News of the World Without a Fit Leader

Story first appeared on The Wall Street Journal.

LONDON—A U.K. parliamentary committee report issued Tuesday said that the News Corp. Chairman and Chief Executive is not a fit person to exercise the stewardship of a major international company and found that three former News Corp. executives misled British lawmakers over the depth of the phone-hacking scandal.

The report from Parliament's Culture, Media and Sport Select Committee sketches out details of a coverup the company allegedly carried out as it sought to contain the fallout from revelations that its now-closed News of the World tabloid illegally intercepted cellphone voice mails in pursuit of information.

A U.K. committee investigating the News of the World phone-hacking scandal issued a final report that came down hard on News Corp. chief Rupert Murdoch and accused company executives of misleading parliament.

The report had especially harsh words for the 81-year-old —although the rebuke divided members of the committee along party lines. According to a passage inserted despite the opposition of Conservative members, he 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 corporate culture permeated from the top, it added.

Three former executives from News International, the company's U.K. newspaper unit, were singled out for misleading Parliament during testimonies on phone hacking in 2009. All three men have left News Corp.

The committee said a number of statements News International executives made in 2009 were untrue, including the claim that illegal voice-mail interception was limited to one reporter and the assertion that phone hacking had been investigated thoroughly by the company. The report says News Corp.'s instinct throughout the affair was to cover up rather than seek out wrongdoing and discipline the perpetrators.

During a news conference, the committee said all of its 10 voting members supported the report's conclusions about the executives in question. But a Conservative Member of Parliament said the committee's Conservative MPs voted against the final report largely because of the line saying that the Chairman and Chief Exec. isn't a "fit person" to run a global company.

It passed with the support of six Labour and Liberal Democrat legislators. Four Conservatives opposed it.

In a statement, News Corp. agreed that there had been serious wrongdoing committed at the News of the World, and that their response to that was much too slow and defensive.

The committee plans to submit a motion to the House of Commons, inviting British lawmakers to endorse its conclusion about the misleading behavior of the three former executives. Misleading a parliamentary committee isn't a criminal offense—witnesses generally don't testify under oath—but it can constitute contempt of Parliament, a noncriminal sanction levied against people who somehow impede the governing body's work.

The committee said the House of Commons will make a final decision on whether a contempt has been committed, and if so, what punishment should be imposed. The report didn't say what the punishment would be other than reputational damage and public opprobrium.

British lawmakers haven't meted out a contempt of Parliament sanction to a nonpolitician in more than half a century. The last time it happened, in the late 1950s, Parliament summoned a tabloid editor to the House of Commons to issue a reprimand and hear an apology.

The report didn't accuse the Chief Exec., or his son, News Corp. Deputy Chief Operating Officer—who oversaw News International for four years—of misleading Parliament, but the conclusions did say the father and son had presided over an affair that "demonstrates huge failings of corporate governance."

The committee hit out at the son's claim that he didn't realize the widespread nature of phone hacking until late 2010, calling it simply astonishing given the amount of information in the public domain.

It said his handling of a crucial phone-hacking civil claim in 2008 "raises questions of competence." Roughly £700,000 ($1.1 million) secret settlement was approved in the case without evaluating a key piece of evidence—an email transcript of hacked voice mails—is "astonishing" and indicative of a "lack of curiosity," or "wilful ignorance," the report says.

The report's denunciation could play into the deliberations of Ofcom, the U.K. communications regulator, which is evaluating whether the owners of British Sky Broadcasting Group are "fit and proper" to hold a British broadcasting license.

News Corp. qualifies as an owner because it holds 39.1% of BSkyB, one of News Corp.'s most lucrative properties. It holds a number of the pay-TV giant's board seats.

Ofcom said Tuesday it is considering the report as part of its evaluation of the broadcasting license. The regulator can revoke a broadcasting license if an owner doesn't meet the loosely defined classification, which takes into account criminality, the propriety of directors and other behavior. Ofcom is unlikely to act before the conclusion of the criminal investigations.

The committee generally refrained from making pronouncements on former News International executives who are among roughly 40 people arrested as part of a massive British criminal probe into phone hacking, bribery, obstruction of justice and computer hacking.No one has been charged.

The committee said it would produce a supplementary report when all criminal proceedings finish.

The phone-hacking matter first shot to attention in 2006, when a British court convicted the News of the World's royal correspondent, and a private investigator, for intercepting the voice mails of aides to the British royal family. The following year, the court sentenced the pair to four and six months, respectively.

