Phone hacking scandal deepens

[Peter Lemkin]

Review of Hack Attack: How the Truth Caught Up with Rupert Murdoch, by Nick Davies, with an Excerpt from the Book

By Peter Oborne
Allies: Rebekah Brooks and Rupert Murdoch in 2010 Photo: Getty Images

Nick Davies's account of how he exposed the Murdoch empire is as exciting as a thriller

By Peter Oborne

Most journalists bumble along. We grapple with the news, file our stories, go home and forget about it. There is also a rare second breed: investigative journalists. The best of these are often obsessive and tortured characters, driven by some deep personal imperative to unearth the truth.

Nick Davies is Britain's greatest investigative journalist. He lives in Sussex and very rarely enters the offices of The Guardian, the newspaper for which he works. He operates on his own, pursuing his own hunches, following his own leads. Davies says: "I spent my childhood being hit by people some grown-ups some of them genuinely vicious, some of them genuinely believing the noxious idea that if you spare the rod, you spoil the child." He speculates that his investigative work has been driven by "some deep-seated urge to hit back at anybody at all who takes power and abuses it".

Several years ago, Davies wrote a brilliant book, Flat Earth News. It remains an indispensable and shocking examination of how the newspaper business works. While researching this book he became fascinated by an apparently small story that had been ignored by most of the newspapers. It concerned Clive Goodman, royal correspondent of the News of the World, who was jailed for hacking into the voicemails of members of the Royal household. The newspaper insisted this was an isolated incident involving one "rogue reporter".

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Had it not been for Davies the matter would have ended there. Rebekah Brooks would probably still be chief executive of News International and Andy Coulson, former News of the World editor, would still be David Cameron's much-admired director of communications. But Davies was not prepared to let the matter rest. This extraordinary book tells the story of a five-year investigation that slowly uncovered a culture of criminality and corruption inside Rupert Murdoch's News International.

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In his battle to reveal the truth, Davies had to deal with lies from News International, the police and the Press Complaints Commission, the discredited body that repeatedly sided with the Murdoch papers. Rivals joined forces to smear him. The British political establishment Labour and Conservative alike were on the side of the criminals. Many times Davies felt isolated and in despair. He slowly extracted the truth by tracking down other victims of phone hacking, thereby exposing the original News International lie that Goodman was acting alone.This book is as exciting as a thriller but far more important because it provides such a horrifying portrait of the media/political class that has governed Britain in recent years. It also raises searching questions about the conduct of the police, who were let off so lightly in Lord Leveson's naive report into the scandal. This book should be compulsory reading in journalism schools and must be read by anyone who wishes to understand how British politics actually works. Few people emerge with credit. It remains quite extraordinary that Cameron, despite repeated warnings, took Coulson with him into Downing Street and even more extraordinary that he has emerged relatively undamaged.At the end of this book Davies asks what has changed as a result of the hacking scandal, and concludes that the answer is almost nothing. Coulson has gone to jail, as have a handful of other News of the World journalists, but Murdoch remains as powerful as ever and shares in News Corp, his holding company have soared over the past two years. His son James Murdoch remains respected, despite the ruling by Ofcom that his handling of the hacking scandal was "difficult to comprehend and ill-judged…[and] repeatedly fell short of the exercise of responsibility to be expected of him as CEO and chairman".Not one of the senior policemen who colluded with News International in the long attempt to suppress the scandal has been arrested. Meanwhile, the culture of collusion between press and politicians which was exposed to the full public gaze when the hacking scandal broke is as strong as ever. No wonder Davies concludes that: "for a while, we snatched a handful of power away from one man. We did nothing to change the power of the elite."Glenn Mulcaire, the former News of the World phone-hacking specialist who was sent to jail for his role in the Royal household hacking scandal of 2006 is one of the central figures in Davies's book. He tells his story for the first time in a work written with James Hanning, a journalist on The Independent. The New Machine: Hacking, the Untold Story (Gibson Square, £14.99) is a gripping read. It argues that Mulcaire himself was as much of a victim as the celebrities whose phones he notoriously hacked. It describes how Mulcaire started to work for the News of the World with high ideals, only to be drawn into a sordid and cynical web of corruption. Perhaps there is some truth in this; there are very few British journalists and politicians who are entitled to reflect on the lessons of the phone-hacking scandal without feeling a sense of profound personal shame.

