News Corp. Faces Expanding Scandal As More Reporters Arrested

News Corporation's The Sun faces a similar mess that sunk News of the World. In fact, the situation is even worse. Five more reporters were arrested for improper payments to police in a widening corruption and hacking scandal:

Four senior journalists from The Sun newspaper have been balied after they were arrested in dawn raids today over allegations of inappropriate payments to police.

In another devastating blow to News International police questioned five men from the paper on suspicion of corruption, aiding and abetting misconduct in a public office and conspiracy.

The five members of Sun staff, all believed to be men aged between 45 and 68, are thought to be deputy editor of the paper Geoff Webster, chief reporter John Kay, picture editor John Edwards, deputy news editor John Sturgis and chief foreign correspondent Nick Parker.

A 39-year-old Ministry of Defence employee and the 36-year-old member of the Armed Forces have also been bailed to a date in May, Scotland Yard said.

One other journalist from the newspaper is still in custody over the probe into inappropriate payments to police and public officials.

Fears that the latest arrests could lead to News International owner Rupert Murdoch closing the title as he did with the News of the World has led to the Australian reassuring staff of his commitment to the title.

The surprise move by police which comes on a day when nearly all Sun staff are out of its offices comes just a fortnight after the paper's former managing editor and three of its most senior journalists were also held and then bailed over corruption allegations.

This is part of an ongoing pattern of business carried out by News Corporation news outlets in the United Kingdom, and the carousel of editors and reporters that has gone between the newspapers shows that the problems are widespread and aren't necessarily limited to just The Sun (and the now defunct News of the World). That's why the investigations continue and arrests continue to be made.

But the real issue is that the culture of News Corporation aided and abetted these kinds of ethical and moral choices that have led to so many arrests.

Rupert Murdoch may be claiming that he's got zero tolerance for this kind of behavior, but his bottom line approach means that as long as his papers sell and he can out-scoop the competition, he'll look the other way. Thus far, he's saying that he wont shutter The Sun, even though the pattern of behavior at the paper is akin to that of News of the World, which he did close.

Pressure is only going to increase on Murdoch to shutter the paper, and will raise the stakes on his newspaper and reporting business even further.

New Troubles For News Corp; Emails Show Top Execs Knew of Hacking

The smoking gun may have emerged that would strike at the heart of News Corporation as it continues to push back against allegations that top executives didn't know of the hacking work done by staffers at its various news outlets in the United Kingdom. Turns out that they did know, and they have the emails to prove it:

Clive Goodman, the former royal reporter jailed for his role in phone hacking, wrote a letter in 2007 claiming that phone hacking was "widely discussed" at editorial meetings, and that former editor Andy Coulson offered to let him keep his job if he agreed to say in court that he was a rogue element within the paper.

The claims are deeply damaging to Coulson, who has always maintained that he did not know about the hacking going on at his paper. They are also politically perilous for Cameron, who took Coulson on even as evidence mounted against him. Moreover, they raise fresh danger for James and Rupert Murdoch, both of whom claimed to know nothing about hacking. Before the documents were released, the select committee for the Department for Culture, Media and Sport announced that it is "likely" to recall James Murdoch when Parliament resumes in September.

The letter was one of several documents published by a parliamentary committee on Tuesday afternoon.
Goodman's letter is from March 2, 2007, after he was released from prison. In the letter, Goodman says he is appealing his firing from the News of the World specifically because he carried out his duties with the "full knowledge and support" of top journalists on the paper, and because the practice was so widespread at the paper.

The letter claims that hacking was so frequently talked about that Coulson—who went on to become David Cameron's top spin doctor—eventually was forced to ban mention of the practice. Goodman also says that he was repeatedly promised to be kept on, even after he was arrested. He further claims that the paper continued to pay and consult him on stories, even after it was known that he would plead guilty.

"[The paper's top lawyer] Tom Crone and the editor promised on many occasions that I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation plea," Goodman writes. "I did not, and I expect the paper to honour its promise to me."

The Guardian's Nick Davies also reports that Les Hinton, the former Dow Jones chief who resigned amidst allegations about his role in the scandal, received a copy of Goodman's letter but failed to pass it to the police. He then told Parliament that Coulson was completely unaware of the hacking going on.

Expect to see the Murdoch's hauled back before the British Parliament to deal with the new revelations, particularly because their earlier statements now look more and more like a coverup.

News Corp Gearing Up For Scandal Spreading To US?

News Corp is busy hiring big-name lawyers to represent different portions of the company in the US against possible legal action from the hacking scandal that threatens to overtake the company in the UK.

The company's nine independent directors hired former Manhattan U.S. Attorney Mary Jo White and former Attorney General Michael Mukasey, who served under President George W. Bush.

The directors are said to be increasingly concerned about Rupert Murdoch's stewardship of the firm and appear to be bracing for new U.S. legal trouble.

By denying knowledge of the phone hacking, bribery and hush money rampant at News of the World, experts said Rupert Murdoch and his son James may have left themselves open to shareholder charges of incompetence.

