News Corp.’s ‘Fake Sheik’ Puts Tabloids Under Scrutiny Again

News Corp.’s reporting in the U.K. faces scrutiny again after testimony by a reporter at the company’s Sun tabloid caused a trial to collapse only weeks after the conclusion of the phone-hacking case.

Mazher Mahmood, an undercover reporter on both the Sun and the now-defunct News of the World tabloids, may have lied during the trial of singer Tulisa Contostavlos, Judge Alistair McCreath said as he dismissed the case earlier this week. Prosecutors and police are looking into whether the reporter, better known as the “fake sheik,” should face legal action.

Mahmood, who has been suspended by the Sun, has added to the company’s woes one month after Andy Coulson, the former editor of the News of the World, was found guilty of conspiring to intercept voice-mail messages. The company’s U.K. tabloids have been the center of police probes and a judicial inquiry for more than three years since the phone-hacking scandal was sparked by revelations that News Corp. journalists listened to messages on the phone of a murdered teenager.

“The suggestion that the worst elements of the press cleaned up their act during or after the Leveson Inquiry has now been shown repeatedly to be unsustainable,” Joan Smith, executive director of the public-interest group Hacked Off, said in a statement.

‘X Factor’ Host

Mahmood, who earned his nickname dressing up as a rich Arab to expose the wrongdoings of the rich and famous, had targeted Contostavlos as part of a sting in which he reported she brokered a drug deal. Contostavlos, a former host of the U.K. talent show “The X Factor,” was charged with being concerned in the supply of illegal drugs in December.

Mahmood, who was the sole “progenitor,” “investigator,” and “prosecution witness,” went “to considerable lengths to get Ms. Contostavlos to agree to involve herself in criminal conduct, certainly to far greater lengths than would have been regarded as appropriate,” Judge McCreath said.

The Metropolitan Police Service said it was aware of the judge’s ruling in the case and working with the Crown Prosecution Service to determine any response.

A spokesman for the Sun tabloid in London said that it takes the judge’s comments seriously and Mahmood has been suspended.

“We are very disappointed with this outcome, but do believe the original investigation was conducted within the bounds of the law and the industry’s code,” Dylan Sharpe, the spokesman, said in a statement. “This was demonstrated by the CPS decision to prosecute.”

The company wouldn’t provide contact details for Mahmood, but said they would forward a request for an interview. A number for Mahmood wasn’t immediately available.

‘King of Sting’

Mahmood, the 51-year-old author of “Confessions of a Fake Sheik -- The King of the Sting Reveals All,” targeted politicians including George Galloway and David Mellor and sports personalities including former England soccer manager Sven-Goran Eriksson. He posed in 2010 as an Indian businessman in a sting operation that led to criminal charges against three Pakistani cricket players and an agent.

Mahmood, who worked for the News of the World for two decades, told a media-ethics inquiry in 2011 he didn’t entrap people to get stories. He exposed the hypocrisy of people who “present themselves as wholesome characters and trade on that status,” he said at the Leveson Inquiry.

Mahmood’s prior stories had little sway over the ruling by McCreath, who looked only at the Contostavlos case.

“There are strong grounds for believing that Mr. Mahmood told me lies,” during a pre-trial hearing at the end of June, McCreath said.

Bentley, Penthouse

Mahmood’s reporting techniques were discussed at the phone-hacking trial. Rebekah Brooks, the former head of News Corp.’s U.K. unit, who was acquitted of phone hacking, bribery and obstructing justice charges, described how the tabloid used Mahmood posing as a fake-sheik for a story that was never published about a countess offering her public-relations clients access to the royal family.

Mahmood “would live the true life of a wealthy sheik,” Brooks said during testimony Feb. 22. He would have a Bentley and a penthouse suite, she said. “He always told me it was imperative.”

News Corp. Chairman Rupert Murdoch closed the News of the World, the country’s best-selling newspaper, in 2011 in a bid to temper public outrage over the hacking of the phone of Milly Dowler, the murdered schoolgirl.

Coulson, along with former royal reporter Clive Goodman, faces a re-trial on conspiracy to commit misconduct charges after a jury failed to reach a verdict last month.

A separate trial looking into payments to public officials by News Corp. journalists is scheduled to begin in October.

Before it's here, it's on the Bloomberg Terminal.