Wow. So this is what a responsive government looks like.

Rupert Murdoch is "not a fit person" to exercise stewardship of a major international company, a committee of MPs has concluded, in a report highly critical of the mogul and his son James's role in the News of the World phone-hacking affair.

The Commons culture, media and sport select committee also concluded that James Murdoch showed "wilful ignorance" of the extent of phone hacking during 2009 and 2010 – in a highly charged document that saw MPs split on party lines as regards the two Murdochs.[..]

Rupert Murdoch, the document said, "did not take steps to become fully informed about phone hacking" and "turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications".

The committee concluded that the culture of the company's newspapers "permeated from the top" and "speaks volumes about the lack of effective corporate governance at News Corporation and News International".

That prompted the MPs' report to say: "We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of major international company."

That's gotta sting a bit. Murdoch shuttered the News of the World last summer as the realization that the publication was routinely phone tapping celebrities, politicians and subjects of their reporting, like Milly Dowling. The thirteen year old was abducted and murdered in 2002. But for six agonizing months, her parents held onto the hope that Milly might be alive, because messages on her mobile phone were being accessed and deleted by a News of the World employee who wanted keep it from maxing out on memory.

It's not clear how binding this report is, nor what impact it will have on Murdoch's broadcasting license of acquisition BSkyB.

Off the back of phone hacking and policy bribery allegations targeted at News Corp-owned News International, Ofcom decided to launch an investigation into whether Murdoch's News Corp is "fit and proper" to hold a broadcasting license in the UK, which it and he does through ownership of BSkyB.

The "fit and proper" assessment comes from the Broadcasting Act 1990 and offers discretion to Ofcom in its judgement as to whether a media owner or operator meets this requirement.

It is the use of the phrase "not a fit person" in the select committee report Tuesday that may suggest the MPs who wrote it and voted to back the report's conclusions are themselves broadcasting a strong signal to Ofcom to revoke BSkyB's license.

Our buddies at TPM have the report in its scathing entirety.

U.K. Prime Minister David Cameron may be in trouble, as the investigation into the Murdoch holdings show they were angling to use their influence with the U.K. government to their own commercial benefit—apparently illegally. And of course, while no one's actually saying it out loud, I think odds are good that the Fox organization was following the same strategy here. Stay tuned!

In 163 pages of paperwork published by the Leveson inquiry, we can see the dialogue between James Murdoch's camp and the office of Jeremy Hunt, the secretary of state for media, who held in his hands the outcome of the biggest deal in the history of the Murdochs' News Corporation, the £8bn takeover of BSkyB.

According to Tuesday's evidence, Murdoch and his lobbyist, Fred Michel, worked their way through every crack in the walls of Whitehall in search of influence and, in Hunt's office, they found friends who would supply them with information, advice and support, even as Hunt claimed to the outside world that he was being impartial and even-handed.

The evidence is likely to be disputed. These are merely Michel's versions of what was said, so they are hearsay. Furthermore, Michel has told the inquiry that his messages that claimed to report conversations with Hunt were in fact based on talking to Hunt's officials, which would mean that they are also secondhand. But, if the evidence stands up, we are looking at a story of secret and improper collusion of precisely the kind that Murdoch's critics suspected.

At a time when Hunt was required to act in the legal role of a judge overseeing Ofcom's inquiry into the bid, this evidence suggests he was secretly supplying News Corp with information about his confidential dealings with Ofcom, advising them on how to pick holes in Ofcom's arguments, allowing their adviser to help him prepare a public statement, offering to "share the political heat" with them, and repeatedly pledging his support for their position.

If proved, this pushes Hunt's political career to the edge of destruction. It cannot help him that his website currently displays an interview describing him as a cheerleader for Rupert Murdoch. But the pressure may not stop there. The question now is whether Lord Justice Leveson will order the disclosure of more emails or other evidence that could conceivably see the prime minister and his government pushed out to the edge as well.

