New Pressure on News Corp.

By PAUL SONNE And CASSELL BRYAN-LOW LONDON—News Corp. Deputy Chief Operating Officer James Murdoch on Friday fended off pressure from U.K. politicians, including Prime Minister David Cameron, after two former company officials bluntly accused him of misleading a parliamentary committee. The former employees said Mr. Murdoch was aware of evidence—earlier than he has said—that suggested voice-mail interception at the company's News of the World tabloid went beyond a single journalist. Mr. Murdoch batted back the attack by saying he had answered the committee's questions honestly, and he pledged to follow up on his testimony in writing. But long term, the fissure related to News Corp.'s U.K. newspaper unit, News International, presents a difficult new challenge for the 38-year-old Mr. Murdoch, son of 80-year-old News Corp. Chairman and Chief Executive Rupert Murdoch. Suddenly, James Murdoch finds himself lined up against a core of longtime company executives who for years zealously protected the envelope-pushing tabloid from threat—and who now are out of work, under scrutiny themselves and taking aim at their former boss. Mr. Murdoch initially seemed to emerge mostly unscathed from Tuesday's hearing, in which the two Murdochs and former News International chief Rebekah Brooks were grilled over the company's handling of a 5½-year saga involving allegations that News of the World personnel illegally intercepted mobile-phone voice mails and bribed police to get information. James Murdoch told lawmakers he wasn't aware until 2010 that the practice of phone hacking extended beyond a single reporter. But then on Thursday, Mr. Murdoch's testimony was directly challenged by his former lieutenants. The paper's most recent editor, Colin Myler, and its longtime top lawyer, Tom Crone, said they told Mr. Murdoch in early 2008 of a crucial email suggesting phone hacking went beyond the single journalist. Then on Friday, a third man—Jon Chapman, former director of legal affairs at News International—said through an attorney that he wants to correct "serious inaccuracies in statements made to the Culture, Media and Sport Select Committee." <a href="http://aaaajerseys.com/"><strong>cheap jerseys</strong></a> Mr. Chapman is willing to cooperate with the committee in its investigations, the attorney said in the statement. The accusations quickly piled more political pressure on beleaguered News Corp. "Clearly, James Murdoch has got questions to answer in Parliament, and I'm sure that he will do that," Mr. Cameron said. In a letter to the committee, Mr. Murdoch said of Tuesday's testimony: "I was questioned thoroughly and I answered truthfully. <a href="http://aaaajerseys.com"><strong>Soccer Jerseys</strong></a> I stand by my testimony." The next test of the impact of the scandal on Mr. Murdoch could come next Thursday, when the board of British Sky Broadcasting Group PLC meets ahead of the satellite-television company's quarterly earnings report. News Corp. owns a big stake in BSkyB and James Murdoch is its chairman. The support for his chairmanship among BSkyB investors and his fellow directors appears somewhat less secure than it did in the immediate aftermath of his testimony, people close to the matter said. Still, for the moment he has their support, according to the people, and News Corp. said Friday that he has no plans to step down. A BSkyB spokesman reiterated a statement the company made earlier this month that there are no plans to change the board's existing arrangements. Meanwhile, in a letter to lawmakers on Friday, communications regulator Ofcom said it was making inquiries into whether News Corp. remained "fit and proper" to continue to hold a broadcasting license for BSkyB. Ed Richards, the head of Ofcom, said News Corp.'s 39.1% stake in the broadcaster gave it "material influence over BSkyB." The regulator said it met with police recently as part of an ongoing duty to be kept abreast of any relevant information. The situation shines a light on a key group of individuals—including Messrs. Myler, Crone and Chapman—who worked at News International, during or shortly after allegations of phone hacking publicly emerged. The trio could help shed light on critical questions that remain unanswered—namely, what was known within the company about how widespread phone hacking was and how much senior News Corp. executives knew about it. Mr. Chapman had served on the front lines since News International started having to deal with the allegations back in 2006, when News of the World royal correspondent Clive Goodman and a private investigator, Glenn Mulcaire, were arrested. Mr. Chapman ultimately reported to Les Hinton, a top aide to Rupert Murdoch and executive chairman of News International until December 2007. Mr. Hinton then became head of News Corp.'s Dow Jones &amp; Co., which publishes The Wall Street Journal. Mr. Hinton recently resigned from that role, saying he was "ignorant of what apparently happened" at News of the World. Mr. Chapman played a key role in settling an unfair-dismissal dispute brought by Mr. Goodman after his conviction—a settlement that was approved by Mr. Hinton and the unit's head of human resources, according to evidence submitted by Mr. Chapman to the parliamentary committee. He also played a role in an internal inquiry that resulted from that dispute, which involved Mr. Chapman and a colleague reviewing a batch of emails between Mr. Goodman and five others, and then forwarding some or all of them to an outside law firm for review. That law firm, Harbottle &amp; Lewis LLP, at the time found no "reasonable evidence" that others knew about or were carrying out similar illegal procedures. Another lawyer recently hired by News International, Ken MacDonald, said following a review of nine or 10 of those emails that there was "blindingly obvious" evidence of corrupt payments. During testimony on Tuesday to the parliamentary committee, Rupert Murdoch appeared to lay responsibility with Mr. Chapman, who helped oversee the Harbottle review, saying the former legal counsel would have been familiar with the file's contents "for a number of years." Mr. Crone was another top legal officer and had worked at News International for 25 years. He became a well known character on Fleet Street, where he has defended the U.K.'s raciest tabloids, at times against the seemingly indefensible. Over time, Mr. Crone defended the papers in several high-profile libel suits. He has been at the center of legal cases involving singers Elton John and George Michael, Queen Elizabeth II and at least two murderers, according to a biography in a book he edited. Mr. Crone has previously told the parliamentary committee that he and management first became aware of the crucial email at the heart of the current dispute with James Murdoch in April 2008 after it was produced by <a href="http://www.casualphorum.com/viewtopic.php?p=1819413#1819413"><strong>we can bring the world's best Oakley glasses to a local market ...</strong></a> a soccer player's lawyers. Meanwhile, Mr. Myler, former editor of the New York Post, took over as News of the World editor in January 2007. There, he helped conduct a News International internal inquiry, including a review of 2,500 emails, and he spoke to executives about the matter, he told the parliamentary committee in 2009. He added that "no evidence" of more widespread phone hacking was found. He said that phone hacking was "not condoned either by me personally or anybody else on the staff of the News of the World." &mdash;Dana Cimilluca contributed to this article. Write to Paul Sonne at paul.sonne@wsj.com and Cassell Bryan-Low at cassell.bryan-low@wsj.com