LONDON - Rupert Murdoch and his son James first refused, then agreed Thursday to appear before U.K. lawmakers investigating phone hacking and police bribery. In the United States, the FBI opened a review into allegations that the Murdoch media empire sought to hack into the phones of Sept. 11 victims.
Those two developments - and the arrest of another former editor of a Murdoch tabloid - deepened the crisis for News Corp., which has seen its stock price sink as investors ask whether the scandal could drag down the whole company.
Murdoch, 80, defended News Corp.'s handling of the scandal, saying it will recover from any damage caused by the phone-hacking and police-bribery allegations. He told The Wall Street Journal - which is owned by News Corp. - that he is "just getting annoyed" at all the recent negative press.
He also dismissed reports that he would sell his U.K. newspapers to stem the scandal, calling the suggestion "pure and total rubbish."
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Meanwhile, the FBI was looking into allegations that employees of News Corp. tried to hack into the telephones of victims of the Sept. 11, 2001, terrorist attacks in the United States.
The decision to step in was made after U.S. Rep. Peter King, Sen. Jay Rockefeller and several other members of Congress wrote to FBI Director Robert Mueller demanding an investigation.
The allegation that Murdoch papers may have targeted 9/11 victims came from the rival Daily Mirror, which quoted an anonymous source as saying an unidentified American investigator had rejected approaches from unidentified journalists who showed a particular interest in British victims of the terror attacks. It cited no evidence that any phone had actually been hacked.
There was no indication members of Congress had information beyond the Mirror report. King spokesman Kevin Fogarty said the congressman's letter "was based on what was in the public record and that those allegations were not denied."
The FBI's New York office hasn't commented and there was no immediate response Thursday from News Corp. or the U.S. attorney's office in Manhattan.
Analysts said News Corp. executives could be at risk of being found criminally or civilly liable under federal wiretapping and state privacy laws if investigators find that American citizens were targeted.
Still, experts said they doubt such actions could jeopardize News Corp.'s U.S. newspaper holdings such as The Wall Street Journal or result in the revocation of the license it needs to own Fox TV stations in America.
