On the heels of its latest quarterly report showing a doubling profits, News Corp. is still reeling from the fallout from the phone hacking scandal as six former News of the World journalists were arrested on February 13 for allegedly intercepting voice mails. Two of those arrested are still employed at News Corp.
According to a February 13 Bloomberg article:
News Corp.'s phone-hacking scandal is widening after London police arrested six more former journalists at its now-defunct News of the World tabloid and uncovered a new conspiracy to intercept voice mail.
Three men and three women suspected of hacking phone messages in 2005 and 2006 were arrested today and some homes are being searched, the Metropolitan Police Service said in a statement. Two of the people arrested currently work at News Corp.'s other U.K. tabloid, the Sun, Britain's best-selling daily title.
News Corp. has settled about 200 civil phone-hacking lawsuits. It faces as many as 100 more as police continue to notify victims, lawyers said at a London court hearing last week.
At least 55 journalists have been arrested in the last two years in connection with the phone hacking investigation.
These arrests, the latest in a long string of arrests and charges for News Corp. employees, are a reminder that the media conglomerate is far from free of its ethical challenges. According to Bloomberg, lawyer Mark Lewis said, "It comes as no surprise that the lines of investigation are widening ... There is a lot further to go, and ultimately this is a problem that will continue to have reverberations at the top of News Corp."
The ongoing investigation hasn't stopped CEO Rupert Murdoch from exploring new business ventures or racking up billions in profits. News Corp. reported net profits of $2.4 billion in the last three months of 2012, mostly related to gains from cable TV and new channel acquisitions, effectively doubling its profits from the same period in 2011.
News Corp. has paid more than $340 million in costs related to the phone hacking scandal.
Last year, News Corp. announced plans to split the company into separate publishing and entertainment divisions. On a quarterly earnings call February 6, News Corp. executives said the planned separation was on track "to be completed in approximately one year from the date of announcement."
As News Corp. seeks to move on from the phone hacking scandal that rocked the company last year, two former editors of Rupert Murdoch's now-shuttered News of the World have been charged with bribery.
Former tabloid editors Rebekah Brooks and Andy Coulson have been accused by British prosecutors of conspiring to pay public officials in exchange for information, according to the Associated Press. Those charges stem from the wide-ranging hacking scandal that has brought down company executives, journalists, and politicians and resulted in a British parliamentary panel declaring Murdoch "not a fit person" to run a major media group, and come as News Corp. attempts to shed the scandal and make new acquisitions.
The British criminal investigation began following the revelation that journalists and editors at the British tabloid, The News of the World, had hacked into phones to uncover information in order to report stories. Now, Brooks is being charged with conspiring to pay a Ministry of Defense employee for a series of stories for Murdoch's The Sun tabloid, and Coulson is accused of conspiring to pay officials for access to a royal phone directory. Brooks and Coulson, who have been brought up on other charges associated with the scandal, have repeatedly denied any criminality.
Brooks served as an editor of The News of the World, The Sun, and most recently as the CEO of News International, until she resigned in July 2011. She was arrested two days after her resignation. Coulson was an editor at The News of the World until 2007, when he left to become a spokesman for Prime Minister David Cameron. He resigned that position in 2011 amid the hacking scandal.
In July 2011, The News of the World shut down.
These latest charges of bribery come on the heels of several indications that News Corp. is attempting to move past the scandal; indeed, The New York Times reported November 19 that the company "is starting to look like its old self again" and is looking to make acquisitions after having "been on its heels for more than a year because of the phone hacking scandal in Britain."
Days after former News International CEO Rebekah Brooks and other journalists connected to News Corp were formally charged in relation to the phone hacking case, more journalists were arrested regarding allegations that a News Corp newspaper used stolen phones.
From Bloomberg News:
A second journalist at News Corp. (NWSA)'s Sun tabloid was arrested on suspicion of handling stolen goods as part of a police probe into allegations that the newspaper used data from mobile phones that were ripped off.
Police arrested a 37-year-old journalist today, the Metropolitan Police Service said in a statement. That follows the arrest of a 51-year-old man yesterday. Both men worked at the Sun, according to an official at News Corp.'s U.K. unit, who asked not to be identified, citing company policy.
