News Corp.'s James Murdoch, shown in July, could face criminal charges… (Peter Macdiarmid, Getty…)
James Murdoch is fighting for his professional life, as a growing scandal engulfs his family and the media conglomerate they control.
On Thursday, the News Corp. heir apparent returns to Parliament for a second round of questions about his role in the British phone hacking case. The legislative body is investigating whether it was misled by News Corp. executives, perhaps by Murdoch himself, as members explored the unscrupulous tactics employed by the company's now-defunct London tabloid News of the World in pursuit of salacious scoops.
Rupert Murdoch's 38-year-old son, who runs News Corp.'s European operations, is in the cross hairs of their inquiry. In July, when Rupert and James appeared before the committee, James Murdoch said he was unaware of the extent of the illegal conduct at the News of the World until late last year. Within 24 hours, two former tabloid executives called James Murdoch's truthfulness into question by offering a different account.
"This is an unusual inquiry," Tom Watson, a member of Parliament's Culture, Media and Sport Committee, said in an interview. "If we publicly find that Parliament was misled during an inquiry of this powerful company, then misled again by James Murdoch .... it will cause huge reputational harm to the company."
The executive has more than his reputation at stake. Just six months ago, the youngest son of News Corp. chief Rupert Murdoch was considered the rising star in the family's sprawling media empire, which includes the Fox broadcast network, Fox News Channel, the 20th Century Fox movie studio, HarperCollins book publishing and a portfolio of newspapers that includes the Wall Street Journal. In March, he was promoted to deputy chief operating officer, the No. 3 executive position in the company. The phone hacking scandal may derail Rupert Murdoch's wish to have James succeed him.
There may be legal consequences too. Scotland Yard officials have been investigating allegations that News Corp. journalists bribed police officers for information and illegally listened to voice mail messages left for members of the royal family, sports figures, celebrities and crime victims. Sixteen people have been arrested in the widening probe, including Rebekah Brooks, who had just resigned as chief of the company's British newspaper unit.
James Murdoch could face criminal charges if police investigators determine he was involved in a conspiracy to cover up a crime. However, his appearance before Parliament will not result in charges. He is not testifying under oath, and British law protects him from being prosecuted over his statements to the legislative body. Scotland Yard declined to comment on its investigation, which is expected to continue through next year. Representatives for Murdoch had no comment.
Since July, after the first revelations that News of the World had hacked into the cellphone of a murdered 13-year-old girl, News Corp. executives have been struggling to contain the fallout. The company shut the 168-year-old tabloid and abandoned its $12-billion bid to acquire full control of British Sky Broadcasting, the commonwealth's largest pay TV service.
The crisis exacerbated tensions among members of the Murdoch clan. News Corp. Chief Executive Rupert Murdoch was conflicted about James' continued role at the company, suggesting that he take a leave of absence last summer, according to an article in the December issue of Vanity Fair. Rupert Murdoch then had a change of heart.
James' sister Elisabeth urged their father to temporarily remove him and ditch other top executives tarnished by the damaging disclosures. Even before the scandal became front page news, a psychologist had been brought in to counsel the family about corporate succession.
"It's kind of like watching 'Dallas.' They're just after each other," said Quentin J. Fleming, an adjunct professor at USC's Marshall School of Business and author of "Keep the Family Baggage Out of the Family Business."
"One of my seven deadly sins is the 'father knows best' syndrome," Fleming said. "I know Rupert has said he wants one of his children to run [News Corp.], but … does he really want that?"
Some inside News Corp. are doubtful that the Murdoch scion can survive the crisis. Others close to James — who is known for being blunt, bright and tenacious — say he believes the facts will support his version of events. Last week News Corp. reaffirmed its support. "We have great confidence in James," Chief Operating Officer Chase Carey said. "James has done a good job."
James Murdoch is expected to tell Parliament that he was not shown an incriminating piece of evidence that has become pivotal to the Parliament investigation.