MR. STEVE ROBERTSThanks for joining us. I'm Steve Roberts, sitting in today for Diane Rehm. Just a few minutes ago, media mogul Rupert Murdoch told the British parliamentary committee that this was the "most humble day of his life." Murdoch and other top executive of News Corp. were called before U.K. lawmakers investigating alleged phone hacking by reporters at the now defunct tabloid News of the World.

MR. STEVE ROBERTSJoining me in the studio to talk about the deepening troubles for News Corp. and the implications for Rupert Murdoch's media holdings in the U.S: Clive Crook of the Financial Times and The Atlantic Monthly and Tom Rosenstiel of the Project for Excellence in Journalism. And from a studio in Chicago, James O'Shea, formerly of the Los Angeles Times and Chicago Tribune. Welcome. Thanks for being here, guys.

MR. CLIVE CROOKThanks.

MR. TOM ROSENSTIELThank you.

ROBERTSYou can join us, as always, at -- here at "The Diane Rehm Show." Give us a call at 1-800-433-8850. Our email address, drshow@wamu.org. Clive, let's start. Right now as we're talking, Murdoch has this extraordinary appearance, which doesn't happen every often in Britain, common in the United States, unusual in Britain, to appear before a parliamentary committee. What have we heard so far from it?

CROOKWell, it's a staggering thing to see, I agree, to see both of the Murdochs there being grilled by this committee of MPs. They're giving them a hard time. And I -- my initial impression is that Murdoch Sr. is not acquitting himself very well. I mean, he looks extremely old frankly. He looks out of it and seems very confused and isn't giving very clear answers to the questions he's being confronted with. James looks pretty impressive. He seems to be the master of the material.

CROOKBut it's interesting that we've seen so far is that the committee is actually trying to focus its questioning on Murdoch Sr. almost as though they're more interested actually in -- as kind of ritual humiliation of the Murdochs than actually getting to the bottom of what went on, but we'll see.

ROBERTSTom, one of the words that the Murdochs used very often this morning is sorry and apologizing. Of course, they did this extraordinary thing of taking out a full-page ad in a number of British newspapers. What's your take on their approach to this scandal?

ROSENSTIELWell, they know that part of what they need to maintain is public support; that the franchise asset of a news company and its properties is that people like the product and trust the product. And we know that media consumption is habitual. It takes a long time or a big breach for people to stop using something that they've used for a long time. That's the traditional knowledge about public behavior and media. But recent years have suggested that that can change more quickly.

ROSENSTIELAnd Murdoch himself knows that you could buy MySpace for a lot of money, and then it can fall out of fashion and something else can come along. The fact that he was willing to close News of the World so quickly suggests that he recognizes that he's got assets here that are irreparably damaged.

ROBERTSJim O'Shea, some of those assets are in the United States. Murdoch, this morning, said News of the World, this tabloid in Britain which he closed down as a result of the phone hacking scandal, was less than 1 percent of his empire and that he employed 53,000 people around the world, including people at The Wall Street Journal and at Fox News and other American outlets.

ROBERTSI should also say that it includes HarperCollins Publishers, which has published several of my books, just to put that on the record. But, Jim O'Shea, what do you see is the fallout in his American properties?

MR. JAMES O'SHEAWell, I think, you know, I think this is -- the News of World situation was a more egregious example of a general slide in media standards that's been under way for the last decade or two in America. I don't think you will -- I don't think anything like phone hacking is condoned here. I think if there is -- if they find some evidence that he did -- that reporters from one of his properties hacked into 9/11 -- the victims of 9/11, I think he's got big problems.

MR. JAMES O'SHEAI think it's just starting for him. He has to really try to contain this by keeping the news developments to a minimum. And I don't think he's doing a very good job on that right now.

ROBERTSClive, let's fill in our listeners. It's -- there are -- it's a very complex story and there are many overlapping charges. We used the word phone hacking. It's come up this morning in the hearings. What exactly is the charge here? And what does the record show so far about what Murdoch's people engaged in?

CROOKWell, the record isn't actually clear about precisely what happened and who did it. But the general accusation is that News of the World journalists found a way to break into people's voicemail on their cell phones and listen to the messages. This scandal broke -- and not just listening, I mean, that is a crucial thing, but this scandal broke with the Milly Dowler case. This was a young girl who had been kidnapped, subsequently discovered to her being murder.

