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Andreas Whittam Smith

Andreas Whittam Smith: Murdoch's unique way of doing business won't change

The 'don't ask, don't tell' culture permeates his operations. When things get tougher, the Murdoch technique is to try denial, or throw the police off the scent

The question I ask about people who have built up huge businesses by their own efforts is, what is their special, precocious gift. What does this particular tycoon have that others don't possess? What is Rupert Murdoch's key attribute? In the case, for instance, of Robert Maxwell who came to own the Daily Mirror, it was his immensely superior bargaining talents, first learnt as a pedlar in eastern Europe before the war. Sir James (Jimmy) Goldsmith, to take another example, described by this newspaper in its obituary as "one of the most buccaneering and charismatic figures of the last 40 years", was also a financial engineer of genius.

Rupert Murdoch is different again. As an owner of media businesses around the world, he understands better than anyone what it takes to avoid or soften media regulation by governments so as to create dominant positions in individual markets. Does American law say that only US citizens are allowed to own TV stations? Right, this proud Australian will become a naturalised US citizen, as he did in 1985, a year before he founded Fox Broadcasting. In Britain he has displayed this talent to the full. His masterstroke was getting Mrs Thatcher's government to wave through his purchase of The Times and The Sunday Times in 1981 without referring it to the Monopolies and Mergers Commission even though, when added to the Sun and the News of the World, it took his share of the national newspaper market close to 40 per cent.

To defend this semi-monopoly and to create others in the UK, such as pay TV (BSkyB), Mr Murdoch has gradually developed a number of powerful techniques. The most important is to take advantage of politicians' obsession with the next general election. For that nagging worry leads them to dread having a bad relationship. So call regularly at No 10 Downing Street – coming in through the back door if necessary. Prime ministers are Mr Murdoch's main targets because they have at once both the most acute fear of losing power and the greatest ability to deflect unwelcome media regulation. The frequency of these visits has been known for some time but many other things we didn't understand have become clear in the past few weeks.

It wasn't as clear as it is now, that the Murdoch technique involves buttressing this access by getting your family and your senior executives to develop parallel relationships with the prime ministers of the day and their entourages and senior ministers. This activity got going at full pelt straight after Mr Cameron entered Downing Street. So Rebekah Brooks gets herself invited to Mr Cameron's 44th birthday party at Chequers. James Murdoch and his wife went to stay there shortly afterwards. The Brooks's and the Camerons saw a lot of each other over Christmas. Of course not a word was said about media regulation on these jolly occasions, but on one side at least, it is bound to have been the unspoken agenda. It looks as if Scotland Yard got the message, too. If these people are personal friends of the Prime Minister, go easy in any investigations into their potentially criminal activities. So, with silken threads, the Murdochs bind up the Prime Minister.

It has also become apparent that another Murdoch ploy is to get his people appointed to important posts in the heart of organisations he seeks to influence. Funnily enough the Metropolitan Police provides just as good examples of this as Downing Street's employment of the former News of the World editor as Communications Director. So Neil Wallis, Mr Coulson's former deputy editor, gets taken on by the Metropolitan Police as a senior PR adviser and another News of the World journalist is employed as a translator – who, incidentally, is thus able to listen in to the early stages of criminal cases long before they become public. Finally – a nice one, this – place numerous former Murdoch journalists in staff jobs in the police press office.

The Murdoch empire, however, requires defensive techniques as well as methods of attack. What about MPs who won't bend the knee? What is to be done about them? Fortunately from Mr Murdoch's point of view, his tabloid newspapers have already found the answer. Use the same investigative techniques into their private lives, right up to and including telephone hacking, blagging personal details from banks and so on, that are already employed by News of the World journalists to expose minor celebrities. Gordon Brown described some of these. Information was obtained from the former prime minister's bank account and legal file .

What to do, though, if these useful weapons are to be seized from your hands as a result of court actions by injured parties? First you can fall back on the "don't ask, don't tell" culture that permeates Mr Murdoch's operations. That was seen on full display when Rupert and James Murdoch appeared in front of the Parliamentary committee on Tuesday. Murdoch senior said he had no idea what had been going on – although he also admitted that he was quite prepared to ring up the editor of The Sunday Times every Saturday evening to find out what was in the paper. The difference is that the latter knowledge couldn't compromise him whereas precise details of how subordinates operated could well do so.

When things get still tougher, the Murdoch technique is to try denial. Say that phone hacking was confined to one rogue reporter and his assistant. And keep on saying it. But as the Culture Select Committee of Parliament commented in February 2010: "it is inconceivable that senior management at the paper were unaware of widespread hacking". Or, if this doesn't work, you can try to throw the police off the scent. Assistant Commissioner John Yates said on Tuesday: "News International... clearly misled us." Or you can refuse to co-operate with the police.

Yesterday's report by the Home Affairs Committee stated that the police told us that "they were unable to pursue the inquiry further with News International because of their refusal to co-operate". Now we are told that total commitment to find the truth is the order of the day. That is highly unlikely. Over half a century Mr Murdoch has refined a method of operating that cannot suddenly be thrown off like a winter coat. The Murdochs will go on being the Murdochs.