Back in Parliament, James Murdoch Denies He Was Warned on Widespread Hacking

Execs' Claims That They Told Him Are 'Misleading,' He Says

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News Corp. Deputy Chief Operating Officer James Murdoch today denied to Parliament former News of the World executives' claims that they told him in 2008 that phone hacking at the paper had gone beyond a single reporter.

"Their testimony was misleading and I dispute it," Mr. Murdoch told a Parliamentary committee, which recalled him after Colin Myler, the News of the World's editor, and Tom Crone, its lawyer, said Mr. Murdoch was mistaken in his July 19 testimony that he hadn't been told.

Mr. Murdoch also blamed the men for not telling him, saying they were the ones responsible for denials issued by the company until January of this year.

"If he had known, he should have told me those things," Mr. Murdoch said about Mr. Myler. "Where evidence and suspicion of widespread criminality were there, this is the job of the new editor to make me aware of those things."

The scandal has shaken Mr. Murdoch's status as heir apparent to his father's media empire. Last month, News Corp. shareholders lodged a protest vote against Rupert Murdoch, the company's chairman and CEO, and his sons, following an annual meeting at which investors called for governance changes and an end to voting practices that cement the family's control. James Murdoch received the highest percentage of votes against his election to the board, at 35%.

Beyond its U.K. newspapers, a relatively small part of the company, News Corp. assets include 20th Century Fox, The Wall Street Journal, Fox Broadcasting, Fox news, Sky Italia and a big stake in the U.K.'s BSkyB.

New Corp. abandoned an effort to buy the rest of BSkyB after revelations in July that the News of the World had hacked into the voicemail of a missing teenager who was later found murdered. It also shut down the News of the World, which had been Britain's biggest-selling newspaper. At least 17 people have been arrested by police investigating hacking and bribing police officers at News Corp.'s U.K. papers, some on the basis of evidence supplied by the company.

Lawmakers criticized James Murdoch's testimony today, with one questioning his fitness to hold his post and another saying the company had "lax" accountability.

Labor Member of Parliament Tom Watson told Mr. Murdoch he "must be the first mafia boss in history who didn't know he was running a criminal enterprise."

Mr. Murdoch ran News Corp.'s U.K. arm, News International, beginning in late 2007. From January 2007 until January 2011, the company denied that illegal hacking had gone beyond the newspaper's royal reporter, Clive Goodman, and a private investigator, Glenn Mulcaire.

In his July testimony, Murdoch said the years of denials rested on three "pillars:" an initial police probe that stopped at Mr. Goodman and Mr. Mulcaire, an examination of some of Mr. Goodman's e-mails by law firm Harbottle & Lewis and an investigation by the Press Complaints Commission.

But the Press Complaints Commission said its probe consisted solely of writing to the newspaper's editor. Harbottle said its work had been limited to defending the company against Mr. Goodman's unfair-dismissal claim and "was simply not one which was designed to bear the weight News International now seeks to place upon it." The police have said the company obstructed their work.

Murdoch today said he regretted that the company hadn't looked into allegations about phone hacking in 2009 when the Guardian newspaper reported them, or in 2010, when the Culture Committee raised questions.

The company "at various times through this process -- and I'm sorry about this -- moved into an aggressive defense too quickly," Mr. Murdoch said.

-- Bloomberg News --

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