Excerpt from the book

On a bright Saturday afternoon in the middle of June 2009, in the rolling green downland of west Oxfordshire, there is a wedding party. Several hundred men and women are gathered by the side of a great lake, 350 metres long, crowned at the far end with an 18th-century boathouse disguised as a Doric temple. The sun pours down. The guests sparkle like the champagne in their gleaming flute glasses. The bride arrives to the sound of Handel's "Rejoice!", written for the arrival of the Queen of Sheba. Among the onlookers, two men lean their heads towards each other.

"So what do you make of all this?" one asks quietly."It is a statement," says the other, in an equally discreet whisper, "of power."The man who wants to know what he should make of all this is a senior member of Gordon Brown's Labour government, one of a small group of ministers scattered through the gathering. Alongside them is a group of other senior politicians from the Conservative opposition, including its leader, David Cameron. The other man in the whispered conversation is a famously aggressive national newspaper editor, a creator of storms, a destroyer of reputations and just one of a substantial collection of editors, former editors, political editors, political consultants, newspaper executives, TV presenters, political lobbyists, political PR specialists and political correspondents, all now pressed together by the lakeside. This is a gathering of the country's power elite, and yet the power that is being stated here is not that of the guests.As the Christian wedding blessing begins, there is an extraordinary interruption. A large car with dark windows arrives at the top of the slope that leads down through the trees to the lake and, instead of halting there with all of the Bentleys and Mercedes (and the chauffeurs slowly baking in the sun), it ploughs on down the hill, its engine horribly loud, its presence horribly wrong, and when several hundred heads turn to understand the commotion, they see the doors of the intruding vehicle open to reveal the familiar form of the prime minister, Gordon Brown, arriving late.Brown starts to move among the guests, but his body language screams his discomfort. He shakes hands, offers a rictus smile and moves on, obviously ill at ease and out of place. Other guests watch and conclude that he simply does not want to be here. He has just attended the Trooping the Colour ceremony. He is due back in London to meet President Bush. But the fact is that he had to be here, to show respect.An alien intruder would assume naturally that this respect is being shown to the bride and groom. The groom is Charlie Brooks easy-going, clubbable, a trainer of racehorses and a liver of the good life, a man who only a few weeks earlier had explained to Tatler, the posh socialites' magazine, that he liked nothing better than to wake up in the morning in his two-bedroomed, taupe-painted converted barn with his bride-to-be by his side, and for the two of them to fly off to Venice for lunch at Harry's Bar, followed by some sightseeing and shopping by the canals, and then to fly back to London for dinner in the famously elegant surroundings of Wilton's oyster bar in Jermyn Street. A perfect day. Charlie is from old English money nothing flash, nothing vulgar, just solid, comfortable, horse-loving, home counties country folk.

'Suddenly Cameron catches his breath and freezes, like a schoolboy spotted by the teacher, as Rupert materialises at his shoulder, smiling' … David Cameron and Rupert Murdoch at the wedding of Rebekah and Charlie Brooks in 2009. Photograph: Julian Andrews/i-Images

