The scandal over phone hacking has exposed a rotten empire and the urgent need for stronger press regulation
Suddenly, Rupert Murdoch seems much less a global mogul, much more a diminished man of glass. He flies into London this weekend from Sun Valley, Idaho, in time for the last rites of the most successful Sunday newspaper in Britain, the News of the World. One hundred and sixty-eight years ago, it pledged: "Our motto is the truth, our practice is fearless advocacy of the truth." After today, the tabloid will appear no more, felled not by one royal rogue reporter but by the arrogance, ambition and apparent tolerance of systemic criminal behaviour by members of the senior News International management.
The loss of a newspaper, especially one with a proud history of award-winning investigative journalism, is a cause for sadness. The News of the World was the biggest-selling Sunday tabloid in the English-speaking world. The death of a paper in such rude health is unprecedented and unwanted in the media. The individuals who are to blame are, as yet, unwilling fully to admit culpability. Rebekah Brooks, the chief executive, still in post, has warned that worse revelations are to come. The shameful saga stretches back over five years. Arguably, it would not have come to light but for the sterling and stoic persistence of the Guardian, some diligent lawyers and a handful of MPs such as Tom Watson and Chris Bryant.
The News of the World's termination is the price Murdoch is willing to pay to halt the accelerating erosion of the British wing of his international empire and to secure full ownership of "the cash machine", the satellite broadcaster BSkyB, the leading provider of pay TV. However, over the past few days, BSkyB shares have lost more than £1bn in value. A decision on its sale has been postponed until the autumn by Jeremy Hunt, minister for media. Against sound advice, he had previously been minded to approve Murdoch and a £10bn deal which would give him an alarmingly large slice of British media. Now, City experts are warning that the deal could collapse.
On Thursday, Murdoch's son, James, deputy chief operating officer of News Corp, the ultimate owner of News International, which also owns the Times, the Sunday Times and the Sun, possibly opened himself up to criminal charges on both sides of the Atlantic. He admitted he had misled Parliament, although he stated that he did not have the complete picture at the time. He went on to give an extraordinary admission of negligence, describing what he called "repeated wrongdoing that [had] occurred without conscience or legitimate purpose" on his watch. He admitted that, without apparently much questioning, he had signed cheques for £1.7m for two individuals among dozens more celebrities, whose phones have been hacked. Why did the young Murdoch authorise the payments? They paid out £700,000 to the chief executive of the Professional Footballers' Association, Gordon Taylor. One of the conditions was that Taylor didn't speak about the case. News Corp also persuaded the court to seal the file on Taylor's case to prevent all public access, even though, as the Guardian revealed, "it contained prima facie evidence of criminal activity". Did alarm bells not sound for him, that he was having to spend such vast sums of money to keep his company's victims quiet?
One would have expected the company to leave no stone unturned to get to the root of the cancer that had spread across its paper. Instead, it convinced almost everyone, including a toothless Press Complaints Commission (PCC), that it was the work of a "rogue reporter". It was anything but – it was industrial scale hacking of phones.
The senior management at News International were abject in their failure – through lack of insight or enthusiasm – to get to the root of the problem. They failed their victims, they failed their journalists and they failed the News of the World. They may yet be proved to have failed their shareholders.
It is a long road from this to James Murdoch's McTaggart lecture in 2009 at the Edinburgh international television festival. The lecture was titled "The Absence of Trust". He argued: "There is an inescapable conclusion that we must reach if we are to have a better society. The only reliable, durable and perpetual guarantor of independence is profit."
James Murdoch would do well to reflect again on The Absence of Trust. Only closer to home this time. He and other senior management at News International should desist from lecturing the rest of the British media in light of their baleful performance over the phone-hacking affair.
It is therefore only right that Ofcom says that once the current police inquiries are complete, it will consider whether News Corporation, as an organisation, would make a "fit and proper" owner of BSkyB .
As a result, Murdoch may be about to reach an unexpected milestone. Possibly for the first time, his powers have proved no shield against the force of public anger. Thanks to new social media, more than 150,000 people have lodged objections to control of BSkyB passing to Murdoch. In addition, dozens of major advertisers withdrew their contracts from the News of the World. The verdict of many appears to be that News Corp is not fit and proper.
