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Murdochs Say Top Executives Didn’t Know of Phone Hacking

July 19, 2011 by Leave a Comment

It was not clear whether their responses would satisfy skeptical lawmakers, who tried for nearly three hours to discover the extent of the Murdochs’ knowledge of events at the heart of the scandal. It exploded two weeks ago with the news that people working for The News of the World, a tabloid run by the Murdoch empire’s British arm, News International, had broken into the voice mail of a 13-year-old girl, Milly Dowler, who had been abducted in 2002 and was later found murdered. The firestorm at followed brought Mr. Murdoch down from the heights of influence here to what he called “the most humble day of my life.”

Adding to the drama, a protester disrupted the hearing by attempting to hit Rupert Murdoch with a paper plate full of white foam. Mr. Murdoch appeared unhurt, and the hearing resumed after a 15-minute break.

The disruption happened near the end of nearly three hours of sustained questioning by British lawmakers over the phone hacking scandal, which has raised questions about the behavior of the police, politicians and the media elite in the worst crisis to confront Prime Minister David Cameron.

Mr. Murdoch, who is 80, appeared at the hearing with his 38-year-old son, James, sitting side by side facing their questioners without lawyers at their elbow. Each wore a dark suit, white shirt and tie, though Rupert Murdoch removed his jacket after the foam incident and finished his testimony in shirtsleeves.

After the Murdochs, the committee heard testimony from Rebekah Brooks, who resigned as head of News International last Friday and was arrested and questioned by police on Sunday.

Ms. Brooks, a former editor of the News of the World, insisted that the Murdoch company acted “quickly and decisively” against phone hacking once it had seen new evidence of the extent of the practice in December 2010. She told the committee that while she was editor she employed private investigators, but only for legitimate inquiries, not for hacking and other illicit methods, and she denied paying police officers for information.

At a hearing of the same committee in 2003, Ms. Brooks said her newspaper had paid the police for information — a comment she later retracted.

In a separate development, the BBC reported the existence of previously undisclosed indirect links between figures under investigation in the scandal and Prime Minister Cameron, who has been criticized by the opposition for hiring a former editor of The News of the World, Andy Coulson, as his head of communications.

In a new disclosure that threatened to bring the scandal closer to Mr. Cameron, the BBC said that, in the run-up to last year’s elections, Mr. Coulson sought advice from another former News of the World executive, Neil Wallis, who has since been arrested in connection with the phone hacking investigation and had worked for Scotland Yard after he left The News of the World.

The Murdochs spent much of their time before the committee, both before and after the disruption, insisting that while they were deeply sorry over the revelations of widespread unethical practices at their British newspapers, they knew little or nothing about them and had not tried to cover them up. Rupert Murdoch, the chairman and chief executive of News Corporation, the parent company of the empire, hit those themes again in a prepared statement, originally intended to open the hearing, that the committee allowed him to read aloud at the conclusion of his appearance.

The disruption came after the Murdochs had been in the hearing room more than two hours. A young man in a checked shirt rushed up to Rupert Murdoch, holding a paper plate full of foam that was thwarted by Wendi Deng, 42, Mr. Murdoch’s wife, who hurtled herself toward the attacker from her seat behind her husband and appeared to strike the man with the palm of her right hand. Within moments, the man was removed from the committee room by police officers who arrested him, his face covered in foam. His identity or motive was not immediately known.

“Why didn’t you see what was happening?” James Murdoch was heard asking the police, British news reports said.

Shortly after the session resumed, Rupert Murdoch was asked by Louise Mensch, a Conservative lawmaker, if he had ever considered resigning.

“No,” he said.

Why not? “Because I feel that people that I trusted let me down, I think that they behaved disgracefully,” he said. “Frankly, I am the best person to clean this up.”

Ravi Somaiya contributed reporting.

