The New York Times reports:

For nearly four years they lay piled in a Scotland Yard evidence room, six overstuffed plastic bags gathering dust and little else.

Inside was a treasure-trove of evidence: 11,000 pages of handwritten notes listing nearly 4,000 celebrities, politicians, sports stars, police officials and crime victims whose phones may have been hacked by The News of the World, a now defunct British tabloid newspaper.

Yet from August 2006, when the items were seized, until the autumn of 2010, no one at the Metropolitan Police Service, commonly referred to as Scotland Yard, bothered to sort through all the material and catalog every page, said former and current senior police officials.

During that same time, senior Scotland Yard officials assured Parliament, judges, lawyers, potential hacking victims, the news media and the public that there was no evidence of widespread hacking by the tabloid. They steadfastly maintained that their original inquiry, which led to the conviction of one reporter and one private investigator, had put an end to what they called an isolated incident.

After the past week, that assertion has been reduced to tatters, torn apart by a spectacular avalanche of contradictory evidence, admissions by News International executives that hacking was more widespread, and a reversal by police officials who now admit to mishandling the case.

Assistant Commissioner John Yates of the Metropolitan Police Service publicly acknowledged that he had not actually gone through the evidence. “I’m not going to go down and look at bin bags,” Mr. Yates said, using the British term for trash bags.

At best, former Scotland Yard senior officers acknowledged in interviews, the police have been lazy, incompetent and too cozy with the people they should have regarded as suspects. At worst, they said, some officers might be guilty of crimes themselves.

The Independent reports:

Five days after the News of the World rolled off the presses for the last time, Rebekah Brooks, the chief executive of its publisher News International, walked out of the company with a severance package estimated by senior colleagues at £3.5m.

Her departure follows that of the final editor of the NOTW, Colin Myler, who is understood to be in line for a £2m pay-off, and two of the company’s senior lawyers, Jon Chapman and Tom Crone, who will each get about £1.5m.

Brooks’ resignation was followed last night by that of Les Hinton, chief executive of Dow Jones, the US branch of Rupert Murdoch’s empire which publishes the prized Wall Street Journal, as the media mogul lost two trusted lieutenants in a single day. Mr Hinton’s payout will further add to News Corp’s bills.

The settlements with senior Murdoch executives will include strict gagging orders to stop them discussing company affairs outside the judge-led public inquiry or criminal proceedings.

The pay-offs contrast with the treatment of nearly 200 lower-ranking workers at the NOTW waiting to hear if they will be made redundant. A leaked email reveals police are effectively treating the paper’s newsroom as a crime scene and forbidding any access to former staff “even under escort”.

“News Corp is not Rupert Murdoch,” says Murdoch.

In this gesture of mock humility, I don’t think the News Corp CEO is suggesting that, for the good of the company, he’s ready to bow out. It’s much more like Muammar Gaddafi saying that he can’t step down from power in Libya because supposedly he’s not the head of state.

News Corp “is the collective creativity and effort of many thousands of people around the world, and few individuals have given more to this company than Les Hinton,” said Murdoch just as he dumped the Dow Jones CEO.

Murdoch ditched News of the World in order to protect News International chief executive Rebekah Brooks, but then he ended up getting rid of her too.

Having now got rid of Hinton, Murdoch is probably nursing the fantasy that he won’t have to axe his son and heir apparent, James, but as Jack Shafer notes, James’ departure is all but certain.

Next week, Murdoch and his son James, who paid settlements to phone-hacking victims, will appear before a parliamentary committee after first declining the request. After saying he’s sorry, Murdoch will say he’s sorry again and again and again. James, who isn’t any sorrier than his father, will say the same thing, but it won’t work, because he paid hush money and is therefore a part of the scandal. As the Telegraph reported this week, as long as Brooks stayed on the payroll, she shielded James from some of the more vociferous attacks. She, after all, was News of the World editor when Dowler’s phone was hacked. But Brooks’ resignation exposes James Murdoch to the fury now, which he can’t possibly endure.