Separately, The Wall Street Journal reported News Corp. hired Washington lawyer Mark Mendelsohn, a top expert in the Foreign Corrupt Practices Act.

These are prudent moves that any corporation would have to take, but it also signals just how serious the company is considering the possibility of charges in the US. They're worried about shareholder suits and criminal investigations.



At the same time, there are reports that there are still other news outlets in the UK that engaged in similar behavior, including ones that aren't affiliated with News Corp. They include The People (operated by The Mirror Group) and even Piers Morgan was accused of such tactics before coming to CNN.

On Tuesday, a member of Parliament accused the CNN anchor Piers Morgan of phone hacking when he was the editor of The Daily Mirror. Mr. Morgan strenuously denied the accusations and demanded an apology. And last week, news reports showed that the actor Jude Law has brought a hacking lawsuit against The News of the World’s sister newspaper, The Sun.

Five former journalists at The News of The World’s rival Sunday newspaper, The People, run by the Mirror group, said in interviews that they regularly witnessed hacking in that newsroom in the late 1990s to early 2000. “I don’t think anyone quite realized the criminality of it,” said one former reporter at The People, who spoke on condition of anonymity. A former reporter for the Sunday Mirror, another News of the World rival, described the extensive use of private detectives to obtain personal information. A former senior News of the World editor, Neil Wallis, who has been arrested on unspecified accusations of phone hacking, left The People in 2003 to join the Murdoch tabloid.

Nick Fullagar, director of communications for Trinity Mirror, the parent company of The Daily Mirror and The People, said, “Trinity Mirror’s position is clear. Our journalists work within the criminal law and the P.C.C. code of conduct,” referring to Britain’s press regulatory body, the Press Complaints Commission. Within Mr. Murdoch’s empire, the flagship daily tabloid The Sun has also been accused of hacking phones. The lawsuit by Mr. Law, filed last month, says that four articles published in 2005 and 2006 were based on intercepted voice mail.

It also comes as no surprise that News Corp affiliates are soft-pedaling the news coverage; the Fox News Network has devoted a fraction of the coverage that CNN or MSNBC has done, and the NY Post has all but buried the scandal as compared to either the Daily News or the NY Times. The Wall Street Journal has covered the story prominently, but that's the exception rather than the rule.

The scandal is also threatening to take down the British government as new revelations about the hiring of former News of the World editor Andy Coulson as Prime Minister David Cameron. Apparently, he didn't undergo the usual top level background checks of others up for similar positions.

Murdoch's Get Grilled By British Parliament; NY Post Silent

Rupert Murdoch, his son James, and Rebekah Brooks are all facing angry British Members of Parliament over the hacking scandal that has resulted in the shuttering of the News of the World and multiple resignations and arrests, including Brooks.

So why is it that the NY Post doesn't have a single link on the front page to the big news of the day - that the Murdoch's are being grilled by the MPs in the UK.

I wonder.

At least the Wall Street Journal is carrying the hearings live (it's another Murdoch-owned paper).

For more coverage, see the NY Times or Memeorandum.

The News Corp. Hacking Scandal Grows Out of Murdoch's Control

Rupert Murdoch attempted to engage in damage control on Friday, even as two of his top corporate allies resigned on Friday, Les Hinton and Rebekah Brooks. This morning, the other shoe dropped on Brooks, as she was arrested in connection with the British hacking scandal.

No amount of apologies and promises of compensation will make good on the fact that Murdoch's company condoned all manner of illegal activities in the United Kingdom over a period of years.

All the years of shady behavior, criminal violations, and unethical behavior is coming home to roost and Murdoch's media empire is crumbling all around him.

British Labour Party leader Ed Miliband is calling for an overhaul of British media ownership rules, essentially breaking up News Corp's hold on media outlets.

In a fresh salvo against Mr Murdoch's News Corp, the Labour leader said he wanted to forge a cross-party agreement on plans that would reduce the media mogul's UK market share.

In an interview with The Observer, he said: ''I think he has too much power over British public life.''

The News Corp empire has been diminished with the closure of the News of the World over the phone hacking scandal, but it still owns The Sun, The Times, The Sunday Times and 39 per cent of BSkyB.

Having already called successfully for the resignation of Rebekah Brooks, the News International chief executive, Mr Miliband said the Government now needed to look at media ownership rules.

He said: ''I think that we've got to look at the situation whereby one person can own more than 20 per cent of the newspaper market, the Sky platform and Sky News.

The scandal is also likely to claim individuals within Scotland Yard, and the all too cozy relationship between the police force and the media outlets has turned into efforts to control the damage. Heads should roll within the police force:

Inside was a treasure-trove of evidence: 11,000 pages of handwritten notes listing nearly 4,000 celebrities, politicians, sports stars, police officials and crime victims whose phones may have been hacked by The News of the World, a now defunct British tabloid newspaper.

Yet from August 2006, when the items were seized, until the autumn of 2010, no one at the Metropolitan Police Service, commonly referred to as Scotland Yard, bothered to sort through all the material and catalog every page, said former and current senior police officials.

