Rupert Murdoch on Friday after he apologised to the family of murdered schoolgirl Milly Dowler. Photo: AP
WHEN you read All the President's Men, Bob Woodward and Carl Bernstein's classic account of the Watergate scandal, one point always makes you pause and catch your breath - when the address book of one of the half-dozen low-rent Cuban operatives caught inside the Washington DC Democratic headquarters is found to contain the name and telephone number of Howard Hunt, one of Richard Nixon's right-hand men. Though it would take years more of investigation, one end of the scandal's golden thread was there, connecting a random burglary to the heights of power. Pulling on that thread unravelled an entire conspiracy.
If there was any doubt the British phone hacking scandal has become News International's Watergate, with months if not years to run, it would be assuaged by looking back at the way the scandal unfolded, for it began with a similarly explosive realisation in an otherwise mundane incident. This time those involved were about as far from low-rent as you can get, for the crisis of News International's British operation began when Prince William realised someone was hacking his phone.
In 2006, William had struck a loose arrangement to borrow a portable TV editing suite from a news producer. Anything that William did counted as a story and it was duly ''broken'' in the News of the World by its ''royal'' editor Clive Goodman, a man whose ability to get scoop after scoop on Britain's royals contributed greatly to the Murdoch tabloid's close to 3 million sales.
Prince William would not have been the first person to look at the News of the World's stories - it also had a breathtaking exclusive concerning his treatment for a knee injury - and conclude that the paper knew more than it possibly could have from gossip. It would later become clear that numerous others had felt the same way, and some even made inquiries of the police. Their concerns could be brushed off as celebrity paranoia, but the concerns of a future king couldn't, so an inquiry was held.
Reluctantly, the police followed the lead from Goodman to his associate, Glenn Mulcaire. With his slicked-back hair and snouty face covered with a perpetual three-day growth, Mulcaire was a London spiv straight out of central casting. Styling himself a ''private detective'', he was really a fixer, the type who had once made a living from going through bins for news leads. The era of the mobile phone had given him a new angle. Working on the assumption most people don't change the factory-setting PIN - 0000 - on their voicemails, the messages of celebrities, or more frequently their PAs, could be retrieved. The numbers could be found from contacts in the hinterland of PR, talent management and agencies.
Once the police investigation was complete, Goodman and Mulcaire were hung out to dry by News International, serving prison terms of several months each, though they later received unfair dismissal payouts. UK News International's chief executive, and former News of the World editor, the flame-haired Rebekah Brooks, announced that the two people concerned were rogue operatives working without supervision, and then NoTW editor Andy Coulson offered his resignation, which was reluctantly accepted. At which point, Coulson became communications director for Conservative then-opposition leader David Cameron, ahead of an election he was virtually certain to win.
The police announced that a grand total of eight other phones had been hacked, and there it was assumed the matter would rest. But no one of any persuasion believed for a second that NoTW's activities were limited to eight people. And it was observed that the net result for Rupert Murdoch was that an operative of his had become even closer to Britain's next prime minister.
Tony Blair, head of a failing government, had been replaced by Gordon Brown, who was failing even more, yet there was agreement that the incoming Tory government was gimmicky and lacking real ideas. When the 2008 global financial crisis came along, the separation between ordinary people and power appeared total.
By now, various parts of Murdoch's News Corporation were eyeing off several targets, including a full takeover of the BSkyB cable network in Britain, of which it already owned close to 40 per cent; a bid for the newly announced and tendered-out Australia Network; as well as musing about buying the debt-ridden New York Times after its 2007 purchase of the Wall Street Journal.
For those who knew more about the case, this was an immensely frustrating time - there was ample evidence that the Goodman-Mulcaire hackings were not an isolated operation.
Years earlier, the News of the World had hired another fixer, Jonathan Rees, a man who made Mulcaire look like Nelson Mandela. Like Mulcaire, Rees was a registered private detective but his repertoire was far wider. Throughout the '90s he had worked for various British papers, selling information gained from corrupt cops and bugging devices, all the while dealing with inquiries into the axe-murder death of his business partner in 1987. A seven-year prison sentence for planting evidence made him persona non grata to his old Fleet Street employers, save one - Coulson's News of the World, which was happy to give him a second chance when he came out of prison in 2004.
