Closing In

07.09.13

Rupert Murdoch Recalled to Parliament as Police Launch Investigation

The media mogul will be hauled back before Parliament for a second grilling at the hands of British M.P.s as police confirm a Murdoch investigation.

Rupert Murdoch is under investigation by Scotland Yard after secretly recorded tapes appeared to contradict public denials that his staff made payments to police officers.

Confirmation that investigators were seeking to obtain the explosive recordings came as the media mogul was ordered to return to Parliament for a second grilling by M.P.s. The last time he gave evidence at a select-committee hearing, along with his son James, Wendi Deng leaped up to foil a foam-pie attack on her husband.

When he returns to answer questions in the autumn, circumstances will have changed: his son is sidelined, the company divided, and his wife will offer no protection.

Assistant Commissioner Cressida Dick, the senior Scotland Yard officer in charge of phone-hacking and related inquiries, confirmed that the police were actively investigating the tapes, which were recorded during a meeting with his London staff earlier this year.

At his first appearance in Parliament two years ago, Murdoch emphatically said that paying police for stories was “wrong.” However, in a transcript of a secretly recorded meeting with Sun journalists, released by ExaroNews last week, Murdoch claimed that payments to police were “the culture of Fleet Street.” He conceded to his journalists, many of whom had been arrested for alleged bribes to public officials, that it was a practice he “inherited” when he took over the now shuttered News of the World and the Sun paper over 40 years ago. “We’re talking about payments for news tips from cops,” he said. “That’s been going on 100 years, absolutely.”

Dick confirmed, "We are seeking to obtain tapes of the meeting with Rupert Murdoch." According to reports, the police launched a new line of investigation into the revelations last week. An anonymous chief inspector on Operation Elveden, specifically charged with looking at corrupt payments to public officials, told ExaroNews that they wanted to examine the material for “evidence of conspiring to commit misconduct in a public office.”

According to the PressGazette, Exaro is now organizing a handover of all the evidence it has, including two digital recordings, to the Metropolitan police.

“The only surprise is that it has taken this long,” said phone-hacking lawyer Mark Lewis.

This is the first time Murdoch himself has been the subject of investigation since the phone-hacking scandal erupted two years ago. Dick also told the Home Affairs Select Committee that Scotland Yard had identified 5,500 potential victims of phone hacking, 419 potential victims of paid leaks by public officials, and 154 allegations of computer hacking. More than 125 people been arrested; 42 of them have been charged. Dick’s deputy, Cmdr. Neil Basu, said the police were “anticipating further arrests ... in the coming weeks or months.”

The senior police officers also confirmed that the Management and Standards Committee, set up by News Corp. two years ago to trawl for evidence of misconduct in over 300 million internal emails, had stopped cooperating with the police on “voluntary requests” for information and that all new requests were being filed through the courts. This seems to corroborate evidence on the tapes. “All I can say is for the last several months,” Murdoch was recorded as saying to his staff in March, “the MSC has told the police, has said, ‘No, no, no—get a court order. Deal with that.’”

As a result of the scandal, Murdoch split his $70 billion media company in two at the end of last month, hiving off the lucrative pay-TV assets into a new company, 21st Century Fox, and leaving a much reduced News Corp. to bundle up the troubled publishing assets. According to SEC filings, it is this rump company which will be left with liability for any crimes.

The company has still to finalize its settlement with the Department of Justice over liabilities under the Foreign Corrupt Practices Act, which makes corrupt payments to foreign officials subject to heavy fines and potential imprisonment of executives. A write-down of News Corp. stock suggests that this figure could be as high as $1.2 billion, making it the biggest corporate fine since Murdoch’s friend Michael Milken and the Drexel Burnham scandal.

After news of the Murdoch tapes broke last week, Labour M.P. Tom Watson wrote to the chairman of the U.S. Senate Committee on Commerce, Science, and Transportation. “Mr Murdoch’s replies,” Watson told Sen. Jay Rockefeller, “demonstrate a significant level of knowledge of the practice and a shocking contempt for the police investigation into it ... Perhaps even more sinister is his confirmation that his organisation will ‘hit back’ at the police because of their investigation,” Watson added.

Labour M.P. Chris Bryant, who also used to sit on the Culture, Media, and Sport Committee, said the parliamentary recall and police inquiries were “long overdue.” “The ‘I know nothing’ defense was blown apart by the secret recordings,” Bryant tells The Daily Beast. “There are several possible areas for charges, including corporate ones.”

Meanwhile, lawyer Mark Lewis, who represents several phone-hacking victims, including the family of murdered teenager Milly Dowler, agreed that “the only surprise is that it has taken this long.”