Why Election Denialism Might Cost Fox News $1.6 Billion

[0] From New York Times, I'm Michael Bobarro.

[1] This is a daily.

[2] A closely watched lawsuit headed for trial in April seeks to hold Fox News legally responsible for the false claims made by its guests and hosts about the 2020 election.

[3] Today, my colleague Jeremy Peters on the mountain of evidence that's emerged so far, showing that Fox knew that what it was doing, was wrong.

[4] It's Monday, February 27th.

[5] Jeremy, tell us about this lawsuit.

[6] So after the 2020 election, you'll recall that all of these wild conspiracies started going viral on the right.

[7] Stories about how the election had supposedly been stolen from Donald Trump through this massive coordinated conspiracy.

[8] And one of the biggest megaphones to amplify those conspiracy theories and falsehoods was Fox News.

[9] Welcome to Hannity that's busy, newsbreaking Friday night.

[10] Tonight we're continuing to track multiple serious and credible allegations of election irregularities.

[11] There were all sorts of stories flying around.

[12] The tape appears to show poll workers retrieving suitcases full of ballots from underneath a table and doing that well past midnight.

[13] What was that?

[14] It looks like fraud.

[15] Suitcases full of ballots that somehow disappeared from polling places.

[16] Three trays of mail.

[17] including mail and ballots, were discovered in a ditch.

[18] Ballots that had disappeared into a ditch.

[19] We've never had voter fraud of this level in the history of this country.

[20] Of course, none of it was true.

[21] And one theory that Trump supporters begin seizing on is this idea that voting machines are somehow involved in this massive conspiracy to deny him re -election.

[22] And the company that receives the most targeting from Trump and his supporters, quarters, is Dominion voting systems.

[23] This company that no one had ever heard of before Sidney Powell and Rudy Giuliani and other Trump allies started talking about it on television.

[24] We have a machine, the Dominion machine, that's filled with holes as Swiss cheese.

[25] We have evidence of how they flipped the votes, how it was designed to flip the votes.

[26] Nobody liked Dominion voting systems.

[27] Nobody.

[28] Why we would use a system that everybody agreed sucked or had problems is beyond me. The conspiracy theories involved these crazy notions that its software was somehow able to be manipulated where you could steal votes from one candidate and give them to the other.

[29] They have businesses in Venezuela, Caracas, they have businesses in Cuba.

[30] It was supposedly founded in Venezuela to help Hugo Chavez rig elections.

[31] The guy who was running it was one of the people who was number two or three in Soros's Change the World Organization.

[32] Its corporate officials had received kickbacks to put their machines in these states so they would be in place to carry out this conspiracy.

[33] It is one huge, huge criminal conspiracy that should be investigated by military intelligence for its national security implications.

[34] Yes, hopefully the Department of Justice, but who knows anymore?

[35] Sidney Powell, good luck on your mission.

[36] Thank you so much for being with us tonight.

[37] None of that, of course, is true.

[38] But if you were a viewer of Fox News at the time, if you were watching shows like Tucker Carlson's, Sean Hannity's, Maria Bartaromas, Lou Dobbs, it would have been very easy if you wanted to believe it to come away with the idea that these conspiracy theories were somehow plausible, if not true.

[39] So the totality of all this coverage is the very strong suggestion that Dominion plays a role, a nefarious role, in Donald Trump's defeat.

[40] Yes, it becomes villain number one in the conspiracy theory of denying Trump re -election.

[41] So as this is playing out on Fox News in millions of households every single night, Dominion becomes a company under siege.

[42] And the company starts to worry about this huge reputational hit.

[43] I mean, let's not forget, lawmakers often award these.

[44] voting system's contracts.

[45] And if Dominion's name is somehow tainted in this non -existent conspiracy, then Dominion's going to have a really hard time selling its machines to red states and jurisdictions.

[46] Right.

[47] And it's safe to say that when the leading cable news network in the country is covering a company like this, that it's taking a major reputational hit.

[48] Exactly.

[49] So what they start doing is sending emails and messages to Fox News employees at all levels of the company.

[50] You're beseeching them to stop this coverage.

[51] Yes.

