Rupert Murdoch declared unfit to lead. The price of half-truths?

A UK parliamentary committee declared Rupert Murdoch 'unfit' to run his global media empire, which could have implications for his stake in the profitable satellite TV network BskyB.

By Dan Murphy, Staff writer / May 1, 2012

In this image from video, News Corp. chairman Rupert Murdoch appears at Lord Justice Brian Leveson's inquiry in London, Wednesday, April 25, to answer questions under oath about how much he knew about phone hacking at the News of the World tabloid.

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In Rupert Murdoch's appearances before the British parliamentary inquiry into allegations of illegal phone hacking and bribery of public officials by two of his UK newspapers, his strategy has been a simple one: Claim he had no knowledge of the extent of the problem, complain that he was misled by subordinates, and promise to fix the culture of his company going forward.

Dan Murphy

Staff writer

Dan Murphy is a staff writer for the Monitor's international desk, focused on the Middle East. Murphy, who has reported from Iraq, Afghanistan, Egypt, and more than a dozen other countries, writes and edits Backchannels. The focus? War and international relations, leaning toward things Middle East.

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In the damning report News International and Phone-Hacking, the House of Commons Culture, Media and Sport Committee has now responded by saying, in effect, that if Mr. Murdoch is taken at his word then he should no longer be running his $49 billion News Corporation. Both Murdoch and his son James told recent parliament hearings that they were misled by executives Tom Crone and Colin Myler about the extent of phone hacking at News International's papers. The committee found that Mr. Crone and Mr. Myler misled them about what they knew, and when they knew it, but also argued that at minimum the Murdochs should have known more themselves. News International is the News Corp. subsidiary for its UK print holdings.

IN PICTURES: Rupert Murdoch's empire

On the basis of the facts and evidence before the Committee, we conclude that, if at all relevant times Rupert Murdoch did not take steps to become fully informed about phone-hacking, he turned a blind eye and exhibited willful blindness to what was going on in his companies and publications."
"This culture, we consider, permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International. We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company.

The finding doesn't carry any legal weight on his own – the UK has no power to remove Murdoch from his positions at the multinational he built from after inheriting a daily newspaper in Adelaide, Australia, from his father in 1952. But UK government regulators have been considering News Corp.'s ownership of satellite station BskyB. The company now owns 39 percent of the company and had hoped to make a $13 billion bid for the full company until that effort was dropped last year as the Murdoch companies became embroiled in scandal. It's possible that the 39 percent stake may come under scrutiny.

Ofcom, the UK's broadcast regulator, requires owners of television licenses to be deemed "fit and proper" for that public responsibility. The hacking scandal, which began at the since-shuttered News of the World weekly tabloid but has now spread to its daily sister publication, The Sun, has already forced Murdoch to abandon a bid for full control of BskyB, which has broadcast rights to Premier League soccer and other sporting events and brought in $715 million of profit in the first half of its current fiscal year. With a parliament committee already declaring Murdoch an enabler of a malfeasance at his companies, Ofcom may take another look at News Corp's ownership stake in BskyB.

The elder Murdoch's reputation is very much in tatters. More than 20 current and former employees have been arrested in the series of scandals that emerged after the discovery last year that NotW reporters hacked into the cellphone of Millie Dowler in 2002, after the 13-year-old girl was abducted. She was later found murdered.