But, for the most part, it is not the amiable Charlie who catches the eye in this gathering. His bride captures far more attention. Rebekah is beautiful, with her red hair falling in crazy corkscrews around her elfin face. She is also charming really quite famous (among this power elite) for her ability to make anybody feel that she is their special friend, that she is part of their team, always ready with a favour, always willing to confide. She is particularly good with men, her fingers resting gently on their forearm and her gaze resting direct on their eyes. Not quite sexual, not quite romantic, but so intimate that a well married, conservative kind of man, several decades older than her, reflects that sometimes he finds himself sighing and wondering whether "maybe, if things had been a little different, maybe we would have been together".This is Rebekah who was so close to Tony Blair when he was prime minister that Downing Street aides recall Blair's wife, Cherie, finding her in their flat and hissing privately: "Is she still here? When is she going?"; Rebekah who then effortlessly transferred her affection to the next prime minister, Blair's great political rival, Gordon Brown, who showed his own affection for her by allowing his official country residence, Chequers, to be used one night the previous summer for an all-girls pyjama party and sleepover to mark her 40th birthday; Rebekah who now spends her weekends swapping canapes and gossip with Brown's newest political rival, David Cameron, who could possibly be prime minister within a year, and who is said to sign off his notes to her with the words "Love, Dave". Everybody (who is anybody) is Rebekah's friend.There are those who say that this is not entirely natural, that they have seen her, for example, on the eve of an important dinner, studying the table plan like a schoolgirl actress with her script, spending several hours revising until she knows all the names and the partners' names and the children's names and the personal interests and the important topics; and then she goes out and performs. And everybody feels so special. Some say that, in truth, Rebekah has no friends at all, only contacts; that all these charming conversations she holds with all these guests are really nothing more than transactions; that all of her relationships are simply a means calculated to attain an end for "the World's Number One Networker". Her obvious and immediate end would be journalistic. She is the editor of the Sun, the biggest-selling daily newspaper in the country, and, of course, she wants contacts, to give her the stories she needs to succeed. So, in these transactions that pass as conversations, clearly she has more than her charm to offer. She also has power the power to make and break a reputation; quite an incentive for those who are offered her friendship.And she will break as well as make: she is famous not only for her charm but also for her tornado-like temper. Some at the Sun remember the morning she woke up to discover that the rival Daily Mirror had beaten them to a particular story, and how she expressed her feelings by walking into the office and targeting the news desk with a well aimed missile, hastily identified as a heavy glass ashtray. One of the guests at this wedding, who has been close to her for years, says that here in Oxfordshire Rebekah is a country wife, riding horses and organising shooting parties, but in London, where the real transactions take place, she is "the beating heart of the Devil".

Livers of the good life … Rebekah Wade and Charlie Brooks at Royal Ascot in June 2007. Photograph: Rex

The word that follows Rebekah around is "ambitious". Most of the journalists who have worked for her love her. In the language of Fleet Street, she has earned the highest accolade she is "an operator". When she wants a story, nothing will stand in her way. Years ago at the News of the World, she once dressed up as a cleaning lady to infiltrate the office of the Sunday Times and steal their story. But some of those who know her say that it is not really journalism that moves her that she knows exactly how it works, how to pull in a story and turn out a headline, but that she has no real love for it, no pulse of excitement at the very idea of it. They say that, for Rebekah, journalism is simply a ladder reaching from her not particularly well-off middle-class origins in a village in Cheshire, up through her first humble jobs in various newsrooms, then rapidly up the next few rungs to the editor's office at the News of the World, and then to the editor's office at the Sun and then higher and higher, as far as the eye of her ambition can see. This summer day in 2009, she is still only 41, still climbing. For her, they say, the power of an editor is simply a mechanism for acquiring still more power. "Where there is power," says one of those who acts as her friend, "there is Rebekah."And yet, any intruder who imagines it is the power of Rebekah Brooks that is being stated here today has entirely missed the point. She is merely an avatar. It may not be immediately obvious, but the man with the real power is the elderly gentleman, aged 78, with the avuncular smile and the clumsily dyed orange hair, chatting quietly in the crowd. He is entirely undistinguished in this gathering, but it is he who has raised Rebekah up the ladder of her ambition, and it is his presence that makes the simple, central statement to the members of this power elite: "You need to be here." He is one of a small global group who have reached that special position where they are commonly identified simply by a first name. It may be Rebekah's wedding, but this is Rupert's day. Since 1979, no British government has been elected without the support of Rupert Murdoch. Between then and this wedding, all those who have been prime minister Thatcher, Major, Blair and Brown have consistently cleared their diaries and welcomed him to the inner sanctum of their governments (and then disclosed as little as possible of what passed between them). It is certain that other national leaders have done the same, in Beijing and Washington and Canberra, and in numerous capitals across the planet. This is the current state of the democratic deal: each man has one vote; this man has power.The fact of the power is clear. Even here, at the wedding, it colours every move around him. At one point, for example, Tony Blair's former media adviser, Alastair Campbell, strolls up to David Cameron and tells him that, although naturally he hopes Cameron will lose the general election that is due next year, he would support the Conservative leader if, on winning office, he tried to do something about the press. Campbell starts to unwind a well rehearsed speech about the mendacity and negativity of so much political coverage, and Cameron focuses and is in the process of saying that he does think that newspaper behaviour has got even worse, when suddenly he catches his breath and freezes, like a schoolboy spotted by the teacher, as Rupert materialises at his shoulder, smiling. When Murdoch smiles, respectable politicians burst with appreciation.Why? That is less clear.Outsiders often misunderstand the power of a man like Rupert Murdoch. They look at him and they see the very model of a media megalomaniac. Certainly, by fair means and foul, with cleverness and cunning, he has built a vast media organisation News Corp with more than 800 subsidiaries and total assets worth some $60bn. He and his family trust directly own 12% of the shares (although a subtle legal manoeuvre means that they control 39.7% of the votes). On this day in June 2009, News Corp owns one of the world's big six film studios, Twentieth Century Fox; one of the world's 20 biggest book publishers, HarperCollins; and what was once the world's most-visited social networking site, MySpace. But, most important of all, News Corp owns TV channels and newspapers.Murdoch creates media triangles. Country by country, he has bought a downmarket tabloid (the Sun in the UK, the New York Post in the US, the Herald Sun and the Telegraph in Australia); then he has found himself a quality title (the London Times, the Wall Street Journal, the Australian); and alongside them, he has locked in a TV network (BSkyB, Fox in the US, Foxtel in Australia). Each triangle in its own way is the foundation of great wealth and political power.