[52] And eventually, some 3 ,600 of these messages go out, and they're finding that their complaints are falling on deaf ears.

[53] For the most part, on the most popular shows with the biggest audiences and the most powerful hosts, the conspiracy theories continue to get air.

[54] So ultimately, Dominion officials realize that they have no other recourse, and they decide that they're going.

[55] to sue.

[56] And so they do so in spectacular fashion in 2021, filing a $1 .6 billion defamation suit against Fox News.

[57] A huge number.

[58] Huge.

[59] But as sensational as that headline number is, the truth is that it's going to be very hard for Dominion to, A, recover that kind of a settlement, but B, win the case in the first place, because defamation cases against media companies are are extraordinarily difficult to win.

[60] And why is that, Jeffrey?

[61] Why are these cases so difficult to win?

[62] Two reasons.

[63] The first is that media organizations like Fox are protected by the First Amendment.

[64] And the First Amendment gives media companies broad latitude to write about and say things about news events and newsworthy people, even if that coverage offends those people.

[65] Right.

[66] And this is why very few people win defamation.

[67] lawsuits against media companies, including Jeremy, our own.

[68] And I recall you recently covered such a case.

[69] Sarah Palin tried to sue the New York Times for defamation.

[70] She did not prevail.

[71] It's just a lot harder than you might think to prove that a media company defamed you.

[72] That's right, because the First Amendment allows the media to make mistakes.

[73] They just have to be honest mistakes.

[74] And that gets to the second reason here of why it's so hard to prove defamation.

[75] You have to be able to prove something called actual malice.

[76] And that's when a person either knew what they were saying was false or they were so reckless and hasty in saying something or writing something that they overlooked something so obvious that would have shown them that they were wrong.

[77] It basically requires you to get inside someone's head.

[78] What did they know when they said what they said?

[79] And that's very hard to do.

[80] But then something pretty remarkable happens.

[81] Dominion is actually able to get inside the heads of Fox executives, producers, and hosts.

[82] Earlier this month, as part of the lawsuits discovery process, we are able to see text messages, emails, excerpts from depositions that essentially Dominion argues show that Fox knew it was lying to its audience about voter fraud and that it did so as part of a business strategy to drive ratings and profits.

[83] Okay, so walk us through that story as revealed through these documents and depositions and emails and texts as Dominion now describes it.

[84] Well, to do that, you have to go back to election 9, 2020.

[85] And that's when Fox did something pretty remarkable.

[86] it became the first news organization to effectively say that Donald Trump wasn't getting a second turn.

[87] And this infuriated Donald Trump, his campaign and his supporters, many of whom watch Fox News all the time.

[88] So in the days after the election, ratings collapse.

[89] And what we now know through the depositions and the discovery in this case is that a panic set off inside Fox News.

[90] These text messages and emails show that at one point, Rupert Murdoch emails Suzanne Scott, the chief executive of Fox News Media, were getting creamed by CNN.

[91] Hmm.

[92] I guess our viewers don't want to watch.

[93] Well, he's right.

[94] They didn't want to hear that Trump had lost.

[95] So they switched off the channel and started going to Newsmax and OAN networks that are much, much farther to the right than Fox was at that time.

[96] You have other text messages from Suzanne Scott to Lachlan Murdoch, Rupert's son, both of whom oversee the larger Fox Media Empire, that viewers are going through the five stages of grief, but that they'll ultimately get there because she has a plan in place.

[97] And she says things will start over, this is day one of that new process.

[98] And what is that process?

[99] That process is Fox's embrace of election denialism.

[100] But what we now know from the Dominion lawsuit is that while Fox hosts and guests were saying one thing on the air, privately, Fox executives, hosts, producers were telling each other that they thought this was all highly dubious, if not outright lunacy.

[101] Okay, what are the specific messages that they are sending each other along these lines?

[102] Well, we can start with Tucker Carlson.

[103] The messages that Dominion has obtained show that his producers were doubtful that there was enough evidence to swing the election.

[104] One producer calls Trump allies desperate and deranged.

[105] He calls Sidney Powell, the Trump legal advisor, and Rudy Giuliani, liars.

