Rupert Murdoch’s News of the World may have printed its final edition yesterday, but the fallout from the unethical and likely illegal activities of its former employees continues to swell. The phone-hacking scandal is beyond a headache for Rupert Murdoch — it’s become a crisis that is threatening his entire media empire.
Here’s a roundup of the most recent developments since late last week:
- On Friday, police arrested Prime Minister David Cameron’s former spokesman, Andy Coulson (who was in charge of the News of the World while it was trying to cover up its activities) and questioned him about the phone hacking scandal. He was released several hours later, but his troubles are far from over. Cameron is under fire for his decision to hire Coulson and is also being pressured to come out against News Corporation’s bid for BSkyB.
- The Guardian is reporting today that scumbags working for Murdoch papers (not just News of the World) harassed former Labour Prime Minister Gordon Brown for years. They evidently tried to get into his voicemail, his bank account, his legal file, and family medical records. “Brown was targeted during a period of more than 10 years, both as chancellor of the exchequer and as prime minister. Some of the activity clearly was illegal. Other incidents breached his privacy but not the law,” the article says.
- The BBC’s business editor reports that he has seen some revealing emails that show that News of the World apparently paid a police officer assigned to protect the royal family to get access to sensitive contact information. “In one of the dynamite e‑mails, Clive Goodman — the paper’s disgraced former royal editor — was requesting cash from the newspaper’s editor, Andy Coulson, to buy a confidential directory of the Royal Family’s landline telephone numbers, and all the phone numbers — including mobiles — of the household staff,” the BBC’s Robert Preston says.
- The Daily Mirror is reporting that a former New York police officer is alleging that News of the World employees wanted to pay him to retrieve voicemail recordings of victims of the September 11th attacks. The Mirror quoted its source (who is not named or described) as saying, “His presumption was that they wanted the information so they could hack into the relevant voicemails, just like it has been shown they have done in the UK. The PI [private investigator] said he had to turn the job down. He knew how insensitive such research would be, and how bad it would look.”
- Forbes reports that a group of News Corporation shareholders has amended a class action lawsuit they filed in Delaware chancery court against Murdoch and his board to take into account the events of this week and last. The suit, triggered months ago by a sweetheart deal, alleges that Murdoch and his family have been using News Corporation to enrich themselves at shareholders’ expense. The updated complaint contends:
Throughout his tenure, Murdoch has treated News Corp like a family candy jar, which he raids whenever his appetite strikes. Ignoring the distinction between the business of a public corporation and a family business, the Board has repeatedly permitted Murdoch to: (i) intertwine rampant nepotism in the conduct of Company business; (ii) undertake actions designed to maintain his control over News Corp; (iii) use News Corp resources for his own personal and political objectives; and (iv) reward himself handsomely with excessive compensation.
Meanwhile, Murdoch’s bid to take over BSkyB appears to be in increasing danger of being nixed. Britain’s Labour Party has called for a vote on the matter, and the Liberal Democrats have signaled they’ll back Labour in voting to block News Corporation’s acquisition of the broadcaster. Deputy Prime Minister Nick Clegg, the leader of the Liberal Democrats, told the BBC:
Rupert Murdoch is now in town in London seeking to sort things out. I would simply say to him, look how people feel about this. Look at how the country has reacted with revulsion to the revelations.
So do the decent and sensible thing and reconsider: think again about your bid for BSkyB.
News Corporation has formally withdrawn its (fake) promise to make Sky News independent so that it could avoid a deeper regulatory review of its BSkyB bid. The move means that the deal will now go before Britain’s Competition Commission. Murdoch and his executives may have decided to do this out of the realization that their takeover bid had already been jeopardized for the time being. They may be hoping to keep the bid alive long enough to weather the storm. Whether their strategy will actually work is another matter. We hope it doesn’t.