Murdoch tries to contain effects of hacking scandal

News-gathering controversy threatens to spread

** FILE ** News of the World Editor Colin Myler (center) holds a copy of the paper's last issue as he leads his staff out of the headquarters of News International in London on Sunday, July 10, 2011. (Associated Press)** FILE ** News of the World Editor Colin Myler (center) holds a copy of the paper’s last issue as he leads his staff out of the headquarters of News International in London on Sunday, July 10, 2011. (Associated Press)
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Media mogul Rupert Murdoch scrambled to London on Sunday to try to contain a scandal that caused him to close the weekly News of the World, Britain’s largest-selling newspaper.

Accusations that his reporters hacked into the phone calls of the families of murder victims and British soldiers have outraged the British public, shaken his News Corporation empire to its core and sent convulsions to the heart of the British government.

“The effects of this crisis are being felt not only throughout British journalism, still reeling from Rupert Murdochs decision to close down News of The World, but also in No. 10 Downing Street,” Andrew Calcutt, a professor of journalism at the University East London, said, referring to the prime minister’s residence.

“When it emerged that tabloid voicemail hacking had extended from politicians and celebrities to murder victims and their families, our appetite for melodrama seemed to go into reverse.”

On Friday, News International, News Corp.s British arm, decided to shut down the tabloid, amid allegations that its reporters had paid private investigators to hack into voicemail messages left on the mobile phones of a teenage murder victim, the families of two abducted children, victims of the July 2005 London terrorist bombings and families of British soldiers who died in action in Afghanistan.

Rupert Murdoch, chairman of News Corp., shown with chief executive Rebekah Brooks, has traveled to London in the wake of the phone-hacking scandal that has shaken his media empire. A pending deal to acquire full control of British Sky Broadcasting is threatened. (Associated Press)

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Rupert Murdoch, chairman of News Corp., shown with chief executive Rebekah Brooks, ... more >

“Thank you and goodbye,” read the last front-page headline of the 168-year-old Sunday newspaper. An editorial inside admitted: “Quite simply we lost our way.”

Police on Friday arrested Andy Coulson, a former News of the World editor and head of communications for British Prime Minister David Cameron until January.

Clive Goodman, a former reporter covering the royal family beat, was also arrested amid speculation that senior employees of News International, including chief executive Rebekah Brooks and News International Chairman James Murdoch, Rupert Murdoch’s son, could be caught up in the investigation.

“Mr. James Murdoch and Rebekah Brooks now have to accept their culpability, and they will have to face the full force of the law,” said Tom Watson, a Labor Party member of Parliament, speaking in the House of Commons last week.

The scandal is likely to continue to reverberate throughout the British media for years to come, said veteran media analyst Steve Hewlett, anchorman of BBC Radio 4’s Media Show.

“Phone hacking almost certainly extends beyond the News of the World,” he said. “The Sunday paper market is competitive. Pressure to get stories is intense and hacking phones was so easy to do.”

The London offices of the Daily Star Sunday, owned by Express Newspapers, were raided by police on Friday. The publishers issued a statement saying the raid was in relation to Mr. Goodman, who worked as a freelancer at the newspaper, and not to the Daily Star Sunday’s own work. Nevertheless, many in Britain wonder if revelations about hacking and bribery at other tabloid newspapers will follow.

The immediate damage is being felt by Mr. Murdochs empire alone. The mogul had hoped to sign a $19 billion deal in Britain this week to give him full control of the satellite television network British Sky Broadcasting.

But public and political opposition to the deal has snowballed since the phone-hacking scandal erupted last week. Labor leader Ed Miliband is seeking bipartisan support to postpone the deal until a full criminal investigation into information-gathering practices at the News of the World is over.

Many are now asking whether News Corp. could meet the legal criteria required for the takeover. The company currently owns a 39 percent controlling stake in Sky.

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