Murdoch’s at Risk Empire Open on the American Front

NEW YORK – In addition to the political earthquake that has decapitated Scotland Yard and rocked London, along comes the collapse of Rupert Murdoch’s American empire, which is now much larger than the U.K. subsidiary. Reasons for the collapse include, but are not limited to, the possible wiretapping on American soil of actor Jude Law and soccer player David Beckham. They are just two of the many well-known victims of the privacy invasions.

FCPA is the acronym that may mark the end of Rupert Murdoch. FCPA stands for Foreign Corrupt Practices Act, legislation that prohibits American companies from all sorts of corruption, making them liable not only for offenses committed on American soil but also for those committed abroad. This is why the illegal wiretapping scandal in England, obtained by corrupting public officials, has already entered its “second episode” in the United States, where for years Murdoch has had his economic center and the legal headquarters of his company, News Corp.

Murdoch himself obtained U.S. citizenship. This was a logical decision from a business standpoint; America is a much richer market than Great Britain and Murdoch has made significant achievements with film and TV giant, Fox, and with the newspaper The Wall Street Journal. That said, the Americanization of his media empire will prove a fateful decision if it makes Murdoch more vulnerable.

Murdoch has enemies in the United States, the most important of whom is in the White House. Barack Obama, after becoming president in 2009, held a long running interview boycott against Fox News in order to punish its right-wing partisanship. Now, Murdoch faces much more severe punishments than the president could have given him. Rebekah Brooks’ arrest could soon be overshadowed, as it is now her boss who is at risk.

“This is an empire that was built on a set of journalistic ethics that’s beginning to explode and unravel. They were routinely bribing public officials…this is not a two-week story,” said John Podesta, trusted advisor to Obama and President of the Center for American Progress, a Democratic think tank.

Attorney General Eric Holder announced that the Justice Department “is considering the possibility of opening a formal investigation, using all necessary agencies.”* Aside from the Justice Department, there are now at least three other agencies involved in current investigations of News Corp., including the FBI, the SEC, and the FCC.

Among other inquiries is an investigation into the spying on September 11 victims and their families. One could argue that the September 11 allegations seem inconsistent, but the other allegations remain solid: corruption abroad by an American company. According to the Foreign Corrupt Practices Act, News Corp. could face up to two million dollars in fines, the executives could face up to five years in prison and the eventual revocation of their licenses. Murdoch could very well see his control slip from the entire Fox network (pay-TV news channels, sports, movies), Fx, and the National Geographic channel. At that point, the economic damage would be fatal.

Before even arriving at such an extreme scenario, the infamous stains on Murdoch’s reputation could cost him dearly. According to Allyson Stewart-Allen, who runs International Marketing Partners, News Corps’ American periodicals “are at risk of losing advertisers.”* Murdoch’s reputation as an entrepreneur is already reeling from the chain of errors. His personal authority has emerged scathed, just as the line of succession in the family. According to Stewart-Allen, “the shareholders will be wondering if there is a capable leader at the helm. They doubt if his son, James, is it.”*

Along with legal problems and political hostilities, there is now a credibility problem in the business world. Porter Bibb of Mediatech Capital Partners foresees Murdoch’s influence being drastically reduced. In short, to save the company he and his son must step aside. This is a blow for such an authoritarian media mogul, so used to leaving a personal mark on each headline. If that were not enough, the New York Times columnist Joe Nocera mocked the obliging interview of its owner that the Wall Street Journal ran two days ago.

This was a gaffe for the business journal that, until recently, had managed to save its integrity — at least in information (quite distinct from its commentary) — and that has been pushed into total obedience to its owner throughout the crisis. The Wall Street Journal’s enslavement to the desperate defense of its publisher is a signal. It is now the battle of Little Big Horn with General Custer and his few faithful loyalists at his side.

For Democrats, Murdoch is an important and strategic target. If the Wall Street Journal and its commentary pages are the intellectual voice of neoconservatives and neoliberals, Fox News has surpassed CNN as the number one cable news network in America and has become a “militant network,” which has launched an all out war on Obama. Fox has been at the helm of previous anti-Obama campaigns, as well as the more vulgar accusations of Obama being a so-called “Muslim non-citizen big-government usurper.” Fox has demolished his healthcare reform, environmental initiatives and fiscal policy and labeled him a socialist.

Now it is up to the Democrats to go on the counter. Earl Blumenauer, a congressman from Oregon, denounced the “culture of corruption that dominates News Corp.,” and his colleague Peter King asked that the maximum severity under the law be used as punishment. In News Corps.’ most difficult hour, the Republicans used their discretion to lash out against the corporation that, at one time, was their biggest constituent.

*Editor’s Note: This quote, accurately translated, could not be verified.