New letters bring scandal closer to Rupert Murdoch

AP News

8/17/2011 6:38:43 PM - AP News

Rupert Murdoch is back on the hot seat of Britain's phone hacking scandal after new documents appeared to contradict the testimony of his son and his former right-hand man.

As Murdoch executives who lost their jobs in the wake of the News of the World's closure begin pointing fingers, those who have watched the Murdoch business say that his son James and confidant Les Hinton have questions to answer.

"This is pretty devastating," Murdoch biographer Michael Wolff said of the newly released documents, claiming that they showed that the "people who Rupert speaks to every day ... are people who were deeply engaged in the cover up of what was going on at the News of the World."

Among those implicated in the latest release is former News International Ltd. Executive Chairman Les Hinton, a man so close to Murdoch that the 80-year-old tycoon told lawmakers last month that he would trust him "with my life." News International is a subsidiary of Murdoch's News Corp.

Correspondence published Tuesday by U.K. lawmakers investigating the scandal show that Hinton, who published the News of the World, was warned more than four years ago that phone hacking was endemic at the now-defunct tabloid. He was also told that senior journalists there approved of the practice, and that the paper's then-editor, Andy Coulson, knew about it.

The charges were made in a letter sent by Clive Goodman, the ex-News of the World journalist whose arrest on phone hacking charges several years ago first brought the practice into the spotlight.

Hinton was the one who'd written to Goodman firing him over the phone hacking and he was one of two senior executives copied in on the March 2, 2007 missive.

Hinton did not mention Goodman's warning when testifying before lawmakers on the matter four days later.

In his March 6, 2007 appearance before the House of Commons' media committee, Hinton assured parliamentarians that no one else at the paper had been engaged in phone hacking, adding that he believed "absolutely" that Coulson knew nothing about it either.

It was later that year that Hinton became chief executive of Dow Jones & Co. and the publisher of its flagship newspaper, the Wall Street Journal. It was the crowning achievement of a career that had seen him work for Murdoch for more than five decades in various positions, including as chairman and CEO of Fox Television Stations.

But Hinton's loyalty couldn't save him from the scandal. He announced his resignation July 15, becoming News Corp.'s first U.S. executive to lose his job in the phone hacking scandal.

In his resignation letter, Hinton referred to what he'd told parliamentarians in 2009, claiming that there "had never been any evidence delivered to me that suggested the conduct (phone hacking) had spread beyond one journalist."

But Goodman's letter claimed the opposite, and Wolff said it was inconceivable that Hinton hadn't gotten it, that he hadn't read it, or that he'd somehow not understood its content.

"I cannot see any other reasonable explanation for this except: 'Les lied,'" Wolff said.

Hinton did not immediately return a message seeking comment at his New York home Wednesday. But in his July resignation statement he stressed that he'd told lawmakers back in 2007 that News International was still investigating the scandal.

One governance expert argued that the apparent contradiction between what Hinton was saying in public and what he was being told in private didn't amount to proof of dishonesty.

"'No evidence' means 'nothing hard and fast,'" said Charles Elson, who heads the University of Delaware's John L. Weinberg Center for Corporate Governance.

Elson noted that accusations from disgruntled employees are common in the business world and that News International had rightly brought in a London law firm Harbottle & Lewis to review Goodman's claims.

Although the Murdochs and Harbottle & Lewis now dispute the scope and the conclusions of that review, Elson said Hinton might well have interpreted it to mean that Goodman's accusations had been disproved and thus were "not really evidence."

But as to why Hinton told parliament in early 2007 _ well before the review had even begun _ that he was convinced that no one else was involved, Elson said: "You'd have to ask Hinton." It isn't just Hinton whose credibility has come under scrutiny. The trustworthiness of Murdoch's son James, the heir apparent to his father's media empire, has been challenged as well.

The younger Murdoch gave a lawyerly performance at last month's dramatic media committee hearing in London, saying he'd been assured that the phone hacking issue had been dealt with and claiming that he wasn't told the full story by his subordinates.

Not so, according to three former senior executives with News International.

"Nobody kept Mr. James Murdoch or any other News International/News Corporation executives from being in full possession of the facts," ex-News International lawyer Jonathan Chapman said in another one of the letters published by the committee Tuesday.

Former legal adviser Tom Crone also contradicted James Murdoch's insistence that he wasn't aware of a damning piece of evidence _ in an email _ suggesting that phone hacking had been widespread at the News of the World.

Crone, who left News International shortly after the phone hacking scandal broke, insisted he'd flagged the email to Murdoch's attention in June 2008. He was backed up by Colin Myler, who replaced Coulson as the News of the World's editor and has since also lost his job.

Amid the claim and counterclaim, lawmakers on the media committee have suggested that James Murdoch could be recalled for a further grilling.

"There seems to be a question as to whether James Murdoch himself misled the committee," opposition lawmaker Tom Watson said Tuesday. "We have not reached a conclusion on that."

News International said in a statement Tuesday that "we recognize the seriousness of materials disclosed" and pledged to work with "relevant authorities" as they investigate allegations of wrongdoing.

Even as the pressure mounts on Murdoch's entourage, others caught up in the phone hacking scandal may be able to breathe a little easier.

The Independent Police Complaints Committee, Britain's law enforcement watchdog, announced Wednesday that it was dropping its investigation into four former top police officials, including former London police Commissioner Paul Stephenson.

Stephenson resigned amid allegations that police didn't properly investigate the wrongdoing at the News of the World because of their close ties to the Murdoch empire _ accusations that have shaken Britain's most important police force at a time of budget cuts and rising social unrest.

Misconduct probes into John Yates and Andy Hayman, both former assistant commissioners, were also dropped, as was an investigation into Peter Clarke, a former deputy assistant commissioner, the police watchdog said.

The watchdog's deputy chair, Deborah Glass, said that while revelations about senior police officers' close ties with Murdoch executives _ including meetings, lunches and dinners with people who've since been arrested _ had had an impact on public confidence in the force, her organization had to identify "what is, and what is not, conduct that needs to be investigated."

Prime Minister David Cameron, who had hired Coulson to work as his chief media aide despite allegations surrounding his tenure at the News of the World, suggested that he wouldn't have repeated the move today.

"If I had known then all the things I know now, then obviously I would have taken different decisions," he said during a visit to Cheshire on Wednesday.

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Ryan Nakashima in Los Angeles contributed to this report.

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Online:

The newly published documents: http://bit.ly/ovOSw3

The Independent Police Complaints Commission: http://www.ipcc.gov.uk/