Some of those who know her say that it is not really journalism that moves Rebekah Brooks (pictured here in 2002, then editor of the News of the World) for her it is simply a ladder to higher and higher things. Photograph: Emma Boam/Rex

News Corp's reach is enormous. Through News International, it owns the four titles that together capture 37% of Britain's newspaper readers; plus 39.1% of the BSkyB satellite TV business, beaming movies and sports and the Sky News channel into 10m homes in the UK and Ireland. It supplies 60% of Australia's daily papers and 70% on Sundays. Its TV holdings have spread across Europe (west and east), across southern Africa and into Latin America. Its Asian TV network, Star, reaches all of India and China, most of the rest of Asia and now, through Star Select, the Middle East, too. News Corp's TV channels broadcast movies made by its own studios and then reviewed by its own journalists in any of its hundreds of magazines. News Corp broadcasts sports whose rights it owns, played by sportsmen whose teams it owns, in games whose results are published by newspapers it owns.Seeing how Murdoch has hoarded media outlets like a miser gathers gold, outsiders often imagine that he behaves like a caricature media boss, who jabs a finger in the face of the dependent politician and dictates "how things are gonna be if they wanna stay healthy". In this version of events, the mogul forces the government to cut a deal. He agrees not to attack the government's policies (and not to expose the grubby personal secrets of its members); in return, the government agrees to reshape its policies to suit the mogul's ideology; the mogul then whips his compliant reporters into line, and they produce the political propaganda he requires; the government rewards the mogul with lucrative favours for his business.And yet government ministers, special advisers and civil servants who have dealt with Murdoch, and executives, editors and journalists who have worked for him, tell a different story. The difference between the two stories is itself a clue to one part of the mogul's method. Those who know him say that this is a man who loves information: he uses his journalists as a network of listeners; he taps up every contact for the inside story; he collects political gossip; he is given secret briefings by intelligence agencies; and he has made a fortune out of selling news. But with his own life, and particularly with his business life, he is well walled and secretive: the outsiders are there to be misled.The insiders say that his use of power is far subtler than the outsiders imagine. They say first of all that there is something very deep that drives him very hard maybe, some suggest, that he grew up believing that he could never be good enough for his father, Sir Keith Murdoch, a towering patriarch who built businesses and broke opponents; and so, all his life, Rupert has been compelled to make his own business bigger and bigger, as though one day his dead father might finally signal that it was enough. With that in mind, they say that his primary interest in politicians is not political; it's commercial. He may be a highly political animal, they say obsessed with the details of life in the corridors of power and personally possessed of some extremely right-wing opinions but what he most wants from politicians is favours for his business. He'll betray his own principles, he'll embrace politicians for whom he has very little respect, just as long as they have the power to help the company get bigger.

