Murdoch Hacking Scandal: 'Catalogue of Failures'

July 20, 2011— -- A British parliamentary committee on Wednesday heaped scorn on Rupert Murdoch's News International for trying to "deliberately thwart" a probe into phone hacking by the company's journalists and called out the police for failing to thoroughly investigate it.

"There has been a catalog of failures by the Metropolitan Police and deliberate attempts by News International to thwart the various investigations," said Keith Vaz, the committee's chairman.

A Parliament committee heard testimony from Murdoch and his son James on Tuesday regarding the hacking scandal at News of the World that has roiled the company and the country.

The new report released overnight singled out former assistant police commissioners John Yates and Andy Hayman for criticism. Yates' 2009 review of the investigation that concluded there was no need to probe further was "very poor" and a "serious misjudgment," according to the report.

Hayman's "cavalier attitude" undermined public confidence in police impartiality, the report stated. Hayman, the report said, made "deliberate prevarication" to mislead the committee about allegations that police took payoffs from reporters.

Prime Minister David Cameron testified before Parliament Wednesday that he would not have hired ex-News of the World editor Andy Coulson as his communications chief had he known about the hacking there.

"With hindsight" it was the wrong decision and Cameron said he would offer a "profound apology" if Coulson was found to have lied to him over his involvement.

"You live and learn and believe me I have learnt," the PM said. He also denied claims today that his staff had tried to stop an investigation into phone hacking and police bribery at The News of the World and said the police were to blame.

"The vast majority of our police officers are beyond reproach and serve the public with distinction," he said today. "But police corruption must be rooted out."

Ed Miliband, the opposition Labour leader, told Parliament that there had been a "deliberate attempt to hide the facts." Miliband claimed that Cameron ignored repeated warnings about Coulson's suitability for the job as press spokesman. He called the hiring a "catastrophic error of judgment."

Yesterday, the apologetic Murdochs went before the committee -- with some fireworks when someone tried to hit Rupert with a foam pie.

Video of Wendi Murdoch Intervening

Many News Corp. analysts seemed to share the opinion that the hearing was not as disastrous as expected and may have even helped the company. News Corp.'s stock rose on Tuesday by 83 cents, or 5.5 percent.

"We give [Rupert Murdoch] an A+ for contrition, which probably helps repair his reputation a bit," David Bank, analyst with RBC Capital Markets, wrote in a recap of the hearing.

Bank also wrote that James Murdoch was "really the star of the show, and his credibility was probably enhanced." Murdoch's youngest son said he was not working directly with News International when the hacking first began.

"He acknowledged that he was informed about key follow-up issues like civil settlements but was not a driving force behind them," Bank wrote.

James Murdoch, 38, is deputy chief operating officer of News Corp. and chairman and CEO of News International. He is in part blamed for mishandling the debacle that also led News Corp. to withdraw its takeover bid for pay-TV broadcaster BSkyB on July 13.

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.

The Murdochs did not reveal any crucial information that could implicate them in additional phone hacking scandals, saying they were "unaware" of phone hacking with respect to victims of the 9/11 attacks. The FBI announced they began a preliminary inquiry on July 14 into the matter.

Bank said that even a simple perception that senior management was unaware of any such activity could help keep the issue contained to the United Kingdom, causing American regulators to focus less on hacking.

"I don't think we really learned much today, but that Rupert insists he is both hands on and deeply ignorant of things at his company," Simon Dumenco, media columnist at Advertising Age, said.

The hearing continued after a brief pause, with Rupert Murdoch not wearing his suit jacket and only a handful of spectators allowed in the room. The BBC reported that the alleged attacker was identified as Jonnie Marbles, who calls himself an activist and comedian. Marbles may have self-incriminated himself by tweeting minutes before the attack: It is a far better thing that I do now than I have ever done before #splat

"Mr. Murdoch, your wife has a very good left hook," Tom Watson, member of Parliament, said near the end of the Murdochs' questioning.

Dumenco said the pie, reportedly shaving cream in a tin-foil pan, actually helped the Murdochs' public image.

"My reaction is the pie throwing incident was a total gift to the Murdochs," Dumenco said. "It becomes the visual that everyone focuses on. It steals attention away from essentially empty answers from James in a verbose form, and all–defiant, know-nothing answers from Rupert."

After the committee dismissed the Murdochs, former News of the World editor and News International chief executive Rebekah Brooks sat down to answer questions.

The committee told Brooks, who was arrested last week, it would be careful with its probing because she is participating in a criminal investigation. She insisted that she did not know about the extent of the phone hacking.

"We had been told by people at News of the World at the time -- they consistently denied any of these allegations in various internal investigations," she said.

She told the committee she acted "quickly and decisively" in dealing with the phone hacking scandal at the News of the World once she had seen fresh evidence regarding actress Sienna Miller in December 2010.

