Bloomberg News

Brown Urges Ofcom to Probe News Corp.’s Existing BSkyB Stake

July 13, 2011

July 14 (Bloomberg) -- Gordon Brown urged U.K. media regulator Ofcom to investigate whether News Corp. is a “fit and proper” company to hold its 39 percent stake in British Sky Broadcasting Group Plc.

The former prime minister broke a seven-month Parliamentary silence yesterday to mount an outspoken attack on Rupert Murdoch’s U.K. publishing unit, accusing it of lawbreaking “on an industrial scale” and using criminals to obtain stories.

“News International descended from the gutter to the sewers,” Brown said during a 32-minute speech in the House of Commons. “The trouble is that they let the rats out of the sewers.”

His intervention in a debate on News Corp. was among several from lawmakers on all sides that suggest the company’s decision to drop its bid for the rest of BSkyB hasn’t assuaged anger among politicians. The decision was made amid pressure over allegations that the News of the World tabloid hacked into hundreds of mobile-phone voice mails and bribed police for information.

“We have barely started yet getting to grips with this cancer of wrongdoing and we will get to grips with it,” said Liberal Democrat David Heath, deputy leader of the Commons.

Opening the debate, opposition Labour Party leader Ed Miliband declared News Corp.’s decision to drop its bid “a victory” for the British people. “The will of Parliament was clear,” he said. “The will of the public was clear, and now Britain’s most powerful media owner has had to bend to that will.”

‘Criminal Media Nexus’

The phone-hacking scandal has within 10 days prompted Murdoch to close the 168-year-old News of the World newspaper on which his U.K. media business was founded, wiped $3.9 billion off News Corp.’s market value and derailed the BSkyB takeover that the government indicated last month it would approve.

During his three years in office from June 2007, Brown entertained Murdoch in his Downing Street residence and invited News International Chief Executive Officer Rebekah Brooks to his Chequers country residence. In 2009 he attended her wedding. Today he accused News International of running “a criminal media nexus” and standing “side-by-side with criminals against our citizens.”

Brown listed hostile front pages the Sun newspaper had written about him and said they had been prompted by a refusal to agree to the company’s demands on media controls. He said recent reports had revealed “lawbreaking often on an industrial scale” and “the systematic use of base and unlawful methods, new crimes with new names on them.”

‘Public Property’

The “private lives, private losses and private sorrows” of innocent men, women and children had been “treated as public property” by News International, he said. “Their private and inner-most feelings and their private tears bought and sold by News International for commercial gain.”

Brown, who alleges News International reporters accessed his family’s legal, financial and medical records using “blagging” techniques, said he had wanted to order a judicial inquiry into the News of the World’s activities in 2009. Gus O’Donnell, the Cabinet secretary and head of the civil service, told him it would appear too political so close to the election.

Ofcom, the media regulator, said it has a continuing duty to consider whether News Corp., through its existing holding, is “fit and proper” to hold a broadcasting license.

News International didn’t immediately respond to a message left after hours.

--Editors: Andrew Atkinson, Philip Sanders

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

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net.


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