LF: Murdoch Scandal Roils WSJ

On Tuesday, July 5, bureau chiefs and editors at The Wall Street Journal dialed into a conference call organized by Dennis Berman, the newspaper’s new editor in charge of corporate coverage. He trotted out some numbers: of the more than 1,200 front-page stories the Journal had run in the previous year, only 12 percent had been about corporations—formerly the paper’s bread and butter.

Since its 2007 sale to Rupert Murdoch’s News Corp., the Journal had been steadily devolving, old-timers thought, into a general-interest daily—still a fine newspaper, but no longer the essential first read of corporate America. “We have to raise our ambitions,” Berman said, according to someone who listened to the call. And it wasn’t hard to believe that the Journal would. A week earlier, it had won three Gerald Loeb Awards, the highest honors in business journalism, after being shut out in 2010 for the first time in decades.

At that moment, though, a long-simmering story in the British press was exploding, dictating that the next major corporation the Journal would be covering would be its own parent.

The bombshell admission by the News Corp.-owned tabloid News of the World that its reporters had hacked the voicemail of a murdered teen, giving her parents false hope that she might still be alive, has made the Murdoch company one of the most reviled on the planet, as more allegations of unethical practices at its various properties have surfaced. News Corp.’s hasty decisions to shutter the tabloid, as well as scuttle a $12 billion bid for complete ownership of a lucrative British satellite broadcasting company, have done little to stanch the outcry. In the sprawling story’s latest developments, the FBI opened an investigation into whether News Corp. outlets violated the privacy of 9/11 terror victims in America; Murdoch himself consented to testify before Britain’s Parliament; and Rebekah Brooks, the CEO of his U.K. newspapers, resigned.

Photos: Who’s Who in Phone-Hack Scandal

Rupert Murdoch, David Cameron, Rebekah Brooks

British Prime Minister David Cameron, top right, has resisted calls for an investigation into the practices of Rupert Murdoch's News of the World, where reporters accessed the voicemail of missing British teenager Milly Dowler in 2002. Rebekah Brooks, lower right, was editor of News of the World at the time., Clockwise from left: Getty Images, AP Photo (2)

In the last week and a half, reporters and editors at the august Journal have had to come to terms with the fact that they share corporate DNA with publications that have paid police for news, paid large settlements to keep phone-hacking victims quiet, and provided Parliament with incomplete information, among other sins against journalism. The Journal's publisher, Les Hinton, has been widely discussed as a possible fall guy for their malfeasance. For the Journal, covering it all has been an awkward and frustrating challenge.

“It stinks. It makes our stomachs churn, to be bizarrely held accountable for some dipshit tabloid guys from eight years ago. It’s absurd,” said a staffer who has been at the Journal since before Murdoch bought the paper. Another reporter, also speaking anonymously, described an end to the era of pretending away the Murdoch taint: “This slightly naïve notion that nobody really knows that we’re part of News Corp., that what they do, what Fox News does, what Rupert Murdoch does, doesn’t affect us—when something like this happens, it forces people to recognize that it does.”

In covering the story, the Journal has walked a fine line. After running articles on page B1 and B3 on its first two days, the News of the World closure made the front page last Friday. The story was then relegated back inside—although Journal reporters Jessica Vascellaro and Russell Adams broke news Wednesday with a report that News Corp. was contemplating the sale of its remaining British newspapers. As the scandal has continued to explode anew each day, the Journal has, indeed, upped its game. Murdoch’s decision to revoke his bid for British Sky Broadcasting was fronted again Wednesday, and yesterday, the paper published the first extensive interview with Murdoch.

Faced with sleazy corporate cousins, reporters at the august Wall Street Journal are grappling with how to cover their boss’s scandal—and their own survival. By Nick Summers.

Photos: Who’s Who in Phone-Hack Scandal