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Rupert Murdoch and the Corruption of the British Media

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Leading article: The police must treat the cover-up as seriously as the crime

The Independent

Saturday, 23 July 2011

James Murdoch has a great deal of explaining to do.

The former head of News International told the Commons media committee this week that the first inkling he had that phone hacking at the News of the World went further than a single rogue reporter was in December 2010. Mr Murdoch claims that when he authorised out-of-court payments to a high-profile hacking victim in 2008, he was kept in the dark by subordinates about the full scale of the illegality that had been taking place at the newspaper.

But this week, two of those executives took issue with that narrative. On Thursday, the former News of the World editor, Colin Myler, and the newspaper's legal manager, Tom Crone, released a statement saying that in 2008 they drew Mr Murdoch's attention to an email that blew a large hole in News International's claims about hacking being the work of one rogue reporter.

So who is telling the truth? Colin Myler and Tom Crone? Or James Murdoch? If it turns out to be Mr Murdoch who is dissembling, then he is in serious trouble. For that would imply that he has lied to the public, misled Parliament, knowingly covered up gross illegality at News International and perhaps even obstructed the course of justice.

It will have wider implications too. The News Corp chairman and chief executive, Rupert Murdoch, told the Commons media committee this week that his company takes a zero tolerance approach to wrongdoing. Yet the possibility now arises that the former head of News Corp's British subsidiary was prepared to sweep serious wrongdoing under the carpet. And, of course, James Murdoch has since been promoted to a senior position in News Corp (and is often spoken of as the successor to his father as head of the company). If this is what has happened, can News Corp, under its present management, seriously be considered "fit and proper" to own media organisations in the UK?

Two things must now happen. The committee's chairman, John Whittingdale, says Mr Murdoch has agreed to write to him to explain his testimony further. But this discrepancy demands more than an exchange of letters. Mr Murdoch, along with Mr Crone and Mr Myler, must be called to testify again before the committee to get to the truth. This should happen within weeks, despite the fact that the summer recess has begun.

Mr Murdoch also needs to be questioned by the police about his testimony. The focus of the Metropolitan Police's Operation Weeting has apparently been on the narrow issue of phone hacking. And that is a big enough job. According to Deputy Assistant Commissioner Sue Akers, who is leading the investigation, only 170 out of some 4,000 phone-hacking targets have so far been contacted. Yet as well as pushing on with that, the police must not neglect to probe this suspected cover-up.

From the start, the phone-hacking affair has been as much a scandal of the apparent immunity of the Murdoch empire as it has been about illegal eavesdropping. For a long time it looked as if one newspaper group was, in effect, above the law thanks to its connections at the very top of politics and policing. That any institution or individual should be in such a position is incompatible with democracy. This is why it is now so vital that the police investigate with the utmost seriousness the possibility that James Murdoch has broken the law.

Who? One standard used in law (unless I've watched too much telly) is that the one who has shown through past events to be a deceptive person ( and to my mind Gough Whitlam's ''The Truth of the Matter'' is a good reference point ) is likely to deserve scrutiny.

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Phone hacking: 7/7 victims fear police passed numbers to News of the World

Survivors of London bombings call in lawyers to investigate allegations that officers may have passed on addresses

By Mark Townsend and Jamie Doward


Saturday 23 July 2011 20.43 BST

Survivors of the 2005 London bombings have asked lawyers to investigate allegations that Scotland Yard "sold" or passed on the confidential contact list of the 7 July victims to reporters working for News International.

Beverli Rhodes, chair of the Survivors' Coalition Foundation, said that a number of 7/7 victims suspected that personal contact details, including mobile phone and ex-directory landline numbers as well as home addresses, were passed by officers to News of the World journalists.

The former security consultant, who specialised in counter-terrorism, said she had been contacted by a number of survivors of the bombings who said they had been approached by News of the World reporters with bogus stories of how they obtained their details, which they believe may have originated with the police.

Their concerns have been discussed with the London law firm McCue and Partners. A spokesman said the survivors were considering their next step, having made requests for the Met to provide answers.

Rhodes said: "Scotland Yard had the full list of survivor contact details. I am pretty sure that is how the News of the World got my home address. I had only moved there maybe three or four weeks before News of the World reporters turned up. The only place where my new details were stored were the post office, bank, doctor and Scotland Yard.

"The suspicion is that the full list was given or sold on to the newspaper or News International or fell into someone's lap when visiting the Yard. One of the survivor's phone numbers is not listed and only known to me and family, but they had addresses to homes, home phone numbers, mobile phones."

She said that after the hacking scandal gathered momentum following the Milly Dowler revelations, several survivors approached her asking if she had provided their personal details to News of the World reporters.

"Two News of the World reporters told them they had got their details from me. They asked: 'Did you give my number to these reporters?', and I said: 'No, never'. These reporters knew an awful lot of specific information and asked very detailed questions."

Rhodes is now demanding that McCue and Partners officially request details from the Metropolitan police to establish if their concerns are substantiated. Scotland Yard has started to contact the relatives of 7/7 victims to warn them they were targeted by the News of the World.

It is understood that bereaved family members may have had their mobile phone messages intercepted by Glenn Mulcaire, a private investigator employed by the paper, in the days following the London bombings.

The Dowler revelations are likely to increase pressure on Andy Coulson, the paper's former editor, and David Cameron, who hired him as his spokesman. Last week recently resigned News International chief executive Rebekah Brooks, in response to questions from Paul Farrelly MP, said she was away when Dowler's phone was hacked and the paper was edited by her deputy, Coulson, or associate editor, Harry Scott. Sources have indicated Coulson was editing the paper then. "It was the Milly Dowler revelations that broke the camel's back," Farrelly said. "Rebekah Brooks has let it be known that she was away at the time, so this brings it all back to Coulson."

Brooks's comments will raise further questions about the cache of emails exchanged between senior editors on the paper which have now been handed to police. There is speculation that they will show who on the paper commissioned the hacking of Dowler's phone.

Although Rhodes has not been contacted by the Met, she has spoken to other survivors. She was one of more than 700 victims of the attacks, which killed 52 people, and was severely injured by the bomb that hit the Piccadilly line tube near King's Cross.

Rhodes, from Ashford, Kent, said the request from reporters involved sensitive details on compensation claims and the nature of injuries. She provided the names of two News of the World reporters who previously had not been connected to the phone-hacking scandal.

A McCue and Partners spokesman said the firm was evaluating the allegations and "considering their position".

Among those known to have been contacted by officers working on Operation Weeting, the Met's investigation into phone hacking, are Graham Foulkes, whose son David was killed at Edgware Road tube station. He said they told him his mobile phone number, ex-directory landline number and address had been found in records made by Mulcaire. Another is Sean Cassidy, father of a victim, and Paul Dadge, famous for helping victims during the attack, who has also been reported to have been emailed by the Met and told his name was in Mulcaire's records.

Last week Scotland Yard was asked to investigate claims that News of the World reporters paid officers to obtain people's locations by tracking their cell phone signals – known as "pinging".

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News International 'bullied Liberal Democrats over BSkyB bid'

Party claims it was told it would be 'done over' by Murdoch papers if deal did not go through as company wanted

By Henry Porter and Toby Helm


Saturday 23 July 2011 20.14 BST

Rupert Murdoch's News International launched a campaign of bullying against senior Liberal Democrats in an attempt to force through the company's bid for BSkyB, high-level sources have told the Observer.

