses. If it happened today, then compasses that once pointed north would suddenly point south, and all our understandings would have to be realigned. Last night, something similar happened in the world of  media, politics and power with the appearances of James and Rupert Murdoch before the British parliamentary committee. Once, being close to Murdoch was a political plus. Now politicians can't get away from him fast enough, and having met him and his lieutenants is a political liability. For decades, the legend of Rupert -- the man who knows everything -- has persisted. We have been asked to believe that he has his fingers on the politics of every country in which he owns media, and the editorial policies of every newspaper he owns. That he is always watching. But last night his evidence could have been summed up by his words half way through, when asked about his dealings with editors: "I am not in touch." What many have suspected is now made clear: he is not always watching. His hand is no longer firmly on the tiller. He is losing, or has lost, his touch. Certainly in this affair not knowing things might have been convenient, but Murdoch was clearly not faking it when he claimed not to have been told about key moves and revelations in the affair. He looked like an old man. Apparently hard of hearing, he had difficulty in understanding questions and difficulty in recalling or clearly stating even basic facts about the affair on which he had been called to account. Certainly it is understandable that as CEO of a global media company he might not have been across the details of a newspaper that represented a tiny part of his empire. But his answers last night -- and some of the answers of his son James -- suggested he had not been reading the clippings of papers like The Guardian over the last six months, after the affair went toxic and began to represent a major reputational risk for News Corporation. Murdoch's habit of slapping the table to make a point, which for years has caused editors and others to quake, looked less like authority and more like the sad mannerism of an old man trying to assert his authority -- like the thump of a walking stick on sidewalk. Long before Lear-like tragedy lurched into melodrama when a member of the audience threw a custard (well, shaving cream) pie, it was not hard to feel sorry for Rupert. In the early parts of the hearing, I was thinking it would not be too strong to say he looked broken. His statement early on "this is the most humble day of my life", and his later emotional recount of how his father had given him a newspaper so that he could do good, were convincing. He looked like a man whose self image, whose internal narrative and personal mythology, had taken a body blow. And yet later, there were signs of the old arrogance, and suggestions the full implications of the affair still haven't hit home. The dropping of the BSkyB bid was because competitors had "caught us with dirty hands and they built hysteria around that", he said. And who was responsible? Would he resign? Certainly not, he said. The people who were responsible were the lieutenants who had let him down. They should pay. And "I think I am the best person to clear this up". By then it was surely hard to agree. James Murdoch's performance was more assured. He proved he can perform under pressure. News Corp shares increased in value on the New York Stock Exchange during the hearing, surely because the market had been factoring in a disastrous performance. It was not that. Yet it is achingly clear this is the beginning, not the end of the calling to account. The most shocking revelation was that the company had been, and probably still is, paying the legal fees of convicted criminals, namely the private eye who hacked murdered schoolgirl Milly Downer's phone, Glen Mulcaire. James declared himself "surprised and shocked" when he found this out. Yet it took the MPs asking directly to extract a promise this would stop, providing doing so did not breach contracts. James made it clear he would not release civil litigants from confidentiality clauses in out of court settlements, so they could tell more about what was done to them. Why not? The MPs did not manage to extract an answer, due to limited time. And if the Murdochs claimed to have been misled, who misled them? Rupert said he would trust News International CEO Les Hinton with his life, and indicated he also trusted Rebekah Brooks. So who is to blame? He seemed to finger former editor Colin Myler, saying it was he who had briefed lawyers who conducted the internal inquiry into the affair. But within minutes Myler had issued a statement denying that he had any role in this. And what about the key folder of emails that, according to what Lord Macdonald told another parliamentary committee contained "blindingly obvious" evidence of payments to police and criminal conduct? Who saw it? Who prevented it from being properly investigated? There were no clear answers. Nor was James really able to explain who made the decisions to make out of court settlements. He claimed to have become aware of the extent of the problem at News of the World only in late 2010, as civil cases lead to more evidence emerging. Since then, he said, the company had handed everything over to the police and was fully cooperating with inquiries. In short, the performance of the Murdochs was little better than a holding statement. Key questions remain unanswered, or not answered in any credible fashion. James showed his skills, there was a clear suggestion that he is effectively the boss. But they were clearly very, very far indeed from in the clear. Following all this Brooks had little to add. It was more of the same. She knew nothing. She learned about the hacking of Milly Downer's phone when she read about it in The Guardian. So who did she blame? She couldn't comment thanks to criminal investigations. We know there is more bad news for News International to come, because Brooks told her staff so when she announced the closure of the newspaper. There were some hints of what it might be. MPs last night asked James if he was aware of any investigations into News International by taxation authorities, the major fraud squad or the financial services authority. He said he wasn't aware of any such investigations. There was also a question about what he would do if News International staff were found to have hacked databases. This affair has only