News Corp. Under Assault Finds Defense in Journal Opinion Pages

While the widening News Corp. (NWSA) phone- hacking scandal sent Rupert Murdoch and son James in front of a U.K. parliamentary committee and unseated senior officials at the company and Metropolitan Police, the media empire found an aggressive defender in the Wall Street Journal’s opinion pages.

Among at least five opinion pieces published so far this week supporting the newspaper’s owner were two signed by editorial board members. A third, a 1,000-word lead editorial, said media organizations commonly “pay sources for information” and “skew their coverage” to influence public affairs. The piece, titled “News and Its Critics,” added that it was “up to British authorities to enforce their laws.”

“This is the first great test of the Wall Street Journal under Murdoch’s ownership,” said Sarah Ellison, whose book “War at the Wall Street Journal” chronicled News Corp.’s 2007 acquisition of Dow Jones & Co. for $5.2 billion from the family that had controlled it for 105 years.

“I think this establishes the Journal as a mouthpiece for News Corp., unfortunately,” Ellison said.

The editorial described the “righteous hindsight” and “thick” Schadenfreude of groups such as British Broadcasting Corp., the Guardian newspaper and investigative website ProPublica. “We also trust that readers can see through the commercial and ideological motives of our competitor-critics,” it said.

Calame’s Take

Byron Calame, who joined the Wall Street Journal in September 1965 and was deputy managing editor when he retired from the newspaper in 2004, said it “remains to be seen” if the editorial’s voice resonates with the newspaper’s readers. While it was “well-crafted,” he said, “the defensive tone alone was a disappointment.”

As of 5 p.m. on July 18, the editorial was the second-most- read article on the Wall Street Journal’s website, behind a piece titled “Get Ready for a 70% Marginal Tax Rate.” It was still No. 2 at 5 p.m. yesterday.

News Corp. closed the News of the World tabloid this month after allegations that its journalists tapped the voicemails of murder victims and paid police officers for stories. Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

The Wall Street Journal’s opinion pages were called “the primest real estate in all journalism” in a column by editorial board member Robert Pollock. He wrote that Murdoch, the company’s 80-year-old chairman and chief executive officer, has imposed “no editorial direction.”

Murdoch told the committee yesterday that while he checks in with editors of his papers on occasion, he doesn't meddle.

`In the Same Building'

``If there's any editor I've spent the most time with, it's the editor of the Wall Street Journal, because I'm in the same building,'' Murdoch said.

Another editorial board member, Bret Stephens, wrote that the reaction to the hacking scandal was harsher than the fallout from whistle-blowing organization WikiLeaks, whose disclosure of classified information he said did more harm.

In a video that followed, Stephens, the editorial page’s deputy editor, described the News Corp. scandal as a “convenient morality play for people who either for competitive reasons or ideological reasons haven’t liked Rupert Murdoch and his company for a very long time.”

Another opinion piece criticized a New York Times columnist who apologized for supporting News Corp.’s purchase of the Wall Street Journal. A fifth described “an outpouring of left-wing ressentiment.”

Les Hinton

The “News and Its Critics” editorial also said that the newspaper’s previous owner, the Bancroft family, had an “appetite for dividends” and that the calls for criminal probes into News Corp. come from a “political mob.” It commended the ethical judgment of Les Hinton, who oversaw News Corp.’s U.K. newspapers during the time of the alleged hacking and resigned as the chief executive officer of the company’s Dow Jones unit on July 15.

The newspaper, the largest by circulation in the U.S., has not been accused of phone hacking.

“The editorial isn’t defending the Wall Street Journal; it obviously easily could defend the Journal,” Dean Starkman, editor of the Columbia Journalism Review’s business press section, said in an interview. “It’s ‘News and Its Critics’ -- News Corp. It’s a defense of News Corp.”

Paul Gigot, the editorial page editor, declined to comment, according to Ashley Huston, a spokeswoman. Former Wall Street Journal op-ed editor Tunku Varadarajan, now the editor of Newsweek International, worked with Gigot for seven years. In an e-mail, he said he saw Gigot’s “high-class mind” and “impressive professional integrity” in the editorial.

David Weidner, a columnist for MarketWatch and the Wall Street Journal, said most of his colleagues would prefer that the newsroom’s work speak for the organization’s integrity.

“The people who are paid to make speeches can make them,” he said in an e-mail. “But you would be hard pressed to find anyone in news who wants opinion pieces read before their own reporting and analysis.”

FBI opens inquiry into hacking of Sept. 11 victims

In response to requests from members of Congress and to at least one news report, the FBI in New York opened a preliminary inquiry on Thursday into allegations that News Corp. journalists sought to gain access to the phone records of victims of the Sept. 11 attacks, according to several people briefed on the matter.

The investigation is in its earliest stages, two of the people said, and its scope is not yet clear. It also is unclear whether the FBI has identified possible targets of the investigation or possible specific criminal violations.
The inquiry was prompted in part by a letter from Rep. Peter King, a Long Island Republican, to Robert Mueller III, the FBI director, in which he asked that the bureau immediately open an investigation of News Corp., citing news reports that journalists working for its subsidiary, News of the World, had tried to obtain the phone records of Sept. 11 victims through bribery and unauthorized wiretapping, the people said.
The decision to open a case in New York stemmed from the expanding hacking scandal that has wracked Britain for days, ever since disclosures that News of the World had illegally intercepted the voice mail of Milly Dowler, a 13-year-old girl abducted and murdered in 2002.
It also follows a decision by News Corp.'s CEO and chairman, Rupert Murdoch, to withdraw from the biggest media takeover bid in British history.
The investigation was expected to be handled jointly by two FBI squads in the bureau's New York office: one that investigates cybercrimes and another that focuses on public-corruption and white-collar crimes, one of the people said. They all spoke on the condition of anonymity because they were not authorized to discuss the case.
It was not immediately clear whether federal prosecutors in Manhattan were involved in the case; they would most likely have jurisdiction over any prosecution because the Sept. 11 victims and their cellphones were in Manhattan when they died. Ellen Davis, a spokeswoman for the U.S. Attorneys Office in Manhattan, also declined to comment.
Laura Sweeney, a Justice Department spokeswoman in Washington, D.C., said: "The department does not comment specifically on investigations, though any time we see evidence of wrongdoing, we take appropriate action. The department has received letters from several members of Congress regarding allegations related to News Corporation, and we're reviewing those."
Jack Horner, a spokesman for the company, declined to comment.
King said in his letter on Wednesday that he was requesting the investigation not only as the chairman of the House Subcommittee on Homeland Security, but also as a congressman whose district lost more than 150 people in the Sept. 11 attacks.
"It is my duty to discern every fact behind these allegations," he wrote.
He cited recent news reports, apparently referring to an article first published on Monday in The Daily Mirror, a chief competitor to News of the World, which closed Sunday as a result of the scandal.
The article said reporters working for the paper had contacted a private investigator, a former New York police officer, and offered to pay him to retrieve the phone numbers of Sept. 11 victims and get details of the calls they had made and received in the days leading up to the attacks.
"If these allegations are proven true," King wrote, "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."
It is not clear if the person referred to in the Daily Mirror article was a police officer at the time of the attacks.
Murdoch began his media career in Australia in 1952 after inheriting The News newspaper after the death of his father, and he has built News Corp. into one of the world's biggest media groups. Assets include Fox News, the 20th Century Fox movie studio, The Wall Street Journal, the New York Post and three newspapers in Britain — down from four with the death of the News of the World.