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James Murdoch's Parliament Testimony: Mafia Comparisons, Blanket Denials Lead The Day (RECAP)

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James Murdoch firmly denied that he misled Parliament about the extent of his knowledge of the phone hacking scandal during a lengthy grilling on Thursday.

Murdoch appeared before a parliamentary committee for the second time this year to answer questions about his role in the scandal that has plagued News Corp., his family's company, for months. He insisted that he had not been informed about the widespread criminality at the News of the World newspaper, and said that top editors and lawyers at the company had misled Parliament by testifying that they had made him aware of such evidence as early as 2008.

The nearly three hour session was dominated by clashes between Murdoch and Tom Watson, the Labour MP who has become the leading parliamentary campaigner against phone hacking. In the most electric exchange, Watson compared Murdoch to an underworld crime lord.

"You must be the first mafia boss in history who didn't think he was running a criminal enterprise," he said. Murdoch called the comment "inappropriate" and "offensive."

Other MPs were similarly dubious about Murdoch's claims. One lawmaker told him that, if his testimony was to be believed, he was a "cavalier" chief executive. Another called him deeply "incurious" and said he found it inconceivable that he was as in the dark as he claimed to be.

At the heart of the hearing was the discrepancy between Murdoch's version of events and the one laid out by former News of the World editor Colin Myler and former News International legal director Tom Crone. Both have testified that they explicitly told Murdoch that phone hacking was widespread at the News of the World in 2008. Murdoch has been equally vehement in his denial of this. A flurry of recent revelations has put a dent in his credibility, however.

On Thursday, he said that Myler and Crone had misled Parliament, and that Myler "should have told me" about the scale of criminality at the News of the World.

Murdoch also addressed the potentially looming specter of a criminal investigation at The Sun, another News International tabloid. A top reporter was recently arrested at the paper on charges of bribing police. Murdoch did not rule out shutting down The Sun—an extraordinary thing to do, given that it is the biggest-selling daily in Britain.

For a complete, blow-by-blow recap of the hearing, please read the liveblog below.

live blog

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The BBC's video is here, and Parliament's video is here.

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Here we go!

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John Whittingdale, head of the committee, starts right in and asks about Colin Myler and Tom Crone's insistence that Murdoch knew all about the reasons he was paying Gordon Taylor massive sums.

Murdoch says that the meeting he was in was for an increase of a settlement offer already made, and so did not go into any detail about phone hacking. (Myler and Crone say something completely different.)

He's also now speaking about the infamous 'For Neville' email with a lot more fluency than we can ever remember! He seems to be saying that he knew about the email, but didn't know what was so damaging about it. Which is strange.

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Murdoch also says he was not aware of a legal opinion by the company's lawyers that talked about a culture of criminality at News International and was very clear that hacking was widespread.

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James now being grilled about the Clive Goodman case. He essentially says he had nothing to do with it, and that former chief executive Les Hinton had handled it. He also says that he did not ask about phone hacking when he took over because he had no reason to believe it wasn't a settled matter.

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Murdoch says that News Corp. had a tendency to react to criticism as hostile or conspiracy-prone, and that the company should have reacted more "dispassionately." He denies that he suffered from any willful blindness.

He's also asked if he thinks crucial evidence was kept from him. He says that he definitely knows he didn't get complete evidence about the Gordon Taylor case, or many other cases. (Again, this claim is heatedly disputed!)

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Murdoch says "if" Myler had known of wider criminality, "he should have told me about those things." Yet again: Myler insists that he did say this!

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Murdoch addresses the huge pushback against the Guardian's (correct) 2009 reporting. He admits that the company pushed back "too hard," but that he didn't know that the evidence was true.

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Which is worse, knowing and not doing anything, or not knowing at all? Murdoch says that the News of the World was a tiny part of the business, and that he trusts executives. (But...he was the head of News International, of which News of the World was the biggest part.)

Chief John Whittingdale then asks why he called the committee a "disgrace" to Parliament. Murdoch apologizes.

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Thank the Lord!

