Rupert Murdoch's Crusading Corporation

Chapter 11 of my new book 'Rupert Murdoch: an investigation of political power'


I think what people don't understand about me is that I'm not just a businessman working in a very interesting industry. I am someone who's interested in ideas.

Rupert Murdoch,1995

The 2004 convention of the Republican Party held in New York's Madison Square Garden was a triumph for President George W. Bush. Still lauded by many as the hero of the Iraq war, Bush went on to defeat John Kerry for the presidency later that year. At the end of the Republican convention, as most delegates were streaming out of their seats, a revealing incident occurred. Dozens of delegates turned to where CNN had its convention-floor set. CNN hosts Judy Woodruff and Wolf Blitzer were still doing post-convention interviews when the delegates began chanting WATCH FOX NEWS! WATCH FOX NEWS! The delegates saw Fox News as their friend and CNN as the enemy in their midst.

CNN once infuriated someone else. Riding his daily exercise bike Rupert Murdoch used to frown at the successful news network and dream of building a TV news operation to rival what he called the 'liberal' and 'left leaning' CNN. Today CNN's rival flourishes and consistently beats CNN in the ratings war. Rupert Murdoch's Fox News is a powerful persuader in US politics. It is credited with not only influencing its loyal audience but with affecting the tone of all US television, summed up in the term, 'the Fox News effect'. Its shouting heads broadcast a nightly mantra of fear-filled messages to its three million viewers. Its swirling graphics and dramatic music intensify its 'Fox News Alerts' about the latest threat from terrorists, liberals, gays -- and Democrats. President Barack Obama has been a particular target.

When he was running for the Democratic nomination in 2007, Fox News commentators rushed to air with a false report that as a child growing up in Indonesia Obama had been educated at an Islamic school, a madrassa. For post-9/11 America, an association with a madrassa was likely to prompt an association with Islamic terrorism. Later, during the presidential campaign, one Fox commentator flippantly suggested that he and Michelle Obama had greeted each other with a 'terrorist fist jab'. The commentator apologised, as did another Fox commentator who joked about assassinating Obama and Osama bin Laden after supposedly muddling their names. Throughout the campaign for president in late 2008 one of Fox News' belligerent hosts, Sean Hannity, nightly attacked Obama for being an 'arrogant elitist' and suggesting he had been a friend of terrorists and black radicals, echoing pro-Republican attack ads. Obama referred to these as 'rants from Sean Hannity' and was particularly upset at attacks on his wife, Michelle.



In the middle of the 2008 campaign Rupert Murdoch met Obama along with Fox News chief Roger Ailes. Obama sought common ground with Murdoch, asking about his relationship with his father (the subject of Obama's Dreams of My Father) but to Ailes he said that he didn't want to waste time talking if Fox was going to keep attacking him and his wife and relentlessly portraying him as 'suspicious, foreign, fearsome -- just short of a terrorist'. Ailes suggested he appear on the channel and after the meeting relations between the future presidents minders and the news channel normalised though the hostility of its talk show hosts barely moderated. When Murdoch's biographer Michael Wolff, reported the meeting in Vanity Fair, stating that Murdoch was sometimes embarrassed by Fox News, Ailes was outraged and Murdoch quickly denied the report and praised Ailes. While Murdoch regularly denies Fox News is politically aligned this sits oddly with the presentation to Roger Ailes in 2011 of the Luce award, a top honour from the powerful right wing think tank, the Heritage Foundation, 'for contributions to the conservative movement'.

Rupert Murdoch had another, less direct, connection to the Republican campaign for the presidency that year. One of his editors 'discovered' Sarah Palin, promoted her as a rising Republican star and then supported her when she became the vice presidential candidate beside John McCain. Bill Kristol, editor of the Weekly Standard, Murdoch's insiders' magazine, visited Alaska on a cruise ship along with other leading US conservatives. He met Palin who was the Republican Governor of Alaska and later Kristol's neo-conservative Standard described her 'shining victory' as governor while the rest of the Republican party was demoralised.