Lib Dem insiders say NI officials took their lobbying campaign well beyond acceptable limits and even threatened, last autumn, to persecute the party if Vince Cable, the business secretary, did not advance its case.

According to one account from a senior party figure, a cabinet minister was told that, if the government did not do as NI wanted, the Lib Dems would be "done over" by the Murdoch papers, which included the now defunct News of the World as well as the Sun, the Times and the Sunday Times.

The accounts are only now coming to light, say sources, because the minister involved feared the potential for damage to the party, which was already suffering a dramatic slide in popularity after going into coalition with the Tories. They chime with reports from senior figures in the Labour party who say that Murdoch executives issued threats to Ed Miliband's office after the Labour leader turned on NI when the news broke that murdered 13-year-old Milly Dowler's phone had been hacked into by the News of the World.

Labour insiders say NI executives made clear to Miliband's office that because he had chosen to "make it personal" they would do the same, implying they would attack him through their media outlets.

The pressure on the Lib Dems was at its most intense around the time that Cable decided to refer the BSkyB bid to Ofcom. However, it relented after Cable was removed by David Cameron from responsibility for the bid when he was taped by undercover reporters from the Daily Telegraph attacking Murdoch.

Cable was recorded saying to the reporters, who pretended to be constituents, saying that he had "declared war on Mr Murdoch and I think we're going to win". Insiders believe NI's interest then focused on the culture secretary, Jeremy Hunt, who took over responsibility for the bid from Cable. News International declined to comment on the bullying allegations.

The revelations will fuel the debate over Cameron's friendship with Rebekah Brooks, the former NI chief executive who was arrested a week ago. Labour MPs placed Cameron under intense pressure to reveal whether he had discussed BSkyB in any of his many meetings with Brooks or other NI executives since becoming prime minister.

It was revealed that Cameron had had 26 meetings with NI officials since becoming prime minister in May last year. Under sustained questioning in the Commons, he said only that he had had no "inappropriate" discussions with Brooks or other NI executives about the bid. Many MPs believe it unlikely, given the determined approach mounted to influence the Lib Dems.

Formal contacts between NI and Hunt continued right up to last month, during which the question of media plurality was discussed.

More details of the links between No 10 and News International were revealed as it emerged that NI entertained Downing Street special advisers more than any other organisation during the first seven months of this government. Figures from the Bureau of Investigative Journalism showed that almost a quarter of all lunches, dinners and hospitality enjoyed by Downing Street's inner circle came from Murdoch's company. Gabby Bertin, Cameron's official spokeswoman, was wined and dined nine times, including a trip to last year's Wimbledon championships.

Labour MP Paul Farrelly, a member of the culture, media and sport select committee, said: "After the phone-hacking scandal we know how deeply News International penetrated Downing Street and the Metropolitan police."

Meanwhile, Strathclyde police gave details of investigations into whether witnesses who gave evidence about phone hacking at the trial of jailed politician Tommy Sheridan – including Cameron's former director of communications, Andy Coulson – may have committed perjury. Coulson, then employed by Downing Street, told the trial in December that he had no knowledge of illegal activities by reporters while he was editor of the News of the World. He also claimed: "I don't accept there was a culture of phone hacking."

Assistant Chief Constable George Hamilton said: "We will also be looking to see if we can uncover any evidence of corruption in the police service or any other organisation related to these inquiries. However, I must stress that no specific allegations regarding corruption have been presented to us."

A News International spokeswoman said: "We can confirm that we have been contacted by police on this matter. We can't say anything else

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Former Schools Chief Emerges as Murdoch’s Unlikely Ally

The New York Times


July 24, 2011

Joel I. Klein, the former New York City schools chancellor, was in a tricky position. Three weeks ago, Rupert Murdoch asked Mr. Klein, now his trusted deputy, to oversee an investigation into the phone hacking scandal that has deeply wounded the News Corporation and its chairman, something Mr. Klein was eager to avoid.

“I am trying to get as far away from this as I can,” he lamented to a friend.

He has not succeeded. Mr. Klein, who joined the News Corporation as a senior vice president in January, is not only responsible for the investigation that could uncover what company managers knew about the hacking, but he also has become one of Mr. Murdoch’s closest and most visible advisers throughout the crisis.

His seemingly contradictory roles — de facto chief of internal affairs officer and ascendant executive with Mr. Murdoch’s ear — are raising questions about how robust and objective the internal inquiry can be. When Mr. Murdoch summoned a team of top deputies and outside consultants to London to help him manage the fallout from the hacking, Mr. Klein was one of the first to arrive, moving into a temporary office 20 feet from the chairman’s.

When Mr. Murdoch and his closest advisers debated whether to accept the resignation of Rebekah Brooks, a newspaper executive at the center of the controversy, Mr. Klein pushed for her exit. When Mr. Murdoch wrote a statement to deliver to Parliament last week, Mr. Klein weighed in on the drafts.

And while the world watched Mr. Murdoch and his son James testify, Mr. Klein sat directly behind them for three hours, occasionally cleaning his rimless glasses with his tie as he looked on in support.

Mr. Klein’s dizzying journey, in under a year, from one of the nation’s foremost education reformers to the corporate consigliere for a media titan whose politics are far to the right of his own, has surprised and unsettled many friends and colleagues, who fear that he will be unable to extricate himself from a scandal that shows no sign of abating or, they say, ending well. “This was nothing he could have ever expected,” said Barbara Walters, a longtime friend of Mr. Klein’s.

But in many ways, interviews suggest, his emergence as a dominant figure within the News Corporation is consistent with a biography that combines high-minded legal and social aims — antitrust law and education — with a driving, sometimes overwhelming competitive fire.

“He has a take-no-prisoners attitude,” said Randi Weingarten, who battled Mr. Klein when she was head of the New York City teachers union. “He is a litigator. He is about winning.”

It is a sign of how delicate Mr. Klein’s position inside the News Corporation has become that he was initially against the idea of an internal review. In April, after London’s Metropolitan Police arrested three News of the World journalists on suspicion of hacking, some executives pushed for an investigation that would have the full backing of the company’s board and senior management, according to two people with knowledge of the discussions taking place at the time.

Mr. Murdoch opposed the idea outright. Standing firmly in his corner was Mr. Klein.

“There was a clear message,” said one of the people who knew of Mr. Klein’s role and requested anonymity to divulge private conversations. “Stay out. And let Joel handle it.”

Top lawyers and experts in corporate governance said the News Corporation should have hired outside legal counsel to oversee the inquiry, as dozens of companies like the American International Group and Fannie Mae have done in the past, rather than rely on an insider.

“That is not standard practice,” said Charles M. Elson, an expert on corporate governance at the University of Delaware. “You cannot be seen as objective if you are inside.”

The News Corporation says the investigative body will have true independence and the power to compel employees to cooperate. The company points to the appointment of Lord Anthony Grabiner, a prominent British lawyer who also sat behind the Murdochs during their testimony before lawmakers last week, as the body’s independent chairman. Lord Grabiner will report to Mr. Klein. Mr. Klein, in turn, will report to Viet Dinh, an independent director on the News Corporation board.

Mr. Klein declined to be interviewed for this article.

“We’ve been given a free hand,” said Lord Grabiner, who added that he and Mr. Klein never would have agreed to take on the job if they felt the committee was a sham.

“If I thought for a moment that this was going to be an in-house job, I wouldn’t do it because my reputation is on the line,” he said. “And I’m sure he feels the same way.”

