James Murdoch ‘Inaccuracies’ Under Scrutiny as Answers Examined

Fresh statements from former News Corp. (NWSA) employees including ex-tabloid editor Rebekah Brooks will help determine whether James Murdoch told the truth to U.K. lawmakers about what he knew about phone-hacking allegations.

Murdoch told lawmakers last month that he hadn’t realized until late 2010 that phone hacking was widespread at News Corp.’s News of the World. That’s been contradicted by Tom Crone and Colin Myler, two former executives of the tabloid, who said they informed him in 2008 about an e-mail that suggested more reporters had been involved, leading lawmakers to demand new responses to explain the inconsistency.

The company’s deputy chief operating officer may be recalled to explain to Parliament what he knew about the scandal that has taken down senior executives and led to the arrest of at least 12 people and the closure of the 168-year-old News of the World tabloid. If Murdoch is found in contempt of Parliament, his position as chairman of U.K. pay-TV broadcaster British Sky Broadcasting Group Plc (BSY) might also be in jeopardy, Damian Collins, one of the lawmakers reviewing the statements today, said in an interview.

“The question we need to answer is at what point did the most senior people become aware the phone hacking was not restricted to a single journalist,” said Collins, a Conservative Party member of the Culture, Media and Sport Committee that is investigating the allegations. “It would raise the question about whether someone can pass the fit-and- proper person tests required to hold a broadcasting license if they have been found to be in contempt of Parliament.”

‘Serious Inaccuracies’

The committee asked Murdoch, Brooks, Crone, Myler, former News International lawyer Jonathan Chapman and Harbottle & Lewis LLP, a law firm that was tasked by the company with investigating initial charges of phone hacking in 2007, to provide responses to explain the inconsistencies, Collins said. Chapman complained of “serious inaccuracies” in Murdoch’s first testimony before lawmakers on July 19.

Brooks, 43, the former chief executive officer of News International, News Corp.’s U.K. publishing arm, has filed a response to Parliament, her spokesman Dave Wilson said yesterday. James Murdoch, 38, sent a letter on Friday, News Corp. said last week, declining to comment on the content. News Corp. spokeswoman Alice Macandrew yesterday declined to comment on the potential repercussions for James Murdoch. Representatives for Harbottle & Lewis, Crone and Myler didn’t respond to phone messages seeking comment on their submissions.

‘Dynamite’

The committee will also vote today on whether to make the letters public, Collins said. On Aug. 12, opposition Labour Party Tom Watson, another U.K. lawmaker on the Culture Committee, said that the documents that had been submitted were “dynamite” without commenting further on their content.

As a result of the phone-hacking scandal, News Corp. dropped its 7.8 billion-pound takeover bid for the 61 percent in BSkyB that it doesn’t already own. After his initial testimony, James Murdoch was supported by the board of BSkyB, which last month unanimously backed him to remain as chairman of the satellite television broadcaster.

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When Murdoch appeared last month with his father Rupert before lawmakers, he said he hadn’t realized until late 2010 that more than one reporter at the News of the World newspaper had engaged in phone hacking.

Afterwards, Crone, the News of the World legal manager, and Myler, its one-time editor, said they told Murdoch in 2008 about an e-mail that suggested more reporters had been involved. They said they told him about it when they asked him to approve a 700,000-pound ($1.1 million) settlement to a phone-hacking victim.

Record Court Award

The circumstances surrounding the 2008 payment to victim Gordon Taylor, chief executive of the Professional Footballers’ Association, were the focus of many lawmakers’ questions to Murdoch last month.

Murdoch said he agreed to the payment -- more than 10 times the record court award in a privacy case at the time -- on advice of outside counsel. Crone told the committee in 2009 that the company decided to settle after Taylor’s lawyer found an e- mail from a junior reporter to Glenn Mulcaire, the private investigator at the center of the phone-hacking allegations. It was labeled “for Neville.”

The transcript was of 35 voicemail messages left by Taylor and his legal adviser. The text of the transcript was redacted by the committee. At the time of the message, the only Neville working at the tabloid was chief reporter Neville Thurlbeck. News of the World royal reporter Clive Goodman was the only journalist that has been jailed for phone hacking.

Celebrity Lawsuits

Brooks, who resigned July 15 as News International CEO, addressed the committee after the Murdochs. She said she didn’t know how widespread the phone hacking was until actress Sienna Miller filed a civil lawsuit last October.

During her testimony, Brooks was asked whether her diary would confirm she never had a meeting with Mulcaire and how many times she met U.K. Prime Minister David Cameron.

Leaders of both Britain’s main parties -- Labour and the Conservatives -- wooed Murdoch, whose News Corp. still publishes the Sun, the biggest selling daily tabloid, and the Times and Sunday Times. The Sun has backed the winner in every election since 1979, when it urged voters to support Margaret Thatcher’s Conservative Party.

News of the World shut down in July following reports that employees tapped into voicemails of murder and terror victims and paid police for stories. James Murdoch joined News International as chairman in 2007, after the alleged hacking took place. While he was responsible for approving settlements for hacking lawsuits against the company, Murdoch says that he relied on lawyers and police reports that indicated the abuse was isolated.

“We need to understand what happened,” Collins said. “We need to find out whether this was a case of willful ignorance, poor management or whether we’ve been misled as a committee.”

To contact the reporters on this story: Tariq Panja in London at tpanja@bloomberg.net; Amy Thomson in London at athomson6@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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