Article source: http://www.nytimes.com/2011/07/20/world/europe/20hacking.html?partner=rss&emc=rss

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Rebekah Brooks Resigns From Murdoch’s British Subsidiary

July 15, 2011 by Leave a Comment

Her resignation came a day after Mr. Murdoch, the chairman of News Corporation, and his son James reversed themselves and said they would testify next week before a parliamentary panel probing the cascading scandal over phone hacking that has forced the closure of The News of the World tabloid and the collapse of a $12 billion bid to assume full control of Britain’s biggest satellite broadcaster.

Until the scandal erupted, Ms. Brooks, 43, had been a star within News International, the British newspaper subsidiary of Mr. Murdoch’s News Corporation, editing two influential tabloids and rising rapidly to head the division. British analysts described her as enjoying the status of a favored daughter, with close ties not only to the Murdoch family but also to leading politicians.

But her resignation had seemed ever more likely as police arrested some of her former colleagues, politicians on the benches of Parliament demanded her resignation, the price of stock in Murdoch holdings faltered and investors voiced concern. Late Thursday, BBC television broadcast an interview with Prince Al-Waleed bin Talal of Saudi Arabia, identified as News Corporation’s second biggest shareholder, in which he said that if Ms. Brooks was involved in wrongdoing “for sure she has to go.”

Ms. Brooks, who has denied that she knew of the phone hacking while she was editor of The News of the World, said in an e-mail to her staff, “My desire to remain on the bridge has made me a focal point of the debate. This is now detracting attention from all our honest endeavors to fix the problems of the past. Therefore I have given Rupert and James Murdoch my resignation. While it has been a subject of discussion, this time my resignation has been accepted.”

She was replaced by Tom Mockridge, the head of Sky Italia, News Corporation’s Italian satellite broadcaster.

Prime Minister David Cameron, once regarded as a personal friend of Ms. Brooks, but who later followed opposition leader Ed Miliband in demanding her resignation, said she had made “the right decision.”

The move came at a sensitive juncture as the Murdoch family shifts to a more assertive posture to try to limit the damage from what has become its most serious crisis of credibility. James Murdoch said on Friday that News International would place advertisements in all British national newspapers at the weekend “to apologize to the nation for what has happened.”

Additionally, Rupert and James Murdoch abandoned efforts on Thursday to avoid scrutiny next week by a parliamentary panel investigating the scandal, saying they would testify before Parliament’s select committee on culture, media and sport, which is the main parliamentary panel investigating the phone hacking. Mr. Cameron has called for a separate inquiry to be headed by a senior judge.

Former staff members at The News of the World questioned why she had not resigned earlier. “Our paper was sacrificed to save her career, and now she’s gone as well,” one former employee said, requesting anonymity because he did not wish to jeopardize his position in severance negotiations following the newspaper’s closure. “Who knows why they’ve chosen to do it now, as she’ll have to appear before the select committee anyway.”

Others faulted News Corporation for what they called a slow and piecemeal response to the crisis. “This is too little too late,” said Michelle Stanistreet, the head of the National Union of Journalists. “This will be cold comfort to the hundreds of journalists who have lost their jobs at The News of the World.”

John F. Burns reported from London and Alan Cowell from Paris. Reporting was contributed by Ravi Somaiya from London.

Article source: http://feeds.nytimes.com/click.phdo?i=e3a6dccab8e830cad56e8cd8dc1be839

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Lawmakers to Call Murdoch to Testify in Hacking Case

July 13, 2011 by Leave a Comment

LONDON — Rupert Murdoch’s once-commanding influence in British politics seemed to dwindle to a new low on Tuesday, when all three major parties in Parliament joined in support of a sharp rebuke to his ambitions and a parliamentary committee said it would call him, along with two other top executives, to testify publicly next week about the growing scandal enveloping his media empire.

