Police question Coulson about alleged hacking, bribery

James Murdoch, News Corp.’s deputy chief operating officer and his father’s likely successor, has questions to answer for his role in the phone-hacking scandal at the News of the World, according to British Prime Minister David Cameron.

News Corp., and possibly even Murdoch, also could face legal action in the U.S., according to the Foreign Corrupt Practices Act.

Some legal experts say the act, which carries penalties for bad corporate behavior, could apply to News Corp. since it is a U.S. company, and since bribes were alleged to be made to police, who are considered government officials.

Cameron, whose former communications director Andy Coulson was arrested over the affair on Friday, said the police should question anyone “no matter how high or low” involved in the illegal phone taps at the News of the World.

On Thursday, Murdoch acknowledged “repeated wrongdoing” at the paper and admitted he had personally approved payments to cover up illegal phone hacking.

Police investigating the allegations of hacking and of police bribery are expected to interview a number of senior News Corp. execs in addition to Murdoch, including News Intl. CEO Rebekah Brooks and Les Hinton, CEO of Dow Jones and publisher of the Wall Street Journal, who was formerly exec chairman of News Intl.

Press reports late Sunday suggest that of those senior execs, Hinton is the most vulnerable. The Sunday Times, which is also owned by News Intl., revealed that a 2007 internal report at the company had concluded that phone hacking was more widespread than it had admitted to police and Parliament.

Many media watchers had considered Brooks, who was editor of News of the World when some of the hacking allegedly occurred, a likely target in the investigation, but Rupert Murdoch said his support of her was “total.”

“We already apologized,” he said. “We’ve been let down by people … the paper let down its readers.”

While she has been portrayed as a villain in the story, Brooks — who has solid connections to British politics and decades of experience — has denied knowledge of the wiretaps, and insisted she is the best person to lead News Intl. through the crisis.

The report and the evidence of wrongdoing it revealed were not shared with police until this year. Hinton was in charge at News Intl. in 2007, and may now be sacrificed by the Murdochs in an attempt to save the BSkyB deal.

Coulson has always denied any knowledge of phone hacking at the paper he edited. He was arrested Friday, along with Clive Goodman, an ex-News of the World royal reporter. Both have been released on bail.

His arrest was conducted by police investigating the interception of private phone calls and allegations that some police officers were illegally paid up to £130,000 ($207,000) by the newspaper during Coulson’s editorship.

Documents were recently passed to the police by News Corp. allegedly showing that illegal payments to the police were authorized at the time Coulson edited the News of the World.

Cameron admitted that the relationship between politicians and the media had been too close.

“The truth is, we have all been in this together — the press, politicians and leaders of all parties — and yes, that includes me,” said Cameron, who has been under pressure from Labour Party leader Ed Miliband to acknowledge his “catastrophic error of judgment” in hiring Coulson.

The U.K. prime minister has announced a package of measures in response to the crisis, including a public inquiry led by a judge and a second inquiry into ethics in the British press.

Questioned by reporters on who may have lied, Cameron said: “I don’t know what these people at News Intl. did know or didn’t know. Frankly, I don’t think any of us know what they did know or didn’t know. The key thing is they are going to be investigated by the police, and when they get investigated by the police and when the truth is out, it (will) be a question of whether they are going to be prosecuted, whether they are going to be convicted, whether they are going to be punished.”

Appearing to acknowledge that U.K. pols in both his own party and the Labour Party had gone out of their way to court the Murdochs and their lieutenants, he said, “You are bound as a party leader to want to have a relationship with journalists, with editors, with broadcasters, with proprietors. You do that because you have a mission to explain how you want to change the country.”

He added, “The regret I have — the problem we are all now identifying — is that leading politicians feel so strongly about wanting that relationship, not just with the Murdochs but with every broadcasting organization, we don’t actually stop and spend enough time asking, ‘Is this organization behaving properly?'”

Just before Coulson’s arrest Friday, News Corp. announced its plan to cease publication of the News of the World after the July 10 edition. The front page of that final edition contained a story in which the paper apologized for wiretapping, but did not admit to paying police for information. It also bore an epitaph — “the world’s greatest newspaper 1843 – 2011″ — along with a headline that read: “Thank you & goodbye.”

(The Associated Press contributed to this report.)

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