Rupert knows this, and knows that he must soon sacrifice his favorite son. Murdoch’s predicament illustrates why no parent should have only one offspring—a backup unit must be kept at all times in case something dreadful happens to the child you’re depending on. It’s Murdoch’s good luck that he has two children who can replace James while he does his time in Siberia. Both Elisabeth, a media tycoon in her own right, and Lachlan, the eldest son and previous heir apparent, could take James’ place in the News Corp. hierarchy. Neither carries any phone-hacking scandal taint, and both are ambitious. Where did Elisabeth stand on the Brooks question? According to a Telegraph report, she told friends that Brooks had “f***** the company.”

Would Murdoch really sack his son? I don’t see why we should rule out infanticide in this case. Writing in the Financial Times this week, former media tycoon and convicted felon Conrad Black held that “Murdoch has no loyalty to anyone or anything except his company. He has difficulty keeping friendships; rarely keeps his word for long; is an exploiter of the discomfort of others; and has betrayed every political leader who ever helped him in any country, except Ronald Reagan and perhaps Tony Blair.”

Murdoch biographer, Michael Wolff, says Elisabeth Murdoch was misquoted. “She said: ‘James and Rebekah fucked the company,'” Wolff tweeted.

Matt Wells writes:

No relationship is safe, no loyal bond strong enough for Rupert Murdoch who – looking more than the sum of his 80 years – is mounting a final battle to save the company he built from nothing.

His decision to throw Les Hinton to the wolves is his most dramatic move yet. For more than 50 years, as a journalist and then an executive, Hinton loyally served the Murdoch empire from its roots in Australia to the height of its power in New York.

Now, in a desperate effort to save News Corporation’s most valuable assets – its 27 US broadcast licences and the 20th Century Fox movie studio – Murdoch is prepared to sacrifice one of his closest allies.

The problem for Murdoch is that every time he ditches a key executive, the flames of scandal flick ever closer to him.

Murdoch’s despotic tendencies were on full display in an interview he did for his paper, the Wall Street Journal, where he took the opportunity to say what an admirable job he has done so far in handling the crisis.

Alex Klein writes:

“In Interview, Murdoch Defends News Corp.” proclaims a much-buzzed headline on the Murdoch and News Corp.-owned Wall Street Journal. It’s a stretch of a title. The 700-word piece is less “interview” than stenography, a generous opportunity for the mogul to swagger, project confidence, and bend the truth. There are a lot of so-sad-it’s-funny quotes, but the best by far is Murdoch’s promise to institute a “protocol for behavior” at all of his newspapers. This meaningless pledge falls right in line with a great deal of bad News of the World commentary that misconstrues the paper’s sins as journalistic overreach or inappropriateness. Stealing, bribing, and hacking aren’t a ‘best practices’ issue, like misattributing a quote or wearing hawaiian shirts to work: they’re illegal. Beyond breaking stuffy American ethics protocol, News International broke real British law. So unless the first bullet-point in News International’s new “protocol for behavior” is “Don’t commit crimes. Also don’t cover up crimes by committing more crimes,” I’m not quite sure what he and the Journal are playing at. The dishonest two-step from illegality to immorality is even reflected in the Journal’s own reporting, which frames the issue as one of “dubious reporting tactics.” And as Media Matters has pointed out, it took the paper a whole week — and a couple of buried NOTW stories — before it reported that its own publisher and Murdoch friend Les Hinton has a starring role in the scandal.

Larry Flynt fears that Murdoch’s lack of concern for the public interest now puts every publisher at risk:

One cannot live off the liberty and benefits of a free press while ignoring the privacy of the people. People such as Murdoch and I, as heads of publishing conglomerates, have a responsibility to maintain and respect this boundary. While Murdoch may understand the significance of what we do under the umbrella of free speech, he may fail to recognize the liability attached to publication. Simply put, he publishes what he wants, apparently regardless of how he gets information and heedless of the responsibility associated with the power he wields.

