Murdochs to face UK govt inquiry, FBI to probe News Corp

LONDON,  (Reuters) – Rupert Murdoch yesterday caved  in to pressure from Britain’s parliament to answer questions  over alleged crimes at one of his newspapers and denied that  News Corp was drawing up plans to separate its  newspaper holdings.

Rupert Murdoch

Murdoch said News Corp had handled the crisis engulfing his  media empire “extremely well in every way possible” making just  “minor mistakes” and called reports he would split off his  newspaper assets “pure rubbish”.

Speaking to his Wall Street Journal newspaper, Murdoch said  his son had acted “as fast as he could, the moment he could” to  deal with the scandal.

The Australian-born media mogul’s comments came as he faced  investigations on both sides of the Atlantic.

In addition to the probe by British lawmakers keen to break  his grip on politics, the Federal Bureau of Investigation said  it was looking into allegations News Corp tried to hack into  9/11 victims’ phones.
“We are aware of the allegations and are looking into it,”  said Peter Donald, an FBI spokesman in New York.

The phone-hacking scandal deepened yesterday with the  arrest by British police of a ninth suspect, named by media as a  former deputy editor of Murdoch’s News of the World.

His detention added weight to a government call for the  media regulator to decide whether Murdoch’s business was fit to  run British television stations.

Murdoch, 80, has been forced to close the News of the World  and back down on his biggest acquisition plan yet, the buyout of  British pay TV operator BSkyB , due to an outcry over  allegations reporters accessed private phone messages.

He and his son James, heir apparent to News Corp, initially  said they would not face questions from parliament’s media  committee over phone hacking but reversed their decision after  Prime Minister David Cameron said they should attend.

Rebekah Brooks, who runs Murdoch’s British newspaper arm,  News International, has agreed to be grilled by the committee.  She was a friend of Cameron, who has echoed calls for her to go.

Brooks, who edited the News of the World at the time of one  of the most serious alleged incidents, said the police inquiry  might restrict what she could say. Her concern was echoed by  James Murdoch in a letter to the committee confirming his and  his father’s attendance.

Speculation was growing at News International’s east London  headquarters that the company might be reconsidering its  position on Brooks after resisting pressure for her to quit, a  source familiar with the situation said.

Murdoch, a U.S. citizen, also said he would give evidence to  a public inquiry announced by Cameron after questions were  raised over the role of some police officers in the scandal and   relations between British politicians and media owners.

The session is certain to be hostile. During a heated debate  on the hacking scandal on Wednesday, Dennis Skinner, a veteran  left-wing Labour member of parliament described Murdoch as “this  cancer on the body politic”.

Murdoch and other senior executives have denied  any knowledge of the alleged practices.

British Business Secretary Vince Cable said of the swift  volte-face by politicians queuing up to condemn the Murdochs.  “It is a little bit like the end of a dictatorship when  everybody suddenly discovers they were against the dictator,” he  told BBC radio.

GLOBAL FALLOUT

The allegations of phone hacking, which reached a peak as  Murdoch’s British bid came up for approval this month, are now  reverberating around the world.
The FBI probe will cover allegations that News Corp tried to  hack into phone records of victims of the Sept. 11, 2001,  attacks on the United States, although U.S. officials said they  were unaware of any concrete evidence to corroborate reports of  wrongdoing.

“I have heard of no evidence of allegations yet of anything  being done in the United States of America. If there is, then  obviously it should be investigated, but I have (heard of) no  allegation of that,” said John McCain, a member of the U.S.  Senate Homeland Security Committee which would be briefed on  9/11 related issues.

Australia’s prime minister said her government may review  media laws.

Murdoch, who owns 39 percent of British pay TV operator  BSkyB, withdrew his $12 billion bid to take over the rest of it  on Wednesday after British politicians united in a call for him  to pull out of the deal.

Britain’s Deputy Prime Minister Nick Clegg noted media  regulator Ofcom was already looking into whether News Corp  should be allowed to maintain its existing stake in BSkyB. “Clearly there are big questions about the fitness and  properness of News International and that is exactly why Ofcom  are now looking at it,” Clegg, leader of the Liberal Democrat  coalition partners, told BBC Radio 4.
“The thing that I think isn’t quite clear to me at least is  exactly how fit and proper tests are applied,” he added.

The catalysts for public disgust over the hacking  allegations were reports a News Corp newspaper had hacked into  the voicemails of murder victims.

“To see some of the things that have been done to intrude on  people’s privacy, particularly in moments of grief and stress in  the family lives, I’ve truly been disgusted to see it,”  Australian Prime Minister Julia Gillard told Australia’s  National Press Club.

“I anticipate that we will have a discussion amongst  parliamentarians about this, about the best review and way of  dealing with all of this,” she said.

“DARK ARTS” OF
JOURNALISM

U.S.-based News Corp has been rocked by a series of scandals  alleging journalists and hired investigators working for its  flagship News of the World tabloid hacked into the voicemails of  thousands of people, from victims of notorious crimes to  families of soldiers killed in the war in Afghanistan.

The allegations, which include bribing police officers for  information, galvanised British lawmakers across party lines to  oppose a man long used to being courted by the political elite.

Police arrested former News of the World deputy editor Neil  Wallis on Thursday, the ninth person held since the inquiry was  revived earlier this year.

In a statement, the Metropolitan Police said it had hired  Wallis as a consultant from October 2009 until September 2010,  an embarrassment for a force facing questions about its links to  tabloid reporters.

The crisis has also tarnished Cameron, who faces questions  about why he appointed a former News of the World editor as his  communications chief.

Clegg distanced himself from the decision yesterday.

“We did discuss it. Of course we discussed it. But at the  end of the day I make my appointments to my own office and David  Cameron makes his own appointments.”

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