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News Corp.’s Succession ‘in Flux’ as James Murdoch Resigns

February 29, 2012 at 12:00 AM EDT
Under pressure from the phone-hacking scandal that engulfed his tabloid News of the World last summer, James Murdoch -- the youngest son of Rupert Murdoch -- stepped down as executive chairman of News International. Gwen Ifill discusses the ongoing fallout with Ned Temko of The Observer in London.
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TRANSCRIPT

GWEN IFILL: Finally tonight, the continuing fallout and widening scope of investigations into the Murdoch newspaper empire in England. It’s the subject of international attention today after another leadership shakeup today.

Thirty-nine-year-old James Murdoch has been under pressure since the phone-hacking scandal erupted in Britain last summer. Now the youngest son of Rupert Murdoch is stepping down as executive chairman of News International, the British newspaper division of his father’s media conglomerate.

James Murdoch oversaw News of the World, the tabloid engulfed and ultimately driven out of business by revelations that journalists regularly hacked voicemails of celebrities, politicians and even crime victims.

Murdoch and his deputies all said they had no idea what was going on.

JAMES MURDOCH, News Corporation: I feel regret. Clearly, the practices of certain individuals didn’t live up to the standards and quality of journalism that we believe in, and that I believe in, and that this company believes in.

GWEN IFILL: But the disclosures kept coming. Murdoch twice changed his story about what he knew and when. Some lawmakers were left incredulous at this parliamentary hearing in November.

TOM WATSON, member of British Parliament: Mr. Murdoch, you must be the first mafia boss in history who didn’t know he was running a criminal enterprise.

JAMES MURDOCH: Mr. Watson, please. I think that’s inappropriate, Mr. Chairman.

GWEN IFILL: The growing outcry led the Murdochs to shut down News of the World after 168 years in business. More than a dozen of its journalists were arrested, and two top executives resigned, along with London’s police commissioner, as the fallout spread.

Two days ago, the police official heading three criminal investigations detailed a culture of illegal payments from journalists to those in authority.

SUE AKERS, deputy assistant commissioner, Metropolitan Police: Payments were being made to public officials who were in all areas of public life. And I have said that the current assessment is that it reveals a network of corrupted officials.

GWEN IFILL: The company said today James Murdoch, who remains under investigation, will now shift his focus to the Family’s television business.

Last weekend, Rupert Murdoch launched a new Sunday edition of his London newspaper The Sun to fill the void left by News of the World’s demise.

For more on all this, we turn to Ned Temko, who writes for The London Observer.

Welcome back, Ned.

What do we know at this hour about why James Murdoch stepped down?

NED TEMKO, The Observer: Well, the official version is he has stepped down to concentrate on the television side of Mr. Murdoch’s business back in the United States.

But I don’t think anyone has any doubt that it also reflects the steadily building pressure on James Murdoch, the son, personally, on Rupert Murdoch, on the entire enterprise by these growing circles of allegations about all sorts of ethically questionable behavior at his titles here in Britain.

GWEN IFILL: You talk about ethically questionable behavior, a lot of fallout from that just in the past six months. Do we know whether James Murdoch himself has been or is likely to be implicated directly in these schemes?

NED TEMKO: I think the likelihood is no.

Certainly, in terms of being personally involved in things like the phone hacking, these alleged and, in fact, now recognized corrupt payments to police and other officials, that didn’t happen on James Murdoch’s watch. He wasn’t in charge of the British operation at the time.

The issue — it’s a little bit like Watergate in a way. The issue isn’t the crimes or the alleged crimes. It’s the alleged cover-up or the questions of basically who knew what when.

GWEN IFILL: Well, does this take him out of the succession loop? Is it widely assumed that by moving to this job which no one is quite certain what it is yet, that he is no longer in line to succeed his father, who’s 81 years old?

NED TEMKO: I think the whole leadership question is now in flux.

He was kind of the crown prince. When his older brother removed himself and basically based himself in Australia a few years back, it was assumed that James Murdoch eventually would take over.

Two things are now clear. One, James Murdoch has removed himself from the U.K. operation, which in financial terms is a very, very small bit of the company, and, second of all, that despite Rupert Murdoch’s age, he’s very much got his hand on the tiller still. He’s very alert.

He’s — it was he after all who was the main face of this new Sunday edition of his Sun newspaper, which launched a week ago. And in James Murdoch’s own statement today, it was clear that Rupert Murdoch will remain involved in the U.K. operation.

GWEN IFILL: Now, since last we talked about this story, there have been arrests, there have been new disclosures about hundreds of thousands of dollars in payoffs to public officials.

Is there any clarity yet about whether this kind of behavior was business as usual or whether it was illegal, whether there was a line here that was crossed?

NED TEMKO: Sadly, I think both are true.

It does appear to have been business as usual. And, indeed, just a couple of days ago, at the judge-led inquiry, one of three inquiries that is now under way into practices in the press, and pretty much has concluded that there was a lot of misbehavior going on.

Sue Akers, the police officer in charge, said that there was a wide culture of payments, for instance, not only to police officers, which was assumed, but to a whole range of government officials. So it was both widespread and in a lot of ways, if all these allegations are true, obviously against the law.

GWEN IFILL: You say there are three separate investigations going on. Can you describe what they are?

NED TEMKO: Yeah.

The first one is an inquiry set up by a committee in the House of Commons. And that was the first one. Then there is a — an ongoing inquiry set up by the government and chaired by a senior judge which has been holding daily hearings and has ensured that, much as no doubt News International wishes all this would go quiet for a while, we get almost daily revelations.

And then the third inquiry is a police inquiry. In 2006, the police looked into this and did very little, but now it’s clear the police are very serious about it, not only in terms of uncovering what was going on at these various newspapers, but, more disturbingly for the police, the degree to which police officers and, as the head of the investigation said, other members of government may have been paid off routinely for stories by The Sun or the News of the World, which were the two tabloid and are the two tabloid titles of Rupert Murdoch in Britain.

GWEN IFILL: And, as you said, this is daily headlines, still, after all this time. In the middle of all this, Rupert Murdoch, as we’ve reported, launches a new publication, or at least an expanded publication, The Sun on Sunday.

How has that been received so far?

NED TEMKO: Well, this replaces essentially the News of the World, which was where the first allegations were targeted, and which he closed, hoping it would kind of bring this — bring this under control.

It’s been received, I suppose, with mixed reviews. Commercially, it seems likely to make a lot of money because it’s basically an extension of the daily edition of The Sun, which is the largest selling newspaper in Britain.

In terms of its editorial clout, it’s really up in the air because, partly in order to demonstrate how the culture at News International has changed, Rupert Murdoch and others have been quite explicit in saying this will be a more family-orientated newspaper, it’ll be less salacious, sensational. And he’s been as good as his word.

The first edition was fairly tame. And that’s the good news, I suppose, for the image of News International. The more complicated thing is, a lot of people bought the News International for the sensation.

GWEN IFILL: Ned Temko of The London Observer, thank you.