Bloomberg News

News Corp. Under Fire for ‘Appalling’ Phone-Hack Allegations

July 05, 2011

(Updates with advertisers in 22th paragraph.)

July 5 (Bloomberg) -- Rupert Murdoch’s News Corp. came under pressure from U.K. Prime Minister David Cameron to respond to “really appalling” allegations that its News of the World tabloid hacked into the voicemail of a murdered schoolgirl.

News International Chief Executive Officer Rebekah Brooks, then the newspaper’s editor, should “consider her position,” opposition Labour Party leader Ed Miliband said. Brooks vowed to “vigorously pursue the truth” after reports that a private detective working for the tabloid gained access to Milly Dowler’s phone messages after she was abducted in March 2002.

“If they are true, this is a truly dreadful act, and a truly dreadful situation,” Cameron told reporters at a press conference in Kabul today with Afghan President Hamid Karzai. It’s “quite, quite shocking that someone could do this, knowing that the police were trying to find this person and trying to find out what had happened.”

The allegations widen a four-year-old phone-hacking scandal at the News of the World previously centered on celebrities, politicians and athletes. More than two dozen people are suing New York-based News Corp., which has apologized and offered to settle some of the cases after journalists linked to the newspaper were arrested as part of a police probe. The House of Commons will hold an emergency debate on phone-hacking tomorrow.

‘False Hope’

Dowler’s body was not found for six months after she was murdered. The case received widespread media coverage at the time and again last month when her killer, Levi Bellfield, was sentenced to life imprisonment. According to a Guardian newspaper report, the private detective, Glenn Mulcaire, is alleged to have deleted voicemail messages on Dowler’s phone, giving her parents “false hope” she might still be alive and thereby complicating the police investigation.

“Doing something illegal, the phone hacking in the first place, was bad enough,” said Charlie Beckett, director of the media institute Polis at the London School of Economics. “But if you’re doing it and then interfering with the course of justice, that’s a double crime.”

Brooks was editor of the News of the World when the alleged interception of Dowler’s voicemail messages took place. Andy Coulson, who resigned as director of communications for Cameron in January, was deputy editor.

The newspaper printed a story based on a voicemail left on Dowler’s mobile phone on April 14, 2002, when she had been missing from her home in Surrey, southwest of London, for more than three weeks.

‘Pursue the Truth’

Brooks wrote to the Dowler family to say News International will “vigorously pursue the truth,” the company said. She also wrote to Surrey Police.

“I have to tell you that I am sickened that these events are alleged to have happened,” Brooks said in a memo to staff. “If the allegations are proved to be true then I can promise the strongest possible action will be taken as this company will not tolerate such disgraceful behavior.”

In her memo, Brooks said she’s “determined to lead the company to ensure we do the right thing and resolve these serious issues.” She said it was “inconceivable that I knew, or worse, sanctioned these appalling allegations.”

Mulcaire and a former News of the World royal editor, Clive Goodman, were given jail terms in January 2007 for plotting to hack into royal aides’ telephone messages.

‘Playing God’

Lawmakers in the House of Commons agreed today to hold a three-hour debate after one of them, Labour’s Chris Bryant, demanded a judicial inquiry into both the newspaper, which he accused of “systematic criminality,” and London’s Metropolitan Police, which he said had “lied time and time again to Parliament.”

Bryant said the News of the World was “not just a paper out of control, that’s not just a paper believing it’s above the law, it’s a national newspaper playing God with a family’s emotions.”

The previous police probe didn’t look at evidence of illegality beyond the hacking of phones belonging to members of the royal household. Senior officers have since defended their decision not to expand their investigation,

“They had all this information in their hands in 2006 and they did nothing with it,” Bryant said.

Business Secretary Vince Cable told BBC television that “a lot of people should be examining their consciences because it’s an appalling state of affairs and those people who were responsible have got to take the consequences.”

‘Uncomfortable’

Brooks’s position in overseeing News International’s probe into phone-hacking may be compromised, according to Beckett at the London School of Economics.

“It’s very strange that the person who’s liaising with the police on this, is somebody who was responsible at the time in a different capacity and much closer to the actual event,” Beckett said. “Shouldn’t they be finding somebody else to do the task of handling the investigation? If she’s now materially involved, it just seems to me that’s uncomfortable to put it mildly.”

News Corp., which bid 7.8 billion pounds ($12.6 billion) for the 61 percent in British Sky Broadcasting Group Plc it doesn’t already own, is awaiting a government review into whether the deal would give Murdoch too much influence. News Corp. already owns four of the U.K.’s largest newspapers.

Takeover Clearance

News Corp. rose 0.4 percent to $18.13 at 1:40 p.m. in New York. BSkyB, the U.K.’s biggest pay-television broadcaster, declined 0.6 percent to 845 pence in London, valuing the company at 14.8 billion pounds.

Ford Motor Co. said it will stop placing advertisements in News of the World and will use alternative media within and outside the News International. RWE AG’s Npower unit and Deutsche Telekom AG’s T-Mobile also said they’re reviewing their ad plans.

Cameron said today the decision to approve the takeover must be made in line with the law, and that he won’t be intervening in Culture Secretary Jeremy Hunt’s deliberations. A second consultation over additional conditions imposed on the deal will run through July 8.

Cable, who had to give up oversight of media takeovers last year after being quoted as saying he had “declared war” on Murdoch, said today the takeover review “really doesn’t have anything to do with the hacking inquiry.”

“The two issues shouldn’t be conflated,” he told the BBC.

‘Lie to Us’

Simon Greenberg, corporate affairs director of News International, told Sky News that he and another director met with the Metropolitan Police earlier today. A spokesman for the police declined to comment.

“There’s only so much we can do when people lie to us,” Peta Buscombe, who chairs the Press Complaints Commission, a voluntary regulatory body set up by publishers, told BBC television. “Words can’t describe how angry I am about this. Clearly we were misled.”

The parents of two schoolgirls murdered in Cambridgeshire, eastern England, in 2002, have also been contacted by detectives investigating phone-hacking, the London-based Times newspaper cited police as saying.

News Corp. faces a trial in January, when the court will decide how much the company should pay in damages to five phone- hacking victims. Bryant, actor Jude Law, soccer agent Sky Andrew and interior designer Kelly Hoppen are among those leading the lawsuit against the News of the World.

The claim of former professional soccer player Paul Gascoigne will now be included in place of sports commentator Andy Gray, who settled with the News Corp. in June.

News Corp.’s U.K. unit has apologized and agreed to pay about 100,000 pounds to settle claims brought by actress Sienna Miller and another 20,000 pounds to Gray.

--With assistance from Thomas Penny in Kabul, Erik Larson, Andrew Atkinson, Amy Thomson, Steve Rothwell and Kari Lundgren in London. Editors: Kenneth Wong, Eddie Buckle

To contact the reporters on this story: Jonathan Browning in London jbrowning9@bloomberg.net; Robert Hutton in London at rhutton1@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net; James Hertling at jhertling@bloomberg.net.


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