Murdoch to Face Second Most Humble Day at U.K. Ethics Probe

Rupert Murdoch told U.K. lawmakers probing phone hacking by a News Corp. (NWSA) tabloid in July that testifying about the scandal was the “most humble day” of his life. He may be humbled again this week.

The 81-year-old chairman and his son James will testify for three days starting tomorrow at a media-ethics inquiry triggered by the scandal over journalists intercepting voice mails of politicians and celebrities. The inquiry won’t accept the “evasive” answers they gave Parliament, said Duncan Lamont, a lawyer for other media companies.

The probe, led by Judge Brian Leveson, “will not be so generous in allowing the Murdochs to obfuscate or not have recollections and just say ‘sorry,’” Lamont said in a phone interview. “There will be a more forensic analysis.”

The inquiry began last year after evidence emerged that phone hacking at News Corp.’s News of the World was rampant and not limited to a rogue reporter. Regulator Ofcom is also examining whether News Corp. is “fit and proper” to own 39 percent of pay-TV provider British Sky Broadcasting Group Plc. (BSY) and opened a probe into its Sky News channel today to investigate e-mail hacking by a reporter.

The phone-hacking scandal, which faded after a News Corp. reporter and a private investigator were jailed in 2007, emerged again last year and led to 45 new arrests, the closing of the 168-year-old News of the World and probes into computer hacking and bribery at the company’s other newspapers.

Photographer: Chris Ratcliffe/Bloomberg

News Corp. Chairman Rupert Murdoch. Close

News Corp. Chairman Rupert Murdoch.

Close
Open
Photographer: Chris Ratcliffe/Bloomberg

News Corp. Chairman Rupert Murdoch.

Celebrities, Police

Rupert Murdoch will testify April 25 and 26. James Murdoch, News Corp.’s deputy chief operating officer and the former chairman of the U.K. unit that published the News of the World, will appear tomorrow. News Corp. spokeswoman Miranda Higham declined to comment.

Leveson’s inquiry, which is now looking at the media’s relationship with politicians, was called for by Prime Minister David Cameron to respond to the phone-hacking crisis. The first two portions of the review looked at the U.K. press dealings with celebrities and the police.

The Murdochs’ testimony is crucial for the inquiry because of their dominant role in the industry, said Tim Bale, a professor of politics at the University of Sussex. The New York- based company still owns the Sun, the nation’s best-selling newspaper, and the Times and Sunday Times.

News Corp. is “clearly an incredibly important part of the media landscape into which Leveson is inquiring,” Bale said. “If you’re going to talk about the media in Britain in the last few decades, you’re really going to have to talk to Murdoch.”

Political Sway

Rupert Murdoch’s political sway goes back to 1979, when he started his streak of supporting winning U.K. prime ministers by endorsing Margaret Thatcher. U.K. politicians have courted Murdoch ever since. Before he became prime minister, when he was still the opposition leader, Tony Blair, flew to Australia in 1995 to address a meeting of News Corp. executives.

Cameron, a Conservative, said last month he rode a horse offered by Rebekah Brooks, the former CEO of News Corp.’s U.K. publishing unit who has been arrested twice in hacking-related probes. He did so before becoming prime minister in 2010.

In July, Cameron said “the clock has stopped” on Murdoch’s influence over British politics. He made the comment the same month that ex-News of the World editor Andy Coulson, who resigned in 2007, was arrested in the phone-hacking probe. Coulson went on to be Cameron’s press chief until January 2011, when he quit as a result of the scandal.

‘People I Trusted’

Rupert Murdoch defended his company and his actions before Parliament’s Culture, Media and Sport Committee on July 19, drawing criticism for short answers and long pauses.

He said he wasn’t responsible for what happened at the News of the World. Asked whom he blamed, he replied: “The people that I trusted to run it, and then maybe the people that they trusted.”

The company’s former U.K. law firm, Harbottle & Lewis LLP, sent a letter to the committee a month later, saying the elder Murdoch was “confused or misinformed” and that he’d given “inaccurate and misleading” testimony.

James Murdoch’s testimony before the lawmakers drew an even harsher response. Former News of the World editor Colin Myler and the tabloid’s lawyer Tom Crone disputed his claim that he wasn’t aware more than one reporter was involved in phone hacking, and the men told Parliament they informed James Murdoch in 2008 that others were implicated.

BSkyB Bid

During questioning by Parliament, 11 lawmakers took turns questioning the pair about topics from political influence to the company’s decision to abandon its 7.8-billion-pound ($12.6 billion) bid to buy all of BSkyB. The proceedings were interrupted by a protester who attempted to hit Rupert Murdoch with a foam cream “pie” before being punched by Rupert’s wife, Wendi Murdoch.

The younger Murdoch stepped down as chairman of BSkyB earlier this month following demands that he resign over his role in the phone-hacking scandal.

Since the July appearance before Parliament, additional evidence has emerged in lawsuits from phone-hacking victims, police investigations and the company’s own internal probe.

Police have arrested current and former reporters and editors on suspicion of paying off police officers and public officials, and perverting the course of justice. The scandal has engulfed the Sun, where more than a dozen journalists have been arrested, and the Times, which has admitted hacking a computer.

‘Fear and Favor’

“It’s fear and favor,” Labour lawmaker Chris Bryant said in an interview. “The way they operated was lots of rewards if you were nice to Sky and pursued by journalists and private investigators if you weren’t. I got threats.”

News Corp.’s Higham declined to comment on Bryant’s statement.

The company has spent has spent at least $195 million dealing with the scandal and settled dozens of lawsuits by hacking victims, including Bryant and actor Jude Law. The company paid damages on the basis that senior employees were involved in a cover-up by trying to destroy e-mail archives.

The Leveson inquiry is an opportunity to ask the Murdochs important questions about the scandal that haven’t been asked, the University of Sussex’s Bale said.

“They didn’t really get the grilling that they deserved before the MPs, for all the huff and puff,” he said. “The Leveson inquiry will, presumably because it’s conducted by a judge and a counsel, put rather harder questions to the Murdochs and make it rather less easy for them to evade responsibility.”

To contact the reporters on this story: Amy Thomson in London at athomson6@bloomberg.net; Erik Larson in London at elarson4@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.