I Ailes death throws Fox probe into doubt

3 Founder was at cen­tre of US probe 3 Sev­eral lines of in­ves­ti­ga­tion at risk

Financial Times USA - - FRONT PAGE - KARA SCAN­NELL — NEW YORK

The crim­i­nal probe into prac­tices at Fox News is now on shaky ground after the death of Roger Ailes, the ca­ble chan­nel’s founder, say two peo­ple briefed on the in­quiry.—

The crim­i­nal in­ves­ti­ga­tion into a wide range of prac­tices at Fox News is on shaky ground after the death yes­ter­day of Roger Ailes, the ca­ble chan­nel’s founder, ac­cord­ing to two peo­ple briefed on the in­quiry.

Prose­cu­tors with the US at­tor­ney’s of­fice in Man­hat­tan have been ques­tion­ing former Fox News ex­ec­u­tives in re­cent weeks as part of a probe opened last au­tumn. Be­cause Ailes, 77, was at the cen­tre of the gov­ern­ment in­quiry, these peo­ple say, that makes it chal­leng­ing for them to ad­vance the probe.

The in­ter­views have cov­ered issues rang­ing from how the ca­ble chan­nel ac­counted for set­tle­ments paid to women who ac­cused Ailes of sex­ual ha­rass­ment to a “black ops” unit that Ailes, the ex-chair­man, de­ployed to counter neg­a­tive public­ity, the peo­ple say.

In the in­ter­views, author­i­ties have also opened up a new line of in­quiry, ask­ing wit­nesses whether money was moved be­tween Fox di­vi­sions to hit fi­nan­cial tar­gets upon which Ailes’ bonus was based, the peo­ple fa­mil­iar with the in­ves­ti­ga­tion say.

It is not clear whether any of the mat­ters un­der scru­tiny were il­le­gal or whether prose­cu­tors found any ev­i­dence to sup­port a crim­i­nal case.

Fox’s au­di­tors signed off on all of the com­pany’s fi­nan­cial state­ments.

In re­cent years, 21st Cen­tury Fox’s ca­ble chan­nel has been hit with law­suits from former em­ploy­ees al­leg­ing sex­ual ha­rass­ment or racial dis­crim­i­na­tion.

The law­suits named the chan­nel as a de­fen­dant, as well as a num­ber of high­level Fox ex­ec­u­tives, in­clud­ing Ailes; host Bill O’Reilly, Dianne Brandi, Fox’s top lawyer; and Bill Shine, a 20-year vet­eran of the ca­ble chan­nel.

Mr O’Reilly and Mr Shine left the com­pany this year. Ms Brandi, through Fox News, has de­nied all of the al­le­ga­tions against her. Mr O’Reilly has been adamant that the claims are “com­pletely un­founded”.

The wave of law­suits come as 21st Cen­tury Fox is seek­ing reg­u­la­tory ap­proval for its bid to con­trol the 61 per cent of Sky, the Euro­pean pay- TV group, it does not al­ready own.

The US at­tor­ney’s of­fice opened the probe after Lau­rie Luhn, a former Fox tal­ent booker, re­vealed that she re­ceived a se­cret $3.1m set­tle­ment in 2011 re­lat­ing to ha­rass­ment al­le­ga­tions against Ailes. Other women sub­se­quently came for­ward re­veal­ing past pay­outs and law­suits filed out­lin­ing ad­di­tional al­le­ga­tions of ha­rass­ment.

The fu­ture of the civil lit­i­ga­tion against Fox News re­mains un­clear. Fox is vig­or­ously de­fend­ing it­self against the al­le­ga­tions. Ms Luhn opted to go public after pre­sen­ter Gretchen Carl­son sued Ailes last sum­mer al­leg­ing he sex­u­ally ha­rassed her.

An in­ter­nal in­ves­ti­ga­tion re­vealed other al­le­ga­tions by Fox em­ploy­ees, in­clud­ing its then star Megyn Kelly. That led to the oust­ing of Ailes from the com­pany that he had built into a pow­er­house for con­ser­va­tive view­ers.

Since then, sev­eral em­ploy­ees close to Ailes, in­clud­ing Nikole King, Brigette Boyle and Den­nis Mul­li­gan, Ailes’ pri­vate se­cu­rity de­tail, have left Fox News.

Mark Kranz, Fox’s chief fi­nan­cial of­fi­cer since 2004, left after Ailes’ exit and has been granted im­mu­nity from pros­e­cu­tion in ex­change for tes­ti­mony.

The death of Roger Ailes at the age of 77 marks the end of a tele­vi­sion era de­fined by Fox News Chan­nel, the Ru­pert Mur­doch-owned net­work that the former Repub­li­can op­er­a­tive ran for 20 years.

Un­der his lead­er­ship, Fox be­came the most in­flu­en­tial force in po­lit­i­cal me­dia, gen­er­at­ing more than $1bn a year as it pro­vided ag­gres­sive prime time con­ser­va­tive opin­ion from the likes of Bill O’Reilly and Sean Han­nity.

