He took on the world’s biggest company and America’s largest education authority, but the task facing Joel Klein at News International could be his biggest yet. The mild-mannered, affable lawyer is in charge of clearing up the phone hacking crisis snowballing out of Rupert Murdoch’s control.
Klein joined News Corp (NSDQ: NWS) board last November after eight tumultuous years in charge of New York’s failing schools system. For the past few days, Wapping’s management and standards committee set up to handle the crisis – comprising Will Lewis, Simon Greenberg and Jeff Palker – has reported directly to the man brought in to set up a new education division, rather than to News International’s chief executive, Rebekah Brooks.
In announcing the decision not to let Brooks manage the internal investigation, Murdoch said Klein would provide “important oversight and guidance” as the company “co-operates with the police in all investigations” into the phone hacking scandal.
Why did Murdoch chose one of his latest boardroom recruits to advise on a newspaper scandal that goes back a decade or more? Firstly, because Klein’s independence from the family is the easiest to prove. His reputation is founded on a career as a Washington lawyer, initially for a non-profit firm and eventually for the US government. Asked whether his experience running New York City schools would help manage the current crisis, he said, “I think my whole life’s experience will bear on this.”
The son of a postal worker father and bookkeeper mother from Brooklyn, he was best known before his stint in New York for leading the antitrust inquiry into Microsoft (NSDQ: MSFT) as assistant attorney general at the justice department. Klein also worked as the deputy White House counsel in the Clinton administration and he was rumoured to be one of Barack Obama’s choices for education secretary.
Although his tenure at New York’s City Hall was controversial – he took on the city’s teaching union by ending tenure, among other things – his move to News Corp was greeted with surprise and some alarm. It was almost as though a jedi was moving into the Evil Empire.
Yet friends and associates are not surprised to see Klein at the heart of the action. Howard Stringer, the head of Sony (NYSE: SNE) and a close friend of Klein’s, said: “His integrity is unquestioned and his track record unblemished. If I had to turn to a lawyer, he is the logical choice. He’s brilliant.”
When Rupert Murdoch was first sounded out about the shock closure of the News of the World, he is understood to have immediately asked whether Klein (as well as Ken Macdonald, the former director of public prosecutions and a new UK board member) had been consulted on the legal ramifications of doing so.
Klein himself spent the weekend as one of a handful of key News Corp executives at the Sun Valley business summit in Idaho – the “summer camp for moguls”. In contrast to his previous attendance during eight years as chancellor of the New York schools system, Klein rarely spoke publicly. As Murdoch flew to London to help in the crisis, Klein flew to Boston to talk about education.
His interest in education – he was a former scholar to Harvard and Columbia – is genuine. He took a 90% pay cut to first take on the challenge set by New York mayor, Michael Bloomberg. Although he was criticised by teachers, he is widely credited with turning round a failing school system by opening 470 new schools, and raising graduation rates by 20%.
His new role, for which he reportedly earns $2m (£1.3m) a year before bonuses, involves looking at digital education start-ups.
Whether his interest in crisis management is anywhere near as great is not known. Merryl Tisch, the head of the committee that oversees state schools in New York, was a frequent opponent of Klein’s plans for the city’s education. Yet on his departure last year, she said: “[He] successfully took a dysfunctional system and gave it some management credibility”.
The 64-year-old will need all that credibility to sort out the current crisis at News International.
This article originally appeared in Guardian.