Command and control

News Corp: News Corporation thrives on breaking the story. Now it has become the story.

Rupert Murdoch’s media group faces allegations that it paid £1m to settle lawsuits that could have exposed illegal reporting practices by some of its journalists.

Murdoch has emphatically denied knowledge of the payments, which were reported by the UK’s Guardian newspaper. But if the claims are true and Murdoch was ignorant of the matter, then who really runs News Corp?

The Sun, the News of the World and Times newspapers are alleged to have made three out-of-court settlements.

The agreements had the effect of keeping the lid on evidence that journalists hacked into phones and private records with the help of private investigators. Targets reportedly included celebrities, government ministers and politicians from all three of the UK’s major parties.

News International, News Corp’s UK newspaper subsidiary, has yet to deny the Guardian's allegation.

But if the story is true, Murdoch’s lack of awareness suggests a disturbing lack of control over such important matters. News International’s controls should have prevented such sums being paid out without approval from a senior executive. True, Murdoch cannot be expected to authorise every cheque across his empire.

But it seems strange that such a serious issue would not have been escalated to his office. If Murdoch was ignorant, who was the most senior person in the loop?

The UK print media’s response to the Guardian’s splash has also been remarkably tepid. There has been little of the copycat follow-up normally seen when a newspaper makes serious allegations of, say, a celebrity.

Perhaps the reluctance of rivals to jump on the story is evidence that it’s not just politicians, but journalists too, who are afraid of upsetting Murdoch. But fear of displeasing the media mogul won’t make this story disappear in a hurry.

Of course, the Guardian may have got its facts wrong. But either way, James Murdoch, News International’s executive chairman, needs to act fast.

He recently named former Sun editor Rebekah Wade as his deputy.

He must now at the very minimum conduct a thorough internal investigation into the allegations to defend the integrity of his newspapers.