Mr. Murdoch has been struggling to complete a huge, contentious takeover deal that still needs regulatory approval, the $12 billion acquisition of the shares in British Sky Broadcasting that his company does not already own. In an effort to save that deal from the scandal’s fallout, Mr. Murdoch has already shut down the tabloid at the heart of the scandal, The News of the World. But the accusations have spread to other papers in his News International group, and have taken in an ever wider and more outrage-provoking list of victims.

The House of Commons is scheduled to vote on Wednesday on a motion declaring that “it is in the public interest for Rupert Murdoch and News Corporation to withdraw their bid for BSkyB,” a motion pushed by the opposition Labour Party that the governing Conservatives decided on Tuesday to support. The Conservatives’ coalition partners, the Liberal Democrats, have been vocal in their condemnation of Mr. Murdoch and his executives. With the three parties holding more than 600 of the 650 seats in the house, the motion is expected to be approved overwhelmingly.

Though it would have little direct effect, the motion represents a powerful political headwind blowing against the deal and against Mr. Murdoch, a figure so powerful in Britain that until the current scandal, politicians and others in public life have rarely risked invoking his ire. And it threatened to undercut a last-ditch step that the News Corporation took on Monday, when it withdrew promises it had made to satisfy antitrust concerns about the deal, most notably that Sky News, the target company’s 24-hour news channel, would be spun off.

Before the scandal flared up, the Conservative government had shown readiness to waive a formal antitrust review of the deal, based on those promises. A regulatory review would now not just delay the deal for months, but may kill it.

A parliamentary committee said Tuesday that it would call Mr. Murdoch, his son James and Rebekah Brooks, the chief executive of News International, to testify next week about accusations of phone hacking and corruption at the News International papers. John Whittingdale, chairman of the Culture, Media and Sport Committee, said it would seek to determine “how high up the chain” knowledge of the newsroom malpractices in the Murdoch newspapers went.

New and alarming charges came on Tuesday from the former prime minister Gordon Brown, who said that one of the most prestigious newspapers in the group, The Sunday Times, employed “known criminals” to gather personal information on his bank account, legal files and tax affairs.

Those charges centered on suggestions that The Sunday Times and The Sun, a Murdoch tabloid, used subterfuge to learn in 2006 that Mr. Brown’s infant son, Fraser, had cystic fibrosis, a fact that generated a Sun scoop.

The two papers responded with statements denying wrongdoing. The Sun said it had not accessed the child’s medical records and did not “commission anyone to do so.” Instead, it said, the article originated “from a member of the public whose family has also experienced cystic fibrosis.”

“He came to The Sun with this information voluntarily, because he wanted to highlight the cause of those afflicted by the disease,” the newspaper said.

The Sunday Times said it had “pursued the story in the public interest” and had followed Britain’s press code “on using subterfuge.” “No law was broken in the process of this investigation,” it said.

A separate parliamentary committee investigating years of indecisive police investigations into The News of the World’s rampant phone-hacking operations spent hours on Tuesday grilling police officers who led the inquiries.

John F. Burns and Don Van Natta Jr. reported from London, and Alan Cowell from Paris. Reporting was contributed by Jo Becker, Ravi Somaiya, and Graham Bowley from London, and J. David Goodman from New York.

Article source: http://www.nytimes.com/2011/07/13/world/europe/13hacking.html?partner=rss&emc=rss

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For Years, the Tabloids’ Sting Kept British Politicians in Line

July 9, 2011 by Leave a Comment

Big mistake.

“ ‘Fat, Jealous’ Clare Brands Page 3 Porn” was The Sun’s headline in response. Its editor, Rebekah Wade (now Rebekah Brooks and the chief executive of News International, Mr. Murdoch’s British subsidiary), sent a busload of semi-dressed models to jeer at Ms. Short at her house in Birmingham. The paper stuck a photograph of Ms. Short’s head over the body of a topless woman and found a number of people to declare that, in fact, they thoroughly enjoyed the sexy photos.

“Even Clare has boobs, but obviously she’s not proud of them like we are of ours,” it quoted a 22-year-old named Nicola McLean as saying.

