Michael Wolff of Adweek has been a follower of the Rupert Murdoch News Corporation for a long time, even written a book1 about Murdoch a while ago (before the current, seemingly ever-escalating scandal). Mr. Wolff is not surprised that the FBI and the DOJ are considering pursuing RICO statute investigations into News Corp.
In my biography of Rupert Murdoch, I referred to News Corporation as Mafia-like, provoking the annoyance of my publisher’s libel lawyers. I explained to them that I did not mean to suggest this was an organized crime family, but instead was using “mafia” as a metaphor to imply that News Corp. saw itself as a state within a state, and that the company was built on a basic notion of extended family bonds and loyalty.
But just because it’s a metaphor doesn’t mean it isn’t the real thing, too.Well-sourced information coming out of the Department of Justice and the FBI suggests a debate is going on that could result in the recently launched investigations of News Corp. falling under the RICO statutes.
RICO, the Racketeer Influenced and Corrupt Organizations Act, establishes a way to prosecute the leaders of organizations—and strike at the organizations themselves—for crimes company leaders may not have directly committed, but which were otherwise countenanced by the organization. Any two of a series of crimes that can be proven to have occurred within a 10-year period by members of the organization can establish a pattern of racketeering and result in draconian remedies. In 1990, following the indictment of Michael Milken for insider trading, Drexel Burnham Lambert, the firm that employed him, collapsed in the face of a RICO investigation.
Michael Wolff continues with some more details about the criminal culture of News Corporation, and Rupert Murdoch:
As it happens, much of this pattern of conduct at News Corp. has long been hiding in plain site. How the company has gotten away with such behavior is, in fact, a subtext of the investigations that are now unfolding.
Partly, the company has escaped legal scrutiny because this is a boys-will-be-boys sort of story. News Corp.’s by-any-means aggressiveness has become so much a part of its identity that it seemed almost redundant to find fault with it. Everybody knew but nobody—for both reasons of fear and profit—did anything about it; hence its behavior has become, however unpleasant, accepted.
And partly, it’s because the fundamental currency of the company has always been reward and punishment. Both the New York Post and Fox News maintain enemy lists. Almost anyone who has directly crossed these organizations, or who has made trouble for their parent company, will have felt the sting here. That sting involves regular taunting and, often, lies—Obama is a Muslim. (Or, if not outright lies, radical remakes of reality.)
Threats pervade the company’s basic view of the world. “We have stuff on him,” Murdoch would mutter about various individuals who I mentioned during my interviews with him. “We have pictures.”
Similarly, the Post and Fox News heap praise and favors on partisans, who in turn do them favors (the police, in New York as well as London, receive and return the favors). This reward and punishment has translated into substantial political power, both in terms of regulatory advantages and, too, in the ability of the company to shield itself from the kind of scrutiny that it has taken a perfect storm of events to have it now receive.
Then, too, as one of the largest media organizations, it has insured a hands-off attitude (if not policy) from other media organizations—those which have business with it, or whose executives want to protect their prospects of working for it, or that extend courtesies in the hope they will be extended back. There’s also the money. Ultimately, if you have the goods or the savvy with which to damage the company, you get paid off. In London, that’s how News Corp. thought it could contain the hacking scandal, with big cash payments to and confidentiality agreements with the hacking victims.
In the U.S., Floorgraphics, the company that News America Marketing tried to extort, was bought for far more than its value when it persisted in its suit against News Corp. Judith Regan received an outsize settlement when she pushed her claim that Ailes had pressured her to lie about her relationship with Kerick.
(click here to continue reading Michael Wolff on the State of the Murdoch Empire | Adweek.)Footnotes: