Video: Apologetic Murdochs denied knowledge of hacking

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    >>> is an american citizen , the head of a media empire that is well known and widely watched here, the current scandal involving his company is mostly unraveling in great britain where he's already shut down one newspaper. where we know people's cell phones were hacked and where today, murdoch and his son and former employee faced members of parliament in a hearing. both murdochs tried to stay above the fray and then the fray came to them in the form of a guy with a cream pie aimed right at the face of the patriarch. it was that kind of day. it's been that kind of scandal. we begin our reporting here tonight with nbc's stephanie gosk in london , stephanie , good evening.

    >> reporter: good evening. brian. the police were armed with machine guns outside the front doors of parliament today, a good indication it was not going to be business as usual . many here in london said today that this was one of the most important days in parliament's history. the murdoch 's made a business out of covering the story. today, they were the story. the man who runs the second largest media company in the world side-by-side with his son, in front of members of parliament . po apologetic.

    >> this has been the most humble day of my life. i would like to say as well, how sorry i am and how sorry we are to, particularly the victims of illegal voice mail interceptions and to their families.

    >> reporter: from the beginning, james took the lead.

    >> i think my son can perhaps answer that in more detail. i think that's a question for james .

    >> reporter: at times jumping in to help when his 80-year-old father searched or stumbled for answers. but it was rupert murdoch 's wife who stepped in at the most critical moment. throwing a right hook to protect over husband from a surprise pie attack. the protester, an amateur comedian that calls himself johnny marbles was arrested and led away by police. for most of the question about phone hacking at "news of the world" the committee focused on who knew what and when. both of the murdochs repeatedly denied prior knowledge and never assumed responsibility.

    >> i don't know.

    >> i have no knowledge.

    >> that's the first i've heard of that.

    >> i don't have direct knowledge of that.

    >> i can't answer. i don't know.

    >> reporter: at one point, murdoch claimed his company is too billing for him to know the details of -- too big to know the details of each business.

    >> "news of the world" say small percent of our company and i'm spread watching and appointing people in my trust.

    >> reporter: james defended executives rebekah brooks who resigned last friday. both led british newspaper's arm.

    >> there's no evidence that i'm aware of that brooks or mr. hinton or any of those executives, had knowledge of that. nonetheless, those resignations have been accepted.

    >> reporter: later in the day, brooks faced questions by herself from the same panel. she was arrested on sunday over allegations of phone hacking and payments to police for information. she, too, denies any knowledge of wrongdoing.

    >> i have never paid a policeman.

    >> reporter: but for the murdochs today's questioning was about salvaging news corp.'s reputation, a business rupert brought up with one paper.

    >> i was brought up by a father who was not rich but a great journalist. before he died, it was a small paper.

    >> reporter: james hopes to one day lead the family business but first he'll have to repair the damage sustained over two weeks of an ever-widening scandal.

    >> it's our determination to put things right. make sure these things don't happen again.

    >> reporter: rumors were floated that the head of news corp. might use today to announce his own resignation. just rumors.

    >> have you considered resigning?

    >> no.

    >> why not?

    >> because i feel that people i trusted have let me down. i'm the best person to clean this up.

    >> reporter: and there may be more tough questions to come. british prime minister david cameron has called for a judicial inquiry that could summon both rupert and james murdoch for questioning. and some u.s. lawmakers are calling for their own hearing, another opportunity to question the media mogul on capitol hill , brian.

    >> stephanie gosk starting off our reporting with the wild day in london , thanks.

By M. Alex Johnson Reporter
updated 7/19/2011 7:02:40 PM ET 2011-07-19T23:02:40

Rupert Murdoch, for decades one of the most powerful and feared media figures in the English-speaking world, appeared to many who watched his grilling Tuesday to be a confused old man. And from his standpoint, that wasn't necessarily a bad thing, professional crisis managers said.

During 40 years running News Corp., the dominant media company in Great Britain and owner of some of the most prominent media properties in the United States, the 80-year-old Murdoch has built a legend as a man able to decide elections, change the political agenda and severely punish anyone who gets in his way.

But appearing before a committee of the British Parliament on Tuesday, Murdoch claimed to have been out of the loop while reporters for his News of the World tabloid broke into the cell phone voicemail accounts of thousands of people to get scoops, and while his company paid off British police.

At times, Murdoch seemed confused and slow to understand questions from the Culture, Media and Sport committee. At one point, he openly acknowledged that "I'm not really in touch" with the editors of all of his newspapers, although he said he did speak with the editor of The Sunday Times every week.

More than once, his son, James, News Corp.'s deputy chief executive, tried to step in and answer for his father, only to be cut off by members of the committee.

