October 6, 2022

Former City Schools Chief Emerges as Murdoch Ally

Joel I. Klein, the former New York City schools chancellor, was in a tricky position. Three weeks ago, Rupert Murdoch asked Mr. Klein, now his trusted deputy, to oversee an investigation into the phone hacking scandal that has deeply wounded the News Corporation and its chairman, something Mr. Klein was eager to avoid.

“I am trying to get as far away from this as I can,” he lamented to a friend.

He has not succeeded. Mr. Klein, who joined the News Corporation as a senior vice president in January, is not only responsible for the investigation that could uncover what company managers knew about the hacking, but he also has become one of Mr. Murdoch’s closest and most visible advisers throughout the crisis.

His seemingly contradictory roles — de facto chief of internal affairs officer and ascendant executive with Mr. Murdoch’s ear — are raising questions about how robust and objective the internal inquiry can be. When Mr. Murdoch summoned a team of top deputies and outside consultants to London to help him manage the fallout from the hacking, Mr. Klein was one of the first to arrive, moving into a temporary office 20 feet from the chairman’s.

When Mr. Murdoch and his closest advisers debated whether to accept the resignation of Rebekah Brooks, a newspaper executive at the center of the controversy, Mr. Klein pushed for her exit. When Mr. Murdoch wrote a statement to deliver to Parliament last week, Mr. Klein weighed in on the drafts.

And while the world watched Mr. Murdoch and his son James testify, Mr. Klein sat directly behind them for three hours, occasionally cleaning his rimless glasses with his tie as he looked on in support.

Mr. Klein’s dizzying journey, in under a year, from one of the nation’s foremost education reformers to the corporate consigliere for a media titan whose politics are far to the right of his own, has surprised and unsettled many friends and colleagues, who fear that he will be unable to extricate himself from a scandal that shows no sign of abating or, they say, ending well. “This was nothing he could have ever expected,” said Barbara Walters, a longtime friend of Mr. Klein’s.

But in many ways, interviews suggest, his emergence as a dominant figure within the News Corporation is consistent with a biography that combines high-minded legal and social aims — antitrust law and education — with a driving, sometimes overwhelming competitive fire.

“He has a take-no-prisoners attitude,” said Randi Weingarten, who battled Mr. Klein when she was head of the New York City teachers union. “He is a litigator. He is about winning.”

It is a sign of how delicate Mr. Klein’s position inside the News Corporation has become that he was initially against the idea of an internal review. In April, after London’s Metropolitan Police arrested three News of the World journalists on suspicion of hacking, some executives pushed for an investigation that would have the full backing of the company’s board and senior management, according to two people with knowledge of the discussions taking place at the time.

Mr. Murdoch opposed the idea outright. Standing firmly in his corner was Mr. Klein.

“There was a clear message,” said one of the people who knew of Mr. Klein’s role and requested anonymity to divulge private conversations. “Stay out. And let Joel handle it.”

Top lawyers and experts in corporate governance said the News Corporation should have hired outside legal counsel to oversee the inquiry, as dozens of companies like the American International Group and Fannie Mae have done in the past, rather than rely on an insider.

“That is not standard practice,” said Charles M. Elson, an expert on corporate governance at the University of Delaware. “You cannot be seen as objective if you are inside.”

The News Corporation says the investigative body will have true independence and the power to compel employees to cooperate. The company points to the appointment of Lord Anthony Grabiner, a prominent British lawyer who also sat behind the Murdochs during their testimony before lawmakers last week, as the body’s independent chairman. Lord Grabiner will report to Mr. Klein. Mr. Klein, in turn, will report to Viet Dinh, an independent director on the News Corporation board.

Mr. Klein declined to be interviewed for this article.

“We’ve been given a free hand,” said Lord Grabiner, who added that he and Mr. Klein never would have agreed to take on the job if they felt the committee was a sham.

Article source: http://www.nytimes.com/2011/07/24/business/media/joel-klein-ex-schools-chief-leads-internal-news-corp-inquiry.html?partner=rss&emc=rss

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