Murdoch's Political Money Trail

The Daily Beast, Friday, July 15, 2011, 7:22pm (PDT)

By Laura Colarusso

For most of his colorful career, Rupert Murdoch has had friends in high places. As the News of the World phone hacking scandal has made clear, he and his lieutenants hobnob with such high-level British politicians as Prime Minister David Cameron. But Murdoch's influence reaches far beyond the shores of the United Kingdom—and that influence has come with a steep price tag.

Over the past decade, Murdoch and his company News Corp. have spent close to $50 million sowing the seeds of goodwill here in America through well-heeled lobbyists, seven-figure political donations and large charitable contributions to key non-profit groups. Murdoch's money trail can be traced deep into the halls of Congress and the powerful federal agencies overseeing the industry that has made him wealthy.

News Corp. is “well into the upper echelon of entities” trying to influence the federal government, says Dave Levinthal, editor of OpenSecrets.org, a Web site that catalogues special interest spending. Its biggest weapon? Lobbying, by far. The company has dispensed more than $42 million since 2001 trying to curry favor with lawmakers and regulators.

That amount has steadily climbed since News Corp. and its affiliates paid out a relatively paltry $1.8 million in 2001. It was also the year when Murdoch began his quest to acquire a majority stake in DirecTV, a satellite network that would help expand his distribution.

The deal stalled, thanks in part to Sen. John McCain, who warned that it could lead to a troubling consolidation of power in one company's hands. But by 2003, News Corp. had bumped up its lobbying budget to about $2.8 million—and the Federal Communications Commission had cleared the way for the purchase.

The next big bounce came in 2006, the year the FCC began reevaluating its ban on one company owning both print and television outlets in a single market. That year, News Corp. spent $4.2 million on lobbying, as relaxing those guidelines would make it easier for Murdoch to snatch up multiple media properties. (In the 1990s, Murdoch had to battle the bureaucracy to obtain a waiver from the FCC to own both the New York-based Fox station and the New York Post, which he had earlier been forced to sell.)

More recently, the company has spent around $5.3 million a year to push its agenda. In 2010, News Corp. used some of its budget to urge congressional Republicans to keep the federal government from intervening in its negotiations with the Cablevision franchise in New York over its attempt to double the fees charged to broadcast News Corp. programming, which led to a temporary blackout. A spokeswoman for Murdoch and News Corp. did not respond to a request for comment.

Beyond lobbying, Murdoch and his company have made millions of dollars worth of political contributions. (Murdoch himself has given more than $130,000 in the last decade. News Corp. has given about $1.7 million.) Though he makes no secret of his right-leaning views and has generally backed political conservatives on both sides of the Atlantic, Murdoch's donations over the years have often been less ideological than opportunistic.

Murdoch has personally given money to Sens. John Kerry and Chuck Schumer, two of the most liberal Democrats in the Senate. He even held a fundraiser for Hillary Clinton's Senate reelection campaign, which reportedly netted $60,000, while personally giving $2,100 to the cause.

The vast majority of Murdoch's money, however, goes to Republican candidates and causes. In 2010, as the GOP was trying to retake the House, Senate and several state houses, News. Corp. donated an eye-popping $1.25 million to the Republican Governors Association and $1 million to the Chamber of Commerce. The move angered some shareholders, who demanded more transparency from the company. As the News of the World imbroglio grows, more attention is being paid to that second seven-figure gift because the chamber has been advocating for reforming Foreign Corrupt Practices Act—the very law the Justice Department could use to pursue News Corp. executives for the phone hacking scandal.

Few on Capitol Hill wanted to talk about Murdoch's sway, but Melanie Sloan of Citizens for Responsibility and Ethics says it's “clearly outsized” when compared to others. “Money is a big factor,” says Sloan, CREW's executive director. “But it's amplified when you combine it with their megaphone. Positive exposure on Fox News is worth a lot.”

Murdoch has also sought to curry favor through charitable gifts, though he isn't known for being particularly philanthropic. (A 2008 Portfolio Magazine piece ranked him dead last on a list of 50 billionaires in terms of giving.) Nonetheless, he is listed as a “notable member” of the Clinton Global Initiative, reportedly contributing $500,000 to combat climate change. Other recipients of Murdoch's largesse include Cornell University's medical school, which pocketed $3.3 million, and the Nature Conservancy, a non-profit dedicated to protecting the environment that received $250,000 from the billionaire.

“This is not a one trick organization,” says Levinthal. “They wage their political battles using a variety of weapons.”

With reporter Ross Schneiderman.