BSkyB chairman James Murdoch, left, and News Corp. chairman and CEO Rupert Murdoch appear before a parliamentary committee on phone hacking at Portcullis House in London on July 19, 2011
Rupert Murdoch sparred Tuesday with a committee of lawmakers over the phone-hacking scandal that has rocked his global empire, reeling from tough questioning before recovering his composure and rebuffing his interrogators with flashes of his legendary toughness. The elder Murdoch banged his hands on the table and said the day was the most humble of his life, becoming flustered when committee members peppered with him questions and turning to his son James for some answers.
He recovered later in a tense question-and-answer session with lawmakers, pushing back with firm denials of wrongdoing. Murdoch, 80, said he was "shocked, appalled and ashamed" at the hacking of the phone of a murdered schoolgirl by his now-shuttered News of the World tabloid. He said he had seen no evidence that victims of the Sept. 11, 2001 terror attack and their relatives were targeted by any of his papers.
Murdoch said he was not responsible for the hacking scandal, and his company was not guilty of willful blindness. He repeatedly batted away questions about operations at the News of the World by saying he wasn't really in touch with the tabloid or didn't know what was going on there.
Murdoch also told the committee that he didn't believe the FBI had uncovered any evidence of hacking Sept. 11 victims in a recently launched inquiry. He said he lost sight of News of the World because it is such a small part of his company and spoke to the editor of the paper only around once a month, talking more with the editor of the Sunday Times in Britain and the Wall Street Journal in the U.S.
James Murdoch apologized for the scandal, telling British lawmakers that "these actions do not live up to the standards our company aspires to."
The younger Murdoch said the company acted as swiftly and transparently as possible. Rupert Murdoch acknowledged, however, that he did not investigate after the Murdochs' former U.K. newspaper chief, Rebekah Brooks, told parliament years ago that the News of the World had paid police officers for information.
Asked by lawmakers why there was no investigation, he said: "I didn't know of it." He says the News of the World "is less than 1 percent" of his News Corp., which employs 53,000 people. Murdoch also said he was not informed that his company had paid out big sums — 700,000 pounds ($1.1 million) in one case — to settle lawsuits by phone hacking victims.
James Murdoch said his father became aware of the settlement "in 2009 after a newspaper report. It was a confidential settlement. " He said a civil case of that nature and size would be dealt with by the executives in the country involved — in this case James Murdoch, the head of News Corp.'s European and Asian operations.
James Murdoch says news organizations need to put a stronger emphasis on ethics in the wake of the phone-hacking scandal, telling lawmakers that "we do need to think in this country more forcefully and thoughtfully about our journalistic ethics."
The value of the Murdochs' News Corp. added around $1.5 billion while they were being grilled, trading 3.8 percent higher at $15.54. The stock has taken a battering over the past couple of weeks, shedding around 17 percent of its value, or around $8 billion. Rupert Murdoch's wife Wendi Deng and News Corp. executive Joel Klein, who is overseeing an internal investigation into the wrongdoing, sat behind him as he spoke. The elder Murdoch denied that the closure of the News of the World was motivated by financial considerations, saying he shut it because of the criminal allegations.
There has been speculation that Murdoch wanted to close the Sunday newspaper in order to merge its operations with the six-days-a-week Sun, which some have said will relaunch as a seven-day publication. Asked by a Tuesday whether there was a financial motive for closing the paper, Rupert Murdoch said: "Far from it."
Politicians also pushed for details about the Murdochs' ties to Prime Minister David Cameron and other members of the British political establishment.
In a separate hearing, lawmakers questioned London police about reports that officers took bribes from journalists to provide inside information for tabloid scoops and to ask why the force decided to shut down an earlier phone hacking probe after charging only two people. Detectives reopened the case earlier this year and are looking at a potential 3,700 victims.
The scandal has prompted the resignation and subsequent arrest of Brooks and the resignation of Wall Street Journal publisher Les Hinton, sunk the Murdochs' dream of taking full control of lucrative satellite broadcaster British Sky Broadcasting and raised questions about his ability to keep control of his global media empire. Rupert Murdoch is eager to stop the crisis from spreading to the United States, where many of his most lucrative assets — including the Fox TV network, 20th Century Fox film studio, The Wall Street Journal and the New York Post — are based.
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