Rupert Murdoch Gets Slammed By This Parliamentary Inquiry

After a months-long investigation into the hacking scandal at News Corp.’s (NASDAQ:NWS)(NASDAQ:NWSA) British newspapers, a parliamentary panel concluded on Tuesday that founder, chairman, and CEO Rupert Murdoch was “not a fit person” to run a huge international company.

Though going further in criticizing Murdoch personally than had been expected from Parliament’s select committee on culture, media, and sport, the report was blunted by the fact that there were divisions within the panel itself, with the dominant Conservatives opposing the criticism while the Liberal Democrats and the Labour Party supporting it.

“The issue on which no Conservative member felt they could support the report itself was the line in the middle of the report that said that Mr. Rupert Murdoch is not a fit person to run an international company,” said Louise Mensch, a Conservative member of the panel. “We all thought that was wildly outside the scope of a select committee” and “an improper attempt to influence” the British media regulator.

The report accuses Murdoch of having exhibited “willful blindness” toward wrongdoing within his organization, and said News Corp. had made “huge failings of corporate governance.” However, the legal consequences of the panel’s findings were not made immediately clear.

After the report was published, Britain’s media regulator, Ofcom, did say that it had a legal duty “to be satisfied that any person holding a broadcasting license is, and remains, fit and proper to do so.” Ofcom said it would continue to assess the evidence.

The report claimed it had been the instinct at the company to “cover up rather than seek out wrongdoing and discipline the perpetrators.” It also accused three former senior executives of News International — Les Hinton, Colin Myler, and Tom Crone — of misleading the parliamentary committee during their testimony

The report also singled out Rupert’s son James for failing to act much earlier — he only took actions once the hacking scandal at News of the World made headlines last summer. “Had James Murdoch been more attentive to the correspondence that he received at the time, he could have taken action on phone hacking in 2008 and this committee could have been told the truth in 2009,” the report said.

It also said that News Corp. had tried to blame lower-ranking executives while “striving to protect more senior figures, most notably James Murdoch.” But even if the Murdochs were unaware of any wrongdoing, the report contends that “the whole affair demonstrates huge failings of corporate governance.”

On top of the parliamentary inquiry, News Corp. is facing a judicial inquiry as well as three separate polite investigations into its phone hacking, email hacking, and bribery of police officers. So far, more than 40 people have been arrested and questioned, though none have been charged. The chairman of the parliamentary committee, John Whittingale, said Tuesday that the panel had been careful not to publicize any conclusions that might prejudice criminal proceedings against those involved.