07.13.11

Murdoch’s U.S. Tabloid Scandal

The media mogul is under fire over the London phone-hacking scandal, but here in America his New York Post has struggled with allegations that it rewarded friends and punished enemies. Howard Kurtz reports.

Ian Spiegelman remembers how the culture of Rupert Murdoch’s New York Post made him “pretty uncomfortable.”

“There were people you were not supposed to mess with,” says the former reporter for the gossipy Page Six, if they were “friends” of executives at the Post or its parent company, News Corp. At the same time, “word would come down through your editor, ‘This is someone we should get, should go after.’ The people high up had people they just didn’t like.”

Amid the mounting revelations of sleazy tactics at Murdoch’s London newspapers, media analysts are questioning whether comparable misconduct may have occurred at his American news outlets. There is no evidence of anything like the phone-hacking scandal that has rocked British politics and prompted Murdoch to shutter the News of the World.

But a scandal that tarnished the Post five years ago carries echoes of a brass-knuckled style of journalism that resonates a bit louder today in the wake of the Murdoch mess across the Atlantic.

The Post scandal carries echoes of a brass-knuckled style of journalism that resonates a bit louder today.

“There was a kind of thuggishness,” says Jared Paul Stern, a former Page Six contributor at the center of the controversy. He says Murdoch was on the phone with Post Editor in Chief Col Allan “all the time. He was down in the newsroom. I can’t imagine anything of that scale could go on and him not know about it.” Allan and a Post spokesman have not responded to requests for comment.

Neither Spiegelman nor Stern is a choir boy. Spiegelman was fired for sending a nasty email with antigay slurs to someone who had crossed him. Stern left after being caught asking a billionaire businessman for money in exchange for keeping negative information about him out of the paper.

But what they describe in interviews with The Daily Beast suggests that they were not just renegades but part of a newsroom environment in which some questionable practices may have been tacitly approved. And it’s worth recalling that News Corp. initially tried to cover up the London hacking by blaming it on a rogue reporter acting on his own.

In a 2007 affidavit, Spiegelman said “accepting freebies, graft and other favors was not only condoned by the company but encouraged as a way to decrease the newspaper’s out-of-pocket expenses…and that News Corp. attorneys had been instructed to ‘look the other way.’” There was a policy of “favor banking,” the affidavit said, “practiced on a much larger scale by Rupert Murdoch.” In 2001, Spiegelman said in the document, “I was ordered to kill a Page Six story about a Chinese diplomat and a strip club that would have angered the Communist regime and endangered Murdoch’s broadcasting privileges” as he was trying to get Beijing’s approval for his satellite-television service.

At the time, Howard Rubenstein, a spokesman for the Post, called the allegations “a tissue of lies” and a “disgrace.”

The affidavit also said that in 1997 a local restaurant owner who was frequently mentioned in Page Six had $1,000 sent to Richard Johnson, then the gossip page’s editor. The Post confirmed this, with Allan quoted as saying that Johnson had made “a grave mistake” and had been reprimanded.

Joe Francis, producer of the “Girls Gone Wild” video series and a fixture on Page Six, also threw a bachelor party for Johnson at his Mexican estate estimated to cost $50,000.

In the Daily Beast interview, Spiegelman said Page Six staffers were showered with so many free gifts that the leftovers were put “on a cubicle shelf behind our backs for anyone to take away.” He said the money-losing Post “would go crazy” if reporters submitted expenses for, say, a visit to the Hamptons, so they would accept free trips: “Everyone knew, that was what you do.”

Allan, the editor at the time, “knew all about the culture. It was his paper,” Spiegelman said.

When celebrities criticized the Iraq War, Spiegelman added, he was told to remind readers of their show-business projects “in case they feel like boycotting.”

In similar fashion, Stern says the troops regularly received marching orders. “For a long time the Clintons were targets,” he said. “You couldn’t get enough dirt on the Clintons. Then Bill Clinton made a rapprochement with Murdoch, sucked up to him in the run-up to Hillary running” for the Senate in 2000.

“Then one day it was, ‘You can’t write anything bad about the Clintons.’ We had to kill stuff all the time. It filtered down from Murdoch. In the meetings we’d be told, ‘No way, mate.’”

Some Australians who were friendly with the Murdoch family, such as actress Nicole Kidman, “had a free pass,” Stern said.

It was Stern’s entanglement with supermarket magnate Ron Burkle that brought many of these allegations to light, and prompted Spiegelman’s affidavit.

Burkle, dubbed a “party-boy billionaire” by the tabloid, was concerned about what he regarded as unfair coverage, some of it by Stern. A meeting was arranged, Stern encouraged him to become a source for the column, and an associate bought $5,700 worth of shirts from Stern’s clothing line, a sideline he had developed. Stern later sent a Burkle staffer an email saying the mogul “certainly has the means” to stop unfavorable stories, which Burkle took as an extortion threat.

Sources later confirmed that Burkle, working with federal law enforcement, had secretly videotaped Stern in subsequent meetings demanding a $100,000 payment and $10,000 monthly stipend in return for ending negative mentions of him in Page Six. Stern said he’d been set up, the Post suspended him, and a News Corp. executive called the episode “highly aberrational.”

When prosecutors declined to bring charges, a spokesman for Burkle said he had “followed the government’s instructions” in an effort to “stop the publication of false reports” about him. Burkle did not respond to an email Tuesday.

“I walked into the trap that he set,” Stern says now. “He wanted to get back at Murdoch and the Post and found a way to do it through me. I kind of took a bullet for all this stuff.”

None of this, of course, reaches the level of hacking people’s phones. But with Sen. Jay Rockefeller now urging the FBI to investigate possible News Corp. misconduct in the United States, the spotlight is certain to fall on some of Murdoch’s American media properties.

Spiegelman offered a rumination about Murdoch’s company in a follow-up email:

“It’s interesting that so many of Rupert’s top editors and VPs are not citizens of the countries to which he dispatches them helter skelter. You need not be a xenophobe to pause at the fact that so many of his papers and cable news outlets in London, NY and, now, DC, are largely run and organized by strangers from strange lands—South Africa, Australia, New Zealand...

“News Corp VPs are nationless. It doesn’t matter where you put them—they are plugged into their own, floating nation…namely News Corp. You don’t always see them, but they are always hovering between the editor-in-chief and Rupert, and their loyalties remain not with any country or system of laws. Imagine the kind of pressure such a misty, loyalty-free menace could put on a reporter who actually lives where he lives and whose life is there. You want to know if this London poison is likely to have spread to New York? Yeah. But don’t blame London.”