News Corp. CEO Rupert Murdoch’s testimony this week before the Leveson inquiry — the U.K. parliamentary panel officially charged with investigating phone hacking and police corruption — has had many of the hallmarks of an outright inquisition. For hours, the 81-year-old media baron was subjected to relentless grilling about what he and other News. Corp officials knew about an apparently widespread, years-long practice by some of his staffers to break into thousands of private voice-mail accounts in order to generate scoops. The big question is how long Murdoch can survive as CEO, especially if more damaging revelati0ns emerge. For now the tycoon looks safe, but his reputation has received a wicked battering.
Perhaps the most remarkable moment during Murdoch’s testimony came when the mogul candidly acknowledged that he “panicked” as the scandal reached an apex last summer, causing him to shutter one of his flagship U.K. papers, News of the World, laying off dozens of journalists. The media tycoon repeatedly apologized to the Leveson commission: “I failed,” he testified. “And I’m sorry about it.”
Throughout his testimony, Murdoch tried to maintain a level of plausible deniablity about just what he and other senior company officials — including his son and one-time heir apparent James Murdoch — knew about phone-hacking and police bribery. He insisted that both he and James did not know the scope of the misconduct, which appears to have been rife at News of the World, and possibly other company properties. He called the conduct at the paper an “aberration” that doesn’t reflect the broader corporate News Corp. culture.
Ultimately, though, Murdoch appeared unbowed: Despite escalating calls from some quarters that he resign as News Corp.’s chief executive, there’s little evidence to suggest that he actually will. There is simply no one in a position to force Murdoch to quit — other than his company’s shareholders, and it’s unlclear just how much influence even they have. News Corp. shares are up 10% so far this year.
Even as Murdoch accepted some measure of responsibility for the ongoing scandal, he was quick to spread blame around to several of his former subordinates, whom he accused of orchestrating a “cover-up.” Murdoch, you see, was himself a victim along with the rest of the company’s “innocent staff” at the paper. Although Murdoch didn’t name names, it was clear he was referring to former News of the World lawyer Tom Crone. Last summer, Crone testified that he alerted James Murdoch that phone-hacking might be widespread at the paper — something the younger Murdoch has consistently denied. Hours after the mogul’s testimony, Crone blasted Murdoch’s allegations as “wholly wrong” and a “shameful lie.”
In a way, the entire Leveson inquiry has felt like a ritual self-flagellation for British society. For years, Murdoch has been the most important political power broker in British public life, using his papers, especially The Sun and News of the World to pressure — some might even say intimidate — politicians and celebrities, all in pursuit of the almighty scoop — the fundamental coin of Murdoch’s realm.
The Leveson inquiry has revealed a striking level of coziness between News Corp. officials and senior political figures, including Prime Minister David Cameron, who regularly socialized with former News of the World editor Rebekah Brooks. Cameron even hired another former Murdoch editor, Andy Coulson, who like Brooks has been implicated in the phone hacking scandal — to be his official spokesperson. Coulson resigned in 2007, and the first details of the scandal emerged, and last year he was arrested by the U.K.’s metropolitan police. Brooks has also been arrested — twice.
The Leveson inquiry continues. Time will tell if further revelations are enough to dislodge Murdoch from his perch as News Corp. CEO. Given the Murdoch family’s 40% voting control of the company, it seems unlikely that a shareholder effort will force him to give up the reigns. Last fall, Institutional Shareholders Services, a shareholder advisory firm, waged a largely symbolic campaign to have Murdoch and his sons step down from the company board. For now, at least, an independent board chairman may be the most Murdoch’s critics can expect, unless further damning details emerge.