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tv   BBC Newsnight  PBS  July 23, 2011 12:00pm-12:30pm PDT

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>> this is "bbc newsnight." funding for this presentation is made possible by -- the freeman foundation of new york, stowe, vermont, and honolulu, newman's own foundation, and union bank. >> union bank has put its financial strength to work for a wide range of companies.
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what can we do for you? >> and now "bbc newsnight." the news corp. boss and his son were defined as they said they had no knowledge of wrongdoing, but our shareholders happy? >> the admission from rupert murdoch that he knew little or nothing about what was happening in certain parts of his business empire does not encourage confidence. >> a much anticipated event, but did it deliver? will anything change? >> i am an optimist. i think if they did not change, that we will get a more accountable and responsible press that is not capable of committing criminal acts. rupert murdoch and his son,
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james, faced a grilling as british politicians attempted to find out if they know anything about alleged phone hacking. both denied any knowledge of wrongdoing and were apologetic about what went on. he described the day as the most humble of his life. investors seemingly approved of what was said. news corp.'s share price rose by the close of sale tuesday. has the storm been weathered? has dominatedng politics here for weeks, but is it just a storm in a british teacup? a global tycoon like rupert murdoch must hope so. >> "the news of the world" is
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less than 1% of our company. we employ 350,000 people around the world to walk proud and ethical and distinguished people. >> the scandal directly concerns one tiny part of his empire, but it has the potential to damage his business worldwide. his biggest problem now may be in denying knowledge of the newspaper, he has raised questions among shareholders worldwide about the way the company is covered and about his own competence as its head. >> one of the concern's shareholders will have with that is that we look to senior management to have a strong grasp as to what is actually going on within the company, and the admission from rupert murdoch that he knew little or nothing as to what was happening in certain parts of his business
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empire was not something which would encourage confidence in the systems and controls in place in the group. >> in the u.s., some shareholders want change. there is a class action lawsuit against news corp. two religious funds have filed a complaint. and calpers says it news corp. does not have one share, one- vote, corruption of the system. other voices want democracy and the company -- in the company. >> if i look at the with the board is structured, you may want to question the prevalence of one particular family within that board and whether there should be a greater representation of the genuinely independent executives and potentially a small representation for the family.
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>> besides ethical mistakes in britain, news corp. has made big business mistakes in america. it owns dow jones -- it bought at dow jones in 2007 and two years later it was worth $2.8 billion, less than their purchase price. myspace was bought for $580 million in 2005, sold for $35 million this year. but one of their largest shareholder still has huge confidence in the company. >> you have seen a business that has evolved, moving from newspapers and to other media, and moving more into a fee- based business model as opposed to advertising based. i think there is an awful lot of good steps that have been made, and i am very impressed overall with the company's success.
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>> rupert murdoch is back in america, more comfortable perhaps in a country where big investors still back him as the chief executive. >> here is a man, even though he is 80 years old, warren buffett is 80 years old and he is doing well, sumner redstone, and these are men with long track records of great success. to not want some of that wisdom in there, i think, would be a mistake. as will rogers said, good judgment comes from experience, and a lot of that comes from bad judgment. >> the phone hacking scandal has sparked political reform in the u.k. how much reform there will be in news corp. itself depends on the markets in the months to come. >> the site of two of the most powerful men in the world facing
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three hours of questioning from british politicians was extraordinary. some might have been reminded of the 1973 watergate hearings. stephen smith assesses the impact of the murdochs' appearance. >> summer. festivals, showtime, but if you are a "newsnight" viewer, hanging around in the chill-out tent does not cut it. the sheer spectacle has little to match the prospect of the murdochs and brooks appearing before the select committee. but did the lineup live up to the hype? how did it shaped up as an event? and what did it tell us, if
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anything, about the state of our institutions? first, did it cut it as drama? >> rupert murdoch is a bit like king lear, and he is rather surprised how it has turned out. the tension between james murdoch and elizabeth murdock is one of the stories. another is the way that rebecca brooks. and then you have the slightly unexpected situation that comes about because of that. >> you claimed they had made a major mistake. can i ask what mistake you were referring to? >> one of the thing about courtroom drama, there is the unexpected hero. in this instance, it was tom watson. one of the other features was the long pauses, and pauses in theater tend to be associated
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with chekhov and harold pinter. these were softened daunted -- these were self indulgent beyond that point. >> we spoke to a lawyer who worked for robert maxwell's sons when he faced and p.'s in the 1990's. >> to me, the most electrifying moment was james explaining the situation up until recently in trying to find a rationale for justifying it, and frankly failing miserably in that way. >> i know that certain legal fees were paid by the company, and i was surprised and shocked to learn that, as you are. >> that was the one moment when he was down. otherwise, i am afraid they did not plan any punches on him. >> was rupert murdoch's
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appearance garnered to gather s and eightympathy? -- to gather symptahy? >> it would be an extraordinary strategy, if it was the strategy, to go to rupert murdoch, the most powerful mobile in the world and say, we think, mr. murdoch, he should come across as slightly shambling, faltering, partially deaf old geezer. >> i think the idea at about portraying him like a mr. burns character would be too far. i would not walk into the room and say, hi, rupert, have a great strategy, you'll be a dithering old fool fumbling around. >> is that the way he is, perhaps? >> if this shows us one thing,