The alleged thefts are the latest accusation against News Corp.'s U.K. publishing business, News International, whose reporters and editors have been accused of hacking into mobile- phone voice mails and e-mails, bribing public officials and disrupting police investigations. Sue Akers, the MPS deputy assistant commissioner, said last week that officers had discovered that News International journalists had information that appeared to be from stolen phones.
About 60 people have been arrested since the police investigations began last year. Eight former News Corp. journalists were charged last week with conspiring to intercept voice mail, including former News International Chief Executive Officer Rebekah Brooks and Andy Coulson, an ex-lead tabloid editor who later became an adviser to U.K. Prime Minister David Cameron.
From Bloomberg News:
News Corp. (NWSA)'s British publishing unit asked a judge to keep secret a series of new claims being made by victims of phone hacking at its News of the World tabloid in preparation for a group trial scheduled for February.
The details of the allegations, which could be used to seek punitive damages, should be kept from the public unless they are approved at a Sept. 7 hearing and added to the victims' so- called generic claims, Judge Geoffrey Vos said today in London.
The claims outline "generalized activities which we think are unsustainable" if challenged, Michael Silverleaf, the lawyer for the News International unit, said at the hearing. "They may change the approach we are taking" to the case.
News Corp., the New York-based company controlled by Rupert Murdoch, is trying to move on from the scandal after the civil case and a parallel criminal probe that began last year revealed a cover up and led to the closure of the tabloid and the arrests of more than 60 people, including another journalist today.
Last week, Rupert Murdoch resigned from a number of British newspaper boards that oversee The Sun, The Times, and The Sunday Times. Today, the senior police officer overseeing the investigation told the Leveson committee that the investigation spawned by phone hacking at News of the World is now investigating information obtained from stolen cellphones and significant payoffs to public officials.
From The New York Times:
The phone hacking investigation of Rupert Murdoch's tabloid newspapers in Britain has broadened to include allegations that information was obtained from stolen cellphones, significant payoffs were made to public officials, and "medical, banking and other personal records" were illegally accessed, the senior police officer in charge of the operations told a judicial inquiry Monday.
The officer, Deputy Assistant Commissioner Sue Akers of Scotland Yard, gave the most detailed assessment yet of the three investigations prompted by allegations in 2009 that The News of the World tabloid had illegally intercepted voice mail messages on an industrial scale.
The newspaper was closed last summer under the weight of public outrage. But detectives now suspect a swath of related illegal activities, Ms. Akers told the panel headed by Lord Justice Sir Brian Leveson.
The police are aware of information that Mr. Murdoch's papers obtained from two stolen cellphones, she said. One was in Manchester, in northern England, and the other in southwest London. She said that it seemed that one of thee phones had "been examined with a view to breaking its security code," in order to gain access to its contents. The authorities are trying to establish whether the thefts were isolated incidents, or "the tip of the iceberg," she said.
Allegations like these are why Murdoch faces a shareholder revolt over the "lax ethical culture and lack of effective board oversight" at News Corp.
Turns out internal Fox News talking points about what not to discuss on the air might be just as influential as the guidelines that coach hosts on which stories to push each day.
What else could explain the fact that it's been 52 weeks since Rupert Murdoch's News Corp. phone hacking scandal broke big, yet Sean Hannity has never addressed the story on his show, according to a search of Nexis.
And Hannity's primetime partner Bill O'Reilly isn't much better. To date, he's committed just seven minutes to the story. And during his single segment on the story, O'Reilly falsely claimed there hadn't been any "intrusion of this story thus far on News Corp. properties" in the United States. (There had; Les Hinton, CEO of News Corp.'s Dow Jones division, was forced to resign as a result of the widening scandal.)
The O'Reilly Factor and Hannity have aired more than 500 hours of programming in the last year, but set aside just a few minutes for the hacking story.
