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Giglio writes: "As if on cue, police Saturday made a spate of headline-grabbing arrests that offered a jarring preview for what comes next - rounding up five high-level journalists from Rupert Murdoch's flagship daily tabloid, The Sun, and prompting the media mogul to make his way across the Atlantic for damage control. Murdoch's newspaper empire suddenly looks to be bracing for another tough fight."

News Corp. publishing magnate Rupert Murdoch testifies during the British Parliament inquiry into phone-hacking allegations, 07/19/11. (photo: Rex Features)
News Corp. publishing magnate Rupert Murdoch testifies during the British Parliament inquiry into phone-hacking allegations, 07/19/11. (photo: Rex Features)

Murdoch Scandal: Phone Hacking Was Just the Start

By Mike Giglio, The Daily Beast

12 February 12


Phone hacking was just the start - a new wave of arrests sheds light on Murdoch papers' ties to police. Mike Giglio on how the second phase of investigation could hit the mogul hard.

n Thursday, Britain's high-profile public inquiry into the conduct of its newspapers brought the first of its four stages to an end. As if on cue, police Saturday made a spate of headline-grabbing arrests that offered a jarring preview for what comes next - rounding up five high-level journalists from Rupert Murdoch's flagship daily tabloid, The Sun, and prompting the media mogul to make his way across the Atlantic for damage control. Murdoch's newspaper empire suddenly looks to be bracing for another tough fight.

The first stage of the Leveson inquiry focused on phone hacking and other questionable information-gathering tactics that provoked such an outrage last summer that Murdoch hastily shuttered his storied Sunday powerhouse News of the World. By the time the inquiry got underway in November, though, some of the dirtiest laundry surrounding phone hacking had already been aired. When Leveson resumes next month for its second stage, a new and possibly explosive topic will be at hand - the potentially corrupt relationship between journalists and police. That subject could have far-reaching implications for Murdoch's News Corp. Saturday's arrests seemed to signal that they're beginning to play out.

The five journalists who made headlines yesterday were arrested as part of Operation Elveden, which is looking into payments by journalists to police. Three others - a police officer, a Defense Ministry official, and a member of the armed forces - were arrested as well, following a similar turn of events last month in which four senior journalists and a police officer were detained.

The arrests, as Murdoch's trip to London suggests, imply serious problems for his media empire, and not just in Britain. They further spread the damage from the defunct News of the World to the profitable Sun, which has the highest daily readership of any newspaper in Britain and is believed to subsidize Murdoch's revered, but money-losing, The Times of London franchise. What's more, the issue of police payments makes News Corp., which is headquartered in New York, potentially vulnerable to American prosecution in a way that phone hacking, to this point, has not. As Reuters reported last week, in the wake of the initial Sun arrests, while US authorities have so far uncovered little evidence of phone hacking in the States, the FBI is investigating whether News Corp. employees have violated the US Foreign Corrupt Practices Act, which prohibits American companies from paying bribes to foreign officials. Company executives could be liable if they either authorized bribes or knew about them but didn't stop them. No charges have yet been filed, but as the list of arrested senior Sun journalists expands, and the net for potentially corrupt sources is cast beyond the police department, the risk can only grow.

The way Operation Elveden has played out, meanwhile, shows how News Corp., in an effort to cauterize the wounds sustained from the phone-hacking scandal so far, has waged a battle against itself. It is the company's own investigators who have provided the police with the information that led to the recent arrests. After the phone-hacking scandal broke, News Corp. set up a special unit in London, the Management and Standards Committee (MSC), tasked with an independent investigation into the company's wrongdoing. The committee is poring through millions of documents and emails from inside the News International offices in Wapping, which it then passes along to police investigators. Even senior Sun employees receive no advance notice of the proceedings - yesterday, Sun editor Dominic Mohan said he was "shocked" by that morning's wave of arrests.

Sue Akers - the Jane Tennison-like top cop at the helm of the Scotland Yard investigation into British newspapers, who helped Helen Mirren prepare for her leading role in the hit TV drama Prime Suspect - told the Leveson inquiry last week that the News Corp. team "are the people who have passed us information on which we've made arrests." She had just increased her Operation Elveden team by 50 percent. And the investigation, she suggested, still had a long way to go.

The arrests, as Murdoch's trip to London suggests, imply serious problems for his media empire, and not just in Britain.

At the heart of News Corp.'s ongoing trouble is a massive trove of emails and documents, reportedly more than 300 million strong, on hand at the company's London headquarters in Wapping. There, a team of lawyers, computer experts, and even police officers working with the MSC reportedly hunker down in soundproof rooms to pore through the documents - a process that will take at least another year and a half to play out. Though critics have argued that the internal investigation was conceived to ward off more serious inquests from the authorities, with so many documents on hand and the public spotlight on News International showing no signs of fading, News Corp. may have planted a ticking time bomb in its midst. Britain's national journalism union has complained that Sun journalists are being "thrown to the wolves" in "a witch hunt."

