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Rupert Murdoch 'Not Fit Person' to Lead News Corp., Lawmakers Say

Tuesday, 01 May 2012 07:09 AM

 

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News Corp. Chairman Rupert Murdoch is “not a fit person” to lead a major international company, U.K. lawmakers said, after his U.K. unit misled Parliament about the extent of phone hacking at its News of the World tabloid.

Murdoch “turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications,” the House of Commons Culture, Media and Sport Committee said in a report published in London. “This culture, we consider, permeated from the top throughout the organization and speaks volumes about the lack of effective corporate governance at News Corp.”

Three executives at the News International unit — Les Hinton, Tom Crone and Colin Myler — gave misleading testimony to the committee in 2009, the panel said. The company failed to disclose documents and made statements that “were not fully truthful,” and Murdoch, 81, and his son James must ultimately take responsibility, the lawmakers said.

The 11-member committee has been working on its report since July, when the Murdochs were summoned to testify about their roles in the scandal. They told a media-ethics inquiry last week underlings, particularly Crone and Myler, were to blame for their failure to detect any wrongdoing at the now defunct newspaper.

“The News of the World and News International misled the committee about the true nature and extent of the internal investigations they professed to have carried out in relation to phone hacking,” the panel said. “Their instinct throughout was to cover up rather than seek out wrongdoing.”

‘Powers of Recall’

The committee said that, had Murdoch been “entirely open” with shareholders and lawmakers, the extent of the hacking scandal would have been discovered months earlier.

“In his testimony and also the Leveson Inquiry, Rupert Murdoch has demonstrated excellent powers of recall and grasp of detail, when it has suited him,” the committee said.

U.K. telecommunications regulator Ofcom has said it will draw upon the report for its decision as to whether News Corp. is fit to hold a broadcasting license. Ofcom last week asked News Corp. to provide documents from civil cases involving phone hacking as it decides whether the matter has compromised the company’s ability to run British Sky Broadcasting Group Plc, the U.K.’s biggest pay-television provider.

Police probes into phone and computer hacking and bribery have led to about 45 arrests, including former News of the World editors Rebekah Brooks and Andy Coulson, once Prime Minister David Cameron’s communications chief. News Corp. closed the Sunday tabloid in July after revelations that the newspaper listened to voice-mail messages on the phone of a murdered schoolgirl.

‘Containment Approach’

After the hacking scandal first became public in 2006, with the arrest of a reporter, Clive Goodman, and a private investigator, Glenn Mulcaire, the company’s “containment approach” was to blame the crime on one “rogue reporter,” the panel said. It then shifted blame to “certain individual,” including Myler and Crone, “whilst striving to protect more senior figures,” notably James Murdoch, News Corp.’s deputy chief operating officer.

Myler and Crone ‘cannot be allowed to carry the whole of the blame as News Corp. has clearly intended,” the committee said. “The whole affair demonstrated huge failings of corporate governance.”

Myler and Crone, summoned before the Culture Committee last September, denied having misled it in 2009. Written evidence later sent to the committee and to the Leveson Inquiry showed that both had been told of claims that hacking had been more widely practised. Two years later, when James Murdoch accused them of keeping evidence from him, they replied that they had both known about it and showed it to him.

Hinton didn’t tell the truth about payments to Goodman and the extent of his knowledge of the voice-mail allegations, the lawmakers said today. Crone misled the panel about the significance of the first legal settlement with a victim of hacking, while he and Myler lied about their knowledge of the participation of other News of the World employees in criminal activity.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

© Copyright 2014 Bloomberg News. All rights reserved.

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