Tabloid phone hacking scandal spreads, former Cameron aide arrested

A scandal that started with revelations that the Sunday tabloid the News of the World had hacked into the cellphone of a missing teenage girl has spiraled into a political crisis for the government of British Prime Minister David Cameron and a business nightmare for media tycoon Rupert Murdoch.

Mr. Murdoch's decision to close the paper at the center of the storm, announced by his son James yesterday, has not put the scandal to bed.

Today, Andy Coulson, a former NotW editor and the prime minister's senior media adviser until he stepped down from his post in January, was arrested. What's more, the government is planning wide-ranging changes to media regulation, and a massive television buyout by Murdoch's News Corporation that appeared set to gain government approval a week ago is now in doubt.

The closure of the 168-year-old News of the World, the world’s best-selling English language newspaper, followed a successful Internet campaign to encourage advertisers to withdraw from the newspaper. At around 11 a.m., British police confirmed they had arrested Mr. Coulson, who edited NotW at the time of the alleged phone hacking.

Coulson's arrest could prove a political challenge for Mr. Cameron. Coulson resigned as Cameron's communications chief when new allegations emerged that he knew about phone hacking at the paper while he worked there. He resigned as editor following the 2007 conviction of a NotW reporter and private investigator for hacking into the cell phone of Prince Harry, saying he took responsibility but didn't know what the two men had been up to. He then took up a job on the Conservative Party's staff. When Cameron won the premiership, Coulson followed his good friend into government.

Cameron told reporters he had a series of conversations with Coulson between his NotW resignation and joining the Conservative Party’s staff. Responding to claims he had been warned Coulson's appointment could be troublesome, the prime minister said: “No one gave me any specific information. Obviously I sought assurances, I received assurances. I commissioned a company to do a basic background check, but I'm not hiding from the decision I made.”

World keeps turning

All the while, the news of the NotW scandal keeps evolving.

The newspaper’s former “royal correspondent” Clive Goodman, who served four months in prison for illegally intercepting royal phone calls, was also re-arrested today.

Shortly after 9 a.m., Cameron promised two inquiries, one a full judicial review, into the phone hacking allegations. Speaking in Parliament, he also announced a major shake-up of newspaper regulation. The present system of self-regulation by the newspaper controlled Press Complaints Commission is to set to be replaced with an as yet unknown watchdog.

“Let's be honest. The Press Complaints Commission has failed. In this case, the hacking case, frankly it was pretty much absent ... I believe we need a new system altogether,” Cameron said.

The newspaper’s closure comes amid growing public demands to stop News Corporation’s takeover of satellite television network British Sky Broadcasting (BSkyB). News Corp, which first developed its interest in European satellite television in 1982, currently owns 49 percent of BSkyB.

Graham Barnfield, journalism professor at the University of East London, says News Corp and Murdoch’s interests lie more in television than in print newspapers. “Sky [television] is the real issue, relative to the News of the World. The News of the World has, like all newspapers, suffered a circulation decline,” he said.

British culture minster Jeremy Hunt said today the volume of responses to a public consultation on the takeover would result in a delay to the process.

Eyebrows have been raised at the closure of the NotW in light of former editor and current News International, boss Rebekah Brooks keeping her job. News International is News Corp’s UK newspaper subsidiary. Ms. Brooks, a close confident of Murdoch, was Coulson's predecessor at the NotW, also at a time when phone hacking and payments to police officers for information are alleged to have taken place.

“The question everyone is asking is: What does Rebekah Brooks know that makes her unsackable?,” says Michael Cross, a journalist who has a column in the National Union of Journalists members’ magazine.

Mr. Barnfield says the newspaper’s predicament is not a result of strong investigative journalism. “Phone hacking has been a product of weak journalism. It’s a culture of ‘see what we have on such-and-such a person this week,’ rather than following investigations,” he said.

He also says the newspaper fell victim to a campaign of outrage not unlike ones it had itself directed. “It’s a fairly clear example of one of these ‘Twitter campaigns,’ but the News of the World did, in the same way, deal in outrage. It led many campaigns of moral indignation, some more successful than others,” he said. For instance, in 2000 the paper ran a "name and shame" campaign with the pictures and names of alleged pedophiles. The campaign led to vigilante violence against some of the accused.

Silver lining for Murdoch?

Though the NotW was highly profitable, many media pundits suspect that the newspaper’s closure suits News International’s plans to run consolidated seven-day newsrooms. British journalists for decades resisted the merging of daily and Sunday newspapers (The Sunday Times, for instance, has separate editors and reporters from The Times of London) but in June Richard Caseby was appointed managing editor of both the daily Sun and the Sunday NotW.

The Sun is also owned by News International and it's widely expected to now start a Sunday edition.

Dominic Ponsford, editor of the Press Gazette newspaper for journalists, says most publishers have moved in the direction of continual operation. “The Telegraph is seven days, the Guardian is seven days. News International was the last major group not to merge its resources,” he said. Mr. Cross says British journalism’s reputation is sinking as a result of the scandal, which could widen to other papers.

“I was speaking to the Information Commissioner yesterday on another matter and he has stuff on other newspapers using information that was bought from private investigators," he says. "Paying off the police is why this is going to run and run."

“We’re all going to be wearing hair-shirts in journalism for the next couple of years," says Cross. "It’s time for professional journalism to assert itself and do things differently – my own hobby horse is transparency,” he said.

The final NotW edition will run this Sunday and feature no advertisements. Around 200 staff are expected to lose their jobs. A new Sun on Sunday title is expected to follow. The web domains SunonSunday.com and SunonSunday.co.uk were registered by web design company Mediaspring on July 5.