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Murdoch’s Clout in U.K. Curbed by Hacking Scandal, Brown Says

October 21, 2011

Oct. 21 (Bloomberg) -- The furor over phone-hacking by Rupert Murdoch’s U.K. publishing unit has produced “a new political framework” in which no single person will wield the influence that Murdoch once had, former Prime Minister Gordon Brown said.

The scandal that mushroomed in July with revelations of hacking into the voice mail of a murdered schoolgirl by the News of the World tabloid has now prompted “the most serious investigation” into civil liberties violations in years, Brown said. The original allegations are “only the tip of the iceberg,” and the police probe may find evidence that computers as well as phones were hacked, he said.

“You’ve got a new political framework,” Brown, 60, said in an interview at the Bloomberg News Washington bureau. “I don’t think one family can exercise so much political power ever again.”

Brown also said the move by the Murdoch-owned Sun newspaper to support the Conservatives over Brown’s Labour Party in the 2010 general election was “a commercial decision by Murdoch that was based on an arrangement” with Conservative leaders.

Under that arrangement, Brown said, the Conservatives agreed to pursue policies once in office that would be favorable to Murdoch’s interests. These included moves to ease the regulation of commercial broadcasters and “neuter” the government-owned British Broadcasting Corp. by restricting its ability to disseminate news on the Internet, Brown said.

‘Decisive Actions’

Calls to News Corp. spokeswomen Teri Everett and Julie Henderson requesting comment on Brown’s statements weren’t immediately returned.

In a statement issued earlier this month to shareholders in support of its candidates for the board of directors, News Corp. said it “has already taken decisive actions to hold people accountable” for the hacking “and will take all prudent steps designed to prevent something like this from ever occurring again.”

The scandal expanded in July after the rival Guardian newspaper reported that the Murdoch-owned News of the World had hacked into the voice mail of murder victim Milly Dowler in 2002. A subsequent police investigation has led to at least 16 arrests, among them Andy Coulson, a former News of the World editor and communications chief for Prime Minister David Cameron, who succeeded Brown.

The furor over the hacking led Murdoch’s parent New York- based News Corp. to close the News of the World and drop a bid to acquire full ownership of British Sky Broadcasting Group PLC, in which it holds a 39 percent stake.

Parliamentary Committee

Murdoch, 80, News Corp.’s chairman and chief executive officer, and his son, James Murdoch, 38, the deputy chief operating officer, testified before a parliamentary committee in July. James is being recalled later this month to answer further questions after his original testimony that he didn’t know of widespread hacking at News of the World was challenged by former executives at the newspaper.

Brown became prime minister in 2007 after serving for 10 years as chancellor of the exchequer under then-Prime Minister Tony Blair. He was ousted from power in the 2010 election.

The Sun, the U.K.’s biggest-selling daily newspaper, supported Blair and the Labour Party in three successive elections. When it switched to the Conservatives in 2009, it said it was doing so because of the Labour government’s record of “under-achievement, rank failure and a vast expansion of wasteful government interference into everyone’s lives.”

Murdoch’s Endorsement

Brown said Murdoch’s endorsement of the Conservatives had “tipped the balance” and created a situation in which “90 percent of the press” was hostile to his government. That made governing “very, very difficult,” he said.

“Everything is wholly personalized,” he said. “People don’t say, ‘X made a mistake in judgment.’ They say that the motive of X was always corrupt.”

Yesterday wasn’t the first time that Brown has attacked Murdoch’s U.K. publishing unit, News International, over the hacking scandal. In a speech in the House of Commons on July 14, he described it as having engaged in “law-breaking often on an industrial scale.”

Cameron said on July 8 that politicians of all parties had been guilty of failing to press for a full investigation of hacking allegations when they first surfaced, in part because of a desire to win the support of the newspapers implicated.

“The truth is, to coin a phrase, we have all been in this together: the press, the politicians of all parties - yes, including me,” he said during a news conference in London. “We have not gripped this.”

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

--With assistance from Amy Thomson, Tariq Panja and Rob Hutton in London and Ron Grover in Los Angeles. Editors: Jim Rubin,

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