Rupert Murdoch
Rupert Murdoch

News Corp has donated at least US$1 million to powerful United States business lobby group the US Chamber of Commerce (CoC), which aims to restrict class action litigation in Australia and globally, Inq has learned.

At the same time News Corp’s national masthead The Australian has stridently campaigned for changes to class action litigation funding in line with the CoC’s goals, though the newspaper has not declared its relationship with the CoC.

Inq can also reveal that in 2017 News Corp was forced to settle a $300 million class action in the United States in relation to the actions of one of its subsidiaries.

In a series of announcements over the last week, federal Attorney-General, Christian Porter and Treasurer Josh Frydenberg have moved to place new restrictions on class action funding in Australia, limit shareholder class actions against companies, and examine class action funding via a federal parliamentary inquiry.

As Inq reported last week, the attorney-general has used identical messaging to that used by the CoC’s Institute for Legal Reform in its global lobbying effort to change national laws. 

The messaging has it that class actions benefit litigation funders and lawyers at the expense of “mum and dad” claimants. Porter and the institute cited the same legal case to demonstrate the point — as did The Australian’s Janet Albrechtsen, who wrote in praise of Porter’s move to have an inquiry. Albrechtsen says the move could herald the end of “the predator’s picnic that is Australia’s litigation funding industry”.

As Inq has discovered, News Corp has real skin in the game when it comes to class action litigation and how it is funded — though it declares none of this to readers.

In 2017 the company settled a class action brought by six major food companies in the United States. The companies, including H J Heinz Co, alleged that a News Corp subsidiary had monopolised the market for third-party, in-store promotions by entering into anti-competitive contracts with retailers, thus pushing up the cost of promotions for the food companies.

“This is what class actions were meant to be,” said solicitor Steven Benz, the lawyer representing the corporations, “because we had a monopolisation of a market that needed to be remedied.”

News Corp’s US$1 million donation to the CoC was revealed in 2011. The CoC’s membership list is secret but includes mega corporations such as Dow Chemicals, Koch Industries, Chevron and Walmart according to research by the not-for-profit Chamberwatch

Democratic Senator Sheldon Whitehouse told the US Senate that the CoC represented the interests of “giant corporations, international corporations, and the ultra-rich”. In a three year period it had involved itself “in roughly 500 cases as either a plaintiff or an amicus curiae, an interested party deemed a friend of the court”, frequently on behalf of the fossil fuel industry.

News Corp made its donation when the Institute for Legal Reform was lobbying to change the Foreign Corrupt Practices Act, a law that punishes US-based companies for bribing foreign officials. At the time News Corp faced the prospect of being charged under the FCP law following revelations that its UK papers had hacked the phones of innocent people and secretly paid public officials for information.

Rupert Murdoch acknowledged the company’s payment to the CoC but said it was linked to a campaign to get Republicans elected to public office.

The CoC, through the Institute of Legal Reform, has consistently worked to weaken class action litigation and has seen Australia as a major target. 

In one of several interviews given to The Australian during lobbying trips to Australia, former institute president Lisa A Rickard said American businesses had “grave concerns” over recent litigation developments around the world.

The Australian reported Rickard as saying that “as Australia goes, so will go the rest of the world” on third party litigation funding regulation.

The Australian has never declared that its owner, News Corp, has supplied funding to the very lobby group it reports on and whose aims it supports editorially.

US reports have speculated that News Corp has made more donations to the CoC than the one acknowledged by Murdoch. The Institute of Legal Reform has refused to provide any comment to Inq. News Corp has refused to say whether or not it is a member of the CoC or if it continues to put money into the coffers of the CoC and or its Institute for Legal Reform.

The connections between the CoC, News Corp and the Australian government’s decisions in relation to class actions and litigation funding underscore the opaque nature of how lobbying works in Australia.

So what rules are there to stop a media organisation pushing a commercial barrow through its editorial pages?  

Journalist union MEAA told Inq that News Corp titles have no staff-agreed charter of editorial independence (in contrast to the former Faifax papers). Instead there was a general MEAA code of conduct requiring that journalists disclose conflicts of interest “that affect, or could be seen to affect, the accuracy, fairness or independence of your journalism”.

The code also says that journalists should not allow advertising or other commercial considerations to undermine accuracy, fairness or independence.

The Australian Press Council told Inq that questions of institutional conflict of interest were covered by the council’s standards of practice and included three “general principles” that media organisations should observe. They are:

  • Ensure that factual material in news reports and elsewhere is accurate and not misleading, and is distinguishable from other material such as opinion
  • Ensure that factual material is presented with reasonable fairness and balance, and that writers’ expressions of opinion are not based on significantly inaccurate factual material or omission of key facts
  • Ensure that conflicts of interests are avoided or adequately disclosed, and that they do not influence published material.

In reality the impact is relatively low level. Media organisations will typically acknowledge instances where journalists accept travel or hospitality they might be given in putting together reports.

Yet there is no meaningful penalty for a media organisation that fails to declare a conflict of interest when it seeks to change government legislation or policy.

Inq asked News Corp for its comment on questions of editorial independence but News declined to address them.

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