News Corp. Facing New Investigation into Phone Hacking Scandal

Prime Minister David Cameron caves to pressure

LONDON—Rupert Murdoch’s News International, a subsidiary of his News Corp. empire, has lost a battle that it desperately wanted to win. It has failed to avoid a public inquiry into the phone hacking scandal.

At Prime Minister’s Questions on Wednesday, Prime Minister David Cameron, who had long resisted opposition pressure for an inquiry, caved in. Tuesday’s revelations about the News of the World hacking into the mobile phone of missing teenager Milly Dowler back in 2002 were too much. The resulting public inquiry, chaired by a judge, will have the power to summon witnesses and to take evidence from witnesses under oath. Apart from phone hacking, it will have the authority to examine the whole culture of criminality in tabloid newspapers, including the practice of bribing police officers to get information.

It doesn’t help that there were further revelations about the extent of the hacking Wednesday evening.  One was that the Chancellor of the Exchequer, George Osborne, has been told that he may have been a victim. The other was that relatives of military personnel killed in Iraq and Afghanistan may have had their phones hacked. MPH Solicitors, a firm that represents, among others, the widow of the first British soldiers to be killed in Afghanistan, has stated that it has been contacted by police as a result of information in the files of private investigator Glenn Mulcaire. News International was swift to express its horror at the possibility, citing its “impeccable” record as a friend of the armed services and of “our servicemen and servicewomen”. Nonetheless, the Royal British Legion, a charity that supports members of the armed services and their families, dropped the News of the World as its campaign partner.

An emergency debate on the matter in the House of Commons on Wednesday was a chance for members of Parliament to vent their fury over the affair, and it was littered with demands for the government to call a halt to approval of News Corp.’s proposed takeover of satellite broadcaster British Sky Broadcasting (BSkyB). Although the attorney general made it clear that neither he nor other ministers were in a position to interfere with the rule-bound legal process, it did emerge that the Ofcom commissioner, who regulates the broadcasting industry, does have the power to intervene at any time if he believes that News Corp. is not a fit and proper body to have outright ownership of a major broadcasting organization. And on Thursday the Financial Times reported that Culture Secretary Jeremy Hunt is expected to delay his decision on whether to allow the deal to proceed until September.

Tom Watson, a member of Parliament from the Labour party who’s been a leading critic of News International over phone hacking, called for James Murdoch, who is on overall charge of his father’s UK media empire, to be “suspended from office while the police now investigate what I believe is his personal authorization to plan a cover-up of this scandal.” Watson went on to say that the police should investigate the attempted destruction of data at the HCL storage facility in Chenai, India where outmoded hard drives from News International offices have been archived.