CROOKApparently, News of the World hacked into her voicemail on her cell phone and even went so far as to delete messages from the phone so that the phone is capable of receiving more messages that the paper could then listen to. And that gave the parents of this poor girl the impression that she was still alive, that she was actually, you know, working her voicemail, an extraordinary thing to do. And I think that broke the dam, because there had been tacit acceptance of shady practices in British journalism for years.

ROBERTSI mean, people went to jail years ago for this in the beginning of this scandal.

CROOKYes, and it wasn't actually ever that big a deal. I mean, I think the British public have very low expectations of the ethical standards of their journalists. And, you know, as I said, there's a sort of tacit acceptance of these very, very dubious practices. It was the egregious quality of the Milly Dowler thing that turned the public so ferociously against the News of the World and against the Murdochs.

ROBERTSAnd, Tom, this is only part of the scandal, because there are allegations that some of the victims of this phone hacking were then paid off with extraordinarily high sums -- this came up in the hearing this morning -- allegations that News of the World journalists paid for information, perhaps even paid police sources for tips. What does this all amount to? I mean, Clive says that the ethical standards in Britain are a lot lower. What's your take on this pattern that's emerging?

ROSENSTIELWell, this will be more familiar to Americans. The cover-up, if you will, has become as big a part of the story as the original crime, the idea that you're paying off victims that News of the World...

ROBERTSTo keep them quiet.

ROSENSTIEL...to keep them quiet. That News of the World editors are then being employed by Scotland Yard to keep tabs on and perhaps to squelch and then inform News of the World editors on what Scotland Yard is investigating. The investigation is then ended. Another News of the World editor goes to work for the Prime Minister David Cameron. And so, really, there are two other elements to this. One is an attempt to put an end to an investigation, and then the other is a cozy relationship with powerful people that is both intimate and also threatening at the same time.

ROSENSTIELThere is an air to the story, at least on the outer edges, that people in British politics are fed up with the power that the Murdochs have wielded over them and over British politics for a long time. And one of the subtexts here is how quickly this story has metastasized reflects the fact that perhaps Murdoch doesn't have as many friends who really like him and like the company as he thought he did.

ROBERTSAnd, Jim O'Shea, one of the things that struck me here is that at same time, as Tom points out, there was this extraordinary nexus between the Murdoch empire, the police, close relationships with the prime minister's office and a power that was unaccountable or was -- either to the police or to the parliament. Today, that's one of the most interesting dimensions of seeing the parliamentary inquiry, is this sense of accountability finally coming forward.

ROBERTSBut at the same time, Jim, there were other news organizations, the Guardian in London, The New York Times in America, that did check and balance to some extent the Murdoch empire by running stories, investigative stories, revealing some of these facts that the parliament or the police had not brought forward. So tell me what you think the role has been of these independent journalists, checking the power of another journalist.

O'SHEAWell, I think that has become -- I think it's great to be honest with you. I think it's a wonderful thing that we have an independent press. I think what this really shows is the dangers of not having an independent press, of not having a press that will check power, will look at powerful institutions and people and examine and scrutinize their activities and hold them to a higher standard.

O'SHEAI think what's happening throughout our country and in Britain is people might become -- start to become aware that there is a danger when there's too much -- there's too cozy of a relationship between newspapers and their politicians. And a more independent press is what’s needed, and it's what threatened now.

ROBERTSDo you see a sense, Clive, of that the people in Britain are coming to some of the same conclusions that there is -- there has been too cozy relationship?

CROOKWell, certainly on the, you know, the relationship with politicians, yes. Let me come back to that in one second, if I may.

ROBERTSYeah.

CROOKFirst thing I want to say is just to remind people that it was actually the British press that brought down the News of the World. I mean, so there was an independent press in that narrow sense. There was a...

O'SHEAWell, the Guardian played a very major role.

CROOKYes. And then every other media outlet jumped on that bandwagon and it's been a feeding frenzy in Britain. So there is a highly competitive, I mean, a viciously competitive press that exists in Britain alongside what I would regard is these rather low, ethical standards when it comes to the actual gathering of information. So those two things shouldn’t be muddled up.