Well Practiced in Turmoil

Investigating his colleagues and possibly his superiors was not what Mr. Klein, 64, signed up for when he joined the News Corporation in January.

His actual job is chief executive of the company’s fledgling education division — a business that sits far down the pecking order in a global media giant that owns Fox News, Twentieth Century Fox Films and The Wall Street Journal. But Mr. Klein, a postal worker’s son who is known for his agile mind and professorial appearance, is well practiced in steering the high-powered through treacherous political shoals.

He helped the Clinton administration prepare Ruth Bader Ginsburg for her Supreme Court nomination hearings in 1993 and also oversaw the Clinton White House’s responses to the Whitewater inquiry. He withstood his own contentious confirmation as head of the antitrust division at Justice Department.

It was in that role that he first crossed swords with Mr. Murdoch, pushing against the Mr. Murdoch’s proposed $1.1 billion merger of his American satellite television company with Primestar, another satellite provider. The deal eventually fell apart, costing Mr. Murdoch an estimated $300 million.

By the late 1990s, Mr. Klein was gaining international renown for his aggressive prosecution of Microsoft, a seemingly invincible technology behemoth with deep pockets and a high-powered legal team.

Mr. Klein, in his forceful but erudite style, spent months trying to persuade lawyers inside Justice Department who advised against pursuing the case, fearing the government stood no chance of prevailing.

“If he had not been 100 percent behind it, it would not have gone anywhere,” said David Boies, who tried the case for the United States and is now chairman of Boies, Schiller and Flexner. “He had to overcome a lot of objections from the staff.”

The government’s victory over Microsoft won Mr. Klein legions of admirers, eventually including the company’s co-founder Bill Gates, who became a major donor to New York City schools.

But his unyielding approach and determination to challenge orthodoxy at times inflamed those around him, especially after Mayor Michael R. Bloomberg named him schools chancellor in 2002.

At what was supposed to be a diplomatic introductory lunch with Ms. Weingarten, the head of the city’s teachers union, he asked her how she believed change should be accomplished within the schools.

“Incremental and sustainable,” she replied.

Mr. Klein scoffed. “We need a revolution,” he demanded.

His eight years as schools chancellor formed the foundation for his unlikely friendship with Mr. Murdoch, who holds his own strong views on education reform, which the two began to discuss over regular lunches and dinners with their wives.

A Surprising Alliance

Though Mr. Klein did not see eye to eye with Mr. Murdoch on many political issues, they agreed on a core set of education principles: that charter schools needed to expand; poor instructors should be weeded out; and the power of the teachers union must be curtailed.

In each other, they saw themselves: Mr. Klein and Mr. Murdoch were both unapologetic about their beliefs, frustrated with status-quo politics and tenacious. They shared a distaste for small talk with strangers and had a habit of quickly disappearing from social events.

Their friendship morphed into a political alliance. Mr. Murdoch’s New York Post emerged as an unflinching and potent champion of Mr. Klein’s proposals to remake the school system, like his successful fight to lift a state cap on the number of charter schools in New York City.

Mr. Murdoch began to put his own money behind Mr. Klein’s efforts. At one point, he quietly donated $1 million to an advocacy group, Education Reform Now, run by Mr. Klein, bankrolling a continuing campaign to overturn a state law protecting older teachers, according to a person told of the contribution.

When Mr. Klein visited The Journal last year to discuss education issues with news and opinion writers, Mr. Murdoch interrupted to lavish praise on the chancellor, much to the surprise of the writers. “Just listen to everything that Joel is saying,” Mr. Murdoch insisted, according to one person who attended the meeting.

As Mr. Klein considered stepping down as schools chancellor in late 2010, Mr. Murdoch made him an alluring offer: work for him, running a new division of the News Corporation focused on education technology. According to a friend, Mr. Murdoch told Mr. Klein he was willing to spend $1 billion to build the business.

It was lucrative work. Mr. Klein’s compensation package may exceed $4.5 million this year, company filings show. He is eligible for News Corporation stock awards and receives a $1,200 monthly car allowance.

At a Titan’s Ear

Some in Mr. Klein’s social circle were startled by his decision to join the News Corporation’s right-leaning news empire.

“What? You’re going to work for Rupert Murdoch?” David Gergen, a former adviser for Bill Clinton, recalled asking his friend.

Mr. Klein was a dyed-in-the-wool Democrat, though he had taken a more conservative tack on education. He rarely took vacations, but when he did he went to the Dominican Republic, where the fashion designer Oscar de la Renta, a friend, held parties that became a retreat for Democrats, including the Clintons.

When friends asked, he reassured them that his only interaction with Fox News was seeing the television screens in the company’s elevators.

In his first few months at the News Corporation, he quickly assimilated and seemed happier than ever before to several longtime friends. He gave up BrickBreaker, the addictive BlackBerry game that he had grown fond of as schools chancellor, saying he no longer needed it because his stress levels had fallen. He told friends that his chronic back pain had vanished.

Mr. Klein has often traveled on Mr. Murdoch’s private jet, and he seemed to relish access to the company’s stable of media properties, occasionally wandering to the desks of Journal writers to discuss education issues.

In the eighth floor executive suite at the company’s Midtown headquarters, where he occupies an office just down the hall from Mr. Murdoch, he closely aligned himself almost immediately with the chairman, isolating himself from other senior executives. That led to some suspicion from colleagues, a person with knowledge of the company’s dynamics said, especially as Mr. Klein left the impression that he wanted the chief legal officer to report to him. Through his spokesman, Mr. Klein said he had no interest in running the company’s legal affairs and was focused on the education business.

Mr. Klein was keen on having his advice heard at the highest levels of the company, according to people told of his conversations with News Corporation executives. At his urging, with some encouragement from his wife, Nicole Seligman, the News Corporation hired Williams & Connolly, her former law firm, to provide counsel on the scandal.

Friends who have spoken with Mr. Klein in recent weeks said he was conflicted about his new investigative assignment: eager to return to the education sphere, but determined to redeem the News Corporation and, in particular, Mr. Murdoch, by conducting a thorough inquiry.

“The easiest thing would be for him to walk away from this,” Mr. Boies said. “The one thing I can tell you is that he will not say something he does not believe. And he does not believe easily.”

During their days together on the Microsoft trial, Mr. Boies recalled, Mr. Klein had a favorite legal maxim that would serve him well in his new role at the News Corporation.

“Facts,” he was fond of saying, “are stubborn things.”

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Miliband mulls MPs' demands to remove hacking-inquiry judge

Labour leader shares concerns over impartiality of Lord Justice Leveson after revelations that he attended parties at the home of Elisabeth Murdoch

The Independent

By Jane Merrick, Jonathan Owen, Brian Brady and Martin Hickman

Sunday, 24 July 2011

Ed Miliband is considering demands by MPs for the judge in charge of the phone-hacking inquiry to be removed from his post after reports that he had socialised with members of Rupert Murdoch's family.

Sources close to the Labour leader said he shared the concerns raised over the impartiality of Lord Justice Leveson after it emerged that the judge attended two parties at the London home of Elisabeth Murdoch, the News Corporation chairman's daughter who is regarded as the heir to the business, and her husband, Matthew Freud.

David Cameron knew about the parties before appointing Lord Leveson to chair the inquiry into the scandal, Downing Street admitted.

In a separate development, it emerged that James Murdoch, the tycoon's son, could be recalled within days to the select committee investigating the scandal over allegations that he gave them misleading evidence. The Culture, Media and Sport committee may also call former News of the World editor Colin Myler and former NI legal manager Tom Crone over their claim that James Murdoch had been "mistaken" when he said that he had not seen an email suggesting the hacking scandal went further than just one rogue reporter.