Watson: Do you accept that Tom Crone prepared the memo Parliament released? Murdoch says Crone prepared a much narrower memo to the best of his knowledge.

Murdoch says that Crone's memo did say that the Taylor details were "fatal" to the News International case, but did not mention any widespread criminality.

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Watson asking about the vast chasm between Murdoch's remembrances and those of Myler, Tom Crone and Julian Pike, who all say he was made explicitly aware of wider criminality.

Murdoch again says he never saw the external legal opinion that said there was "overwhelming" evidence of illegal activity and a "culture of illegal information access."

Essentially, then, we are to believe that all of these major things were kept from Murdoch.

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James Murdoch says all he recalls from his one meeting with Myler and Crone is that they wanted to increase their settlement.

He again flatly denies that he knew of any wider criminality.

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Watson says it seems "inconceivable" that Murdoch wasn't looking at any of the documents that were at the heart of making an unprecedented settlement to Gordon Taylor. Murdoch is getting increasingly testy, and insists, "that's what happened."

TW: Did you mislead this committee in your original testimony?

JM: No I did not.

TW: So if you didn't, who did?

Murdoch says that individuals "without full possession of the facts" testified. He flatly says that Crone and Myler misled Parliament, not him. "I believe their testimony was misleading and I dispute it," he says.

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Watson says it certainly seems like Murdoch had discussed phone hacking with someone. Nope, Murdoch says.

"You are seriously suggesting" that phone hacking was not discussed with you, Watson asks. Yes, Murdoch says.

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"Do you still maintain that neither Crone nor Myler mentioned this even in passing, given the strength of words used by Silverleaf?" Watson asks. "Yes," James says, maintaining his blanket defense.

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Lots of other things haven't been raised yet: the huge severance to Rebekah Brooks, the news that News Corp. paid people to spy on hacking victims' lawyers, and the recent arrest of an editor at the Sun.

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Tom Watson says he's met Neville Thurlbeck, the former chief reporter. He recounts a meeting Neville Thurlbeck had with Tom Crone in 2008, where Crone said he was "going to have to show" James Murdoch about the evidence of wider phone hacking.

Murdoch just says nobody ever showed him the evidence. Watson says that Thurlbeck also said that Crone later told him that he'd shown Murdoch the email.

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"You're familiar with the term Mafia?" Watson asks. That goes about the way you'd think it would. Murdoch says it's "offensive" to say that News Corp. is like the Mafia.

"You must be the first Mafia boss in history who didn't he was running a criminal enterprise," Watson says. "Mr. Watson, please. That's inappropriate," Murdoch says. And with that, Watson's portion ends!

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Murdoch now being asked about the astronomical size of the Gordon Taylor settlement. He simply says that he was told that the amount was right, and presumably asked no further questions about it.

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Murdoch asked if he normally just signs off on huge settlements. He says enough evidence was given for him to do so.

"It may not be the Mafia, but it's not management today," the MP says.

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Back to those crucial meetings that did or did not take place in 2008. He sticks to the same old lines, insisting he was not made aware of any wider problems. He's also asked more about the large settlement to Gordon Taylor.

"You seem to be more vague this time round than you were the last time," the MP quizzing him says.

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@ alantravis40 : The Mafia accusation is the parliamentary equivalent of the foam pie thrown at Murdoch snr - will blot out all else that comes out

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Once more, the picture that emerges of James Murdoch is, at the very least, of a rather odd chief executive: one who is rather intensely unaware of the very deep problems those just below him are discussing, and one who signs off on huge legal settlements with seeming casualness.

Phillip Davies says Murdoch seems awfully "cavalier" with money. He says that, if a similar person at a subsidiary of Wal-Mart were given the kinds of figures he was given in the Gordon Taylor case, he would instantly ask about the details of such a settlement.

Murdoch says that he was told that the Taylor case would be lost, and that he was given a precise range of settlement money. He says the company has always delegated a lot. In his version, he trusted his deputies and took them at their word.

Davies asks what it would have taken for Murdoch to say, "let me have a look at that." Important here: Tom Crone was apparently only authorized to make settlements of up to £10,000—a lot less than the huge Taylor settlement. So why did Murdoch not bat much of an eye when he was told he would have to go a lot higher?

