Murdochs in the Hot Seat: Faces of a Scandal

VIDEO: Rupert Murdoch and son James' testimony will decide media empire's fate.
ABCNEWS.com

Rupert Murdoch and his son James will appear before British Parliament on Tuesday to be grilled by a special committee over evidence of phone hacking at the defunct tabloid News of the World.

The widening scandal has rocked the media, police and the public in Britain, where Murdoch owns many of the country's largest newspapers. It is alleged that his now defunct News of the World hacked the phones of 4,000 people, from stars to crime victims, to get juicy stories -- all with the encouragement of top editors at the paper and aided by some in the police force.

Rupert Murdoch made a rare apology in British newspapers over the weekend.

The elder Murdoch is a man "who meets power with power" and is not going to leave News Corp. willingly, biographer Michael Wolff told Bloomberg News. Wolff's book, "The Man Who Owns the News: Inside the Secret World of Rupert Murdoch," was published in 2008.

The Murdoch name has been synonymous with News Corp. even before it was incorporated in 1979. Rupert Murdoch, the only son of Sir Keith Murdoch, took over his father's newspaper publishing business, News Limited, after he passed away in 1952.

After decades of cutthroat competition and shifting technology, the Murdoch family and embattled News Corp., which owns FOX News Channel, The Wall Street Journal, and publisher Harper Collins, among other assets, now face the tough challenge of surviving a scandal that has even rocked Scotland Yard.

After the dust clears, Rupert Murdoch reportedly hopes one of his children will eventually take the reigns of what has been called the second-largest media congolmerate in the world in terms of 2010 revenue behind Disney, which owns ABC News.

Luchina Fisher, Tom Nagorski and Ben Forer contributed to this story.

Rupert Murdoch: 80-Year-Old Tycoon Faces Questions
Rupert Murdoch, chairman and chief executive of News Corp., published a full-page apology in British newspapers over the weekend about alleged phone-hacking by journalists at his tabloid, the News of the World.

"We are sorry. The News of the World was in the business of holding others to account. It failed when it came to itself," Murdoch wrote in the ad.

Howell Raines, former executive editor of The New York Times, told ABCNews.com that scandal has badly affected Murdoch's reputation.

"I think he's seriously wounded," Raines said. Raines resigned from the New York Times in 2003 amid that newspaper's own scandal in 2003 after a reporter, Jayson Blair, committed plagiarism and fabricated stories.

The 80-year old Murdoch has six children, three of whom are directly involved in his media empire. Murdoch married Wendi Deng, 42, his third wife, in 1999. They have two young daughters, Grace and Chloe.

The Oxford-educated media mogul took over his father's newspaper business, News Limited, in his native Australia when he was 22, according to the BBC. Reportedly in good health since being diagnosed with "low grade" prostate cancer in 2000, he has reportedly insisted that his eventual successor have the Murdoch name.

In an interview with the Wall Street Journal, Murdoch said News Corp. has handled the crisis "extremely well in every way possible," making just "minor mistakes."

"I was appalled to find out what had happened and I apologized and I have nothing further to say," said Murdoch, who last week apologized to the family of Milly Dowler, a murdered teen whose phone was hacked by News of the World in 2002.

Murdoch will answer to members of the British Parliament on Tuesday in regards to the scandal. His biographer, Michael Wolff, said he will also have to defend the Murdoch name, which investors say has tainted News Corp.

"It's likely he's not going to go willingly," Wolff told Bloomberg News about any future calls for Rupert Murdoch to retire. "He's going to go because there is no other alternative."

James Murdoch, the Heir Apparent?
James Murdoch, 38, deputy chief operating officer of News Corp. and chairman and CEO of News International, has been drawn into the phone-hacking scandal that destroyed News of the World, Rupert Murdoch's British tabloid. The debacle led News Corp. to withdraw its takeover bid for pay-TV broadcaster BSkyB on July 13.

James did not directly oversee the News of the World, but he approved payments to some of the paper's most prominent hacking victims, including 700,000 pounds ($1.1 million) to Professional Footballers' Association chief Gordon Taylor, according to the Associated Press.

James has been criticized for responding too slowly to initial allegations that the tabloid was engaging in illegal phone-hacking. News International apologized in rival national newspapers over the weekend for its wrongdoings. Considered the heir apparent to his father Rupert Murdoch's media empire, James may be forced to resign or, worse, could face arrest as the News Corp phone hacking scandal continues to unravel.

"I don't see how he can survive," Howell Raines, former executive editor of The New York Times told ABCNews.com. "Seems to me that the movement both politically and legally is ominous."

"Unlike Lachlan, James is like his father, News Corp. people believe. Or at least he tries to be," Michael Wolff wrote. "But it may not be so much his father that he's emulating as some generic idea of the advanced business figure."

James Murdoch and News of the World initially told Parliament that phone hacking took place in isolated incidents at News of the World, which has been proven false.

