- The Washington Times - Sunday, July 10, 2011

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.

“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.

Mr. Murdochs visit comes as the fallout from the crisis that started in Britain hits his U.S. holdings. Britain’s Observer newspaper, sister paper of the Guardian, reported that “nervous hedge-fund investors have reportedly jammed the switchboards of London lawyers demanding to know the scale of the threat to the Sky deal.”

It said the saga was spiraling out of control, threatening “long-term damage to Murdochs U.S. interests such as Fox News and the Wall Street Journal.” Shares in Sky have fallen by 12 percent, wiping $2.9 billion off the companys value.

Mr. Cameron has been forced to defend his judgment after he employed Mr. Coulson despite warnings about his past.

The Guardian newspaper revealed last week that it had spoken to leaders of all three main political parties before the 2010 election to warn them of allegations that Mr. Coulson was involved in illegal information gathering. Senior politicians have come forward to reveal they had warned Mr. Cameron over the appointment.

Mr. Cameron has also been criticized for becoming too close to journalists including Ms. Brooks, another former News of the World editor.

In an emergency press conference last week, the prime minister admitted the relationship between politicians and the press would have to change.

“Over the decades, on the watch of both Labor leaders and Conservative leaders, politicians and the press have spent time courting support, not confronting the problems,” he said.

“Well, it’s on my watch that the music has stopped. And I’m saying, loud and clear: Things have got to change. The relationship needs to be different in the future.”

He described the actions by the journalists involved in the scandal as “simply disgusting” and ordered two official inquiries that could trigger an overhaul of British regulation of the press.

Until now, the British press has regulated itself through the independent Press Complaints Commission, which Mr. Cameron, in effect, said needs to be scrapped.

The closure of the paper, read by 7.5 million people, made front-page news across the world over the weekend.

“It always contained scandal but it had strong stories about important people,” Mr. Hewlett said of the News of the World. “Mostly, the journalism was outstandingly good, and it campaigned on behalf of its readers.”

For example, he said that the paper pushed for the implementation of “Sarah’s Law,” giving parents the right to find out if anyone having regular contact with their children had been convicted of a sexual offense.

“It was always naughty, troublesome and entertaining, always stepping over the line but fundamentally there for ordinary working class people,” he said. “But then it veered into gross invasions of privacy and [into] stories with no element of public interest.”

c Jason Walsh in Dublin contributed to this report.

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