Continue reading »

Warren Buffett has answered the Wall Street Journal's snarky remarks about his tax returns. Today in an interview with Fortune Magazine editor Carol Loomis, he challenged Rupert Murdoch to release his tax returns to the press. Buffett said he'd release his at the same time. Here's the transcript, via CNBC:

CAROL LOOMIS: Well, one of the centers of criticism has been the Wall Street Journal's editorial page.

WARREN BUFFETT: Oh, really? (Laughter.)

CAROL LOOMIS: And they've asked you to give them your income tax statement.

WARREN BUFFETT: Yeah.

CAROL LOOMIS: What do you think about that?

WARREN BUFFETT: Well, I think it might be a terrific idea if they would just ask their boss, Rupert Murdoch, and he and I will meet at Fortune and we'll both give you our tax returns, and you can publish them. (Applause.)

CAROL LOOMIS: We like it. We like it. (Laughter.)

WARREN BUFFETT: I'm ready tomorrow morning.

So far, crickets from Rupert. But then, he may be preoccupied with how he's going to pull his tail out of Rupertgate's fire.

I wouldn't hold your breath on those tax returns, but maybe it'll shut up the whiners over at the Wall Street Journal for awhile, and it's always amusing to watch a verbal game of chicken between two billionaires.

Viet D. Dinh, former Assistant AG and the chief architect of the original USA PATRIOT Act, has had his fingers in oh, so many neocon pies. And now, he's the man who's supposed to bring credibility to the Murdoch clan (insert maniacal laughter here). This is the thing about corruption -- even when you're trying to simulate ethical behavior, it's so foreign to the way you normally do things, you can't quite pull it off. I'll bet it never even occurred to the News Corp. people how this would look from the outside.

News Corp.’s independent directors, obligated to assess Rupert Murdoch and other top executives’ handling of the company’s phone-hacking scandal, are relying for guidance on Viet Dinh, a board member with personal ties to the Murdoch family.

Dinh, 43, is point man between the independent board members and a panel that New York-based News Corp. (NWS) created to cooperate with authorities probing phone hacking by the defunct News of the World tabloid and to evaluate company standards.

A Washington attorney and Georgetown University Law Center professor, Dinh has been a friend of Chief Executive Officer Rupert Murdoch’s oldest son Lachlan since 2003 and is godfather to Lachlan’s second child. In 1992, a decade before they met, the South China Morning Post, then owned by Murdoch, helped Dinh free his sister from a Hong Kong refugee camp.

“Usually it’s required that an investigation like this is undertaken by a committee of independent directors,” said Jay Lorsch, a Harvard Business School professor who has served on the boards of four publicly traded companies. “It’s very hard to be objective if you’re involved in any way -- financially or emotionally -- with the family of the chief executive you are supposed to be supervising.”

Dinh will update directors on the scandal at an Aug. 9 board meeting in Los Angeles, two people familiar with the situation said. The “management and standards” committee, established by News Corp. last month, reports to board member and Executive Vice President Joel Klein, a former assistant U.S. attorney general and New York City schools chief, who then reports to Dinh, the company said in a July 18 statement.

When Rupert Murdoch gave his testimony earlier this week in London, former New York City School Chancellor Joel Klein was sitting directly behind him. After a stormy tenure in New York City where he fought teachers unions and closed schools according to the Michelle Rhee School Destruction Model, he left and took what looked to be a cushy job at News Corp helping Murdoch launch his for-profit education products.

Getting in the middle of another public dustup was the last thing on his agenda when he joined Murdoch’s media empire last November as a $2 million-a-year executive vice president, leaving his flap-prone post as chancellor of New York City’s school system to sit on News Corp.’s board of directors and advise the company’s entry into the for-profit education market. Klein is nothing if not savvy in the ways of big media companies; his wife, Nicole Seligman, is chief counsel for the Sony Corp.

But Klein doesn't just have ties to Rupert Murdoch. He's also "like this" with Michelle Rhee from his time in New York.

GothamSchools.org, in 2009:

Michelle Rhee touted her red-track/green-track teacher pay proposal last night at Pace University, saying it’s made such a splash that Mayor Bloomberg asked Chancellor Joel Klein if they could bring a similar model to New York. The proposal, which is being negotiated with the D.C. teachers union right now, would award some first-year teachers nearly $40,000 raises in exchange for giving up their tenure rights — while others could choose a “red” path where they retain tenure but are paid less.

