from Breakingviews:

James Murdoch stuck in limbo

By Chris Hughes
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The challenge to James Murdoch's credibility remains serious.

Two former senior staff have repeated assertions that News Corporation's European boss was made aware, in 2008, of evidence that phone hacking at his UK newspapers involved more than just a single rogue reporter. Murdoch has strongly rejected that claim. The truth of the matter remains unclear.

The dispute turns on what was discussed at a meeting between Murdoch and his two accusers -- a former editor of The News of The World newspaper and a senior legal executive -- more than three years ago. The meeting lasted only about 15 minutes. The outcome was that Murdoch approved a jumbo settlement to an alleged victim of phone hacking. The size of the financial settlement leads some to think that News Corp was buying silence. The key question, however, is whether Murdoch was told that phone hacking was more widespread than the company had previously maintained.

Murdoch's accusers say that he was told. But the details are fiddly. Neither Colin Myler, the editor, nor Tom Crone, the lawyer, can recall the exact phrases used in the discussion. So Murdoch can say, and is saying, that he wasn't explicitly told in plain language that phone hacking went beyond one individual.
The lack of decisive evidence regarding the 2008 meeting does not exonerate Murdoch. It is his word against the word of two others. He still has a case to answer and the allegation that he didn't act on evidence, and later misled parliament, is very serious. Another grilling is likely.

To his advantage, however, Murdoch's word has been more articulate and sure-footed to date. His explanation, that a 15 minute meeting could not have included any explicit references to such a serious matter, seems to have had force with at least one of the UK lawmakers investigating the affair.

Should media owners rethink Hulu sale plan?

BTIG’s Rich Greenfield is an analyst who seems to have never met a contrarian debate on the media business he didn’t like. This morning, he turned his attention towards online video site Hulu, arguing in a research note that its owners should think twice about selling the business (subscription needed). First round bid for Hulu, which is owned by News Corp., Disney, Comcast, and Providence Equity Partners, are due Wednesday and are expected to reach as high as $2 billion.

In his note, Greenfield, known for his embrace of hyperbole, says selling Hulu is “a mistake of epic proportions.” He says Hulu is the perfect weapon for combating cable TV’s excessive ad load, supercharging on-demand TV, and for integrating social media’s impact on how consumers watch TV.

Greenfield asks why Hulu owners would sell now, at a time when Hulu is growing viewers, advertising and subscription revenues. As he sees it, on-demand online video is clearly the future and big media would be better served having a say in how the future of video distribution over the long-term is shaped rather than handing Hulu over to Google, Amazon, Yahoo or some of the companies that are supposed to be interested.

News Corp’s ethics were set at the top

By David Callahan
All opinions expressed are his own.

Rupert and James Murdoch have even more explaining to do after Tuesday’s allegations that top editors at the News of the World knew about the use of phone hacking by reporters. While the Murdochs have pleaded ignorance about the sordid doings of their underlings, a growing pile of evidence suggests that at least James was very much in the loop. That is not surprising. You don’t build a business empire – or even inherit one – by being a hands-off boss. What’s more, subordinates in major corporations don’t tend to commit serious crimes unless they think such behavior is okay with the boss.

Business scandals typically take a predictable path. Atrocious behavior comes to light and, within days, top executives are in front of klieg lights professing to be just as shocked as anyone else. But look, they say, we CEOs and chairmen can’t know everything that goes on around here. Then, over time, documents and witnesses emerge to show that top executives did know about illegal behavior. So it is that former CEOs like Jeff Skilling of Enron, Bernard Ebbers of WorldCom, Calisto Tanzi of Parmalat, and John Rigas of Adelphia are now serving long prison sentences for frauds that they initially denied any knowledge of. Other CEOs, such as subprime king Angelo Mozillo of Countrywide, have paid large penalties to settle suits by government authorities.

