Phone hacking scandal a corruption story, like Enron and countless others

A member of a British parliamentary committee asked Rupert Murdoch on Tuesday, “At what point did you realize that criminality was endemic” at News International?

“Endemic is a very hard word,” Murdoch replied.

It’s a hard word, but it’s the right word. It describes an expected, naturally occurring characteristic of a group or a place. In epidemiology, a disease or disorder is considered endemic when it consistently occurs in a given population.

That’s what people mean when they say that phone hacking and buying scoops are just part of British tabloid culture.

The question now is whether such unethical, and in some cases illegal, behavior is endemic to News Corp. as a whole. Put another way, to what extent has News Corp.’s journalism, and the company itself, been corrupted?

Corruption is journalists’ most sought, most elusive prey. Such stories don’t have to involve payoffs in a brown paper bag. They can reveal how a church concealed sex abuse, how a plagiarist was promoted in an esteemed newsroom, or how journalists eavesdropped on private voice mails.

The wrongdoing is just one part of corruption stories like these; the other part is the institution that spawns such wrongdoing.

Phone-hacking as symptom of corruption

At its most basic level, the phone hacking scandal is about the corruption of journalism practices. It’s also about the corruption of a publication (perhaps an entire division of a company) that relied on underhanded methods. And it’s about the corruption of police who at low levels took money for information and at high levels failed to fully investigate all these practices. The phone hacking story ties together issues of journalistic ethics, political influence and the corruption of power. This should’ve been the fifth season of The Wire.

Chief executive of News Corporation Europe and Asia, James Murdoch arrives at News International headquarters in London, Tuesday, July 19, 2011. (Sang Tan/AP)

Like other corruption stories, this one is moving up the chain from the wrongdoers to the people who supervised them. From the people who hacked into voice mails, to the editors who knew (or should have known) that their journalists and private investigators did this sort of thing, to the company officials and police officers who were supposed to investigate the extent of the problem and stop it, to the executives who set the tone for the company and are ultimately accountable.

The Wall Street Journal’s editorial board objects to this path of inquiry. But this is how journalists report corruption stories, whether they work for the Guardian, The Washington Post or the Journal itself.

Institutional corruption, from Enron to The New York Times to News Corp.

It’s easy to recognize corruption when it involves city officials in Bell, Calif., paying themselves grossly inflated salaries or Enron propping up its financial status with bogus accounting methods.

Some stories are about corruption even if we don’t talk about them that way. The Boston Globe won a Pulitzer in 2003 for revealing a pattern of sexual abuse within the Catholic Church. Those stories were as much about the nature of an organization that paid victims to keep them quiet and shuttled abusers from church to church as they were about the abuse itself.

The Wall Street Journal won a Pulitzer Prize in 2007 for showing how companies backdated their executives’ stock options, locking in the lowest prices so they could make the most money. Those stories were about corrupt business practices, not just white-collar crime.

And although Jayson Blair is known simply as a plagiarist and a liar, that too is a story of corruption – of the practice of journalism, sure, but also of a newsroom that promoted him and failed to respond to warning signs.

Among the key questions addressed by an internal Times inquiry:

  • How someone with such a poor track record of reporting enjoyed such prominent assignments, even after an editor warned, “We have to stop Jayson from writing for The New York Times. Right now.”
  • How so many clues that he wasn’t off reporting around the country, such as a mysterious lack of expense reports, went undiscovered.
  • How a company in the communications business could do such a poor job communicating internally.

Those failures, not the fabrications, caused the resignation of the newspaper’s top two editors, Executive Editor Howell Raines and Managing Editor Gerald Boyd.

The Times’ investigation led them from Blair’s acts of malice to the systematic failures that enabled them. That’s the goal of corruption reporting: to learn just how diseased the institution is.

  • Is “robo-signing” just a problem with how people filled out paperwork, or does it reveal that the foreclosure process itself is corrupt?
  • Was the Enron accounting scandal just one company’s big lie, or did it show how auditors overlooked such lies in order to preserve their consulting contracts?
  • Was the practice of backdating stock options a minor ethical issue or did it reveal a corporate culture in which insiders lied to enrich themselves, at the expense of regular investors?

It’s not just about a rogue reporter who fabricated news stories; it’s about the kind of place that promotes him to high-profile assignments despite complaints. It’s not just about paying off cops or hacking into voice mails; it’s about the kind of place that relies on such journalistic espionage for its stories.

The culture of a news company

In its editorial on Monday, the Journal argued that media “want their readers to believe, based on no evidence, that the tabloid excesses of one publication somehow tarnish thousands of other News Corp. journalists across the world.”

The Journal correctly notes the complicated roles of media companies investigating other media companies, though perhaps it should have let someone else to make that case. Such issues are manageable through editorial controls, disclosure of editorial decisions, and a commitment to fair and impartial reporting.

In the end, the Journal may be correct in saying that the culture at News of the World and perhaps News International does not reflect on the rest of News Corp. But the reporting and the official inquiries are far from ending.

So far, some evidence suggests that an anything-goes culture extends beyond News Corp.’s British tabloids.

The Times’ David Carr reported that a News Corp. company named News America, which is in the business of in-store and newspaper insert marketing, “has paid out about $655 million to make embarrassing charges of corporate espionage and anti-competitive behavior go away.”

Carr uses the lawsuits as a window into the culture at News Corp., noting that even if Murdoch didn’t know about the “culture of permission” at News International, the substantial settlements surely have made him aware of what has happened at News America.

Carr, who knows a bit about corporate culture from his reporting on Tribune Co., concludes that “the damage is likely to continue to mount, perhaps because the underlying pathology is hardly restricted to those who have taken the fall.”

In one of those lawsuits, according to BNet, the head of a competing company testified that Paul Carlucci, now publisher of the News Corp.’s New York Post, told him that he worked “for a man who wants it all, and doesn’t understand anybody telling him he can’t have it all.”

That is why Rupert Murdoch had such a humbling day Tuesday. That’s why he was asked when, not whether, he realized that criminality was endemic at News International. And that’s why his statement that he does not bear responsibility for the phone hacking scandal is so troubling.

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  • http://mymediainfo.com/ Renee

    As Enron has become the poster child for what not to do in business, it seems News Corp has become the poster child for what not to do in journalism. There are many similarities.

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