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it has shown a lot about the munchies mote of the organization -- about the machismo of the organization. >> the news corp. shares have suffered a discount because people feel that rupert murdoch was past his best. if the left, the shares could rise further. as with every festival, there is now a sobering feeling that the party is over, but the cleanup may take a while yet. tuesday, the day of those hearings, my colleague spoke with carl bernstein, who with bob woodward, broke the story of watergate. they spoke strongly about press intrusion at the princess diana funeral. >> you had some hopes of purse
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reform. it did to get anywhere today? >> i had high hopes today, but not at all. i thought they would be briefed well enough to get through the questions from hampered inquisitor's because they are dealing with the backdrop of the inquiry. not many punches were landed. i don't like any great progress was made. >> was this a big moment, are things changing? >> i hope so. i am an optimist. i think if they don't change on the back of what has happened on the past few weeks, that we get a more accountable press, one that is not accused of criminal acts, i don't know when we will. >> what has been the effect over the years on you and your family? >> fairly massive, but i have chose to live abroad to get away from tabloid intrusion. this is much more a case not
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about people like myself who could move, but it is about people who may be rolled over by the press unexpectedly in their lives. it is the titanic force. i have the means to take any action that i want against newspapers or other media outlets, but what i hope comes out of this is that not just news international but other groups who have been resorting to the same methods, which i know they have been -- >> it is not just then? >> i am absolutely sure other newspaper groups are waiting for the spotlight to move to them. my hope is that we purge the system, not control the press out in a way that they cannot do it be proper job of responsible journalism, such as what under this -- such as what unearthed this, but that will make the press more accountable. >> when you were watching this,
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did you feel any sympathy at all for rupert murdoch? >> i always feel well -- feel sympathy for a man who was well past his prime. i have to remind myself this is a man who has taken the british media down a certain route and has not, as a result, i don't think, they have done things that are not. . >> what about david cameron? >> i know very little about this, the political side, but i am touched by these implications. for me, as someone who has been sitting on the sidelines, there has been the occasional tabloid punched back, but i do not see it on that basis. what is exciting for me is i think everybody gets it now. there has been distilled the little secret among politicians and newspaper providers -- there has been this little guilty little secret among politicians and newspaper providers, this
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phone hacking, the purloining of medical records, etc., and it is only now that it is a major issue because of the obscene act of tapping into a murdered girls telephone. this takes it into a different arena and i hope that we walk out of it with a more responsible press. >> how important do you think this moment is for britain and the murdoch organization? >> i think this is a big event in the history of the west, particularly the english- speaking world. what we saw today was evidence of the sad tale of what has happened to modern great britain, and how one man has been able to capture the political system, the media, and the cops of a great nation of regeneration or two. it is appalling. the one thing i think the girl is right about -- the one thing
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that i think the earl is is right about it is that this is a partially criminal press at the store level -- sewer level of politicians. we're not talking about the sewer, and the british public has lapped it up, just as much of the american public has lapped up this tabloid journalism, though perhaps not this extreme, as other journalists have stood by and said this is perfectly fine, we understand, we laugh at it, it is kind of funny. it then you realize this is a terrible business, and a whole country has been polluted by the people that we sell out there today. >> on twitter, it has been called hack-gate. is it a moment like that, of
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change? >> for almost 40 years, i have winced almost every time the murdoch press has appended "gate" to something else. then i wrote a piece the other day saying murdoch's watergate, question mark. there are many similarities. at first, it is about the corruption of an institution, just as nixon corrupt at the white house and the administration. murdoch has corrupted the press under his watch, the low-end of his empire. and now we are looking for a smoking gun, just as we did in watergate. we don't need a smoking gun to know what kind of aura existed at "news of the world" and other publications. i think there is something, this is not just about murdoch's papers. as he went deeper into the
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gutter in terms of the lowest descending common denominator in journalism, with his publications, others followed suit, just as they did in this country went "the new york post" started to go down. >> is this a huge amount of change? >> i would like to believe is a moment of change. i would agree with carl that what this represents is a kind of corruption of the british political system -- the british press corps system. i thought one of the most telling thing is that murdoch said today was when he leaned over and said that singapore was the most open society in the world, as far as he was concerned, and that got a laugh from the assembled m.p.'s. what i saw there was the arch apostle of envy in that culture. that is the culture that murdoch
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introduced. everything flows from a more divisive society and more envious culture. even when gates and stevenson of the home affairs committee were up there, that was about and be also. -- that was about envy also. >> do you share any of the optimism? >> we have to remember that the hard cases that are being investigated go back a few years. at any journalist today knows that if they start hacking or try to get stories by criminal means, they will go to jail. the law of the land is strong. any regulator can possibly be. i think that alone is good. about not as a big moment, -- >> as a big moment, did people want to see a hanging? >> they did not that the hanging, but the got the custard pie, which was extraordinary.
