While the Murdochs have been doing their best to keep out of the press over the past few weeks, the scandal that threatened to dismantle their empire is roaring back at them, this time with some allegations that look next to impossible to side step. From the Guardian:

Rupert Murdoch, James Murdoch and their former editor Andy Coulson all face embarrassing new allegations of dishonesty and cover-up after the publication of an explosive letter written by the News of the World's disgraced royal correspondent, Clive Goodman.

In the letter, which was written four years ago but published only on Tuesday, Goodman claims that phone hacking was "widely discussed" at editorial meetings at the paper until Coulson himself banned further references to it; that Coulson offered to let him keep his job if he agreed not to implicate the paper in hacking when he came to court; and that his own hacking was carried out with "the full knowledge and support" of other senior journalists, whom he named.

What does this mean? Most likely the Murdochs will be recalled to Parliament to explain why they gave misleading evidence before, and James Murdoch's career will most likely come to an end. I don't think it possible for him to claim ignorance with this type of damning evidence, and even if he didn't know, he should have, making him inept as an executive. Many more within News International will be facing jail time, and the scandal that refuses to die will simply escalate as more and more employees speak out.

Rupert Murdoch will be quaking in his boots, and rightly so.

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The scandal that knows no end just keeps getting worse and worse. This time, the ramifications will be devastating. From the Guardian:

Sara Payne, whose eight-year-old daughter Sarah was abducted and murdered in July 2000, has been told by Scotland Yard that they have found evidence to suggest she was targeted by the News of the World's investigator Glenn Mulcaire, who specialised in hacking voicemail.

Police had earlier told her correctly that her name was not among those recorded in Mulcaire's notes, but on Tuesday officers from Operation Weeting told her they had found her personal details among the investigator's notes. These had previously been thought to refer to a different target.

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If it wasn't clear before that Fox News is not a news organization and acts only as a mouthpiece for the GOP and Rupert Murdoch's financial interest, after the phone hacking scandal, it really should be. Fox News's coverage of the scandal has been, to put it mildly, hilarious. Just wait till the end of this brilliant Daily Show clip when a Fox News journalist tries to ask Murdoch about the News of the World closure – it's almost poetic:

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Matt Taibbi on how the phone hacking scandal was a natural consequence of modern corporate capitalism:

Once the media business made the collective decision to always put money above editorial judgment, I think scandals like the News of the World affair became inevitable. Because once media companies abandoned the notion that their business was somehow different from other money-making businesses, that there were no longer places they wouldn’t go to generate product, it became inevitable that the corporate media game would become nothing more than an all-out, relentless quest for sensational, titillating material.

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Two key quotes from Rupert Murdoch and his son James Murdoch during the parliamentary hearing in the UK today (transcript via the Guardian):

Rupert Murdoch:

I didn't know of it [paying police bribes]. I'm sorry… if I can just say something. And this is not as an excuse – maybe it's an explanation of my laxity. The News of the World is less than one per cent of our company. I employ 53,000 people around the world who are proud, and great and ethical and distinguished people. Professionals in their lives. And perhaps I'm spread watching and appointing people whom I trust to run those divisions.

James Murdoch:

I do not have direct knowledge of what they knew and at what time but I can tell you that the critical new facts as I saw them and as the company saw them really emerged in the production of documentary information or evidence in the civil trials at the end of 2010. The duration from 2008, or 2007 I should say till the end of 2010, the length of time it took for that come clear and that real evidence to be there is a matter of deep frustration. Mine, I have to tell you I know and I sympathise with the frustration of this committee and it's a matter of real regret that the facts could not emerge and could not be gotten to, to my understanding, faster.

The Murdochs were obviously prepped well for the hearing, giving only prepared soundbyte answers designed to obsfucate rather than inform. James Murdoch, the more polished performer, spoke for most of the time doing his best to appear humble and helpful, while Murdoch senior was more curt and reluctant to offer up information while being grilled. If anyone expected a dramatic turn of events, they will be sorely disappointed. The hearings confirmed that:

1. The Murdochs still believe they did nothing wrong personally.

2.They are not culpable for the phone hacking and bribes paid by journalists and senior executives.

3.The links between their empire, the police and the government has not been improper or corrosive.

