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News Corp. Scandal Crosses Atlantic: Les Hinton Under Scrutiny

To preserve the Wall Street Journal’s reputation for editorial excellence, Rupert Murdoch may have to oust his longtime confidant

The phone-hacking scandal at Rupert Murdoch’s late News of the World may be spreading to his premier publication on this side of the Atlantic, the Wall Street Journal — with a target painted on the back of its publisher, Dow Jones CEO Les Hinton.

Hinton was the executive chairman of the embattled News International, the corporate umbrella of News of the World, before taking the position at News Corp.-owned Dow Jones. His tenure coincided with much of the hacking and police payoffs that led to the British tabloid's closure last week.

By late Monday, Hinton's position seemed increasingly tenuous. A report in the Daily Mirror, a U.K. tabloid and News Corp. rival, suggested that Murdoch will soon ditch Hinton and shakeup the Dow Jones' executive suite.

Also read: Hacked! How the News of the World Scandal Threatens Murdoch's Empire

According to a News Corp. newspaper executive, the Journal's managing editor, Robert Thomson, has moved to distance himself from the scandal that’s gnawing at his superior, Hinton.

At the newspaper’s daily 4 p.m. news meeting late last week, Thomson reminded his senior editors that at the time of the initial hacking scandal, he was working for the Journal’s top rival, the Financial Times, and later, when the scandal expanded, he was new to the Murdoch empire, the executive said.

For the executive, the comment suggested Thomson was distancing himself from an imbroglio that could easily pull in Hinton. 

Reached by TheWrap, Thomson declined to comment.

Few are closer to Murdoch than Hinton, who rose from a lowly copy boy to become a top executive over more than four decades at News Corp.

But Thomson may have an even tighter bond to the octogenarian mogul. An April profile of Thomson in the New Yorker descibed the managing editor as “perhaps Murdoch’s only close friend.”

That Hinton has lasted this long is in many ways a signal of shifting mores at the News Corp.-controlled Dow Jones. Indeed, former senior executives of the financial information company have told TheWrap that Hinton surely would have been dismissed under Dow Jones’ Code of Conduct in the pre-Murdoch era.

A spokesperson for Dow Jones declined to comment.

All of the former Dow Jones executives spoke on condition that they not be identified out of concern of angering their current employers. Some, too, may be contractually barred as a condition of their exit from the company from speaking negatively about Murdoch, News Corp. or the successor Dow Jones management.

It appears that Hinton may have perjured himself in his 2007 testimony to Parliament, in which he said that there was no evidence suggesting that phone hacking at Murdoch's U.K. papers had gone beyond a lone reporter. Those statements seem to contradict an internal report that Hinton received prior to his testimony, which found that the illegal hacking was much more widespread.

More embarrassing revelations about Hinton’s knowledge of wrongdoing at News of the World might tarnish the Wall Street Journal’s status as one of America’s leading newspapers.

Under Murdoch, initial fears that he might tabloidize or ruin the Wall Street Journal have proved unfounded. Circulation has grown under the new leadership, with the Journal becoming the most widely read paper in the country, often viewed as being in  healthier shape than the more cash-strapped New York Times.

And the paper this year won the first Pulitzer Prize under Murdoch's ownership, for editorial writing.

Key to demonstrating the paper’s editorial independence, one senior former executive told TheWrap, will be the opinion page. If the editorial page, a crusader against corporate corruption, doesn’t come out with a strong condemnation of a the scandal by Tuesday, the damage could be irreversible.

If there’s isn’t a call for heads to roll, it might suggest, he declared, “they’ve received pressure — explicitly or implicitly — to not deal with these issues in the normal course.”

For now, Hinton remains the most problematic Murdoch executive for the Journal.

“From what I read, the man committed a crime,” a former Dow Jones executive said. “He lied to a national legislation under oath. There is a corporate death penalty every place for that. I assume News Corp. believes he didn’t lie or that it hasn’t been proven.”

Hinton is entitled to a presumption of innocence, the ex-honcho said, adding, “we didn’t fire people over newspaper reports, but this is an unusual situation.”