James Murdoch Seen 'Incurious About Everything' in Hacking
By Jonathan Browning – Nov 11, 2011 7:16 AM ET
James Murdoch, News Corp. (NWSA)’s Deputy Chief Operating Officer, may have done enough to convince lawmakers he didn’t authorize a cover-up of the phone-hacking scandal at the company’s U.K. newspaper unit. In the process he left the impression he wasn’t in control of the company.
Testifying for a second time before a U.K. parliamentary committee, Murdoch yesterday said he regretted that he hadn’t looked into hacking allegations in 2009 when the Guardian newspaper reported them, or in 2010, when lawmakers raised questions. His failure to act triggered a scandal that engulfed News Corp. and thwarted a 7.8 billion-pound ($12.4 billion) bid for full control of British Sky Broadcasting Group Plc. (BSY)
“He obviously decided that it’s better to be the man who didn’t know than the man who didn’t do anything about it,” said Stewart Purvis, a professor for television journalism at London’s City University.
Murdoch, trying to hold on to his job at News Corp. and his position as BSkyB Chairman, yesterday blamed executives at the News of the World tabloid for not telling him in 2008 that intercepting the phones of celebrities and politicians went beyond a single reporter. Murdoch’s testimony shows that he kept his distance, says Claire Enders, founder and CEO of media researcher Enders Analysis.
“He was incurious, he was incurious about everything,” Enders, whose clients include the U.K. government, said in an interview.
‘Didn’t Occur to Me’
At a meeting with News of the World executives in 2008, when Murdoch was running the newspaper unit, Murdoch was told that Gordon Taylor, the CEO of the Professional Footballers’ Association should be receiving a 425,000-pound payment to settle a phone-hacking case. Murdoch yesterday said he didn’t ask to see the opinion of an outside lawyer.
“It didn’t occur to me probe further,” Murdoch told the lawmakers during 2 1/2 hours of testimony. “I was given a narrower set of facts than I would have liked,” Murdoch said. “They did not discuss allegations of widespread phone hacking or criminality or the like.”
Murdoch said Colin Myler, the News of the World’s editor, and Tom Crone, its lawyer, were responsible for denials issued by the company, including to Parliament, until January of this year and failed to pass on relevant information.
Murdoch, 38, had been recalled by the panel after Myler and Crone both said he was mistaken in his July 19 testimony that he hadn’t been told in 2008 about an e-mail that showed hacking went beyond the newspaper’s royal reporter, Clive Goodman, and a private investigator, Glenn Mulcaire.
“Their testimony was misleading and I dispute it,” Murdoch said yesterday. Crone said in an e-mailed statement after that appearance that Murdoch “was told by us in 2008 about the damning e-mail and what it meant in terms of wider News of the World involvement.”
Myler said in an e-mailed statement that his evidence to the panel “has been entirely accurate and consistent” and he stood by his account. He said he was confident that the police probe into hacking and a judge-led inquiry set up by Prime Minister David Cameron “will establish the truth.”
Tom Watson, a Labour Party member who has led Parliament’s inquiry into phone hacking, said Murdoch hadn’t fulfilled his duties as an executive officer.
“It’s plausible that he didn’t know, but if he didn’t know he wasn’t asking the questions that a chief executive officer should be asking,” Watson said.
James Murdoch joined News International as chairman in December 2007, after the alleged hacking took place.
Labour Party lawmaker Paul Farrelly told James Murdoch that “in 2009, you were possibly the only person in London who still thought there was one rogue reporter.”
Murdoch’s second testimony came after News Corp. investors lodged a protest vote at the annual meeting against Rupert Murdoch, the company’s chairman and CEO, and his sons. James received the highest percentage of votes against his election to the board, at 35 percent.
James Murdoch, also facing investors of BSkyB at the annual general meeting on Nov. 29, should step down as chairman of the British pay-TV company, investor Franklin Resources Mutual Series said in October, adding that “an independent chairman would be advisable.” Mutual Series owns about 3 percent of BSkyB, according to Bloomberg data.
A group of British pension funds, accounting for about 1 percent of BSkyB, today advised members to oppose Murdoch’s re- election. Following Murdoch’s appearance, the group said it was concerned about the chairman’s independence and the “ongoing risk” of “contagion.”
“BSkyB shareholders need to see some distance put between the company and the scandal engulfing News Corp,” the U.K. Local Authority Pension Fund Forum said.
The lawmakers yesterday questioned Murdoch’s credibility in handling the Taylor settlement.
“I find it incredible, absolutely incredible that you didn’t say: How much? Let me have a look at that,” Conservative lawmaker Philip Davies told Murdoch.
Watson told Murdoch he “must be the first mafia boss in history who didn’t know he was running a criminal enterprise.”
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.
Since the revelations in July that the News of the World had intercepted the voicemail of a murdered schoolgirl, News Corp. has tried to limit the damage by closing the 168-year old News of the World tabloid, once Britain’s biggest-selling tabloid.
At least 17 people have been arrested by police investigating hacking and bribing police officers at News Corp.’s U.K. newspapers, including Rebekah Brooks, a former News International CEO, and Andy Coulson, a former editor of the News of the World and spokesman for Prime Minister David Cameron.
James Murdoch still faces questions over the extent of phone hacking at other News International titles. When asked if he would consider closing the Sun newspaper if evidence of phone hacking were found, Murdoch yesterday didn’t rule it out.
News Corp. investigators found evidence that more reporters participated in phone-hacking and bribery scandal and informed the police, who arrested one person last week, two people familiar with the probe said this week.
Lawmaker Davies, who formerly worked as a marketing manager for Wal-Mart Stores Inc. (WMT)’s Asda unit, yesterday told Murdoch that executives at other companies would have paid more attention.
If there had been a similar legal issue, “any chief operating officer of Asda I’ve ever dealt with in my entire life would have said ‘for God’s sake let me have a look at that,” Davies said.
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