The problem for the Murdochs is that while the scandal may appear to be peaking, it has only really just begun. James and Rupert are attempting to stem the tide, and today's performance may or may not have done that. In reality, it doesn't really matter – the investigation will continue and as more and more people will be implied, it will be harder to contain the wider implications of a highly corrupt corporate culture. Corporate culture comes from the top, and Rupert Murdoch is ultimately responsible for what goes on inside his company.

He may stay on as head of News Corporation, but his authority, power and prestige have been irreversibly tarnished. No longer will he be invited to Downing St for cups of tea with the Prime Minister, and no longer will he influence which political party gets into power. It will be shocking if the UK does not implement stringent laws to prevent the consolidation of media conglomerates, and if that happens, Murdoch will be about as relevant to UK politics as Gordon Brown now is.

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While the Murdochs scramble to contain the disaster over the phone hacking scandal, elements out of their control continue to escalate to the point of no return. Over the weekend, former executive of News International Rebekah Brooks was formerly arrested on suspicion of conspiring to intercept communications and on suspicion of corruption allegations.  Following her arrest, Britain's most senior policeman, Met police commissioner Sir Paul Stephenson resigned stating:

"I have taken this decision as a consequence of the ongoing speculation and accusations relating to the Met's links with News International at a senior level and in particular in relation to Mr Neil Wallis."

The two dramatic events signal that the scandal is far from over, and will probably involve months and possibly years of investigation. How far up the food chain will it go? Who knows, but Rupert and James Murdoch should be very, very nervous. While they are doing their utmost to stem the tide of overwhelmingly negative PR, the truth is, events are now completely out of their control and they sit back like the rest of us and see where the chips fall.

The scandal is so epic in proportion that it is impossible to fully comprehend how deeply this will effect Britain's media and political establishment. While the Murdoch empire has been struck a potentially fatal blow, the political establishment will next come under scrutiny for its incestuous relationship with the press.

PM David Cameron is working over time to do his own containment, but his links to Andy Coulson and Rebekah Brooks will also come back to haunt him, possibly ruining his chances of reelection if he is seen to have had an improper relationship.

Amazingly, we are only witnessing the beginning of a very unique revolution.

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The phone hacking scandal that brought about the end of the 'News of the World' and the arrest of 12 people (three of them policemen), is threatening to cause a Soviet style melt down of the Murdoch Empire.

I'm over in the UK at the moment, and the public mood is absolutely extraordinary. The anti Murdoch sentiment is palpable, and it is hard to see how he can rebuild his credibility in a country whose media he has dominated for the past 30 years. If people disliked Murdoch and his ruthless monopolization of the media before, it has now turned to outright hatred and a desire to topple the Australian born mogul from his virtually unrivalled position of power. 

Murdoch's News Corporation must now put on hold his attempt to fully takeover BSkyB, and given the onslaught of new revelations that point to far more widespread illegal activity within his empire, it is looking less and less likely. The consequences of a blocked deal and legislation to break up Murdoch's grip on the British media could send News Corporation (Murdoch's integrated global media company) into disarray. It is hard to calculate the international consequences of the debacle, but at least in the UK, Murdoch's time as the main man is well and truly over.

It took a celebrity resorting to the same dirty tactics that saw his own phone hacked to begin the extraordinary investigation – an irony that works as a timeless reminder: You live by the sword, you die by the sword.

Here is Hugh Grant explaining how he entrapped the same journalist who hacked his own phone over a pub lunch in Dover:

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Breathtaking news from the UK. Via the Guardian:

News International announced on Thursday that it is closing the News of the World after this Sunday's edition, with no end in sight to the political and commercial fallout from the phone-hacking scandal after 72 hours of mounting crisis.

Sunday's edition of the paper will be the last, News International chairman James Murdoch told News of the World staff on Thursday afternoon.

Murdoch told employees at the 168-year-old title: "The News of the World is in the business of holding others to account. But it failed to when it came to itself".

Murdoch said in a statement: "Wrongdoers turned a good newsroom bad and this was not fully understood or adequately pursued."

I hate to say this, but credit to Rupert Murdoch here – journalists from his newspaper committed an unforgivable sin, and he is taking severe and dramatic action. It sends a brutal message that this type of behavior will never be tolerated, and indicates he understands just how serious the phone hacking scandal was. I don't know whether this gets him off the hook, but there's not much else he could have done (short of resigning himself).

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