A Defence official was arrested last month in the same round of arrests that swept through the Sun’s upper ranks. (Scotland Yard also rounded up a police officer and a member of the armed forces that same day.) Scotland Yard isn’t the only agency looking into the activities of Murdoch’s tabloids. The FBI has long been reported to be investigating whether News Corp. is in violation of the U.S. Foreign Corrupt Practices Act (FCPA), which prohibits American companies from baying bribes to foreign officials. On Sunday, British papers reported that the FBI has told Scotland Yard it is “prepared to step in” if the British police fail to investigate the full extent of allegedly illegal activity in Murdoch’s tabloids. As Mike Koehler, an FCPA expert at Butler University, told The Daily Beast after last month’s arrests, the risk to News Corp. grows as the investigation expands from police to include the military and government.  “The issue when it comes to executives will be, did they authorize the payments, or did they know about them but fail to put a stop to them,” Koehler said.

For decades, the full story of Murdoch’s eventual acquisition of the Times Group has consisted of guesswork. He wooed the unions and editorial staff by promising jobs and independence—promises he rapidly broke. Many suspected a behind-the-scenes deal, and the diaries of Woodrow Wyatt, a confidante of both Murdoch and Thatcher, outlined the quid pro quos of political support. However, until now, any personal meetings between the Proprietor and the prime minister on the bid have been denied.

In a timely move, the Thatcher Foundation has just released papers detailing Murdoch’s secret lunch with Thatcher in January 1981. The fix is in. Murdoch (who had moved to the U.S. in 1973) promised to introduce Thatcher to President Ronald Reagan and key members of his entourage.  Meanwhile, the bid could be waved through on a technicality: The Times, though not The Sunday Times, was a money-loser. The rest—Murdoch’s unflagging support for Thatcher—is history.

Flash forward 30 years and Rupert’s son James, hoping to seal his role as heir apparent, planned to take over the whole of BSkyB, Britain’s monopoly pay-TV satellite service. The move would breach competition law and the stringent “pluralism’” test of the broadcasting regulator Ofcom. But in 2008, in his first major speech as News Corp senior executive, James called for Ofcom’s powers to be removed. In July 2009, the Conservative Party leader David Cameron made a similar speech. A month later, at the Edinburgh Television Festival, James called for the BBC to be downsized. Two months later the Sun, now under the direct control of James, reversed twelve years of Labor support. At the general election in 2010, all News International papers told their readership to vote Conservative.

With David Cameron finally in 10 Downing Street, and with his father Rupert one of the first visitors James launched his $15-billion bid for the remaining share of BSkyB in May 2010. Again there was uproar in the press, and questions were raised in Parliament. However, in September, the Coalition slashed the BBC’s budget by 16 percent in a comprehensive spending review. That December, the Liberal Democrat Minister Vince Cable was removed from oversight of the takeover when he was caught in a sting operation saying he had “declared war on Mr. Murdoch” and wanted the bid referred. Instead the process was overseen by Culture Minister Jeremy Hunt, and with some vague promises of independence for Sky News, the BSkyB bid was in days of being waved through July last year.

The documents, released by the Margaret Thatcher Archive Trust and first reported this morning by the BBC, include a note marked “commercial in confidence” from Thatcher’s press secretary, Bernard Ingham, detailing the meeting, which has long been denied by both Thatcher and Murdoch. “The main purpose of Mr. Murdoch’s meeting was to brief the prime minister on his bid for Times Newspapers,” the note reads, before going on to detail Murdoch’s plans for the acquisition, including reducing the workforce by a quarter and challenging the notorious print unions. “The prime minister thanked Mr. Murdoch for keeping her posted on his operations.”

The secret meeting is controversial because Murdoch needed a special exemption from the government in order to avoid having his bid referred to the Monopolies and Mergers Committee, as he already owned The Sun and News of the World newspapers. Though this issue is not addressed in the meeting, the argument Murdoch would later use to avoid facing the MMC—that the newspapers were unprofitable, and therefore eligible for an exemption—is hinted at in the note. “Mr. Murdoch freely admitted that some £50 million of the News Group’s resources could be at risk and that such an amount ‘could finish us’. He implied that he was willing to take losses for a limited, but unspecified, period,” Ingham writes. “Nonetheless, turning round a £13-17 million loss was a formidable underaking at a time of deep industrial recession.”