Rhee said the model came up in a recent chat with Klein, who she said she speaks to regularly to share “best practices” and to commiserate. Klein told her that Mayor Bloomberg had asked if they could bring the red/green plan to New York.

“Apparently Klein said to him, ‘Not even you have enough money to do all of that in New York City,’” she said. Rhee’s plan, if passed, will be financed by private philanthropy for the first five years, she said.

See that private philanthropy claim there at the bottom? This is a Rhee hallmark. She rides into school districts on promises of private benefactors if only those schools will just clean up their acts and get it together the way she envisions. She doesn't name the private benefactors, so let me name a few who spend millions of dollars on Rhee's enterprises: Devos, Walton, and the Friedman foundations, whose sole goal is to turn public school districts private.

She'll deny that, of course, but as was reported over at Daily Kos, she slipped up and let it out with regard to Tennessee:

In essence, Rhee has been edging out of the closet on this issue, showing her opposition to collective bargaining first and foremost through her actions, but slipping every now and then and letting it come through in her words. That's what happened in Tennessee over the weekend, in which she talked about her support for school vouchers privatization, and:

She also praised the Tennessee legislature for its recent stances on education, calling its work "aggressive and courageous laws."

That would be a clear reference to the Tennessee bill eliminating collective bargaining and preventing teachers' unions from making campaign contributions or lobbying the state legislature; it was passed at the same time as a bill allowing corporations to give direct contributions to political candidates. To this point, Rhee has been working the "Democrat who saw the light" angle as she works overwhelmingly with Republicans. That image has deteriorated to the point where she had to shore up her credentials as a non-Republican by hiring DNC spokesman Hari Sevugan to shill for Students First. But at this point, you have to wonder why she's making the even a halfhearted effort to pretend she's anything but a John Kasich-Rick Scott-Scott Walker Republican when it comes to education issues.

The Nation ties it up in a nice neat package:

But what’s been less well understood is the impact the scandal might have on Murdoch’s attempt to make a profit off the American public sector, most notably through seeking to provide technology services, such as data-tracking systems and video lessons, to public school districts. Last November, shortly after hiring Klein, News Corp. acquiredWireless Generation, an education technology firm that had worked closely with Klein during his tenure as chancellor on two projects: ARIS, a controversial (and buggy) data system that warehouses students’ standardized test scores and demographic profiles; and School of One, a more radical attempt to use technology to personalize instruction, reorganize classrooms, and reduce the size of the teaching force.The acquisition put Klein, who was set to supervise Wireless Generation, in an awkward position vis à vis city ethics regulations.

Back to those non-profits for a minute. It's no secret that Rhee has set a goal of securing $1 billion in donations for her Students First organization in order to evangelize her message to reform privatize our public school system and destroy unions. Those goals are perfectly in line with Murdoch's business model with regard to his education products too. So do they have a connection, given the common links with Klein? Possibly, as The Nation reports.

But scrutiny on Murdoch’s school agenda is growing. Aware of the media titan’s relationship with former DC schools chancellor Michelle Rhee, education reporter Alexander Russo tried to find out if Murdoch had donated toStudentsFirst, Rhee’s PAC. The group’s goal is to act as a political counterweight to teachers’ unions.“After two days of emails and phone calls—they must have been freaking out behind the scenes trying to figure out what to do—a Rhee spokesperson would neither confirm nor deny the Murdoch money,” Russo wrote.“Our policy doesn't allow me to reveal who our donors are or aren't,” the spokesman said.

Watch this space for more. It would be great if the FBI would look at those ties in addition to what they're already investigating. I'll be watching.

I confess that for the most part I found the Murdoch testimony before Parliament today to be predictable, frustrating, and boring. So boring, in fact, that I dozed off just before the Great Murdoch Pie Face moment. However, there actually were some revelations. One of the more interesting one is the one John Dean discusses with Keith Olbermann in the video above.

