Murdoch rejects blame in phone-hacking scandal

By Henry Chu, Los Angeles Times

July 20, 2011 12 AM PT

Reporting from London — The question was pointed. The answer, even more so.

Wasn’t he ultimately responsible, as chairman of media giant News Corp., for the phone-hacking scandal that has shaken his global empire to the core?

“Nope,” answered Rupert Murdoch, sounding almost surprised anyone would think so.

The Australian-born media mogul described it as the “most humble day of my life.” But his conclusions during an afternoon of grilling by British lawmakers Tuesday in the shadow of London’s Big Ben were anything but.

Summoned to give evidence before Parliament, Murdoch tried to undo some of the damage caused by a newspaper debacle that has spread to politicians and the police, morphing into one of the worst national crises in recent British memory.

At times vague and frail-looking, at others pugnacious and curt, Murdoch denied any knowledge of rampant cellphone hacking by the News of the World. His son James, called to appear with him, did the same in a sometimes-stumbling performance. And even as questioners tried to get him to accept some responsibility for what happened, the 80-year-old billionaire declared he was “the best person” to clean up the mess.

In the end, after three hours of sparring, neither side of the table in the staid committee room seemed to land a knockout punch. The person who came closest was Murdoch’s wife, Wendi, who sprang from her chair in back of her husband to smack an activist as he hurled shaving cream onto her husband.

“Mr. Murdoch, your wife has a very good left hook,” lawmaker Tom Watson said in a rare moment of levity in the proceedings. (For the record, she swung with her right arm.)

The packed session had been hotly anticipated since Murdoch and his son were summoned Thursday to give evidence before Parliament. Analysts expected it to be the most-watched parliamentary committee hearing in history.

People lined up early for tickets to see the man who trafficked in sensational headlines become one himself. A group of protesters, some wearing Rupert Murdoch masks, thronged the area outside the building. Some waved placards reading, “Smash Murdoch’s evil empire!”

For the Murdochs, it was a chance to make a public atonement for the News of the World’s accessing of private voicemails of potentially thousands of people, including not just celebrities and political bigwigs but also murder victims and fallen soldiers. In response to a public outcry, Murdoch shut down the tabloid two weeks ago.

For members of Parliament, the committee hearing was their moment to demonstrate that they no longer stood in thrall to a man who has intimidated plenty of British politicians through the power of his newspaper holdings.

In a statement, Murdoch apologized to the hacking victims.

“I want them to know the depth of my regret for the horrible invasions into their lives. I fully understand their ire. And I intend to work tirelessly to merit their forgiveness,” he said.

But he had to endure some sharp questions from lawmakers, particularly Watson, who were intent on unveiling whether Murdoch fostered a culture of criminal recklessness at News International, the British subsidiary of News Corp., which also owns the Times of London and the Sun newspapers.

Murdoch said he had zero tolerance for lawbreaking but acknowledged that he might have taken his eye off the tabloid.

“The News of the World is less than 1% of the company,” Murdoch said. “I employ 53,000 people around the world … and I’m spread watching and appointing people whom I trust to run those divisions.”

He dismissed suggestions that he and his top executives had been “willfully blind” to what went on.

“I’ve heard the phrase before, and we were not ever guilty of that,” Murdoch said. “I feel that people I trusted — I’m not saying who, I don’t know what level — have let me down.... And it’s for them to pay.”

But he and his son both strongly backed two senior News Corp. executives who have stepped down as a result of the scandal: Les Hinton, the chief executive of Dow Jones, and Rebekah Brooks, the head of News International and the editor of the News of the World at the time the tabloid is suspected of intercepting and tampering with voicemails left on the phone of a kidnapped 13-year-old schoolgirl who was later found killed.

Both Hinton and Brooks deny knowledge of hacking at the News of the World. Brooks, who was arrested and released on bail Sunday, gave evidence to the committee after the Murdochs.

In one surprising disclosure, it emerged that News International had paid the legal fees of private investigator Glenn Mulcaire, who was convicted of hacking into the cellphones of aides to the royal family. Mulcaire is also suspected of intercepting and deleting messages on the phone of the slain teenager in 2002.

It was unclear whether News International was continuing to pay Mulcaire’s legal fees in civil suits, but Murdoch said he would try to end the arrangement.

Mulcaire and the News of the World reporter who covered the royal family, Clive Goodman, were both jailed in 2007. Until several months ago, News International had maintained that phone hacking was confined to a single “rogue reporter,” despite thousands of pages of documents seized from Mulcaire suggesting the behavior was widespread.

Scotland Yard, which has been criticized for a lackadaisical first investigation, is now conducting a new probe.

With no bombshell revelations Tuesday, neither the Murdochs nor the lawmakers were able to gain an upper hand, said Tony Travers, a political analyst at the London School of Economics.

“I suspect News Corp. and the Murdochs feel they haven’t lost any ground today,” Travers said. As for the members of Parliament, “it was always going to be difficult for the MPs to score big victories over the Murdochs in that [formal] environment.”

When pressed for details, Murdoch often looked uncertain and confused, glancing at his son for guidance. He was animated and combative when he wanted to be, however, punctuating his remarks by pounding the table often enough that his son murmured to him to tone it down.

The media tycoon declared that his newspapers had made a great contribution to British life, and that his rivals were bent on using the scandal to thwart his ambitions, especially News Corp.’s now-aborted bid to take over BSkyB, Britain’s biggest satellite broadcaster.

“A lot of people had agendas, I think, in trying to build this hysteria,” Murdoch said. “They caught us with dirty hands and they put hysteria around.”

Murdoch, a naturalized U.S. citizen, also dismissed accusations that the News of the World might have tried to obtain the phone records of victims of the Sept. 11 terrorist attacks. Though only one publication in Britain has made the uncorroborated allegation, the FBI has opened an investigation.

“We have seen no evidence of that at all, and as far as we know the FBI haven’t either,” Murdoch said. “I cannot believe it happened.”

The younger Murdoch, 38, was questioned extensively about a payment of more than $1 million to former soccer player Gordon Taylor in 2008 to settle a dispute over phone hacking. Murdoch denied it was hush money, despite the confidentiality clause attached to the settlement.

Few Britons ever imagined they would see the Murdochs and their media conglomerate called to account. The scene was a far cry from three months ago, when James Murdoch told interviewer Charlie Rose that the hacking scandal had not damaged News Corp.’s reputation.

“It shows what we were able to do is really put this problem into a box,” he said.

That box has turned out to be Pandora’s.

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