London Tabloid Shocker: Celeb Phones Hacked!

The British tabloid News of the World is no stranger to sleaze. It regularly publishes articles accusing the country's leading figures of affairs, fraud and other wrongdoing. Now, in what could be read as karmic retribution, the tabloid finds itself on the other side of scandal, with claims that News of the World's publisher, News International, Rupert Murdoch's British subsidiary, paid $1.6 million to settle court cases that exposed that its journalists had used criminal methods to secure stories.

Related

Special Report

Top 10 Outrageous British Expense Claims

Photos

Rupert Murdoch

Specials

Top 10 Celebrity/Paparazzi Showdowns

Stories

• As More Ministers Resign in Britain, Can Brown Survive?

The brouhaha kicked off on July 8, when the Guardian published a report citing an unnamed "senior source" at Scotland Yard as saying that News International had settled three cases out of court. Those cases allegedly demonstrated that its journalists had worked with private investigators to hack into the cell-phone messages of "two or three thousand" people to obtain data related to bank statements, phone bills, social-security records and taxes. Among the public figures the Guardian claims were targeted are former Deputy Prime Minister John Prescott, London mayor Boris Johnson and actress Gwyneth Paltrow. (See pictures of London.)

Murdoch, whose News Corp. also owns the New York Post, the Wall Street Journal and Fox Broadcasting, denies that he had any knowledge of the payments. "If that happened, I would know about it," he told Bloomberg News on July 8. (See pictures of Murdoch.)

The information obtained by the Guardian emerged during a court case in which Gordon Taylor, head of Britain's Professional Footballers' Association, sued the News of the World on the grounds that its management knew of an alleged hacking operation targeting his mobile phone. The Guardian does not cite a source but claims that News International paid $1.6 million in damages and legal costs to Taylor and two others involved in professional soccer. The newspaper also claims that clauses in the financial settlement prohibited those receiving money from discussing the cases.

Not surprisingly, the report has triggered a political firestorm. Labour politicians are calling on Conservative leader David Cameron to sack his director of communications and principal spin doctor, Andrew Coulson, who was deputy editor and then editor of the News of the World during the period its journalists were supposedly engaging in the hacking. MP John Whittingdale, the Conservative chair of the Commons culture select committee, said it was "highly likely" that Coulson would be asked to testify in the committee's investigation into whether News of the World executives knew how its journalists were operating. Prime Minister Gordon Brown mentioned the allegations during a press conference at the G-8 summit in L'Aquila, Italy: "I think this raises questions that are serious and will obviously have to be considered, but I understand that the police are looking at a statement later today, and I do not think I should say any more than that." (See pictures of the 2009 G-8 summit.)

Suspicion also surrounds Scotland Yard, which chose not to notify those targeted by the hackers and said on July 9 that it would not investigate the claims because no new evidence has come to light since its original investigation in 2007. (Read "A Case for Scotland Yard.")

For Prescott, that's not good enough. "First of all, those of us that had our phones tapped and the police were aware of it — why were we not told? Why [was the News of the World] not prosecuted?" he asked in an interview with the BBC. "Why was a separate deal done in the court and then put away and not made available to us?"

While Prescott's outrage isn't surprising, it may serve a purpose beyond releasing steam. Following the Daily Telegraph's monthlong series on British parliamentarians' use of taxpayer money to pay off personal expenses — from building a duck pond to cleaning a moat — the political classes may sense an opportunity to turn the tables on the British press and thereby redeem themselves, at least a bit. (See the top 10 most outrageous British expense claims.)

We've been here before. In December 2006, a government watchdog named 31 British publications, including tabloids and more respectable national newspapers, for working with private investigators to obtain personal information about members of the public. Indeed, using investigators is not illegal if the information they obtain is used in the public interest. But as Andrew Neil, former editor of the Sunday Times (a News International paper) pointed out on Thursday: "Someone has yet to explain to me why getting into the voice mail of Gwyneth Paltrow after she's had a baby is in the public interest."

Read "How to Save Your Newspaper."

See the top 10 scandals of 2008.