Amid the howls of outrage over the proposed Islamic community center and mosque near Ground Zero, some political pundits on Fox News, which is owned by Rupert Murdoch's media conglomerate News Corp. (NWS), have been particularly vocal in their opposition to the project.
Last Thursday, popular Fox News host Sean Hannity said the proposed center's leader, Imam Feisal Abdul Rauf, a U.S. citizen who has spent 25 years working to improve relations between the Muslim world and the U.S., wants to "shred our Constitution" and install "Sharia law as the law of the land in America." Sharia is a body of law derived from the Koran and Islamic teachings.
In fact, in his book What's Right With Islam, Rauf writes that "many Muslims regard the form of government that the American founders established a little over two centuries ago as the form of governance that best expresses Islam's original values and principles." (Page 81.) He has never publicly advocated "shredding" the U.S. Constitution or replacing it with Sharia law.
A Major Backer From the Muslim World
The stridency with which Fox News personalities attack the downtown Islamic center -- red meat for the millions who tune in each night -- is an example of the often uneasy relationship and occasionally diverging interests between many of News Corp.'s properties, in this case Fox News and its parent corporation.
For example, News Corp.'s second-largest shareholder, after the Murdoch family, is Prince Alwaleed bin Talal (pictured at left, and above right), the nephew of Saudi Arabian King Abdullah, and one of the world's richest men.
Through his Kingdom Holding Co., Alwaleed owns about 7% of News Corp., or about $3 billion of the media giant. He also owns 6% of Citigroup -- to which he was introduced by the Carlyle Group -- or about $10 billion of the giant bank. He's a part-owner of the famed Plaza Hotel in New York and has invested in many other prominent companies. (At one point he invested in AOL (AOL), the parent company of DailyFinance.)
Earlier this year, News Corp. invested $70 million for a 9% stake in Alwaleed's Middle Eastern media and entertainment company, Rotana, which "owns the Arab world's largest record label and about 40% of the region's movies -- most of which are Egyptian -- and operates 11 free-to-air television channels, two of which are through a partnership with News Corp.," according to Reuters. (Rotana broadcasts Fox movies and TV shows throughout the Middle East.) News Corp. has an option to double its stake in Rotana for another $70 million within 18 months.
"We Look Forward to Working Together"
Alwaleed has announced his intention to take Rotana public within the next two years, a move that could earn News Corp. a handsome return. In News Corp.'s 2010 annual report recently filed with the Securities and Exchange Commission, Alwaleed is referred to only as, "A significant stockholder of the Company, who owns approximately 7% of the Company's Class B Common Stock." (Page 44.)
A News Corp. spokesman in New York declined to discuss the company's investment into Rotana and referred inquires to a colleague in London, who declined to comment. Attempts to reach Prince Alwaleed or a representative of his conglomerate, Riyadh-based Kingdom Holding Co., for comment, were not immediately returned.
But presumed News Corp. heir James Murdoch has publicly touted the company's investment in Rotana. James Murdoch, who's the chairman and CEO of News Corp.'s European and Asian operation, has said: "A stake in Rotana expands our presence in a region with a young and growing population, where [economic] growth is set to outstrip that of more developed economies in the years ahead. Rotana is a leading player in the Middle East, and we look forward to working together."
As usual with Murdoch, money trumps ideology. "News Corp. is a big company, and Murdoch makes decisions based on money and business," says Robert Thompson, a professor of TV and popular culture at Syracuse University. "This isn't a conspiracy of the right or the left. It's a conspiracy of money."
The Warren Buffett of Saudi Arabia
Routinely listed as one of the top 10 or 20 richest men in the world, Alwaleed has long cultivated deep personal and financial ties with the U.S., especially among powerful business and government officials. Just consider that in 2002, he donated $500,000 to help fund the George Herbert Walker Bush Scholarship at Phillips Academy in Andover, Mass. Above all, Alwaleed is a businessman and a philanthropist, not an ideologue. He has been very generous to Islamic charities and other humanitarian efforts. Alwaleed is such an influential figure that he's been referred to as the Warren Buffett of Saudi Arabia.
Saudi Arabia, which is ruled by Alwaleed's uncle King Abdullah, is, of course, an authoritarian petro-monarchy that actually is governed by Sharia law and is known as one of the top global sponsors of terrorism. A spokesperson for the Saudi embassy in Washington says that while Alwaleed is part of the royal family, he isn't a member of the government, but rather a private citizen.
Alwaleed, like Iman Rauf (pictured at right), professes a desire to build bridges of peace and understanding between the Islamic world and the West. One man is a multibillionaire, with far-flung investments around the world, and the other is a religious cleric, whose congregation happens to be in downtown Manhattan.
Many Fox News pundits seem to have a big problem with the idea that a foreign government or entity with ties to terrorism could help sponsor a mosque in lower Manhattan -- a legitimate concern. But as viewers listen to Fox News pundits rail against Rauf -- and question his center's funding -- they should keep in mind that Fox News is part of a company, News Corp., that has extensive business ties with the Muslim world.
It's just part of running a multinational media giant in today's global, interconnected economy, where alliances and business relationships are more nuanced than the black and white -- good and evil -- viewpoint that many Fox News pundits espouse.
Learn the most important step in structuring an investment portfolio.View Course »