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Murdoch to launch new Sun on Sunday paper amid crisis

By Laura Smith-Spark, CNN
updated 5:00 PM EST, Fri February 17, 2012
News Corporation Chief Rupert Murdoch leaves his London home to visit the offices of his British tabloid The Sun on February 17
News Corporation Chief Rupert Murdoch leaves his London home to visit the offices of his British tabloid The Sun on February 17
  • If claims of bribery are proven, Murdoch's News Corp. could run afoul of U.S. law
  • Murdoch tells Sun staff he is proud of them, but illegal activities "cannot be tolerated"
  • A Sunday edition of The Sun newspaper will launch "very soon," Murdoch says
  • Murdoch's visit to The Sun's London offices follows the arrest of five journalists

London (CNN) -- Media magnate Rupert Murdoch traveled to London Friday as he seeks to rein in a crisis over alleged misconduct at the embattled Sun newspaper, part of his huge News Corp. empire.

Murdoch's visit follows the Saturday arrests of five Sun journalists as part of an inquiry into alleged illegal payments to British police and officials.

In what appeared to be a bid to boost morale, Murdoch told staffers at The Sun -- Britain's best selling newspaper -- that the company will launch a Sunday edition of the paper.

Staff at the paper have reacted angrily to the arrests and internal investigations of their journalistic practices, which they have likened to a witch-hunt.

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The launch of a Sun on Sunday newspaper to replace the News of the World, a sister paper to The Sun that was shuttered amid a phone-hacking scandal in the summer, had been widely rumored.

However, this is the first time News Corp.'s UK subsidiary, News International, has confirmed the move.

In an e-mail to staff at The Sun, Murdoch said the company would "build on The Sun's proud heritage by launching The Sun on Sunday very soon."

He also said he had great respect for the "exceptional journalism" produced by The Sun, but that it must abide by the law.

"My continuing respect makes this situation a source of great pain for me, as I know it is for each of you," he wrote.

"We will obey the law. Illegal activities simply cannot and will not be tolerated -- at any of our publications."

In a sign of support for the arrested journalists, none of whom have been charged, Murdoch said all suspensions had been lifted and that they could return to work.

News Corp. will cover their legal expenses, he said, adding: "Everyone is innocent until proven guilty."

But he made clear that the newspaper could not protect anyone who had paid public officials.

The arrests are part of Operation Elveden, an investigation running in parallel with a police inquiry into alleged phone hacking by the media, London's Metropolitan Police said.

The five journalists, aged 45 to 68, were arrested at their homes in London, Kent and Essex on suspicion of corruption, aiding and abetting misconduct in a public office, and conspiracy in relation to both offenses, police said.

Their arrests followed those of four current and former Sun employees two weeks earlier in connection with the same investigation.

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Allegations of payoffs to public officials by Sun employees threaten to bring the UK crisis across the Atlantic to the United States, where the Foreign Corrupt Practices Act prevents companies from paying bribes overseas.

"At the moment it appears he is ready to sacrifice the journalists and journalism in London to do whatever it takes to be seen to be cleaning up his act there so that it will play better in the United States," Andrew Neil, a former editor of Murdoch paper, The Times, told CNN Thursday.

"The consequence of that is quite amazing -- The Sun, which is the most loyal newspaper Murdoch has ever owned -- now believes it is being hung out to dry and the Sun journalists are turning against them."

Murdoch's UK interests only represent a $1.6 billion slice of his $32 billion News Corp. empire, which includes movie studio 20th Century Fox, the Fox Broadcasting Co. and Harper Collins Publishers, as well as The Wall Street Journal and Dow Jones newswires.

"This is for Rupert Murdoch no longer about journalism. This is about defending News Corp., his American based parent company, from judicial action and investigation in the United States," Neil said.

Such actions could put broadcast operations, the most profitable part of the News Corp. operations, in jeopardy, said Porter Bibb of Mediatech Capital Partners in New York.

"If it can be proven that anybody working for News Corp. bribed or gave money to an official of a foreign government -- i.e. the UK -- that's a clear violation and the Justice Department will start the wheels in motion, and I think that's what Rupert Murdoch has been gearing up for in the past few months," Bibb said.

Following the arrests, Murdoch, chairman and CEO of News Corp, assured an executive he would continue to own and publish The Sun newspaper, according to an internal staff memo sent by News International Chief Executive Tom Mockridge.

Mockridge also said he was "very saddened" by the arrests of deputy editor Geoff Webster, picture editor John Edwards, chief reporter John Kay, chief foreign correspondent Nick Parker and John Sturgis, who is a news editor.

Analysis: Murdoch empire - and journalism - on the line

News Corp. said in a statement last Saturday that it "remains committed to ensuring that unacceptable news gathering practices by individuals in the past will not be repeated."

News Corp.'s Management and Standards Committee, set up in the wake of the scandal that engulfed the News of the World tabloid, provided the information to police that led to the arrests.

The move prompted fury among many reporters at the paper.

Trevor Kavanagh, associate editor of The Sun, wrote a column Monday in which he said the paper's journalists were being subjected to a "witch-hunt."

"The Sun is not a 'swamp' that needs draining. Nor are those other great News International titles, The Times and The Sunday Times," he wrote.

"Yet in what would at any other time cause uproar in Parliament and among civil liberty and human rights campaigners, its journalists are being treated like members of an organized crime gang."

He said it was right police inquiries are carried out separately from the journalists under investigation.

But he added: "It is also important our parent company, News Corp, protects its reputation in the United States and the interests of its shareholders. But some of the greatest legends in Fleet Street have been held, at least on the basis of evidence so far revealed, for simply doing their jobs as journalists on behalf of the company."

Murdoch may be hoping his visit to London will lessen the anger felt by staff at The Sun, Britain's best-selling newspaper. Editor Dominic Mohan has said the paper has a readership of more than 7.7 million.

The arrests of the Sun employees comes after Murdoch-owned newspaper News of the World was alleged to have hacked into private voice mails of a wide range of public officials, celebrities and victims of crime.

The phone-hacking scandal prompted Murdoch's son, News Corp. executive James Murdoch, to shut down News of the World in July. The best-selling British newspaper was 168 years old.

So far, News Corp. and its subsidiary companies have paid more than $200 million in legal fees and settlement of 59 of 60 lawsuits filed over phone hacking claims.

James Murdoch is facing new e-mail evidence that would have made him aware of widespread phone-hacking at the newspaper. The younger Murdoch has appeared twice before UK. lawmakers and said he had no knowledge of the practice.

CNN's Kevin Voight and Bharati Naik contributed to this report.

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