Tuesday, July 12, 2011

Murdoch: it is still getting worse

The revelations for the beleaguered Murdoch Empire just keep coming.

The exquisitely timed released of information that the medical records of Gordon Brown's children had been stolen by NI hacks. The growing realization that the Sunday Times, The Times and the Sun are also to a greater or lesser degree involved not only in phone hacking, but also in computer hacking and the theft of personal information on an industrial scale. That payments to the Police were routine.

What does Murdoch do next?

Despite the referral to the Competition Commission, the bid for BSkyB remains on the table, but short of actually closing his whole newspaper business in the UK, with a loss of jobs that would itself be highly unpopular (not least in the wider media), it is hard to see how the bid could now be allowed in the teeth of overwhelming public opposition. The point is that even if Murdoch did sell or even close News International in its entirety- as some are suggesting that he might- the legal fall out, and criminal prosecutions could still go on for many years.

James Murdoch himself face gaol if the allegations of breaches of the US Foreign Corrupt Practices Act are substantiated. A criminal is not- in any way- a fit and proper person to stand as a company director, still less in a business that has the power to set the political agenda in the way that Murdoch has been doing for years.

Gordon Brown's statement that it was Rebekah Brooks herself who told him that she already knew about his children's serious medical problems is surely now fatal for her position. She had- after all- already moved onto the Sun by the time of that conversation.

Last night I met a number of senior British politicians at a cocktail party. Several of them had been the subject of extraordinary intrusion. One described how they received a call from a journalist on a number so private that only nine people were permitted to know it. Another described how a journalist from the NoTW had called within an hour or two to ask about a fracas that had taken place outside their house: quite clearly information that had been released by the Police.

So the scandal of Police involvement remains unresolved. The issue of BSkyB remains unresolved, though it seems that Murdoch at this point is simply preparing to bluff it out. Of course it seems pretty clear that newspapers in other groups may have carried out similar crimes, though possibly not on the same scale. Murdoch's bet is probably that as those scandals come out, they will eclipse his own, and that the BSkyB deal gets back on track.

However, there is also the real chance that the scale of the crisis leads to a criminal investigation of the whole Murdoch business in the UK. It already seems clear that a wave of arrests is likely, and that the Police will -under intense public scrutiny- be forced to follow up every lead to its final conclusion- and that the other papers will not be a focus at this point, whatever may come later. Meanwhile any attempted investigation by Murdoch's journalists into his rivals could get them into even more trouble than they are already.

It is not the report of the Competition Commission that Murdoch must fear most, but the report to the Director of Public Prosecutions.

Meanwhile what of Cameron?

His error of judgement in hiring Andy Coulson has already cost him dearly. The recovery of Ed Miliband that this has allowed is clearly dangerous for him. However this may be the point where the Lib Dems, having been human shields, may end up as a weapon against Labour, whose kow-towing to Murdoch in the years they were in office dwarfs the problems of the Tories. The Lib Dems of course are known as long-term enemies of Murdoch- as Vince Cable's indiscreet comments earlier in the year showed all too well. The Lib Dem commitment to the coalition remains strong enough and it is clear that several Lib Dem figures are prepared to use their essentially uncompromised position in order to protect the coalition's flank.

Watch this space- the Liberal Democrats may be getting their mojo back.

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