Critics have long challenged Murdoch’s arguments on the Times’s finances, arguing that the Sunday Times was already on its way to returning to financial health. But as the BBC notes, recently released minutes from a 1981 government meeting on the takeover show Thatcher highlighting the exemption, which ultimately allowed Murdoch to go through with his bid, creating what would become by far the United Kingdom’s largest newspaper group. The Times went on to become a stalwart supporter of Thatcher.

Ten days after the 1981 meeting at Chequers, Murdoch sent Thatcher a thank-you note, which is also included in the released documents. “My dear prime pinister,” Murdoch writes. “It was very kind indeed of you to let me interrupt your weekend at Chequers 10 days ago and I greatly enjoyed seeing you again. ‘The Times’ business is proceeding.”

Murdoch’s desire to retain that post is thought to be among the motivating factors for an unsolicited seven-page missive that he sent to British Parliamentarians at the start of the week. It is addressed to the chairman of the parliamentary committee on culture, media and sport—the body, formerly known as a posting for MPs to score free tickets to theater and sporting events, that has morphed—under the initiative of members led by the crusading MP Tom Watson—into a bloodhound on the Murdochs and their phone-hacking trail. It was before this same committee that Rupert and James made their infamous appearance last summer to defend their handling of the crisis—with Rupert getting a shaving-cream pie in the face, and James insisting vehemently that, until only recently, the scale of the problem had been carefully kept from his sight. Now, the committee is deliberating on the conclusions of a highly anticipated report that experts believe could spell serious trouble for James Murdoch, possibly even shaking him in his BSkyB seat.

Was the letter from James a preemptive strike?

“His letter was known to the press before the committee members received it,” lamented Watson, the MP, via Twitter last night.

In the letter, James Murdoch reiterated his comments from this summer—which, despite mounting suspicion to the contrary, remain his main defense: that he was not aware of the scope of the problem taking place under his watch, or involved in trying to shield it from view. “It has been suggested that my decision to resign my role at News International reflected past knowledge of voicemail interception or of other alleged criminal wrongdoing at News International. This is untrue,” Murdoch wrote. “I take my share of responsibility for not uncovering wrongdoing earlier. However, I have not misled Parliament. I did not know about, nor did I try to hide, wrongdoing. I do not believe the evidence before you supports any other conclusion.”

As Cameron pointed out, he’s been close to Charlie Brooks for years, reaching all the way back to their schoolboy days. The Telegraph cited a November 2009 article for the British version of GQ, titled “The Eton Factor,” in which Brooks praised his fellow alumni, including both Cameron and the prime minister’s older brother Alex, a barrister. “Alex Cameron QC is the star of our pack,” wrote Brooks, who is the same age as the elder Cameron. “I thought he’d do well in politics, but it was to the bar that he went.”

“Then there’s Alex Cameron’s younger brother Dave,” Brooks continued. “Of him, we’ll be hearing plenty. If you’ve never seen him in action on a tennis court or cricket pitch, I can assure you of one thing. He’s a competitive old blue.”

The Telegraph piece noted that Brooks in fact seemed closer to Alex Cameron, and that a three-year difference between Brooks and David Cameron “makes a huge difference in the rigid social structure of a public school like Eton.” The suggestion was that Cameron was trying to cover up his close relationship to the controversial Rebekah by claiming the bond was with Charlie instead—an idea that, with both Brookses arrested today, seems unlikely to do the prime minister much good.

The younger Cameron was close enough to Charlie and Rebekah, known at the time as Rebekah Wade, to be a guest at their 2009 wedding at millionaire Charlie’s lavish estate in Oxfordshire. Cameron and his wife, Samantha, have reportedly spent frequent dinners, picnics, and at least one Christmas party with the Brookses (nicknamed “Champagne Charlie” and “Looks Brooks” by the media). And both couples are known to be members—along with James and Katherine Murdoch, who have also reportedly dined with the Camerons and Brookses—of the tightly knit Chipping Norton set, named for the tony market town in the Cotswold Hills where they all live, and which is an enclave of Tory power.