COLUMNIST'S ALLEGED EXTORTION JUST LATEST SCANDAL AT MURDOCH PAPER

by Joe Conason

On the remarkable videotape that shows Jared Paul Stern allegedly trying to shake down California billionaire Ronald Burkle, the New York Post gossip writer explains succinctly to his prospective client how his world works. If you make "friends" with the powerful gossips who operate the Post's Page Six column by paying them, then your future will include fewer bad items and more good items.

"It's a little bit like the Mafia," says Stern, echoing a similar remark made by a fired colleague last year.

Such preening babble lacks subtlety but contains a significant truth. Whether the Post is as corruptible as the Stern tape suggests or not, its proprietor Rupert Murdoch has long used the News Corporation's assets to reward his friends and punish his enemies. His company isn't a criminal enterprise, but he has often skirted the appearance of sleaze and worse. So any wayward tough guys who have worked for him may only be emulating his dubious example.

To comprehend Murdoch's unsavory stewardship of his media empire, look back to the earliest years following his arrival in the United States. From the very beginning, he shamelessly abused the Post's pages to promote politicians he liked and denigrate those he didn't, as he still does today.

The first inkling of something even worse came during the late winter of 1980.

Jimmy Carter, the incumbent president challenged by the insurgent liberal candidacy of Sen. Edward Kennedy, badly needed to win the critical Democratic primary in New York. Murdoch, owner of Ansett Airlines, a troubled Australian aviation company, badly needed a cheap government loan to buy new planes from Boeing.

On Feb. 19, 1980, Murdoch visited Washington, D.C., to meet with the chairman of the U.S. Export-Import Bank, a federal agency that loans money to finance foreign purchases of American products. (That was well before the Australian-born press lord sought U.S. citizenship so that he could legally buy up American broadcasting properties.) After pleading his case for corporate welfare, he went to the White House for lunch with the president.

Three days later, on Feb. 22, the Post endorsed the Democratic president (until the paper rudely dumped Carter for Ronald Reagan). And six days after that endorsement, the Ex-Im Bank approved a $290 million loan to Ansett on easy terms.

That happy series of coincidences soon drew the attention of the Senate Banking Committee, where Murdoch swore that the loan had nothing to do with the endorsement. He conceded that the circumstances could be "misconstrued," however, and said he would avoid such mistakes in the future.

It was a touching vow, and as sincere as a promise by Tony Soprano to quit loan-sharking.

A long list of politicians have benefited from the largesse of the Murdoch empire since that embarrassing episode. In world capitals where the Post endorsement doesn't mean much, and where Murdoch seeks tax breaks, regulatory favors and broadcasting licenses, he can bestow other benefits. His companies have handed out lucrative book contracts to such political eminences as Margaret Thatcher, Newt Gingrich, Mikhail Gorbachev and Boris Yeltsin.

The Thatcher government coddled him by overlooking potential regulatory restrictions on two of News Corp.'s most important acquisitions, The Times of London in 1981 and the Sky satellite network in 1990. Exemptions from the Monopolies Act and the Broadcasting Act were worth far more than the few million pounds advanced to the Iron Lady for her memoirs.

Within weeks after Gingrich's Republicans won control of Congress in 1994, he met Murdoch in the Capitol. Suddenly the new speaker's literary agent had an offer of $4.5 million from HarperCollins, the News Corp. publishing subsidiary, for a two-book contract.

Bad as that episode smelled, a worse fragrance wafted from the Murdoch enterprise in China, where he won broadcasting privileges from the corrupt Communist regime. For a reported advance of $1 million, News Corp. published the stunningly awful hagiography of party boss Deng Xiaoping, authored by daughter Deng Rong. Meanwhile, Murdoch tried to suppress a critical book on China by the renowned British diplomat Christopher Patten.

Whatever may result from the "Page Fix" affair, this scandal will bring renewed scrutiny to the appalling journalistic standards and practices of the Murdoch media. Their influence both at home and abroad should renew the debate over whether democracy can survive such concentrated control of news, opinion and entertainment -- especially if the management tends to operate "a little bit like the Mafia."