London - Rupert Murdoch is unfit to run a major
international company and should take responsibility for a culture of illegal
phone hacking that has shaken News Corp, a powerful British parliamentary
committee said on Tuesday.
Pulling few punches, lawmakers focused on the failings of
the 81-year-old News Corp chief executive, his son James and a company which
they said had showed “willful blindness” about the scale of phone-hacking that
first emerged at Murdoch’s News of the World newspaper.
The cross-party committee, which approved the report by a
majority of six to four, scolded News Corp for misleading the British
parliament and trying to cover up illegal phone hacking. It said that there had
been huge failures in corporate governance which raised questions about the
competence of Rupert’s son, James.
“News International and its parent News Corporation
exhibited wilful blindness, for which the companies’ directors -including
Rupert Murdoch and James Murdoch - should ultimately take responsibility,” it
“Their instinct throughout, until it was too late, was to
cover up rather than seek out wrongdoing and discipline the perpetrators,” the
lawmakers said in an 85 page report.
“Even if there were a 'don’t ask, don’t tell' culture at
News International, the whole affair demonstrates huge failings of corporate
governance at the company and its parent, News Corporation.”
The report may force James Murdoch, once heir apparent to
the media empire, to sever his last ties with Britain’s biggest satellite TV
firm BSkyB, which News Corp had sought to take over before the scandal.
In the week of local elections, the report could also
embarrass Prime Minister David Cameron, who has acknowledged that Britain’s
political elite has been dazzled and charmed by the Murdoch’s media clout for
The committee has been investigating the allegations on and
off since a single reporter went to jail for the crime in 2007, believing that
the practice went far beyond the one “rogue” staffer and questioning a string
of executives over what they knew and when.
Rupert Murdoch has apologised for the scandal but told a
judicial inquiry into press ethics last week that senior staff at his British
newspaper publisher had hidden the hacking scandal.
The 39-year-old James has also apologised for failing to get
to the bottom of the scandal but said he was kept in the dark by staff at the
Both Rupert and James Murdoch have put the blame on the
journalists and in particular on the News of the World’s former lawyer Tom
Crone and former editor Colin Myler.
Media regulator Ofcom will take the report’s findings into
consideration in its assessment of whether BSkyB’s owners and directors are
“fit and proper” persons to hold a broadcast licence.
James Murdoch recently stepped down as chairperson but remains
on the board of BSkyB, which is 39% owned by News Corp.
“We’ll all be looking at the wording in terms of the fit and
proper test,” said Charlie Beckett, founding director of the Polis journalism
and society think-tank at the London School of Economics.
“If it says there was a systematic lack of due diligence at
News International or News Corp, that might impinge on future fit and proper
tests for Ofcom.”
Cameron was summoned to parliament on Monday to explain why
he would not investigate emails revealing that a ministerial aide had assured
News Corp over its $12bn bid for BSkyB.
He insisted there was no need to refer the case to his
independent adviser on ministerial conduct, noting the emails had been handed
to a separate judicial inquiry into press ethics.
“I am perfectly prepared to admit that the relationship
between politicians and media proprietors got too close,” Cameron said during a
rowdy debate, blaming politicians of both main parties for the failing.
But Cameron could face further embarrassment as former
Murdoch confidante and News Corp executive Rebekah Brooks prepares to reveal
text messages and emails between herself and the prime minister, a former
friend and part of the so-called “Chipping Norton” set.
The group includes Cameron, Brooks and other political and
media elite who live in and around the well-heeled Oxfordshire town of Chipping
Norton, giving rise to accusations of cronyism and suspicions that Britain is
run by an exclusive clique.
The committee will present its report to parliament, which
is likely to hold a debate on its findings, and the government then has 60 days