Some suggest that Rupert grew up believing he could never be good enough for his father, Sir Keith Murdoch, a towering patriarch who built businesses and broke opponents.

In practical terms, this comes down to a repeated demand to be freed from regulation. He and his senior journalists all sing from the same song sheet on the virtues of deregulated free markets, in the UK and the US and Australia, wherever Murdoch owns outlets: theirs is the world's loudest voice calling for the state to be cut back to make way for private enterprise. They do this as though it were simply a point of political philosophy. Clearly, however, it is a matter of overwhelming commercial interest for a businessman who wants to expand, to beat competitors and to dominate the very markets whose freedom he so often proclaims. Democratic governments across the world create regulators to speak up for the public interest to protect their markets against the power of dominant corporations, to stop them crushing the competition or setting unfair prices or otherwise abusing their position. Repeatedly Murdoch has had to find ways to beat them, and to sideline the public interest in order to advance his own. Legal fences obstruct him so he looks to friendly politicians to quietly open gates and wave him through.The outsiders may assume that this involves striking a deal. The insiders again say it is subtler than that not so much a deal (finite, static, a conscious agreement) as a somewhat cynical relationship (each side pretending friendship but seeking advantage, both offering a little more than they hope finally to give, neither side ever quite sure of the outcome). And that special relationship, they say, is born and brought up and free to flourish in places like this wedding.Here, beside this lake, Murdoch and his executives and senior journalists enjoy the first privilege of power: that they are given for free the kind of access for which unscrupulous lobbyists will pay fat packets of cash. The prime minister, his likely successor and their respective followers queue up to hear his views, to pick up the signals, to understand what he wants, to send him their own signals, to bond. Some 46 million voters in the UK might like that kind of access to their leaders, but it is this foreign billionaire who does not even have the right to vote in the UK who enjoys it and the special relationship with governments that it brings.So he moves among the wedding guests, casual and relaxed, chatting quietly. He does not display his power in any overt way no bodyguards, no sitting apart and holding court like some silver-screen godfather. There is no hint of threat or enforcement. Effortlessly, and with some charm, he harvests the respect of those around him. But …Ultimately, of course, there is something else at work here. It is not respect. It is fear. It is a curious fact that Murdoch holds no fear for ordinary people: most could not care less about him; the few who do care, tend to hold him in contempt as a model of avarice with his seven homes around the globe and his annual income touching $22m. But among those who play the power game, certainly, beneath the courtesy and the conversation, there is a quiet fear.That, in turn, is a little to do with his character. He can show his charm, he can tell a blue joke to the lads, but the truth is that many of those who shake his hand can see the snarl behind his smile. An Australian associate recalls what happened one day when he suggested to Murdoch that he might like to rebuild bridges with a businessman with whom he had argued and who had since seen his business empire collapse. As he remembers it, the snarl pounced out as Murdoch explained: "I didn't like talking to that cunt when he had money, and now he's broke, he can get fucked." One member of this powerful gathering recalls a much gentler but equally revealing comment from the Queen, who asked about Rupert's son, James, and then added, sotto voce: "The father is awful."The man's character, in turn, is at the heart of his approach to business. Rupert Murdoch is a man who will crush an opponent like a beetle beneath his boot, and he will do it for one simple reason for News Corp. One of the guests who is closest to him says: "Rupert does not discriminate he does not care about anybody more than he cares about the business. That includes himself, his kids, his political allies. The business comes first. His plan is "kill or be killed". Every single corporate battle that he's fought over the last 50 years, he's gone head-to-head to win. You have to win. You don't acknowledge that politics is a higher power. You don't yield to the law of the land. You don't submit to any higher code than your own."