In the course of testimony, it came out that Glenn Mulcaire's legal bills are being paid for by News Corp. Mulcaire is the "private investigator" who hacked into murder victim Milly Dowler.

Telegraph:

Mr Murdoch said: "I asked the question myself and I was very surprised to find the company had made certain contributions to legal settlements.

"I don't have all of the details around each of those - not legal settlements sorry, legal fees - I was surprised, I was very surprised to find out that had occurred.

"They were done, as I understand it, in accordance with legal counsel and their strong advice."

Asked who signed the cheques, Rupert Murdoch said "it could have been" Les Hinton, head of News International at the time, or, alternatively, the chief legal officer.

It was put to the Murdochs that their company had been paying legal fees for Mulcaire, a "convicted felon" - a charge James Murdoch admitted.

He said: "I do know certain legal fees were paid for Mr Mulcaire by the company and I was as surprised and shocked to learn that as you are."

But he denied the fees were paid to buy Mulcaire's "cooperation and silence", saying: "When the allegations came out I said: 'Are we doing this? Is this what the company's doing?'

"The strong (legal) advice was that from time to time it's important and customary even to pay co-defendants' legal fees."

Other things I learned: James Murdoch is the one to watch out for. Rupert Murdoch is his old, crotchety, middle-finger-in-your-face-as-always guy, but James is one smooth operator. Always ready with a concerned look, contrite words, and a very long-winded answer, he restated what everyone else said, which was basically to say nothing.

This exchange is a perfect example. Yes, we paid his legal fees because someone else told us to, but also yes, we're all about being hands-on with the company and oh, by the way, did I forget to say I'm sorry?

Rebekah Brooks handled her testimony in a similar fashion, but was treated far more harshly by the panel questioning her. Not that she doesn't deserve harsh treatment. She does. But compared to the kid-glove treatment of the Murdoch duo, she was raked a bit harder.

Bottom line? Much like Congressional hearings here in the US, these were largely for show and not substance. The real hearings to watch will be the ones where criminal charges are brought, which I believe will happen at some point.

Just when you thought that a crazy news week was going to end on a mellow note this Friday, boom went the dynamite within Rupert Murdoch’s corrupt media empire. Just a little while ago news broke about yet another blockbuster resignation from Murdoch’s rattled camp. This time it is Les Hinton, who has been Murdoch’s lieutenant for more than 50 years. More from the Guardian, which has been all over this:

Some more now on the career of Hinton, who served for 12 years as Executive Chairman of News International.

Before that, he spent 20 years working in the US, first as a correspondent for the company's newspapers in the UK and Australia and later in a series of senior management positions at its publishing and television business units.

So just how bad and big is this latest development? As Eric Boehlert from Media Matters tweeted a little while ago:

In the last month Murdoch has lost his News Corp general counsel, his @WSJ publisher and his Brit newspaper CEO

Adding this:

Does the canning of Brook and @WSJ Hinton mean that News Corp might have evidence that shocking 9/11 hacking allegation are true?

Good question all around. Reminds me of this question posed in 2008:

Has Roger Ailes been keeping tabs on your phone calls?

Fox laughed it off back then but it is not so funny any more. Guess we will have to stay tuned as the situation around Murdoch continues to unravel.

(Here's FOX News finally covering Rupertgate)

I've been calling for News Corp. to be investigated in America and so have many other bloggers and that seems to taking hold across the political landscape. Finally, it's happening, thanks to Rupertgate.

Not that I trust Rep. Peter King, but I'll take his words at face value:

New York Rep. Peter King (R) has called on the FBI to investigate allegations that journalists working for Rupert Murdoch's News Corp. hacked into the phones of victims of the September 11th attacks.

"It is revolting to imagine that members of the media would seek to compromise the integrity of a public official for financial gain in the pursuit of yellow journalism," King said in a letter to FBI Director Robert Mueller. "The 9/11 families have suffered egregiously, but unfortunately they remain vulnerable against such unjustifiable parasitic strains."

