James Murdoch's ignorance defence threatens his empire

No doubt remains that that senior figures at News International knew that phone hacking went beyond one rogue reporter at least as early as 2008 and possibly much earlier. However, whether those senior figures includes News Corporation heir-apparent James Murdoch still remains a point of contention.

Murdoch's future has been under threat for some time, and now, regardless of what he knew when, he looks more vulnerable than ever. Whether he is guilty of wrongdoing remains questionable, but his future hinges as much on board members faith in his competence as it does on his culpability in the phone hacking case.

James Murdoch has fiercely clung to the defence that he was not made aware that phone hacking went beyond former royal reporter Clive Goodman and was, in fact, wide spread at the now shuttered tabloid, News of the World.

After being recalled by parliamentary committee to clarify earlier comments, Murdoch blamed News of the World legal advisor Tom Crone and editor Colin Myler of failing to warn him of the extent of criminality at the paper.

James Murdoch in this file photo. AFP

In November, Murdoch told the committee:

"If [Myler] had known that there was wider-spread criminality I think he should have told me. We have to rely on these people and we have to trust them."

The problem is that an email exchange released yesterday show that Crone did try to alert him. The exchange amongst Murdoch, Crone and an external legal advisor in 2008 show that the legal team was fully aware that the lone, rogue reporter defence was false.

That defence collapsed some time ago, and Crone admitted in testimony on Tuesday that he thought, as far back as 2004, that clinging to that defence would come “back to bite” the company.

James Murdoch's defence is looking increasingly shaky as well. Now, the veracity of Murdoch's defence hangs on whether or not he fully read an email sent to him on a Saturday in 2008 and furthermore whether or not he was made aware of the extent of phone hacking in a meeting three days later. Crone claims he was, and Murdoch claims that he wasn't. Now, we're left with a he said, she said situation.

Murdoch claims that as he responded only minutes after receiving the email that he didn't fully read the it. He only read the top of the email requesting a meeting without reading the email chain below it.

Some of Murdoch's explanation strains credulity. In a letter to John Whittingdale, the MP chairing the Culture, Media and Sport committee inquiry into phone hacking (PDF), Murdoch claims that while he responded to the email in 2008, he “only became aware of the email on Wednesday, 7 December 2011” by News International's management and standards committee.

Are we to believe that he responded to the email in 2008 but only “became aware of the email” in 2011? Three days later, James Murdoch met with Crone and News of the World editor Colin Myler to agree to a secret £700,000 settlement with former Professional Footballer's Association head Gordon Taylor in connection with phone hacking. Signing off such a sizeable cheque in a case that Crone wrote was “as bad as we feared” would certainly stick in most people's mind, but apparently not James Murdoch's.

However, Murdoch's November attack on Crone, that the legal advisor did not alert him of the scope of phone hacking, has now been proven false. Crone did alert him via email at the very least, but Murdoch's defence now rests on claims that he didn't read it. Murdoch can no longer lay the blame completely at the feet of his subordinates.

As BBC business editor Robert Peston says:

“The defence of his probity — his claim that he knew nothing of the extent of phone hacking till about a year ago — rests on his admitting that he made a management mistake by ignoring evidence of a serious problem that was put under his nose.”

To cling to his innocence, James Murdoch has to undermine his own managerial competence. It's not a tenable position for a senior executive who has aspirations of one day taking over from his father the helm of their global media empire. It's a poison chalice, Murdoch must choose between culpability in the case or admit that he's, at best, a cavalier executive. The assumed chain of succession from father to son is now very much in doubt.

Updated Date: Dec 16, 2011 09:12 AM

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