The trouble stirred up by the internal investigation has reached to the highest levels of News Corp. management, too. James Murdoch, in his efforts to remain unsullied by the phone-hacking scandal and ensuing cover-up, maintained before Parliament last summer that he was unaware that the practice was widespread when he authorized an unprecedented $1.1 million settlement to a hacking victim in 2008. Yet an email chain unearthed by the MSC in December showed company officials alerting the younger Murdoch to the scale of the problem. He has since claimed that he didn't fully read the emails at the time, but many observers see the email chain as damning to his defense.

Some of the same crusaders who helped bring the phone-hacking scandal to light now have their knives at the ready. MP Tom Watson, one of News International's key antagonists, yesterday portrayed the Sun arrests as another big chink in Murdoch's armor. "Today's developments show this is no longer only about phone hacking," he said. "It goes to the very heart of corporate governance of the company led by Rupert Murdoch." Watson's colleague Chris Bryant, who told The Daily Beast at the height of the scandal in July that he had been "monstered" by the Murdoch papers in the past, suggested that The Sun should be closed: "If you follow the logic of what happened at the News of the World, the same logic should apply to The Sun."

While closure of the paper seems unlikely at the moment - there has been neither corresponding public outrage with the Elveden arrests nor pressure from shareholders or advertisers - the British press is reporting that rumors on Fleet Street are swirling. One Sun insider told The Daily Telegraph Saturday night: "I do think it is entirely possible they will close The Sun. It is very clear Rupert Murdoch has turned his back on them. They are being thrown to the lions." The worries were enough to inspire News International CEO Tom Mockridge to send a reassuring memo to staff: "You should know that I have had a personal assurance today from Rupert Murdoch about his total commitment to continue to own and publish The Sun newspaper. Today we are facing our greatest challenge." Murdoch is expected to visit his London staff near the end of next week.

For all the uproar the Elveden arrests have sparked, paying officers for information may be just part for the potentially corrupt relationship between Murdoch's newspapers and police that will come under the full Leveson spotlight next month. Allegations of coziness with top Scotland Yard officials have swirled around the phone-hacking scandal from the start - from police chiefs dining regularly with News International executives to former Scotland Yard officials moving on to work for News of the World and the decision of police brass not to fully investigate phone hacking sooner. Former Scotland Yard top official Sir Paul Stephenson stepped down last summer due to "the ongoing speculation and accusations relating to the Met's links with News International at a senior level," he said at the time.

After losing News of the World in the first phase of the phone-hacking scandal, Murdoch enters the next one facing questions over whether he can keep the rest of his empire intact. your social media marketing partner


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+99 # artful 2012-02-12 15:50
Murdoch needs to be in prison, kept away from normal citizens of all countries. He is a menace to democratic societies.
+83 # wsh 2012-02-12 16:33
Gee, Murdoch is free...but Assange isn't.

I'll give everyone two guesses who runs the world (and it ain't George Soros).
+68 # LessSaid 2012-02-12 16:46
I hope when goes to prison, they send Fox TV along with him. They do so much damage to our society.
+32 # Dave45 2012-02-12 19:42
Just make sure he doesn't try to buy the prison before they thrown him in.
+45 # ckosuda 2012-02-12 16:41
just this morning I was wondering out loud was Murdoch in prison yet? I'm still wondering - when does HE go to jail!

he had to have known - he runs the show - he is responsible, and remember, even if he is a corporation, he is a "person." hooray!
+37 # angelfish 2012-02-12 16:52
He and his "FIXED" News cronies should be barred from EVER again "reporting" News of ANY kind! He is a sorrow and a Pity to Humanity!
+39 # olpossum 2012-02-12 17:10
This whole scandal is as nothing, compared to the treasonous activities of Rufus Murdoch and his stable of professional liars in the US. There had be some investigations of these people on this side of the pond. The GOP slobs in the legislatures and media investigated Clinton (and the present president) every time they took, and take, a notion.
+61 # X Dane 2012-02-12 17:46
Years ago I read about all the trouble Murdoch caused in England, all the dirt he threw around. Messing up peoples lives.
I remember feeling glad that he was not in this country......An d then he did come here.

Now his poisonous tentacles are into everything. His damned fox network has indoctrinated a huge part of the population, and he is influencing our elections and who knows how much of what is going on in the world.

They are working hard at unraveling a lot af Murdoch's crimes in England. I sincerely hope they will be able to nail him, his son, and who else is involved.

Murdoch and fox is a cancer on our society. I hope FBI is looking into his dealings in our country. There is no doubt in my mind that he has done something illegal here also.
+19 # reiverpacific 2012-02-12 17:50
THE SUN has been trash-can, fish-and-chip receptacle bollocks from it's inception and there are plenty more tabloids with less dubious means of news-procuremen t who can fill it's place.
Hope that the trash-can has room for it's "Birther" (to use a recently au courant phrase in another context) when it finally gets taken out.
+34 # TrueAmericanPatriot 2012-02-12 20:49
It's been awhile since I have posted, but I could not help noticing that this Murdoch-NEWSCOR P scandal article. When this story broke last summer, I predicted it would spread to the U.S. shores in the early spring; we're just a few weeks away! X Dane is right about Murdoch being a cancer; truer words were never spoken! I will go on to say this. If all goes well, he and his son will be in prison by the time Fixed Lies and Newscrap are investigated. The good thing will be that he cannot directly interfere with the investigation. Result? He and his son may expire in prison if everything is brought to light. And "Fixed Lies," and their collection of Stepford Wives will be decommissioned, PERMANENTLY!!! In fact, the GOP will go down with them, since Murdoch owns most of the rethugs anyway.