O'SHEAInteresting.

CROOKBut on the point about this intimate and incestuous relationship between politicians and the press, yes, that is a huge problem. But I would like to just point out that it goes both ways. It isn't just that the Murdochs were incredibly powerful through their control of these politically influential papers. The politicians also saw opportunities to exert their own influence and advance their interest. That's the critical part of it. This was a two-way street.

ROBERTSWe're gonna get to your calls and your comments in just a minute with Tom Rosenstiel, Clive Crook and Jim O'Shea. I'm Steve Roberts, sitting in today for Diane. We'll be right back.

ROBERTSWelcome back. I'm Steve Roberts, sitting in today for Diane. Our subject this hour, the ongoing scandal in Britain, phone hacking and payoffs and police corruption involving News Corp., the worldwide media empire run by Rupert Murdoch and his son James. And right as we are doing this show, they are appearing before a Parliamentary Committee of Inquiry in London, and we're gonna keep you up to date on that.

ROBERTSMy guests this hour, Clive Crook of the Financial Times, the Atlantic Monthly, Tom Rosenstiel, who runs the Project for Excellence in Journalism, James O'Shea, formerly editor of Los Angeles Times, Chicago Tribune. And we have gotten an email -- several -- asking why there's no representative of Fox News or News Corp. on today's program. We asked them. They declined to participate. So we did want them to come and join this discussion, but they did not want to.

ROBERTSNow I'm gonna get to our callers in just a minute. But I wanna ask a little bit more about, Tom, about the dilemma that Murdoch's publications, including his U.S. outlets, are faced with in covering this story. You have Fox News, which has kinda downplayed it. You have The Wall Street Journal, which he owns, which actually wrote an editorial defending him. You have Piers Morgan, major figure on CNN who once worked for him, but also worked for one of his competitors.

ROBERTSWhat's your read on how the delicacy of being faced with covering your own boss and how the -- particularly the American properties of Rupert Murdoch are doing? And the New York Post, actually, to add to it.

ROSENSTIELRight. There are two standard models in American journalism about how you cover a scandal in house. One of them is epitomized by The Wall Street Journal itself back in the 1980s when they had an insider trading scandal led by a young man named Foster Winans, who wrote the Heard on the Street column. And Washington Post, when it had the Janet Cooke scandal, epitomized this model too, which is that you decide you're going to cover the story more aggressively than any other competitor and, in so doing, reassert your journalistic independence.

ROSENSTIELThe other model is one that Jim O'Shea may remember, when a former editor of The Wall Street -- of the Chicago Tribune said, look, you can't win trying to cover yourself. So you ought to just sort of step aside and not cover it very much. But, you know, you don't operate as a mouthpiece for your boss either. You just sort of say, we're conflicted out.

ROSENSTIELAnd I would say that more often than not in American journalism history in the last 50 years, people have opted for the very aggressive model. We're gonna cover this tougher than anybody else.

ROBERTSAnd send a message to our stakeholders, you can trust us to be as open with this problem.

ROSENSTIELRight. This is an opportunity for us, not just a crisis. I would say that by any measure, the News Corp. properties have not followed that path in this. Fox has covered it less than the other cable channels. The Journal has done an editorial essentially accusing the rest of the media of damaging the press by covering the story so aggressively, and then had a very credulous interview with Murdoch last week.

ROSENSTIELThere's really no evidence that the paper -- although there -- initially, in the first days, there was some reporting that was trying to keep up with the rest of the press. The air seems to have gone out of that. And that's, you know, that's unusual. It's -- although it's not, frankly, unusual for Murdoch. His history suggests that while his papers are not -- while his properties are not always political in the same way, that one consistent pattern is that when the company has interests at stake, those properties tend to reflect those interests.

ROBERTSNow, Clive, another moving part on the American scene here is a growing interest to the FBI in investigating, among other things, potential bribery under Foreign Corrupt Practices Act. An American corporation -- News Corp. is chartered in America. It's a Delaware corporation. What do we know about the potential criminal liability here on the American side and what the FBI might be looking at?

