Rupert Murdoch is facing challenging times: a newspaper closed, a multi-billion-dollar deal for BSkyB dropped, his UK CEO Rebekah Brooks arrested and now one of Britain’s top policemen resigns because of links to his company.
After a tumultuous weekend that saw the arrest of his former British CEO Rebekah Brooks in connection with the escalating phone hacking scandal, Rupert Murdoch faces a tough week ahead and an appearance before a parliamentary hearing on Tuesday.
On Sunday, the hacking scandal intensifying at Murdoch’s News Corporation claimed another scalp with the resignation of Britain’s top policeman.
Sir Paul Stephenson, chief commissioner of the (London) Metropolitan Police, quit after “speculation and accusations” about his links to Neil Wallis, a former executive at the now defunct paper News of the World. Wallis worked for the Met as a part-time PR consultant for a year until September 2010.
Stephenson is also accused of failing to investigate phone-hacking charges at the Sunday tabloid that had surfaced as far back as 2005.
Reporting from London, FRANCE 24’s Benedicte Paviot said that Stephenson’s resignation Sunday evening sent shockwaves across the country. “It stunned everybody,” said Paviot. “”He is the highest public servant to resign so far.... this is very serious indeed.”
Stephenson’s resignation on Sunday evening followed the arrest of former News International CEO Rebekah Brooks, the most high-profile News International figure to be arrested so far.
Brooks was arrested by appointment at a London police station at noon on Sunday after agreeing to help police officers with their inquiries.
She was grilled for 12 hours over “suspicion of conspiring to intercept communications” and alleged illegal payments to police officers while she was editor of The News of the World from 2000 to 2003.
Brooks has denied any knowledge of hacking at the newspaper.
The weekend also saw News International’s full-page “We are Sorry” advertisements in British national newspapers, including the Guardian, the daily that has played a key role in breaking the “hackgate” scandal.
Last Wednesday News Corp. withdrew its 12 billion dollar claim for the 61% of British satellite broadcaster BSkyB that it does not already own, after a commons debate calling for Murdoch to drop the plans.
London's police chief denies any wrongdoing
And while Murdoch is fire-fighting in the UK – he has to deal with concurrent judicial and police inquiries into News International’s activities - the damage has spread to his operations in the US.
On Friday, long-term ally Les Hinton quit as CEO of Dow Jones and as publisher of the Wall Street Journal, both owned by News Corp.
In Australia, home of the Murdoch empire, News Corp. shares were 5.82 % down at noon on Monday (3am GMT) having clawed back from a more than 7% drop earlier Monday. They lost more than 11% last week.
A tough week ahead
The pressure is going to intensify for Murdoch this week as he, his son James and Brooks prepare to give evidence to a parliamentary select committee in the House of Commons on Tuesday.
Questions are likely to focus on the allegedly "industrial scale" of phone hacking and of cash payments made to police officers for stories, as well as looking at the relationship between News International executives and government. (Click here for the Guardian’s list of “questions that need answering”).
Whatever line the committee takes, the questioning is likely to be merciless. In the UK, using subterfuge to gain information is acceptable if it can be proved that it is “in the public interest”. But critics say that many of the scoops and stories allegedly broken by the News of the World as a result of illegal activity were merely “interesting to the public”, and often either extremely damaging to political reputations or intrusive for ordinary Britons.
ANDY COULSON: A LONG WAY FROM DOWNING STREET
But while all eyes are on Tuesday’s parliamentary hearing, Paviot warns that Brooks may provide few answers during the session. “We may get very many silences because she may be advised, by her lawyers, not to incriminate herself and not to pose a problem for the judicial inquiry that is going to get underway as well as a police investigation into the scandal. So it was high drama over the weekend and more high drama – I think – coming up.”
Focus to shift to David Cameron
Many of the committee's questions will explore the relationship between Andy Coulson, editor of the News of the World from 2003 to 2007, and Prime Minister David Cameron, who made the ill-fated decision to hire Coulson as his senior press advisor.
Coulson resigned as editor of the News of the World in 2007 following the conviction and imprisonment of the paper’s royal reporter Clive Goodman and private investigator Glenn Mulcaire for phone hacking.
He resigned as Cameron's director of communications in January 2011, saying "When the spokesperson needs a spokesperson it's time to move on".
Cameron’s decision to hire Coulson raises serious questions, both about Cameron’s judgement and also about the closeness of his relationship with News International.
In addition to giving Coulson “a second chance”, Cameron also enjoys a close social relationship with Brooks, who lives less than a mile from the Prime Minister's constituency home in Oxfordshire.
In a veiled barb at Cameron in his resignation letter, out-going Met chief Sir Paul Stephenson sought to justify the force’s decision to hire Wallis as a media advisor, and pointedly compared Wallis to Coulson.
In his resignation statement, Stephenson, who denies any wrongdoing, wrote: “Unlike Mr Coulson, Mr Wallis had not resigned from News of the World, or, to the best of my knowledge been in any way associated with the original phone hacking investigation.”
Date created : 2011-07-18