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Murdoch’s moment: What’s at stake for News Corp. in phone-hacking hearings

The top three executives of the Murdoch empire that owns 40 percent of the British press and the biggest TV market here will today be publicly questioned about a hacking scandal that this week alone forced the resignations of Britain’s top two police officials and has brought the prime minister home early from Africa over questions of his leadership.

In a scandal whose momentum has been breathtaking, it may be another new peak of drama.

For Mr. Murdoch, the stakes could be extremely high. A committee room of assorted politicians asking frank questions is not seen as the Australian-born mogul’s best setting. Should he appear too sharp, combative, dismissive, or insincere, he could permanently lose the British public, analysts say.

Murdoch, owner of News Corporation, his son James Murdoch, who had oversight of News of the World (NotW), and Rebekah Brooks, the recently arrested NotW editor and former CEO of Murdoch’s British newspaper arm, will go before a House of Commons committee to answer what they know about the scope of phone hacking at NotW – and when they knew it.

Together they are being called “the Wapping Three” after the area of London where Murdoch’s press empire is centered.

Questions will also be put to Sir Paul Stephenson, who resigned Sunday as head of the Metropolitan Police Dept., and John Yates, his deputy, who stepped down Monday.

The scandal – some call it “Murdochgate” – has shown enough daily twists to satisfy a crime series drama. The private conversations and voice mails of some 3,870 Brits were hacked mainly by the NotW in a scandal that has, overnight, exposed cozy relations among media, politicians, and police, as well as a culture of avarice in gaining material for London’s hard-hitting tabloid world.

Page 1 headlines this morning detailed the discovery of the body of Sean Hoare, the former NotW reporter who first blew the whistle on the scale of News Corp. phone hacking, in his apartment outside London. Mr. Hoare’s death has been described as “unexplained” but not “suspicious” by police officials in Watford where he lived.

Hoare described the extent of phone hacking at NotW in a way that shattered a previous News Corp. story that hacking was done by a lone “rogue reporter.”

Hoare described a “culture of bullying,” fingered police involvement, and significantly described former NotW deputy editor Andy Coulson as deeply implicated. Mr. Coulson, now under arrest, worked under Ms. Brooks at the paper, and “encouraged” hacking, according to Hoare. Coulson was then hired by Prime Minister David Cameron to be his chief press secretary and was widely regarded as one of Murdoch’s chief allies inside 10 Downing St.

How the Murdochs and Brooks will “come across” and acquit themselves is the chief talk in London this partly cloudy morning.

The public drama of members of Parliament questioning the executives draws comparisons to the Elizabethan sport of “bear-baiting … a powerful, blinded beast maddened by small dogs,” notes British barrister Geoffrey Robertson, who also points out that, unlike committee members in the US Congress, members of Parliament cannot conduct a serious cross-questioning.

“I wouldn’t underestimate the Murdochs,” says Martin Moore, of the London-based Media Standards Trust, an advocacy group for press reform. “They’ve agreed to testify and they must feel they have a compelling story to tell and the ability to do effectively.”

The senior Murdoch is being looked to for his knowledge of the hacking practice, and analysts say that his sincerity and contrition will be important. As the scandal developed, he told The Wall Street Journal, part of the Murdoch empire, that he had no regrets about anything. Then last Friday, he switched tactics and engineered a full-page ad in British dailies that read “We Are Sorry.”

With James Murdoch, questions may focus on his knowledge of hundreds of thousands of dollars paid to investigators, particularly one Glenn Mulcaire, known to obtain information by hacking or other means. The younger Murdoch also signed off on nearly $1 million in a hacking settlement in 2008.

For Brooks: what did she witness and sanction as the editor in charge of News of the World during its hacking heyday?

Mr. Moore says the immediate questions are whether police were paid off, whether News Corp. executives covered up evidence, and whether its executives lied to the House of Commons in previous inquiries. Yet any full answering of such questions will depend more on the talents and terms of the judicial inquiry that Cameron initiated, rather than one afternoon with the “Wapping Three,” he adds.

One unanswered question is whether the arrest of Brooks this week will allow her and the two Murdochs to artfully dodge direct answers, and to say they would like to answer fully but that ongoing investigations prevent them from doing so.

The scene of some of the most powerful players in shaping British opinion and politics now being brought to account as their empire loses value daily (Standard & Poor has put News Corp. on a credit watch) is an extraordinary symbol.

Only 20 days ago, it appeared that Murdoch, with the help of Cameron, would breezily conduct a takeover of the rest of the British Sky Broadcasting (BSkyB) satellite TV firm. Instead, the hacking revelations that focused first on a 13-year old murdered girl, Milly Dowler, whose voice mail was erased by hackers in hopes of getting more information, giving the family misguided hopes, brought unexpected moral rage by the public.

In its wake, Murdoch closed the 168-year old NotW and focused on the more lucrative BSkyB but then withdrew his bid as the British mood turned against him and political allies ran for cover as the scandal spread.

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