Murdoch’s enterprises have consistently published stories about people who did not give permission to have their private lives dissected in the media — and that’s just the tip of the iceberg. News Corp. employees allegedly hired known criminals to obtain private information about former British prime minister Gordon Brown when his infant son was given a diagnosis of cystic fibrosis. News Corp. employees allegedly hired investigators who hacked into the phones of victims of the 9/11 attacks in the United States and the July 7, 2005, bombings in London. And News Corp. employees allegedly paid police officers for illegally obtained information about the queen. Meanwhile, Roger Ailes, chief of Murdoch’s Fox News, runs a well-oiled propaganda machine.

So it only seems fair that Murdoch was forced to close the News of the World tabloid, that he has had to abandon his bid for British Sky Broadcasting and that his reputation, not stellar to begin with, is forever tarnished.

No matter how offensive or distasteful some people may find Hustler magazine and my other publications, no one has appeared unwillingly in their pages. I do not create sensationalism at the expense of people living private lives. Yes, I have offered money to those willing to expose hypocritical politicians — one of those offers, in 1998, resulted in the resignation of Bob Livingston, a Republican congressman from Louisiana who voted to impeach President Bill Clinton despite his own extramarital affairs. I focus not on those who are innocent, but rather on those who practice the opposite of what they very publicly preach. This may be considered an extreme or controversial practice in getting a story, but it is far from criminal.

On a daily basis, and in ways that the general public does not even recognize, our right to privacy is disappearing rapidly. Our political leaders allow companies such as Google and Facebook to continually infringe on this right. Both of those companies serve as data mines, selling information about their users. Facebook, behind a mask of individual privacy settings, has almost single-handedly killed privacy; founder Mark Zuckerberg has actually stated, according to reports, that he doesn’t believe in privacy. The government needs to get back to its roots: protecting the privacy of its citizens while encouraging the individual freedoms on which this country was founded.

Freedom of the press and the right to privacy do not have to be combatants. The people have tasked members of the news media with the duty and the responsibility to provide information. As publishers, we must find the boundary, push it, but refuse to cross it — never selling out our readers and never publishing what we cannot verify.

If the allegations are true, Murdoch did not just cross the line — he erased it. By doing so, he has placed all of us who enjoy freedom of the press at grave risk.

Bloomberg reports:

News Corp. (NWSA) Chairman Rupert Murdoch and his son, James, are under mounting pressure from U.K. lawmakers to take responsibility for a phone-hacking scandal after bowing to calls for Rebekah Brooks to resign.

Some people close to the Murdoch family and News Corp.’s directors think it would make sense for Murdoch to relinquish his job as chief executive officer and stay on as chairman. Although a leadership change hasn’t been formally discussed by the board, the situation is fluid and everything is possible, said one of the people, who wouldn’t be identified because the matter isn’t public.

The resignation of Brooks, who edited the News of the World tabloid at the time of the alleged phone-hacking, marks a U-Turn for James, News Corp.’s deputy chief operating officer, and Rupert Murdoch, 80, who said last week Brooks had their support and would stay on. Murdoch yesterday backed his 38-year-old son and heir apparent, saying he had acted “as fast as he could, the moment he could.”

“It’s now about the Murdochs,” said Chris Bryant, a Labour lawmaker who called the July 6 emergency debate on the News of the World. “James Murdoch has got to answer questions about their hush money strategy. Did the board agree to it?”

The Daily Telegraph reports:

Rupert Murdoch’s daughter Elisabeth has made a “furious” attack on Rebekah Brooks’s handling of the phone hacking scandal at News International, The Daily Telegraph has learnt.

The 42-year-old is said to have privately “railed” against the News International chief executive and former editor of the News of the World.

Miss Murdoch, who is set to be given a seat on the board of her father’s News Corp empire, told friends that Mrs Brooks had “fucked the company”.

Her remarks represent the first breach in the show of solidarity around Mrs Brooks by the Murdoch family.