CROOKWell, we don't know very much. I mean, it's obviously a big area of risk for the company. But I don't know what the prospects are of bringing a prosecution under that act are in this case. I mean, if I were working for News Corp., I'd be very disturbed merely to hear that an investigation was under way. But it's just too early to say what it might yield -- maybe nothing.

ROBERTSAnd, Jim O'Shea, you've been a major executive of two news organizations, the Tribune and the L.A. Times. And one of the things also that seems to be a potential threat to the media empire of Murdoch are potential shareholder suits, that the value of this corporation has plummeted. It's lost $8 billion in book value as its shares have dropped. And there are questions being raised about a number of decisions made by the corporate leaders that have now been called into question. What do we know about that?

O'SHEAWell, I think they are vulnerable to shareholder suits, quite vulnerable, because of the plunging values in their stocks. But I think I wanna go back to one thing. You know, you don't really need the Foreign Corrupt Practices Act here. Phone hacking has been -- is illegal in many states and in -- you have to remember, back in -- earlier, the Cincinnati Enquirer published a big expose on Chiquita Banana.

O'SHEAAnd when one of the reporters was found that he was hacked -- he had hacked into voicemails, the whole -- the credibility of the whole story was thrown -- cast into doubt. And there were other criminal investigation. I believe he eventually pleaded guilty to some charges. So we don't need the Foreign Corrupt Practices Act, you know, because you can -- and this has happened before.

O'SHEAThe other thing, I think, we need to take a look at is we are on a slippery slope, in many cases. And some of the ethical practices, you know, are gonna -- I just wonder how it's gonna play. When you begin looking at television stations that pay for interviews, that pay for photos and covering of news -- and this has been a practice of other tabloids. And I think, you know, we are on -- this could bring a additional scrutiny to all kinds of practices by American news organizations.

O'SHEAThat's not to say that everyone engages in this. But on the most egregious examples of these ethical slip-ups, I think you're gonna see some more scrutiny. I'm sure of it.

ROBERTSAnd, Tom, the history is exactly that, that when something like this happens, it does cause news organizations not only internally to ask questions. You mentioned the Janet Cooke case, the famous Jayson Blair case at The New York Times, changed the whole culture of The New York Times. But then you -- in today's environment, you have a lot more outside scrutiny of the press, a lot of bloggers, a lot of websites who are also gonna be asking these questions.

ROSENSTIELYeah. And Clive mentioned that in England, the public doesn't have a particularly high opinion -- and, in fact, News Corp.'s executives have argued that the practices that are at the root of the story are not unique to News Corp., and that phone hacking and some of these other things are common on Fleet Street. The general impression is that that is not the case in the United States.

ROSENSTIELAnd when there have been scandals of this nature -- as you said, Steve -- there's a long history of the press actually pulling back dramatically. The red lion -- Food Lion case in the 1990s, when a jury found -- against ABC News because of trespassing and the use of hidden cameras in a grocery store expose, that was such an embarrassment to the press that the use of hidden cameras, which had become common on American television, virtually vanished overnight.

ROSENSTIELAnd while these practices may be -- I can't speak to, you know, how widespread they are in Britain or not. In American newspapering, they are very rare, and there are very significant differences between the way the newspaper business operates in Britain versus here.

ROBERTSLet me bring in David Folkenflik. He's a media reporter for NPR. He's on the phone with us from New York. He has been covering this story quite closely. And give us your take on what we've learned, stepping back from the details, what we've learned about Rupert Murdoch and News Corp., about its culture, about its power and where it goes from here, David.

MR. DAVID FOLKENFLIKWell, I think we've learned -- we've certainly fleshed out our understanding of the News Corporation, particularly the Murdoch family and the close coterie of aides surrounding it, the sort of soft power that translates into hard influence throughout the United Kingdom. If you look at the scandals particularly affecting the Scotland Yard Metropolitan Police, the resignation...

ROBERTSWhere two major figures have resigned in the last few days.

FOLKENFLIKThat's right. Because of their close ties, because there were people that they had hired from News of the World who turned out themselves have been implicated, indeed one of them arrested in this very scandal. The deep ties that senior figures in the current government, Conservative Party, and in the past Labour Party government have with both the Murdoch family and their top aides, this was built on both careful courtship and also fear.