Rupert Murdoch with copies of the Sun and the Times at his new print works in Wapping in 1986. He broke away from the print unions and put 6,000 people out of work. Photograph: PA

Notoriously, in 1975, Murdoch abused his position as a newspaper owner to support a plot that ousted the democratically elected prime minister of Australia, Gough Whitlam, who had dared to wander away from the mogul's path. Murdoch is the man who threw 6,000 men out of work when he broke away from the printing unions in London; who dumped his own citizenship as an Australian in order to become an American so that he could own more than 25% of a TV network; who pushed the Daily Telegraph and the Independent to the edge of destruction in a UK price-cutting war which doubled the circulation of The Times; who adopted Christianity like a new suit and then dumped it when he tired of it.But above all, the fear is generated by the people he hires to work for him. "He loves thugs," as one of his senior executives puts it. Roger Ailes at Fox TV; Kelvin MacKenzie at the Sun; Col Allan at the New York Post; Sam Chisholm at Sky TV: they all came out of the same box, marked "bully". And when Murdoch's men bully, their victims really feel it. All these members of the power elite have seen what Murdoch's news outlets can do, using their stories in the same way muggers in back alleys use their boots, to kick a victim to pulp. "Monstering", they call it a savage and prolonged public attack on a target's life, often aimed at the most private and sensitive part of their existence, their sexual behaviour, inflicting maximum pain and maximum humiliation.Very often, this will have nothing to do with Murdoch's own manoeuvres; it will simply be a matter of filling news space at the expense of some hapless individual who has caught the tabloid eye. Most journalists will refuse to do it, just as most men would refuse to be torturers. But some of those who carry press cards are like the droogs in Anthony Burgess's A Clockwork Orange: they kick their victims because they love it. It sells newspapers, it pays well, it's fun.A monstering from Murdoch's droogs is a terrible experience. If the damage they did were physical visible the courts could jail them for years. As it is, they inflict grievous emotional harm, the kind of injury from which some victims simply never recover. Indeed, there are some who have been left suicidal by the experience. It can come out of nowhere, picking on some off-the-cuff statement or some tiny detail that has caught nobody else's eye, least of all the victim's, and suddenly the violence begins. It can be completely arbitrary in its choice of target. If Miss Muffet abandons her tuffet because of the approaching spider, the droogs can choose to attack her for cowardice; or to attack the spider for indecency and threatening behaviour.Once it starts, the monstering cannot be stopped by the victim. If the spider says he meant no harm, he was simply looking for somewhere to sit, then "an unrepentant spider last night threatened to spread his regime of fear". Apologising will not work "a humiliating climbdown". Nor will refusing to apologise "an increasingly isolated spider". There is no end to the potential angles. The droogs will call everybody who ever sat next to the spider until they find somebody else who didn't like him. They will comb through arachnophobes everywhere, in search of alarmist quotes and calls for action. They can keep it going for days. A little distortion here, some fabrication there. The fact of the focus is itself a distortion: the relentless return to the same victim, the desire to destroy that corrupts normal editorial judgement. Often, other newspapers and broadcast bulletins will join in, so that simple commercial competition encourages the hunt for a new angle. The spider is helpless if he speaks out, he fuels the story; if he stays quiet, the story tramples him.Eventually, the monstering stops, usually because some new target has arrived; or because the target has been destroyed. Sometimes, even destruction is not enough. In his diary, Alastair Campbell recalls the ferocious monstering that was given to the then transport secretary, Stephen Byers, in the spring of 2002, which continued even after he had resigned: "It's like they get a corpse but then are disappointed there is nothing left to try and kill, so they kill the dead body too."

Clare Short received a monstering' from News Corp after she criticised the Sun for printing pictures of topless women. The paper called her killjoy Clare', fat', jealous', ugly' and crazy'. Photograph: Martin Argles