One of the alleged hacking victims may include one of Britain's most senior policemen, who died from exposure while in turmoil over his private life.

Michael Todd, the Chief Constable of Greater Manchester Police, feared that a string of affairs was about to be made public by a Sunday newspaper, when he died while walking on Mount Snowdon in March 2008.

It is believed that his lover at the time of his death, Angie Robinson, had her phone hacked by journalists. It is not known whether those journalists worked for the NOTW. However, it has emerged that another woman romantically linked to Mr Todd, Andrea Perry, who at the time was reporting for the NOTW, is to be interviewed by detectives investigating hacking.

An inquest into Mr Todd's death said he had not committed suicide, but in the hours before his death he sent tortured text messages to women with whom he had been involved. A report into Mr Todd's conduct by Sir Paul Scott-Lee, Chief Constable of West Midlands Police, concluded his affairs made him vulnerable to blackmail.

Coincidentally, Sir Paul is now on Lord Leveson's inquiry panel.

Lord Leveson attended two parties at the London home of Mr Freud and Ms Murdoch, on 29 July last year and on 25 January this year.

A source close to the Labour leader said: "The Prime Minister must make clear whether he considered all aspects of the appointment [of Lord Leveson] properly. Ed is aware of and shares the concern about this."

A number of top executives at News International were told that the News of the World was breaking the law four years before the company finally abandoned its "rogue reporter" defence of illegal phone-hacking this year, The IoS has learned. They were warned that the newspaper had illegally obtained the medical records of Manchester United's manager, Sir Alex Ferguson, in 1997, when Phil Hall was editor and Rebekah Brooks his deputy.

The revelations are from a private and confidential statement, presented to executives by sports reporter Matt Driscoll at a meeting to discuss his appeal against dismissal in July 2007. Mr Driscoll, who was subsequently awarded £792,736 by an industrial tribunal, stated that he had "witnessed, first-hand, the kind of journalistic practice the News of the World would stoop to in order to get a story", after he had failed to substantiate rumours about Sir Alex's health.

It has also emerged that a Surrey police officer was taken off the hunt for the killer of Milly Dowler, whose phone was hacked by the NOTW, after leaking confidential details of the investigation.

An officer with knowledge of sensitive information was given "words of advice" and removed from the case after a complaint that he mishandled confidential data.

Surrey Police said it had no evidence that the officer had passed any information to the NOTW. But Labour MP Chris Bryant said: "This raises major questions about the original investigation and about the News of the World's relationship with other police forces. The problem is the Surrey police knew about this in 2002 and did nothing."

Edited by Douglas Caddy
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George Osborne's relationship with Murdoch under scrutiny

The Independent

By Matt Chorley, Political Correspondent

Sunday, 24 July 2011

George Osborne's relationship with News International will be thrown into the spotlight this week when the Chancellor is forced to publish details of every meeting with media executives since the election.

The revelations are expected to step up pressure on Mr Osborne as a senior political strategist at the heart of the Tory party, and his role in persuading David Cameron to hire the ex-News of the World editor Andy Coulson as his communications chief. Sources close to Mr Osborne confirmed that he flew to New York last December and had dinner with Rupert Murdoch, two weeks before Ofcom was due to rule on his bid to take over BSkyB.

More details are expected early next week when the Cabinet Office releases details of every meeting between a cabinet minister and media executives and proprietors since May 2010. Mr Cameron released his meetings 10 days ago. A senior Whitehall source feared the release would be "hideous".

Aides to Michael Gove, the Education Secretary, are also understood to be nervous about further details of his contact with senior News Corp figures. Mr Gove was a senior journalist at The Times, owned by News International, before the 2005 election and continued to write for the paper until 2009. Mr Gove, who is married to Sarah Vine, a writer on The Times, attended a party hosted by Mr Murdoch's daughter Elisabeth days before it emerged that Milly Dowler's phone had been hacked. James Murdoch, News Corp director and son of the media mogul, was also at the party on 2 July.

The release of details of ministerial meetings with newspaper editors and owners will also reveal the extent to which the Lib Dems have courted the media since entering government. It also emerged last night that David Blunkett, the former Labour home secretary, was paid £25,000 by News International for a six-month "advisory post for corporate social responsibility (volunteering and education)".

As the furore threatens to ensnare more political figures, so other newspapers were drawn into the scandal. Piers Morgan, a former editor of the News of the World and the Daily Mirror, faced fresh claims that hacking took place under his watch. James Hipwell, a financial journalist under Mr Morgan's editorship of the Mirror, told The Independent the practice was "seen as a bit of a wheeze". He offered to give evidence to the judge-led public inquiry because he was sick of all the "lies". He also said hacking happened at The People.

Mr Morgan has insisted he "never hacked a phone, told anyone to [do so], or published any stories based on the hacking of a phone". BBC's Newsnight also reported a former Sunday Mirror journalist claiming there had been "routine phone-hacking in the newsroom". A spokesman for Trinity Mirror, which owns the three papers, said: "Our journalists work within the criminal law and the Press Complaints Commission code of conduct."

The allegations revealed today in The IoS by Matt Driscoll about questionable practices at the NOTW date back to when Phil Hall, now a PR consultant, was editor from 1995-2000. He could be forced to give details of the culture during his time in charge.

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There is a hysteric campaign to unseat the Labor Government in Australia right now. Both the ex Leader of tjhe Liberals and the touted but much despised as well Tony Abbot, the leader of the opposition have come out swinging for Murdoch. I really think this iinvestgation must take into account the young Rupert Murdoch. Please. An Abbott regime, which inevitably will involve Turnbull and his ilk, will be disastrous for our country. And guess what? It's about fossil fuels, union busting and regime change.. This guy has no right to wield this influence, anywhere, but for me, particularly here in oz. Thank you.

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Will James Murdoch still be chairman after Thursday?

The Independent

Sunday, 24 July 2011

James Murdoch's position as chairman of BSkyB will be discussed at this Thursday's board meeting ahead of the broadcaster's results on Friday.

Investors are said to be divided over whether Mr Murdoch should retain his role following the phone-hacking revelations at the now closed News of the World. Nick Ferguson, deputy chairman, has taken soundings and will lead the discussions over Mr Murdoch's fate with fellow directors who include the publisher Dame Gail Rebuck and the former Royal Mail chairman Allan Leighton. Several investors, including Crispin Odey of Odey Asset Management, back Mr Murdoch.

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James Murdoch's Week Ahead

News Corp. Executive Faces Multiple Challenges as He Seeks to Stabilize Status

The Wall Street Journal

July 25, 2011


Having faced a public grilling before a U.K. parliamentary committee last week, News Corp. Deputy Chief Operating Officer James Murdoch will confront a series of behind-the-scenes battles this week as he seeks to stabilize his status at the media giant.

James Murdoch faces more tests after ex-company officials accused him of misleading a parliamentary panel.

Mr. Murdoch faces pressure over his handling of the phone-hacking scandal at the company's News of the World U.K. tabloid, an epic saga that has thrown into question the company's future, as well as Mr. Murdoch's status as the potential successor to his father, 80-year-old News Corp. Chairman and Chief Executive Officer Rupert Murdoch.

Especially troublesome for James Murdoch was last week's public accusation by two former News of the World executives that he misled Parliament about when he learned that illegal reporting practices at the tabloid were more widespread.