According to the U.K.'s Daily Mirror, a former New York City police officer who now works as a private investigator claims that News Of The World reporters asked him to get the phone records of dead victims of 9/11, from the days leading up to the attacks. "[The investigator's] presumption was that they wanted the information so they could hack into the ­relevant voicemails, just like it has been shown they have done in the U.K.," a Mirror source said.

Washington Post:

The FBI has opened a preliminary inquiry into allegations that News Corp. employees sought to hack into the phones of victims of the Sept. 11 terrorist attacks and tried to bribe law enforcement officers for information, U.S. officials said Thursday.

FBI agents are reviewing information on the phone-hacking scandal engulfing Rupert Murdoch’s British media operations and trying to determine if U.S. laws were broken, the officials said. Murdoch is chairman and chief executive of News Corp., which is based in New York and has extensive U.S. operations.

While it is unclear if the review will expand into a full investigation, the FBI’s involvement heightens the scrutiny faced by the media giant, which is under intense fire in Britain over allegations that its journalists hacked into the phones of thousands of people.

The FBI probe also raises the politically delicate possibility that the Obama administration— which has questioned the objectivity of News Corp.’s Fox News — could bring criminal charges against employees of the network’s parent company. Murdoch is a political conservative, and last year he directed a $1 million contribution to the Republican Governors Association on behalf of News Corp.

Murdoch's UK rags have had a disastrous effect on England's political landscape as they've boasted that they won many an election for their favorites.

The scandal that has collapsed the British tabloid News of the World and rocked the News Corp. empire, brings into question the pervasive influence of Rupert Murdoch's media holdings on British media and politics. The past five prime ministers have courted Murdoch assiduously in gaining and holding onto office — none more so than Labour's Tony Blair. In plotting his path to 10 Downing St. in the mid-1990s, Blair once flew to an island off the coast of Murdoch's native Australia to address an annual meeting of News Corp. That impressed Murdoch, who threw his support behind Blair's New Labour movement.

I think they should have been investigated when Roger Ailes unleashed the NY Post's Page Six tabloid trash to attack Keith Olbermann when he was feuding with Bill O'Reilly:

Rupert Murdoch's handmaidens over at the New York Post this morning jumped into a feud between their Fox News shouting head Bill O'Reilly and MSNBC ranter Keith Olbermann. The tabloid's gossip page ran an item dredging up various minor controversies involving Olbermann dating back to his ESPN days, up through an alleged spat between Olbermann and fellow MSNBC personality David Gregory last Tuesday over camera time.

They did the same thing to Andrea Mackris when she sued Bill O'Reilly too.

Mackris has also drawn her share of negative coverage. The New York Post, which is owned by the same parent company as Fox, ran the headline " 'Lunatic' O'Reilly Gal Went Nuts in Bar." But she kept up the public pressure, telling the New York Daily News that her father wanted to challenge O'Reilly to a duel.

Howard Kurtz has more on the Ailes threats to Jeff Zucker:

Bill O'Reilly, the Fox News star, is mounting an extraordinary televised assault on the chief executive of General Electric, calling him a "pinhead" and a "despicable human being" who bears responsibility for the deaths of American soldiers in Iraq.

On the surface, O'Reilly's charges revolve around GE's history of doing business with Iran. But the attacks grow out of an increasingly bitter feud between O'Reilly and the company's high-profile subsidiary, NBC, one that has triggered back-channel discussions involving News Corp. owner Rupert Murdoch, Fox News Chairman Roger Ailes, NBC chief executive Jeff Zucker and General Electric's CEO, Jeffrey Immelt.

Ailes called Zucker on his cellphone last summer, clearly agitated over a slam against him by MSNBC host Keith Olbermann. According to sources familiar with the conversation, Ailes warned that if Olbermann didn't stop such attacks against Fox, he would unleash O'Reilly against NBC and would use the New York Post as well.

Both Fox and the Post are owned by Murdoch, who complained about Olbermann's conduct in separate calls to Zucker and Immelt.

The high-level appeals failed, and O'Reilly has escalated his criticism of GE in recent weeks, declaring, "If my child were killed in Iraq, I would blame the likes of Jeffrey Immelt."