Later in the hearing, Murdoch appeared to gain strength, and his answers became more focused. He reacted with aplomb late in the hearing when a man tried to attack him with a plate filled with foam, then calmly resumed answering the committee's questions after a short break.

Story: Pie thrower no match for Murdoch's 'tiger wife'

But the dominant impression as reflected in commentary from media specialists with years of experience dealing with News Corp. was that of an aging corporate giant who could no longer control everything that was being done in his name:

  • James Poniewozik, a media columnist for Time magazine, said on Twitter that Murdoch appeared "uninformed" and "doddering," asking his followers whether that was even worse than being seen as deceptive.
  • Paul Farhi, media reporter for The Washington Post, said Murdoch seemed "very foggy."
  • And Howard Kurtz, Washington bureau chief of The Daily Beast and one of the most prominent media reporters in the United States, tweeted, "Every detail of scandal that Rupert says he's not familiar with makes him look more disengaged as a CEO."

Murdoch claimed to have had no knowledge about large payments to potential litigants and police over the last decade — a prospect that media experts suggested was inconceivable. Asked whether he had been told of financial settlements in hacking cases, he said he couldn't remember.

And he said he hadn't even heard of the most widely publicized case, the hacking of the voicemail of 12-year-old murder victim Milly Dowler, until two weeks ago, when it was revealed by The Guardian.

Tom Watson, a member of Parliament and a leading critic of Murdoch's, said answers like that were "revealing in itself (about) what he does not know and what executives chose not to tell him."

'Certain level of sympathy'
Daniel Diermeier, a reputation management expert at Northwestern University's Kellogg School of Management, said that perception might not have been a bad outcome for Murdoch and News Corp.

"If you appear as an old man, there is a certain level of sympathy," said Diermeier, author of "Reputation Rules: Strategies for Building Your Company's Most Valuable Asset."

That reaction would have been "reinforced by this whole pie-throwing incident," he said, adding: "The appearance went reasonably well. It was kind of a stabilizing day for them."

Story: Piers Morgan again defends work on UK tabloid papers

Chris Tennyson, a partner and co-leader of the crisis management practice at Fleishman Hillard International Communications, one of the world's biggest public relations companies, said Murdoch appeared to be "on strategy."

"Giving them the benefit of the doubt — that that's the truth — then they did well," he said.

(Diermeier and Tennyson said they had no professional ties to News Corp.)

Tough choices for Murdoch
Both men said Murdoch appeared to be in a Catch-22. He needed to appear open and honest with the committee while at the same time saying nothing that could open him to prosecution.

Story: Murdoch's legal, financial woes escalate

The unavoidable casualty may have been his image as a dynamic, involved corporate leader, they suggested.

"On the one hand, if you're not in touch with how your business is run, that raises questions about how effective you are," Diermeier said. "You are setting the tone at the top. ...

"On the other hand, there's this issue: If all these allegations turn out to be true, we're talking about criminal behavior," he said.

Tennyson said it was, in fact, possible to believe that Murdoch was both fully in charge of News Corp. while knowing little about the specifics of how his British newspapers worked.

"It's very usual that (a chief executive) would not be in the weeds," he said. "An individual at that level and that importance is not involved in the day to day."

If Murdoch's apparent disengagement was a performance, it seemed to have worked, at least partly. News Corp. stock rose more than 5 percent during the hearing.

That was likely the result of low expectations, Diermeier said.

"News Corp. has really been in a free fall the last few weeks," he said. "I don't think this is a turnaround, and I don think this is sustainable."

That's especially true if it eventually emerges that Murdoch was not telling the truth, Tennyson said.

"I've never been in a situation where the press doesn't get the truth," he said. "They have to realize that's going to happen sooner or later.

"The communications strategy has to absolutely support the truth" about three things, he said: What did Murdoch and his advisers know, how much did they know and when did he know about it?

"The answers to those questions are critical to whether the press will portray you as a villain or a victim," he said.

Either way, it was a very different Rupert Murdoch from the swashbuckling media titan whom political leaders and media observers thought they knew, an executive legendary for micromanaging his properties to get exactly his way.

Murdoch news sites defaced, brought down by hackers

Bloomberg News, citing three sources, reported that Murdoch and his son had rehearsed their testimony and that company executives "had concerns about how he handled questions."

Diermeier and Tennyson said it was highly unlikely that Murdoch was "coached" to appear out of the loop to avoid criminal liability, but that strategy that was explicitly suggested Tuesday morning by David Corker, who was the attorney for the sons of the late media baron Robert Maxwell when they appeared before a parliamentary committee in 1992.

It would be "premature" for Murdoch to answer questions now because of potential criminal proceedings, Corker said on BBC Radio's "Today" show, advising Murdoch to "tough it out" even though it would be a "P.R. disaster."

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