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Dublin: 7 °C Thursday 2 October, 2014

Murdoch: Fallout from hacking scandal ‘changed my entire company’

The 81-year-old tells Leveson: “I failed, and I’m sorry about it,” adding later: “We are now a new company altogether.”

Image: Mark Lennihan/AP

RUPERT MURDOCH used his testimony before the Leveson Inquiry today to portray himself as the victim, and not the perpetrator, of a cover-up over phone hacking — a bold claim unlikely to be accepted by those suing his company for invading their privacy.

The 81-year-old media magnate apologised, saying he had failed in his role as CEO of News Corporation, and noted that the corporate cleanup of the British phone hacking scandal had cost the company hundreds of millions of dollars and transformed its culture.

“I failed, and I’m sorry about it,” Murdoch said, adding later: “We are now a new company altogether.”

Murdoch’s two days of testimony, which began yesterday, marked his attempt to corral the scandal that has rocked Britain, tainted senior politicians, prompted top police commanders and media executives to resign and affected large swathes of his media empire.

His words, delivered under oath, offered an unusual public glimpse into the media mogul’s personality, alternately combative and contrite. Murdoch showed the occasional sign of annoyance, but pointed questions about his alleged vast political influence and business interests were largely parried with firm denials and touches of dry wit.

A few new revelations tumbled out, among them his admission that his dramatic decision to shut down the 168-year-old News of the World — the Sunday paper at the centre of the scandal — was an impulse move. He said he snapped his fingers and “it was done like that.”

“I panicked. But I’m glad I did,” Murdoch said, explaining that he’d long wanted to replace the paper with a Sunday edition of The Sun, his top-selling tabloid.

Murdoch also revealed that he had been taken aback at the size of the 2008 payout made to phone hacking victim and former England soccer manager Gordon Taylor — testimony at odds with what his son James Murdoch told the inquiry earlier in the week.

Conflict

The elder Murdoch’s admission was important, because critics have alleged that the $1 million settlement to Taylor — 10 to 20 times larger than a typical payout for breach of privacy — was intended to bury the hacking scandal.

If James Murdoch knew that the settlement was outrageously large when he signed off on it, it would strengthen the argument that the 39-year-old media executive knew that the payout was aimed at hiding wrongdoing.

The younger Murdoch said on Tuesday that, at the time, he had no way of knowing whether the sum was particularly large. But the elder Murdoch expressed no such doubts Thursday.

“The size seemed incredible,” Murdoch said. “It still does seem incredible.”

Overall, Murdoch stuck to the line that he and his son were deliberately kept in the dark by subordinates about the illegal behavior at the News of the World.

“The senior executives were all misinformed, and shielded from anything that was going on there,” he told the inquiry. “I do blame one or two people for that.”

He didn’t name them, but he identified one as “a clever lawyer” who shared drinks with many of the journalists involved — a transparent reference to News International legal manager Tom Crone.

‘Shameful’

Crone, in a statement, called Murdoch’s testimony “a shameful lie.”

Murdoch seemed to catch Lord Justice Brian Leveson, the head of the media inquiry, off guard with his statement that “a journalist doing a favour for someone and getting a favour back is pretty much everyday practice.”

“It’s a common thing in life, well beyond journalism, for people to say: ‘I’ll scratch your back if you scratch my back,’” Murdoch said.

The comment came as a surprise because Murdoch and his son James had spent much of their testimony denying that they ever traded favours with top politicians.

Observers say Murdoch largely dodged the potential pitfalls during his testimony. ”Rupert got the best of them,” said Murdoch biographer Michael Wolff.

Murdoch may have performed well, but storm clouds still linger over News Corp. Just as Murdoch finished testifying, British broadcasting regulator Ofcom announced it was expanding its investigation into his British Sky Broadcasting Group.

At the same time, British MPs announced that they would publish their long-delayed report into the phone-hacking scandal on May 1.

- Raphael Satter

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