Bancroft family members regret WSJ sale

July 14, 2011 at 4:00 AM
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NEW YORK, July 14 (UPI) -- Members of the family that sold The Wall Street Journal to Rupert Murdoch are expressing regret in light of the widening British phone-hacking scandal.

"If I had known what I know now, I would have pushed harder" against accepting the Murdoch bid, Christopher Bancroft, whose family controlled Journal publisher Dow Jones & Co., told the non-profit ProPublica news organization.

News Corp. made an unsolicited takeover bid for Dow Jones May 2, 2007, offering $60 a share for stock that had been selling for $33 a share. The Bancroft family, which controlled more than 60 percent of the voting stock, at first rejected the offer, but later reconsidered, entering into a definitive $5 billion agreement Aug. 1, 2007, and approving the deal in a shareholder vote Dec. 13, 2007.

During the negotiations the board discussed that News of the World Royal Editor Clive Goodman had been jailed in January of that year for intercepting British royal household cellphone voice mails. News Corp. British subsidiary News International insisted the hacking was confined to a single "rogue reporter."

The Guardian reported in July 2009 that the practice was widespread and that Murdoch had secretly paid nearly $2 million to settle cases brought by other hacking victims.

The allegations have mushroomed.

Lisa Steele, another Bancroft family member on the board, told ProPublica "it would have been harder, if not impossible" to have accepted Murdoch's bid had the facts been known.

"The ethics are clear to me -- what's been revealed, from what I've read in the Journal, is terrible. It may even be criminal," she said in the story co-published with Britain's The Guardian.

The crisis spread to the United States as four senators and a member of the House of Representatives urged federal probes into whether News Corp. violated anti-bribery, privacy and other laws.

Sens. Frank Lautenberg, D-N.J., and Barbara Boxer, D-Calif., asked U.S. Attorney General Eric Holder to investigate whether News Corp., which also owns Fox News Channel, violated the Foreign Corrupt Practices Act. Sens. Jay Rockefeller, D-W.Va., and Robert Menendez, D-N.J., called on Holder to probe whether Murdoch journalists tapped the phones of Sept. 11, 2001, victims.

Murdoch's British tabloid The Sun and the News of the World may have targeted the terrorist-attack victims, London's Daily Mirror and other newspapers reported.

The Daily Telegraph said the News of the World tried to buy phone records of World Trade Center victims from a former New York City police officer.

Rep. Peter King, R-N.Y., asked FBI Director Robert Mueller to investigate this too, calling the alleged practices "revolting."

Murdoch is talking about selling The Sun, along with The Times of London and The Sunday Times, to "stem the fallout" from the scandal, the Journal reported.

As allegations of hacking and other journalistic dirty tricks spread to other Murdoch newspapers, Murdoch also discussed spinning off News International as a separate company under new management, The New York Times said.

News International legal manager Tom Crone, who allegedly advised making secret damages payments to phone-hacking victims, quit Wednesday, the company said.

Bancroft family member Bill Cox III told ProPublica he "probably would have sold" to Murdoch, even after the mushrooming scandal.

But he said, "Reading all this makes me sick to my stomach."

Murdoch "thinks he is completely above the law as he always has," Cox wrote in an e-mail.

"We did a deal with the devil and it really saddens me [that] the editorial of this quasi-public trust that has been on the vanguard of world journalism for years is not in good hands," he said. "That I am really struggling with."

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