On Friday, David Cameron was heavily criticised for his lack of judgment in giving Andy Coulson a second chance when he appointed him as his director of communications. Cameron opted for a polished mea culpa: "The buck stops here," he said. He indicated that Rebekah Brooks should resign. He also said that the PCC should be axed and reforms to the regulation of the fourth estate initiated. In addition, an investigation into the laxity of the original police and News International inquiry will be conducted. A third inquiry will ask: "How did we – press, politicians and police – get here?"
Undoubtedly, good and honourable journalists exist in abundance, many employed on News International's remaining titles. However, the scale of the News of the World's telephone hacking operation has triggered international disapproval. What appears to be the routine invasion of the privacy of ordinary people already blighted by tragedy is a particularly ruthless and cold-hearted method of harvesting copy.
So what kind of an organisation provides a home for such a culture? Over 40 years, Murdoch convinced the establishment that he can make or break political reputations and grant or take away electoral success. In doing so, he has come close to gelding parliament, damaging the rights of citizens and undermining democracy. It is legitimate to ask how a naturalised American, domiciled in New York, born in Australia, and who pays next to no UK tax, holds so much sway. What right exactly did this man have to exert such influence over our political life? Freedom of information requests reveal that he spoke to prime minister Tony Blair three times in the 10 days that led up to the Iraq invasion in 2003. This was a perversion of our politics, orchestrated by a man whose power the establishment failed to check. Then they had to live with the demeaning consequences.
And what did Britain get in return for gifting this man the back keys to political power? (Literally in Murdoch's case, as he swept into Downing Street days after last year's election and then left by the back door). In return, a swaggering, bullying, crassly ineffective News International treated British citizens with contempt by hacking their phones and treated the media, police and politicians investigating the affair with wilful disdain and barely concealed threats. Let this never happen again on our watch.
Prime ministers have danced fast and furiously to Murdoch's tune. In 2001, for instance, Murdoch's newspapers supported Blair in the general election. Blair in turn backed a communications bill that loosened restrictions on foreign media ownership. More recently, News International bosses are reported to have told Ed Miliband that there would be "repercussions" if he continued to call for Rebekah Brooks's resignation. Miliband, belatedly, has broken out of the cocoon of fear that is Murdoch's speciality. He is on the offensive against the power of Murdoch and that's to his credit. It's hard to conceive that there's any going back.
Abuses of power have certainly occurred around News International. For several years, police failed to notify potential victims of hacking and follow up leads. The police in Surrey appear to have known about the Dowler hacking but did little. Since January, however, the Met's deputy assistant commissioner, Sue Akers, head of Operation Weeting, has been in charge. More arrests are expected. Clearly, the police have much to explain and much to reform. We need a full account of the failure of earlier investigations to unearth the widespread evidence of wrongdoing that is now coming to light.
There are huge challenges ahead, too, for Britain's newspapers. In the 1960s, Hugh Cudlipp of the Daily Mirror dismissed the Press Council as "an exercise in futility". The current PCC has more powers but, ill-equipped as it has proved to be, its bite still seems gummy. It published a woefully poor report into hacking that it subsequently had to withdraw. But before we embrace statutory regulation, with all the danger of political interference that threatens, we must urgently consider radical reforms of the existing regulatory framework: reducing the power of serving editors to stand in judgment of their own work; enhancing the investigative powers of the new body which is properly staffed and funded; and providing sanctions, including the power to levy substantial fines and insist upon prominent retractions of false claims. How this new organisation deals with publishing on the internet is perhaps its first challenge.
It is rumoured that Murdoch intends to launch the Sun on Sunday, possibly in the autumn. That makes it all the more urgent that the lessons of what has happened at the News of the World and on other newspapers are rapidly established.
In the spirit of media plurality, it is essential that Murdoch's control of BSkyB is rejected, as we have argued consistently in these pages. The spectre of the old Murdoch, whose demise was signalled last week – voracious and threatening – must not rise again from the ashes of the News of the World.