+10 # Karlus58 2012-02-13 10:21
That "Stepford Wives" analogy is excellent!
+15 # infohiway 2012-02-12 21:12
The voicemaillness( sic) and general hacking, logically, includes 911 victims (the survivors, dead and bereaved). It is just a matter of time until that's uncovered and/or whistleblown (further explaining why Wikileaks is 'on ice' at the moment).

But - paying out more cash to cover-up the initial hacks and bribes etc (as is done - one way or another) takes it into the realm of intent, and conspiracy, to commit MORE crime(s). I.E. Payola - whenever and however done. EOS.

'Conspiracy' without proof is theory; with proof it's crime - every time.

'The great and the good' are virtually all in on it at some level. Will they dare 'scapegoat' Rupert knowing he has dirt on everybody?
Not likely.
+21 # PatriotPaul 2012-02-12 21:12
Take the time to ask every one of your relatives and friends who is a Fox News fan if the roles were reversed and this was their much hated CNN or New York Times or Washington Post if Fox News would be having a field day with this? Would Hannity, O'Reilly, etc. be bringing it up regularly and calling for the prosecution of their CEO and/or Board of Directors? Of course they would. Please do inquire so you can hear them try and squirm.

Paul Harris
Author, "Diary From the Dome, Reflections on Fear and Privilege During Katrina"
+11 # cordleycoit 2012-02-12 22:08
Time to run the editors and publishing thugs up Fleet Street along with hot tar and feathers. Then off to N.Y to send some of the staff there to the Tombs. Then off to the Wall Street Journal and a free government sponsored trip to Florance Colorado to join the Unibbomber in custody there.
Wouldn't be nice to read real news again instead of our current wrench prepared pap that passes though the kidneys of the fawning so-called reporters, editors and publishers,,,an d then after the Fox.
+21 # johnseipp1 2012-02-12 23:13
My parents sit around glued to Fox "News" all day long and they honestly believe that they are well informed. I am simply amazed at how hopelessly MIS-informed they are on all of the issues. I've warned them over and over again of just how Fox goes about literally brainwashing their viewers and they just say that they believe everything Sean Hannity, Bill O'Reilly and Rush Limbaugh say. Rupert Murdoch is responsible for manipulating the minds of the republican base who are people who really aren't all that bright apparently. The university studies are very true re: how Fox viewers are the most misinformed people in America. Murdoch should be tried for treason, tarred and feathered and thrown into the cargo hold of a Quantas jet and shipped back to Australia where he belongs!
+9 # X Dane 2012-02-13 01:18
johnseipp, I feel so bad for you. I have several friends, who are brain-washed by Foux "News" It must be terrible to have your parent's brains poisone by those creeps. Hopefully they will be brought to justice before too long.
They have done so much damage, it needs to be stopped
+6 # bugbuster 2012-02-13 15:26
Take my advice, please, because I never use it. I say let mom and dad watch and think what they want, unchallenged. You won't convince someone for whom changing your diapers happened yesterday.

Reality will catch up with all this misinformation. It won't play out exactly as we or anyone else imagines. Left and right will claim vindication no matter what happens, but Reality will just go on ignoring all of that, defying definition and explanation, and what will be will be.

Let you and mom and dad be there for each other when the sh*t hits the fan, and best not to poison the air with contentious conversation.
+6 # ozken 2012-02-13 01:55
Anyone who thinks that Murdoch will ever end up in prison is dreaming. Rupert has more cunning and is smarmier than a rat with a gold tooth. Crikey - please do not ship him back here to Oz - we were glad to get rid of him to the U.S.A. although even from a distance it is sickening to see the way he runs Fox 'News'. He wouldn't have many friends in the White House right now. Good.

Yeah we got Murdoch...but we also got Assange - both newspapermen. You watch the difference in the way justice is carried out in our so called fair societies..

If he ever looks as though he may end up in prison he will be playing the “I’m old and sick and a little bit gaga” card.
+5 # JayMagoo 2012-02-14 16:24
It's coming out that Murdoch is a sleezy wiretapper and a common slime-ball eavesdropper. But let us not forget that Murdoch also uses Fox News to impose his sick right-wing fantasies and lies on several million Americans stupid enough to view Fox News.
0 # leslie griffith 2012-02-16 00:53
“We can always count on the Americans to do the right thing, after they have exhausted all the other possibilities.”
― Winston S. Churchill--

Let's hope he was right.

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