"We now have voluntarily given evidence to the police that I believe will prove that this was untrue and those who acted wrongly will have to face the consequences," James said in a statement. "This was not the only fault. The paper made statements to Parliament without being in the full possession of the facts. This was wrong."

Rupert Murdoch has defended his son, saying that James' position with News Corp. is unchanged. As a protective father, Murdoch said James did not respond too slowly to the phone hacking scandal.

"I think he acted as fast as he could, the moment he could," Rupert Murdoch told the Wall Street Journal.

Michael Wolff, Rupert Murdoch's biographer, says otherwise.

"I think he's finished, over, toast," Wolff told Bloomberg News describing James' future. "There's just no credibility."

Elisabeth Murdoch, Groomed by Father
Elisabeth Murdoch, 42, is the eldest child from her father's second wife, Anna Maria Torv Mann.

Elisabeth Murdoch has reportedly blamed her brother for ruining her father's company by mishandling the phone hacking scandal, according to Murdoch biographer Michael Wolff.

Elisabeth has denied that she also said the same of former editor, Rebekah Brooks.

She is married to Matthew Freud, a British public relations executive. Freud criticized Fox News President Roger Ailes in a January 2010 interview with the New York Times.

"I am by no means alone within the family or the company in being ashamed and sickened by Roger Ailes' horrendous and sustained disregard of the journalistic standards that News Corp., its founder and every other global media business aspires to," Freud said.

Howell Raines, former executive editor of the New York Times, told ABCNews.com that Elisabeth Murdoch could be a potential successor to her brother and father.

"It seems to me that the family is going to have to put forward a new candidate," Raines said. "If I were in that family I'd think about seeing my future financial prospects very much at stake right now. The value of company is plunging. If the family has the capability of installing someone they should."

Elisabeth graduated from Vassar College, then worked for her father in the television industry. Wolff wrote in his book that Elisabeth had an entrepreneurial, independent streak. He wrote:

She gets into Stanford Business School. "I called my dad and said, 'I've gotten into Stanford and I'm going.'

"He said, 'Are you f---- crazy? No, you are not. I can give you a much better MBA of life than anybody at Stanford can give you, you know. Come work for me.'"

Elisabeth joined British Sky Broadcasting Group, or BSkyB, of which News Corporation has a stake, in 1996. She departed somewhat controversially in 2000, in part, after taking her mother's side in a "marital battle" with her father, Wolff wrote.

She eventually started her own independent television production company, Shine, which News Corp. acquired in April 2011 for $647 million. The LA Times wrote that the deal accomplished "Murdoch's goal of returning his daughter, Elisabeth Murdoch, to the corporate fold a week after her brother James Murdoch was elevated to deputy chief operating officer of News Corp."

Lachlan Murdoch, Eldest Son
Lachlan Murdoch, 39, is listed as the executive chairman of News Corporation's board of directors though he abruptly left the company in 2005 "partly because his father's executives have ganged up on him, partly because his father can't give up control," Michael Wolff wrote.

"He's as famous in Australia as Prince William in England. His wife becomes the head of the major Murdoch charity in Australia, and, in 2007, the hostess of a popular morning show. They're the king and queen of Bronte Beach. Australia is his place," Wolff wrote describing Lachlan and his wife, Sarah, a model and actress. "Yet he is hardly Australian. He was born in London in 1971 but grew up in New York. It was a wholly upper-class, establishment—liberal Eastern establishment, to be sure—American upbringing. Dalton and Trinity, in Manhattan. Then Phillips Academy, in Andover, Massachusetts. Then Princeton."

Prudence Murdoch: "Forgotten" Daughter
Born in 1958, Prudence is Rupert Murdoch's oldest child and only daughter with his first wife, Patricia Booker. Michael Wolff, who wrote "The Man Who Owns the News: Inside the Secret World of Rupert Murdoch," wrote that "Prue" is "the only one of his children not directly competing for his business affections."

"But her husband, Alasdair MacLeod, is a ranking News Corp. executive, so Prue is hardly neutral about the fate of her father's company," Wolff wrote. "What's more, her children, James, born in 1991, Angus, born in 1993, and Clementine, born in 1996, are the oldest grandchildren, which strategically positions them in the dynastic stream."

Wolff wrote that Prudence "continues to feel like the stepsister and outsider child -- without a place in her father's empire -- and her resentments come to a head in 1999 when she's plastered on the front page of the Sydney Morning Herald under the headline "Forgotten Daughter." Still furious about remarks her father made at a press conference in 1997 in which he'd referred to "my three children," Prue agreed to sit for the only interview she'd ever given up to that point.

Rebekah Brooks: Loyal Editor, Arrested Executive
Rebekah Brooks, once editor of News of the World, was the tenth person arrested in connection to the phone hacking scandal. She was chief executive of News International before resigning last week.

