LONDON—James Murdoch may have embarrassing questions to answer when he returns to Westminster on Thursday to testify before a parliamentary committee investigating the phone hacking scandal that has engulfed the News Corporation .
Documents released since his first round of testimony in July have cast doubt on his version of events, while fresh revelations have spilled out about his company’s questionable practices.
Mr. Murdoch, the company’s deputy chief operating officer and the younger son of its chairman, Rupert Murdoch, was a deft and deflecting witness in July, nimbly parrying lawmakers’ questions while maintaining essentially that he had learned only recently how widespread the hacking problem really was.
Now, he will be faced with defending himself against mounting evidence that top executives at News International, the company’s British newspaper arm, knew a full three years ago that hacking was pervasive at The News of the World, the tabloid newspaper that the company shut down in July, and that the executives discussed it with Mr. Murdoch at the time.
“Obviously, there are things which the committee wishes to raise with him, particularly in relation to some of the evidence we have received since he testified,” said John Whittingdale, a Conservative member of Parliament and chairman of the committee holding the hearings, the select committee on culture, media and sport.
Mr. Murdoch will also be asked about News International’s behavior after the investigation into its hacking operation intensified. The company acknowledged this week that over the past year and a half, The News of the World had hired a private investigator to conduct covert surveillance of two lawyers representing victims of phone hacking.
The admission was prompted by a report in The Guardian that the investigator, Derek Webb, followed and photographed the lawyers and their families, presumably in the hope of unearthing unsavory information about them and using it to discourage them from pursing their cases.
“While surveillance is not illegal, it was clearly deeply inappropriate in these circumstances,” the company said in a statement. “This action was not condoned by any current executive at the company.”
Mr. Webb told the BBC that he had done such work for The News of the World routinely for eight years, spying on dozens of people, including Prince William; the sports broadcaster Gary Lineker; Lord Goldsmith, the former attorney general; Chelsy Davy, Prince Harry’s former girlfriend; José Morinho, the former manager of the Chelsea soccer team; and the parents of the actor Daniel Radcliffe.
“I was working for them extensively on many jobs throughout that time,” Mr. Webb told the network. “They phoned me up by the day or by the night.”
Recently released News of the World documents, some of them obtained by the parliamentary committee from News International’s former lawyers, Farrer & Company, show that on June 3, 2008, a lawyer warned company executives in a memo that there was “a powerful case that there is (or was) a culture of illegal information access” at the paper.
The lawyer, Michael Silverleaf, also said there was “overwhelming evidence of the involvement of a number of senior journalists” in the paper’s attempts to illegally obtain information about Gordon Taylor, the chief executive of the Professional Footballers’ Association.
Mr. Silverleaf’s memo was written at a time when top News International executives, including James Murdoch, were mulling over how to respond to Mr. Taylor’s claim that his voice mail messages had been repeatedly hacked by the News of the World. Mr. Silverleaf counseled them to handle the case privately. “To have this paraded at a public trial would, I imagine, be extremely damaging” to the company, he said.
Even more potentially worrying for Mr. Murdoch is the growing body of evidence that other executives discussed newly discovered details of phone hacking at the paper with him around the same time.
For example, a May 27 note by Julian Pike, a Farrer & Company lawyer, says that Colin Myler, the editor of The News of the World, spoke to Mr. Murdoch about Mr. Taylor’s claims and that the two men decided to refer it to outside counsel. Another note two weeks later—after Mr. Silverleaf wrote his damning conclusions—says that after meeting Tom Crone, who was the legal manager of News International at the time, Mr. Murdoch “said he wanted to think through options” about how to proceed in the case.
Several days later, Mr. Murdoch authorized News International to pay Mr. Taylor more than £450,000 ($725,000) and legal fees exceeding $322,000. Mr. Pike has said that Mr. Murdoch personally authorized the amount, in exchange for a pledge of confidentiality, to keep the matter from being made public.
Tom Watson, a Labour member of the parliamentary committee and a persistent critic of News International, said that the panel would question Mr. Murdoch further about the Taylor settlement.
“It’s a curious bit about James Murdoch saying he wants to think about his options”—options that included “making a large payment to keep this quiet,” Mr. Watson said.
Mr. Murdoch, 38, has been seen for some time as his 80-year-old father’s heir apparent at the top of the sprawling News Corporation media empire. He got a vote of confidence last week when Chase Carey, News Corporation’s chief operating officer, said he was doing a “good job.”
On Thursday, though, Mr. Murdoch’s credibility may be on the line. He has always maintained that when he authorized the Taylor payment, he was acting on the advice of lawyers and had no reason to believe that hacking had gone beyond the actions of a single “rogue reporter”— Clive Goodman, the former royal reporter at The News of the World, who was jailed in 2007 for intercepting private voice mail messages of members of the royal household.
But the lawyers’ notes indicate that Mr. Murdoch had several discussions with other executives who knew that the hacking was more widespread before he agreed to the settlement with Mr. Taylor.
Mr. Myler and Mr. Crone came forward over the summer to dispute Mr. Murdoch’s July testimony, telling the committee that they informed Mr. Murdoch of a damning e-mail marked “for Neville”—a reference to Neville Thurlbeck, The News of the World’s chief reporter, who was given transcripts of illicitly intercepted phone messages.
On May 24, 2008, Mr. Crone sent a letter summarizing the case to Mr. Myler, the paper’s editor, to help him prepare for his “planned chat with chief exec James Murdoch.” In the memo, Mr. Crone describes the “for Neville” e-mail as “fatal to our case.” He adds: “The position is perilous. The damning e-mail is genuine.”
In his July testimony, Mr. Murdoch denied knowing about the “for Neville” e-mail.
The committee also plans to ask about a report by The Guardian last weekend that Rebekah Brooks, the former News International chief executive who was arrested in July on suspicion of phone hacking and illegal payments to police officers, received a severance package of more than $2 million, an office and a car and driver when she resigned from News International.
A spokesman for Ms. Brooks did not return calls seeking comment.
A spokeswoman for News Corporation said she could not comment on Ms. Brooks’s severance agreement or on what James Murdoch did or did not know. “Whatever he has to say, I think it’s appropriate that he says it to the committee on Thursday,” she said.