(Updates with Peter Clarke comment in 18th paragraph.)
July 13 (Bloomberg) -- News Corp.’s Rupert Murdoch, who’s been asked to testify in front of U.K. lawmakers, is facing at least six investigations stemming from a phone-hacking scandal and his bid to buy all of British Sky Broadcasting Group Plc.
Murdoch may be in the spotlight on July 19 as he’s called to answer questions from the Parliament’s committee on Culture, Media and Sport about prior evidence that News Corp.’s British newspaper unit, News International, had paid police to get stories. The News Corp. Chief Executive Officer’s son, James, and the unit’s CEO Rebekah Brooks were also summoned to testify. News International said they will cooperate.
John Whittingdale, the committee’s chairman, told Sky News yesterday News International needs to answer questions about who knew of the crimes and when.
“The police inquiry is the most important thing and will lead to criminal charges against some people,” Whittingdale said. “Part of the problem with this saga is that everyday has brought a new revelation. I’ve given up being surprised.”
Rupert Murdoch arrived in London on July 10 to deal with a flurry of allegations that reporters at the now-defunct News of the World tabloid hacked into hundreds of mobile-phone voice mails, including those of murder and terror victims, and bribed police for confidential information. The scandal prompted Murdoch to close the 168-year old tabloid.
“They have misled parliament egregiously over time, they have misled the country, they’ve misled their readers and it’s incumbent,” on parliament to get the facts, Tom Watson, a member of the committee, told BBC Radio 4 yesterday. “We will be sitting next Tuesday and we expect them to be there.”
London’s Metropolitan Police are investigating, and Prime Minister David Cameron called for two other inquiries into why an initial police phone-hacking probe failed, how widespread the hacking was, and whether it also occurred at other newspapers.
The current police probe was opened in January after new information surfaced as the result of civil lawsuits filed by celebrities including actress Sienna Miller against the tabloid. Police opened a second investigation last week into police bribes. Meanwhile, communications regulator Ofcom and the U.K. Competition Commission are reviewing the proposed BSkyB deal.
Two watchdog groups, Media Matters for America and Citizens for Responsibility and Ethics have called for U.S. lawmakers to investigate if journalists working for News Corp. hacked the voice mails of Americans.
Senator Jay Rockefeller, a Democrat from West Virginia, called for U.S. agencies to investigate whether alleged phone hacking at News Corp.’s U.K. newspapers targeted American victims of the Sept. 11, 2001, terrorist attacks.
“I am concerned that the admitted phone hacking in London by the News Corp. may have extended to 9/11 victims or other Americans,” Rockefeller, said yesterday in a statement posted on the website of the Senate Commerce, Science and Transportation Committee, which he chairs. “If they did, the consequences will be severe.”
News International is assisting the Metropolitan Police in their investigation, Brooks said in a July 8 memo to staff. Joel Klein, who heads News Corp.’s education unit, is leading and directing the company’s overall handling of the matter, Brooks said. Klein, the former chancellor of New York City schools, was also the head of the U.S. Justice Department’s antitrust division.
Brooks said in the memo that News Corp. isn’t conducting its own investigation.
“One of the real challenges for the company will be dealing with all of these inquiries running in parallel with overlapping goals,” Nick Benwell, the head of the crime, fraud and investigations group at Simmons & Simmons in London, said in an interview yesterday. “They’ll be very keen to limit the damage and keep it to a News of the World issue.”
Miranda Higham, a spokeswoman for New York-based News Corp., declined to comment on the scope and expense of the probes or any distraction they may cause management. Murdoch, his son and Brooks aren’t required to appear at the parliamentary hearing.
“They are damned if they do and damned if they don’t,” said Niri Shan, the head of media law at Taylor Wessing LLP. “If they don’t appear it looks like they have got something to hide. If they do, whatever they say is going to lead to growing scrutiny of the issue.”
‘Lack of Cooperation’
Murdoch avoided an in-depth probe into the tactics of reporters at the paper for years after its former royal reporter, Clive Goodman, and private investigator Glenn Mulcaire were jailed in 2007 for tapping phones of members of the royal family. The police closed an investigation in December, citing a lack of evidence.
News International blocked an earlier police inquiry into phone hacking by its “complete lack of cooperation” and “lies,” Peter Clarke, former deputy assistant commissioner of the Metropolitan Police, told lawmakers on Parliament’s Home Affairs Committee yesterday.
“This is a global organization with access to the best legal advice in my view deliberately trying to thwart a criminal investigation,” Clarke said as he tried to explain why police between 2006 and 2010 refused to extend their investigation into illegal activities by journalists at the News of the World. “I was certain as could be that they had something to hide.”
Former Prime Minister Gordon Brown yesterday accused Murdoch’s newspapers of using criminals to get stories about him while he was in office and said he was reduced to tears when the Sun tabloid phoned him to say its reporters obtained his son’s medical records showing he was diagnosed with cystic fibrosis.
News Corp. said it didn’t access the medical records of Brown’s son nor did it commission anyone to do so. The story came from a member of the public whose family also experienced cystic fibrosis, the company said in an e-mailed statement.
The phone hacking revelations have overwhelmed the company’s BSkyB bid. News Corp. on July 11 rescinded its offer to spin off Sky News as part of the BSkyB buyout, pushing U.K. Culture Secretary Jeremy Hunt to refer the bid to the Competition Commission for a review.
BSkyB shares declined 1.8 percent to 679.5 pence in London trading as of 11:37 a.m., less than the 700 pence a share offered by News Corp. for the 61 percent it doesn’t already own.
Hunt said the latest review, which follows investigations by Ofcom and the Office of Fair Trading, will focus on media plurality, whether the deal would reduce the number of voices. Ofcom, which has the power to revoke BSkyB’s license, can still hold up the deal as it considers whether News Corp. should own BSkyB and said it’s monitoring the police probe.
The regulator is likely to wait until the investigation concludes before deciding whether News Corp. is “fit and proper” to own a U.K. broadcaster, said Chris Watson, a telecommunications lawyer at CMS Cameron McKenna in London.
“In merger control issues, they ought to be quite reluctant for approving the deal,” Watson said. The finality of a decision “requires you to be very hesitant.”
Cameron joined other politicians pushing for News Corp. to drop the BSkyB bid as the scandal widened and said he would support the opposition Labour Party in a non-binding vote on the issue today. On July 8, he called for a judge-led inquiry and a second review that can begin this summer to “look at how our newspapers are regulated and make recommendations for the future.”
Chris Goodall, a media analyst at London-based Enders Analysis, said the volume of activity will be difficult for News Corp. to manage.
“The people who would usually be running the business end up spending a large fraction of their time working on the regulatory and political stuff,” Goodall said. “It’s continuous requests for data.”
--With assistance from Jonathan Browning, Robert Hutton, Amy Thomson, Ben Moshinsky and Kit Chellel in London, Patricia Hurtado, Chris Dolmetsch and David Voreacos in New York and Anthony Palazzo in Los Angeles. Editors: Christopher Scinta, Simon Thiel
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