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Rupert Murdoch 'unfit to lead News Corp'

By Gavin Cordon and Sam Lister

Media mogul Rupert Murdoch is not "a fit person" to run a major international corporation, a committee of MPs said today.

In a devastating report into the News of the World phone-hacking scandal, the Commons Culture, Media and Sport Committee accused the News Corp chief of exhibiting "wilful blindness" towards the wrongdoing in his organisation.

It said News Corp had been guilty of "huge failings of corporate governance" and that throughout its instinct had been "to cover up rather than seek out wrongdoing and discipline the perpetrators".

The report accused three former senior executives of News Corp's UK newspaper publishing arm News International - Les Hinton, Colin Myler, and Tom Crone - of misleading the committee during its inquiries into the scandal.

And it said that Rupert Murdoch's son James had demonstrated "wilful ignorance" about what had been going on, which "clearly raises questions of competence" on his part.

The most damning judgment was reserved for Rupert Murdoch.

"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 wilful blindness to what was going on in his companies and publications," the report said.

"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 committee was split on party lines over a number of key findings - including the verdict on Rupert Murdoch - with the Tories voting against and Labour and the Lib Dems in favour.

The committee found that Mr Hinton, the former News International chairman, had misled it when he gave evidence in 2009 about payments made to former royal correspondent Clive Goodman, who was jailed in 2007 for phone hacking.

And it said that Mr Myler, former News of the World editor, and Mr Crone, the paper's former legal manager, misled it over their knowledge that other staff were involved in phone hacking.

It said it could now ask the House of Commons to decide whether there had been a contempt of Parliament and what the punishment should be.

"The integrity and effectiveness of the select committee system relies on the truthfulness and completeness of the oral and written evidence submitted," it said.

"The behaviour of News International and certain witnesses in this affair demonstrated contempt for that system in the most blatant fashion."

The committee said it was "simply astonishing" that News International - including the Murdochs - had sought to maintain that phone hacking was down to one "rogue reporter".

The company continued to stick with the line even after James Murdoch authorised a £700,000 payout to Gordon Taylor, chief executive of the Professional Footballers' Association.

"Had James Murdoch been more attentive to the correspondence that he received at the time, he could have taken action on phone hacking in 2008 and this committee could have been told the truth in 2009," the report said.

It said that it was only at the end of 2010 that the company accepted that its "containment approach" had failed and that it no longer had "any shred of credibility".

"Since then, News Corporation's strategy has been to lay the blame on certain individuals, particularly Colin Myler, Tom Crone and Jonathan Chapman, and lawyers, whilst striving to protect more senior figures, most notably James Murdoch," the report said.

"Even if there was a 'don't ask, don't tell' culture at News International, the whole affair demonstrates huge failings of corporate governance at the company and its parent, News Corp."

A spokesman for media regulator Ofcom said: "We note the publication of the Culture, Media and Sport Committee report.

"Ofcom has a duty under the Broadcasting Acts 1990 and 1996 to be satisfied that any person holding a broadcasting licence is, and remains, fit and proper to do so. Ofcom is continuing to assess the evidence - including the new and emerging evidence - that may assist it in discharging these duties."

Labour committee member Tom Watson, who was at the forefront of efforts to expose the extent of phone hacking, said the process was far from over and called for a series of fresh inquiries into further aspects of the case.

He said he had "reason to believe" that the Serious and Organised Crime Agency (Soca) possessed seized hard drives that included details of people who had been victims of computer hacking and was failing to inform victims.

That should be investigated by the home affairs select committee, he said.

There should also be a Commons investigation into a potential contempt of Parliament over claims that private detectives were hired to dig into the private lives of the committee.

And all serving and former prime ministers and chancellors should reveal full details of their contacts - texts and emails - with News Corp executives, he said.

Expressing disappointment that the committee had not reached a unanimous conclusion, he said: "The truth is that whatever we have said in our report and however you choose to report it, the public have made up their minds: powerful people were involved in a cover-up and they still haven't accepted responsibility.

"And after all of this, the story is not yet over."

"These people corrupted our country. They brought shame on our police force and our Parliament. They lied, they cheated, blackmailed and bullied and we should all be ashamed when we think how we cowered before them for too long."

Tory committee member Louise Mensch blamed Labour committee members for the inability to reach unanimous agreement on the "partisan" report, criticising the decision to question Rupert Murdoch's fitness to run an international news company.

She said: "Conservative members of the committee did not vote as a bloc and often disagreed with each other and divided in different ways on different amendments. That was not, however, the same with our Labour colleagues.

