03:13 - Source: CNN
Murdoch blames his staff for failures

Story highlights

NEW: Evidence reveals a back channel between News Corp. and the government

James Murdoch says staff members knew he would have "cut out the cancer"

Rupert Murdoch is to appear Wednesday at the inquiry into British media ethics

Both Murdochs deny knowing about the scale of illegal actions at their papers

London CNN  — 

Rupert Murdoch said last week that if he had known the depth of the problem in 2007, when a private investigator and a Murdoch journalist were sent to prison for phone hacking, he “would have torn the place apart and we wouldn’t be here today.”

Underlings did not tell James Murdoch how pervasive the practice was when he took over News Corp.’s British newspaper publishing arm, he testified Tuesday.

He agreed with a suggestion that the reason was because they knew he would put a stop to it.

“I think that must be it, that I would say, ‘Cut out the cancer,’ and there was some desire to not do that,” he told the Leveson Inquiry.

Former Murdoch employees testified earlier that they told him about the problem.

He was testifying before an independent British inquiry into journalistic ethics prompted by phone hacking at the defunct News of the World, once the flagship British Sunday tabloid of News Corp.

The scandal has reverberated through the British political establishment, led to dozens of arrests on suspicion of criminal activity and forced News Corp. to pay hundreds of thousands of pounds in compensation to the victims of phone hacking.

Tuesday’s hearing revealed the depth of the links between the Murdoch family and British politicians, with Murdoch saying he had had drinks with David Cameron at a pub before Cameron became prime minister and dined with him once he was in office.

Leveson Inquiry lawyer Robert Jay pressed Murdoch over the extent of his contact with politicians as the company moved to take full control of satellite broadcaster BSkyB, a bid that collapsed because of the phone-hacking scandal.

Evidence published Tuesday suggests that News Corp. was getting inside information from the government minister with the power to approve or block the acquisition, Culture Secretary Jeremy Hunt.

Hundreds of pages of e-mails painted a picture of a back channel between Hunt’s office and Frederic Michel, a top Murdoch employee.

Michel told Murdoch in January 2011 that he had gotten “absolutely illegal” information about government plans related to the takeover plan, the e-mails show.

Prime Minister Cameron has full confidence in Hunt, his spokesman Craig Oliver told CNN after the Murdoch testimony concluded.

Hunt’s portfolio includes the London Olympics, which are now less than 100 days away.

James Murdoch and his father, Rupert Murdoch, have been hammered over the past year about what they knew about phone hacking by people working for them.

Rupert Murdoch is scheduled to appear Wednesday and perhaps Thursday morning at the inquiry.

The younger Murdoch has already been called twice to testify before British lawmakers and resigned from a number of top management positions at British subsidiaries of his father’s media empire.

They have always denied knowing about the scale of the practice, which police say could have affected thousands of people, ranging from celebrities and politicians to crime victims and war veterans.

James Murdoch said Tuesday that he had no reason to look into illegal eavesdropping by his employees when he took over the company’s British newspaper subsidiary in December 2007.

A News of the World reporter and a private investigator had been sent to prison that year for hacking the phones of the staff of Princes William and Harry, but Murdoch said he had been assured that the problem went no further.

“I was not told sufficient information to go and turn over a whole bunch of stones that I was told had already been turned over,” he said. “I don’t think that, short of knowing they weren’t giving me the full picture, I would’ve been able to know that at the time.”

The journalist who went to prison, Clive Goodman, had been saying that phone-hacking went beyond his case, Leveson Inquiry counsel Robert Jay said.

“I was not aware of that,” Murdoch replied.

He told the Leveson Inquiry on Tuesday that he did not decide what went into the company’s British tabloids, The Sun and the News of the World, relying on his editors to make the decisions.

He was also pressed on his relationship with British politicians, including former Prime Minister Tony Blair and the current leader, Cameron.

He acknowledged meeting with them, but denied having lobbied them improperly about his family’s business interests.

And he denied having made a “crass calculation” about how The Sun’s endorsement of Cameron’s Conservative party before the 2010 elections would affect News Corp.

His son, James Murdoch, a top executive in his father’s company, has also been summoned and is scheduled to testify Tuesday.

The suspects include at least one journalist and a police officer, the Crown Prosecution Service said, declining to name them.

No charges have been filed, and the Crown Prosecution Service said it did not know when a decision would be made about charges.

In addition to the Leveson Inquiry and London’s Metropolitan Police, two parliamentary committees also are looking into media conduct.

James Murdoch, 39, resigned as chairman of British Sky Broadcasting this month, saying, “I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this company.”

Rupert Murdoch testified before lawmakers in July alongside his son.

News Corp. shut down The News of the World, its British Sunday tabloid, last summer after public outrage at the scale of illegal eavesdropping its journalists did in search of stories.

The British lawyer representing dozens of alleged News Corp. phone-hacking victims is in New York this week, exploring options for a U.S. case against the company.

Attorney Mark Lewis told CNN he is representing three or four new clients, one of whom is believed to be a U.S. citizen, who say their phones were hacked while they were on U.S. soil.

There are also many potential new clients, Lewis said.

“As I’ve been traveling here,” he said, “I’ve been contacted by many people who’ve had, so they say, similar problems – not just hacking, but maybe being trailed, or have fallen out with some American Murdoch News Corp. company, and then found themselves, as they would say, at the wrong end of investigations, the wrong end of information gathered.”

CNN’s Dan Rivers, Erin McLaughlin, Elaine Ly and Claudia Rebaza contributed to this report.