But by the time of Ailes’ dis­missal last year, the net­work had been en­gulfed by a wide-rang­ing sex­ual ha­rass­ment scan­dal that tar­nished his rep­u­ta­tion and sparked a crim­i­nal in­ves­ti­ga­tion.

Ailes cut his po­lit­i­cal teeth as an ad­viser to Richard Nixon and fine­tuned his skills along­side the late Lee At­wa­ter on the elec­tion cam­paign of Ge­orge HWBush.

Mr Bush said on Twit­ter: “He wasn’t per­fect, but Roger Ailes was my friend & I loved him.”

At­wa­ter once de­scribed Ailes as his “soul brother”, adding: “We be­lieve re­ally in two things. One is the im­por­tance of stay­ing on the of­fence, and the other is the im­por­tance of con­trol­ling the agenda.”

Un­der Ailes, Fox News em­bod­ied this phi­los­o­phy. Launched by Ru­pert Mur­doch in 1996 with a lit­tle help from the ca­ble bil­lion­aire John Malone, whose TCI group dis­trib­uted the net­work, it aimed to cap­ture a heart­land au­di­ence that had been turned off by coastal broad­cast­ers such as CBS and NBC.

Ailes’ own ide­ol­ogy drove the chan­nel’s agenda. The son of an Ohio fac­tory fore­man — he once de­scribed his up­bring­ing as “God, coun­try, fam­ily” — Ailes re­alised that much of mid­dle Amer­ica shared his re­sent­ment of ur­ban lib­eral elites. So they — and the “main­stream me­dia” — quickly be­came Fox’s prime tar­gets.

At Fox News, Ailes turned pre­sen­ters into na­tional stars. Mr O’Reilly be­came the most watched ca­ble news pre­sen­ter in Amer­ica un­til his ig­no­min­ious fall last month when he, too, was fired fol­low­ing an in­ves­ti­ga­tion into claims that he sex­u­ally ha­rassed fe­male col­leagues.

The cause of Ailes’ death was not dis­closed. He is sur­vived by his wife, Elizabeth, and son, Zachary. In a state­ment Mrs Ailes said her late hus­band was “pro­foundly grate­ful to live in a coun­try that gave him so much op­por­tu­nity”.

Ailes em­bod­ied the ma­cho cul­ture that de­fined the net­work. Para­noid and con­trol­ling, he used pri­vate in­ves­ti­ga­tors to fol­low re­porters who had writ­ten crit­i­cal sto­ries about him.

The f ormer Fox News an­chor Gretchen Carl­son, whose law­suit last sum­mer sparked the in­ves­ti­ga­tion that led to his down­fall, al­leged that he once told her: “You and I should have had a sex­ual re­la­tion­ship a long time ago and then you’d be good and bet­ter, and I’d be good and bet­ter.” He was not loved by Mr Mur­doch’s sons, James and Lach­lan, who have taken big­ger roles at 21st Cen­tury Fox, which owns Fox News — and will even­tu­ally suc­ceed their father at the top of the com­pany. Ailes was known to speak in deroga­tory terms about James and clashed with Lach­lan in 2005 over a pro­gram­ming mat­ter. When Ru­pert Mur­doch sided with Ailes, Lach­lan left the com­pany and moved to Aus­tralia, only to re­turn to the fold — and the ex­ec­u­tive chair­man role — a decade later. But Ru­pert Mur­doch and Ailes re­mained close. “Roger and I shared a big idea which he ex­e­cuted in a way no one else could have,” Mr Mur- doch said in a state­ment, which ac­knowl­edged the “huge role” Ailes played “in shap­ing Amer­ica’s me­dia over the last 30 years”. Ailes, he added, was “a great pa­triot who never ceased fight­ing for his be­liefs”.

In Ailes, Mr Mur­doch had a kin­dred spirit who shared his po­lit­i­cal views and knew how to fash­ion them into attention-grab­bing tele­vi­sion for con­ser­va­tive-lean­ing view­ers. When Ailes was forced out of Fox News last sum­mer, his de­par­ture co­in­cided with Don­ald Trump’s ac­cep­tance of the Repub­li­can nom­i­na­tion in a speech that re­minded some of Nixon’s law and or­der-themed cam­paign in 1968 — a cam­paign a much younger Ailes helped to craft.

“The cam­era doesn’t like you,” Ailes once told Nixon, a ref­er­ence to his much de­rided 1960 tele­vised de­bate per­for­mance with John F Kennedy.

“It’s a shame you have to use gim­micks like tele­vi­sion to get elected,” Nixon replied.

“Tele­vi­sion,” Ailes shot back, “is not a gim­mick.”

Few un­der­stood this bet­ter than him. The ques­tion fac­ing Ru­pert Mur­doch, who took over Ailes’ job last au­tumn, is whether a true suc­ces­sor at Fox News will ever be found.

‘He wasn’t per­fect, but Roger Ailes was my friend & I loved him’ Pres­i­dent Ge­orge HW Bush

Ca­t­rina Gen­ovese/ WireImage

Roger Ailes built up Fox News but was sacked after it be­came em­broiled in a sex­ual ha­rass­ment scan­dal

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