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Murdochs Brace for ‘Damning’ Phone-Hacking Report

A committee of UK members of parliament is preparing a “damning” report on phone-hacking that will add to the pressure piled on News Corp’s Rupert and James Murdoch.

Rupert and James Murdoch in front of Parliament
CNBC
Rupert and James Murdoch in front of Parliament

The report, due at 10 a.m. BST (5 a.m. New York time) Tuesday, will be critical of their leadership.

After embarrassing revelations about the closeness of politicians to the Murdoch empire, none of the MPs wants to be perceived as soft on the media tycoons, a source close to the committee told CNBC.com. The committee has previously delayed the report several times as its members failed to reach agreement on just how critical to be of the Murdochs.

The source said that, while the report would be harsh, the MPs will have to be careful not to prejudice any of the ongoing criminal investigations into phone-hacking and alleged payments to public officials at News Corp’s British newspaper operation, News International.

Tom Watson, one of the MPs on the committee, has already published a book about the scandal, “Dial M For Murdoch,” which lambasted News International and claimed that it put MPs under surveillance in order to influence their decisions.

One key sticking point has been the evidence offered by former News of the World editor Colin Myler, and News International’s former legal affairs head Tom Crone. Both men maintain that James Murdoch was informed that phone-hacking went beyond one rogue reporter at an earlier date than he told the committee. James Murdoch has repeatedly denied this.

UK Prime Minister David Cameron admitted over the weekend that his government had gotten too close to the Murdochs, but insisted there had not been any “grand deal” to allow the Murdochs to gain full control of cable TV operator BSkyB in return for News International newspaper The Sun supporting his Conservative Party during the last election.

Cameron is facing further potential embarrassment as Rebekah Brooks – the former News International chief executive who has been arrested twice over the scandal – is prepared to release all her text messages and emails from him, according to a source close to Brooks. Cameron is an old school friend of Brooks’ husband Charlie and famously rode an old police horse loaned to Rebekah.

Rupert Murdoch admitted that there had been a “cover-up” of hacking to the Leveson Inquiry, the UK’s judicial inquiry into the scandal, last week, but maintained that it was carried out at an executive level below him and his son.

When the elder Murdoch appeared in front of the committee last July, his wife Wendi famously defended him against a pie-throwing protestor.