News Corp. long said the wrongdoing at the News of the World was isolated to those two individuals—a claim the company later admitted was false. The scandal exploded more prominently last July with the revelation that in 2002 the News of the World hacked the phone of a missing 13-year-old girl who turned out to be murdered.

Tuesday's report criticizes News Corp. for throwing money at both perpetrators and victims to "buy silence" and making "misleading and exaggerated claims" about internal company investigations in a deliberate strategy to exaggerate evidence in support of the company's innocence.


For more organic SEO and web optimization related news, visit the SEO Done Right blog.
For national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For healthcare and medical related news, visit the Healthcare and Medical blog.
For law related news, visit the Nation of Law blog.
For real estate and home related news, visit the  Commercial and Residential Real Estate blog.
For technology and electronics related news, visit the Electronics America blog.

British Broadcasting Giant in Deep for Email Hacking

Story first appeared in The New York Times.

LONDON — Sky News, a British satellite news broadcaster whose parent company is part-owned by a News Corporation, admitted Thursday that one of its reporters had hacked into e-mails on two occasions while pursuing news stories, the first time that Britain’s hacking scandal has spilled into television news.

The acknowledgment came just two days after the News Corporation's son resigned as chairman of Sky’s parent company, British Sky Broadcasting, or BSkyB. Company officials said there was no link between the resignation and the hacking revelations, which were made public only as a result of a recent inquiry by the newspaper The Guardian.

Sky said the hacking, while illegal, had been authorized by its executives for journalistic reasons — in pursuit of a story that benefited the public interest — and in one instance had helped a police investigation. And the company said that a continuing review of its e-mail records and accounts had so far turned up no evidence of impropriety in Sky’s reporting practices.

The admission came after months of overlapping police, parliamentary and judicial inquiries into phone hacking, e-mail hacking and paying bribes to public officials at two company-owned tabloids, The Sun and the now-defunct News of the World. In general, broadcasters abide by higher standards of news gathering in Britain than newspapers do. Sky News operates separately from the newspaper business and has asserted its independence by aggressively reporting on News Corporation’s troubles.

Still, the disclosures of e-mail hacking come at an awkward time for BSkyB, which is 39.1 percent owned by News Corporation and which has suffered from its association with the owners as the hacking scandal has unfolded.


Last summer, stung by sustained criticism in Parliament and across Britain, News Corporation withdrew one of the owners' cherished goals: its $12 billion bid to take over the portion of BSkyB that he did not own already. On Tuesday, in announcing the chairman's resignation from BSkyB, the company said the continuing phone hacking investigation was making him a lightning rod for dissatisfaction and proving distracting to the company.

A report from a House of Commons select committee investigating phone hacking is scheduled to be released within the next few weeks, and is expected to criticize the chairman for what some members believe was incomplete and misleading testimony during hearings last summer.


A representative of Sky said Thursday that one of the e-mail hacking cases occurred in 2008 and concerned a Briton who staged his death in a fake canoeing accident in 2002 but actually moved to Panama and, in collusion with his wife, collected £500,000 in life insurance.

Known in the tabloids as the “canoe man,” he returned to Britain and lived in a secret apartment in his old house until 2007, when he turned himself in to a police station, claiming at first to have no idea what he had been doing for the last five years.

The next year, a Sky News reporter pursuing the story sought permission to hack into e-mails he suspected had been used by the Darwins to communicate after the fake death.

A second case involved e-mails relating to a suspected pedophile, a spokeswoman for Sky News said. On both occasions, she said, the managing editor of Sky News authorized the hacking.

The company likened the e-mail hacking to other instances in which journalists broke the law for the sake of journalism. In 2004, Sky News journalists bought an Uzi machine gun to highlight how easy it was to buy illegal weapons in Britain. The year before, a reporter penetrated airport security to show how porous it was.

BSkyB has suffered various upheavals in the last year. As a result of the allegations surrounding the Murdochs’ newspaper business in Britain, the broadcaster is being investigated by Ofcom, the British broadcast regulator, over whether it is “fit and proper” to hold a television license.

Critics seized on Sky’s disclosures as evidence of impropriety at the company.


But the head of Enders Analysis, a media research firm in London, said she thought that the biggest potential obstacle to BSkyB’s retaining its broadcast license had been the chairman, and that his resignation had removed much of the problem.

For more organic SEO related news, visit the SEO Done Right blog.
For more business related news, visit the Peak News Room blog.