It is the fear of incidents like this, along with political necessity, that has long underpinned the uneasy collusion between British politicians and even the lowest-end tabloids here.

However much they might deplore tabloid methods and articles — the photographers lurking in the bushes; the reporters in disguise entrapping subjects into sexual indiscretion or financial malfeasance; the editors paying tens of thousands of dollars for exclusive access to the mistresses of politicians and sports stars; the hidden taping devices; the constant stream of stories about illicit sex romps — politicians have often been afraid to say so publicly, for fear of losing the papers’ support or finding themselves the target of their wrath.

If showering politicians with political rewards for cultivating his support has been the carrot in the Murdoch equation, then punishing them for speaking out has generally been the stick. But the latest revelations in the phone-hacking scandal appear to have broken the spell, emboldening even Murdoch allies like Prime Minister David Cameron to criticize his organization and convene a commission to examine press regulation.

The power to harass and intimidate is hardly limited to the Murdoch newspapers; British tabloids are all guilty to some extent of using their power to discredit those who cross them, politicians and analysts say.

“The tabloid press in Britain is very powerful, and it’s also exceedingly aggressive, and it’s not just News Corp.; The Mail is very aggressive,” said John Whittingdale, a Conservative member of Parliament who is chairman of the Culture, Media and Sport Committee. “They do make or break reputations, so obviously politicians tread warily.”

Those who do not pay a price. Cherie Blair, wife of former Prime Minister Tony Blair, was regularly tortured in print by the right-leaning Daily Mail because she made no effort to cultivate it and because it was not an admirer of her husband’s Labour government. In a stream of articles, The Mail portrayed her as greedy, profligate and a follower of wacky alternative-medicine regimes, selecting unflattering photos to make her look chunky and ill-dressed, her mouth invariably curled in a strange rictus.

But politicians have always been most afraid of the sting of The Sun and its Sunday sister (at least until this Sunday, when it is to close), The News of the World, because the papers’ good will is so important politically.

“They go on little feeding frenzies against various politicians,” said Roy Greenslade, a professor of journalism at City University London. Until the floodgates opened on Wednesday, when the outrage over the latest phone-hacking revelations had politicians voicing disgust in a cathartic parliamentary session, most members of Parliament were terrified of crossing Mr. Murdoch, Professor Greenslade said.

“Privately, M.P.’s say all sorts of things, but most of them have kept very, very quiet about Rupert Murdoch until now,” he added. “When you are facing the wrath of News International, you can bet they will turn up anything about you — whether it be true or just spun in a certain way.”

Labour politicians still shudder about the fate of Neil Kinnock, the party leader in the early 1990s, who was leading the Conservative Party’s John Major in the 1992 election when The Sun mounted a sustained attack on him. The reasons were political — the paper supported the Conservative Party — but the means were personal. Mr. Kinnock was the subject of a barrage of articles depicting him as inept, long-winded, strange looking, and even mentally unstable.

The day before the election, The Sun printed a package of articles under the headline “Nightmare on Kinnock Street.” It printed a picture of a fat topless woman and the warning, “Here’s How Page 3 Will Look Under Kinnock!” And, in an image he would never live down, the paper printed a large front-page photograph of Mr. Kinnock’s head inside a light bulb, under the headline: “If Kinnock Wins Today Will the Last Person to Leave Britain Please Turn Out the Lights.”

Article source: http://feeds.nytimes.com/click.phdo?i=153e5074ba6f14628192211e44579909

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Move to Close Newspaper Is Greeted With Suspicion

July 8, 2011 by Leave a Comment

In fact, it may have only fueled the outrage.

An outpouring of suspicion and condemnation came from all directions on Thursday, and was directed chiefly at the News Corporation’s chairman, Rupert Murdoch, a figure as powerful as he is polarizing.

