Parliamentary Report Just One Piece Of Larger News Corp Troubles

May 1, 2012 9:39 a.m.

The UK parliamentary report on phone hacking practices at Rupert Murdoch’s British newspapers is harsh — but it’s just one piece of a much larger puzzle.

“It is only the ‘B movie’ — the two main features are the Leveson Inquiry, which has far more real power, and the five ongoing criminal investigations by the police,” said Paul Connew, a media commentator and former deputy editor of the News of the World (in its pre-hacking days).Both Rupert and James Murdoch testified last week before a UK judicial inquiry into press culture and practices. James Murdoch told the inquiry that he didn’t control what went into the News of the World. The legal and ethical risks of phone hacking were “very much in the hands of the editor,” he said, according to the Guardian. Rupert Murdoch apologized for the phone hacking and admitted that there was a “cover-up” within the paper to shroud the extent of the hacking from senior executives.

More than 40 people have been arrested in connection with the ever-widening scandal and the first charges are expected to be announced within weeks. “This has a long way to run yet,” Connew said. “It’s like the closing of the second act of a five-act play.” Connew told TPM that he thinks the parliamentary report increases the likelihood that the Justice Department and FBI — already looking into News Corporation — will “pursue a rigorous investigation” of any violations of the Foreign Corrupt Practices Act. Michael Wolff — author of The Man Who Owns the News, a biography of Rupert Murdoch — “absolutely” agrees, but it’s likely to happen after the November election.

Rupert Murdoch has been shielded in a way because the scandal keeps unfolding an ocean away from his home and corporate headquarters. If, for instance, a U.S. congressional committee or regulator criticized Murdoch in the way that the British Parliament has, Wolff told TPM — “willfully blind” and “not a fit person” to lead an international company — “you would be thrown out or your company would collapse.” But Murdoch’s standing “in the face of everything that is pushing against him is pretty firm.”

So what is next for the media mogul’s empire? The company’s newspapers, which Steve Hewlett, a Guardian columnist and BBC host, says have become “completely toxic,” will probably be sold off. They’re old media and and not very profitable, Hewlett said. And British politicians are set to give evidence to the Leveson Inquiry this spring to explain how they got so close to Murdoch.

But no matter what the company does, no matter how much it tries to limit the damage, “there is no getting out from under this,” Wolff added. “It doesn’t go it away. It follows. It sticks.” So the logic is that, at some point, it arrives on U.S. shores. “This will be another Murdoch summer.”

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