Financial Scandal in the Times of the Internet
…to engage in corruption, and to expect to survive in public life is to have either a generous faith in the mechanisms of secrecy or a confident sense of what one can get away with in the event that activities hitherto hidden are suddenly made visible to others. —John B. Thompson, in Political Scandal
Please note: this is the fifth post in a series; to read the rest of the series, click on any of the following:
Part 1: Introduction
Part 2: When Knowledge Is Exchanged
Part 3: Case Study A: the Beeching ‘Axe’
Part 4: Case Study B: the Newby-Mandelson ‘Axes’
Part 5: Scandal in the Times of the Internet
Part 6: Conclusions: Financial Scandal and Neoliberalism
In Part 4 of this series, I examined some of the continuities between the Beeching ‘Axe’, and what I described as the Newby-Mandelson ‘Axes’. In this, the penultimate post in the series, I would like to consider what I regard as one of the main differences between the two contexts and their associated scandals: the role played by the media of mass communication. In my opinion(1), a key difference was that neither Richard Beeching nor Ernest Marples had to contend with the politics associated with internet-based representations; in this post I will offer a view on how financial—and to be sure, not just financial—scandals have changed thanks to this difference.
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In Political Scandal (2), John B. Thompson argues that the mass mediated disclosure and commentary of what he describes as a scandal’s ‘discourse of opprobrium’ are not secondary or incidental features of the scandal. Mass communication introduces qualitative shifts to scandal, and indeed some of the shifts may actually be constitutive of aspects of the scandal.
It is possible to begin to show how this is the case by way of Thompson’s notion of ‘mediated publicness’. Thompson suggests that in localised scandals, the disclosure of events associated with scandal tends to be limited to acts of communication involving the co-presence of the different actors: information about the events is disseminated via face-to-face encounters in everyday living or working spaces. By contrast, in the case of mediated publicness, the actions or events at the heart of the scandal are made visible to others who are not present at the time of their occurrence, and who may be situated in spatially distant locals.
Thompson analyses this difference with reference to Erving Goffman’s(3) distinction between ‘front regions’ and ‘back regions’. Simplifying somewhat, ‘front regions’ are those in which an individual attempts to project an image that is compatible with social conventions and frameworks, while the ‘back region’ involves actions or aspects of self which are felt to be inappropriate, or which might discredit the image that the person is seeking to project (4). In the case of localized scandals, there is one shared front region and multiple back regions; the individuals who share the front region become aware of the events in at least one individual’s back regions. By contrast, in mediated scandal real or alleged transgressions in back regions are propelled to multiple front regions: there are, for example, the front regions of the different media institutions—some sympathetic, others unsympathetic to the actors at the centre of a given scandal; and then again those of different audiences, which may themselves be disposed, or not to join in any condemnation.
Before the media of mass communication publicised aspects of the Newby/Carter & Carter scandal, it is unlikely that more than a handful of high level staff members knew about any real or alleged conflict of interest. However, once the matter was reported by Private Eye, it burst into a national arena. This meant, amongst other things, that the events could be both perceived and judged not just by much larger numbers of people, but in the context of a variety of front regions: those shaped by the different media themselves, and those shared by different audience groups.
Thompson notes in Political Scandal (and indeed in earlier works)(5) that if this change occurs, it is because the media can work to inscribe or ‘fix’ symbolic forms in technical media of transmission. This process has the effect of durably inscribing messages, and thereby makes it possible to transpose the messages across space and time to new contexts. It might be argued that the internet makes it possible to enact a newer version of this self-same process. I suggest, however, that the internet reveals the relative, and itself potentially ephemeral nature of the ‘fixing’ of media messages. In the more traditional media of mass communication (e.g. newspapers or TV), a message may indeed be ‘inscribed’ as Thompson suggests, but this is of course no guarantee that it will be received, let alone preserved by audiences. As Thompson himself would doubtless agree, in the course of everyday life a variety of factors may lead audiences to miss, overlook, or simply forget a media message, or one of its aspects. A first key shift in the internet is that the messages, or one or more aspects of the messages may be more durably inscribed thanks to the internet’s archival character. The ‘half-life’ of certain kinds of messages is thus likely to be greatly extended; even if internet messages may themselves be overlooked, audiences can always return to them, or be encouraged to return to them.
