* Murdochs change mind, agree to answer UK committee's
* FBI to probe News Corp after allegations of 9/11 victims'
* Police arrest former News of World deputy editor
* UK Deputy PM raises "fitness" issue on media ownership
(Adds Murdoch denial on separating News International)
By Kate Holton and Georgina Prodhan
LONDON, July 14 Rupert Murdoch on Thursday caved
in to pressure from Britain's parliament to answer questions
over alleged crimes at one of his newspapers and denied that
News Corp was drawing up plans to separate its
Murdoch said News Corp had handled the crisis engulfing his
media empire "extremely well in every way possible" making just
"minor mistakes" and called reports he would split off his
newspaper assets "pure rubbish".
Speaking to his Wall Street Journal newspaper, Murdoch said
his son had acted "as fast as he could, the moment he could" to
deal with the scandal.
The Australian-born media mogul's comments came as he faced
investigations on both sides of the Atlantic.
In addition to the probe by British lawmakers keen to break
his grip on politics, the Federal Bureau of Investigation said
it was looking into allegations News Corp tried to hack into
9/11 victims' phones.
"We are aware of the allegations and are looking into it,"
said Peter Donald, an FBI spokesman in New York.
The phone-hacking scandal deepened on Thursday with the
arrest by British police of a ninth suspect, named by media as a
former deputy editor of Murdoch's News of the World.
His detention added weight to a government call for the
media regulator to decide whether Murdoch's business was fit to
run British television stations.
Murdoch, 80, has been forced to close the News of the World
and back down on his biggest acquisition plan yet, the buyout of
British pay TV operator BSkyB , due to an outcry over
allegations reporters accessed private phone messages.
He and his son James, heir apparent to News Corp, initially
said they would not face questions from parliament's media
committee over phone hacking but reversed their decision after
Prime Minister David Cameron said they should attend.
Rebekah Brooks, who runs Murdoch's British newspaper arm,
News International, has agreed to be grilled by the committee.
She was a friend of Cameron, who has echoed calls for her to go.
Brooks, who edited the News of the World at the time of one
of the most serious alleged incidents, said the police inquiry
might restrict what she could say. Her concern was echoed by
James Murdoch in a letter to the committee confirming his and
his father's attendance.
Speculation was growing at News International's east London
headquarters that the company might be reconsidering its
position on Brooks after resisting pressure for her to quit, a
source familiar with the situation said.
Murdoch, a U.S. citizen, also said he would give evidence to
a public inquiry announced by Cameron after questions were
raised over the role of some police officers in the scandal and
relations between British politicians and media owners.
The session is certain to be hostile. During a heated debate
on the hacking scandal on Wednesday, Dennis Skinner, a veteran
left-wing Labour member of parliament described Murdoch as "this
cancer on the body politic".
Murdoch and other senior executives have denied
any knowledge of the alleged practices.
British Business Secretary Vince Cable said of the swift
volte-face by politicians queuing up to condemn the Murdochs.
"It is a little bit like the end of a dictatorship when
everybody suddenly discovers they were against the dictator," he
told BBC radio.
The allegations of phone hacking, which reached a peak as
Murdoch's British bid came up for approval this month, are now
reverberating around the world.
The FBI probe will cover allegations that News Corp tried to
hack into phone records of victims of the Sept. 11, 2001,
attacks on the United States, although U.S. officials said they
were unaware of any concrete evidence to corroborate reports of
"I have heard of no evidence of allegations yet of anything
being done in the United States of America. If there is, then
obviously it should be investigated, but I have (heard of) no
allegation of that," said John McCain, a member of the U.S.
Senate Homeland Security Committee which would be briefed on
9/11 related issues.
Australia's prime minister said her government may review
Murdoch, who owns 39 percent of British pay TV operator
BSkyB, withdrew his $12 billion bid to take over the rest of it
on Wednesday after British politicians united in a call for him
to pull out of the deal.
Britain's Deputy Prime Minister Nick Clegg noted media
regulator Ofcom was already looking into whether News Corp
should be allowed to maintain its existing stake in BSkyB.
"Clearly there are big questions about the fitness and
properness of News International and that is exactly why Ofcom
are now looking at it," Clegg, leader of the Liberal Democrat
coalition partners, told BBC Radio 4.
"The thing that I think isn't quite clear to me at least is
exactly how fit and proper tests are applied," he added.
The catalysts for public disgust over the hacking
allegations were reports a News Corp newspaper had hacked into
the voicemails of murder victims.
"To see some of the things that have been done to intrude on
people's privacy, particularly in moments of grief and stress in
the family lives, I've truly been disgusted to see it,"
Australian Prime Minister Julia Gillard told Australia's
National Press Club.
"I anticipate that we will have a discussion amongst
parliamentarians about this, about the best review and way of
dealing with all of this," she said.
"DARK ARTS" OF JOURNALISM
U.S.-based News Corp has been rocked by a series of scandals
alleging journalists and hired investigators working for its
flagship News of the World tabloid hacked into the voicemails of
thousands of people, from victims of notorious crimes to
families of soldiers killed in the war in Afghanistan.
The allegations, which include bribing police officers for
information, galvanised British lawmakers across party lines to
oppose a man long used to being courted by the political elite.
Police arrested former News of the World deputy editor Neil
Wallis on Thursday, the ninth person held since the inquiry was
revived earlier this year.
In a statement, the Metropolitan Police said it had hired
Wallis as a consultant from October 2009 until September 2010,
an embarrassment for a force facing questions about its links to
The crisis has also tarnished Cameron, who faces questions
about why he appointed a former News of the World editor as his
Clegg distanced himself from the decision on Thursday.
"We did discuss it. Of course we discussed it. But at the
end of the day I make my appointments to my own office and David
Cameron makes his own appointments."
(Additional reporting by Stefano Ambrogi, Michael Holden, Matt
Falloon and Mark Hosenball in London, Paul Thomasch,Basil Katz,
Carlyn Kolker and Yinka Adegoke in New York, and Rob Taylor in
Canberra; Writing by Keith Weir and Louise Ireland; Editing by