This week marks the one-year anniversary of the shocking Guardian scoop about how Murdoch's News of The World tabloid hacked into the voicemails of an abducted schoolgirl who was later found murdered. The ghoulish revelation catapulted the News Corp.'s long-simmering British phone hacking scandal into the news stratosphere and uncorked a twelve-month ride that has been brutal for CEO Murdoch at every turn, as allegations have tumbled out about rampant phone hacking and the paying off of public officials. And there is no end in sight to his woes.
Since that scoop, the hacking story has been arguably the biggest media business news story of the year, as the controversy has completely roiled Rupert Murdoch's company, causing him to close an entire newspaper and jettison top lieutenants (including his own son) who became tainted by the scandal.
Government investigations were launched to determine whether News Corp. employees had hacked phones, computers and emails. In May, a scathing U.K. parliamentary report found Murdoch to be "not a fit person" to run a major media company.
Just last month Murdoch was forced to reorganize his entire News Corp. media empire in an effort to "quarantine" his now-toxic UK newspaper properties, as one Wall Street analyst put it.
Meaning, the scandal continues to reverberate throughout Murdoch's world, and deep into the heart of British politics. To date, it stands as one of the most sweeping and damaging corporate media eruptions in modern times.
In other words, the scandal nicely captures everything that's wrong with the culture of corruption that Murdoch has fermented at his partisan media titles. And so of course that's the reason Hannity and O'Reilly, who promote themselves as tough talkers willing to confront uncomfortable truths, are too terrified to mention the story while the cameras are on even though it's a story that intersects at the usual Fox sweet spot of media and politics.
Unable to mount even a feeble defense on Murdoch's behalf and the rampant lawbreaking that occurred in his name, Hannity and O'Reilly have simply played dumb on an epic scale, turning a blind eye to a story that has ravished their employer and permanently scared his reputation.
We usually think of Fox as a propaganda outlet because of the false stories and smears it relentlessly pushes. But as Murdoch discovered during his most difficult year, with Hannity and O'Reilly, sometimes propagandists prove their worth by not covering stories that embarrass the boss.
A May 15 New York Times article reported that Rebekah Brooks, a former executive in Rupert Murdoch's News Corp., will be prosecuted on various charges stemming from the phone hacking scandal surrounding News Corp. Brooks was the former CEO of News Corp.'s British newspaper division, News International. From The New York Times:
Once among the most powerful figures in the British media, with close contacts stretching from her boss, Rupert Murdoch, to her friend, David Cameron, Rebekah Brooks, the former head of Mr. Murdoch's British newspaper empire, was told by prosecutors on Tuesday that she, her husband and four others will face charges of conspiring to pervert the course of justice in the hacking scandal that has burrowed into public life here.
It was the first time the charges have been formulated since police reopened inquiries into the affair in January 2011 and intensified their questioning six months later. The development brought the scandal to a watershed between criminal investigations, which have resulted in around 50 people being arrested and then set free on bail, and the prospect of trial before robed judges.
The six were accused variously of concealing documents, computers and archive material from officers investigating the scandal last July.
Prince Alwaleed bin Talal, News Corporation's second biggest shareholder, has reportedly said that the company's phone hacking scandal "is not helping the name of the company" and is "not something to be proud of."
Alwaleed also said that his backing of embattled News Corp. CEO and chairman Rupert Murdoch "is definitely unwavering." A British government panel recently concluded that Murdoch is "not a fit person" to lead a major company, citing his "willful blindness" to unethical behavior.
From The Guardian:
Alwaleed said that although News Corp was "very diversified," with interests covering books, magazines, newspapers, television and film, the phone-hacking scandal was having a company-wide effect. "I really hope that this is behind us because really it is not helping the name of the company," he said. "We hope that this page is folded and put behind us because really it is not something to be proud of."
News Corp investors have voiced concerns about the phone-hacking scandal since it erupted last year and, at the company's AGM in October, several shareholders, including powerful pension fund CalPERS, called for the appointment of an independent chairman. Murdoch currently holds the position of chairman alongside that of chief executive. Alwaleed is one of Murdoch's staunchest supporters and had never before spoken publicly about the wider impact of the scandal.
