(UPDATED) 9/11 Hacking Allegation is Questionable

An allegation that reporters for Rupert Murdoch’s now-defunct News of the World tried to steal personal information from the phones of victims of the 9/11 terrorist attack on the World Trade Center is generating considerable smoke but no fire.

This is because the allegation rests entirely on a July 11 story in The Daily Mirror, a News of the World rival, based on an unnamed former New York City police office turned private investigator anonymous that the Murdoch tabloid tried to bribe an NYPD officer to help hack the phones of the victims, especially Brit0ns.

As flimsy as that thread may be, the FBI has launched a preliminary inquiry — as opposed to a full-blown investigation — of the allegation at the request of Representative Peter King, the New York Republican, and several other members of Congress, but absent that police officer coming forward if in fact a bribe attempt was made, it is difficult to see how investigators can get any footing.

Although Murdoch’s News Corp. share price has plummeted, 10 of his former minions have been arrested in the U.K. for their alleged role in widespread phone hacking, he and his son have reluctantly agreed to appear before Parliament today and the head of Scotland Yard is among the government heads to roll, the scandal has had little impact in the U.S.

But all that would change — and change dramatically — if the 9/11 victim allegation is found to be credible.

If so, News Corp. is almost certainly vulnerable to illegal wiretapping and wire fraud charges, and while there are weighty jurisdictional and statute-of-limitations issues to iron out, it is unlikely that U.S. prosecutors would defer to authorities in the U.K.

As former federal prosecutor Jeffrey H. Cramer has noted, “9/11 victims are held dear. ” Even if the allegation were true but prosecutors were unable to move forward because of the statute of limitations, it would be an extraordinary public relations disaster for Murdoch, even as shameless as he has proven to be over a long career built on media outlets that specialize in sleaze and misinformation.

It is difficult to avoid the conclusion that Murdoch is evil. Here is a man who keeps on a close associate who is the key player in the hacking scandal and is now under arrest, while firing dozens of reporters who are now unemployed.

In the past, Murdoch and News Corp. have made their myriad legal problems go away by paying multi-million dollar judgments and, in the process, silencing their critics. The New York Times reports that in the case of News America Marketing, its profitable in-store and newspaper insert marketing business, News Corp. has paid out a staggering $655 million over corporate espionage and anticompetitive behavior charges.

But this time no amount of lucre will do the job. And if the 9/11 victim allegation is true, Murdoch will be toast in his adopted country.

For people seeking blood, the nearly three hours of testimony today by Murdochs senior and junior before a parliamentary select committee was deeply dissatisfying. For people hoping to confirm that Murdoch senior, at least, is an unctuous weasel who can portray himself as a hands-on chief executive when it suits his needs and a chief executive who was kept in the dark about the criminal activities of his editors and reports, his testimony was deeply satisfying.

“This is the most humble day of my life,” Murdoch senior said early in the hearing. Of that everyone can be sure.