The fear of this monstering generates power far beyond the relatively small number of victims who are attacked. All those in the power elite are prone to fear Murdoch, because none can be sure that they will not be next to be kicked by the tabloid boot. They all saw what happened to the former Labour minister Clare Short. Several times she criticised the Sun's use of topless women to sell the paper and found herself denounced to millions as "killjoy Clare", "fat", "jealous", "ugly", "Short on looks", "Short on brains". At various points, the paper offered readers free car stickers ("Stop Crazy Clare"); sent half-naked women to her home; and ran a beauty contest to ask their readers whether they would prefer to see her face or the back of a bus. Separately, the News of the World ran two bogus stories suggesting she was involved with pornography; tried to buy old photographs of her as a 20-year-old in a nightdress; and published a smear story that attempted to link her to a West Indian gangster.Her fellow Labour MP, the former Anglican priest Chris Bryant, provoked the full wrath of the Murdoch papers when he trapped Rebekah Brooks intoadmitting that her journalists had paid police officers for information at the media select committee hearing in March 2003. Immediately afterwards, Bryant was warned by a reporter from the Sun that "they will get you for that". They got him a little bit a few months later when he told the House of Commons that he opposed the idea of a referendum on the new EU constitution and found the Sun telling its readers that he was a "Euro fanatic" who thought they were too stupid to vote. They got him more severely that December when the Mail on Sunday exposed his sex life, complete with an embarrassing photograph of him wearing only a tight-fitting pair of briefs, and Brooks at the Sun and Andy Coulson at the News of the World joined in a vicious monstering. Brooks made it very clear that this was personal, sashaying up to Bryant at a subsequent Labour party conference to deliver a sharp dig at his sexuality, calculated to remind him of the embarrassment of one of his former colleagues who had been accused of cruising a London park for gay sex: "Oh, Mr Bryant, it's after dark. I'm surprised you're not out on Clapham Common."The punishment was equally harsh for the American writer Michael Wolff. In March 2009 he found himself on the receiving end of a thorough monstering by the New York Post when he was working on a biography of Murdoch. By some unexplained means, the mogul's people had laid hands on an unpublished typescript and started to send clear warnings that the boss was not happy with some its contents. Wolff recalls a senior executive calling to ask him to make changes before the book was published."What will you do if I don't?" Wolff asked."Then we will not support the book.""How bad is that?""It could be bad."And it was bad. The New York Post discovered that Wolff had been having an affair, and ran stories on 2, 3, 6, 25 and 30 March, and 3 and 9 April, publishing along the way a secondary story that accused Wolff of evicting his mother-in-law from her apartment, as well as a cartoon of Wolff in bed with his lover, portraying the Jewish writer in a style which might reasonably be described as antisemitic.At its worst, everybody in the power elite has heard that the punishment can amount to crude blackmail. They have all heard the stories about how Murdoch editors have safes containing dossiers of evidence about the private lives of politicians and competing businessmen; and that Murdoch and his people agree to suppress these gross embarrassments in exchange for yet more favours. There are specific rumours about a senior figure in British sport who is said to have complied with Murdoch's plans for TV rights when he was informed that the Sun was ready to tell its readers that he had had sexual relationships with young men; and about a middle-ranking Labour politician who is said to have spoken up on behalf of Murdoch's UK newspapers after journalists obtained a video of him having sex with a prostitute while the prostitute's husband watched. It is true that the sports administrator and the Labour politician offered their support to Murdoch. Whether they did so out of fear of the dossiers or whether the dossiers even exist is not so clear. The power is in the belief and in the fear it engenders. Which is widespread.Certainly, many have come across a gentler version of this, something more like whitemail a favour done rather than a threat made. There are senior politicians, police officers and others who know that senior Murdoch journalists have privately put in a word for them, to help with a promotion, to defuse some threat. Most of the wedding guests know that Rebekah worked a clever piece of whitemail with the deputy prime minister John Prescott when, as editor of the News of the World, she got hold of the story that many years earlier Prescott's wife, Pauline, had given up a baby for adoption. This had happened before the Prescotts had met, but now the long-lost son had made contact. Prescott pleaded with Rebekah not to publish the story until his wife and her adult son had had a chance to get to know each other. She agreed a decent act, and one that earned her a sense of indebtedness from Prescott who later, when his family were ready, opted to take the story to her at the Sun, where she had become editor. Favours are valuable currency in the corridors of power.