[106] Tucker himself calls these claims shockingly reckless, and at one point, he claims to have caught Sidney Powell in a lie.

[107] We find out that he even refers to President Trump as a demonic force.

[108] Wow.

[109] This is all in the period when Fox News is promoting this election denialism on air.

[110] Exactly.

[111] Sean Hannity, the host who is the closest to President Trump, who defended him unfailingly through two impeachments and a special counsel investigation.

[112] Hannity is quoted in a deposition as saying about Sidney Powell's conspiracy theories, I did not believe it for one second.

[113] Yet he has Sidney Powell on his show anyway and they speak disparagingly about Dominion.

[114] Then you have this instance when a Fox News reporter actually fact checks a tweet from Donald Trump about Dominion voting machines and their role in this supposed fraud.

[115] And she says there's no evidence of this.

[116] So a Fox News correspondent corrects the record basically of her colleagues on Fox and says nothing to see here on Dominion.

[117] That's right.

[118] And we now know thanks to all of these texts and emails that Dominion has that inside Fox News, people go crazy.

[119] Tucker Carlson demands that she be fired.

[120] He texts saying, does she have any idea what she's doing to hurt the brand?

[121] She's hurting the stock price.

[122] And the implication of Carlson's text here is that Fox's viability as a business relies on spreading these claims of election fraud.

[123] And this Fox reporter, by fact -checking and undercutting those claims, is basically damaging Fox's business.

[124] That's what he's suggesting.

[125] Exactly.

[126] Jimmy, earlier you said that Dominion has been able to peek inside Fox's collective head.

[127] Has that process and all this evidence allowed them to potentially meet that very high threshold of proving that they have been defamed by Fox.

[128] It gets Dominion pretty close.

[129] The legal analysts I've spoken to say that this is one of the strongest defamation cases against a major media organization that they've ever seen.

[130] And that's because of the voluminous amount of evidence that Dominion has from 20 Fox broadcasts that it can point to and say, this is what they told you on the air, but the executives behind the scenes knew that it wasn't true.

[131] And ultimately, That hits to the heart of Dominion's case because it's evidence like that that shows what Fox was saying on the air was all a business strategy.

[132] The lies about Dominion Machines is what Fox executives realized its audience wanted to hear.

[133] So they told them what they wanted to hear.

[134] We'll be right back.

[135] So Jeremy, how does Fox News plan to prove that it did not defame Dominion?

[136] in the face of all this pretty damning internal information you just described.

[137] So Fox will make its full arguments in court addressing these claims once the trial gets going in April.

[138] But what we can already tell from what it's filed in court, it plans on arguing that the First Amendment protected what was said on Fox broadcasts after the election about voter fraud.

[139] They're going to say that they were just covering and commenting on newsworthy events.

[140] and that there was nothing more newsworthy at the time than the president of the United States alleging that the election was stolen from him.

[141] Fox, to be clear here, is not arguing that the president was right.

[142] They're not admitting that they believe in the big lie.

[143] But what they're saying is that reporting on and talking about the big lie is their job, and that's protected by the First Amendment.

[144] And are they right?

[145] Well, yes and no. They can point to lots of examples when their hosts were indeed just reporting on what President Trump and his advisors were saying at the time.

[146] But when it comes to those hosts who are endorsing and promoting these conspiracy theories, that's a different story.

[147] And that is the kind of stuff in this lawsuit that puts Fox on very thin legal ice.

[148] Jeremy, I'm curious how Fox plans to grapple with this idea of malice.

[149] and the notion that all these internal messages we've been talking about may establish malice in a defamation case.

[150] Well, what Fox has argued so far is the Dominion has cherry -picked these quotes.

[151] It's taken them out of context and once we see the full messages themselves and compare them with what was said on the broadcasts, we'll come away with a different, less damning take than we see right now.

[152] Remember, this isn't going to try, until mid -April.

[153] So a lot still will come out.

[154] Another aspect of their defense is going to be to argue that these fraud allegations, the idea that Dominion machines could be hacked, were not made up out of whole cloth.

[155] And what I mean by that is, as Fox's lead lawyer told me, while the president's allegations of widespread voter fraud were not true, there was plausibility to them.

