UK gov't defends Murdoch ties as scandal spirals

[July 16, 2011]  LONDON (AP) -- Britain's Conservative-led government denied Saturday that it was too close to Rupert Murdoch's scandal-hit media empire, as the mogul apologized for phone hacking by one of his tabloids in full-page newspaper ads across the country.

Government records show that Prime Minister David Cameron has had scores of meetings with media executives in the past year, including more than 20 with Murdoch employees.

Rupert Murdoch's son James, his former British CEO Rebekah Brooks and ex-News of the World editor Andy Coulson all stayed at the prime minister's country home, Chequers.

Coulson's stay in March came two months after he resigned as Cameron's communications chief amid the spiraling phone hacking and police bribery scandal. Critics said that invitation showed poor judgment on Cameron's part and revealed the cozy relationship between political leaders and Murdoch's powerful media empire. Coulson was arrested in the scandal last week.

But Foreign Secretary William Hague said Saturday he was not embarrassed "in any way" by the government's relationship with Murdoch executives.

"It's not surprising that in a democratic country there is some contact between leaders" and media chiefs, he told the BBC,

"I'm not embarrassed by it in any way, but there is something wrong here in this country and it must be put right," Hague said. "It's been acknowledged by the prime minister and I think that's the right attitude to take."

Cameron acknowledged last week that the relationship between politicians, the media and the police in Britain had grown too close and must be changed.

Hague said Cameron had invited Coulson to Chequers "to thank him for his work, he's worked for him for several years, that is a normal, human thing to do."

Coulson is one of nine people arrested and questioned by police over what they knew about phone hacking at the News of the World, the 168-year-old tabloid shut down by Murdoch last week after the scale of its illegal hacking became clear. No one has been charged.

Murdoch is struggling to contain the scandal, which has scuttled his bid for lucrative TV broadcaster BSkyB and knocked billions off the value of his News Corp. empire. On Friday, the scandal claimed the jobs of Brooks and another senior Murdoch aide, Wall Street Journal publisher Les Hinton.

News Corp. made a public act of contrition Saturday, placing an ad in seven British national newspapers with the headline "We are sorry." Signed by Murdoch, it apologized "for the serious wrongdoing that occurred."

"We are deeply sorry for the hurt suffered by the individuals affected. We regret not acting faster to sort things out," it said.

The company plans to take out more ads in the coming days outlining its next steps -- part of a new strategy by the once all-powerful mogul. A front-page headline in the Murdoch-owned The Times on Saturday read "Day of atonement."

Murdoch on Friday met with the family of murdered schoolgirl Milly Dowler, whose phone was hacked by the News of the World in 2002. The revelation that journalists had accessed her phone in search of scoops while police were looking for the missing 13-year-old fueled an explosion of interest in the long-simmering scandal about illegal eavesdropping.

The 80-year-old mogul said "as founder of the company I was appalled to find out what had happened and I apologized."

The phones of celebrities, royal aides, politicians and top athletes are also alleged to have been hacked, and police are investigating whether the scandal also reached to the victims of London's 2005 terrorist bombings and the families of dead British soldiers

On Friday the scandal that has rocked his British holdings claimed a senior Murdoch executive in the U.S. when Hinton -- a staunch ally who has worked for Murdoch for more than half a century -- announced he was stepping down immediately as publisher of the Wall Street Journal and chief executive of Dow Jones & Co.

Hinton was chairman of Murdoch's British newspaper arm during some of the years its staffers are alleged to have hacked into cell phones. Still, he had testified to a parliamentary committee in 2007 and 2009 that he had seen no evidence that abuses had spread beyond a single jailed reporter, Clive Goodman.

Hinton said Friday that "the pain caused to innocent people (by hacking) is unimaginable."

"That I was ignorant of what apparently happened is irrelevant," he said.

Murdoch's British lieutenant, Rebekah Brooks, also stepped down Friday. Brooks said she was stepping aside because her status as "a focal point of the debate" was interfering with "our honest endeavors to fix the problems of the past,"

Tom Mockridge, the head of Sky Italia, was installed to replace Brooks as CEO at News International, the British newspaper arm of Rupert Murdoch's global News Corp.

The loss of two top aides ended a rough week for Murdoch, who faces more pressure Tuesday when he, his son James and Brooks all face questioning by a U.K. parliamentary committee investigating phone hacking and police bribery.

Cameron also has appointed a judge to conduct a sweeping inquiry into criminal activity at the News of the World and in the British media.

Murdoch is eager to stop the crisis from spreading to the United States, where the FBI has opened an inquiry into whether 9/11 victims or their families were targeted by News Corp. papers.

Murdoch's News Corp. empire includes Fox News, the 20th Century Fox movie studio, the Wall Street Journal, the New York Post and three British newspapers -- The Sun, The Times and The Sunday Times.

Newspaper analyst Ken Doctor said Friday's departures of Brooks and Hinton show Murdoch is "trying to build a firewall between the past and the future of News Corp."

It also suggests that Murdoch doesn't want the Wall Street Journal, one of the world's most respected newspapers, to get tarred in a scandal involving the tawdry behavior of journalists at a British tabloid.

Protecting the Journal's reputation has become more important to Murdoch now that his political influence in Britain has been diminished. Doctor believes it's likely News Corp. will sell all of its British newspapers.

"He has lost his power in Britain and he is never going to get it back in this lifetime, so there is no longer a reason for him to own News International," Doctor said. "The movie studio and cable TV is what's really important to protect now."

[Associated Press; By JILL LAWLESS]

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