Summary:

Remember that independent panel that was supposed to safeguard the integrity of Dow Jones and the Wall Street Journal after the acquisition…

Les Hinton and Rupert Murdoch at Dinner during D8

Remember that independent panel that was supposed to safeguard the integrity of Dow Jones and the Wall Street Journal after the acquisition by Rupert Murdoch’s News Corp (NSDQ: NWS). in late 2007? Thanks to the UK hacking scandal, they’re back in the spotlight for what I think is the first time since Marcus Brauchli, the managing editor at the time, took a payout four months later and left — and Wednesday, that light got brighter when two senators asked for an investigation.

The five-member committee includes Thomas J. Bray, former Detroit News editorial page editor; technologist Nicholas Negroponte; Louis Boccardi, former AP CEO; Jack Fuller, former president of Tribune Publishing Co.; and Susan M. Phillips, former dean of the George Washington University business school. They are each paid $100,000 a year to keep an eye on the standards and ethics of the WSJ and Dow Jones Newswires.

They have nothing to do with News International, the UK publishing unit, or the News of the World, the tabloid so mired in the hacking scandal that News Corp. shut it down. But there was a connection: Les Hinton, the CEO of Dow Jones since News Corp. took over and publisher of the Journal for most of that time, headed News Intl. during the years when the hacking took place and testified twice to Parliament — once while DJ CEO, that it was limited. That has since been shown to be false but Hinton said he did not know that when he testified.

Last Friday, Hinton resigned after 52 years with News Corp. He expressed regrets for what happened on his watch but continued to deny being involved but is thought to be in jeopardy of being arrested in by UK authorities. The special committee weighed in after press requests, with Bray stressing that there was no evidence DJ and the Journal acted with anything but high ethical standards.

Wednesday, though, U.S. Senators Barbara Boxer and Jay Rockefeller, both Democrats who have already asked that the FBI investigate allegations that the NotW tried to hack the phones of 9/11 victims, called on the special committee to take a hard look, asking for an investigation into whether senior Dow Jones execs knew of illegal activity at News Corp., writing (full letter below) that they “were surprised that the Committee’s statement appears to foreclose any further investigation, despite the fact that the former chief executive officer of Dow Jones and former publisher of the Wall Street Journal served as the top official at News International while illegal phone hacking occurred at its newspapers.”

They also want to know if the committee expressed concern when Hinton was appointed. Robert Thomson, the editor-in-chief of Dow Jones and managing editor of the Journal, is close to Murdoch but so far there is no reason to think he was involved during his tenure at The Times.

By e-mail Wednesday night, Bray told paidContent:

The Dow Jones Special Committee is aware of the letter issued by Sens. Rockefeller and Boxer earlier today. We will reply to them in due course. Our focus from the outset has been on ensuring that the highest standards of journalistic ethics are being met at the Wall Street Journal and Dow Jones Newswires. In conversations with countless present and former Dow Jones employees we have found absolutely no sign of journalistic misconduct such as is at the heart of the scandal in London.

We did not investigate former Dow Jones Chairman Les Hinton’s activities in London, which were investigated there in the past and are the subject of renewed focus now.

The senators’ letter, dated July 20:

Dear Members of the Special Committee:

As you know, allegations of illegal phone hacking and bribery in the United Kingdom at properties owned by News Corporation, a United States-based company, have outraged people around the world. Ten individuals, including senior News Corporation executives, have been arrested and other top News Corporation officials have resigned.

The American people need to be reassured that this kind of misconduct has not occurred in the United States and that senior executives at News Corporation properties in our country were not aware of or complicit in any wrongdoing.

As members of the Special Committee in charge of overseeing the operation of the Wall Street Journal and Dow Jones and Company properties, your governing charter gives you a special responsibility to assure the “continued journalistic and editorial integrity and independence of Dow Jones’ publications and services.” The Special Committee, which was created as “a condition to the willingness of the Bancroft Investors to execute…the Merger Agreement” has unique authority since your charter provides “access [to]…all books, records, facilities, and personnel of the Company.”

We were pleased to learn that the Special Committee will take steps to ensure that no illegal activity took place at Dow Jones and Company publications. But we were surprised that the Committee’s statement appears to foreclose any further investigation, despite the fact that the former chief executive officer of Dow Jones and former publisher of the Wall Street Journal served as the top official at News International while illegal phone hacking occurred at its newspapers.

As you know, Leslie Hinton was hired as publisher of the Wall Street Journal and chief executive officer of News Corporation in December 2007. From 1995 through 2007, he served as Executive Chairman of News International, a foreign subsidiary of News Corporation that oversaw News of the World and other publications that are now under scrutiny.

On July 20, 2011, the House of Commons Home Affairs Committee released a comprehensive report on the phone hacking scandal. The Committee noted that “it is almost impossible to escape the conclusion…that [News International] were deliberately trying to thwart a criminal investigation” during Mr. Hinton’s tenure as Executive Chairman. This condemnation of News International’s actions under Mr. Hinton’s leadership of the company is very troubling.

In March 2007 Mr. Hinton appeared before the House of Commons of the United Kingdom to testify about phone hacking at News International’s News of the World paper that resulted in the imprisonment of one of its reporters, Clive Goodman, and a private investigator, Glenn Mulcaire. Mr. Hinton testified that the company had conducted a full investigation and determined that Mr. Goodman was the only employee involved in phone hacking. In 2009, Mr. Hinton again testified on the matter before Parliament and said that “there was never any evidence delivered to me that suggested that the conduct of Clive Goodman spread beyond him.” Mr. Hinton also admitted that he had authorized payments to both Mr. Goodman and Mr. Mulcaire after both had been sentenced for their role in illegal phone hacking.

Evidence has recently been discovered that raises questions about Mr. Hinton’s 2007 and 2009 testimony. Despite Mr. Hinton’s assertions that the phone hacking was limited, British police now say that as many as 4,000 people have had their information illegally hacked by News of the World. Reported targets of phone hacking include a missing 13-year old girl, the families of British soldiers who died in Iraq and Afghanistan, the families of the victims of the 2005 London bombings, and former Prime Minister Gordon Brown and his family. In the United States, the Department of Justice has acknowledged that it has commenced an investigation to determine whether News of the World attempted to gain access to the phone records of victims of the attacks of September 11, 2001.

On July 15, 2011, Mr. Hinton announced his resignation as publisher of the Wall Street Journal and chief executive officer of Dow Jones and Company, while insisting that he was “ignorant of what apparently happened” at News of the World.

As the Chairman and a senior member of the Commerce Committee of the United States Senate, we urge the Special Committee to publicly address the following issues:

1) Will the Special Committee conduct a broader investigation that includes an examination of whether current or former senior Wall Street Journal or Dow Jones executives had knowledge of or a role in alleged criminal activity at News Corporation publications?

2) Did the Special Committee investigate Mr. Hinton’s knowledge of alleged criminal activity at News International before or after he was named publisher of the Wall Street Journal and CEO of Dow Jones?

3) Did any member of the Special Committee or other senior executives at the Wall Street Journal or Dow Jones express any concerns regarding the hiring of Mr. Hinton given his role in overseeing News International’s News of the World when its employees engaged in criminal phone hacking?

This information will help give Americans confidence that the illegal activity that appears to have taken place at News Corporation in the United Kingdom did not spread to News Corporation entities in the United States.

Sincerely,

Barbara Boxer
United States Senator

John D. Rockefeller IV
United States Senator

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