News Corp. Hacking Report Delayed Amid Debate Over James Murdoch

U.K. lawmakers probing whether News Corp. covered up phone hacking at the News of the World tabloid are at least two months behind schedule with their report, as they debate how critical they can be of Deputy Chief Operating Officer James Murdoch.

Members of Parliament’s Culture Committee have not agreed on the wording of the report and are unlikely to publish it before the end of February, according to two people with knowledge of the panel’s discussions, who declined to be identified because the meetings are confidential. Chairman John Whittingdale said in November he hoped to issue the report before Christmas 2011.

There is no question of Murdoch escaping criticism completely, according to the people. They said panel members are unimpressed by his statements that he was ignorant about what was going on at News Corp.’s London-based U.K. publishing unit, News International, which he ran from the end of 2007. The committee is likely to find fault with former News of the World editors Rebekah Brooks and Colin Myler and the newspaper’s former lawyer, Tom Crone, the people said.

The 11-member panel began its inquiry in July after Murdoch said lawmakers had been misled about the extent of phone hacking by the now defunct News of the World during a previous probe in 2009. It has questioned him twice for the new report, once alongside his father Rupert, the News Corp. chief executive officer. The panel held its final public hearing on Nov. 10.

Whittingdale said in a statement yesterday that committee members had a policy of not commenting on the panel’s internal workings. A News International spokeswoman declined to comment on the committee’s forthcoming report.

Rogue Reporter

Crone and Myler had told lawmakers in 2009 that an investigation by News Corp. found no evidence that hacking went beyond a single rogue reporter. Recalled to give evidence last year, they said they had told James in 2008 about an e-mail that showed more people were involved.

Murdoch, 39, denied being informed about wider involvement when giving testimony in July. He repeated the denial when he was recalled in November, saying Myler and Crone had given him “a narrower set of facts than I would have liked,” and that “they did not discuss allegations of widespread phone hacking or criminality or the like.”

While opposition Labour Party lawmaker Tom Watson accused Murdoch during the November hearing of “running a criminal enterprise,” others on the committee are reluctant to be so critical, according to the people familiar with the panel’s discussions.

‘Ethical Review’

Louise Mensch, a member of Prime Minister David Cameron’s Conservatives, closed her questioning of Murdoch the same day by wishing him “luck in pursuing your ethical review of the company.”

“Which do you think is worse, knowing what was going on, but being willfully blind to it, or not knowing what was going on, when you should have known what was going on?” Liberal Democrat lawmaker Adrian Sanders asked Murdoch at that session.

One of the people familiar with the committee’s discussions said their report had been delayed partly because fresh evidence kept emerging.

One such piece of evidence was a letter Murdoch wrote to Whittingdale on Dec. 12 that increased the pressure on the News Corp. (NWSA) executive. In it, Murdoch said News Corp. investigators had found a 2008 e-mail sent to him by Myler that described a “nightmare scenario,” with hacking going beyond a single reporter. Murdoch wrote that while he had replied to Myler’s request for a meeting, he had received the message on a Saturday and not read all of it. He also said he didn’t recall any conversation with the editor that weekend.

Milly Dowler

Another document released by the committee last month concerned the 2002 hacking of murdered schoolgirl Milly Dowler’s phone by the News of the World, when Brooks was editor. It was the disclosure of that incident that sparked a public storm that led News Corp. to close the newspaper.

The new evidence was a letter from Surrey Police describing how an unnamed person from the News of the World told officers that reporters had listened to Dowler’s voice mails. After the panel published the police statement, Conservative committee member Damian Collins wrote on the Huffington Post website that he thought it “incredible that that could have happened without the knowledge of senior people on the paper.”

Brooks has denied she was aware Dowler’s phone had been hacked. She was arrested in July and hasn’t been charged.

According to one of the people, the panel is taking legal advice on what Parliament’s powers are if lawmakers conclude they were misled by witnesses. Parliament historically had the power to fine or imprison offenders, but this has fallen into abeyance.

The last non-lawmaker to be censured, according to Parliament’s website, was John Junor in 1957, for an article published in the Sunday Express “casting doubt on the honor and integrity of members.” He was called to appear before the House of Commons and apologize.

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To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net

To contact the editor responsible for this story: Heather Harris at hharris5@bloomberg.net

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