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Murdoch in Free Fall - Credibility Gone Billions to Follow

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Rupert and James Murdoch conjured up a fictional report that serves as the fig leaf used to cover the naughty secret of News Corporation --- they never investigated phone hacking in general and they never tried to clean house.

The House of Commons committee investigating Rupert Murdoch's United Kingdom media properties released new evidence this week. The evidence elaborates on themes generated at the committee hearing of July 19 and adds new information to the toxic brew that threatens to drown the largest media company in the world. (Images: Hubert Burda Media, L, World Economic Forum)

At the July 19 hearing of the House of Commons Media, Sport and Culture Committee (Commons committee), Member of Parliament (MP) Tom Watson asked both Rupert and his son James Murdoch if either was aware of the "for Neville" memo concerning the 2008 phone hacking settlement by the News of the World (NoW). The Murdoch paper's on-staff private detective, Glenn Mulcaire, was caught tapping the voicemail of Gordon Taylor, chief executive of the Professional Footballers Association.

Rupert and James Murdoch both denied any knowledge of the memo prior to the extraordinary 725,000 Sterling out of court settlement of the Taylor suit.

The memo described, "" the way senior staff at the NoW had been involved in systematic hacking -- the very thing the paper had been strenuously denying all along, not only to Taylor's lawyers, but to its readers, parliament and public." (Guardian.co.uk, July 22)

Had either Murdoch seen the summary legal memo seeking approval of the Taylor settlement, they would have known that NoW was involved in widespread phone hacking and other illegal surveillance of news figures. That would contradict their ongoing denials that these illegal activities were common practice. More troubling, if true, it would mean that one or both of them lied at the July 19 hearings of Commons committee.

This seemed to be the most explosive issue to be addressed by the evidence released by the Commons committee this week. As it turns out, there is even more devastating evidence of what seems like unmistakable, broad based deception of the House of Commons by the Murdochs starting in 2009.

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Bad News for News Corporation from New Documents Released

Tuesday's release of information contains letters from former NoW legal executive Tom Crone and former NoW editor Colin Myler that are unambiguous. Both were sure that James Murdoch had reviewed the "for Neville" memo outlining the rationale for a huge settlement in the Taylor phone hacking case. Crone said, "I have no doubt that I informed Mr. [James] Murdoch of it's existence [the memo], of what it was, and where it came from." (letter to Commons Committee, August 6). James Murdoch continues to claim he never saw the memo.

The evidence released contained a more sinister implication for Rupert and James Murdoch. They invented and described an investigation and report that provided NoW with a clean bill of health in 2007. There's just one problem with that assertion, according to the News International executives and outside counsel who supposedly conducted the investigation and provided a report. No such activities took place. No such report was issued. This is outlined in two documents.

The first document is from former News International legal executive Jon Chapman. (letter to Commons committee, August 11) In 2007, Chapman and the head of IT were tasked with reviewing emails relating to the trial of a NoW employee for phone hacking, Royal Family correspondent Clive Goodman.

Chapman details how this limited review of emails relating to one case has been trumpeted as a thorough general investigation of phone hacking and other intrusive practices. Chapman's letter cites extensive testimony by News Corporation executives at a 2009 Commons committee hearing claiming that the 2007 simple review was a major investigation and that NoW and News International thought there had been no broader illegal activity. Chapman makes clear that this was a limited investigation, a review of emails related to Goodman's case only, and that there was no exculpatory report on NoW's journalistic practices.

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During the July 19 Commons committee testimony by Rupert and James Murdoch, there are clear references to a "report" from Chapman and outside counsel on the matter. In response to a question by Conservative MP Paul Farrelly (237) about investigations of phone hacking at NoW, James Murdoch responded: "I think it was Mr Chapman at the time, along with Mr Myler, who testified to this effect -- took a report. From then, the opinion was clear that as to their review, there was no additional illegality in respect of phone hacking in that file. As to their review, that opinion was clear. The company really rested on a number of things from then on." (Commons committee, July 19, p. 30)

James quotes a report that doesn't exist and a conclusion that could never be inferred from the limited review, as Chapman describes it. Of course, there was "no additional illegality" reported. The email review was focused only on one case, that of Clive Goodman. Through a slight of tongue, James implies that the Murdoch group had done their very best to investigate but could find no widespread hacking. This is pure fantasy.

Rupert Murdoch was asked about 2007 comprehensive efforts to assure there was no illegal surveillance. In response to a question from Mr. Farrelly (348) at the July 19 hearing, Murdoch says:

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