On Thursday, the board of British Sky Broadcasting Group PLC will meet two weeks after the scandal prompted News Corp. to withdraw its bid for the 60.9% of the satellite-TV broadcaster it doesn't already own. The meeting is expected to provide the strongest signal yet of whether the BSkyB board will continue to support James Murdoch as the company's chairman.

Meanwhile, even with the BSkyB bid dead, U.K. communications regulator Ofcom is still studying whether, after the hacking revelations, News Corp. remains "fit and proper" to hold a broadcasting license for BSkyB.

And then there is the question of what will come next from former executives of News International, the company's U.K. newspaper unit. Last Thursday, the paper's most recent editor, Colin Myler, and its longtime top lawyer, Tom Crone, said they told James Murdoch in early 2008 of a crucial email suggesting phone hacking went beyond a single journalist, contradicting the company line, put forward by Mr. Murdoch as recently as last week's hearing, that it didn't become aware that hacking was more widespread until much later. A third man—Jon Chapman, former director of legal affairs at News International—has also indicated he wants to correct "serious inaccuracies" he claims were aired at the hearing.

It's a far cry from the sigh of relief some at News Corp. breathed after last week's parliamentary hearing, when the initial feeling was that nothing had transpired to make matters worse for either Murdoch.

The News Corp. board is expected to meet in person in early August, according to people familiar with the matter, and it isn't expected to make any major decisions related to the scandal at least until then. But the people said the situation could change depending on events.

News Corp. owns The Wall Street Journal.

On the BSkyB front, people close to the situation said last week that Mr. Murdoch's future as the chairman largely depends on how the phone-hacking story unfolds in coming days. More damaging accusations from his former colleagues—or information that substantiates those already made—could weaken his position further.

There are other matters beyond James's role in the scandal that could play a role in determining his future at BSkyB. Now that News Corp. has been forced to shelve its effort to buy the rest of BSkyB, the satellite company is expected to take steps such as returning cash to shareholders that would effectively compensate them for the premium they were expected to get from News Corp. in the buyout deal.

But it's not clear how eager News Corp. would be for the cash windfall that such a move could send its way given the media giant's big existing BSkyB holding. A person familiar with the matter said last week that if the interests of News Corp. and other BSkyB shareholders diverge further, that could ultimately also play a role in determining Mr. Murdoch's future with the broadcaster.

Working in Mr. Murdoch's favor is the fact that the scandal has had no measurable impact on BSkyB's business.

Furthermore, Mr. Murdoch is credited by a number of BSkyB investors with laying the groundwork for the success the company has enjoyed since his tenure as CEO there. But that could all change rapidly depending on further revelations.

Though Thursday's BSkyB board meeting is regularly scheduled, the subject of the phone-hacking scandal is expected to be discussed, people familiar with the matter say.

BSkyB directors, representing the company's shareholders, could be seen as a proxy for News Corp. shareholders, since the companies have many top shareholders in common. That means that any move or signal from BSkyB's board on Mr. Murdoch's status in light of recent events could be an indication of his standing at News Corp. too.

Meanwhile, Ofcom officials met with police as recently as last week to learn of any developments in the phone-hacking investigation. The regulator has a standing duty to ensure that holders of broadcasting licenses are "fit and proper." In a letter to lawmakers Friday, Ofcom Chief Executive Ed Richards said the body will consider any "relevant conduct" by News Corp. or BSkyB, but he warned it would not rely on "unsubstantiated allegations" to reach a judgment.

On Friday, News Corp. said Mr. Murdoch had no plans to step down from the BSkyB board. A spokesman for BSkyB said the company stood by its statement earlier this month that it was satisfied with the current board arrangements.

The U.K. parliamentary committee that has been investigating what senior News Corp. executives knew about phone hacking and when they knew it are also due to meet this Friday. While the Culture, Media and Sport committee is meeting for an unrelated matter, it is expected to also consider developments related to phone hacking.

That is likely to include written responses from James Murdoch, who will supply additional information following evidence given by him and his father last week. In addition, the committee has asked him to clarify parts of the testimony that he gave following the comments by his former News International colleagues.

This week, News Corp. is also preparing for increased scrutiny from the U.S. Department of Justice, which has been preparing to issue subpoenas as part of preliminary investigations relating to alleged foreign bribery and alleged hacking of voicemail of Sept. 11 victims, according to a government official.

A person close to News Corp. said last week that the preparation of subpoenas is "a fishing expedition with no evidence to support it." A News Corp. spokeswoman has said that the company has "not seen any evidence to suggest there was any hacking of 9/11 victim's phones, nor has anybody corroborated what are clearly very serious allegations."

—Cassell Bryan-Low and Jessica E. Vascellaro contributed to this article.

Write to Dana Cimilluca at dana.cimilluca@wsj.com, Paul Sonne at paul.sonne@wsj.com and Russell Adams at russell.adams@wsj.com

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Rupert Murdoch shirking responsibility over phone hacking, says police chief

Sir Hugh Orde contrasts News Corp chairman's behaviour with Sir Paul Stephenson, who quit over indirect NoW links

By Patrick Wintour


Sunday 24 July 2011 20.56 BST

Sir Hugh Orde, the president of the Association of Chief Police Officers, has lambasted Rupert Murdoch, saying the chairman of News Corporation had shown a complete denial of responsibility for what had gone on in his company.

He contrasted Murdoch's behaviour with the leadership shown by Sir Paul Stephenson, the Metropolitan police commissioner who quit last week over his indirect links with former News of the World editors.

Orde is tipped as a possible replacement for Stephenson, and it is the second time in a few days that he has attacked the irresponsibility of News Corps.

Speaking on the BBC's Andrew Marr programme, Orde said "You saw the chief officer of the police service of this country, Sir Paul Stephenson, saying, 'Look this happened on my watch. I am responsible. I am therefore … It's on my watch. I am resigning.' Compare that to Rupert Murdoch – complete denial of any responsibility of his organisation."

Writing in Jane's Police Review at the weekend, Orde said: "What we have seen over the last few days is police officers standing up, explaining their actions and decisions and being held to account for them. Across the country, in serving our communities, police officers expect to have to do no less.

"It is a stark contrast to the way in which others have sought to meet their responsibilities."

News Corporation can respond that top executives have now stepped down, notably Les Hinton, chief executive of News International at the time of the phone hacking, and his successor, Rebekah Brooks.

The culture select committee is due to meet on Friday – when it releases a report on football governance – to discuss how to handle the apparent conflict of evidence between James Murdoch, News Corps International chief executive, and other former News International executives, including Colin Myler, the former editor of the now-closed News of the World.

Myler said he did show a crucial email – known as the "For Neville" email – to James Murdoch before News International's decision to pay out around £700,000 to Gordon Taylor, chief executive of the Professional Footballers Association in an out-of-court settlement after Taylor threatened to sue the paper.

James Murdoch insisted he did not know about the email, but Myler and Tom Crone, the News Group's former head of legal affairs, have claimed he is mistaken.

Culture select committee members said they hoped to write to Myler and Crone.

They will also be writing to the firm of solicitors Harbottle & Lewis to ask the firm to explain the origins of a carefully crafted letter dated 29 May 2007 claiming that it had not found "reasonable evidence" that senior editors were aware of the actions of Clive Goodman – the royal reporter who went to prison for phone hacking -or that "others were carrying out similar illegal procedures". Harbottle & Lewis reviewed emails from the accounts of Andy Coulson and five other individuals, according to documents published by the culture select committee.