His most public previous involvement was to suggest the resignation of Rebekah Brooks as chief executive of News Corp's UK newspaper division, News International. Brooks was editor of the News of the World when its journalists hacked the phone of murdered schoolgirl Milly Dowler and in July last year Alwaleed told the BBC's Newsnight: "If the indications are for her [Brooks's] involvement in this matter is explicit, for sure she has to go, you bet she has to go ... Ethics to me is very important." Brooks resigned the following day.
News Corp holds a significant stake in Alwaleed's Saudi Arabian film, TV and music business Rotana Media Group and he said: "We have a strategic alliance with Rupert Murdoch for sure and I have been with him for the last 15 or 20 years. My backing of Rupert Murdoch is definitely unwavering."
Alwaleed said that although the scandal had had an impact on News Corp's reputation, its financial results had not been damaged. "The share price is really separating from what is happening in the UK," he said. "We see the price is hovering around $20 and the results are very good."
The British parliamentary panel investigating phone hacking by News Corp. concluded in a report released today that Rupert Murdoch is "not a fit person to exercise the stewardship of a major international company" and that Murdoch "exhibited willful blindness to what was going on in his companies and publications." The New York Times reported:
In a damning report after months of investigation into the hacking scandal at Rupert Murdoch's newspapers here, a British parliamentary panel concluded on Tuesday that Mr. Murdoch was "not a fit person" to run a huge international company.
The report said Mr. Murdoch exhibited "willful blindness" toward wrongdoing at his organization and said News Corporation, his New York-based global conglomerate, had made "huge failings of corporate governance." The consequences of the panel's findings were not immediately clear.
"On the basis of the facts and evidence before the committee, we conclude that, if at all relevant times Rupert Murdoch did not take steps to become fully informed about phone hacking, he turned a blind eye and exhibited willful blindness to what was going on in his companies and publications," the report said. "This culture, we consider, permeated from the top throughout the organization and speaks volumes about the lack of effective corporate governance at News Corporation and News International," its British newspaper subsidiary.
"We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company."
During testimony last week, Murdoch admitted a "cover-up" to hide the widespread phone hacking at The News of the World and apologized for the scandal. Bloomberg has reported that there were likely more than 1,000 victims of The News of the World's phone hacking.
The investigation by the British government into phone hacking by News Corp. prompted an appearance by Rupert Murdoch today at a parliamentary hearing into the matter.
Despite the widespread phone hacking from the Murdoch-owned News of the World, he testified that "I don't believe in using hacking, in using private detectives or whatever, that's a lazy way of reporters not doing their job. But I think it is fair when people have themselves held up as iconic figures or great actors that they be looked at."
Bloomberg recently reported that there were likely over 1,000 victims of the News of the World's phone hacking.
In additional testimony Murdoch sought to downplay his involvement in British politics. From The New York Times:
The government's lead attorney for the inquiry, Robert Jay, pursued a chronological line of questioning beginning with Mr. Murdoch's entry into the British newspaper market in the late 1970s and early 1980s. Much of the questioning centered on meetings with British political leaders and the pledges Mr. Murdoch had made not to influence his newspapers' editorial policies.
He acknowledged meetings, dinners and shared quips with a series of prime ministers, but sought to dismiss suggestions that he wielded any influence.
"I don't know many politicians," he said, on one of many occasions when he denied accusations from Mr. Jay that his newspapers supported politicians whose policies might offer him some commercial benefit. As to suggestions that his power might be more subtle than such obvious exchanges, he responded, "I'm afraid I don't have much subtlety about me."
The emails showed that News Corp. and representatives of the British government were discussing government approval of the media company's purchase of satellite TV network BSkyB.
CNN's Howard Kurtz admonished officials at Sky News, a News Corp.-owned British news channel, for "saying they reserve the right to break the law" after it emerged that officials there acknowledged hacking into private emails.
Officials at the News Corp. channel confirmed this week that on at least two occasions, reporters illegally hacked into private email accounts.
Sky News head John Ryley made clear that the hacking was authorized and said that they "stand behind these actions as editorially justified and in the public interest." Kurtz on Sunday called that justification "bloody rubbish."
