Sunday, July 31, 2011

Murdoch And Klein Game The System

The NY Daily News reports that News Corporation, the media and news conglomerate owned and run by Rupert Murdoch, has gamed the political system to get a no-bid contract for its educational division:

More than a dozen private firms wanted to work on a project like the one the state Education Department is set to award to a Rupert Murdoch-owned company in a $27 million no-bid contract.

Agency officials have cited "an extremely challenging time line" in their decision to partner with News Corp. subsidiary Wireless Generation to build a data system of student test scores and other information.

The Daily News has learned that the agency has explored the project for at least two years - proof, critics say, state officials had ample time to competitively bid out the contract and still meet a fall 2012 deadline for a federal Race to the Top grant.

"It raises all kinds of questions," said Susan Lerner, executive director of good government group Common Cause New York. "There appears to be time in this process to go through a much more open-bidding process to ensure that the public is getting the best vendor at the best price."

The News has also learned that Wireless Generation paid as much as $5,000 a month to lobbying firms to advocate for the contract and Race to the Top funds with state officials.

The biggest lobbying Murdoch could have done for this business was to hire Joel Klein, the former chancellor of New York City schools and a big proponent of Wireless Generation, to run the education division of News Corp. that now owns Wireless Generation.

In 2009, Klein had handed Wireless Generation a contract for School of One, a computerized education program that Klein said would help create "a school system where instruction was individualized by cutting down on the number of teachers and relying more on technology."

This contract was extended in October 2010 by the DOE, just one month before Klein resigned from his chancellorship of the NYCDOE and announced his hiring by News Corporation and a month and a half before Murdoch's News Corp. bought Wireless Generation.

Rupert Murdoch has been a wizard at greasing the wheels for much more lucrative deals in the past then this one (after all, $27 million is just chump change to Murdoch), but don't kid yourself, Murdoch and Klein envision a very profitable future for their for-profit online education division.

In a speech he gave in June, Murdoch said he expects News Corporation's education division to become "a leading provider of educational materials within five years, aiming for about 10% of total revenue to come from this source."

Now that Murdoch has dropped his bid for BSkyB, the British satellite broadcasting company that would have added billions to News Corporation's profits, Murdoch may need the extra revenue from his education division even more.

The loss of the BSkyB deal came as fall-out from the phone hacking scandal that is embroiling Murdoch's News International company in Britain.

Allegations that Murdoch's employees at his British newspapers hacked into the phones of murder victims, victims' families, politicians, celebrities and others, bribed the London Metro police for hacking information, and subverted justice by paying off cops charged to investigate News International and politicians have Murdoch's empire in Britain reeling.

Murdoch has already shut the newspaper at the center of the scandal, News of the World, and may be forced to sell his remaining British newspapers in addition to losing the BSkyB deal.

Ten people have been arrested in the scandal, including the former editor of News of the World and one of Rupert Murdoch's closest allies in News International, Rebekah Brooks.

Murdoch named Joel Klein to head an internal News Corporation investigation into the hacking scandal. Klein can be seen at the photo at the top left seated behind Rupert Murdoch's son, James, as he testified to Parliament back on July 19 that he knew nothing about a cover-up of the phone hacking scandal.

James Murdoch's testimony has since been disputed by former News International employees.

The scandal, seemingly isolated to Murdoch's British News Empire, has crossed to the United States in the last few weeks when allegations surfaced that News International employees may have hacked into the phones of 9/11 victims.

Representative Peter King (R-NY) asked for the FBI to investigate the allegations and the Department of Justice has opened an investigation into the matter. In addition, Murdoch's Wall Street Journal reported that the SEC may be opening an investigation into News Corporations' business practices and the Daily News has reported that employees at the NY Post have been advised by the editor to save any information related to the hacking case for an internal News Corp. investigation.

Les Hinton, the former chairman of News International during the period the phone hacking scandal was alleged to have taken place and the publisher of the Wall Street Journal, was forced to resign from the paper over the scandal earlier this month.

All of this brings me back to just how Murdoch and Klein, still engulfed in a phone hacking scandal that has seen new allegations that News International employees hacked into the phone of a murdered girl's mother News International itself had given her, can be winning the $27 million no-bid contract from the New York State Department of Education when the rest of the News Corporation Empire is so scandal-ridden.

And the answer is of course the same as how Murdoch got away with so much criminal activity in Britain for all these years.