The Guardian reports:

It is not yet clear exactly why Brooks’s resignation after 22 years at the company was accepted by the Murdochs, who had so far steadfastly stood by her during the crisis. This despite calls for her to go from the leaders of all the main political parties, including the prime minister, David Cameron, and the family of murdered schoolgirl Milly Dowler, whose mobile phone was allegedly hacked by a private investigator working for the News of the World.

However, the last straw may have been Thursday night’s Newsnight interview with News International parent company News Corporation’s second largest shareholder, Saudi prince Al-Waleed bin Talal Alsaud, in which he said that if there was evidence of Brooks’s “explicit” involvement in the alleged illegal activity, “for sure she has to go, you bet she has to go”.

Nicholas Wapshott writes:

Many companies are made in the image of their boss, but none more so than News Corp. While Murdoch has been obliged to delegate at his TV network, at Fox News, and at the Fox movie division, Murdoch, a brilliant tabloid journalist, is the true editor-in-chief of his newspapers, as every editor who has worked for him knows – full disclosure: I was an executive at The Times, London, 1992-2004. As Andrew Neil, a dozen years The Sunday Times editor, wrote, “Anybody of importance reports direct to him. Normal management structures . . . do not matter.”

As an aggressive Australian alpha-male, Murdoch does not like editors who have their own ideas. In Britain, editors of The Times and The Sunday Times used to be big beasts of the political jungle, larger-than-life personalities, movers and shakers among the great and the good. Since the Murdoch takeover in 1980, faceless, unquestioning, anonymous beta editors have taken their place, and woe betide those who become well known.

“When you work for Rupert,” explained Neil, “you are a courtier.” He has “a weakness for courtiers who are fawning or obsequious.” Neil, who was “too inclined to become a public personality in my own right,” was eventually squeezed out. Michael Wolff, Murdoch’s biographer, tells the same story. “He tends to hire people who are grateful for the chance,” he wrote. “He never seems to be surrounded by the brightest bulbs, the ‘A’ team.”

The New York Times reports:

In response to requests from members of Congress and to at least one news report, the Federal Bureau of Investigation in New York opened a preliminary inquiry on Thursday into allegations that News Corporation journalists sought to gain access to the phone records of victims of the Sept. 11 attacks, according to several people briefed on the matter.

The investigation is in its earliest stages, two of the people said, and its scope is not yet clear. It also is unclear whether the F.B.I. has identified possible targets of the investigation or possible specific criminal violations.

The bureau is “taking a hard look at it from a couple of angles,” one of the people said. The person said the matter was being treated as an assessment, a term the bureau uses to characterize the early stages of an investigation that precede the possible issuance of subpoenas or the use of other investigative tools like wiretaps.

The inquiry was prompted in part by a letter from Representative Peter T. King, a Long Island Republican, to Robert S. Mueller III, the F.B.I. director, in which he asked that the bureau immediately open an investigation of News Corporation, citing news reports that journalists working for its subsidiary, The News of the World, had tried to obtain the phone records of 9/11 victims through bribery and unauthorized wiretapping, the people said.

Meanwhile, The Guardian reports:

Rupert Murdoch donated $1m to a pro-business lobby in the US months before the group launched a high-profile campaign to alter the anti-bribery law – the same law that could potentially be brought to bear against News Corporation over the phone-hacking scandal.

News Corporation contributed $1m to the US Chamber of Commerce last summer. In October the chamber put forward a six-point programme for amending the Foreign Corrupt Practices Act, or FCPA, a law that punishes US-based companies for engaging in the bribery of foreign officials.

Progressive groups in the US have speculated that there is no coincidence in the contemporaneous timing of the Murdoch donation and the launch of the chamber’s FCPA campaign, which they claim is designed to weaken the anti-bribery legislation. “The timing certainly raises questions about who is bankrolling this campaign – if it’s not News Corporation who is it?” said Joshua Dorner of the Centre for American Progress action fund.

Ilyse Hogue of the monitoring group Media Matters said the donation was in tune with Murdoch’s track record. “Time and again we’ve seen News Corporation use their massive power and influence to change laws that don’t suit them. The proximity of this contribution and the chamber’s lobbying campaign at least should raise eyebrows.”