How the mighty Murdoch has fallen

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It's seldom the daily news brings joy such as the News of the World phone-hacking scandal.

Rupert Murdoch is a man who held prime ministers in his palm - "the 24th member of Blair's cabinet" according to a Labour insider. Yet there he was in July, called to account by MPs, pushed to close his biggest-circulation newspaper and drop his bid to control the absurdly profitable BSkyB, his son James poised to lose his role as heir, his US empire in jeopardy.

From Coulson to Cameron

Andy Coulson, former editor of the News of the World (NoW) and head spin doctor for David Cameron, may be heading to jail if found guilty of perjury (for which an honourable mention is due to Scottish socialist Tommy Sheridan, himself a victim of the News of the World, for making Coulson deny all knowledge of hacking in court).
Indeed, it now appears Coulson was paid by Murdoch's News International for some of time he worked for the Tories.

Rebekah Brooks, the News International chief executive and former editor, may yet face prison after her resignation - compelled by popular opinion - and arrest. So may Les Hinton - Murdoch's long-time number two, who assured MPs that "we went to extraordinary lengths to investigate" - and a growing list of senior NoW journalists.

Days after the Murdochs, emperor and heir, appeared before MPs to insist they were shocked at the behaviour of reporters in their employ, their own lawyer and a senior executive (indeed, the last editor of the NoW) jointly wrote to MPs to say in effect, "James did know. We told him. He saw the evidence."

In mid-August, Clive Goodman - one of two men jailed in 2007 and for so long the lone "rogue reporter" to admit hacking - produced what looks like the smoking gun that will put senior Murdoch associates in the dock.

The Goodman letter dates from March 2007 - an indication of how long News International managed to keep the lid on the scandal. It is addressed to the company's director of human resources, registers an appeal against Goodman's sacking for gross misconduct after admitting hacking royal voicemails, and points out that he acted "with the full knowledge and support" of senior colleagues. The letter notes of phone hacking, "This practice was widely discussed in the daily editorial conference, until explicit reference to it was banned by the editor." The editor at the time was Coulson.

The letter continues, "Tom Crone [company legal head] and the editor promised on many occasions that I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation plea. I expect the paper to honour its promise."

The scandal goes back to late 2005 when Buckingham Palace complained to police about the interception of voicemails. Scotland Yard traced the hacking to the News of the World in 2006, and Goodman and private investigator Glen Mulcaire were jailed in 2007. The police reported no evidence of wider wrongdoing.

The following year the head of the Professional Football Association Graham Taylor and celebrity public relations adviser Max Clifford sued the NoW. In July 2009 the Guardian revealed that News International had paid Taylor £700,000 to end his action. The Guardian's Nick Davies reported that the case was the tip of an iceberg involving hundreds of illegal acts. Nothing happened. In autumn 2010 an unnamed Scotland Yard detective told the New York Times the Yard's "close relationship" with the NoW had hampered enquiries. Last December a second police investigation reported no new evidence.

Yet the same month News International suspended a senior journalist who was about to be named in court in one of a series of actions pursued by "celebrities" subjected to NoW exposes. It lifted the lid, triggering a growing number of revelations - of endemic hacking, police collusion and official cover-up. However, until July the "victims" of the scandal appeared to be actors, footballers and their agents, junior royals, politicians and police chiefs, and the hacking typically linked to sex, drugs and excess alcohol.

Establishment rocked

What rocked the establishment was popular outrage at the revelations that Murdoch's reporters hacked the phone of murdered schoolgirl Milly Dowler - to the extent of removing messages, leading her parents to believe she was still alive - and the phones of family members of soldiers killed in Afghanistan.

Financial Times leader writer Philip Stephens expressed the mood at the top of society when he wrote, "It beggars belief. The cover-up may well turn out to be more significant than the original allegations. Much of the evidence now emerging has been available in police files for five years...Mr Cameron, Mr Murdoch and the police are all big losers...they are falling out as each struggles to salvage a reputation. The news gets worse every day."

Former prime minister Gordon Brown, who lived in fear of the Murdoch titles when in office, now denounces "law breaking on in industrial scale" and blames his former cabinet secretary for blocking an inquiry during the Labour government. Peter Mandelson, Blair's "Prince of Darkness", says of Murdoch's papers, "We chose to be cowed because we were too fearful to do otherwise."

Of course, Murdoch has the biggest team of the finest lawyers money can buy to help salvage what he can from the wreckage. The establishment is already closing around the disgraced police chiefs - whose investigations of News International failed to expose what they found and withheld evidence from hacking victims - exonerating them from wrongdoing. The Murdochs will hope to pay off a large number of the celebrities still pursuing them - although some (Steve Coogan, Hugh Grant) have proved remarkably determined to nail those responsible.

Yet the scandal has developed a life of its own now. The court cases will rumble on. In late August, Mulcaire was due to reveal in court who ordered several instances of hacking. MPs will re-call James Murdoch and others to testify in the autumn. Former loyal lieutenants of the Murdochs will finger those above, others will be left with nothing to lose and name more names - a possible route for Mulcaire, who faces News International reneging on a promise to pay his legal fees, and Coulson who is being set up to take the rap.

The scandal may widen to Mirror Group Newspapers and bring down former Mirror editor Piers Morgan. The fact that the Guardian was for so long the only paper to report the allegations may not be unconnected to the extension of hacking beyond the NoW. Two judicial inquiries will seek to draw a line under the affair while ensuring that the steady drip of revelations continues. Jail terms await a growing number.

Why did journalists engage in hacking? "To get the story at any cost," according to one former NoW reporter, who recalled being told "to offer a binman £25,000 in cash, a new car and a holiday". A former NoW editor Phil McMullan said hacking "started as a party trick. It was so easy everybody did it. There was no reason not to."

Another, Sean Hoare - recently found dead, but who worked with Coulson for years - said hacking "was encouraged as long as you didn't get caught. It was not really about journalism. It's negotiation. You'd say [to a celebrity publicist] I've got this detail. What do you have for me?"

Police collusion

Why did the police collude? McMullan suggested, "Twenty percent of the Met has taken backhanders from tabloid hacks." Brooks testified to MPs that her company paid police officers for information. Both the police chiefs who led investigations that dismissed allegations of wider hacking were aware the NoW had evidence of their extramarital affairs. But most important, the collusion between tabloids and police was routine, long standing and endemic. Papers that help identify "rioters" or are prepared to blame football fans for a disaster such as Hillsborough can expect to be repaid with tip offs about celebrity transgressions.

Shed no tears for the NoW. It is an outrage that Brooks and the Murdochs sacrificed the paper's staff to save themselves, of course. But as a "British institution" it ranked with a sewer and was a lot less use. One of the NoW reporters recently arrested, Greg Miskiw, was recorded explaining tabloid journalism thus: "We go out and destroy people's lives."

The affair may yet cost the ageing Murdoch his empire if hacking comes to light in the US - and it could bring down Cameron and, possibly, his coalition, if evidence emerges that the Tory leader was aware of Coulson's role.