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Davies asks Murdoch if he's made any changes to his executive style since all of this happened. Murdoch says the company's made a lot of changes, including new boards and compliance officers.

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The Guardian has a transcript of the blockbuster exchange between Watson and Murdoch about Neville Thurlbeck.

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Murdoch says that Colin Myler and Tom Crone were very much driving the bus on the Gordon Taylor settlement. He also says he's happy to provide the committee with his calendar from 2008, but declines to say explicitly that he'll let Colin Myler access his computer files from the same period.

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Murdoch says he doesn't remember if he had a lot of knowledge about Gordon Taylor. Farrelly asks if Murdoch sat up and said, "he's not royal," meaning that this was clearly a case that was different from that of the one that ensnared royal reporter Clive Goodman, and thus was evidence of wider criminality at the News of the World.

Murdoch just says he was told that Taylor was another person Glenn Mulcaire had hacked.

Farrelly asks him if he wondered, "who the hell else has this Glenn Mulcaire been hacking?" Murdoch says he didn't. Farrelly asks if Rupert Murdoch might have been more inquisitive. James says he doesn't know.

"Are you always so incurious with the other businesses that you run?"

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Farrelly tells Murdoch that he must have been the only person to believe, after the Guardian's initial 2009 hacking report, that the scandal was limited to one rogue reporter and one private eye. Murdoch says that he was told there was no new evidence in the scandal, and left it at that.

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"What never happened was Mr. Crone and Mr. Myler showing me the relevant evidence," Murdoch says. He says that the two men had a "lot of supposition" in their testimony, and have never said definitively that the smoking gun documents were shown to him.

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"Do you think you have handled this competently?" Farrelly asks. Murdoch says he's spent a lot of time thinking about this, and feels that he behaved "reasonably given the information that I had." He does say that News Corp. took too long to come to grips with the scandal.

"Yes or no?" Farrelly asks. "No, I don't think it shows me to be incompetent."

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Louise Mensch takes over. She asks about the internal reviews that the company has promised to take. Murdoch says he thinks they're going well.

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There's been an arrest at The Sun recently, but James Murdoch says he can't talk about that. He says that he has "no knowledge" of phone hacking beyond NoW, but does not want to "prejudge" any investigations. So...there might be?

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Mensch asks about reports that Tom Crone asked private investigators to spy on hacking lawyer Mark Lewis. Murdoch says that this was "shocking" and "appalling," and that he just found out about it.

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Murdoch also apologizes "unreservedly" to Tom Watson for NI spying on him. Mensch says that it seems like every few weeks, another scandalous practice emerges from News Corp. and NI. Why not just release all the shady info at once? Murdoch says that the company has been as transparent as possible.

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Murdoch says that the use of private investigators was too widespread, and has been severely restricted. Watson, who was spied on, says it is a "great relief" to hear this.

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Watson now asking about computer hacking, but is cautioned by committee chair Whittingdale that he is straying into murky legal waters and backs off.

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Murdoch now asked if employees at The Sun commissioned phone hacks. Murdoch says he shouldn't comment. The MP asks him if he was aware that the words "The Sun" appeared in Glenn Mulcaire's private files. Murdoch says he's not aware. MP asks him if he'll shut The Sun down if evidence of phone hacking surfaces there. Murdoch says he's not going to rule anything out.

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"Wow" is the basic reaction everyone has to Murdoch saying he could shut The Sun down. That would be a huge deal.

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Paul Farrelly goes for the final question. It's about the million-dollar phone hacking payoff to super-PR man Max Clifford. Murdoch (surprise!) says he wasn't involved, though he was made aware of the settlement.

He then goes for a final final question, about Glenn Mulcaire. Murdoch says that NI will pay damages on behalf of Mulcaire, since he was doing work for the company. Farrelly says that this effectively means that NI is backing up the man who hacked Milly Dowler's phone.

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That didn't clear up much. Expect more hearings, and especially to hear more from Colin Myler and Tom Crone.

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