Phone hacking at the now-shuttered tabloid News of the World was not at all the work of one “rogue” reporter as the paper’s editors and News Corporation executives have insisted. London’s Metropolitan police have revealed that, after reviewing some 11,000 pages of notes seized from NoW private investigator Glenn Mulcaire’s house, some 5,795 people could be possible victims of phone hacking. That is, it is likely that phone hacking occurred on an “industrial scale” at the NoW, also in contradiction to Assistant Commissioner John Yates’s initial statement that “hundreds, not thousands” were potential victims.
Indeed, in June 2008, a company lawyer for News International, the UK-based News Corp. subsidiary, warned senior executives that “at least three” of its journalists were engaged in a ”culture of illegal information access.” Executives were also informed that it would be ”extremely damaging” to the NoW if such information were revealed to the court as part of a legal action brought against the company by Gordon Taylor, the chief executive of the Professional Footballers’ Association, whose lawyers had found evidence of phone hacking. The NoW‘s legal counsel, Tom Crone, received this information on June 3, 2008; James Murdoch, third in command at his father Rupert Murdoch’s News Corp., had approved a payment of £425,000 plus costs to Taylor in order to, in effect, buy his silence, in June of 2008.
On Tuesday, News International said that Murdoch had not seen the lawyer’s statements. But the new revelations raise further doubts about James Murdoch’s claims about what he knew, and what he did not know, about the practice of phone hacking at NoW. The lawyer’s opinion is likely to be referred to next week, when Murdoch will appear before a parliamentary culture, media and sport committee for a second time.
Murdoch Family Therapy
As revelations about the extent of the phone hacking scandal have emerged, so has mention of the friction within the Murdoch clan, especially in regard to the question to which of Rupert Murdoch’s four adult children might take the helm of the company. According to a Vanity Fair article by former Wall Street Journal journalist Sarah Ellison, the four adult Murdoch siblings engaged a family therapist last year to discuss the issue of who will succeed their father at the helm of his global media company.
As well as James, the others involved in the therapy were Lachlan, Rupert’s eldest son, who sits on the News Corp board, and Elisabeth, whose production company, Shine, was recently acquired by News Corp. Rupert’s oldest child, Prudence, the product of his first marriage, was also involved.
The article reveals the tensions that the phone-hacking scandal at the News of the World caused within the Murdoch empire. “Elisabeth blamed her brother for allowing the phone-hacking scandal to spiral out of control,” Vanity Fair reports. “She approached her father and urged him to take control of the situation.”
According to the account, Elisabeth told her father that James should take a leave of absence from the company, while arguing that Rebekah Brooks, who was chief executive of News of the World publisher News International, should resign along with Les Hinton, the loyal Murdoch deputy who had run News International previously.
Rupert considered the idea, the article claims, and telephoned James. “‘Maybe you should go too’, he said. But after a sleepless night he changed his mind.”
Certainly the phone hacking scandal is taking a toll on News Corp. and not only in its public image. One-third of the company’s shareholders voted against James and Lachlan Murdoch for election to the company’s board. Closing the NoW — which had been the most profitable newspaper in the company’s portfolio — cost News Corp. $91 million. The company also incurred $130 million in “other” charges in the quarter; among these was the cost of dropping its bid to acquire 100 percent of satellite broadcaster British Sky Broadcasting.
On the other hand, despite all these travails, News Corp. reported that its total revenue increased 7.2 percent to $7.96 billion, largely thanks to its lucrative cable networks, including FOX and the FX Network. ”We have great confidence in James,” said Chief Operating Officer Chase Carey. So far, the reports of disturbing and unethical practices at News Corp.’s media holdings haven’t been affecting its profits. The public’s desire for its media offerings apparently trumps whatever disgust is felt about “industrial scale” phone hacking.
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