A request for information will also be sent to Lawrence Abramson, a former senior partner at the law firm. The firm of solicitors is not yet clear whether it has legal immunity from News Corps to discuss the exchanges.

Committee members want to ask for evidence from Jon Chapman, News International's former director of legal affairs, about his knowledge of the level of phone hacking. It has been suggested that in 2007 Chapman and Daniel Cloke, then News International's human resources director, reviewed the emails between the six named News of the World members of staff before sending them to Harbottle & Lewis.

It is thought unlikely that the committee will meet in public before September, but this does not prevent compilation of written evidence.

In a separate development, an opinion poll carried out by YouGov for the Sunday Times showed the proportion of people who believed David Cameron was performing "well" had fallen to 39% while his "performing badly" figure at 55% was the worst of his premiership. At the end of May, Cameron was on 48% – 46% showing a net positive of two.

At the same time the proportion who believed Miliband was performing badly had fallen to 50%, down from 60% before the phone-hacking scandal broke. The proportion who believed he was performing well was 35%, up from 25%. So for the first time more people believed Cameron was performing badly than they did Miliband. YouGov surveyed 2749 adults between 21 and 22 July.

News Corp management and standards committee has written to all News International staff ordering them to retain all emails and documents regarded as a relevant to police and parliamentary inquiries into phone hacking.

The email reads: "if you are uncertain whether a document is relevant or falls within the definition of 'document', you should preserve it. Care should be taken to avoid overwriting any electronic file that might be relevant."

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News International staff told to stop deleting emails

The Independent

By Oliver Wright, Whitehall Editor

Monday, 25 July 2011

Staff across all of Rupert Murdoch's News International newspapers have been warned not to delete or destroy documents relating to any of the phone-hacking investigations now under way.

In an email sent to employees over the weekend, the company reveals it has suspended all automatic deletion of files and destruction of documents.

The memo shows News Corp's fears that journalists from its other papers might get sucked into the phone-hacking scandal, given the company's insistence that it was solely an issue for the News of the World.

The email, sent from News Corp's new Management and Standards Committee, also raises questions about why such a policy has only just been implemented, given that the company has been aware of the extent of the allegations against it for some time.

"It is very important that all News International employees take immediate steps to preserve and retain all documents that may be relevant to these issues," it reads. "We apologise that this is necessary but it is an important step the company must take in order to comply with the various investigations."

The email goes on to warn staff that "all types of electronic and hard copy data or communications, including memoranda, letters, emails, reports, presentations, handwritten notes, tapes and any other recorded information or computer media" are covered by the edict.

It adds: "Please suspend any automatic deletion or discarding of any documents, whether electronic or paper, including emails or drafts of documents... If you are uncertain whether a document is relevant... you should preserve it."

The company also confirms that its current policy towards the deletion of documents has been suspended. "Given the current circumstances you should be aware that all policies requiring the destruction of such documents or overwriting of any electronic material will be suspended immediately," it said.

The News of the World newsroom has already been sealed and staff refer to it as a "crime scene". All News Corp staff will be spoken to in the coming days over the way they deal with emails.

News Corp's Management and Standards Committee is being run on a day-to-day basis by Will Lewis, public-relations man Simon Greenberg and Jeff Palker, general counsel for News Corp Europe and Asia. It is being overseen by Joel Klein, a News Corp director and former legal adviser to the White House.

Yesterday, The New York Times reported concerns about Mr Klein's role as an independent adjudicator given his close relationship with the Murdochs. He sat behind them when they gave evidence to MPs on Tuesday and was initially hired by the company to push its educational publishing arm.

Lawyers and experts in corporate governance said News Corp should have hired outside legal counsel to oversee the inquiry, rather than use an executive director. "That is not standard practice," said Charles Elson, an expert on corporate governance at the University of Delaware. "You cannot be seen as objective if you are inside."

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Tom Watson: 'It has seemed like surfing a giant wave for two weeks'

The Monday Interview Tom Watson tells Martin Hickman about his role as scourge of the Murdochs, and why his battle isn't over

The Independent

Monday, 25 July 2011

Tom Watson is a little bleary but otherwise in good spirits. Exposing the dark heart of the world's most powerful news corporations is physically demanding, black coffee-fuelled, exhilarating work; he doesn't always get eight hours sleep. In fact, for the past three weeks, the 44-year-old scourge of Rupert Murdoch has averaged three hours a night as he gives TV interviews, writes letters to Scotland Yard, asks Commons questions and generally causes havoc to Mr Murdoch's hopes of continuing in business in Britain.

His two-year campaign to uncover the scale of wrongdoing at Mr Murdoch's News International (NI) dramatically burst to life three weeks ago with the disclosure that its best-selling paper, the News of the World, had hacked into the mobile phone of Milly Dowler.

The ensuing "firestorm" (David Cameron's words) forced the Prime Minister to open a public inquiry and Rupert Murdoch to abandon the tabloid and, eventually, the redtop he had been hoping to keep, NI's chief executive Rebekah Brooks.

At every stage Watson has popped up on TV, newspaper front pages and Twitter undermining the PR counter-offensive from Britain's biggest newspaper group. He has also kept up the pressure in Parliament, where last week, as the resident phone-hacking expert on the Culture, Media and Sport Select Committee, he came face to face with the Murdoch clan: Rupert and James, and their former British chief, Ms Brooks. Commentators judged Watson's questions to have been the most incisive and he repeatedly refused to let Murdoch Junior jump in for his father.

As he waits for his lunch at a Mexican restaurant in Fulham, where The Independent tracked him down, Watson pauses as he works out how to sum up the last few extraordinary weeks. "It has seemed like surfing a giant wave for two weeks solid," he says. "I've not been able to look down, nor take it all in."

His newfound fame has won him the admiration of assorted showbusiness stars. The strangest experience, he says, was George Michael calling him his hero, and he also had his hand shaken effusively last week by the comedian (and Sky TV quiz host) David Walliams, who stopped him on London's South Bank.

Since joining the DCMS committee's inquiry into press standards in 2009, he has been preoccupied with the misdeeds of Britain's biggest newspaper group – some would say obsessed. He starts his day thinking about how to tackle the fast-moving story and goes to sleep thinking about the next line of attack. Despite the tumultuous events of the past weeks, he believes the "phone-hacking scandal" still has a long way to go. "I don't think we're half way through it," he says, munching through the starter.

"We're a lot closer to the people at the core of the organisation who really run News International; we're a lot closer to finding out who knew what. But as to the actual number of victims and types of criminal invasions of privacy, I don't think we're anywhere near to getting that story out yet."

The revelation about Milly Dowler almost instantly shattered the Murdochs' political power. Labour and Conservative politicians who had been paying their respects to the family at their summer party in London two weeks earlier were suddenly desperate to distance themselves from their empire.

Ed Miliband made the running by demanding a public inquiry and the head of Ms Brooks, both of which duly arrived. By contrast, Mr Cameron was left responding to events, his position made all the more difficult by his initial defence of his former communications director Andy Coulson, the ex-NOTW editor, who was arrested over alleged police corruption.

Watson, Labour MP for West Bromwich East since 2001 and a friend of Gordon Brown, is pleased at his leader's stance. "I'm really very proud of Ed Miliband," he says. "I hope my colleagues in the Parliamentary Labour Party, the Labour Party and the country are in no doubt that he is the only candidate at last year's leadership election that would have called for Rebekah Brooks to go at PMQs, and we should all be proud that that we elected him.