The phone hacking scandal is now well along this familiar trajectory. James Murdoch may have gotten to the top of the News Corp mainly because of nepotism, but he is no dummy and profiles have depicted him as a very competent executive. Yet we are supposed to believe that he signed off on a record payment to settle a hacking complaint without knowing the damning details? Or that, even though hacking was discussed openly at News of the World editorial meetings — until such explicit talk was banned by the editor — the top command at the News Corp had no idea what was going on? Right.

from Breakingviews:

James Murdoch’s perch gets shakier by the second

By Chris Hughes
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The phone hacking scandal at News Corp burst back to life on Tuesday. New evidence emerged suggesting that top executives were warned four years ago the illegal interception of voicemail messages went beyond one rogue reporter. James Murdoch, who returned to the company to run European and Asian operations in December 2007 after the matter appeared to have been resolved, continues to protest ignorance. But the sheer scale of what he didn't know raises fresh questions of how he handled the affair.

It wasn't until late 2010 that Murdoch acted on evidence that probes into hacking were insufficient. Fresh documents disclosed by British Parliament provide no smoking gun he knew the practice was more widespread at the now-defunct News of the World before then. Murdoch again rejected allegations by former managers that he was presented with such information in 2008 at a meeting to discuss an alleged victim's damages claim. Though it's still unclear what was said then, questions about Murdoch's conduct in signing off on the settlement and his response to later media allegations aren't going away.

Evidence of a News Corp coverup mounts

By Nicholas Wapshott
All opinions expressed are his own.

By this stage of the summer, Rupert Murdoch and his family would normally be relaxing on his yacht, The Rosehearty. But any hopes the magnate might have entertained that August would bring respite from the scandal that has engulfed his empire have been shattered by the release of two letters to the parliamentary committee investigating phone hacking by his papers. The excuse Murdoch gave to Parliament that he knew nothing of the wrongdoing is increasingly hard to credit. The blame for the routine invasion of privacy by his papers is now inching closer to Murdoch himself.

The first letter, from News of the World royal reporter Clive Goodman, who became the patsy for the affair, gives the lie to the suggestion to Parliament by Murdoch’s most trusted retainer Les Hinton that phone hacking was the work of a single rogue reporter. In the letter, Goodman lets slip that “the actions … were carried out with the full knowledge and support” of some of the paper’s other journalists and that “other members of staff were carrying out the same illegal procedures.” The names of those others have been redacted for now, at the request of Scotland Yard, for fear of jeopardizing a prosecution.

Prime Minister David Cameron’s judgment is also called into question by the letter. The socially remote Cameron felt he could not connect with humdrum voters and hired Andy Coulson, top editor at the News of the World when the hacking took place, to explain his government’s policies in language the ordinary person could understand. Cameron says he hired the tainted Coulson because Coulson denied knowing of the illegality going on under his nose. But Goodman reports that hacking “was widely discussed in the daily editorial conference, until explicit reference to it was banned by the Editor [Coulson].” The “smoking gun” letter makes Cameron look naïve and gullible for being taken in so easily.

The myth of the irrational Murdoch

By Maureen Tkacik
The opinions expressed are her own.

No recent episode more vividly demonstrates the debasement the media has suffered in the ascent of Rupert Murdoch as its collective tsk-tsking over comedian Jonnie Marbles’ interruption of Murdoch’s Hackgate testimony. The outrage has generally echoed this New Republic missive:

I can’t find anyone who approves of what happened yesterday, when news titan Rupert Murdoch suffered a near-shaving-cream-pie in the face during a hearing before members of Parliament in London. Everyone seems to agree that the pie-thrower, “activist” Jonnie Marbles, is a dumbass. We even seem to agree that Rupert Murdoch’s wife, Wendi Deng, is a badass.

If Rupert Murdoch doesn’t deserve a pie in the face, who does? This is a media baron whose free-market fundamentalism has effectively robbed journalists of their livelihoods, most vividly in the shuttering of News of the World. Perhaps more perniciously, he’s robbed the media industry of its sense of self-worth, not for the first time; it’s no surprise a trove of former Murdoch editors have decided stepped into the light and hurl a stone or two at the News Corp. castle walls.

