Rupert Murdoch and Son to Appear at Parliament, as Fallout from Phone Hacking Sandal GrowsJul 19, 2011 | Parker Waichman LLP
Rupert Murdoch, the 80-year-old owner of News Corp., is set to answer questions about the News of the World hacking scandal today before a committee of the British Parliament. He will be joined by his son, James, who serves as News Corp. chairman and CEO.
According to a report from MSNBC, the stakes are high for both Rupert and James Murdoch, and for News Corp. In the two weeks since the hacking scandal broke, the company's stock has dropped 21 percent, an $8 billion loss. The loss is said to have cost the Murdoch family $1 billion. The scandal has also forced News Corp. to drop plans to take full control of U.K. pay TV operator BSkyB.
Millions in Britain are expected to tune in to watch the Murdochs' testimony, MSNBC said.
"It seems as if there will be standing-room only, that's not surprising as it's the first time Rupert Murdoch has been before a select committee in his 40 years of building up a media empire," said Paul Farrelly, an opposition Labour committee member.
Reporters for the 168-year-old News of the World tabloid are known to have hacked thousands of phones, including those belonging to a teenage murder victim, British Prime Minister David Cameron, and scores of celebrities. It has also been alleged that News of the World may have hacked into phones belonging to victims of the 9/11 terrorist attacks.
Initially, the media conglomerate's official answer to the charges was to insist the hacking was the work of "rogue reporters" at News of the World. But revelations over the past week made it clear that wasn't the case. Public outrage in Britain hit fever-pitch when it was learned that reporters for the tabloid had hacked voicemail belonging to a missing teenager who was later found to be murdered. The reporters ultimately deleted messages and raised false hopes she could be still alive, MSNBC said.
Also testifying today is Rebekah Brooks, a former Murdoch protégée and head of the News of the World when hacking was taking place. Brooks, who resigned her position as News International CEO last week, was arrested yesterday for her role in the hacking. She is one of ten News of the World employees facing charges, though more arrests could follow.
Meanwhile, News Corp. is facing more trouble in the U.S., as MSNBC is reporting that the Justice Department it was investigating $160,000 in payments the company made to officials at the U.K.'s Scotland Yard to see if they violated the U.S. Foreign Corrupt Practices Act, which makes bribing an official in another country a crime. U.S. Attorney General Eric Holder already confirmed that the Justice Department was looking into the 9/11 hacking allegations.
In a filing in a Delaware court, a group of investors charge the hacking allegations show “a culture run amok within News Corp.” The charges were added to a shareholder suit filed in Delaware Chancery Court several months ago, which was amended to include the hacking scandal.
Finally, one of the first News of the World Reporters to come forward in the scandal has died. According to the Guardian, Sean Hoare told The NewYork Times in 2010 that the tabloid’s editor, Andy Coulson, had actively encouraged him to hack into voicemail. Hoare was found dead in his London home yesterday, and investigators are calling his death "unexplained" but not suspicious. According to a report from the Daily Mail, Hoare had become reclusive and paranoid in recent weeks due to stress caused by the scandal.