The News Corp. board issued a statement announcing "its full confidence in Rupert Murdoch's fitness" to lead the organization..
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The News Corp. board issued a statement announcing "its full confidence in Rupert Murdoch's fitness" to lead the organization..

Story highlights

A Parliament panel called Murdoch unfit to run a major international corporation

The News Corp. board cites Murdoch's vision in endorsing his leadership

British regulators could force Murdoch to sell off some media assets

A phone hacking scandal led to the inquiries into Murdoch holdings

CNN —  

Global media tycoon Rupert Murdoch received a strong endorsement from the board of directors of his News Corp. on Wednesday, a day after British lawmakers investigating a phone hacking scandal said Murdoch was “not a fit person” to run a major international company.

After meeting Wednesday, the News Corp. board issued a statement announcing “its full confidence in Rupert Murdoch’s fitness and support for his continuing to lead News Corporation into the future as its chairman and CEO.”

“The board based its vote of confidence on Rupert Murdoch’s vision and leadership in building News Corporation, his ongoing performance as chairman and CEO, and his demonstrated resolve to address the mistakes of the company identified in the” report by the Parliament panel, the statement said.

Tuesday’s ruling by the Parliament committee could prompt British regulators to force Murdoch to sell his controlling stake in British Sky Broadcasting, a significant part of his media empire.

The damning report accused Murdoch and his son James of showing “willful blindness” to phone hacking at the News of the World tabloid and said the newspaper “deliberately tried to thwart the police investigation” into the illegal activity.

The now-shuttered tabloid’s publisher, News Corp. subsidiary News International, “wished to buy silence in this affair and pay to make the problem go away,” the Parliament’s Culture, Media and Sport Committee found.

Ofcom, the British media regulator that could force Murdoch out of BSkyB, said it was “reading with interest” the report from Parliament.

The agency noted that it “has a duty under the Broadcasting Acts of 1990 and 1996 to be satisfied that any person holding a broadcasting license is, and remains, fit and proper to do so.”

News Corp., which Murdoch leads as chairman and chief executive, accepted responsibility for some failings Tuesday but pushed back against some of the more critical remarks made by lawmakers.

“Hard truths have emerged from the Select Committee Report: that there was serious 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 Select Committee in 2009,” it said in a statement.

However, remarks made by some lawmakers after the report was issued Tuesday were “unjustified and highly partisan,” it said.

News Corp. said it had already acted on many of the failings highlighted in the report, had brought in new internal controls and is supporting police investigations into alleged wrongdoing.

Allegations of widespread illegal eavesdropping by Murdoch journalists in search of stories have shaken the media baron’s News Corp. empire and the British political establishment, up to and including Prime Minister David Cameron.

Police have arrested dozens of people as part of investigations into phone hacking, e-mail hacking and police bribery, while two parliamentary committees and an independent inquiry led by Lord Justice Brian Leveson are looking into the scandal.

Testifying last week before the Leveson inquiry, Murdoch admitted that there had been a “coverup” of phone hacking at News of the World, which ceased publication in July.

But Murdoch, who owns the Sun and the Times in London, as well as controlling The Wall Street Journal, the New York Post and Fox News, said his News Corp. had been a victim of the coverup, not the perpetrator.

“Someone took charge of a coverup, which we were victim to and I regret,” he told the Leveson inquiry Thursday.

He apologized for not having paid more attention to the scandal, which he called “a serious blot on my reputation.”

Tuesday’s report by the Culture, Media and Sport Committee was based in part on earlier by Rupert and James Murdoch.

John Whittingdale, the chairman of the committee, said Tuesday that, although there is “no definitive evidence to prove whether or not James Murdoch was aware of … evidence which indicated that phone hacking was widespread, the committee was nevertheless astonished that he did not seek to see the evidence.”

Tom Watson, the Labour lawmaker who has long been one of the fiercest critics of Murdoch, was blistering in a news conference announcing the parliamentary findings.

“These people corrupted our country,” he said. “They have brought shame on our police force and our Parliament. They lied and cheated, blackmailed and bullied, and we should all be ashamed when we think how we cowered before them for so long.”

But Louise Mensch, a Conservative member of Parliament who is on the committee with Whittingdale and Watson, said the report had gone too far.

She was one of the four Conservative MPs who dissented from the amendment to the report finding that Murdoch was not a fit person to run a company.

She called the amendment “faintly ridiculous,” given Murdoch’s decades in the business, and accused the Labour members of the committee of pushing through a “nakedly political” statement.

“The amendments were so far out of left field they made a mockery of the whole thing,” she said.

The section declaring Murdoch “not fit” passed by a vote of 6-4, with support from Labour and Liberal Democrat lawmakers, over opposition from Conservatives. Committee chairman Whittingdale, a Conservative, did not vote.

The report did not accuse either Murdoch of misleading Parliament but said three of their underlings had done so in testimony to the committee.

Longtime Murdoch right-hand man Les Hinton was criticized, as were Colin Myler, the last editor of News of the World, and Tom Crone, who was the paper’s lawyer for decades.

In a statement, Myler said he stood by the evidence that he gave the committee.

The full House of Commons will have to rule on whether the three committed contempt by misleading the committee, “and, if so, what punishment should be imposed,” the report says.

In a statement Tuesday to News Corp.’s 50,000 employees, Murdoch said the report “affords us a unique opportunity to reflect upon the mistakes we have made and further the course we have already completed to correct them.”

He said that it was difficult for him to read many of its findings, “but we have done the most difficult part, which has been to take a long, hard and honest look at our past mistakes.”

Murdoch continued, “We certainly should have acted more quickly and aggressively to uncover wrongdoing. We deeply regret what took place and have taken our share of responsibility for not rectifying the situation sooner.”

He said News Corp. officials “have gone beyond what law enforcement authorities have asked of us, to ensure not only that we are in compliance with the law, but that we adhere to the highest ethical standards.”

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.”

But he also suggested last week that key parts of the scandal have been overblown.

“The hacking scandal was not a great national thing until the Milly Dowler disclosure, half of which has been somewhat disowned by the police,” Murdoch said.

He was referring to the revelation that people working for him had hacked into the voice mail of a missing 13-year-old who later turned out to have been murdered.

Murdoch was also grilled over his media empire’s back-channel lobbying of the British government and said he learned of the existence of one of the key lobbyists only “a few months ago.”

He said he was “surprised” by the extent of the contact by the employee, Fred Michel, with the British government as it considered a bid by News Corp. to take full ownership of British Sky Broadcasting.

That bid collapsed because of the phone-hacking scandal.

The scandal has also forced News Corp. to pay hundreds of thousands of pounds in compensation to the victims of phone hacking.

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

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.