A parliamentary committee has judged that Rupert Murdoch is "not a fit person" to run a major international company such as News Corp. due to his handling of the phone hacking scandal.
The verdict, from the Culture, Media and Sport committee in the House of Commons, is an unexpectedly damning one. Committee members made clear on Tuesday that it was not a unanimous one, setting up a political fight when the entire House votes on some of its findings.
The committee wrote that Murdoch "turned a blind eye and exhibited willful blindness to what was going on in his companies and publications," and concluded that he "is not a fit person to exercise the stewardship of a major international company."
The report is the culmination of years of investigation since the phone hacking crisis first broke in 2009. Since then, the scandal has caught everyone from journalists to police to politicians in its net, and cost Murdoch hundreds of millions of dollars.
Both Rupert and James Murdoch gave evidence to the committee after the Milly Dowler story sent the scandal into overdrive in July of 2011. Last week, Rupert Murdoch said that there had been a "cover-up" at the News of the World, the now-shuttered paper at the center of the scandal. But he has insisted that he was completely in the dark about the extent of phone hacking, and that he "failed" to make any attempts to find out what was going on at his newspaper.
The report was highly divided along political lines, chiefly due to the surprisingly harsh criticism of Murdoch. Members of the opposition Labour party voted as a bloc, along with one Liberal Democrat, to insert the passages, over the objections of all of the Conservative members.
At a press conference held by the committee on Tuesday, Louise Mensch, a Conservative member, said that the report was "partisan" and had been "damaged" by the controversial sections. Labour MP Tom Watson countered, saying that he was "disappointed that some members didn’t feel sufficiently convinced or confident to hold the most powerful to account."
The "not a fit person" phrase is a resonant one in the UK. Media regulator Ofcom is tasked with judging whether a company is "fit and proper" to hold a broadcasting license — something of keen interest to Murdoch, who owns a hefty chunk of the highly lucrative satellite broadcaster BSkyB. Ofcom has been investigating whether Sky is fit and proper to hold the license. Until recently, James Murdoch was chairman of BSkyB.
"We note the publication of the Culture, Media and Sport Committee report, which we are reading with interest," Ofcom said in a statement. "Ofcom has a duty under the Broadcasting Acts 1990 and 1996 to be satisfied that any person holding a broadcasting license is, and remains, fit and proper to do so. Ofcom is continuing to assess the evidence that may assist it in discharging these duties. As part of this we are considering the Committee report."
While the MPs split over Murdoch, they were united on other aspects of the report. The committee unanimously found that former News International chief Les Hinton, former News of the World editor Colin Myler and former News of the World legal manager Tom Crone had misled Parliament.
Hinton was deemed to have misled the committee repeatedly over his knowledge of payments to Clive Goodman, the first reporter to be caught up in the scandal. The report said Crone had lied about the nature of his involvement in the notorious phone hacking settlement with soccer union boss Gordon Taylor, and that both he and Myler had "answered questions falsely" about their knowledge of phone hacking.
Myler is now the editor of the New York Daily News. In a statement, he said, "I stand by the evidence that I gave the committee."
Hinton also issued a statement, saying he was "shocked and disappointed" at the allegations against him, which he called "unfounded, unfair and erroneous."
Myler and Crone have insisted for months that they warned James Murdoch explicitly that phone hacking was rife within the paper, something Murdoch has vehemently denied. The committee members wrote that they could not come to a conclusion about who was telling the truth in the matter. But they condemned James Murdoch for his professed lack of interest in the Taylor settlement, which dwarfed any similar payment the company had made in the past.
While the committee did not find that James had misled the House of Commons, it said that his "lack of curiosity" about phone hacking, which it also described as "willful ignorance," was "astonishing."
The report avoided making firm conclusions about Rebekah Brooks — a top former Murdoch deputy who was the editor of the News of the World when Milly Dowler's phone was hacked — because she is involved in an ongoing police investigation.
Overall, the report said that News International had shown "contempt" in its dealings with the committee and had misled it about the "true nature" of its investigations into phone hacking.
And it was scathing in its verdict about the company's overall handling of the crisis. it said that it had failed to release documents that would have "helped to expose the truth," and that it has "above all, wished to buy silence in this affair and to pay to make this problem go away."
News International's instinct "was to cover up rather than seek out wrongdoing and discipline the perpetrators," the committee wrote.
News Corp. initially issued a statement saying that it was "carefully reviewing the Select Committee's report and will respond shortly." It also said that it "fully acknowledges significant wrongdoing at News of the World and apologizes to everyone whose privacy was invaded."
Later, the company released more extensive comments. It acknowledged that "hard truths" could be found in the report, and that its response to the scandal was "too slow and too defensive." But it criticized what it called the "unjustified and highly partisan" passages in the report.
Murdoch also sent a company-wide memo to his employees.
"I recognize that for all of us – myself in particular – it is difficult to read many of the report’s findings," part of the memo, which was obtained by The Huffington Post, read. "But we have done the most difficult part, which has been to take a long, hard and honest look at our past mistakes. There is no easy way around this, but I am proud to say that we have been working hard to put things right."
Read the report below.
Phone Hacking Report
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