Financial Times Editorial: Murdoch Must Address Hacking Scandal

A July 5 Financial Times editorial called on News Corp. chairman and CEO Rupert Murdoch to “immediately appoint an independent figure” to investigate allegations that his News of the World tabloid hacked and deleted voicemails of murder victim Milly Dowler, impeding a police investigation and giving her family false hope that she was still alive.

The Financial Times wrote:

Senior managers at the UK subsidiary should be held responsible for what happened on their watch. The idea - assiduously peddled for a long time by News Corp - that the hacking was the work of a “lone wolf” was never credible. Indeed as the allegations mount up, what is emerging is an industrial-scale operation where, in many cases, it was the first resort of journalists pursuing a story to engage the so-called “dark arts” of the private investigator and phone hacker. In these circumstances, the idea that bosses did not know what went on would be a poor excuse even if one accepted it.

Mr Murdoch must set aside personal loyalties and remove those executives with any involvement in the affair - whether through their role as editors or at a corporate level. That includes those responsible for handling the company's response. For a start, Rebekah Brooks, the chief executive of News Corp's UK operations, should go. Assuming the allegations are correct, as the editor of the News of the World when Ms Dowler's phone was hacked, her position is untenable. Although she has pleaded ignorance, the final responsibility was hers.

But it is no longer enough just to dismiss people. The affair has inflicted great reputational damage on News Corp. This should be of concern not just to Mr Murdoch but also to the company's wider shareholder base. After all, the group is seeking to expand its UK interests massively with the acquisition of the broadcaster, BSkyB.

Following allegations that News of the World hacked the 13-year-old murder victim's voicemail, Ford Motor suspended all advertising with the paper, and several other companies -- including T-Mobile -- are reportedly considering following suit.

News of the World has previously admitted it intercepted cell phone messages, and has paid damages in some cases. Reportedly thousands of people -- including celebrities, politicians, and royals -- may have had their phones targeted by the paper.