The latest News Corp (NSDQ: NWS). casualty in the spreading hacking scandal: Les Hinton, CEO of Dow Jones since it was acquired by News Corp. in 2007 and publisher of the Wall Street Journal. Hinton who is close to Rupert Murdoch, resigned today — not for anything he did at the Journal but because of his years as head of UK publishing unit News International, the center of a massive scandal threatening the Murdoch empire. He will not be replaced now; instead, DJ President Todd Larsen will report to Chase Carey, deputy chairman, president and COO of News Corp. — insulating the organization somewhat from Rupert Murdoch.
Hinton was the second high-profile departure today: Rebekah Brooks resigned as CEO of News International this morning.
The resignations are part of an extraordinary 24 hours of crisis management by News Corp., moves that might have made a huge difference has they occurred as outrage started to build with the Guardian‘s July 4th report that News of the World reporters had hacked into the voicemail of a young murder victim.
Never mind that it happened years ago — the report escalated previously known instances of phone hacking from celebrities and politicians to people whose lives had been torn apart by tragedy. Hinton headed News Intl. during those years, was in charge when the hacking scandal first unfolded, and, worse, testified in 2007 that the illegal activities were limited in scope and all the details were known. In retrospect, that was completely wrong. He could be in legal jeopardy for that testimony, especially if it can be proven that he knew at the time it was false.
Brooks, who was editor of News of the World then, became a lightening rod for much of the outrage but Hinton, who prefers that other people make headlines, was squarely in the spotlight, particularly because he had assured authorities and the public that he and News Intl. had been completely forthcoming the first time around. His closeness to Murdoch — the two have known each other for more than 50 years — earned him considerable loyalty but his days at News Corp. were numbered as soon as it became clear that either choice for explanation looked bad for him. Either he should have known and mishandled the investigation and inquiries or he knew and lied.
“That I was ignorant of what apparently happened is irrelevant”“
In his resignation letter to Rupert Murdoch, Hinton says the latter was not the case:
When I left News International in December 2007, I believed that the rotten element at the News of the World had been eliminated; that important lessons had been learned; and that journalistic integrity was restored. My testimonies before the Culture Media and Sport Select Committee were given honestly. When I appeared before the Committee in March 2007, I expressed the belief that Clive Goodman had acted alone, but made clear our investigation was continuing.
In September 2009, I told the Committee there had never been any evidence delivered to me that suggested the conduct had spread beyond one journalist. If others had evidence that wrongdoing went further, I was not told about it.
He also expressed remorse and regret for people who had been hurt:
I have seen hundreds of news reports of both actual and alleged misconduct during the time I was executive chairman of News International and responsible for the company. The pain caused to innocent people is unimaginable. That I was ignorant of what apparently happened is irrelevant and in the circumstances I feel it is proper for me to resign from News Corp, and apologize to those hurt by the actions of the News of the World.
News Corp. formally hired ad hoc advisor Edelman to handle the UK end of the crisis this week. Once the company kicked into full crisis management mode Thursday — Wednesday’s withdrawal of the BSkyB (NYSE: BSY) bid was just a warm up — the dominoes quickly started to fall.
Murdoch gave a formal interview (true, to the WSJ but he was on the record) trying to dismiss some claims and to manage others. Plans were announced to run full-page apologies in News Intl. and other papers over the weekend. He met with the family of murder victim Milly Dowler’s family, expressing what even their lawyer said seemed like true regret. Rebekah Brooks resigned, after full support for the first part of the crisis from Murdoch and son James. Her successor, Tom Mockridge, was appointed. The Sun won an apology from the Guardian for one mistake, the claim that Gordon Brown’s family medical records had been breached (when Brooks was editor).
And, after 52 years, Hinton left the company where he spent all of his working life. (The Hinton news first broke in a tweet by WSJ Marketplace Editor Dennis K. Berman.)
Yet to be seen: whether this will be enough to keep James Murdoch in the company at all, let alone in the line of succession, and whether Rupert Murdoch will be able to remain CEO much longer rather than turn the reins over to his deputy Chase Carey.
We’ve moved the memos/statements to a new post and will keep updating this one as the story develops.