How many other times did News Corp unleash the dogs or threaten to against their rivals that we don't know about? That is: How many times did the threats succeed? A lot, I'll bet.

Rebekah Brooks has resigned from News International in the wake of the phone hacking scandal. She released a carefully-worded letter to the staff.

Via The Guardian:

At News International we pride ourselves on setting the news agenda for the right reasons. Today we are leading the news for the wrong ones.

The reputation of the company we love so much, as well as the press freedoms we value so highly, are all at risk.

As Chief Executive of the company, I feel a deep sense of responsibility for the people we have hurt and I want to reiterate how sorry I am for what we now know to have taken place.

I have believed that the right and responsible action has been to lead us through the heat of the crisis. However my desire to remain on the bridge has made me a focal point of the debate.

This is now detracting attention from all our honest endeavours to fix the problems of the past.

Therefore I have given Rupert and James Murdoch my resignation. While it has been a subject of discussion, this time my resignation has been accepted.

Rupert's wisdom, kindness and incisive advice has guided me throughout my career and James is an inspirational leader who has shown me great loyalty and friendship.

I would like to thank them both for their support.

I have worked here for 22 years and I know it to be part of the finest media company in the world.

News International is full of talented, professional and honourable people. I am proud to have been part of the team and lucky to know so many brilliant journalists and media executives.

I leave with the happiest of memories and an abundance of friends.

As you can imagine recent times have been tough. I now need to concentrate on correcting the distortions and rebutting the allegations about my record as a journalist, an editor and executive.

My resignation makes it possible for me to have the freedom and the time to give my full cooperation to all the current and future inquiries, the police investigations and the CMS appearance.

I am so grateful for all the messages of support. I have nothing but overwhelming respect for you and our millions of readers.

I wish every one of you all the best.

Rebekah

The wording of the letter suggests she had tried to resign already and had her resignation refused. The part about having time to correct the record seems to be CYA language in light of the downward spiral News International has been on over the past couple of weeks.

Take rumors for what they're worth here, but it appears that at least one member of the Murdoch family was quite unhappy about Ms. Brooks. Elisabeth Murdoch is reported to be furious over the scandal.

The 42-year-old is said to have privately “railed” against the News International chief executive and former editor of the News of the World.

Miss Murdoch, who is set to be given a seat on the board of her father’s News Corp empire, told friends that Mrs Brooks had “f----- the company”.

Meanwhile, if one were to watch only Fox News, they would have no clue anything untoward was happening elsewhere, because it's "the subject [they're] not talking about today."

Gee, I wonder if this will be discussed on any of the Fox News shows:

Responding to allegations from several Washington lawmakers, the FBI has opened an investigation into whether Rupert Murdoch's News Corp. attempted to hack into the telephones of victims of the Sept. 11, 2001, attacks and the families of those who died.

According to federal law enforcement sources, the decision by the FBI's field office in New York to launch the criminal probe came after several members of Congress raised concerns in letters to FBI headquarters, questioning whether reporters for the media empire may have tried to compromise Sept. 11 victims just as they reportedly hacked into the phones of numerous individuals in England.

"We are doing this based on their requests," said an FBI source, who asked not to be identified because the investigation is just getting underway. "But after reviewing the letters and their allegations, and after consultation with the U.S. Attorney's Office in New York, we are proceeding."

At the Department of Justice, officials also acknowledged they are "reviewing" the allegations by Rep. Peter T. King (R-N.Y.), chairman of the House Homeland Security Committee, and others that Sept. 11 victims and families may have been put at risk by News Corp.

"If these allegations are proven true," King wrote in his letter to FBI Director Robert S. Mueller III, "the conduct would merit felony charges for attempting to violate various federal statutes related to corruption of public officials and prohibitions against wiretapping. Any person found guilty of this purported conduct should receive the harshest sanctions available under law."

Maybe Bill O'Reilly can invite King -- a frequent guest -- onto his show to discuss this, eh?

The New York Times has more, as does the U.K. Telegraph.

Question of the Day: Will Darrell Issa investigate?