Publisher to the powerful

What did Rupert Murdoch want for his $4.5 million investment in Newt Gingrich? The tycoon's past dealings shed some light.

Consistency may be the hobgoblin of small minds--or the result of finding something that works. Take Rupert Murdoch's publishing house, HarperCollins. Not only does the venture make a gratifying amount of money selling books, but evidence suggests that it serves another, less visible function.

For example, HarperCollins sees fit to pay millions of dollars to Jeffrey Archer (former leader of the British conservatives and an influential member of the House of Lords) for novels many critics find of dubious quality. HarperCollins also advanced Margaret Thatcher $5.4 million for her almost unreadable memoirs, and is rumored to have given Deng Xiaoping's daughter, Deng "Maomao" Rong, a cool million for a book the New Yorker described as "a turgid, barely literate piece of propaganda." And finally, HarperCollins ignited a political firestorm when it attempted to give Newt Gingrich $4.5 million for his ruminations on the American political scene.

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What do Britain, China, and the United States have in common? In each, Murdoch's enterprises have faced daunting regulatory and political obstacles. In England, Thatcher and her Tories allowed him to buy the London Times without a review from the Monopolies Commission. He also bought a half-interest and control of Britain's only satellite television service, despite the fact that Thatcher's own home secretary found the deal "not technically legal." In China, the politburo recently attempted to ban satellite dishes, which would make Murdoch's STAR TV signal inaccessible to the Chinese; with the ruler's daughter a new member of the HarperCollins' millionaire club, however, things may change. And in the U.S., where Murdoch's Fox TV network is under scrutiny for illegal foreign ownership, the Gingrich connection is of more than passing interest. (Fox's parent company, News Corporation Ltd., is owned by Murdoch's family trust, an Australian entity.)

In December of last year, Newt's literary agent, Lynn Chu, and HarperCollins announced a $2 million book deal for the speaker-to-be. Less than two weeks earlier, Gingrich and Murdoch had their now-famous November 28 meeting--and admitted to touching on the latter's regulatory difficulties--but both denied knowing there was a book deal in the works. Exploded one literary agent, "Chu had a deal going and she didn't tell her own client? That's almost impossible to believe." As for Murdoch, his attention to detail in all his business operations is legendary. As one News Corp. exec says, "If someone mops a floor at one of Murdoch's enterprises, Rupert knows what's in the bucket."

Whatever Gingrich was selling he decided the price was too cheap, and told Chu to get him more money. On December 20 Chu held a book auction for her client. Gingrich has since said that five publishing houses made bids. In fact, only two did.

Bidding was set at HarperCollins' original offer of $2 million. After the auction began, Chu told Doubleday the bidding had reached $3 million, and then $4 million, all indicating hot-and-heavy activity in the trading room. Doubleday never made a bid. Neither did Little, Brown--after they heard that the bidding was in the vicinity of $4 million. Nor did Putnam when Chu told them the price was at $3.7 million. Simon & Schuster tried repeatedly to make a bid, but the price was always moving beyond its grasp. Viking Penguin was the only house other than HarperCollins to actually make a bid, rumored at $4 million--a sum intended to blow away the competition. But HarperCollins carried the day nonetheless, by bidding $4.5 million on the condition that, in addition to his political manifesto, Newt also edit an anthology.

It's hard to understand exactly what happened. The bidding figures had jumped around, indicating activity. But the only bids came from HarperCollins and Viking Penguin. Where was the $3.7 million bid that scared off Putnam and Little, Brown? Was HarperCollins bidding against itself? Was the auction a sham? Only a special prosecutor could know for sure.

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