FOLKENFLIKThe idea that Mr. Murdoch's newspapers -- and, ironically, in the United Kingdom, it's the newspapers that are the fearsome one and the television stations that News Corp. owns that is seen as the more responsible news outlet. There's fear that political figures could be targeted if they didn't play ball.

FOLKENFLIKI've been watching this morning very closely the questioning of both Rupert and Janice Murdoch by a special parliamentary panel. And one of the sharpest questioners is a guy named Tom Watson, a Labour member of parliament, who never really sort of got with the program, has always been a thorn in the Murdoch side and was, therefore, a target for its editorials, for its mockery, for its close coverage of scrapes that he might have gotten in. And that's just one of scores of incidents like that.

FOLKENFLIKWe've learned that this stuff is real. People who are friendly with the Murdochs have often sort of been dismissive of the idea that these are fantasies spun by liberal critics of the Murdochs, of Fox News in this country, of The Sun or the News of the World in the U.K.

FOLKENFLIKBut in reality, there is this nexus of influence and power that has enabled the Murdochs to get things done under Margaret Thatcher, to be given a waiver, essentially, to be able to take control of The Times of London and The Sunday Times, two prestigious broadsheets, even though he already controlled two of the leading tabloids in the country.

FOLKENFLIKAnd similarly, they thought they would get the same deal with BSkyB, the largest broadcaster in the United Kingdom that they own already 39 percent of and that James Murdoch led for years. They thought they'd get the whole thing, add billions to their revenues annually. And because of this, because of this trip up, this original sin with that first tabloid in the U.K., the News of the World, it's come tumbling down.

ROBERTSWell, I wanted to get to get to that point because they were forced to withdraw their bid for BSkyB. They had to close the News of the World, which Murdoch said this morning less than one percent of his empire, still a very visible part of his empire. They've lost $8 billion in stock value. Are we gonna see, looking forward, a shrinkage in the power and influence of News Corp and Rupert Murdoch?

FOLKENFLIKYou already have. Because when you have power and influence based on a combination of courtship and fear, and nobody wants to be proximate with you, that kills the courtship. And nobody fears you anymore and that, you know, kills the threat. So you've already seen a diminishment of News Corp. being able to work its will in the United Kingdom, which, after all, you know, it came out of the seeds planted in Australia.

FOLKENFLIKBut Murdoch's real big fortune was initially made in the United Kingdom, and that let him jump the Atlantic here with The New York Post and much more recently, The Wall Street Journal, as well as all the Fox properties. And it's -- there's no question that there's been a diminishment of that power. There'll be a question of whether the team, you know, comes over here to the same extent. Certainly, it's not done so so far. There's close ties between Fox News, for example, and the major elements of the Republican Party.

FOLKENFLIKAnd you've not seen, on the whole, Republicans leading the charge in this country against News Corp., although Peter King, a Republican who's chairman of the Homeland Security Committee in the House of Representatives, did ask for an FBI investigation of whether 9/11's victims phones were hacked in a similar way to terror victims in London were. So, you know, it's damaging. The future, of course, is not in newspapers. The future is in television. The future is in entertainment.

FOLKENFLIKThe future is in America more than there. So, you know, it remains to be seen how much control the Murdochs have. I got to tell you, I'm looking right now on my screen...

ROBERTSHold on a second, David. I'm Steve Roberts. And you're listening to "The Diane Rehm Show." OK, David. Go ahead.

FOLKENFLIKForgive me. I was just saying, you're looking now at the testimony being given by the two of Murdochs -- James Murdoch, sort of trying to convey empathy, giving detail after detail of his account of what was known, when was known. You see Rupert Murdoch looking on the whole down at his hands, dejected, in a very laconic, almost telegraphic answers, mostly indicating a lack of knowledge of what happened.

FOLKENFLIKIf true, a real change from the very hands-on editor who used to go into newsrooms, you know, on various continents and tear up headlines, you know, in his -- for the front pages of his papers. This, you know, Murdoch said, this is the most humbling day of my life. That may not be an extremely high bar for him but at the same time there's a diminishment here. And a real question is whether this company, which, after all, is an American-based company, publicly traded, gets to be continued to operated as a family concern.