During that same time, senior Scotland Yard officials assured Parliament, judges, lawyers, potential hacking victims, the news media and the public that there was no evidence of widespread hacking by the tabloid. They steadfastly maintained that their original inquiry, which led to the conviction of one reporter and one private investigator, had put an end to what they called an isolated incident.

After the past week, that assertion has been reduced to tatters, torn apart by a spectacular avalanche of contradictory evidence, admissions by News International executives that hacking was more widespread, and a reversal by police officials who now admit to mishandling the case.

Murdoch is likely to be grilled by British parliamentarians on Tuesday, and some of the luster and fear of crossing him has faded in the UK.

FBI Opens Investigation Into News Corp. At Behest of Bipartisan Political Pressure

The noose is tightening around News Corporation and Rupert Murdoch's media empire. Rep. Peter King (R-NY) has penned a letter to the FBI demanding that it open an investigation into whether any of News Corporation's affiliates engaged in wrongdoing, including wiretapping or hacking into voice mail accounts of victims of the 9/11 attacks.

The inquiry was prompted in part by a letter from Representative Peter T. King, Republican of New York, to Robert S. Mueller III, the F.B.I. director, in which he asked that the bureau immediately open an investigation of News Corporation, citing media reports that journalists working for its subsidiary, The News of the World, tried to obtain the phone records of 9/11 victims through bribery and unauthorized wiretapping, the people said.

The decision to open a case in New York stemmed from the mushrooming hacking scandal that has wracked Britain for days, ever since The News of the World admitted that it had illegally intercepted the voice mail of Milly Dowler, a 13-year-old girl abducted and murdered in 2002. It also follows a decision by the News Corporation chairman, Rupert Murdoch, to withdraw from the biggest media takeover bid in British history.

The investigation was expected to be handled jointly by two F.B.I. squads in the bureau’s New York office, one that investigates cybercrimes and another that focuses on public corruption and white collar crimes, one of the people said. They all spoke on the condition of anonymity because they were not authorized to discuss the case.

That follows similar calls from Senators Frank Lautenberg (D-NJ), Jay Rockefeller (D-WV) and Barbara Boxer (D-CA) and Rep. Louise Slaughter (D-NY) among others.

The British Daily Mail had alleged that the News of the World attempted to access the voice mails of victims of the 9/11 terrorist attacks or other Americans but thus far the Guardian has been unable to verify that report. With the FBI entering into the fray, this matter is going to come to a head.

If the FBI finds that one of News Corporation's outfits engaged in this kind of action, the gig will be up for the company and puts everyone associated with those media outlets in jeopardy - particularly editors and reporters who used that information or knew or had reason to know how such information was obtained, or condoned those kinds of activities.

The Coming Downfall of News Corp.

News Corporation, which owns the likes of Fox News, the Wall Street Journal, New York Post, and British Papers such as the Sun and now-shuttered News of the World, and film and publishing companies is on the ropes following disturbing revelations about its improper conduct at several of its British papers over the past decade including hacking of voice mail accounts, bribing public officials, and a whole laundry list of other malfeasance.

As a result, Rupert Murdoch has abandoned his efforts to take over the British BSkyB television network.

A company statement quoted Chase Carey, News Corporation’s Deputy Chairman, President and Chief Operating Officer, as saying “We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has become clear that it is too difficult to progress in this climate.”

“News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it,” the statement said.

The development also seemed to end what, for years, had been a close, cozy and influential relationship with the British establishment.

Only hours before the announcement, Prime Minister David Cameron had sought to distance himself from Mr. Murdoch and had urged him to drop the bid for BSkyB. The announcement came just before Parliament was set to approve a cross-party call for Mr. Murdoch to abandon his long-cherished desire to take full control of the lucrative satellite broadcaster.

The scandal has also convulsed the British politicians, press and police, forcing them to contemplate unheard-of scrutiny of their ties with each other.

On Wednesday, Mr. Cameron offered details for the first time of a broad inquiry into those relationships to be led by a senior judge, Lord Justice Leveson. Mr. Cameron told Parliament that it would have the power to summon witnesses to testify under oath. The announcement came as Mr. Cameron fought to recover the initiative in a scandal that has turned into potentially the most damaging crisis of his time in office.

That was after the British parliament united in its call for him to drop the takeover bid. News Corp's got to fight a rearguard action to keep the mess from spreading, but because so many within the organization have switched jobs within the company - going from one of the British papers to a US outlet, or vice versa (including those at the heart of the scandal in the UK), trying to contain this is like a wildfire that is splitting out in hundreds of different directions at once and can't be controlled.

If it turns out that Americans, including 9/11 victims, were among the victims of a hacking effort by News Corporation affiliates, the company and Murdoch would be finished. The FCPA (Foreign Corrupt Practices Act) is just the tip of the iceberg, and considering that there are inklings that they may have tapped phones, hacked accounts of 9/11 victims families, or otherwise engaged in illegal activities you're going to see prosecutors opening up cases in New York City and elsewhere.