"He probably made one of the biggest political calls of his life – and he made the right call."

As to Mr Cameron, Watson is bemused why he seems to be "constantly behind the curve on this".

"Don't get me wrong," he says. "I admire the fact that he's now agreed to a judge-led inquiry and a full investigation can now take place and I don't discount that. But he has lost his usual surefootnedness on this issue and he looks a little evasive."

Within Parliament, MPs from all parties have been personally warm, he says. "It's heartening. Colleagues from both sides of the House have been very supportive. I think they regard the matter as a stain on the character of the country and they understand that collectively we've got to put that right.

"Some of them used to rib me a year ago when they thought I was being mildly obsessional in my pursuit of the facts of this case and, in an embarrassed way, have apologised for making fun of me, so there have been some amusing moments as well." He continues: "We've had lots of letters phone calls and emails in the office and people have stopped me in the street and said, 'Well done'."

Before he become known for his role in covering the scandal, Watson was a leader of the "Curry House plot" to unseat Tony Blair in 2006, for whom he was a defence minister. Gordon Brown made him a minister in 2008, putting him in charge of government modernisation at the Cabinet Office.

He has an interest in technology and was one of the first MPs to blog and use Twitter. While many newspapers were not reporting the scandal, social media was "key", he recalls, adding that the papers that did investigate were "The Independent, the Independent on Sunday, the Guardian and FT".

"The other papers were not reporting the story, so it was social media that kept the issue alive and many thousands of people on social media have been concerned that a cover up has taken place.

"I think the story might not have come about had not people using social media expressed their outrage. Certainly without Facebook or Twitter a consumer boycott of the advertisers of the News of the World would not have been organised so quickly."

Watson adds: "Even more embarrassing the editor of a website called Labour List is running a campaign for me to carry the Olympic torch which would" – the rotund MP laughs – "actually be the ugliest image in sporting history."

Life in brief

1992 President of the NUS and chair of the National Organisation of Labour Students while at the University of Hull.

1993 National Development Officer for Youth for Labour Party.

2001 Elected MP for West Bromwich East.

2006 Resigned from Ministry of Defence after signing letter calling on Tony Blair to stand down. Told BBC News that Rebekah Brooks said she "would never forgive [him] for what I'd done to her Tony".

2009 Awarded damages by The Mail on Sunday and The Sun for carrying stories that claimed he knew about smear emails sent by Labour adviser Damian McBride.

19 July Questioned Rupert and James Murdoch, along with Brooks, in the Culture, Media and Sport Select Committee session.

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Why Tyrants Love the Murdoch Scandal

The New York Times Sunday Magazine


July 25, 2011

Whether the scandal afflicting News Corp. represents the beginning of the fall of the House of Murdoch or just another thrilling episode in the career of the Teflon tycoon, I can’t say. There is plenty enough spectacle without speculation.

Nor is this the place to celebrate a rival’s troubles. True, I did pull from my files and savor the indignant letters we received from News of the World’s top editors last year as we prepared to publish an investigation of the paper’s phone-hacking culture and Scotland Yard’s timidity — work that has been fully vindicated in recent weeks. But even if it is true, as online wags put it, that Murdoch’s troubles threaten to deplete the world supply of schadenfreude, I don’t plan to join the party.

There is one aspect of the scandal, though, that has not received the attention it deserves. It falls under the heading of collateral damage.

I was talking the other day to a friend from South Africa, a former journalist, who remarked that the phone-hacking scandal comes at a terrible time for his country. Nelson Mandela bequeathed South Africa one of the most liberal constitutions on earth, in some ways more embracing in its guarantees of freedom than our own. (For one thing, it prohibits discrimination based on sexual preference; thus same-sex marriage has been legal throughout South Africa since 2006.) In practice, however, the current government is less tolerant of dissenting voices than Mandela’s was, and the ruling party is now proposing the establishment of a Media Appeals Tribunal to adjudicate complaints against the press.

“You can be sure they will use the phone-hacking fallout to help make their case,” my friend said, adding with some exasperation, “Nobody pays much attention to the effect of something like this on little countries like ours.”

The sad truth is that any time those who pride themselves on their freedoms fail to live up to their ideals, there can be consequences in places where liberty is more precarious. Despots love to see a free press behaving badly. When Jayson Blair was caught fabricating stories in this newspaper, he became a global exhibit in the case against an unfettered press. Even more, they love to see a free government reacting badly. When our government equates journalism with espionage, propagandists smirk: Even in America. ...

Thus Prime Minister David Cameron of Britain, who is trying to salvage a career fueled in part by Murdoch’s support, has given comfort to tyrants everywhere by proposing to constrain a press that is already hemmed in by draconian libel laws and an official secrets act. Visiting Nigeria — which, to its credit, recently emulated the good side of Great Britain by passing a freedom of information act — the prime minister called for some kind of “independent” press regulator to deal with abuses like phone hacking. There is another, less drastic option, of course: simply getting the police to enforce existing laws.

And those of us who are uneasy about Cameron’s intentions might spare a little concern for our own Justice Department, which is investigating whether Murdoch’s company, incorporated in the United States, violated the Foreign Corrupt Practices Act when reporters paid London police officers for news tips. That seems an ominously expansive use of a statute that was created to eliminate bribery as a means to obtain business or favorable regulations from foreign governments. (On this point I find myself in agreement with The Wall Street Journal editorial page, not usually my favorite handbook on press conduct.)

I’m not terribly alarmed that either Britain or the United States will significantly roll back the protections that allow us to hold our governments accountable — up to and including the hot scrutiny of stories like the WikiLeaks disclosures. But the tradition of an aggressive press is not so deeply rooted, or so tolerated, around the world.

“There are so many examples — from Venezuela to Rwanda, from Ecuador to South Africa — where this is a live issue,” said Joel Simon, executive director of the indispensable Committee to Protect Journalists, when I asked about my South African friend’s worry. “And yes, both Jayson Blair and Judy Miller were used by governments to justify their own repressive policies.”

Simon recalls, for example, that each time his agency visited the Venezuelan ambassador to argue against President Hugo Chávez’s repressive press laws, the ambassador pointed out that even the United States, which so proudly wraps itself in the First Amendment, locks up reporters like Miller for refusing to disclose sources.

Few countries are as practiced as Russia in the fine art of holding up a crooked mirror to America. When Mike Wallace of “60 Minutes” asked Vladimir Putin a few years back about the Kremlin’s habit of interfering with news coverage, he retorted, “Don’t you know that some of the American journalists were fired because of their positions on Iraq or the presidential election campaign?” Putin was referring to Dan Rather, who left his CBS anchor job under a cloud after broadcasting a dubious report on George W. Bush’s military record. See? Even in America. . . .

The first oppressive regime to hop on the new hacking bandwagon — at least the first I’ve seen — was Zimbabwe’s, dependable as ever. An Africa watcher from the Committee to Protect Journalists sent me a report from the state-run press service last week, quoting Robert Mugabe’s propagandists on the News of the World scandal: “A media analyst, Mr. Alexander Rusero, said the hacking scandal should serve as a lesson to the third world that the concept of free media is a myth, saying people should judge from the way the British government has reacted to the scandal that even the West cannot practice what they preach.”