As it turned out, Fox News' support for the McCain/Palin ticket and its relentless hostility to Obama was not enough to stem the tidal wave of support for him. But this was just the beginning. To mix a metaphor, Fox didn't change its spots. Obama's victory lifted the hopes of many Americans, but deeply troubled many conservatives. Conservatives saw their chance to fight back when Obama increased government spending to cope with the worst financial crisis in 80 years. Within a few months of his inauguration, a new political phenomenon was born, the 'Tea Party', which attacked the spending and tax increases needed to deal with the global crisis. For the first time in many years, conservative political action took the form of angry street protests. Fox News leapt on this and its talk show hosts urged their audience to support the rallies while Fox News website gave locations and times of the rallies. A particular devotee of the street protests was Fox News' new host, Glenn Beck, whose incendiary remarks accusing Obama of being a 'racist' with 'a deep seated hatred of white people or the white culture' shocked many. In the weeks before the first major Tea Party rallies in April 2009 Fox News aggressively promoted them, urging viewers to 'vent your anger'. At the rallies, several high profile hosts including Sean Hannity, Neil Cavuto and Greta Van Susteren, as well as Beck, gave live coverage. Nor was this merely Fox News. Murdoch's New York Post backed the anti-Obama tea parties right from the start, with editorials headed 'Time to make some noise'. Like Fox, the Post gave times and locations of rallies.

Fox News also consciously manipulated the language of political debate. When Obama's health package was being discussed, a senior Fox News executive sent a 'friendly reminder' to staff urging them to use the term 'government-run health insurance' and to avoid the term 'the public option'. If the latter phrase had to be used, it was better to refer to 'the so-called public option'. In similar fashion the New York Post routinely referred to 'government-run health care' and the 'so-called public option'. On cue, editorials in the Wall Street Journal also began to regularly refer to the 'so-called public option' and 'government-run' health care. This coincided precisely with the advice given by Republican strategists to their party.

The White House was rattled by the Tea Party rallies and described Fox News as a wing of the Republican party. Obama's spokeswoman, Anita Dunn, said that when Obama appears on Fox, 'he understands that ... it is really not a news network at this point'. A few days later, Murdoch responded saying that the Obama administration had a reputation for being 'anti-business'. He was smug about the attacks on Fox. 'Strong remarks have been coming out of the White House about one or two commentators on Fox News. All I can tell you is that it's greatly increased their ratings.'

It wasn't just the Obama administration which was unhappy with Fox News. In early 2010 a minor political eruption occurred close to Rupert Murdoch. His son-in-law, Matthew Freud, husband of daughter, Elisabeth Murdoch, told the New York Times his views of Fox News. 'I am by no means alone within the family or the company in being ashamed and sickened by Roger Ailes' horrendous and sustained disregard of the journalistic standards that News Corporation, its founder and every other global media business aspires to,' he said. Freud, one of London's leading PR executives, would have weighed every word of this personal attack on Ailes' standards. For his part, Roger Ailes said of Freud (great grandson of Sigmund) that he 'needs to see a psychiatrist'. Just who else Freud's statement represented is unclear. His wife Elisabeth later distanced herself from it. Freud's statement strengthened rumours that Rupert Murdoch's children and heirs had been unhappy about Fox News coverage of Obama's presidential campaign. In the lead up to that campaign, Elisabeth Murdoch held a fundraising event for Obama in Britain and her brother James was also said to have supported Obama.

Along with Lachlan Murdoch, Elisabeth and James Murdoch will control the global media giant when their father dies or chooses to relinquish control. So Freud's statement was intensely examined because observers are looking for clues about the post-Rupert political orientation of News Corporation. Freud's statement was one straw in the wind which may signal the major changes to the kind of political influence exerted by News Corporation over the last 40 years across the United States, Britain and Australia.

A uniquely political business

News Corporation is sometimes seen as a typical creature of the new age of globalisation. Like a small number of other global corporations, it has vast assets, makes fabulous profits and does business all over the world and around the clock. In the US it operates a major television network, Fox Broadcasting, as well as the movie studio, Twentieth Century Fox. It also has the cable channel, Fox News, the Wall Street Journal and the New York Post. In Britain it controls BSkyB as well as a chain of newspapers including the Sun, the Times and News of the World; in Australia its newspapers dominate a surprising 70 percent of the total newspaper market which includes the top-selling Herald Sun and Murdoch's flagship daily, the Australian. On top of this are a global book publisher, HarperCollins and a string of smaller businesses.

To imagine that News Corporation is a typical global media giant would be a big mistake. News Corporation is a unique business. Its singularity begins on the most fundamental measure of a corporation, the bottom line. Most global companies are bureaucracies staffed by efficient technocrats and headed by CEOs who avoid the limelight. News Corporation is different. It is an empire run by an autocrat whose personal idiosyncrasies dominate in place of the needs of shareholders who are, legally, in control. Murdoch's board of directors includes many old friends along with co-thinkers who share his political beliefs, such as Spain's former Prime Minister Jose Azner and the controversial former New York schools manager, Joel Klein. Like all public companies, the overt goal of News Corporation is to maximise returns to its shareholders. The desire for profits is the one thing on which Murdoch's critics and supporters agree. His critics denigrate him as a grasping businessman interested only in money. His supporters (and his many biographers) are dazzled by his undoubted business acumen. All agree he has a ruthless devotion to profits at the expense of everything else. Indeed Murdoch endorsed this view of his own single minded pursuit of profits. He told his British biographer, William Shawcross, 'All newspapers are run to make profits. Full stop. I don't run anything for respectability. The moment I do, I hope someone will come and fire me and get me out of the place - because that's not what newspapers are meant to be about. ' But this is merely a kind of corporate chest beating. It's also not true.

