News Corp.’s Hacking Cost ‘Way More’ Than Announced, U.K. Lawmaker Says

Rupert Murdoch’s News Corp., rocked by a phone-hacking scandal in the U.K., hasn’t fully disclosed all its surveillance methods and may be liable for “way, way, way more” than the 20 million pounds ($32 million) it has set aside to settle the cases, a U.K. lawmaker said.

The company may be liable for cases involving as many as 4,000 people hacked by private investigator Glenn Mulcaire, said Tom Watson, the Labour lawmaker who has led attacks on News Corp. in the scandal, in an interview with Bloomberg Television today.

Three other private investigators are also subject to a police investigation in connection with hacking by the company, Watson said. He said he plans to reveal additional surveillance practices at News Corp. (NWSA)’s annual shareholder meeting in Los Angeles today. He didn’t say where he got his information.

The 168-year-old News of the World was closed in July after admitting it had hacked the phone of murdered schoolgirl Milly Dowler. News Corp.’s U.K. unit today agreed to pay 3 million pounds to settle claims by the family of Milly Dowler, who was killed in 2002. The scandal has led to at least 16 arrests, including former company executives.

Watson has obtained shares in the company, giving him the opportunity to address the meeting. He went straight from a hearing on phone-hacking in Parliament in London to the airport to catch his flight to Los Angeles.

“I want to leave News Corp. investors in no doubt that the scandal is not over,” Watson said today. “I don’t think the board has been fully straight with investors.”

News Corp. spokeswoman Miranda Higham declined to comment on Watson’s allegations.

Dowler Settlement

Watson told reporters yesterday he has new information relating to the U.S. that “will leave people in no doubt that there will be huge reputational harm to the company in months, possibly years to come, that they’re not through the worst of it, and there are more questions for the Murdochs to answer.”

Today’s settlement includes a 2 million-pound payment to the Dowler family and a 1 million-pound donation by Rupert Murdoch to charity.

Including these two payments, News Corp. has agreed to pay more than 4 million pounds in at least six settlements with celebrities and crime victims -- including Sienna Miller, Andy Gray, Gordon Taylor and Max Clifford -- who were the subjects of News of the World stories.

‘Not Acceptable’

A member of the Labour Party, Watson has used his seat on Parliament’s Culture Committee since 2009 to pursue News Corp. over hacking allegations. He was the lawmaker who informed Parliament of the Dowler accusations.

Watson was unsympathetic to suggestions that James Murdoch, Rupert’s son, may have accidentally misled Parliament in July when he failed to mention a second meeting in 2008, revealed yesterday, at which he discussed a phone-hacking lawsuit against the News of the World.

“I don’t think it’s acceptable, nor do I think it’s understandable,” Watson said.

Watson said he accepted that Rupert Murdoch and his family control enough News Corp. shares to retain power.

“They’ve got the votes, so they’re going to get what they want,” Watson said. “But if they had any decency, they’d listen to the concerns being raised.”

The official called on Murdoch, 80, to relinquish control over the company.

“It’s time for him to hand over,” Watson said.

To contact the reporter on this story: 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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