At Ethics Inquiry, James Murdoch Again Blames Subordinates

'I Was Given the Same Assurances' That Everyone Heard, News Corp. Exec Says

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James Murdoch, the News Corp. executive whose leadership has been called into question over phone hacking at the company's U.K. unit, continued to blame his subordinates in testimony to a media-ethics inquiry.

James Murdoch
James Murdoch

Under new questioning Tuesday about his knowledge of the scandal, Mr. Murdoch said again that News of the World Editor Colin Myler failed to tell him in 2008 that voicemail interception was common at the paper. Mr. Myler and the newspaper's lawyer, Tom Crone, have said they discussed the evidence with Mr. Murdoch.

"Their assurances to me were consistent, as I've said -- the newspaper had been investigated thoroughly, outside people had come in to investigate, no evidence was found, and the police found nothing," Mr. Murdoch, News Corp.'s deputy chief operating officer, said in London. "That was entirely consistent with Crone and Myler all the way through."

Mr. Murdoch, 39, and his 81-year-old father, News Corp. CEO Rupert Murdoch, are testifying over three days this week at the panel set up by Prime Minister David Cameron to help quell public outrage over phone hacking. The scandal, which widened to include police probes of computer hacking and bribery, has led to 45 arrests and the closing of the best-selling News of the World tabloid, where the hacking started.

News Corp.'s U.S. holdings include Fox Broadcasting, Fox News, 20th Century Fox and The Wall Street Journal. The hacking scandal received widespread U.S. attention when The Guardian reported last year that The News of the World had hacked into the voicemail of a missing girl, Milly Dowler, who was later found murdered. But the scandal has not significantly impacted News Corp.'s U.S. business yet. Last week a lawyer who has represented Milly Dowler's family said he has three or four clients with grounds to sue News Corp. in the U.S.

James Murdoch, who oversaw News Corp.'s U.K. operations, also described his relationships with the country's leaders, including Mr. Cameron, as the inquiry probes the ties between the press and politicians. He described a Dec. 23, 2010 Christmas dinner with the prime minister and others in which he discussed News Corp.'s then-proposed 7.8 billion-pound ($12.6 billion) bid for the 61% of British Sky Broadcasting Group it didn't already own.

"I imagine I expressed a hope that things would be dealt with in a way that was appropriate and judicial," Mr. Murdoch said of the government's review of the proposed takeover. "It was a tiny side conversation at a dinner where other people were there."

Mr. Murdoch has said he didn't read a 2008 email from Mr. Myler about phone hacking potentially being much more widespread than the reporter who was jailed a year earlier. He said he didn't read it because it was sent on a Saturday , he had jet lag and was preoccupied with his two children swimming in a pool at home.

Robert Jay , a lawyer for the inquiry, repeatedly asked how James Murdoch seemed to ignore key evidence on whether phone hacking extended beyond reporter Clive Goodman and private investigator Glenn Mulcaire, both of whom had gone to jail over the crime.

"Either you were told about the evidence which linked others at The News of the World about Mulcaire and this was in fact a cover-up, or you weren't told," Mr. Jay said. "You didn't read your emails properly and there was a failure of governance within the company. Do you accept those are the only two possibilities?"

Mr. Murdoch responded that he didn't agree.

"I was given the same assurances that they gave outside," he told Mr. Jay .

Mr. Myler didn't return a message left at the New York Daily News, where is now the editor.

Mr. Murdoch told the inquiry that he only read The News of the World from "time to time" and that the publisher didn't have enough transparency when he took over in 2007, the same year the tabloid's royal reporter and private investigator were jailed for phone hacking. He said new controls were put in place and the scandal was believed to be contained.

"You didn't feel it was necessary to get into any more detail when your senior management team, at least according to a judge, had got it spectacularly wrong?" Judge Brian Leveson, who is overseeing the inquiry, asked Mr. Murdoch today.

The U.K. Parliament questioned the Murdochs last year about how much they knew about reporters' illegal activities. Since the July appearance before lawmakers, additional evidence has emerged in litigation by phone-hacking victims, police investigations and the company's own internal probe.

The controversy has been a blow for the younger Murdoch, as the scandal prompted News Corp. to drop the bid for the rest of the BSkyB shares it didn't own. It also led to his resignation this month as chairman of BSkyB, the pay-TV operator he built into one of News Corp.'s most profitable businesses.

He said that before the BSkyB bid was dropped, he also complained to Chancellor of the Exchequer George Osborne, with whom he is "friendly," about the government's review of the deal taking too long and its referral to media regulator Ofcom.

"I don't think there's any evidence of an advantage," Mr. Murdoch said of the company's relationships with politicians. Approval of the BSkyB deal was sought "on the merits of the business." News Corp. ultimately dropped the bid as a result of the phone-hacking scandal.

James Murdoch's resignation as BSkyB chairman came after he had moved a step closer to succeeding his father with his promotion to News Corp.'s deputy chief operating officer in New York in March 2011. The role at BSkyB had been crucial for Murdoch after he departed from other boards in the wake of the hacking scandal to focus on overseeing News Corp.'s international TV business.

-- Bloomberg News --

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