Some foreign attempts to constrain press freedom are more understandable than others. It is not hard to fathom why Rwanda, still not fully healed from an ethnic slaughter that was egged on by radio zealots, would look for ways to regulate what it calls “divisionism” in the media. The Egyptian military has some reason to fear that its unsettled protodemocracy might be hijacked by Islamic extremists, which is one pretext for restoring a media-managing Information Ministry that was abolished after the fall of Hosni Mubarak.

And autocrats will be autocrats, with or without our bad example. Robert Mugabe and Hugo Chávez would be just as hostile to an unfettered press if no British journalist had ever hacked a phone or if the United States had never jailed Judy Miller.

But do we really want to be held up as role models for repression?

I hoped Rupert Murdoch might use his day in the parliamentary hot seat to make this point. Instead he offered us Singapore — which ranks 152nd out of 195 nations in the Freedom House ranking of press independence — as “the most open and clear society in the world,” where government ministers are paid so lavishly they have no temptation to be corrupt, and thus presumably there is no need for a nosy press. I’m betting that made every paper in Singapore.

Bill Keller is the executive editor of The New York Times.

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Scandal Splinters a Family Business

The New York Times

July 25, 2011


The News Corporation, the global enterprise controlled by Rupert Murdoch, has a history of living by its own rules and operating beyond consequence. That ended last week.

Mr. Murdoch, long a spectral presence who made his plays on a chess board of his own making, was brought low before a committee of Parliament composed of people he could not have been bothered with three weeks ago.

In testimony last Tuesday, he appeared as a supplicant, a faltering one at that, who interrupted his son James in the opening moments of the hearing, not to correct him, but to tell the members of the committee how sorry he was.

He is very sorry. Sorry that one of his tabloids hacked into the voice mail of a 13-year-old murder victim. Sorry that the scandal threatens to derail his plans of succession. And sorry to find himself suddenly in the public stockade.

Is he sorry that he and his employees created a culture and a business where all that seemed cricket? Probably not so much.

His family and the board of his company are sorry as well, but that will probably not end up meaning much. The protective instincts of the family were on broad display last week. James sought to leap in front of every hard question while Mr. Murdoch’s wife, Wendi, inserted herself into the fray when someone tried to shove a shaving cream pie at her husband. She has a mean right hook.

Rupert has his own protective streak when it comes to his family, and has gone to great lengths to make them central to the News Corporation’s success structure. But what his sons and daughters could soon find out is that if Mr. Murdoch is forced to choose between the family and the company he has built, he will choose the News Corporation.

“Rupert may end up having to make a choice between his son and the company, which is fairly biblical,” said a friend of the family who works in the media business and who declined to be identified when speaking about private family matters.

James Murdoch is done. He and his father both know that. His testimony curdled as he emitted it, and within two days a couple of former News Corporation executives publicly challenged it. The hooks are still in him, as Prime Minister David Cameron made clear when he said James still had “questions to answer.” And so he will, gradually sinking further into the mess he has overseen.

Oddly, the News Corporation’s stock began to tick up during the hearings as Rupert Murdoch testified, his large hands thumping as he dropped them to the table. But it was less about his performance than about the clear message that emerged: an era had ended. The family business is splintering. If James is out, as would seem to be the case, will his other offspring, Elisabeth and Lachlan, come swinging into view? I and others doubt that the charms of a global media enterprise being run as a corner grocery store will continue.

While the family reign seems certain to fracture, the News Corporation’s own fortunes are less predictable. A report by the analyst Michael Nathanson of Nomura Capital Investments nicely captured the moment. The market does not care if you have done bad things; it cares when you get caught.

“While we remain disappointed by the actions of a muckraking newspaper and frustrated that perhaps the least-valuable asset in the News Corp. portfolio could cause this much value destruction,” Mr. Nathanson wrote, “we continue to believe that the risk/reward for News Corp. investors remains positive.”

Reached later by phone, Mr. Nathanson suggested that the News Corporation had been cornered into doing the right thing, after doing a lot of not-so-right things. The fact that the company moved swiftly to buy back its stock — approving $5 billion of the oodles of cash the company has on hand — calmed the markets, if not the troubled waters that the company finds itself in.

“The loss of the BSkyB deal is significant and not good for the company, but in the long term, I think this will force the company to take a hard look at where they are putting capital,” he said, referring to the company’s abandoned bid for British Sky Broadcasting, Britain’s most lucrative satellite television network.

Historically, Mr. Murdoch has used the digital and broadcast parts of his empire to make money, and the more quotidian assets — newspapers, family influence and raw political power — to create running room for the rest of the organization. That was fine as far as it went.

The hacking scandal changed the dynamics. Suddenly, Mr. Murdoch’s fetish for newspapers looked like an ill-advised indulgence. The News Corporation’s prized relationships with 10 Downing Street and Scotland Yard became liabilities, with all of the coziness on view for inspection. It speaks to the scale of the drama and the company that it is almost an afterthought that the government of Britain hangs in the balance.

Perhaps most significantly, Mr. Murdoch has lost the ability to punish, which has been his lever of power for so many years. People are suggesting what has long been on their minds, which is that having one man control so much of the conversation can’t be good for anyone besides him.

His support structure is badly damaged as well. To make room for his children, he pushed out Peter Chernin, the former chief executive, and Gary Ginsberg, the former communications executive. Lachlan Murdoch flew in from Australia to back up his father, but he won’t choose this moment to show up on his father’s behalf.

Elisabeth may end up in the middle things, but why would she choose to grab the baton when it is on fire? The best case is that Chase Carey, deputy chairman, president and chief operating officer — who has been stored behind glass for the duration of the scandal — will grab the tiller until things calm down.

“The board has talked and will continue to talk about Rupert stepping aside as C.E.O. and serving as chairman with Chase Carey becoming chief executive, but Rupert would never do that at the point of gun,” said a person who is close to both Mr. Murdoch and the board. “Not in a million years. Not in two million years. Six months, nine months or a year from now, that may happen, but it will not happen in the current circumstances.”

In his testimony, Mr. Murdoch was frank about his objective for the day, beyond making a well-coached — and perhaps deeply felt — apology for the sins of those in his employ. He deflected responsibility for the whole mess, suggesting that he had been betrayed by those who worked for him and that he was as offended as the rest of us. When pressed, he suggested that the man to get to the bottom of all of it was the man who had enabled much of it in the first place.

“I think that, frankly, I’m the best person to clean this up.”

Others may not agree.

The board members of the News Corporation have watched the free fall with an increasing sense of doom. They could not be blamed for finding it difficult to get their arms around the concept of a News Corporation absent Rupert Murdoch. But now the laws of men, and not some ticking clock on Rupert Murdoch’s health, have brought other questions into play.

How is it that Mr. Murdoch, the ultimate deal guy, got clobbered by John Malone, his former partner in DirecTV. True, as the result of the DirecTV deal, he increased family control of the business he runs, but how is that good for the shareholders? Mr. Murdoch was hailed as a visionary when he bought MySpace — by me among others — but that did not end up working out so well. He gets credit for getting his hands on The Wall Street Journal, but at what price? At $5.6 billion, he looked less like a businessman in pursuit of an asset and more like a compulsive shopper who couldn’t resist the bauble in the window.

And his decision to buy Shine, the company owned by his daughter, looked like checkbook nepotism and nothing more. It could end up making sense if she winds up running the company, but in terms of pure economics? Not so much.

Mr. Murdoch is suddenly, deeply mortal. And the questions that I am asking will be asked by others as well. It’s not just James who is done. Rupert Murdoch, as we have long known him, is done as well.

E-mail: carr@nytimes.com;


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