The Sun isn't shining

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The wheels continue to come off at News International. James Murdoch's resignation as executive chairman is the latest blow. It came a few days after Metropolitan police deputy-assistant commissioner Sue Akers' explosive account to the Leveson Inquiry of a "culture of illegal payments" to a "network of corrupt officials" by the Sun

Ackers' broadside came a day after Rupert Murdoch launched the first Sun on Sunday, replacing the News of the World which was shut last July. His abrupt move followed the dawn arrests of ten Sun journalists - an eleventh is wanted for questioning - sparking such discontent among Murdoch's loyal hacks that Rupert himself descended on Wapping to reassure them.

Sun associate editor Trevor Kavanagh went on the BBC to declare the mood at the Sun "despondent", which is wholly welcome, and insist the Sun's closure "would be a catastrophe" which it would not. He hailed those arrested as "the greatest legends in Fleet Street", who had been "dragged from their beds in dawn raids". How it must hurt to be on the receiving end of the Sun's favourite boys in blue.

Three linked but separate processes are running beyond the control of Murdoch and his New York based News Corporation.

First, there are the legal cases over phone hacking. No sooner does Murdoch settle 60 of them than 200 fresh cases appear. Second, there is the Leveson Inquiry into the role of the press and police in hacking. This began in November, will run and run and may yet connect David Cameron to knowledge of phone hacking through Andy Coulson's period as his press secretary.

Third are the police investigations: Operation Weeting into phone hacking, Elveden examining corrupt payments to public officials, and Tuleta looking into computer hacking.

The processes overlap and feed one another, continually throwing up fresh revelations and new evidence. For example, all emails from the period in question at News International were declared "lost" until recently. Now 300 million are available for inspection.

The pressure led Murdoch to set up a Management and Standards Committee (MSC) - comprising of company executives and lawyers - to demonstrate how seriously he takes phone-hacking and to head off a US investigation. A "source close to the MSC" described its task as "draining the swamp". This upset Kavanagh, but it is apt. As far as the committee is concerned, it is the alligators doing the draining.

Yet the MSC now feeds the scandal, scouring the News International email database in response to requests from 20 police based at Wapping.

The committee reports to Washington anti-trust lawyer and former head of New York's schools Joel Klein, brought on to the News Corp board last July. Klein reports to Murdoch and also heads News Corp's new education division, which has made him a regular dinner companion of education secretary Michael Gove (a former Times journalist).

The nightmare for Murdoch would be a US Department of Justice (DoJ) prosecution under the Foreign Corrupt Practices Act (FCPA). So the Guardian reports, "News Corp has amassed the most formidable team of FCPA lawyers ever assembled, including the former head of the DoJ's FCPA section."

Former Sunday Times editor Andrew Neil argues, "Murdoch is playing for time. [But] the side he will come down on will be News Corp. That is a multibillion-dollar business. News International is a multimillion-dollar business."

The Financial Times puts it similarly: "News Corp's publishing division [which includes Wapping] generated a quarter of the group's $17 billion revenue in the six months to December, but only 11 percent of operating income. The scandal has cost News Corp 60 percent of that."

So any confidence at the Sun is entirely misplaced.

Of course, there is no reason to trust Akers' account more than those following the two previous police investigations, except that Akers must be seen to act because the Met itself is under scrutiny, and Cameron did not appoint Leveson to extend our freedoms. The process is contradictory.

But a clue to the impact Leveson has had thus far comes from the identity of those attacking the inquiry. The Daily Mail hailed the Sun arrests as "Operation Overkill". Gove described Leveson as having a "chilling effect" on Fleet Street. London mayor Boris Johnson called for the Leveson "caravan to move on" saying, "Let's knock it on the head as soon as possible." On the contrary: bring it on.