The British media establishment, Facebook and Twitter users and even Mr. Murdoch’s own employees questioned his move. Some said it was a ploy to salvage government approval of the News Corporation’s potentially lucrative controlling stake in the satellite company British Sky Broadcasting, or BSkyB. Others saw it as merely a rebranding.

There are already indications that The News of the World may be reconstituted in some form. People with ties to the company said Thursday that the News Corporation had for some time been examining whether to start a Sunday edition for its other British tabloid, The Sun.

The demise of The News of the World, which publishes only on Sundays, would seem to create the opportunity for that, these people said, speaking anonymously because they were not authorized to discuss the matter publicly.

Mr. Murdoch’s News International is the largest national newspaper publisher in Britain, a status that affords him tremendous economic and political influence. In addition to publishing The News of the World and The Sun, News International owns The Times of London, a smaller but more prestigious paper.

The News of the World has a circulation of 2.7 million, a size that gives News International scale with advertisers and a dominance in the market that analysts say Mr. Murdoch is unlikely to want to see diminished.

“Their significant share of the newspaper market is a very important part of their power base in this country — it is essential to their force and clout,” said Claire Enders of Enders Analysis, a media research firm.

The News Corporation is unlikely to walk away from that much power, Ms. Enders added, and it would be wise to examine whether to start a publication similar to The News of the World under a different brand. Not to do so, she said, “would be a very severe business issue in terms of the existing economics of their newspapers, their revenues.”

But others questioned whether The News of the World’s success could be replicated so easily.

“I think they would be very hard pressed to get the Sunday Sun circulation to that level,” said George Brock, head of journalism at City University in London.

A Sunday Sun, he said, “is not likely to be a complete offset.”

Closing The News of the World is likely to benefit the News Corporation in one major way, Mr. Brock noted: It could help tame any threat to the company’s pending purchase of BSkyB.

The News Corporation is also dealing with a flight of advertisers, something that users of social media hoped they could accelerate by creating an online campaign to encourage a boycott of the company.

One Twitter user, Paul Friend, generated a Google document with e-mail addresses of the chief executives of the companies that advertise in the paper. The document was used by hundreds of people who then sent e-mails to executives with their complaints.

By Thursday morning, more than 20 companies said that they would be suspending or re-evaluating their advertising spending with The News of the World.

As the scandal widened this week, social media became an important vehicle for people to voice their discontent.

“The goal was not to shut down the paper,” said Melissa Harrison, a freelance magazine editor whose efforts on Twitter on Monday helped prompt thousands of people to demand that companies withdraw advertising dollars from The News of the World.

“No one wants people to lose their jobs,” Ms. Harrison said. “I think our goal was to voice public outrage. What really happened is that people have found that they have a voice. And News Corp. heard that people have a voice.”

“There is quite a lot of cynicism about what is really happening here,” she said. “It is looking like The Sun will go seven days a week and that everything stays the same.”

Ms. Harrison and a growing chorus of users on Facebook and Twitter are demanding a full accounting of the allegations that executives from The News of the World paid police officers, lied to members of Parliament and hired investigators to listen to voice mail messages left on the cellphones of a murdered girl and the victims of terrorist attacks.

“The idea that he can close the paper and it will all be forgotten is not going to work,” she said. “What we wanted was someone taking responsibility for this behavior, which means a criminal investigation.”

David Babbs, executive director of 38 Degrees, a grass-roots online advocacy group, said that more than 110,000 signatures had been gathered in recent days demanding a full inquiry and that they would be presented to government officials on Friday as a British regulatory agency formally ended its public comment period on the BSkyB deal.

The group is demanding that the government decline Mr. Murdoch’s request for a controlling stake in the satellite company.

“This latest scandal has generated such an outpouring of disgust because it reflects the sheer scale of power that the Murdoch presses have over us, not just our media but our democratic process,” Mr. Babbs said. “The phone hacking is disgusting and disgraceful, but it also reflects the broader way that he has hacked our democratic process.”

