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Ailes found the key to ratings in the Obama era shortly after 8:00 on the morning of February 19, 2009. About halfway through his morning editorial meeting, a remarkable television moment was unfolding on CNBC. Rick Santelli, a loudmouthed former hedge fund trader turned financial correspondent, uncorked a Howard Beale rant during a genial discussion of Obama’s stimulus bill and the housing crisis. “The government is promoting bad behavior!” Santelli yelled from his position on the floor of the Chicago Board of Trade. “How about this, president and new administration? Why don’t you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the losers’ mortgages?” Traders standing nearby nodded and chanted their approval. “President Obama, are you listening?” Santelli bellowed into the camera. “We’re thinking of having a Chicago Tea Party in July.”

The phrase and the sentiment were irresistible. As Tea Party groups sprang up around the country in the winter and spring of 2009, Ailes capitalized on the wave of excitement, making their protests, with their tricorn hat wardrobes and creative if sometimes over-the-top signage, a significant fraction of his news programming. The conflict between the president and his detractors was great for business; prime-time ratings jumped 25 percent in the opening months of the Obama presidency. Fox personalities more than ever before blurred the line between reporter and activist, often taking a direct role in creating the story they were covering. One reporter donned colonial costume for a segment on the movement’s history. Another producer helped whoop up crowds before a live shot. Fox built anticipation in the run-up to the tax day protests. On the morning of April 15, Fox hosts fanned out across the country to broadcast live from the barricades. “It’s Tea Party time, from sea to shining sea,” anchor Megyn Kelly giddily announced. The new movement was often written off by left-leaning pundits as artificial grass roots, but Fox helped them grow into an enduring force. “There would not have been a Tea Party without Fox,” Sal Russo, a former Reagan gubernatorial aide and the cofounder of the national Tea Party Express tour, said.

But amidst the journalism-as-advocacy, some of the network’s journalistic ballast was disappearing. In July 2008, news broke that Brit Hume would step down from anchoring Special Report after the election. Then, two weeks after the election, David Rhodes, Fox’s vice president for news, quit to work for Bloomberg Television. Rhodes’s brother, Ben, was a senior national security adviser to Obama, and David told staffers that Ailes had expressed concern about this closeness to the White House. David, for his part, felt uncomfortable with where Fox was going in the Obama era. He cringed when Fox sent a camera crew to interview Philip Berg, a Philadelphia attorney who had filed a lawsuit challenging Obama’s birth certificate. (The suit was thrown out later that month.) The network’s coverage of fringe groups like the New Black Panther Party made him concerned that Fox was stoking racial fears. Finally, a few months after Rhodes’s departure, John Moody left. (Murdoch put him in charge of launching News Corp’s wire service.) “They used to tell Roger no,” a senior executive said. “They could also filter his demands and make him think he was getting what he wanted on air.”

The turnover revealed that loyalty to Ailes had its limits. Although the culture he built at Fox had its rollicking appeal, its fear-inducing dark side pushed some toward the exits. One Christmas season, Brian Lewis and his staff went to the second floor to hand out gifts to senior Fox executives, a tradition Lewis had started. “Ho ho ho, Merry Christmas from Media Relations!” Lewis bellowed as he pushed a mail cart full of gifts down the hall. Sitting in his office, one executive heard the holiday greetings, followed by screams. “What the fuck are you doing! What the fuck! What the fuck!” Lewis yelled. His young female assistant had handed out the wrong present to the wrong person.

The executive sat there shaken. A moment later, Lewis popped his head into his doorway wearing a Santa Claus hat and handed him his gift. “Merry Christmas,” Lewis said cheerfully. He continued wheeling his cart down the hall.

The staff replacements tended to be either weak or ideologically driven. Bill Sammon, a former Washington Times correspondent, was appointed managing editor of the Washington bureau, and angered Fox’s political reporters, who saw him pushing coverage further to the right than they were comfortable with. Days after Obama’s inauguration, an ice storm caused major damage throughout the Midwest. At an editorial meeting in the D.C. bureau, Sammon told producers that Fox should compare Obama’s response to Bush’s handling of Katrina. “Bush got grief for Katrina,” Sammon said.

“It’s too early; give him some time to respond,” a producer shot back. “This ice storm isn’t Katrina.”

Later, Sammon caused problems internally when David Brock’s Media Matters obtained a series of controversial emails about Fox’s coverage of climate change and health care. “We should refrain from asserting that the planet has warmed (or cooled) in any given period without immediately pointing out that such theories are based upon data that critics have called into question,” he wrote in one December 2009 email. Media Matters also revealed that Sammon admitted in a speech to conservatives aboard a private cruise that he had knowingly misled Fox viewers in the closing days of the 2008 campaign by calling Obama a socialist. It was a notion he privately found “far-fetched.”

Moody’s replacement was an ABC News producer named Michael Clemente. Early in his tenure, Clemente tried to fire F.O.R. Ken LaCorte because he had a vague brief. “What he does officially is a mystery,” one executive said. Many believed he was Ailes’s eyes and ears in the newsroom, who engaged in, as another executive put it, “black helicopter shit.” When Clemente told LaCorte he was out, a screaming match erupted. LaCorte immediately went to Ailes, who rescinded the firing. By undercutting Clemente, Ailes sent a powerful message to the entire organization that Clemente lacked influence. “Clemente fucked up with LaCorte. He never should have taken that on,” a senior producer said.

The most potent force in Fox’s reinvention of Obama was Glenn Beck, who debuted in the 5:00 p.m. time slot the day before Obama’s inauguration. Within weeks, he was pulling in more than two million viewers a day, a 50 percent increase. Only Bill O’Reilly and Sean Hannity put up better numbers, and that was in prime time, when the television audience was vastly larger. Although Ailes was often unsparing in his praise of hosts, he told Beck in one meeting, “You are probably the most uniquely talented person on television I’ve seen.”

When Ailes hired Beck, he imagined him hosting a conventional cable news talk show. “I see your show being more of a Jack Paar show,” he told him. “Jack delivered a monologue, but you also have guests and it has a variety component.” Beck had a different idea. He conceived his program an anti-television show—partly because Beck said he didn’t like television—which would feature Beck roaming his set in plain view of the cameramen and cables. There would be few guests. Instead, his studio was like a one-room prairie schoolhouse where he delivered daily sermon-like lectures before a chalkboard, on which he traced a web connecting his progressive enemies, George Soros central among them, though Obama senior adviser Valerie Jarrett was a supporting player. With the Dow plunging from its peak of 14,000 toward 6,000, Beck’s dire scenarios—FEMA concentration camps, societal collapse—were fears that became imaginable.