In the context of the Newby/Carter & Carter case, I would offer two examples of this phenomenon. First, almost two years after the scandal first acquired mediated publicness in the spring of 2007, ‘SOS’ (Save Our Subjects) campaigners at the University of Liverpool who mobilised to stop the closure of their departments (see Part 4 of this series) found, and were able to ‘re-activate’ the commentary of blogs such as this one. I include below an image taken of a page at Liverpool Student Media, in which one campaigner—presumably a student—alerted others about one of my own blog’s earliest pieces about the scandal, and in so doing made an allegation that the cited blog itself did not:

Image of page in the Liverpool Student Media, originally at http://www.liverpoolstudentmedia.com/they-say-cut-back-we-say-fight-back, accessed 27 April 2010. Days after I accessed it, the page, and the overall LSM website were removed, with a sign that said ‘This account has been suspended’.
As a second example, I would refer to the short Private Eye article which inaugurated the aforementioned mediated publicness of the scandal. This piece was transcribed by the ‘SOS’ campaigners in the spring of 2009, and then again, in early 2010, by a blogger who scanned and uploaded the article (6).
A second shift is illustrated by these selfsame examples. It was not just that the items in question were preserved, and made available; after all, anyone wishing to retrieve most printed news and current affairs in the traditional media might well be able to do so via one of the national libraries (though it might be considerably more difficult to do the same with newscasts). A key change was that the Private Eye piece, and a variety of blogs could be both retrieved, and then re-distributed via new websites. In some cases, such websites might act as virtual clearing houses of discourses of opprobrium, listing all critical accounts and making them instantly retrievable by existing, or new generations of web users (7).
The consequences of this change are difficult to overestimate. Unless the actors at the centre of an internet scandal are able to ‘scrub’ the web (I will return to this point at the end of this post), any damage inflicted to their reputations in a first wave of traditional media representations is likely to acquire a new spatiality and temporality on the internet. Stories may be easily accessed for much longer periods of time, and may be made available to new audiences in quite different spaces.
My reference to different spaces leads me to a third change. It might be assumed that the recontextualised items are simple reproductions of the ‘originals’. But of course, many internet-based references to pieces such as appeared in Private Eye or in this blog were more than reproductions; they were framed in accounts that often highlighted or sought to otherwise intensify what the new sites’ authors regarded as the most transgressive aspects of the actions at the centre of the scandal. The allegation made by the SOS campaigner in the example I offered above is a case in point. Another good example may be found in the Bristol Blogger, which was eventually censored but whose original text may still be found quoted at the ‘Howard Newby and the Management of Science’ page of DC’s Improbable Science(8).
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A different example, drawn this time from the comments posted after an internet version of a Times Higher article, leads me to another major shift brought about by ‘internet-mediated’ scandals. The example involves the commentary that followed, and which I depict below (9).

Again, the commentary involves allegations not made by Melanie Newman, or by this blogger. What interests me here is that, as I noted earlier, Thompson draws a distinction between localized and mediated scandals. However, the above juxtaposition of a ‘bona fide’ journalistic piece, and the commentary that follows suggests the need for a reconsideration of the distinction between localized and mediated scandal. Thompson would no doubt be the first to recognise that his localized/mediated distinction is not set in stone. However, in my view the above example (and indeed the earlier one of the SOS campaigner) points to the extent to which an internet-mediated scandal refigures the question of what counts as the local, ‘word of mouth’ scandal, and what counts as the mediated, technically ‘fixed’ or inscribed scandal. Here I would like to question not so much the manifest difference, as the difference in the implicit or underlying codes of communication.
Even when the media report on local events, they do so in ways which, explicitly or implicitly, frame views and events to fit with the overall discourse of the media institution. Whatever the politics of that discourse, journalistic conventions, and the threat of libel means that the media must work to maintain a distance, however superficial, between their own representations, and those of the individuals or groups they refer to.
By contrast, especially in the context of sites with open commentary, ‘third person’ representations of the kind associated with conventional journalism may be juxtaposed with ‘first person’ experiences and opinions of the kind that might be expressed in the course of everyday conversations or gossip. One consequence is that the kind of morality associated with local, ‘word of mouth’ discourses of opprobrium is transposed to the context of mediated publicness.
