The recall of Rupert Murdoch to a committee of the British parliament over a secret tape of him dismissing the alleged illegal behavior of his journalists is likely to cause personal embarrassment for the world’s most famous media mogul but no criminal charges.
It could, however, further complicate his business dealings in Britain, where his firm has long wanted to take full control of the pay-TV group BSkyB and where it is still locked in negotiations with the government over regulation of the press.
The 82-year-old head of News Corp and 21st Century Fox has been recalled to appear before lawmakers in London, the scene two years ago of what he called his “most humble day,” to explain his recorded comments that British tabloid newspapers had for decades paid bribes to police for information. No date has yet been set for the committee hearing.
Murdoch also said in the tape, covertly recorded during his meeting with News Corp’s Sun journalists in March, that he had been wrong to give so much help to the police as they probed a phone-hacking scandal that engulfed his British newspaper business, and that he would, at the right time, hit back.
The revelations have raised questions in Britain over whether Murdoch could himself face charges, and the police have said they wish to obtain the tape to review the contents.
They have also given more ammunition to Murdoch’s critics, who accuse him of using his newspapers to wield huge influence over politicians and undermine the rule of law.
But legal sources, consultants and media observers in both Britain and the United States said the chances of him facing individual charges were slim.
In Britain, they said Murdoch’s comments revealed no specific knowledge of wrongdoing by his reporters, and even the policeman leading the broader investigations characterized their marks as showing empathy with staff.
Two U.S. law enforcement sources told Reuters that a U.S. criminal action against Murdoch personally was highly unlikely.
The same people said that while the FBI and U.S. Justice Department have been conducting investigations into possible violations of the Foreign Corrupt Practices Act by people working for Murdoch, those investigations did not appear to be close to a resolution.
Legal sources and experts say that any U.S. probe may well not be resolved until after criminal investigations by the British authorities are completed, which could take months to over a year. News Corp declined to comment.
Appalled and humbled
The sound of Murdoch railing against the police and dismissing the payment of bribes as “next to nothing” stands in stark contrast to the image he had previously presented.
Appearing for lengthy questioning before the committee two years ago alongside his son James, he had described himself as appalled by revelations of illegality and phone-hacking.
“He came to tell us that it was the most humble day of his life, and he was seemingly contrite, and yet the opposite comes out of these taped remarks,” one of the committee members Paul Farrelly told Reuters.
“In terms of paying people for information, it’s a criminal offence to do that with public officials. For Rupert Murdoch to say that that was all part of a culture, seems like he is excusing that behavior.”
Claire Enders, a high-profile media consultant in Britain, said while the comments were unlikely to cause problems for Murdoch the man, they could cause trouble for his companies.
Confronted by a wave of public outrage over the revelations about hacking, the then combined News Corp group was forced to pull a $14 billion bid to buy the 61 percent of the highly profitable BSkyB it did not already own.
The scandal also prompted Britain’s media regulator to examine, and later clear, BSkyB as “fit and proper” to hold a broadcasting license, due to News Corp’s 39 percent stake.
But Enders said the tape could make it harder for Murdoch’s21st Century Fox, which was spun out of the wider News Corp group, to one day make another bid for the rest of BSkyB.
“It’s a corporate governance issue, and we think that this makes the famous re-emergence of the BSkyB bid extremely unlikely,” she said.
She added that the tacit toleration of bribery at a business controlled by the Murdoch family could even encourage the regulator Ofcom to look again at the ownership of BSkyB, especially if further damaging evidence emerges from the criminal trials that are due to start in September this year.
So far, investors have shrugged off any potential collateral damage from the latest news to surface in Britain.
News Corp shares are up 0.4 percent at $14.93 since the transcripts and recording of the tape surfaced in British media on July 3.
“This noise from an investing standpoint is a great opportunity to find value,” said Todd Lowenstein, a portfolio manager at High Mark Capital Management, which holds shares in both News Corp and Fox.
Lowenstein is in News Corp for the balance sheet, which has more than $2bn in cash and no debt, and for its mix of assets that include Australian pay-TV services and the strong brand of The Wall Street Journal.SHOW MORE