Murdoch may not seek respectability but he seeks something else. He is at least as devoted to propagating his ideas and political beliefs as he is to making money. The media Fox is a political animal. Murdoch has a particular conservative world-view which has evolved over the years and on which he spends many millions each year evangelising both through corporate spending and personal (and often secret) donations. The most obvious example is that News Corporation has spent hundreds of millions of dollars propping up loss-making newspapers which advance Murdoch's personal political beliefs and influence. The prime example is the New York Post, purchased for $37m in 1976 which has never made a profit and today costs an estimated $15-20m a year. Forced to sell it in 1988, Murdoch quickly re-purchased it in 1993, admitting afterwards that his previous 13 year period of ownership cost him $100m. The London Times also runs at a vast annual loss which one recent report said amounted to $89m in 2004, with this significant loss being subsidised, in good times, by its profitable sister paper the Sunday Times. In 2009, both newspapers lost £87m. The flagship daily in his country of birth, The Australian, lost money for its first 20 years and today still does not always make a profit. These are, in effect, political subsidies designed to give Murdoch a seat at the table of national politics in three English speaking nations. Today, he is experimenting with an Ipad-only newspaper, The Daily, which is necessarily subsidised given that it is a wholly new venture. Given Murdoch's track record, if The Daily gives him political leverage among a strategic group of readers its subsidy may extend beyond the stage of experimentation. On the rare occasions that Murdoch acknowledges these losses, he argues that he simply offers competition and choice for readers. But this is nothing more than code for the advocacy of his conservative beliefs and values. Not all of News Corporation is political. The Fox Broadcasting network, BSkyB and his movie studio are devoted to profits not politics. But key parts of his empire are deeply enmeshed in their nation's politics and operate as megaphones for Murdoch's values and leverage. Murdoch revels in political gossip and loves to play the powerful political insider to whom politicians defer. Political leaders do this because Murdoch has used his media assets countless times to advance his political beliefs and play favourites with governments and political parties. The story of Fox News is similar to the London Sun. Both make vast amounts of money and both operate as a powerful political lever to support or oppose political parties and their leaders. The treatment meted out to Barack Obama today is very familiar to the hate rained on the head of the former British Labour leader, Neil Kinnock, in the early 1990s. Just as Fox News supported George W. Bush, so the Sun shone on Tony Blair.

In opposition to the view that Murdoch is deeply motivated by politics is the commonplace wisdom that 'Murdoch backs winners'. For critics, this paints Murdoch as a man who believes in nothing but profits. The most frequently cited evidence is his 1997 electoral support for a Labour government in Britain under its leader, Tony Blair. Supporting Blair is offered as proof of Murdoch's political pragmatism and of his ruthlessness in disowning his previous support for the Conservative Party. Yet while Murdoch is certainly ruthless, the 'Murdoch-backs-winners' mantra is incomplete and misleading. It is equally likely that his support for the Labour Party in 1997 simply recognised that the political centre in Britain had moved towards a new Thatcherite consensus which Tony Blair and Labour shared. Rather than Murdoch shifting to support Labour, Labour had shifted its views dramatically. Indeed Murdoch's newspapers helped create this shift in Britain's political consensus which underlay the convergence of Britain's political parties. Backing winners can have its advantages since they can indeed affect his business interests, but in this case, the Labour winner was known to be amendable to Murdoch's desire to be left alone by regulators to conduct his business. This was the message delivered by Tony Blair when he travelled half way around the world to address one of News Corporation's editorial conferences before the 1997 election which brought him to office.

