Friday, September 10, 2010

Murdoch Rules, NOT OK!

METROPOLITAN POLICE riding to the rescue of Murdoch's millions. But he didn't pay for them. You did. And now we're learning more about News International's respect for law. And perhaps about the relationship between the Murdoch press and senior police officers?

NEXT year will be the 25th anniversary of the battles of Wapping, which began when Australian-born press magnate Rupert Murdoch shifted production of the Sun, Times and News of the World to his new 'Fort Wapping' plant, and sacked 6,000 print union members.

It was a trial of strength with the Fleet Street unions, which Murdoch won with the help of the right-wing Electrical, Electronic and Plumbing Trades Union (EEPTU) which had recruited replacement labour, and the Metropolitan Police, who kept the ways clear for the scabs to go in, and newspapers to come out, earning once again the name "Maggie's Bootboys" which they had acquired the year before when sent out against the miners.

I remember going down to Wapping one night with friends, and naievely thinking that being no hero, I would stand well back from the road where things seemed to be kicking off. Suddenly I found myself in a crowd trapped up against a wall, as the mounted police who had charged to clear the road now turned and began urging their animals up onto the kerb so they could attack the crowd. I had not seen that before. Later I heard how they had ridden into a pub garden, supposedly in pursuit of suspects, and started laying about local people, whom they regarded as sympathetic to the strikers. It brought home that the Met could behave like a hostile occupying army to Londoners, just as it had to Yorkshire miners.

Of course it had the backing of Tory Prime Minister Margaret Thatcher, Murdoch's ally. Hadn't the press baron whipped up jingoist enthusiasm for her war with Argentina? And didn't his papers continue savaging Labour, so they could boast after the Tories victory in 1992 "It's The Sun Wot Won It" ( Saturday 11 April 1992). At least until Murdoch decided he could use a 'New Labour' government under self-confessed Thatcher admirer Tony Blair. The American-resident tycoon and the British prime minister kept in contact in build up to the Iraq war, and in handling its aftermath.

PATRIOTISM comes cheap when you don't have to pay taxes

Rupert Murdoch's Sun is well-known for its enthusiasm for flag-waving and encouraging its readers to subscribe to comforts for Our Boys. Murdoch was an Australian by birth, became an American citizen so he could expand his media empire there, and didn't let his 'free enterprise' principles get in the way of acquiring interests in 'Communist' China. He has been "honoured" more than once for his support to Israel, and Binyamin Netanyahu has been a commentator for Murdoch's conservative Fox News channel; but Murdoch conservativism hasn't prevented him getting around the US embargo to open a business in Cuba.

Evidently a pragmatic patriot. But Cuba's just one of the islands where he has offshore interests so that in one respect he is consistent. As a US blogger commented:

"Where did Rupert Murdoch get $5 billion to buy up the Wall St. Journal? Beyond normal profits, his coffers were stuffed by dodging taxes in the U.S. and elsewhere. Some of that is your money!

The Economist, in 1999, investigated Murdoch’s corporate tax affairs and discovered that a collection of 800 offshore companies help him cut corporate taxes to 6%!

According to the magazine at the time,In the four years to June 30th last year [1998], News Corporation and its subsidiaries paid only A$325m ($238m) in corporate taxes worldwide. In the same period, its consolidated pre-tax profits were A$5.4 billion.

“So News Corporation has paid an effective tax rate of only around 6%. By comparison, Disney, one of the world’s other media empires, paid 31%. Basic corporate-tax rates in Australia, America and Britain, the three main countries in which News Corporation operates, are 36%, 35% and 30% respectively.

The Economist wrote, “Finding out the specifics of News Corporation’s tax affairs is difficult because of the company’s complex structure. In its latest accounts, the group lists roughly 800 subsidiaries, including some 60 incorporated in such tax havens as the Cayman Islands, Bermuda, the Netherlands Antilles and the British Virgin Islands.

The BBC has also taken this up:

Media tycoon Rupert Murdoch may run one of the most profitable businesses in the UK, but it appears that he has somehow managed to avoid running up a tax bill over the past 11 years.

According to The Economist, Mr Murdoch has saved at least £350m in tax - enough to pay for seven new hospitals, 50 secondary schools or 300 primary schools.

How he has done it remains a mystery - and News Corporation is certainly loath to give away any financial secrets.

But it appears that Mr Murdoch's tax accountants have surpassed themselves - making full use of tax loopholes to protect profits in offshore havens.

[ image: Mr Mudoch is believed to have used loopholes to avoid tax]

Mr Murdoch also has the luxury of shifting funds from country to country across his sprawling media empire to foil the taxman

Friday, March 19, 1999
, Business: The Company File

Murdoch 'pays no UK tax'

An earlier report in the Independent shows just how cheaply the billionaire enjoyed the services of the British state looking after his interests.

