05/01/2012 09:21 EDT | Updated 07/01/2012 05:12 EDT

Phone-hacking panel slams Rupert Murdoch as unfit

Rupert Murdoch should take responsibility for the phone-hacking scandal that shook News Corp. and is unfit to lead the company, says a report from a British parliamentary panel.

The panel accused Murdoch's company of covering up evidence and misleading Parliament about the scale of phone hacking at one of its tabloids, and said it doubted Murdoch's protestations that he was unaware that hacking was widespread at the now closed News of the World.

If that were the case, "he turned a blind eye and exhibited wilful blindness to what was going on in his companies," the report by the panel of 11 lawmakers said.

"We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company."

The report went on to roast the company's directors — including Murdoch and his son James — for their lack of leadership.

"Their instinct throughout, until it was too late, was to cover up rather than seek out wrongdoing and discipline the perpetrators," the report said.

The 85-page report was approved by a slim majority vote that went along party lines. Labour members of the panel voted in favour, while Conservative members opposed condemning Murdoch.

But the panel did unanimously agree that three key executives of News International — the British newspaper division of Murdoch's News Corp. — misled Parliament by lying about their knowledge of how prevalent phone hacking was at the News of the World.

Questions of competency

The panel stopped short of accusing James Murdoch of lying to Parliament about his former tenure as News International's executive chairman. Murdoch claimed that he had not fully read a 2008 email that spelled out the widespread nature of phone hacking. Panel members questioned his competency.

"As the head of a journalistic enterprise, we are astonished that James Murdoch did not seek more information," the report said.

That's a damaging finding. Before the scandal broke, News Corp. sought to take over the satellite TV firm BSkyB. It already owns 39 per cent of the firm. James Murdoch has stepped down as BSkyB's chairman, but remains on the board. This report may force him to cut all ties to the TV company.

Murdoch closed down the 168-year-old Sunday tabloid last July amid public disgust over the hacking of voice mail messages of celebrities and victims of crime, including murdered schoolgirl Milly Dowler.

More than two dozen past and present staffers of News International have been arrested on various phone hacking and bribery charges. The company has paid millions of dollars to settle lawsuits from more than 60 celebrities, sports stars and other public figures.

In a statement, News Corp. acknowledged "significant wrongdoing" at News of the World and it apologized to those whose privacy it invaded.

But at a news conference, the company complained about what it called the "unjustified and highly partisan" nature of the report.

The panel's report now goes to the British House of Commons, where a debate on its findings is likely.