The last of the moguls

By Jeff Jarvis
The opinions expressed are his own.

Rupert Murdoch is the last of a breed, a breed he and his company will be responsible for killing in an act of mogulcide.

The Economist agrees that he is the last mogul and says it is time for him to go. It also says that media need a strong News Corp. There we certainly disagree. Autos don’t need a strong GM. What media needs — and is getting — is disruption of its overly strong institutions. The death of the mogul in news is something to celebrate, and eulogize.

I’ve worked for many moguls: latter-day Hearsts (San Francisco Examiner); Robert Maxwell (New York Daily News); Murdoch (TV Guide and Delphi Internet); and the Newhouses (though I’ll argue they’re not very mogully because they don’t fit most of these criteria). What makes a media mogul?

Can the feds do an Al Capone on News Corp?

By James Ledbetter
The opinions expressed are his own.

I wrote last week that using the U.S. Foreign Corrupt Practices Act (FCPA) to charge News Corp over allegations that officials at the now-shuttered News of the World bribed police officials would be an “enormous, unprecedented stretch…which seems unlikely to stand up in court.” There are two qualifiers to this; first, the column was referring to Guardian reports about payments to police supposedly made in 2003, which appear to have been for tips leading to stories for the paper. If it could be shown that subsequent sums to police were made to delay or thwart investigations into News Corp activity—a very big if—then those payments might come a little closer to the types of bribes historically punished under the FCPA. (Even there, however, U.S. authorities would still be reluctant to jump into such a case unless British prosecutors abandoned such an inquiry, which seems unlikely to occur any time soon.)

I also hinted at a second possibility, both more intriguing and more likely: a different part of the FCPA could apply to any police bribes News Corp paid. This is the “books and records” provision of the FCPA; ProPublica’s Jake Bernstein summarized its potential use in this case succinctly: “If you pay off the policemen and you don’t write it down in your company ledger as ‘Bribe two policemen,’ then this can be a problem because you haven’t accurately kept your books and records.”

The FCPA is quite explicit about this: an American company doing business abroad has to maintain timely and accurate books; has to have internal accounting controls that ensure that employees don’t have the authority to wander off paying bribes on their own; and has to constantly check its records for any discrepancies.

The real meaning of “hack”

By Adam Penenberg
The opinions expressed are his own. This piece originally appeared in Fast Company.

Over the years I’ve published tens of thousands of words on “hackers.” I wrote “Hacking Bhabha,” a story about the “hack” of an Indian atomic research station, when gangs of computer miscreants went wilding through its servers, and the 1998 takedown of the New York Times website, which, for me, resulted in the threat of a justice department subpoena.

I interviewed Kevin Mitnick while he was still in prison and sat at my computer one night as someone who called himself MagicFX replaced eBay’s home page with his own that said: ”Proof by MagicFX that you can’t always trust people… not even huge companies.”

Tech wrap: Fake Apple Store defiant

Customers at an apparent Apple Store in the Chinese city of Kunming berated staff and demanded refunds after the shop was revealed to be an elaborate fake, sparking a media and Internet frenzy. Staff were also angry at the unwanted attention after more than 1,000 media outlets picked up the story and pictures of the store from the BirdAbroad blog. Apple declined to comment on the fake store or others like it dotted around China.

Apple was in early talks to join the bidding for Hulu, the online video site that Walt Disney Co, News Corp and its other owners have put up for sale, Bloomberg cited two unidentified sources as saying.

Verizon Wireless signed up 1.3 million fewer iPhone customers than AT&T and Verizon Wireless customers spent less per month than expected in the second quarter, disappointing Wall Street. While Verizon Wireless added three times more net subscribers in the quarter than AT&T, it only activated 2.3 million Apple iPhones compared with 3.6 million activations at AT&T.