Rebekah Brooks was very close to Tony Blair when he was prime minister, and then effortlessly transferred her affection to his successor, Blair's great political rival, Gordon Brown. Photograph: Fiona Hanson/PA

The power to conceal or reveal sensitive personal information turns out to be just like the power of the bully in the school playground. The bully need only batter one or two children for the fact of his power to be established: fear will then ensure that the others do all they can to placate him. In the same way, the really big power that Murdoch is said to wield that he can swing the result of elections does not have to be entirely real. What matters is the fear that it could be real. Far safer to be an ally, or even to join the shuffling queue of current and former members of the power elite who take his money, writing columns for his newspapers or selling their memoirs to HarperCollins: the then Speaker of the US House of Representatives Newt Gingrich; the daughter of the then leader of the Chinese Communist party, Deng Xiaoping; the former Conservative leader William Hague; the former Metropolitan police commissioner Sir John Stevens; the former Labour minister David Blunkett; the former Downing Street press adviser Alastair Campbell; the former Metropolitan police assistant commissioner Andy Hayman; and so on and on.Nobody is sure whether an aggressive newspaper really can decide the outcome of a national ballot. The newspapers like to claim that they can; politicians claim not to believe it; psephologists argue about the impact of news on voters and the distribution of any newspaper's readers among the swing voters in marginal seats that dictate results. In the best-known UK case, Kelvin MacKenzie's Sun in 1992 bloodied its toecaps all over the political career of the then Labour leader Neil Kinnock, and loudly claimed to have won the election for the Conservative leader, John Major. MacKenzie's claim was widely seen as unfounded, if only because of his notorious estrangement from the truth.There is no doubt that the droogs can cause grievous political harm. A cynical newspaper that targets a political party in or out of government can inject it with chaos. All debates become splits, all problems become crises, all changes become climbdowns, all setbacks are humiliating, all successes are ignored. It can change the news agenda so that on any day, the party or government is diverted into managing some crisis that the newspaper has manufactured. It can ruin reputations, with falsehood as easily as with truth. It can wreck the public debate of whole subjects by pumping it full of distortion. (Britain's relationship with the European Union, for example, has been fundamentally shaped by a relentless sequence of notoriously false stories about the EU supposedly banning the British army, Scottish kilts, pints of beer, bent bananas, charity shops and Christian teachers, as well as supposedly suffocating daily life with an imaginary set of petty regulations.) The impact is like the effect a screaming brat has on a family: the family may not break up, but ordinary life becomes impossible.Murdoch controls his company's money with obsessive care, checking daily "flash reports" from every subsidiary to ensure they are sticking to the budget he has laid down for each of them. But very little of the editorial distortion in his empire comes directly from him. He intervenes in the round by requiring his outlets to work within the boundaries of policies that will favour businesses like News Corp: cut taxes, cut welfare, cut government, cut regulation all the essentials of neoliberalism. From time to time, he directly intervenes in particular stories to help an ally, to promote his business, to reflect some random personal bias. His senior journalists admit privately that this is unacceptable a clear form of editorial corruption but they insist that he intervenes far less often than outsiders imagine. The vast bulk of Murdoch's news output, including the huge majority of any falsehood and distortion, is simply the spontaneous product of his highly commercialised newsrooms. It sells.In the same way, very little of the aggression needs to be directed by Murdoch himself. The fear is all. In the balance of power, a government wins easily over a newspaper group with its vast budget, its military and police, its bureaucracy and all the limbs of the state. But in the balance of fear, the outcome is the opposite. The government lives in fear of what the mogul might do to its collective standing (and perhaps to some individual reputations) by causing chaos in its coverage. The mogul has little to fear from the government. For the most part, politicians will step round him and, in the unlikely event that they do attack, he has the ultimate sanction: he can sell up and leave, avoiding everything they throw at him, taking his investment and his jobs with him.The point about real power is that it does its own work, particularly among those who deal in power. Nobody in the power elite needs to be told. They all recognise the mogul's power and, with few exceptions, they do everything they can to pacify him, to ingratiate themselves. The mogul, for the most part, does not have to make threats or issue instructions. He just has to show up. Not even that he just has to exist, somewhere in the background. Everybody understands; the fact of power is enough. If there's a bull in the field, everybody steps carefully. The fear gives him access; the access gives him influence. Real power is passive. Andy Coulson's reign at the News of the World: the second extract from Hack Attack Hack Attack: How the Truth Caught Up With Rupert Murdoch is published in the UK by Chatto & Windus on 31 July, priced £20. Buy it for £16 at guardianbookshop.co.uk. It is published on 12 August in the US by Farrar, Straus and Giroux