He's got politicians like Andrew Cuomo in his pocket as allies to do his bidding for him, he's manipulated the political process by using his media empire as a bludgeon over the heads of politicians who don't give him what he wants, and paid off the right people either with campaign contributions or jobs.

As John Nichols wrote about Murdoch's political influence in The Nation:

As in England, Murdoch and his managers have for many years had their way with the American regulators and political players who should have been holding the mogul and the multinational to account. Sometimes Murdoch has succeeded through aggressive personal lobbying, sometimes with generous campaign contributions (with Democrats and Republicans among the favored recipients), sometimes by hiring the likes of Newt Gingrich (who as the Speaker of the House consulted with Murdoch in the 1990s) and Rick Santorum (who as a senator from Pennsylvania was a frequent defender of big media companies), sometimes by making stars of previously marginal figures such as Michele Bachmann.

Former White House political czar Karl Rove, who prodded Fox News to declare George Bush the winner of the disputed 2000 presidential election and who remains a key player in Republican politics to this day, still works for Murdoch, as does former Arkansas Governor Mike Huckabee, a prospective GOP vice presidential candidate.

But Murdoch is not the rigid partisan some of his more casual critics imagines. He often discovers unexpected political heroes or heroines—such as Secretary of State Hillary Clinton, a former target whose 2000 US Senate run in New York and whose 2008 presidential run earned surprisingly generous coverage from the New York Post and Fox after Murdoch determined that she was on the rise politically. The Clinton embrace was classic Murdoch. He plays both sides of every political divide. But when he is not aiding and abetting the party of the right he looks for conservative and centrist figures (Britain’s Blair, America’s Clinton) within traditional parties of the left. The point, always, is to assure that those with power are pro-business in general and pro-Murdoch (or, at the least, indebted to Murdoch) in particular.

The strategy has been so successful that, even now, there is some debate about the extent to which Murdoch’s influence will diminish in the United States.

Murdoch has taken that strategy into public education by hiring former NYC Schools Chancellor Joel Klein, by using his Americans news outlets like the NY Post, the Wall Street Journal and FOX NEWS to promote the meme that public education is a failure that can only be saved by radical reform of the system, and aggressively lobbying behind the scenes for business deals and radical education reforms like tenure changes that will help his for-profit online K-12 education division grow into the moneymaker he envisions.

So far, it's still working in education even as Murdoch sees his news divisions here in the U.S. come under scrutiny for the hacking case and his British division come close to collapse.

In fact, News Corporation is sponsoring an education conference that will promote online K-12 education as well as give Republican 2012 presidential hopefuls a platform to air their views on the issue:

NEW YORK - Rupert Murdoch's News Corp. and not-for-profit the College Board said Tuesday that they will work together to make education reform a top issue in the 2012 presidential campaign with an event that will give Republican candidates the opportunity to outline their vision for improving the U.S. education system.


To help set the agenda, the two organizations said they will co-host The Future of American Education: A Presidential Primary Forum here on Oct. 27, which will be televised and streamed online. It is timed to coincide with the College Board’s annual national forum, which attracts representatives from educational institutions across the country.

All Republican primary candidates "who meet a threshold level of support in national polls" will be invited to participate in the event, the companies said.

“Whoever is elected President in 2012 will need to take dramatic steps to improve the way we prepare our students for college and ensure our nation’s ability to better compete in the global economy,” said News Corp. chairman and CEO Murdoch. "This forum will provide a great opportunity for candidates for the Republican nomination to articulate their plans to achieve these goals."

Klein and the Wall Street Journal's Paul Gigot will host the forum.

This conference was announced before the phone hacking scandal broke wide open, so we'll see if News Corporation remains a public sponsor of the event or if Klein remains one of the hosts now that he has become a very prominent face in the Murdoch damage control team.

But the point of all of this remains whether this education conference comes off or not.

Murdoch is creating a very profitable environment for his online education business by denigrating public schools in his media, buying off the politicians to get them to change labor laws and regulations to help promote this business (just as he has done with the media enterprises in the past in both Britain and the U.S.) and hiring the right people with the right connections to promote his education business as an alternative to the public school system.

The Wireless Genration/ARIS contract is just a little glimpse into that very corrupt process and Murdoch and Klein should NOT be allowed to get away with this, NOT after the phone hacking, NOT after the bribery of the London Metro police, NOT after the conspiracy to subvert justice in Britain, NOT after all the political manipulation and chicanery.

The Murdoch phone hacking scandal points us toward the future.

It is not only time for a Murdoch-free news media in Britain.

It is time for a Murdoch-free education system here in America.
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