Rupert Murdoch has already shut the News of the World (NotW), the biggest selling newspaper in the UK, in response to the unfolding scandal over unethical practices at newspapers owned by News International, a UK subsidiary of his News Corporation. Today there were allegations that two other of his UK papers engaged in illegal practices. Murdoch was summoned to testify before parliament next week.
Monitor correspondent Jason Walsh has been tracking the scandal and caught up with Michael Wolff today. The entrepreneur and columnist wrote "The Man Who Owns the News," a 2008 biography of Mr. Murdoch. He spent hours with Murdoch while working on the book and wrote that "every second working for Murdoch is a second spent thinking about what Murdoch wants," something to think about as questions are asked about how high up responsibility for the papers' actions should run.
He spoke to Jason by telephone, ironically enough from Murdoch's New York headquarters (where Wolff was waiting for an interview with Murdoch's Sky News).
JW: Is this fatal for News International as part of News Corp?
MW: "Fatal" seems harsh. I think the company is not going to die because of this, but it may well be true [that it is fatal] to the [current] management of this company. I don't know how James Murdoch can recover from this. I think his credibility is damaged. As for Rupert: What did he know? One of the things we're also seeing is Rupert looks his age. There are legitimate questions that can be asked about who's running things.
JW: Is Les Hinton's position a particular problem for News Corp's US interests, given he was head of News International at the time being investigated? (The 67-year-old Les Hinton is the CEO of News Corp subsidiary Dow Jones and has worked with Murdoch since he was 17.)
MW: Absolutely. There is a very clear chain of command here. The nature of the UK operation has always been close-knit. There aren't big bureaucratic gulfs that separate the companies. If you were running the company when these crimes took place, the chances of you not knowing about them or not being involved, are slim.
JW: What about The Wall Street Journal? Is the situation a disaster for it?
MW: It can be a disaster for the Journal in a variety of ways. It'd certainly not be good for its chief executive to be tied-up in this, but it also means [that], if it damages The Wall Street Journal as one of Murdoch's [personal business] interests – no one else in this company wants it as much as he does. Also, how the Journal covers it is an issue.
JW: People here believe the advertisers pulling-out, as a result of the campaign, killed the NotW but there's evidence that's not true: Rebekah Brooks has already said there is more to come, and who knows what we will hear. Nevertheless, had the plug not been pulled on the NotW, the advertising situation could easily have become a major problem. Is there any evidence that a similar thing could happen to News Corp's US properties?
MW: The contagion of this scandal has been spreading, as we know, like wildfire. How deeply does it spread into the US? We're waiting to see.