Clouds behind the son

News Corp: The phone hacking scandal at News Corp burst back to life on Tuesday. New evidence emerged, suggesting top executives were warned four years ago that the illegal interception of voicemail messages went beyond one rogue reporter. James Murdoch, who returned to the company to run its European and Asian operations in December 2007, after the matter appeared to have been resolved, continues to protest ignorance. But, the sheer scale of what he didn’t know raises fresh questions of how he handled the affair.

It wasn’t until late 2010 that Murdoch acted on evidence that probes into hacking were insufficient. Fresh documents disclosed by the British Parliament provide no smoking gun that he knew the practice was more widespread at the now-defunct News of the World then. Murdoch again rejected allegations by former managers that he was presented with such information in 2008, at a meeting to discuss an alleged victim’s damages claim. Though it’s still unclear what was said then, questions about Murdoch’s conduct in signing off on the settlement and his response to media allegations later aren’t going away. Murdoch keeps saying how little he knew.

He has now admitted that when he gave evidence to lawmakers last month, he was unaware the £700,000 ($1.15 million) settlement was so big partly because it included a confidentiality clause. This post-testimony qualifier is embarrassing. Worse, a law firm involved in the affair is fighting back. Harbottle & Lewis is now giving lawmakers tips on tricky questions to ask, particularly as it relates to the settlement. It has attacked assertions by James and his father, Rupert Murdoch, News Corp’s chairman and chief executive, that they took comfort from a probe it conducted in 2007. That investigation focused on narrow charges in an unfair dismissal claim: It was far from a full phone hacking probe. James may yet come through all this.

But, if he does, he will have been exposed as an executive who failed to ask tough questions and whose staff ran rings round him. Though James was once a presumed heir apparent by investors, Rupert just endorsed News Corp’s chief operating officer as his under-the-bus replacement. The younger Murdoch can also expect a hard time if, as now expected, he faces another grilling from lawmakers. His ability to be an effective boss at the media empire looks all the more tougher.