just begun. It will run for years. But nobody who saw Murdoch give evidence yesterday could retain in their mind the image of an all powerful, dominant mogul. He is an old man, perhaps a broken man, though still with temper and bite. So what, if anything, does all this mean for the Australian arm of News Corporation? I would suggest the Murdochs' performance, and their description of how delegation works in the company, makes it clear what I have long suspected -- that the local lieutenants have become much more powerful and important over the last decade as News Corporation internationally became more an entertainment company than a journalism company. Certainly there is a strong international corporate culture, and those who rise within News Limited are comfortable fitting in with and sustaining that culture. The culture has both good points and weaknesses. But when it comes to particular stories and particular issues, the strengths and weakness of News Limited newspapers are those of the local bosses. It is hard to believe Rupert is following closely, even though he doubtless makes his views known, and editors are quick to jump and guess at his wishes. It would be wrong to assume that, if he wasn't paying attention to News of the World, that he cares all that much about the Australian newspapers on a daily basis. Murdoch's evidence suggests that it is News Limited CEO John Hartigan, and title editors, who take credit and blame for what the local mastheads do. After all, when Murdoch spoke to News of The World editors, they apparently didn't think to brief him on out of court settlements worth hundreds of thousands of dollars. So, for example, we can assume the decision to allow to litigate the dismissal of former Herald Sun editor Bruce Guthrie would have been made locally. The Storm imbroglio would have been handled locally. So too the editorial line and the campaigns -- good and bad. The meritorious sustained attention to indigenous Australia by The Australian. The line on the NBN. The line on climate change. Murdoch promised a review of global operations to ensure there was no illegality, and a renewed focus on journalism ethics within the company. It will be interesting to see what that means in practice. What about the idea of a public inquiry into the media in Australia? The Greens want it, the prime minister hasn't ruled it out. Some are saying the terms of reference suggested by the Greens are too broad, intruding on matters of legitimate journalistic practice and discretion. And now the journalists' union, the Media, Entertainment and Arts Alliance, is saying that, on the contrary, the terms are too narrow and what is really needed is a broad inquiry into ownership and the multiple challenges facing the news media. Probably, the inquiry won't go ahead, and there are reasons for this. One of these is that we already have a very important and powerful inquiry -- or investigation -- underway in the Convergence Review. As I wrote a while ago, its latest issues paper suggests it will fundamentally alter media ownership regulation, and many other things besides. Even if we had never heard of the News of the World, we would be facing big changes in the Australian media landscape. So any new  inquiry would have to find a sharp point of difference, and avoid tripping over the feet of the convergence review. What issues are left? There is privacy, but that has already been the subject of inquiries. The only question is whether the government will move on their recommendations. That leaves issues to do with power, its uses and abuses, and the sustainability of media business models, and what that means for society's journalistic capacity. There is no real doubt that in Australia, the News Limited story is about not illegality but the uses and abuses of power. While it would be a brave media CEO who ruled out the possibility that an Australian journalist somewhere, sometime might have paid an official for information, or hacked a phone, nobody suggests the practice is common here, let alone institutionalised in the way it has been in Britain. I would be surprised if any evidence was found. But when it comes to power, there are issues of considerable concern. Leaving aside political bias, what worries me is that News Limited has been a player in the dangerous and murky area of police politics. Two examples make the point. June 12, 2010. Chris Mitchell, editor in chief of The Australian, writes to the Victorian Office of Police Integrity after it had shown him a draft report concerning its investigation into a leak: "I assure you The Australian newspaper will use every journalistic and legal measure available to pursue what can only be described as an outrageous fabrication ... should our concerns not be addressed." And what Mitchell threatened came to pass. What followed was a vigorous campaign against the OPI and the Victorian Police Commissioner Simon Overland, including siccing investigative reporter Hedley Thomas on to the case. At the same time, there was a Federal Court action aimed at suppressing the OPI report. Overland didn't help his own cause, making a series of significant errors of judgement, yet it is also true the News Limited campaign was a factor leading up to his recent resignation. And also in June last year came the allegation, reported by The Age, that Hartigan had told NSW police they could either work with News or against it. The coppers, according to The Age, took this as a threat. Now Hartigan denies having said these words. Here's what he told Leigh Sales on 7.30 last week:
LEIGH SALES: The Age reported in June last year that you personally told a meeting of senior New South Wales police that they could choose to work with News Limited or not, and that paper reported that police took that as a threat, that if they didn't co-operate your group's reporters, that they would receive negative coverage. Are they right in that interpretation? JOHN HARTIGAN: No, they're not. In fact it's the opposite. The Police Commissioner at that time said to me that he had no intention of working with the media in this country. He then went about, in my view, a series of leaking to an opposition newspaper organisation, but he instigated that. I went there to really open the bounds of having a relationship with him; he chose not to. LEIGH SALES: So what did you mean then when you said you can work with us or against us? JOHN HARTIGAN: No, I didn't say that.