The outrage was not limited to people who see Mr. Murdoch as a political threat. Even people on his payroll objected. Employees of The Sun walked out in protest on Thursday evening.

Article source: http://www.nytimes.com/2011/07/08/world/europe/08newscorp.html?partner=rss&emc=rss

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Lacking Blockbuster, News Corp. Falls Short

May 5, 2011 by Leave a Comment

That seemed to be Rupert Murdoch’s message on Wednesday as his sprawling media company, the News Corporation, reported earnings that largely fell short of most analysts’ expectations. The company’s total revenue for the quarter that ended in March, $8.26 billion, was down 6 percent from the same quarter last year, when ticket sales for the blockbuster film “Avatar” greatly increased revenue.

“Avatar” became the highest-grossing film in history (not adjusted for inflation), but with that title came one downside for the News Corporation: “challenging comparisons,” as Mr. Murdoch put it in a statement, between this year and last year’s earnings. The company’s net income for the quarter, $639 million, or 24 cents a share, was down 24 percent from the same quarter last year, when the net income was $839 million, or 32 cents a share.

Ticket sales for “Black Swan,” a film released last December that scored a best actress Oscar for Natalie Portman, led the film division’s revenue in the most recent quarter. Citing the new animated film “Rio,” which was released three weeks ago but has already earned more than “Black Swan,” Mr. Murdoch said the “difficult comparisons in this segment over the past nine months are now behind us.”

Cable channels like FX and the Fox News Channel remained by far the biggest contributors to the News Corporation’s bottom line, accounting for more than 60 percent of profit. Like other major media companies, the News Corporation enjoyed significant gains in cable advertising revenue over the same time last year — in its case, up 14 percent in the United States and up an average of 18 percent in other countries.

Fox News, which is the most-watched cable news channel in the United States, continues to be a profit center for the company. In the most recent quarter, Fox News recorded its highest-ever operating profit margin, David DeVoe, the company’s chief financial officer, said in a conference call with analysts Wednesday.

The company’s local and national broadcast television division also showed strong results, having mounted a recovery from the recession. It helped that Fox had the rights to the Super Bowl this year and that the eight-year-old “American Idol” franchise has, as Mr. DeVoe asserted, found a “second life” with new, nicer judges.

But attention lately has been focused not on the News Corporation’s television assets, but on underperforming digital pieces of the company. Since last year, it has been attempting to sell Myspace, the ghost of a social network that suffered increased losses in the most recent quarter. Chase Carey, the News Corporation chief operating officer, said Wednesday that an unspecified Myspace transaction is “on course.”

The company is also trying to spin off IGN.com, a portfolio of video game news Web sites, according to AllThingsD, which reported the plan earlier this week.

In its publishing division, the News Corporation is trying to market the tablet newspaper, The Daily, that it introduced on the iPad in February. Mr. Carey said that the company lost about $10 million on The Daily in the quarter and emphasized that “it’s very early days.” He did not share any data about the number of subscribers to the newspaper, but a News Corporation employee was overheard on the conference call saying that the app that delivers the newspaper has been downloaded 800,000 times.

The publishing division posted a steep decline in net income in the quarter because of a $125 million charge related to a legal settlement at News America Marketing, its coupons and consumer marketing outfit. Excluding that charge, the company over all posted earnings of 26 cents a share.

Analysts pressed News Corporation executives on Wednesday on the status of its attempted acquisition of the 61 percent of British Sky Broadcasting, or BSkyB, that it does not yet own. The company is awaiting final approval of the deal by the British government.

If the approval comes — and by most accounts it will come soon — the News Corporation may have to pay more than the $12.4 billion it has already committed. Mr. Carey had little new to say about it, but he reiterated his hope for a “reasonable deal.”

Article source: http://feeds.nytimes.com/click.phdo?i=11655d5b22f94d61d012a5236e6cfa4b

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