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Report on hacking scandal calls Murdoch unfit to lead company

Rupert Murdoch "is not a fit person to exercise the stewardship of a major international company," a British parliamentary committee said Tuesday in a scathing report on News Corp.'s handling of the phone hacking scandal.

The report, which culminates months of investigation by a select committee, was far more condemning of the 81-year-old media titan than expected, saying the chairman and chief executive of News Corp. had "turned a blind eye and exhibited willful blindness" over the widespread malpractice at his now-closed News of the World tabloid.

"This culture, we consider, permeated from the top throughout the organization and speaks volumes about the lack of effective corporate governance at News Corporation and News International," the report said.

Parliament's Culture, Media and Sport committee approved the report six votes to four, with the four members from Prime Minister David Cameron's Conservative Party staunchly objecting to the description of Murdoch as an unfit proprietor.

"The issue on which no Conservative member felt they could support the report itself was the line put in the middle of the report that said that Mr. Rupert Murdoch is not a fit person to run an international company," said Louise Mensch, a Conservative MP and panel member, at a news conference in central London on Tuesday.

The 121-page report includes a catalog of criticisms, accusing three senior figures at News International, the British arm of News Corp., of misleading the committee.

The three included Les Hinton, the former head of News International, who the panel said was "complicit" in a cover-up. The lawmakers also said that Colin Myler, the former editor of News of the World and now editor at the New York Daily News, and Tom Crone, the tabloid's former legal manager, "answered questions falsely" while testifying before the committee.

Still, their "reluctance" to be honest with the committee was "understandable," the committee said, given Murdoch's "fearsome reputation." Crone denied the allegations in a statement, while Hinton, Murdoch's right-hand man for decades, described them in a separate statement as "unfounded, unfair and erroneous."

The panel also pointed a finger at Murdoch's sprawling media empire as a whole, blaming its overall corporate governance.

"In failing to investigate properly, and by ignoring evidence of widespread wrongdoing, News International and its parent News Corporation exhibited willful blindness, for which the companies' directors -- including Rupert Murdoch and James Murdoch -- should ultimately be prepared to take responsibility," the report said, referring also to Murdoch's 39-year-old son, the former head of News International.

News Corp. said Tuesday that it regretted parts of the report's commentary "that we, and indeed several members of the committee, consider unjustified and highly partisan."

For years, News Corp. maintained that phone hacking at News of the World was limited to its royal editor Clive Goodman, who was briefly jailed in 2007, along with a private investigator, for tapping into the voice mails of aides to Prince William. Murdoch closed the News of the World last summer following the revelations that its reporters had hacked into numerous voice mails, including those of a teenage girl who had been murdered.

News Corp.'s investors did not appear too shaken by the report, with shares up 1.35 percent in early trading Tuesday. Murdoch's British operations are a relatively small part of News Corp., accounting for approximately 8 percent of the company's revenue.

Murdoch's U.S. media empire includes the Fox television network and 20th Century Fox film studio, publisher Harper Collins, Dow Jones Newswires, the Wall Street Journal and the New York Post. Political commentators said Hinton, Crone and Myler could be asked to apologize in person to the House of Commons, a sanction said to be last imposed more than 50 years ago.