She also denied reports that she had an overly influential relationship with the current and previous prime ministers.

"I have never been horse riding with the prime minister," she said in response to various news reports about her close relationship with Prime Minister David Cameron. Cameron hired a previous News of the World editor, Andy Coulson, a former editor of the News of the World who was arrested earlier this month, as communications director in 2007.

Brooks said she "regularly" visited former Prime Ministers Tony Blair and Gordon Brown at Downing Street around six times a year.

Earlier, Rupert Murdoch told the British Parliament committee that he wasn't responsible for the scandal that has embroiled his media empire.

"Mr. Murdoch, do you accept you are ultimately responsible for this whole fiasco?" asked Jim Sheridan, a member of Parliament.

"No," replied Murdoch, explaining that those he hired and trusted and the people who they hired and trusted were responsible. He mentioned Les Hinton, the publisher of the Wall Street Journal, who resigned Friday. Hinton and Murdoch have worked together for 52 years, including while Hinton was chief executive of News International, Murdoch's British newspaper publisher.

"I would trust him with my life," Murdoch said of Hinton.

Faces of the Murdoch Scandal

The House of Commons Culture, Media and Sport Committee opened hearings into the phone hacking scandal that has roiled the media, police and the public in Britain. Outside the hearing room, the international media and a huge crush of spectators crowded the building. Behind the Murdochs sat a limited number of spectators, including Murdoch's wife, Wendi Deng.

The morning's questioning is a follow-up to a similar hearing that took place in 2009. In the committee's previous report, the committee stated it was "inconceivable" only one reporter had been involved in phone hacking.

When asked if closing News of the World was a commercial decision, Rupert Murdoch said, "Far from it."

Both men played down the suggestion that they were planning to open a new Sunday tabloid to replace the News of the World.

"We have made no decision on that," Rupert Murdoch said. His son added: "I think we leave all those options open. That is not the company's priority now."

Rupert Murdoch's first comment to Parliament was that today is the "most humble day of my life."

In answering a query about his hands on-off approach when it comes to his newspapers, Rupert Murdoch said that he perhaps "lost sight of" the News of the World because it was so small in the general frame of the company. He explained that the editor he is in most touch with is the editor of the Wall Street Journal because they work in the same building. The News Corp. headquarters is in Manhattan.

Rupert Murdoch said he works a 10 to 12 hour workday, but he was not aware of all the details of News of the World, which comprises less than 1 percent of his entire company.

"I employ more than 53,000 people around the world," the elder Murdoch said.

Piers Morgan, CNN host and former editor at News of the World, defended his former boss.

"Rupert called me every week for 18ms on News of the World -- rarely asked about anything but what stories we had that week," Morgan tweeted during the hearing.

Murdoch's son, James, said that what happened at the company's now closed News of the World newspaper was not in keeping with the company's standards.

"I have to tell you I sympathize with the frustration of this committee," James Murdoch said. "It's a matter of real regret that the facts could not emerge and could not be gotten to, to my understanding, faster."

Rupert Murdoch's Statement to the Committee

In answer to a number of questions, Rupert Murdoch, 80, said he did not recall exact details and paused for moments before responding.

"We have broken our trust with our readers," a grim Rupert Murdoch said.

One member of Parliament, Tom Watson, asked Rupert Murdoch whether Rebekah Brooks or James Murdoch informed him that victims of phone hacking received monetary settlements. Rupert Murdoch said he did not remember precisely, but his son likely informed him. The elder Murdoch also looked to his son when asked who was the lead counsel of his company at one point.

Sir Paul Stephenson, who quit as head of the Metropolitan Police, also known as Scotland Yard, testified first about his involvement with the case. He fielded questions from MPs about the department's relationship with the Murdoch papers.

Stephenson told the committee that "distracting" news coverage of his connection to the hacking case gave him no other choice than to resign. "It was my decision and my decision only."

John Yates, assistant commissioner of London's Metropolitan Police, followed Stephenson in answering questions. Yates reportedly reviewed phone-hacking evidence in 2009 and concluded there was no need for a deeper investigation.

"God, I wish I had done something different," Yates told the committee.

Rebekah Brooks is also set to appear before British Parliament on Tuesday morning about the phone hacking.

It is alleged that the tabloid 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.

Members of Parliament and the media reignited the scandal earlier this month after reports the tabloid's journalists hacked the phone of a murdered teen, Milly Dowler. Journalists and a hired private investigator allegedly deleted some voicemail messages in her full mailbox, to hear new ones from concerned family members.

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.

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 an earlier 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 made a rare apology in British newspapers over the weekend.

Considered the heir apparent to his father Rupert Murdoch's media empire, James may face pressure inside and outside the company 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."

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 July 14.