[156] Because Dominion machines, according to some, had these security flaws that could be exploited.

[157] There's no evidence that they ever have been exploited, but a reasonable juror might conclude that they could have been.

[158] And all it takes is for one juror to decide that.

[159] And that blows up Dominion's whole case.

[160] Right.

[161] And what that might mean if you're Fox and Fox's lawyer, right, Jeremy, is that all you really need is a single.

[162] Fox viewer on that jury, a single Fox viewer who would have watched this coverage and might be very skeptical of Dominion.

[163] Exactly.

[164] So let's talk about the various outcomes of this case once it goes to trial.

[165] And let's start with the possibility that Dominion wins its case and proves that Fox defamed it.

[166] What would that outcome mean?

[167] Well, on the one hand, it could mean significant financial pain for Fox.

[168] I mean, let's not forget Dominion is asking for $1 .6 billion.

[169] Fox has a pretty healthy cash flow, but that's a lot.

[170] It's not going to bankrupt them, but it's going to be a huge hit.

[171] A less tangible outcome, if they're found liable, is what it says about the lies that they knowingly told their audience.

[172] What do you mean?

[173] Well, if a jury comes back and says, we conclude that Fox basically knew what it was telling its audience was false, but did it anyway for profit and ratings, that's going to be a kind of victory that Democrats and Trump opponents have long sought but failed to achieve.

[174] How many investigations and impeachments have we been through where ultimately Trump has gotten off in some way or another?

[175] The idea that the news network most loyal to him watched by millions and millions of people is going to be held responsible is pretty extraordinary.

[176] So you're saying it will represent a real and rare reckoning in a sense for the entire right.

[177] Exactly.

[178] Well, given all that, what will it mean if a jury returns a verdict that finds Dominion was not defamed and that Fox did nothing wrong?

[179] It will mean that there's no consequence for spreading the type of misinformation and outright lies that really tore the country apart.

[180] But it will also mean that media organizations effectively have a license to lie.

[181] I mean, there's ample evidence that we've seen so far that many people, inside Fox News knew what they were doing was wrong, but did it anyway.

[182] I think a victory for Fox in this case would cause a lot of people to start asking whether the courts have interpreted the First Amendment too broadly and whether defamation cases are just too hard to win.

[183] After all, if one of the most powerful media organizations in the country can tell its audience a story that it knew not to be true and get away with it, then maybe those laws aren't doing what they were supposed to do.

[184] Jeremy, thank you very much.

[185] Thanks for having me, Michael.

[186] Later today, the court overseeing Dominion's lawsuit against Fox will release documents containing a new set of internal emails, text messages, and depositions from inside the network.

[187] Some of them are expected to shed even more light on the role of Rupert Murdoch in shaping Fox's coverage after the election.

[188] We'll be right back.

[189] Here's what else you need to know today.

[190] In an interview with CBS News, the head of the CIA, William Burns, said that the United States has detected unmistakable evidence that China is thinking about supplying Russia with military, equipment that could be used against Ukraine.

[191] We're confident that the Chinese leadership is considering the provision of lethal equipment.

[192] We also don't see that a final decision has been made yet, and we don't see evidence of actual shipments of lethal equipment.

[193] Such a decision by China, which has become increasingly close to Russia since the war began, could alter the course of the war.

[194] As a result, Bern said, the Biden administration has been trying to publicly pressure China not to send Russia the equipment.

[195] And that's why I think Secretary Blankin and the president have thought it important to make very clear what the consequences of that would be as well.

[196] To deter it?

[197] Yeah, to deter it because it would be a very risky and unwise bet.

[198] But in the latest sign of China's growing support for Russia, its president Xi Jinping, will host the president of Belarus, a close Russian ally.

[199] in Beijing, starting tomorrow.

[200] Today's episode was produced by Ricky Nevetsky and Alex Stern, with help from Stella Tan and Carlos Prieto.

[201] It was edited by Mark George, contains original music by Marion Lazzano, and was engineered by Chris Wood.

[202] Our theme music is by Jim Runberg and Ben Landsfork of Wonderly.

[203] That's it for the daily.

[204] I'm Michael Bobar.

[205] See you tomorrow.