The water keeps rising around James Murdoch

Attorneys for News Corporation investigating the phone-hacking scandal at the now-defunct UK tabloid News of the World revealed today that emails warning of widespread hacking were deleted from James Murdoch’s computer.  The New York Times reports:

Rupert Murdoch’s son James that referred to “a nightmare scenario” of legal repercussions from widespread phone hacking at the News of the World tabloid was deleted from his computer less than two weeks before the police opened their current investigation into phone hacking, lawyers said Wednesday.

“The deletion was part of an “e-mail stabilization and modernization program” in which accounts were “being prepared for the migration to a new e-mail system,” said Linklaters, a law firm representing News International, the British newspaper arm of the Murdoch media empire.

“The e-mail was a chain of messages sent June 7, 2008, to James Murdoch, head of News Corporation’s European and Asian operations, warning that the potential legal fallout from hacking at The News of the World was ‘as bad as we feared.'”

A spokesperson for News Corporation declined to comment, which is seldom a good sign. But after many public statements and appearances before a parliamentary committee, what more can they say to refute the claims that James Murdoch knew about the ill deeds?

The revelation suggests that evidence showing James Murdoch was informed of the widespread use of hacking might have been deliberately destroyed. If true, it was a rather clumsy and naïve attempt to bury an electronic “smoking gun” in the digital age.

This has ceased to be simply a communication matter for News Corp. It’s a governance issue for the board. Can a senior executive operate effectively under such a cloud of suspicion?  Is the board truly acting in the interest of shareholders by allowing him to continue in his current role?

At most public companies, James Murdoch would have been placed on administrative leave while the matter was investigated.  But News Corp isn’t like most public companies when it comes to the Murdoch family, and James appears determined to hang on.



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