7 Sep 2011

Is James Murdoch set to survive after all?

Could the Murdoch dynasty survive after all? Krishnan Guru-Murthy blogs on James Murdoch and the phone-hacking scandal.

James Murdoch is clearly going to tough it out. Any thoughts that the claims of his former legal manager and editor on the News of the World would finish him off seem now to have been premature. Could the dynasty survive after all?

It boils down to who you – or rather MPs and investors – believe. The current argument, in case you’ve forgotten, is about whether James Murdoch was telling the truth when he told parliament that when he agreed to settle a case with former football executive Gordon Taylor he did not know that the phone hacking scandal went beyond the one convicted News of the World journalist Clive Goodman and the investigator who did the hacking Glenn Mulcaire.

Lawyer Tom Crone and former editor Colin Myler claim he knew because it was discussed at a meeting they had with him. They can’t recall exactly what was said but insist they all knew that an email message from Mulcaire had surfaced apparently addressed “for Neville” rather than Clive Goodman – which would be devastating if it got out as it showed hacking was more widespread than the ‘one rotten apple’ they had claimed throughout.

Murdoch‘s contention is that they are wrong and he stands by his evidence. He says they neither showed him the “for neville” email nor told him about it. When he next gives evidence to MPs he can be expected to claim that he agreed to settle with Gordon Taylor to limit the corporate damage from what had been done to Taylor not to cover up knowledge of widespread hacking. He will presumably claim he thought the Taylor hacking had been done by Goodman and Mulcaire.

There is no paper evidence one way or another from the meeting so it will boil down to credibility. And from the tone of questioning yesterday it is clear some of the MPs on the media select committee are sceptical as to how Myler and Crone can be so sure of the content of their meeting with James Murdoch while being so vague about what was actually said or produced.

There were also questions about why a meeting with such potentially damaging revelations would last less than fifteen minutes. Wouldn’t the boss want to know more? So on yesterday’s performances it seems unlikely a killer blow has been dealt to James Murdoch’s ambitions to take over from his father at the helm of News Corporation.

You might ask what about the questions of basic corporate governance and competence? Will the company’s shareholders start to question whether James Murdoch was severely lacking? Shouldn’t he have mounted proper inquiries of his own to get to the truth instead of waiting until the scandal had been exposed by the Guardian and MPs?

Shouldn’t he have asked executives like Myler and Crone or Rebekah Brooks directly what they knew, or suspected, or even feared? Will this, rather than a parliamentary report, finish his career in the end? Well, maybe. But while anyone can have an opinion on these matters they are in fact questions for those few on the board and among the voting shareholders who take the decisions. James Murdoch is fighting not just for his personal reputation, but that of his whole family. And that family still has vast power over the key decisions. It also still commands support from those few shareholders who have spoken in public on the matter. So while there is still a fair way to go in this saga the Murdoch dynasty doesn’t feel over yet.

Follow @krishgm on Twitter.