While there is almost certainly a greater risk of defamatory commentary, it is also the case that more direct and experiential accounts of real acts of corruption (or of social injustice) may be made available, and may be accessed by a wider range of audiences. Ideally at least, the internet functions as a means of empowering voices that would otherwise be either entirely suppressed, or effectively filtered by mainstream media.
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This point leads me to the last issue I’d like to address in this post: what can the actors at the centre of scandal do in the context of the changes I’ve described?
We should recall that scandal does not necessarily mean that a corrupt or illegal action has taken place. Individuals may be wrongly accused of transgressions, or the transgressions may offend a certain morality without constituting illegal actions in and of themselves. Indeed, Newby himself might argue that any scandal arising in relation to Carter & Carter was the result of determined efforts on the part of disgruntled staff first at UWE, and then at Liverpool to stop a necessary exercise in the rationalisation of each university’s practices.
Whatever the case, it seems to me that in the context of an internet-mediated scandal, it becomes rather more difficult for individuals or institutions—even individuals and institutions with significant amounts of economic, cultural and symbolic power—to attempt to manage or otherwise control the mediated publicness of a scandal.
As I explained in Part 3 of this series, soon after he became Minister of Transport for the Macmillan government, Ernest Marples was ‘outed’ as having a direct interest in promoting greater road use. However, a full and potentially cripling scandal was averted. This happened thanks to the Tories’ ability to control parliamentary procedures. As a result, a full debate of the matter in the House of Commons was cut short, and Marples was allowed to do a paper divestment of his road building business. Note, though, that from then onwards, Marples’ preferred modus operandi was to have Richard Beeching as the front man for his plans to effectively close down one third of Britain’s railway lines and stations.
But it seems likely that a full scandal was also averted thanks to the fact that, as noted by the historian Richard Lamb, prior to the publication of Beeching’s The Reshaping of the British Railways, Marples and Macmillan reportedly had a ‘quiet word’ with the editors of at least two leading national newspapers(10). Although Lamb does not elaborate on this point, we may assume that the editors were asked to engage in self-censorship vis-à-vis the growing scandal regarding the proposed closure of railway lines and stations.
I also noted that key railway managers exercised self-censorship and refrained from criticizing Beeching and Marples in public. For politicians and other public figures in the 1960s, these and other forms of censorship meant that it was either easier to prevent mediated scandals, or once they started, to moderate their consequences. Of course, such strategies have not always proved effective.
Today the control or attempted control of mediated scandal is made far more complex—and censorship or self-censorship more difficult—in so far as the internet has made possible a proliferation of sites which may produce and reproduce, distribute and redistribute information at the heart of financial and other forms of scandal. The Thompson quote which I use as an epigraph in this series acquires a somewhat different meaning in the early internet era. The mechanisms of secrecy that might once be taken for granted by corrupt politicians such as Marples have been undermined to the point that it may be almost impossible to use raw censorship to hide any transgressions.
Almost impossible, but not impossible. Here again, the second case study is instructive. In early 2010, some two and a half years after the first hostile representations appeared in the media and in the blogs, the University of Liverpool Legal Department issued a complaint to WordPress, alleging that several of the posts in this and other blogs were defamatory (see my earlier post, ‘When the Exchange of Knowledge Is Threatened‘).
One way of interpreting this action was in terms of an effort to ‘scrub’ the internet ‘clean’ of at least some aspects of the scandal that continued to dog Newby thanks in part to the extended durability of messages on the internet. In the opinion of some critical observers, the legal department may have hoped that the number of sites was still small enough that any ‘evidential base’ (as Thompson might put it) for scandal might be completely erased, a policy that would almost certainly have been impossible to carry out in the case of one of Mandelson’s or other leading politicians’ more recent scandals. Put simply, an efforts to ‘scrub’ a reputation clean would only be successful if the number of websites was sufficiently small, or localised to make possible acts of censorship.