The Rees-Coulson link made visible the two-way traffic between the police force and NoTW - Rees ran a network of police informers, and a thorough investigation of the paper would have been a disaster for both sides. It also gave flesh to an explosive clip of Coulson and Rebekah Brooks giving evidence to a parliamentary committee on media regulation in 2003. Asked about information-gathering practices, Brooks piped up to say that they ''had paid police for information in the past'' - perhaps unaware this was a criminal act. Coulson interrupted her, though his answer was no better, saying they would do so again if it was ''in the public interest''.
Luckily for News, Rees couldn't be named between 2008 and 2011 because he was on trial, charged with the murder of his former business partner. By the time he was acquitted in March this year, and Rees's connection with NoTW could be spoken of again, the scandal had been revived from other sources.
The New York Times had put a great deal of time into investigating Murdochworld, and had finally come up with an important witness, Sean Hoare, one-time NoTW showbiz editor, who claimed Coulson had actively directed phone hacking, and the whole paper was involved in it. Hoare was buttressed by a series of reports by The Guardian beginning in 2009 and based on freedom of information requests it made to police when it became clear the latter's investigation had been curtailed. As it turned out, the police had gathered 11,000 pages of evidence during the initial investigation, and knew of thousands of people whose phones were hacked and who they hadn't bothered to inform.
For the first time this included not merely celebs, but politicians. By last year it was clear that not only had the police known of systemic phone hacking by NoTW, but that News International was willing to pay almost any number of out-of-court settlements to make specific accusations go away. Though the company maintained a party line that no journalists had been directed to hack phones, it became clear that settlements of up to three-quarters of a million pounds were made as early as 2008, and authorised at the top level of News's European operations, chaired by James Murdoch.
By the end of last year, it was clear this strategy was in crisis. Though Coulson remained communications adviser to Prime Minister Cameron, the pressure on News International was immense, as numerous celebrities - from actress Sienna Miller, to hard-left former MP George Galloway - refused to take settlements and pushed towards civil court proceedings. News International was now angling to be granted the right to a controlling interest in BskyB, with a decision due early this year.
In December, Ian Edmondson, a former NoTW assistant editor, and two reporters were arrested, with allegations of having worked with the hacker, Mulcaire. This gave Downing Street and the House of Commons no option - in January Coulson resigned from Cameron's office and the House announced two inquiries.
News International responded by clearing the decks, announcing it would agree to sell Sky News as a condition of taking over full ownership of BSkyB. Culture Secretary Jeremy Hunt approved the BSkyB takeover under that condition, much to the relief of the Tories, that it would not, as a minority government, have to risk News International taking its support elsewhere.
By now those who had been at News's tabloid coalface knew what was coming, even if the leadership did not - and revelations that crime victims' phones had been hacked made the ''fair game celebs'' defence moot.
When it was revealed the paper had hacked the phone of Milly Dowler, it was clear that a crisis point had been reached, for both News and the government. Dowler was a 13-year-old girl who disappeared in 2002. NoTW reporters had hacked her mobile phone, and in doing so had wiped two messages from her voicemail. Since her distraught family were also accessing her voicemail, the erasures gave them hope Milly was alive. In fact, she was already dead.
Further revelations would come - most particularly a confusing story from former PM Gordon Brown about whether News had used hacking to reveal his newborn son's cystic fibrosis - but it was the Dowler case that was the real disaster. In short order, a congressman in the US began inquiries into whether US citizens had been hacked, and British opposition Labour leader Ed Miliband pulled together an all-party vote calling on the company to withdraw its bid for BSkyB. As advertisers began to desert, News responded with a scorched-earth policy - first closing down the 168-year-old NoTW, then delaying and later withdrawing the BSkyB bid.
The moves were a desperate measure to protect Rebekah Brooks, to whom Rupert was very close and who resigned her position as News International CEO on Friday morning London time. Even Rupert's personal apology to the family of Milly Dowler the same day is unlikely to be enough to halt the carnage.