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i thought it delivered wonderfully in tv terms. i thought the relationship between rupert and james was fascinating, the whole dynamic. were 's pauses extraordinary. there was a moment with rupert murdoch stepped up for investigative journalism, and i thought that was a wonderful irony because it was investigative journalism on the part of "the guardian" that led to him sitting in front of the select committee. >> did you feel any sympathy towards him? >> as a person, as a woman, yes. as a person, i felt sympathy. i thought at the beginning, he looked confused and he looked extremely uncomfortable, as well he might be, and i thought there was a moment where i was watching with a group of people
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in my office, and the pendulum will swing towards him. >> is an unusual experience for rupert murdoch, the scion of the family, to be accountable and that situation. he is used to being accountable to shareholders, but he has the votes so he just goes through the motions and listens to them. the big question that was not asked today and that would have gotten news corp. completely out of the woods, if they had written this as soon as the phone hacking, the first incident came to light, if they had called in in the bid to head it -- if they had called an independent investigators and said, this is one case, are there any more? and they have done everything to avoid that. >> the idea was i am a rank outsider, i am anti established
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area -- i am anti-establishment. but gradually, he has become the establishment. >> but they are the back door establishment. >> nonetheless, that is the establishment. by the prime minister side, with the police. there is a degree of collusion in this case that is phenomenal. what the emphasis is the b sky b deal. that smelled to high heaven, and there is a synergy there. >> do you think the people that will hold rupert murdoch to account will be the shareholders? not anybody in the british house of commons or in the courts, but the people who invest in his company? >> i think this will depend on dependwill. -- depend on popular will.
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if enough people expressed their disgust, that will get through to the board of directors and the british political establishment, and that is alternately i think where it lies. >> why do you feel that things have changed now, when they did not after what you said? >> i think carl bernstein is right. ain his minimum optimism, it is up to the public to change, and i don't know if they have the appetite to change. i think there is a revulsion that i have not seen for 14 years against the tabloids, but the worst excesses of the tabloids have been someone new. no politician can provide a fig leaf of respectability to allow it to continue.
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no mainstream high level petition can be suffering with the murdochs again. >> the great element is what outcry against bublic rupert murdoch, but still love his products. is newspapers are some of the most successful in this country, but somehow the public somehow feels they do not like people wielding political influence when they do not have the votes. >> when they have not been elected. >> you referred to the relationship between father and son. is this the breakup of the great empire, that the dynasty will not be handed on and quite the way they thought? >> it is hard to know. rupert did not say much, but every word that he said mattered. james murdoch talked a lot, and i cannot really remember what he said. i thought that was quite
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interesting. he said quite often, that is a very good question, i am glad that you asked that, which is a brilliant public relations ploy. >> what about rebecca brooks? >> i have sympathy for her. she is a woman under enormous pressure. i think she has been maybe rightly vilified, but she has been vilified as a woman. i feel there has been too much of that and there has been less talk about what she actually did at the newspaper. >> it depends how it plays out. if she is made the fall guy or she was responsible. >> we don't know. >> right now, the jury is open. >> did you have any dealings with her? >> i did, when the front page of
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"the sun" was very inaccurate. she was very charming and offered no hope of redress or anything. >> as a company, as news corp. or news international need the murdochs? >> the institutional shareholders are the people who will count on that, and we all know what the fault line is in the states. my impression is that james, grasping for the shakespearean analogies, has nothing, nothing? my impression it is that rupert murdoch is not happy with the idea of james' succession. that is what rebecca was about. >> i think you will see a strong arm of corporate governance finally imposed on news corp. and news international companies. the board structures are not compliant with best practice of
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corporate governance. >> and that is all for this week. for all of us, good night. >> make sense of international news at >> funding for this presentation is made possible by -- the freeman foundation of new york, stowe, vermont, and honolulu, newman's own foundation, and union bank. >> union bank has put its global expertise to work for a wide range of companies, from small businesses to major
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corporations. what can we do for you? >> "bbc newsnight" was presented by kcet, los angeles. 
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