James Murdoch may face lawmakers again in hacking scandal

News Corp.'s James Murdoch faces new questions about the extent of illegal phone hacking at the News of the World tabloid after two executives challenged his statements to parliament.

Tom Crone, the newspapers' lawyer until July, and Colin Myler, its former editor, yesterday said they told Murdoch in 2008 about an e-mail that suggested phone-hacking went beyond a rogue reporter. Crone told the parliament's Culture Committee it was “absolutely inconceivable” that the pair wouldn't have explained this when they discussed a lawsuit with Murdoch.

The fresh challenge to Murdoch's claims may prompt lawmakers to recall him for questioning in the scandal that led to the closure of the News of the World, the arrests of at least 15 people and forced News Corp. to drop a bid for British Sky Broadcasting Group Plc. Murdoch, News Corp.'s deputy chief operating officer, reiterated that he hadn't realized until late 2010 that hacking was widespread.

“He was either guilty of ignoring a wider problem, or failing to spot it. Either way, he's not acted responsibly,” said Charlie Beckett, director of media at the London School of Economics. At the same time, it “strains credulity to think” that both sides are “giving us a full picture.”

James Murdoch, 38, and his father Rupert, 80, were already questioned on July 19 by British lawmakers for three hours. Rupert Murdoch, who is News Corp.'s Chief Executive Officer, is “highly unlikely” to be recalled, Therese Coffey, one of the committee's members, said yesterday.

‘Top of the Empire'

“Rupert Murdoch was very much at the top of the empire and covering a vast range of activities,” Coffey told BBC Radio 5. “I think it's clear that James Murdoch was the key figure.”

Lawmakers may meet next week to decide on whether to recall witnesses in the probe. Committee Chairman John Whittingdale said July 29 that the lawmakers wrote to Murdoch and that they're likely to demand new explanations.

News Corp. rose 3.3 percent to the equivalent of $16.70 in Australian trading today. The stock closed yesterday at $16.33 in New York.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

The dispute centers around an e-mail that was produced by police and showed transcripts of hacked voice mails and had been passed around the News of the World newsroom.

‘I Probably Did'

Myler and Crone met with Murdoch for less than 15 minutes in 2008 to discuss the settlement of a privacy complaint filed by Gordon Taylor, chief executive of the Professional Footballers' Association. They said yesterday they told him the company had to settle because Taylor's lawyers had produced a transcript of voice mails typed by a reporter at the newspaper and marked “for Neville.”

“I think everybody perfectly understood the seriousness and significance of what we were discussing,” Myler told the committee.

Asked if he had told Murdoch that this appeared to be a reference to Neville Thurlbeck, the paper's chief reporter, Crone replied, “I've got a feeling I probably did.”

James Murdoch said neither Myler nor Crone told him that wrongdoing extended beyond reporter Clive Goodman and private investigator Glenn Mulcaire, who both went to jail in 2007.

“As I said in my testimony, there was nothing discussed in the meeting that led me to believe that a further investigation was necessary,” Murdoch said in a statement. “They did not show me the e-mail, nor did they refer to Neville Thurlbeck.”

Murdoch has said he agreed to the payment -- more than 10 times the record court award in a privacy case at the time -- on advice of outside counsel.

Hacking Terror Victims

The News of the World has been accused of hacking into voicemails from terror victims, celebrities, sports athletes and politicians. James Murdoch joined News International, News Corp.'s U.K. newspaper unit, as chairman in December 2007, after the alleged hacking took place.

“James Murdoch has to stick to his story,” Niri Shan, the head of media law at Taylor Wessing LLP in London, said in an interview yesterday. “The committee wasn't particularly convinced by Myler's and Crone's recollection of the meeting.”

Jon Chapman, the former head of legal affairs at News International, said yesterday that the company's investigation into phone hacking after a reporter's arrest was never intended to be a wide-ranging probe into wrongdoing.

A law-firm probe commissioned by the company was designed to deal with an employment lawsuit filed by Goodman, Chapman said. Chapman said his own review of e-mails didn't find evidence of illegal activity.

The review “was in the context of an employment tribunal and not a criminal case,” Chapman said.

Murdoch told the committee in July that the law firm's investigation was one of the three “pillars” the company relied on during years of denials that wrongdoing went beyond a single reporter. In written evidence released by the committee yesterday, News Corp. said an examination of e-mails represented the only external probe of phone hacking that had taken place.

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