James Murdoch to face second UK hearing

JAMES Murdoch is being recalled for another grilling before Britain’s Parliament after former News Corporation executives raised serious doubts about his role in the country’s tabloid phone hacking scandal.

The committee of lawmakers investigating the scandal hopes to tie up “one or two loose ends” by recalling the younger Murdoch, committee Chairman John Whittingdale said today.

But the committee said News Corporation chief Rupert Murdoch – who appeared alongside his son at a July 19 UK hearing that was televised around the world – was not being recalled.

The two Murdochs gave a dramatic performance earlier this summer, apologising for a scandal that has shaken Britain’s establishment but refusing to accept responsibility for the illegal behaviour which happened at newspapers under their watch.

Ex-News Corporation employees have cast doubt on several claims made by the father-and-son media magnates.

A group of disgruntled shareholders also contend that Rupert Murdoch has known about and sometimes encouraged shady behaviour among his employees in an effort to enrich News Corporation, publisher of The Australian.

The shareholders, consisting of pension funds and other institutional investors in the US, expanded their allegations of corporate corruption and mismanagement in an amended complaint filed overnight in a Delaware federal court.

Former News of the World tabloid editor Colin Myler and former legal adviser Tom Crone insisted that James Murdoch was wrong when he claimed not to have been aware of a critical piece of evidence suggesting that illegal espionage was far more widespread at the tabloid then was being claimed at the time.

Myler and Crone insist that Murdoch was explicitly told about the evidence in a 2008 meeting – raising the possibility that James Murdoch authorised a massive phone hacking payout in an effort to bury the scandal and then lied to parliament about it in July.

“Clearly, there are different accounts which we have heard,” Whittingdale told Sky News television.

“We have spent some time questioning Tom Crone and Colin Myler last week about their version of what happened. We would want to put that to James Murdoch and hear more about how he recalls the meeting.”

James Murdoch has stood by his testimony and his company has criticised Myler and Crone’s evidence as confused and contradictory. A spokeswoman for News Corp., where James Murdoch serves as deputy chief operating officer, said he was “happy to appear in front of the select committee to answer any further questions.”

Alice Macandrew said the company would “await details of the committee’s request.”

Whittingdale told Sky that his committee was “beginning to reach the end of its deliberations” but didn’t give a specific date for the new testimony.

He also said he wanted to quiz Les Hinton, Rupert Murdoch’s former right-hand man, Mark Lewis, a lawyer for many people who have sued the tabloid for hacking into their phones, and Farrer & Co., a law firm which advised News International executives on the payout.

Neither Hinton nor Lewis immediately returned messages seeking their reaction to the committee’s announcement. Farrer & Co. declined comment.

The most explosive allegations in the latest shareholder complaint against News Corp. focus on two subsidiaries that have been previously accused of engaging in abusive and, in some cases, illegal conduct.

Among other things, the allegations assert that the subsidiaries hacked into technology used by New Corp.’s satellite TV rivals, stole business plans and spread false information about competitors in the newspaper advertising business.

The conduct at News America Marketing, a subsidiary that distributes coupons in about 1600 U.S. newspapers, and NDS, a division that provides pay-TV technology, triggered a series of lawsuits that resulted in nearly $1 billion in verdicts and settlements.

Rupert Murdoch was on part of News America Marketing’s board during the time of alleged misconduct that dates back to the 1990s, according to the lawsuit. Other News American Marketing board members at the time included: Daniel DeVoe, News Corp.’s chief financial officer and a board member; and Arthur Siskind, still a News Corp. board member.

Another prominent News Corp. employee, New York Post Publisher Paul Carlucci, once ran News America Marketing. The latest shareholder allegations quote from the sworn testimony of a former News America Marketing rival who said Carlucci delivered this threat in July 1999: “(I)f you ever get into any of our businesses, I will destroy you…I work for a man who wants it all, and doesn’t understand anybody telling him he can’t have it all.” The suit says Carlucci was referring to Rupert Murdoch.

“The revelations surrounding News Corp.’s corporate governance lapses get worse with each new disclosure,” said Jay Eisenhofer, a Delaware attorney representing the unhappy shareholders who allege News Corp.’s board has allowed the company to be run like Rupert Murdoch’s personal fiefdom. The initial complaint, filed in March, focused on a $615 million acquisition of a company owned by Rupert Murdoch’s daughter Elisabeth, before broadening its scope.

News Corp. spokeswoman Teri Everett declined to comment on the latest allegations today.

Hinton, the former publisher of Murdoch’s US flagship, The Wall Street Journal, is the most senior executive to resign in the phone hacking scandal.

At least 16 people have been arrested over the phone hacking scandal, in which News of the World stands accused of illegally hacking into the voice mails of celebrities, politicians and even murder victims in search of scoops.

Those arrested include Andy Coulson, the former top communications aide for Prime Minister David Cameron.

In a separate development today, a lawyer told Britain’s High Court that the mother of a July 7, 2005 London transit bombing victim was among those suing the News of the World over allegations of illegal espionage.

Hugh Tomlinson said that Sheila Henry, whose son Christian Small died in the attack, was among those seeking damages from the now-defunct British paper.

It wasn’t immediately clear whether she or her son had been spied upon by News of the World journalists, although a BBC obituary published after the bombings said loved ones had made repeated attempts to contact him by phone after the bombing.

News of the World journalists are accused of routinely mining voicemail messages left on the phones of crime victims for stories.

Henry’s will now be among a series of test cases aimed at deciding how to handle an ever-growing number of claims being made against the News of the World by people who allege that they’d been illegally spied upon by the tabloid.

Tomlinson also said that staff at News Group Newspapers – a sub-unit of News Corp. responsible for publishing the News of the World and The Sun tabloid – had uncovered tens of thousands of documents as part of their inquiries.

The documents’ content wasn’t made clear.

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