Now the News of the World is at the centre of a row over unscrupulous - and illegal - newsgathering methods that has already involved the Tory government and could have repercussions concerning Murdoch's media empire and the state.

Andrew Coulson, whom Tory prime minister David Cameron made his head of media at Downing Street, has come under pressure from MPs, with the Home Affairs Select Committee announcing an inquiry into phone tapping and hacking by reporters at the News of the World, and will face more questioning from the police over his alleged role when he was editor. Coulson resigned as editor in 2007 after its royal correspondent Clive Goodman and Glenn Mulcaire were jailed for phone tapping.

Coulson said he was unaware of the phone tapping. However, former News of the World journalists have claimed that he ordered them to do it.
There was a time when 'phone tapping was assumed to be the work of the police, and even they were supposed to make a case to the Home Office to get permission for it. Of course we assumed that more of it went on than was admitted, and that was besides the tapping and mail interception carried out by the government and security services.

New means of communication, with users often off their guard, have created new opportunities for snoopers. But what is remarkable is that not only have 'private enterprise' hacks felt entitled and encouraged to spy on people's private communications, but the range of targets and the scale of it. The Guardian which uncovered this says the number of names runs into thousands.

Some were warned by Scotland Yard that their voicemail was being accessed without authority. Some people considered to fall into 'national security' categories - not 'security' risks and Lefties like me, but members of the royal household, the military, police and government - were warned if there were grounds to suspect their voicemail might have been accessed. Some who took the initiative to approach Scotland Yard were told if there was any evidence. But according to the Guardian, police hold a spreadsheet detailing a mass of paperwork, audio tapes and computer records from Glen Mulcaire, which revealed 4,332 names, 2,987 mobile phone numbers, and 91 PIN codes needed to access voicemail of people who have changed the factory settings of their mobiles.

Paul Farrelly, a former journalist who is a Labour member of the Commons committee, has used parliamentary privilege to make allegations about Andrew Coulson and Tom Crone, legal manager of News Group Newspapers (part of News International). Farrelly said people had wrongly assumed that his committee had cleared Coulson because it could find no evidence linking him to the hacking. "We were incredulous of the notion that such a hands-on editor would not have had the slightest inkling about what his staff, and what private investigators employed by the paper, were up to."

He cited a story that was spiked because of concern over the way the information to back it had been obtained.

Farrelly criticised Andy Hayman, former head of the Met's special operations unit, now a Times columnist, who had been in charge of the Mulcaire inquiry. He also criticised Hayman's successor, assistant commissioner John Yates. "Had Mr Hayman been in charge of the Watergate inquiry, President Nixon would have safely served a full term. His line is one which … John Yates is finding increasingly difficult to maintain … We were very critical of the evasiveness displayed by Mr Yates in the police evidence to us."

Former Labour Home Secretary Alan Johnson has questioned the conduct of Scotland Yard in this affair. Senior officers told him last year that every individual whose phone may have been hacked into would be informed. But his former government colleague, Chris Bryant, said police took no action when it became apparent his phone might have been targeted.

The Home Office abandoned plans to establish an independent inquiry into the phone-hacking scandal last year after a senior official warned that the Metropolitan Police would "deeply resent" any interference in their investigation. A leaked Home Office memo shows that the Labour government decided against calling in Her Majesty's Inspectorate of Constabulary after intense internal lobbying.

A former News of the World deputy features editor, Paul McMullan, has said hacking was rife and Coulson must have been aware of it when he was running the paper's investigations. "He never sat over my shoulder to watch me do it. But he wouldn't have been able to reach his position without knowledge of how the industry works. It would be disingenuous of me to say that Andy Coulson didn't know about it."

Tom Watson, another Labour member of the Commons committee, has accused Rupert Murdoch of appointing Rebekah Brooks as chief executive of News International, knowing that she had admitted that illegal payments had been made to police officers for information and stories. Watson says Murdoch should be asked to give evidence to the inquiry. "I doubt that Rupert Murdoch knows about these indiscretions, but he is responsible for appointing people to positions of great power who should, and for that reason he too should explain his actions to the committee," says Watson, a former Cabinet minister, who had to resign over a letter urging Tony Blair to resign. The Sun agreed to pay Watson substantial damages last year after claiming he was involved with the so-called e-mail plot to smear Tory MPs.

The News of the World may not be the only newspaper that has been implicated in telephone snooping and similar methods. But it will be interesting to see how far up the News International organisation the investigations are allowed to go, and what kind of relations with police and politicians come out. Murdoch's influence with Thatcher and Blair, as well as the growth of his media empire, may have left confusion as to who is in charge, and whose word is law.

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