Murdoch under fire as tabloid hacking scandal grows

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Rupert Murdoch’s News Corporation is in damage control over a scandal in which its British tabloid News of the World was found to have hacked into mobile phones to listen to voicemails of murder and terrorism victims. The latest allegation against the tabloid is that a private investigator employed by the paper hacked into the personal accounts of family members of soldiers killed in the Iraq and Afghanistan wars.

British Prime Minister David Cameron says there needs to be a public inquiry into the allegations.

Former NOTW editor and News Corp executive Rebekah Brooks is expected to be forced from the company. Companies continue to withdraw advertising from News of the World, as News Corp’s stock dropped 3.6 percent on Wednesday.

All this is bad timing for Murdoch who is in a takeover bid for British broadcaster BSkyB, a move that would require government approval.

“It [The hacking] also raises questions about whether these practices were endemic throughout the organization, throughout news corps newspaper division in the U.K.,” says Rob Cox, the U.S. editor of Reuters BreakingViews, who has been following this story from a business perspective.

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