Brooks, whom Murdoch reportedly considered 'his other daughter,' edited the News of World from 2000 to 2003, when much of the alleged criminal activity took place. She has insisted that she knew nothing about it -- even though it is now alleged the paper's reporters illegally hacked 4,000 people's cell phones in search of scoops.

"There's no way that a reporter can come in with the kind of salacious page one stories that the News of the World was running, without an editor saying 'how'd you get that story? Who was your source?'" Ken Auletta, Media Critic for the New Yorker, told ABC News.

Those who worked with her said Brooks would do anything for a story and to further her own career. Her former boss, Piers Morgan, said in his memoir, "The Insider," that Brooks once dressed as a cleaning lady for the Sunday Times and hid in the paper's bathroom to get a freshly-printed issue of the competitor's paper. She then used the Times' material about a Prince Charles biography for the News of the World, Morgan wrote.

Sir Paul Stephenson: Former Head of Scotland Yard
Sir Paul Stephenson, Metropolitan Police commissioner and head of Scotland Yard, resigned on Sunday.

Stephenson insisted he had no involvement in the police's failure to investigate alleged widespread criminal acts by Murdoch's journalists, nor the alleged bribery of police by reporters.

"I had no knowledge of the extent of this disgraceful practice or indeed the extent of it and the repugnant nature of the selection of victims that is now emerging," Stephenson said in his statement.

The 57-year-old had run the police force since 2009, rising up through the ranks. It is alleged that police aided the phone hackers in various ways and may have covered up attempts to investigate it.

John Yates: Resigned Scotland Yard Assistant Commissioner
John Yates, who led the police counter-terrorism department, is the second top police official of Scotland Yard to resign. Yates reportedly reviewed phone-hacking evidence in 2009 and concluded there was no need for a deeper investigation.
Andy Coulson: Prime Minister's Former Communications Director and Ex-Editor
Andy Coulson, editor of News of the World from 2003 to 2007, then communications director for British Prime Minister David Cameron until this past January, was arrested by Scotland Yard on July 8, for his alleged connection to the phone hacking scandal and corruption charges.

Sean Hoare, former News of the World reporter who was the first named journalist to allege Coulson was aware of the phone hacking scandal, was been found dead on Monday, according to British newspaper The Guardian.

"The death is currently being treated as unexplained, but not thought to be suspicious," the police said in a statement. "Police investigations into this incident are ongoing."

The BBC reported that Hoare had been in poor health for some time.

David Cameron: British Prime Minister with Indirect Ties to Scandal?
Prime Minister David Cameron is scrambling to contain damage to his government from the hacking scandal, which has tainted officials at the Metropolitan Police and his own former spokesman.

Cameron announced Monday from South Africa, where he is on a two-day visit, that he would return to Britain in time to address a special session of Parliament on Wednesday. Parliament had been scheduled to recess for the summer Tuesday.

The latest attempt at damage control from Cameron comes just one day after the resignation of Britain's top law enforcement official, Sir Paul Stephenson, and the arrest of Rebekah Brooks. Cameron is known to be a close friend of Brooks, and has invited her to stay at Chequers, the country residence of the U.K.'s Prime Minister.

Cameron also appointed Andy Coulson, a former editor of the News of the World who was arrested earlier this month, as communications director in 2007.

Les Hinton, Former Wall Street Journal Publisher, Long-time Lieutenant
Dow Jones CEO Les Hinton, executive chairman of News International while its tabloid The News of the World engaged in alleged phone hacking, resigned on July 15. Hinton is one of a handful of high-ranking casualties in days that have rocked the British press and police.

For over 12 years, Hinton led News International, Rupert Murdoch's newspaper publisher in London that owned The News of the World.

In Hinton's resignation letter, obtained by the website All Things D, Hinton maintained he was unaware of the inappropriate action that occurred while he was chairman of News International.

"I have watched with sorrow from New York as the News of the World story has unfolded," Hinton wrote. "I have seen hundreds of news reports of both actual and alleged misconduct during the time I was executive chairman of News International and responsible for the company.

He became CEO of Dow Jones and publisher of The Wall Street Journal in December 2007. Hinton previously told Parliament that he had no knowledge of the phone hacking.

"The pain caused to innocent people is unimaginable," he wrote in his statement. "That I was ignorant of what apparently happened is irrelevant and in the circumstances I feel it is proper for me to resign from News Corp., and apologize to those hurt by the actions of the News of the World."

In a statement about Hinton's resignation, Rupert Murdoch wrote that he and Hinton had been on a "remarkable journey together for more than 52 years."

At the start of both their careers, Murdoch reportedly first hired Hinton to be a copy boy for an Australian newspaper when he was 15 and rose among the ranks.

"That this passage has come to an unexpected end, professionally, not personally, is a matter of much sadness to me," Murdoch wrote.

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