In an April 6 Huffington Post column, Media Matters executive vice president Ari Rabin-Havt explained how the latest development in the News Corp. hacking scandal further validates concerns that the company suffers from a culture of corruption:
The Sky case is particularly interesting because for the first time, the company has admitted that hacking was not only approved of, but in fact officially sanctioned by the management of the channel. John John Ryley, the head of Sky News, told reporters, "We stand by these actions as editorially justified and in the public interest." Ryley continued: "Material provided by Sky News was used in the successful prosecution, and the police made clear after the trial that this information was pivotal to the case."
Regardless of intentions or the criminal behavior of a target, it is not in the realm of a private entity to determine which laws to follow and which to ignore. It's because of this hubris, which runs up and down the News Corp. ladder, that the company has landed in this place.
A former editor for Rupert Murdoch's shuttered tabloid News of the World is defending the publication's routine use of the fictional byline "Edward Trevor," a practice which is reportedly under investigation by Scotland Yard.
Over the weekend, The Independent reported that "[d]etectives are interested in Trevor because this 'house byline' appeared on work that for various reasons the real author did not want to be associated with." Trevor's byline appears on hundreds of stories published in the infamous British newspaper, which Murdoch closed last year amidst allegations that reporters there engaged in widespread phone hacking and police bribery.
But Stuart White, who served as News of the World's LA-based American Editor from 1994 to 2003 and is now a novelist, tells Media Matters there is nothing unique or nefarious about the use of a "house byline" like Edward Trevor, adding, "the back story to this is that both The Independent and the Guardian are obsessed with ravaging the corpse of the News of the World."
From the February 14 edition of CNN's Starting Point:
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"This is the most humble day of my life."
That's how Rupert Murdoch began his July 20 testimony to Parliament about the phone hacking and bribery scandal that had already resulted in the resignations and arrests of key News Corp. officials.
Murdoch's son, James, was equally contrite. "I would like to say as well just how sorry I am and how sorry we are, to particularly the victims of illegal voicemail interceptions and to their families," he told the committee. "It is a matter of great regret to me, my father and everyone at News Corporation. These actions do not live up to the standards that our company aspires to everywhere around the world."
The story had begun spiraling out of Rupert Murdoch's control two weeks earlier, when the Guardian reported allegations that employees of Murdoch's London tabloid News of the World had hacked into the mobile phone voicemails of a British schoolgirl who had gone missing, and who was later found dead.
"I cannot think what was going through the minds of the people who did this. That they could hack into anyone's phone is disgraceful," lamented Prime Minister David Cameron as the scandal quickly engulfed the U.K., and spread throughout Murdoch's global media reach. "But to hack into the phone of Milly Dowler, a young girl missing from her parents, who was later found to be murdered, is truly despicable."
Allegations of phone hacking within Murdoch's newspapers had been simmering for years in the U.K., and News Corp. had been forced to make public apologies for the systematic invasions of privacy, often sponsored by News of the World and targeting celebrities, athletes and members of the royal family.
And while parts of the Dowler story have since been called into question, News Corp. agreed to pay her family 2 million pounds, and Murdoch himself delivered an apology in person. Moreover, the story set off a cascade of damning revelations that have continued to this day.
Evidence quickly tumbled out indicating the hacking been widespread, and that multiple, high-ranking executives had known about the intrusions. That meant previous explanations to Parliament, when Murdoch managers claimed the crimes had been limited, had been misleading at best. At worst, Murdoch chiefs lied to lawmakers in an effort to cover-up massive wrongdoing.
For years, Media Matters has documented the stream of purposeful misinformation that flows from Murdoch's American properties, most notably Fox News, where the misinformation has taken an epic turn for the worse under President Obama. Yet the corporate spectacle on display this year is even more troubling. This has been Murdoch overseeing a corrupt enterprise and one whose transgressions extend well beyond tapping into phone messages.
And for that dubious distinction, as well as for starring in a media unraveling that has attracted multiple police and government investigations on several continents, Rupert Murdoch and his international media behemoth are the recipients of this year's Misinformer of the Year award.