U.K. Panel Slams News Corp., Murdochs Over Hacking Scandal


A British parliamentary committee blasted News Corp. (NASDAQ:NWSA) on Tuesday, saying the media giant exhibited willful blindness in the U.K. hacking scandal.

In a 121-page report that was approved by a six-to-four vote, the House of Commons committee on culture, media and sport heavily criticized News Corp. for its handling of the damaging scandal that first erupted last summer at the News of the World tabloid.

“Their instinct throughout, until it was too late, was to cover up rather than seek out wrongdoing and discipline the perpetrators,” the report said.

New York-based News Corp. said "hard truths have emerged" from the report, including that there was "wrongdoing at the News of the World; that our response to the wrongdoing was too slow and too defensive; and that some of our employees misled" the committee in 2009.

Earlier News Corp., which is the parent of FOX Business as well as The Wall Street Journal, said it "fully acknowledges" the wrongdoing and "apologizes to everyone whose privacy was invaded."

Specifically, the committee calls out three former News Corp. executives -- Les Hinton, Tom Crone and Colin Myler -- for misleading Parliament about the phone hacking.

“In failing to investigate properly, and by ignoring evidence of widespread wrongdoing, News International and its parent News Corporation exhibited willful blindness, for which the companies’ directors -- including Rupert Murdoch and James Murdoch -- should ultimately  be prepared to take responsibility,” the committee report said.

The report said Rupert Murdoch “turned a blind eye” to what was going on at his publications and is “not a fit person to exercise the stewardship of a major international company.”

While the committee said all 10 members supported the conclusions about Hinton, Crone and Myler, the conservative members voted against it due to the conclusions about Rupert Murdoch, the Journal reported.

News Corp. said it "regrets" that the committee's "analysis of the factual record was followed by some commentary that we, and indeed several members of the committee, consider unjustified and highly partisan." The company noted the party-line vote.

Rupert Murdoch also received support from a host of high-profile business executives, including former Fox CEO Barry Diller, now the chairman of IAC/Interactive (NASDAQ:IACI).

"I worked intimately for eight years with Rupert Murdoch. I never once -- not once -- in any situation saw anything other than the most honorable behavior in every possible business situation," Diller said in a statement. "He is more fit, morally and otherwise, to lead an organization than the majority of those that do."

Using Twitter to weigh in, Donald Trump said the elder Murdoch "is a superb businessman and a world class CEO. He has built a tremendous empire and is certainly 'fit' to run his corporation."

Shares of News Corp., which have rallied about 10% so far this year, were unfazed by the news. In recent trading News Corp. was up 1.73%, compared with a 1.1% rise on the S&P 500.

News Corp. said it has already "confronted" and "acted on the failings" spelled out by the report by conducting internal reviews of its operations, volunteering evidence of apparent wrongdoing to authorities and instituting "sweeping changes" in its internal controls and compliance programs.

Hinton, the former executive chairman of News International, the U.K. newspaper business, issued a statement in response to the charges.

"I refute these accusations utterly," Hinton said, according to the Journal. "I have always been truthful in my dealings with the committee and its findings are unfounded, unfair and erroneous.”