Murdoch’s Attempt to End Phone Hacking Scandal Unlikely to Succeed

LONDON — The story so far: Clive Goodman, a journalist for Rupert Murcoch’s English tabloid, the News of the World, was sent to prison in 2006, along with a private detective, Glenn Mulcaire, for hacking into the voice mail messages of Prince William and Prince Henry. News International, the U.K. newspaper-owning subsidiary of Murdoch’s News Corporation, has consistently claimed that the phone-hacking was confined to a single rogue reporter, but evidence uncovered by the Guardian and New York Times has suggested otherwise.

Last Friday, James Murdoch told PBS’ Charlie Rose that News International had defused a reputation crisis over allegations of widespread illegal phone hacking at the News of the World newspaper: “You talk about a reputation crisis—actually the business is doing really well. It shows what we were able to do is really put this problem into a box.”

But the lid has not stayed on the box and the contents have spilled over the sides. Rupert Murdoch has now tried to put that box into yet another one by issuing a blanket apology and offering a compensation fund for a select number of victims. Again, the lid does not seem likely to stay put.

News International’s announcement of the apology on Friday amounts to a complete reversal of policy by Rupert Murdoch and his top brass. Until now the management of News International has always argued that a single rogue reporter had been engaged in phone hacking. But the recent arrests of a former senior News of the World executive and the paper’s chief reporter—both of whom have been bailed till September pending further developments—and a court order requiring the release of internal e-mails has given the lie to that strategy.

The former Labour minister Chris Bryant, who is suing News International, said that it is “a pretty extraordinary moment . . .  when a national newspaper, which has been saying for years and years that there was just one rogue reporter, that it was all very regrettable, and that there were very few victims, owns up to a massive degree of criminality at the newspaper.”

It has been obvious to many that the “rogue reporter” strategy was flawed ever since News International settled claims in 2008 with Gordon Taylor, chief executive of the Professional Footballers’ Association, for £700,000, and the publicist Max Clifford, for more than £1 million. After all, why would a reporter who covered the royals have been hacking their phones?

Speaking on BBC TV news on Friday, Andrew Neil, who served Murdoch as editor of the Sunday Times in the 1980s, declared that the “take-no-prisoners” newsroom culture of his tabloids was something Murdoch “revels in” and that he is now reaping what he has sown. In a separate statement for the BBC Web site, Neil emphasized that the decision to issue the apology could only have come from the elder Murdoch himself: “It’s a complete mea culpa. There’s no way any management in London would have either the guts or the power to make a decision like that.” Contrast this with the settlements with Taylor and Clifford, which were approved by James Murdoch.

Over the weekend, the Sunday Times distanced itself from the phone-hacking activities of its News International stablemate, but it tried to claim that the company’s decision to apologize and offer a compensation fund came about because the judge who is handling claims had invited proposals to streamline the legal process. However, the Independent on Sunday saw it rather differently, reporting that the judge “is said to have become exasperated at NI’s reluctance to disclose material sought by lawyers involved in the legal battle.” The IoS added: “Further potentially embarrassing disclosures are expected to be ordered by the judge at a case conference this week and seem certain to give rise to further evidence of the extent of unlawful activity.”

The fact that News International concedes that there wasn’t a “more robust investigation earlier” could be a veiled slap at Rebekah Wade’s predecessor as managing director, Les Hinton, since the original investigation was undertaken on his watch. Hinton currently runs Murdoch’s Wall Street Journal operation, and so is outside of the U.K. frame.  

Meanwhile, many observers see Wade herself in jeopardy on three counts. Some believe that evidence will emerge of phone hacking during her own editorship of the News of the World, which predated the 2006 Clive Goodman case. She may also have known about the News of the World’s wider culpability long before she ceased denying it. And she faces a separate inquiry into illegal payments to police officers while she was editor of the News of the World.

There is even talk of a possible corporate criminal prosecution of News International itself, as distinct from individual reporters and executives. Under the relevant statute, NI could be charged with illegal phone hacking if it is found to have “connived” or “consented” with the commission of the offense, or if it can be shown that such hacking was the result of “any neglect on the part of a director, manager, secretary or other similar officer of the body corporate” or “any person who was purporting to act in any such capacity.”

Former Deputy Prime Minister John Prescott, who believes that his phone was hacked by News of the World journalists, has said that Murdoch’s takeover of BSkyB should not be permitted to go ahead while the other half of his U.K. empire is under this cloud. But government advisers have made it clear that there would be no legal basis for such a decision. The Enterprise Act, which governs U.K. takeover rules, allows referral for political approval on one ground only. Since the BSkyB takeover has already been referred on the ground of media plurality, it cannot also be referred on a ground of suitability of persons (which was originally intended to prevent pornographers from acquiring mainstream news media).

Lawyers representing claimants are not satisfied with News International’s announcement, and none of them are inclined to let the matter drop here. Notwithstanding that they have several more clients waiting in the wings, these lawyers are reluctant to let NI cherry-pick the most-likely-to-succeed claimants and leave the rest to apply for judicial disclosure of documents on a case-by-case basis.

Charlotte Harris, who represents football agent Sky Andrew, one of the eight claimants News International is keen to do business with, considers it unacceptable that “only when the News of the World’s position has become totally untenable . . .  they suddenly apologize and then decide it’s time to dictate the agenda.” She says her client wants to see all internal News International documentation pertaining to his case.

Mark Thomson, who represents the actress Sienna Miller, another of the favored claimants, told the Observer that his client’s voice mails were persistently hacked and the information obtained was used to publish numerous intrusive articles over a period of a year.” Thomson also said that Miller’s ”primary concern is to discover the whole truth and for all those responsible to be held to account."

Harris and another lawyer, Mark Lewis, continue to believe that there are several thousand persons whose phones were hacked by the News of the World and that many more claims will be initiated in the future. The figure of £20 million has been mentioned as the amount Murdoch is willing to part with to make claimants go away, but informed observers think that’s wishful thinking on his part.