LONDON (ABC /Reuters / Pacific Media Watch): A powerful British parliamentary committee has labelled Rupert Murdoch unfit to run a major company, and called on him to take responsibility for the culture of illegal phone hacking that has shaken News Corporation.
The long-awaited report by the Culture Select Committee did not find that Rupert and James Murdoch had misled MPs, but said the 81-year-old News Corp chief lacked credibility and his son James appeared incompetent.
"News International and its parent News Corporation exhibited wilful blindness, for which the companies' directors - including Rupert Murdoch and James Murdoch - should ultimately take responsibility," it said.
"Their instinct throughout, until it was too late, was to cover up rather than seek out wrongdoing and discipline the perpetrators.
"Even if there were a 'don't ask, don't tell' culture at News International, the whole affair demonstrates huge failings of corporate governance at the company and its parent, News Corporation.
"We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company."
However, the committee split on party lines, with outnumbered Conservative MPs unhappy with its explicit criticism of the Murdochs, criticism which has been led by Labour MP and committee member Tom Watson.
"We shared different views about the culpability of News Corporation, and the degree of culpability of James Murdoch in particular," Conservative committee member Louise Mensch said.
"It will be correctly seen as a partisan report, and we've lost a very great deal of its credibility, which is an enormous shame."
The cross-party committee, which approved the report by a majority of six to four, scolded News Corp for misleading the British Parliament and trying to cover up illegal phone hacking.
"To put it politely, we've been led up the garden path by News International, but more importantly, so were the readers of its newspapers, the general public and the victims of phone hacking," Labour MP Paul Farrelly said.
The committee said three News International employees had misled parliament: News of the World's former chief executive Les Hinton, who lied about payments to royal reporter Clive Goodman; former legal director Tom Crone; and former editor Colin Myler who could have stopped phone hacking as early as 2007, but paid out football union boss Gordon Taylor to cover up the practice.
In response, a News Corporation statement said the scathing British report had uncovered "hard truths".
"Hard truths have emerged from the Select Committee Report: that there was serious wrongdoing at the News of the World; that our response to the wrongdoing was too slow and too defensive; and that some of our employees misled the Select Committee in 2009," the statement read.
"We have already confronted and have acted on the failings documented in the report: we have conducted internal reviews of operations at newspapers in the United Kingdom and indeed around the world, far beyond anything asked of us by the Metropolitan Police.
"As we move forward, our goal is to make certain that in every corner of the globe, our company acts in a manner of which our 50,000 employees and hundreds of thousands of shareholders can be justly proud."
In an email to News International staff, Rupert Murdoch said the report made for difficult reading.
"But we have done the most difficult part, which has been to take a long, hard and honest look at our past mistakes," he said.
The report may force James Murdoch, once heir apparent to the media empire, to sever his last ties with Britain's biggest satellite TV firm BSkyB, which News Corp had sought to take over before the scandal.
The deputy editor of the Independent on Sunday, James Hanning, says the committee's report is significant for the warning shots it fires.
"What they've done is send two messages - One to Ofcom, the controller which is the regulator of the media in Britain, and they're saying, 'Well look, these people are not reliable, they shouldn't be involved in running BSkyB'.
"And secondly, I think they're sending a message to the director of public prosecutions, who has had a file on his desk for a year from the police, suggesting that there is a degree of corporate responsibility, and that possibly there should be charges in that direction against the Murdochs."
In the week of local elections, the report could also embarrass British Prime Minister David Cameron, who has acknowledged that Britain's political elite has been dazzled and charmed by the Murdochs' media clout for years.
But it could be some time though before any concrete changes flowing from the report are seen.
The first part of the Leveson inquiry is not due to finish until November, and the three police investigations are still ongoing, with around 40 people arrested. However, early indications are charges could be laid soon.
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