ROBERTSRight. Let me get to some of our callers and some of our emails. We got an email from Catherine (sp?) in Indianapolis, who asks, "Why did the publisher of The Wall Street Journal resign?" How is this related, Clive? It's directly related because -- explain to the caller what the connection is.

CROOKLes Hinton was a senior executive in the British newspaper operation at the time when a lot of the hacking was going on. Now, of course, he denies knowledge of what was going on, but he accepts a measure of responsibility, I guess, since he was there at the time and has, therefore, resigned.

ROBERTSWe have -- Tom Rosenstiel, Ellen writes to us from -- here in Washington. "Do U.S. journalists employ private investigators or other consultants who help with information gathering? What is the widely accepted ethical threshold in this regard?"

ROSENSTIELIn general, that does not occur in newspapers. There have been some cases where primetime magazines, like of the sort that we used to see a lot of, "Dateline" and...

ROBERTS"20/20."

ROSENSTIEL..."20/20" would, for a specific episodes, you know, "To Catch a Predator" and some of that other stuff that went on. But that -- there has been a good deal less of those programs in recent years. They have been basically replaced by reality shows. It's important to recognize that we don't really have a substantial number of tabloid newspapers in the United States the way they do in Britain. The true tabloids that we have are the supermarket tabloids that you buy in the grocery checkout line, which really aren't -- it may replace...

ROBERTSIn many ways, the tabloids are the TV shows.

ROSENSTIELYes.

ROBERTS"Entertainment Tonight" and...

ROSENSTIELAnd indeed, the tabloids that we once had were afternoon newspapers in most cities, and they died in the late 1950s and 1960s as local television news came on and supplanted them.

ROBERTSAnd what about the practice of paying for information, which has come out as fairly standard practice for some of the tabloids? How -- American standards are somewhat different on that issue.

ROSENSTIELYes. There's a long tradition against doing that except at the supermarket tabloids. The ethical consideration there is very simple.

ROBERTSThe Star or the Enquirer.

ROSENSTIELRight. And the reason for that is that if you create an incentive for somebody to tell you a certain story, it casts out over the veracity of what they're telling you. In the 1970s, CBS News famously paid a Watergate conspirator, H.R. Haldeman, for his interview and, afterwards, the scandal or the -- the smoke over that caused the networks to agree not to ever do that again.

ROBERTSWe're gonna come back with your calls, your comments, your questions about the ongoing scandal in Britain and the -- Rupert Murdoch's testimony this morning. I've Steve Roberts, sitting in today for Diane Rehm. We're gonna be right back. Stay with us.

ROBERTSWelcome back. I'm Steve Roberts, sitting in today for Diane Rehm. Our subject this hour, the evolving and ongoing scandal in Britain, also here in the United States, over the power and the influence of News Corp. run by Rupert Murdoch and his son, James. As we speak, they are appearing before parliamentary committee of inquiry in London.

ROBERTSAnd with me to discuss this: Clive Crook of the Financial Times and Atlantic Monthly, Tom Rosenstiel of the Project for Excellence in Journalism, James O'Shea of formerly the Los Angeles Times and the Chicago Tribune and author of the new book, "The Deal from Hell," about his experiences in the newspaper business, and also David Folkenflik from NPR. Their media reporters have been covering this. And, David, I -- let me ask you one or two quick questions. I know you have to leave.

ROBERTSWe got a tweet from a listener who says -- and he's speaking about the hearing going on right now, where Rupert Murdoch has had very little to say and his son, James, sort of stepped in and tried to answer a lot of the questions for him. And the tweet says, "It must be great to be so close to your own father that he can use you as a human shield. Dad of the year."

FOLKENFLIKWell, there is this sort of astonishing thing where Rupert Murdoch keeps wanting to deflect questions about when things were known, what British newspaper executives were aware of wrongdoing when and say, you know, my son, James, might answer. And James keeps popping up and answering it. The amazing thing, just in terms of the atmosphere was that at the very start, the very start, James Murdoch asked to offer opening statements and the chairman said, you know, nothing doing.

