Rupert Murdoch's News Corp. Scandal

10.15.12

Rupert Murdoch’s Future Rests on News Corp. Shareholders Meeting

The embattled mogul could be voted out Tuesday at News Corp.’s annual shareholders meeting in Los Angeles, and his attempts to stifle rebellion appear ruined by more bad news. Peter Jukes on the damning new reports.

After a weekend during which Rupert Murdoch seemed to push back against the phone-hacking scandal that closed his oldest paper, News of the World, and scuppered his biggest-ever media bid for BSkyB, two new revelations on Monday seem to embroil the embattled media mogul further.

Lord Justice Brian Leveson is due to make his report to the prime minister on press ethics in a month’s time, and there has been a vociferous campaign in the U.K. press to question his findings in advance, especially if they put regulation of the press under any statutory obligation.

On Saturday, Murdoch joined in the fierce debate, tweeting that the members of the Hacked Off campaign, representing phone-hacking victims, who had lobbied Prime Minister David Cameron during the Conservative Party conference, were “scumbag celebrities.”

The actor Hugh Grant is one of the more vocal campaigners for Hacked Off, and he was at the meeting with the prime minister. But so too was a former police officer, Jaqui Hames, and the singer Charlotte Church. Hacked Off also has the support of the family of Milly Dowler, the 13-year-old murder victim whose phone was hacked by News of the World. Both Hames and Church took to Twitter to remonstrate with the media mogul, demanding an apology. The American actor Alec Baldwin replied, in response to a request for comment from The Daily Beast, that the statement raised questions about Murdoch’s “fitness to run an international media company.”

Baldwin’s comment was particularly barbed, as the annual general meeting of News Corp. shareholders takes place on Tuesday in Los Angeles. A parliamentary report into phone hacking in May also dubbed Murdoch “not fit” to run an international corporation.

Last year, the independent shareholders voted by large majorities to exclude his two sons, Lachlan and James, from the board. Because of the varying voting rights of different shares, the Murdoch family could ignore the demands of the independent shareholders. But now some large shareholders have declared they intend to vote against Rupert Murdoch as chairman, including the CalPERS pension fund and fund managers Hermes and Legal & General.

Dozens of ‘embarrassing emails’ among Brooks, Coulson, and Cameron were withheld from the Leveson Inquiry on advice from government lawyers because they weren’t ‘relevant.’

As both chairman and CEO of News Corp., Murdoch is in charge of a company now capitalized as the second-largest media conglomerate in the world. He also is responsible for corporate governance during the period when major News Corp. subsidiaries have been accused of phone and computer hacking, satellite-card piracy, and bribing state officials.

Two new reports have surfaced in the British press on the eve of the shareholders meeting to make it even more uncomfortable still. The Financial Times led its front page on Tuesday morning with a report that the disgraced former CEO of News International, Rebekah Brooks, who resigned during the height of the hacking scandal, received a $12 million payout when pension, salary, legal fees, and other perks are included, more than four times the sum previously disclosed. The FT alleges that she and her friend, former lieutenant, and chief government press officer Andy Coulson, have stringent “claw-back” clauses in their severance packages. Both Coulson and Brooks faces multiple charges of phone hacking and perverting the course of justice, and are due to stand trial later next year.

Meanwhile The Independent newspaper claims, on its front page Tuesday, that dozens of “embarrassing emails” among Brooks, Coulson, and Cameron were withheld from the Leveson Inquiry on advice from government lawyers because they weren’t “relevant” to the public inquiry into press ethics. Since the Leveson Inquiry has already disclosed almost weekly meetings between senior government ministers and News Corp. executives in the run-up to the hacking scandal, it’s hard to imagine what could be more embarrassing still.