News Corp: a study in the failure of corporate self-regulation

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Robert Greenwald

Robert Greenwald is a producer, director, political activist, and Brave New Films founder and president.

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July 26th, 2011 2:49 PM

News Corp: a study in the failure of corporate self-regulation

By Robert Greenwald

What is the main lesson learned in the Murdoch scandal?

That corporate conglomerate power run unregulated causes great public harm and lacks the checks and balances required for there to be any accountability. Given this, what would be the best way to investigate the criminal wrongdoings of such a conglomerate?

News Corp would have you believe that the answer to that question is: have the guilty and obscuring conglomerate examine itself and then report to the rest of the world the level of information it chooses to publish.

Let me be blunt: this is the definition of insanity.

Former New York City school Chancellor Joel Klein, now News Corp's executive vice president, has been tapped to lead the investigation of the company that pays him $4.5 million a year and gives him stock awards. What could potentially be a conflict of interest around that?

And who does Klein report to? Viet Dinh. Viet Dinh's prior work experience? Authoring the USA Patriot Act, a law that greatly increased the government's use of wiretapping and other forms of eavesdropping on citizens.

We also have already seen how such internal News Corps investigations turn out. There is the precedent of Les Hinton's prior internal investigation, which revealed no phone hacking beyond the "bad apple" who had already gone to prison. Eventually, that failed investigation caught up with Hinton, who resigned from his post as chief executive of Dow Jones, publisher of the Murdoch-owned Wall Street Journal. But this example further highlights the point: there is no incentive for a senior executive to do anything other than minimize the issue they are investigating.

This act of News Corp supposedly investigating itself is a clear and raging sign of why consolidated power cannot be left in complete and unchecked control -- particularly of their own investigation. As my 2004 documentary Outfoxed highlighted, in examining the unethical behavior of Fox News, the News Corp problem of distorting the truth has long existed. As a company, News Corp, with Fox often leading the way, has led an imaginary war in which it sees itself as "against the world." Nothing from its corporate practices suggests that a self-investigation would reveal actual information.

This is not how things have to be. News Corp could follow the lead from dozens of prior companies and hire outside legal counsel to oversee the investigation. What News Corp is doing, once more, goes beyond standard practice and refuses to cede any control, presumably fearing that it might stop it from doing whatever it is it wants to do. Charles M. Elson, an expert on corporate governance at the University of Delaware, was recently quoted in The New York Times on this matter, saying clearly, "You cannot be seen as objective if you are inside."

Let me summarize what has been learned by this whole parade of corruption. Corporate conglomerates run without regulation, do not work in the service of society, and run reckless and unchecked whenever possible. Self-investigation of such malfeasance is not the standard, and should not be the situation in this case. This whole phone-hacking story has been nothing but an absurd example of how power run unchecked responds by claiming more power when attempted to be reined in.

News Corp should not be allowed to continue this charade of a self-investigation. Meanwhile, the United States Senate and the department of justice should use all the power they have to push for a complete and thorough investigation into News Corp's US dealings. We all deserve real answers to how much criminal activity occurred, and where the related responsibility and accountability failed.

Those answers will never come from News Corp itself.

This post was originally published by the Guardian.