FOLKENFLIKMaybe at the end, if you feel like you haven't been able to make your point. And so, he, nonetheless, in his first answer, launches into apology. But the father, Rupert, interrupt to just say -- he puts his hand out and says, this is the most humbling day of my life, which -- while undoubtedly, the message he wanted to convey interrupted the flow and the sincerity of what James was attempting to do on -- in a perhaps smoother way on behalf of the company. Murdoch was making clear this is about me, and at the same time, he doesn't really wanna answer any of the specifics.

ROBERTSLet me ask you one other thing, David. This is an email from Jonathan here in Washington. He points out that Murdoch runs his business at arms length, allowing plausible deniability, which he has repeatedly said all morning that he didn't know, wasn't aware. "Without a 'smoking' gun, he seems in the clear," writes Jonathan. News of the World accounted for 1 percent of Murdoch's overall company according to Murdoch's own testimony.

ROBERTSWe talked about that earlier. So here's Jonathan's question, "Is the scandal really enough to dismantle his media empire? Is it enough to remove his family from key positions?" What do you think?

FOLKENFLIKI think that this is a question that shareholders and that independent directors of News Corp. are ultimately going to be the ones to determine in the absence of some finding of upper level criminality. But certainly, James Murdoch is in a very delicate position in the United Kingdom, where he's, you know, sort of a top official there for News Corp.

FOLKENFLIKHis overall European and Asian operations, in the sense that -- as one important instance, he approved a payment of more than $1 million to key figures in the world of professional football, what we call soccer, to keep them quiet that -- about their complaints about being hacked. Why does this matter? Well, this matters because this happened in -- shortly after the trial of two men for hacking into the phones of the royals and their associates. And the trial ended, they went to jail, 2007.

FOLKENFLIKNews International officials including Les Hinton testified that they believe that this was limited to just the one reporter and the one private investigator in the case. For James Murdoch to approve that payment to these other guys in the football world indicates that he had to know that it was more than just the royals. These are two very different stories in different instances.

ROBERTSRight. David, thank you so much for joining us. We really appreciate it. Keep covering the story for us.

FOLKENFLIKYou bet. Thank you.

ROBERTSOK. Bye. Let's turn to Vinette (sp?) in Fort Lauderdale, Fla. You're on "The Diane Rehm Show". Welcome, Vinette.

VINETTEThank you. I was really -- I'm riveted by this whole scandal or, you know, but what my thought was that I think it's very dangerous for a man like Murdoch to be able to acquire so many of our, you know, well, he has Fox News and The Wall Street Journal, and I think that he has really taken the luster off The Wall Street Journal by, you know, acquiring it in and what has now happened.

VINETTEAnd from what I understand, it seems to be that it is pervasive throughout his -- all of his holdings from what I understand, 'cause he also owns a company called American -- The America Corp. or something like that, where he also use -- hacking into someone's computer to gain access to company...

ROBERTSRight. We've been talking about that all morning. What's your question?

VINETTEWell, my question is that I hope that -- I wonder if our elected officials will now look at what's going on and decide not to allow one person to be able to acquire, you know, too many of our, you know, news operations?

ROBERTSThank you. It's a very good question. James O'Shea, of course, there are rules that Murdoch, to some extent, has tried to bend and to get around. But answer Vinette's question, what are the rules and what are the -- what's the issue here?

O'SHEAWell, there are federal communications rules that try to inhibit such concentration of ownership. But I don't think that this will result in any widespread legislative efforts to say people can't own newspapers and televisions in the same city, that there is a dispute about that now. So I don't know that that will occur. It's been -- the people have been trying to do that for a long time.

O'SHEABut there are a lot of other companies besides Rupert Murdoch who don't want that to happen, who want to own those kinds of combinations. And there are market...

ROBERTSIncluding one you recently worked for.

O'SHEAIncluding the Tribune Company, where I worked for many years. So I just think that the odds of restricting that kind of ownership are really not too high.

ROBERTSMark in Chagrin Falls, Ohio, welcome to "Diane Rehm Show." What's on your mind this morning?

MARKThank you for taking my call. I'm just curious if your panelists see any difference whatsoever in the relationship between News Corp. and the British government, which has earlier been said is just way too cozy. It was just completely wrong. And Fox News and News Corp’s relationship with the Republican Party here in the U.S., especially after News Corp. donated $1 million to the Republican Party and, I believe, gave zero to the Democratic Party. I'll take my answer offline.