Let's take Hartigan at his word and assume the NSW police misunderstood him. There is still the issue of perceptions. And that arises because everyone knows that News Limited is an influential political player prepared to use its muscle. As the continued existence of The Australian -- a loss-making masthead -- proves, News Corporation cares not only about commerce, but also about power. The Australian is, for all its weird campaigns and personal vendettas, home to some of the best journalism in the country. We will be the poorer if and when it closes, as will almost inevitably be the case if Murdoch loses control of the empire, or is forced to sell up the newspaper business. One of the best things about Hartigan's interview on 7.30 last week is that it gave viewers some insight into the self belief that fuels the local News arm. The line he took -- that only The Australian does a proper job of reporting politics in this country -- is sincerely believed and often repeated by journalists I query about why The Oz does what it does. Yet there are also an increasing number of dissenters, and with the realignment of the compass that is taking place due to Murdoch's troubles, more and more of them are coming out. I have been approached by 13 News Limited insiders in recent days wanting to express their concerns -- though not, sadly, on the record. So it is that I heard the story of how Mitchell was "excited" about running this story putting The Age editor-in-chief Paul Ramadge on the front page and accusing him of presiding over database hacking. The story, my sources said, was clearly recognised by insiders as a long bow, but in Mitchell's eyes it was legitimate because, in his view, Fairfax newspapers had erred in putting the News of the World story on the front page day after day. This was meant to put them in their place. Now, there is a legitimate point buried there somewhere. Journalists do work in the world of the unauthorised disclosure. And it is fair to ask what divides the publication of stolen information -- such as WikiLeaks -- from what the News of the World has done. The answer, as every journalists' code makes clear, is serving the public interest. It is worth spelling out the differences between what The Age did in the ALP database story, and what the News of the World did. Most importantly, The Age declared what it had done in its original story, detailing its sources and how it obtained the information. Not so the News of the World. Second, it hacked nothing. Instead, it used passwords provided by those who had authorised access to the database. This makes the story analogous to a leak, rather than a hack. And no journalist is going to oppose leaking. Lastly, while the story was arguably overplayed (surely we all knew that political parties kept such information), there was undeniably a public interest component. So why did The Oz go after the all too mild mannered Ramadge? Once again it is about power. In the United Kingdom, humble and repentant is the flavor of the Murdoch approach at present, albeit with that tetchy hammering of the table, the signs of continued arrogance. But here in Australia, it is all about attack, all about self belief and an almost narcissistic inability to tolerate criticism. The paper has systematically turned on its critics -- and even those who merely report criticism. In the last week the ABC, Fairfax and Communications Minister Conroy have all come in for return fire. Locally, News Limited asserts that the News of the World crisis has nothing to with it. There is no need for humility. Yet this crisis does change things locally. Never again will it look good or wise for politicians or police to be seen as close to News Limited, or any other journalistic organisation for that matter. And that is a major realignment. It should mean that arrogance and attack is less sustainable. But will it? True north is no longer where it used to be. In the months ahead, a lot of people -- police, politicians and media organisations -- will have to explore new ways forward.