"And it is not simply a matter of not voting for certain amendments. No Conservative member on this committee with a vote was able to recommend the report itself to the House.

"And every one of us, while we share different views about the culpability of News Corporation and the degree of culpability of James Murdoch in particular, none of us were able to support the report and we all voted against it.

"That will mean it will be correctly seen as a partisan report and will have lost a very great deal of its credibility, which is an enormous shame.

"The issue on which no Conservative member felt they could support the report itself was the line in the middle of the report that said that Mr Rupert Murdoch is not a fit person to run an international company.

"We all thought that was wildly outside the scope of a select committee, was an improper attempt to influence Ofcom and to tread on areas that are not the province of a select committee."

While the "many amendments tabled by my colleagues Paul Farrelly and Tom Watson (both Labour MPs) were carried by a majority vote, I would nonetheless have voted for the report and explained where I disagreed, and so would many of my colleagues - not all of them but many of them - had that line about Rupert Murdoch's unfitness to run an international company not been left in".

The report was "carried on political lines and, therefore, after many months of work, I fear its credibility has been damaged".

Conservative committee member Philip Davies said the report's description of Mr Murdoch as not a fit person to run a major corporation was passed on a majority of just six votes to four, and he accused Labour members of the committee of "getting carried away".

"Many people may conclude that some people's conclusions were written before any of the evidence was ever heard, and I think that is very sad," said Mr Davies.

"To me, very clearly, Rupert Murdoch is a fit and proper person to run a major company."

He urged the public and fellow-MPs to focus on the elements of the report which were passed unanimously, and which accused specific individuals of misleading the committee.

Another Tory member of the committee, Damian Collins, said "fit and proper person" was a specific legal test applied by regulator Ofcom and not something the committee could rule on.

"You may have all sorts of personal opinions of Rupert Murdoch and the way he runs his companies, but it isn't something we have investigated," said Mr Collins.

Committee chair John Whittingdale said he did not vote on any of the amendments in the report, but hinted at his opinion on whether it should have branded Mr Murdoch unfit, saying: "I would merely observe that as well as being the chairman of the committee, I am a Conservative MP."

He said it would be for the House of Commons to decide what sanctions should be applied against anyone found to have misled the committee, if it agreed to debate the issue in the chamber, as the report recommends.

The committee said that despite the professed willingness of News International to assist its inquiries, it had failed to release documents which would have helped expose the truth.

It said the company "repeatedly made misleading and exaggerated claims" regarding the investigations it "purportedly" commissioned following the arrests of Mr Goodman and private investigator Glenn Mulcaire.

"The willingness of News International to sanction huge settlements and damaging wide-ranging admissions to settle civil claims over phone hacking before they reach trial reinforces the conclusion of our 2010 report that the organisation has, above all, wished to buy silence in this affair and to pay to make the problem go away," it said.

The committee strongly criticised payments - totalling £243,502.08 - made by News International to Mr Goodman in the period following his arrest.

"Despite the legal precedents, however, we are astonished that a man convicted of a criminal offence during the course of his work should be successful in his attempt to seek compensation for his perfectly proper dismissal," it said.

"Illegally accessing voicemails is wrong and News International should have been willing to stand up in an employment tribunal and say so."

It said that a letter sent by former News International chief executive Rebekah Brooks and legal director Jonathan Chapman in November 2009 had referred only to a £40,000 compensation payout.

"Such incompleteness is either the result of an attempt to play down the settlement, or of ignorance about the full extent of the payments or both," it said.

"None of these scenarios casts Rebekah Brooks and Jonathan Chapman in a positive light: either they should have been more frank or else they should have been better informed."

The committee said that the arrangements which saw News International pay some £365,000 to cover Mr Mulcaire's legal costs were "every bit as distasteful" and further evidence of the company's determination "to cover up the extent of the phone-hacking scandal".

It said that Mrs Brooks - who was News of the World editor in 2002 when murdered schoolgirl Milly Dowler's phone was hacked - should accept responsibility for those actions "and the culture which permitted them".

The committee also criticised the failure of the Metropolitan Police and the Crown Prosecution Service for failing to mount a proper investigation after 2007 - singling out former assistant commissioner Mr Yates and Director of Public Prosecutions Keir Starmer.

"Given the extraordinary revelations in the media and in civil court cases in the years that followed, however, they both bear culpability for failing to ensure that the evidence held by the Metropolitan Police was properly investigated in the years afterwards, given all the opportunities to do so, and that the sufficiency of the evidence was not reviewed by the CPS," it said.

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