The other evidence which might suggest Murdoch always puts profit before politics and principle was his 1990s cultivation of the Chinese communist leadership in the hope of doing business in China. To this end Murdoch was extraordinarily deferential. In 1993 Murdoch had praised technological advances which were 'a threat to totalitarian regimes everywhere' which angered the Chinese leadership but the following year he withdrew the BBC service from his STAR TV network after complaints from China because 'the BBC was driving the nuts'. Later his company, HarperCollins, published a dull, uncritical biography of the leading economic reformer, Deng Xiaoping, written by his daughter Deng Rong for which it paid a reported $1m. In counterpoint, HarperCollins dropped a contracted book on China by Chris Patten, the former governor of Hong Kong, who was hated by the Chinese leadership. But while these moves demonstrate his ruthlessness, they concern a country in which Murdoch had no interest in being a political player or insider. Murdoch's elevation of politics to equal his business interests is a phenomena of countries where he or his news media can affect events and governments. Moreover, China in the 1990s was not the China which anti-communists like Murdoch once feared and hated.

The primacy which Murdoch gives to politics and political influence goes well beyond support for political parties at elections. It involves a more diffuse and decades-long desire to promote a set of values, regardless of what party is in power. The British media scholars Steve Barnett and Ivor Gaber recognise that Murdoch's support for formal political parties may vary. But leaving aside party political support, they say, 'there are consistent messages within his newspapers that taken together constitute a coherent ideology.... Those who have followed the Murdoch papers - not just in the UK but around the world - will recognise here the values that infuse his publications and which, when a particular issue of political significance arises, usually colour its coverage.' . For example, when Murdoch took over the Wall Street Journal, a key ideological appointment was Gerard Baker, a conservative British journalist, who was appointed deputy editor-in-chief in 2009. Baker had strong connections to Murdoch's most right wing outlets, having been been a Fox News Contributor for several years and a contributing editor to the neo-conservative Weekly Standard between 2004 and 2007. Baker had the task of 'policing the newsroom for left-leaning ideological bias', according to an account by a former journalist at the Wall Street Journal.

Murdoch's political crusade extends to unlikely parts of his empire, which his biographers have barely examined. This includes the global book publisher HarperCollins which published Going Rogue: An American Life by the 2008 Republican vice presidential candidate, Sarah Palin. (Palin met Murdoch and later became a paid contributor to Fox News in early 2010). Following the big success of Going Rogue, HarperCollins announced that it would create a specialist imprint for books on conservative topics by conservative authors. The head of the new imprint, Broadside Books, Adam Bellow, said he would publish 'books on the culture wars, books of ideas, books of revisionist history, biographies, anthologies, polemical paperbacks and pop-culture books from a conservative point of view'. Forthcoming books include one on the 'death of liberalism' and a 'free market capitalist's survival guide'.

HarperCollins had been publishing conservative books long before the success of Palin's Going Rogue, including blockbuster books about President Ronald Reagan, former British Prime Minister Margaret Thatcher, the Australian Prime Minister John Howard and other conservative politicians. They include a host of more obscure right wing books which were part of the ideological war against Bill Clinton in the 1990s. While some conservative books make sense commercially others resemble pet projects of an eager to please publisher. As he does in newspapers, Murdoch makes his publishing executives aware of his political likes and dislikes. A former publisher at HarperCollins, William Shinker, told a journalist in 1995: 'Rupert would accuse me on several occasions of not publishing enough conservative books ... He'd joke: "You're all a bunch of pinkos."'

Rupert Murdoch's devotion to advocating certain political ideas and values is not confined to his newspapers, TV or book publishing outlets. Over the years, he has dispensed a great deal of money to political causes, usually quietly. One donation which was not quiet was the $1.25m he gave the Republican Governors Association (RGA) and another million to the US Chamber of Commerce in the run up to the 2010 elections for the US Senate and House of Representatives. Both groups targeted the Democrats with TV attack ads on a scale never seen before. Of the Republican Governors' donation, a News Corporation spokesperson said that the RGA, like News 'believes in the power of free markets'.

Murdoch has long invested in Republican politics with donations in 1993 to the Project for a Republican Future established by Bill Kristol, a former adviser to the US Vice-President Dan Quayle. Kristol's Project is widely credited with stiffening the spine of the Republicans to destroy Hillary Clinton's health care plan. Kristol went on to edit the house organ of the neo-conservatives, the Weekly Standard, a Washington insiders' magazine owned by Murdoch which never made a penny but which pioneered the campaign to invade Iraq. In 2003 Murdoch donated $300,000 to an anti-affirmative action campaign to ban the collection of race-based data by Californian state and local governments. Murdoch fought furiously to prevent the release of this information by a court. It followed a previous $1m donation to Californian Republicans to defeat Bill Clinton and oppose affirmative action in 1996. During the Thatcher years he arranged to pay £270,000 to a ultra-Thatcherite group which ran a campaign of anonymous smears against members of the British Labour Party. He has also funded a far right British propagandist who worked closely with the CIA and British intelligence (see chapter 4).

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