On the BLOOMBERG-MURDOCH trail

 EDITOR’S NOTE: This is Part One of an investigation of the symbiotic relationship between Rupert Murdoch, his company News Corporation, and Mayor Michael Bloomberg and his privately held company Bloomberg LP.

As the English Parliament and enforcement officials in that country continue to investigate how Rupert Murdoch and his company (News Corporation) illegally hacked private citizens’ phones and bribed police, the company has had to accept the resignation of several of their longtime top executives, including Wall Street Journal Publisher Les Hinton.

Regardless of the outcome of who knew what, the investigation highlights a media conglomerate that is showing strong signs of being ethically challenged – something the city’s black community has long known (see sidebar page 9). 

It also raises the question that given News Corp. is now headquartered in NYC and owns the New York Post, the Wall Street Journal and almost every local newspaper in Brooklyn, along with local television and radio outlets, is it possible they have used the same type of influence peddling and possible illegal doings here in New York City.

Assuming the possibility, the next question is where most in city government is influence peddling and possible corruption worth it? The answer is obvious and well-covered  – the city’s Department of Education (DOE).
    

The DOE has a $22 billion annual budget, and with that kind of cash flow it must even appeal to Mayor Bloomberg, the businessman. The man, who on one hand earns a dollar a year as mayor, and on the other hand has seen his assets grow from $4 billion to $18 billion during his administration through his privately owned Bloomberg LP company – a company headed by Daniel Doctoroff, who served as the city’s deputy mayor under Bloomberg.

“Education is the new growth industry,” said one City Hall source. “All the business giants, including Bill Gates, want to find the one product that will revolutionize education.”

There are many DOE/News Corp. common threads. There’s Joel Klein, who served as chancellor of the DOE and moved to News Corp. to head their education initiative.

There’s the uncharacteristic Bloomberg pick of Cathie Black – who has longtime ties to News Corp. There’s the News Corp. purchase of the DUMBO-based Wireless Generation (WG) for $360 million. There’s the ongoing work that (WG) does for the DOE and the recent $27 million no-bid contract the state gave to WG to do the same work they have done with the city.

The mainstream media has covered all these events individually, but have yet to try to connect the dots.

The first installment of this series attempts to do that through the following brief timeline.

A “smoking gun” cartoon
In mid-February 2009, the New York Post ran an editorial cartoon depicting two cops with “smoking guns” standing over a bullet-riddled chimpanzee characterization of President Obama. The insensitive and derogatory cartoon led to an uproar around the city and particularly in the black community. Choosing to start here makes sense because the incident put News Corp. in damage control mode – similar to what is happening in London.

The cartoon led to calls for a boycott of the paper, and for the firing of key employees such as the paper’s longtime editor in chief Col. Allen and its publisher Carlucci.

In the February 24, 2009 issue of the New York Post, Rupert Murdoch wrote an apology to anybody offended by the cartoon. The apology came after the Post first tried to defend the cartoon. Community activists such as Rev. Al Sharpton, City Council member Letitia James and others, however, kept the heat on and demanded News Corp. do something in deeds and not just words.

These demands included that the Post’s employment records be looked at in terms of diversity hiring, renewed calls for the Federal Communications Commission to break up the company’s monopolistic media holdings and continued boycotts of the Post.

In short, the heat was still on the paper.

On March 12, 2009, Mayor Bloomberg and then-Chancellor Joel Klein visited the Harlem Village Academies (HVA) School and lauded it as being exemplary. Like both the Post and Bloomberg LP, it’s a non union shop.  It’s founder and CEO, Dr. Deborah Kenny, makes $422,000 annually including bonuses and expenses, according to the pro -teachers union blog, Education Notes.

On May 8, 2009, Rupert Murdoch gives HVA a $5.5 million donation, effectively taking the heat off the Post and News Corp.

On May 10, 2010, – Cathie Black  is appointed to the HVA National Leadership Board. She has fairly strong ties to Murdoch in that her career took a leap forward after working for him as publisher of New York magazine in the 1980s when News Corp. owned it.

According to a Daily News story, the mainly figurehead position is meaningless in terms of HVA school policy or the school’s relationship with parents.

 On Nov. 9, 2010, Joel Klein steps down from the DOE and goes to work for News Corp.’s new education initiative division. Cathie Black is tabbed to replace him. It’s an odd pick not only because of her qualifications, but because it came out of nowhere. Reportedly, even Bloomberg’s staff new nothing about it.

On Nov. 23, 2010, News Corp. buys the DUMBO-based Wireless Generation (WG) for $360 million. At the time of purchase, the company was already doing business with the DOE in tracking all city students’ name, ethnicity, test scores, age and home addresses.
“When it comes to K thru 12 education, we see a $500 billion sector in the US alone,” Murdoch told reporters following the sale.

On April 12, 2011, the New York Times reports that 13 hours before Black was fired, Murdoch talked it over with Klein. There’s an intriguing photo of the two of them together with the story.

On April 13, 2011, Cathie Black is fired and replaced with Dennis Walcott.

On June 9, 2011, the state Department of Education awards a $27 million no-bid contract to Wireless Generation.

The money comes from a $700 million, four-year Race To The Top federal grant.

A United States Department of Education spokesperson referred all questions to the New York State Department of Education.
State Education Department spokesman Tom Dunn stood by the decision to award the contract, but refused to release a copy of it until the state comptroller’s office signed off on it and has until September to do so.

Comptroller Thomas Di Napoli spokesperson Mark Johnson said News Corp.’s hacking scandal could factor into its decision. Business ethics for affiliated firms are considered as part of an official review for awarding any contract, he said.

Calls to the DOE and Mayor’s Office were not returned at press time.

Next Week: Questions are asked of the mayor’s relationship with Rupert Murdoch.