There are reports that News may pull out of the UK altogether - a move possibly prompted by revelations that the material gained from hacking had been shared with ''quality'' titles, The Times and The Sunday Times, which would implicate the whole organisation.
Yet, by now, the process is almost entirely out of the hands of News and the compromised police force that tried to protect it through sheer indolence. The process will grind on for years to come. As the doings of the thuggish Jonathan Rees are drawn into the picture, the FBI has also opened investigations into hacking in the US. And it has been revealed that not only had the head of the initial investigation, Andy Hayman, been given a column in The Times, but Neil Wallis, a now-arrested deputy editor of News of the World, had been contracted to give consultancy advice to the police. As the paper itself liked to say, you couldn't make it up.
Whatever happens, the cautionary tale in all this will attach to Andy Coulson, who has been arrested in the wake of the Milly Dowler revelations and faces years of inquiries, pariah-status in the British media world, and accusations that he perjured himself last year as a witness at the trial of Scottish socialist Tommy Sheridan - for perjury! - by denying any knowledge of phone hacking.
Even if this is not the case, the behaviour of Coulson and others throughout poses one central question - how is it that ever-larger numbers of people can lose all power of individual moral judgment when part of a powerful and determined organisation? One could hardly say there is no place for blagging or hacking in the armoury of a journalist investigating stories of public interest, nor that there is any hard-and-fast rule about what constitutes the public interest. But the lack of such a rule does not imply there is no distinction, it merely suggests that no amount of rule-making, codes of conduct and the like can substitute for individual moral judgment.
There may well be an occasion when hacking a missing teenager's mobile is not only a moral act, but a journalistically essential one - if the police investigation has been inadequate for example, scarcely an unlikely scenario given the Met's performance over phone hacking. But to do so as part of a scandal round-up is quite another matter. You can't use a code of conduct to make that distinction - you need to be a human being.
The trouble is that big organisations headed by a personality cult (and News Corporation is surely that) work by turning people into the opposite of human beings, into gaining meaning in their lives by handing over conscience and control to the organisation, a process that occurs across News's global organisation.
News didn't invent phone-hacking, but the manner in which it put these techniques at the centre of its journalism was a product of its global culture - an elitist disdain for the moral frameworks by which others live. The phone-hacking in Britain is matched by News Ltd Australia's willingness to engage in serial vendettas against political opponents, going beyond political contestation to calumny and attempts at psychological destruction of those it constructs as enemies. In both countries, such methods make the higher echelons of the organisation self-selecting, drawing in those with a streak of sycophancy or bullying in their nature, or both. The News global groupthink makes the organisation capable of moving fast, but fatally separates it from critical feedback from the outside world. Its operatives were thus unable to guess what the humans were thinking, or at what point a fatal divide had appeared between media and audience.
In the wake of the phone hacking scandal, there have been loud calls for tighter regulation of day-to-day press activities, with people such as the orgy-loving formula one supremo Max Mosley and actor Hugh Grant calling for a system akin to the French approach, whereby privacy laws oblige media to inform a public figure that they are being investigated, at which point of course they can take out a pre-emptive injunction. This would be by far the worst result of the whole affair, and to be resisted at all costs. Journalism will always occupy a boundary-crossing space in social life. The job will sometimes oblige its practitioners, in the name of right, to break laws, which are themselves right.
But that unique social role makes it all the more imperative that means of last resort do not become standard operating procedure, for then the state, as a representative of the public, has no choice but to act. The greatest and most vulnerable victim of the nihilism spruiked by News is not the ordinary families who suddenly became fair game for a crew of crooks and fixers - it is journalism itself, and the complex set of principles and mores by which it operates in a society dominated by the power of big corporations.
American society survived Watergate and Nixon's merry band of anti-social thugs. The news will survive the phone hacking scandal, but not until it has re-examined its convictions - and not until there have been at News Corporation more than a few convictions.
Guy Rundle's most recent book is The Shellacking: The Obama Presidency, the Tea Party and the 2010 mid-term Elections.