Hacking scandal casts light on Murdoch's politics

[July 15, 2011]  WASHINGTON (AP) -- Rupert Murdoch is a political kingmaker in Britain and his native Australia. In the United States, he's best known for promoting conservative opinion through media properties like the Fox News Channel. And in China, he's primarily a businessman working to give his News Corp. empire a toehold in that country's tightly controlled media market.

The phone hacking scandal roiling Britain has cast a fresh light on the billionaire media mogul's influence around the globe.

His outsize political role in Britain will almost certainly be reduced amid evidence his newspapers illegally hacked phones, including that of a murdered teenager, and bribed police. It's less clear what will happen in Australia. Murdoch's political engagement in the U.S. and elsewhere is less intimate and may not be as compromised by the burgeoning controversy.

"His newspapers in England are far more directly involved in politics than anything he owns in the U.S," said Michael Wolff, editorial director of Adweek magazine and author of a Murdoch biography, "The Man Who Owns the News." "He's significantly more influential in the political life of that country."

In the U.S. and other countries, Wolff said, "he's wielded considerable influence but much less than in the U.K. He's focused his influence mainly on the regulatory issues that most affect his business."

Murdoch has been the most influential outside player in British politics for decades, with leaders of all ideological stripes competing for his backing. He's often referred to as the country's permanent Cabinet member.

The hacking scandal has freed British lawmakers, who have long lived in fear of his power. They issued a summons to Murdoch and his son James to appear before a parliamentary committee investigating the scandal -- a step that would have been unthinkable until recently.

In the U.S., the FBI has begun a preliminary inquiry based on concerns in Congress over a report that News Corp. sought to hack into the phones of Sept. 11 victims, Attorney General Eric Holder said Friday at a press conference in Australia, where he was attending a meeting of attorneys general from several nations.

Murdoch began building his power in Britain in the 1980s, when Conservative Prime Minister Margaret Thatcher allowed Murdoch to add The Times and The Sunday Times to his stable of media properties, including The Sun and the News of the World, the tabloid primarily connected to the hacking scandal. Murdoch shuttered the News of the World last week.

Murdoch returned Thatcher's favor, and his papers strongly backed her conservative policies.

Murdoch continued to have relationships with British leaders after Thatcher stepped down. In the 1992 parliamentary elections, when it looked as though Labour Party leader Neil Kinnock might topple Thatcher's successor, John Major, as prime minister, The Sun published a bold front-page headline: "If Kinnock wins today will the last person to leave Britain please turn out the lights." That headline was credited with helping Major and the Tories to victory.

Murdoch eventually switched his allegiance to Tony Blair, the Labour prime minister from 1997-2007. Blair telephoned Murdoch repeatedly before committing British troops to the Iraq war in 2003, which was strongly endorsed by Murdoch's newspapers across the world.

Blair's successor, Labour Party leader Gordon Brown, tried initially to resist Murdoch's influence. But he did attend the wedding of the company's chief executive, Rebekah Brooks, who was News of the World editor in 2002 when the paper's operatives hacked the phone of 13-year-old murder victim Milly Dowler, giving her family false hope that their daughter was still alive.

Brooks, a loyal Murdoch lieutenant, resigned Friday as the chief executive of his embattled newspapers. Murdoch had vigorously defended Brooks from politicians who wanted her to go and had previously refused to accept her resignation. James Murdoch said Murdoch's media company would run ads in major British newspapers to apologize for the phone hacking scandal.

Murdoch visited the current Conservative prime minister, David Cameron, shortly after he took office in May 2010 -- the only formal meeting Cameron held at Downing Street that month aside from those with foreign dignitaries. Cameron has distanced himself from Murdoch in recent days since Cameron's former communications director, a former News of the World editor, was arrested in the hacking probe.

Cameron announced Wednesday he had placed a judge in charge of reviewing evidence tied to the scandal. "There is a firestorm, if you like, that is engulfing parts of the media, parts of the police, and indeed our political system's ability to respond," he said.

In Australia, where Murdoch's journalist father, Sir Keith Arthur Murdoch, was well connected in political circles, the younger Murdoch has been similarly influential. He became a prominent political figure in his own right in 1964, when he founded the newspaper The Australian. Today, News Corp. controls 70 percent of that country's news readership and his papers have been the main platform for climate change skeptics there.

"He's had very close relationships with every prime minister for the last 30 years," said David McKnight, author of "Rupert Murdoch: Political Crusader" and an associate professor of journalism at the University of New South Wales. "I don't know any country in the world where a single proprietor has such extraordinary penetration and influence."

Murdoch is not as personally connected to political leadership in the U.S., where he is a naturalized citizen. But he commands a host of right-leaning media outlets, including Fox News Channel and the New York Post. He also owns The Wall Street Journal, whose editorial page is an influential conservative voice.

Murdoch has been less ideological as a political donor, contributing money primarily to Republicans but also to Democrats involved in setting policy that might affect News Corp.'s bottom line. He gave $6,500 and hosted a fundraiser in 2006 for then-New York Sen. Hillary Rodham Clinton, a Democrat who had been pilloried by the New York Post during her first Senate campaign.

News Corp. raised eyebrows last year when it was disclosed that the company had contributed $1.25 million to the Republican Governors Association and $1 million to the U.S. Chamber of Commerce before the 2010 midterm elections. In April, the company's board announced that News Corp. would disclose its political giving annually on its website.

To be sure, News Corp. is far from the only media company hoping to influence policy in Washington. Others, including Comcast, Time Warner and The Walt Disney Co., have contributed nearly $38 million to candidates in the last two decades, according to the Center for Responsive Politics, which studies political giving.

But Judd Legum, who has researched Murdoch as vice president for communications at the liberal Center for American Politics, says Murdoch's impact on the U.S. political conversation -- primarily through Fox News -- sets him apart from other media moguls.

"I wouldn't say it's as great as it is in Britain. But to have that kind of relationship with all the most influential Republican players is pretty unprecedented," Legum said, noting that many GOP presidential candidates and potential contenders have been paid Fox contributors, including former House Speaker Newt Gingrich; former Arkansas Gov. Mike Huckabee, who sought the Republican presidential nomination in 2008; and Sarah Palin, the 2008 GOP vice presidential contender and a former governor of Alaska.

In Italy, Murdoch has been very much the aggressive businessman, challenging Premier Silvio Berlusconi's Mediaset broadcast empire. In May, James Murdoch addressed a newspaper convention in Tuscany and chided publishers for accepting state subsidies, a long-established practice that papers depend on for their survival. He told them that nothing comes without a price.

In China, Murdoch has spent two decades trying to expand News Corp.'s presence but has sharply scaled back after the company's plans were blocked by government media controls. Murdoch visited China repeatedly over the past 20 years to lobby for market access, and his charm offensive included arranging a private screening of "Titanic," made by his 20th Century Fox film studio, for then-President Jiang Zemin in 1998.

In 2005, Murdoch complained that News Corp. had "hit a brick wall" in China. He said government authorities there were "paranoid" and didn't want foreign investors in their media market. Chinese regulators, in turn, complained that Murdoch's publications sometimes aired racy content that ran afoul of government censors.

[Associated Press; By BETH FOUHY]

Fouhy can be reached on Twitter at www.twitter.com/bfouhy.

Associated Press writers Charles Hutzler and Joe McDonald in Beijing, Kristen Gelineau in Sydney, Victor Simpson in Rome, Sylvia Hui in London and Tom Hays in New York contributed to this report.

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