Whether there was an effort to scrub the web of the Newby/Carter & Carter scandal or not, and whether or not Newby himself played a role in any such effort, it seems clear that the action could only really be taken thanks to increasingly authoritarian libel laws in the UK. As I interpret them, one of the functions of these laws is precisely to attempt to control the developments that I have outlined in this post. I will explain this point in the final post of this series, in which I will argue that we are perhaps witnessing the end of an ‘early’ era of the internet, one which may well be replaced by a second which will be dominated by the kind of controls which Google was happy to observe in the context of China—the same country that many universities in the UK have been so keen to engage in business.
Whether this happens or not, the outcome of the effort to censor this and other blogs entailed a paradox which Thompson describes by way of the notion of ‘second order’ transgressions. As Thompson defines them, such transgressions occur when ‘attention is shifted from the original offence to a series of subsequent actions which are aimed at concealing the offence’ [or I would note, alleged offence](11). As Thompson notes, ‘The attempt to cover up a trangression—a process that may involve deception, obstruction, false denials and straightforward lies—may become more important than the original transgression [or alleged transgression] itself’(12). According to Thompson, in such cases there is a shift from a ‘simple’ to a ‘complex’ scandal. One of the hallmarks of mediated scandals is precisely this spiraling of transgressive actions.
Whether the actions undertaken by the University of Liverpool’s legal department constituted an effort to ‘conceal’ a real or alleged offence or not—the University’s legal department would doubtless suggest that it was simply taking steps to remove ‘defamatory’ representations—the effect was arguably to trigger such a spiral. The complaint also had the effect of generating a renewed interest in the back, or the alleged back region(s): surely a vice-chancellor with a distinguished academic and managerial record would not try to use illiberal libel laws in ways that flatly contradict the right to freedom of speech? Why, then, was the University’s legal department suddenly trying to silence Newby’s critics, in some cases more than two years after the criticisms had first been published?
Any effort to silence this and other bloggers was noted by entities such as the Index of Censorship (13) and by the national media, whose journalists enquired as to the nature of the allegations, and the consequences for this and other blogs. A financial scandal which by early 2010 had long since been forgotten by many academics roared back to life, fueled in my opinion by the growing suspicion amongst some academics that ‘Knowledge Exchange’ was a kind of prototype for the draconian changes demanded by Peter Mandelson (see Part 4 of this series). The upshot was arguably that, whether the intention was to ‘scrub’ the internet of any uncomfortable information or not, the censorship of this and other blogs had precisely the opposite effect: it resulted in a reactivation of the scandal, and thereby gave the representations at the centre of the scandal additional durability, new audiences, and in the context of the drastic cuts in funding demanded by New Labour, perhaps an even greater credibility.
Postscript: as I note above, just days before this post appeared, several of the webpages it referred to were removed, with the notice, ‘This Account has been Suspended’. Suspended by whom?
References
1) I’d remind readers that this post, like the rest of this blog, is just that: a matter of opinion.
2) J. B. Thompson (2000) Political Scandal. Cambridge: Polity Press.
3) In E. Goffman (1969) The Presentation of Self in Everyday Life. Harmondsworth: Penguin.
4) Thompson, Political Scandal, op cit p. 63.
5) See also J. B. Thompson (1990) Ideology and Modern Culture. Cambridge: Polity.
6) See http://bristle.wordpress.com/2010/01/06/bristolbloggergate-wot-private-eye-said-about-sir-howard-newby-back-in-2007/, accessed 2 May 2010.
7) As a good example, I’d refer to http://www.liverpoolstudentmedia.com/sos-save-our-subjects, which could be accessed as recently as 26 April 2010, but which has now also been removed.
8) See http://www.dcscience.net/?p=181, accessed 2 May, 2010.
9) This commentary appeared beneath an article by Melanie Newman titled ‘Unease over Liverpool’s plans for a ‘research-focused’ realignment’, at Times Higher online, 15 January 2009, http://www.timeshighereducation.co.uk/story.asp?storycode=405004, accessed 2 May 2010.
10) Richard Lamb (1995) The Macmillan Years 1957-1963. London: John Murray.
11) Thompson, Political Scandal, op cit, p. 17.
12) Thompson, Political Scandal, op cit, p. 17.
13) See ‘WordPress versus the Bloggers’, at http://blog.indexoncensorship.org/2010/01/18/wordpress-bloggers-libel/ accessed 2 May 2010.