ROBERTSOK. Thanks a lot. Clive.

CROOKWell, I think this whole issue of the, you know, the nexus of politics and media is crucial. But I think it goes broader than this -- than the questioner implies. I mean, looking at this as a foreigner, looking at the American media as a foreigner, I see a pretty healthy landscape here. I mean, I don't apply that observations to the print side of the industry, which is dying. But media, broadly, all points of view get expressed. You have an incredibly vigorous debate going on in this country.

CROOKI don't see anything very wrong with that. The problem in Britain is that many channels of political communication that you take for granted in the U.S. were actually closed down. And there's a paradox here. You know, there's a big debate in the U.S. about money and politics, how to curb the role of money in politics, and this is, you know, plainly a big issue. You know, Obama is planning to spend $1 billion on his re-election campaign. Republicans, struggling to see if they can raise anything remotely like that.

CROOKAnd Americans are worried about the role that money plays in politics. The thing to bear in mind about Britain is that that problem is being largely resolved in Britain. There -- money plays a much smaller role in British politics. There are very tight restrictions on what political parties can raise and what they can spend. And what is the consequence of that? The consequence is that the influence of the newspapers is colossal.

CROOKThere is a tradition of highly disputatious, politically controversial British newspaper coverage of elections. Papers pick sides, and they campaign for their chosen candidates. There's no pretense of neutrality in the British press over these things and the -- and I think that is a problem. That has come to the fore in the Murdoch scandal. But the cause of it is actually the Brits have solved the problem of money in politics. It's a case of be careful of what you wish for.

ROBERTSIt's almost a vacuum being filled by another force.

CROOKExactly.

ROBERTSTom, speaking of cozy relationships, we do have an email from the other point of view from our caller. This is from Robert. He says, "The cozy relationship that exists here in the U.S. is between the overwhelmingly liberal mainstream media and broadcasters and the Democratic Party. The sole alternative voice, Fox News, is an object of hatred by liberals."

ROSENSTIELWell, there's certainly the view among a growing number of Republicans that the press at large is -- tends to be liberal. It's interesting when you look at the data that we have at the Pew Research Center. When we ask people, when you think of the media, who do you have in mind, people think overwhelmingly of CNN and Fox. And when they are answering these questions about your attitudes about the press over the years and whether they're accurate, and we probe and say, who are you thinking of, those are the two.

ROSENSTIELSo the reality is that when you also ask people about their local media, much as in the case of Congress, their views are more accepting. And most newspapers in the United States are not particularly partisan. The advertisers who provide 80 percent of the revenue to newspapers want those papers to be very responsible and cautious.

ROSENSTIELAnd the research shows that the tone and the political ideology of newspapers tends to reflect the community that they're in. So a Tulsa newspaper is more conservative than a San Francisco newspaper because that makes economic sense.

ROBERTSBut what about the phenomenon that we've seen Fox News employ in one time or another, a majority of the people who ran for the Republican nomination? And some had to leave when they announced, like Newt Gingrich. Sarah Palin continues to be a paid contributor. Mike Huckabee continues to be a paid contributor, who’s not running.

ROSENSTIELYeah.

ROBERTSIs that closer to the British model that Clive was talking about?

ROSENSTIELIt is and that's new. It's -- it functions because Fox is a national network that focuses almost exclusively on politics. It seems when you look into the details of the Fox audience, only 40 percent of people who say they're Republicans say they are regular Fox viewers. But 70 percent of people who say they're Tea Party supporters are Fox viewers. So it may not be that Fox reflects the Republican Party as much as it reflects a faction or a part of the Republican Party which is very active, which wants to focus on politics on a regular basis and has a certain kind of a sense of grievance about where politics is going.

ROBERTSI'm Steve...

O'SHEACan I jump in here a minute?

ROBERTS...yeah, Jim.

O'SHEAI think that the appearance of political figures coming on as -- in commenting on the news or even portraying themselves as part of a news team, is not good. I think that that -- it may not -- it gives the impression of a political cast to news organizations particularly on the broadcast media. And so I think there is a broader influence of -- it gives us appearance of a lack of objectivity, a lack of fairness, a lack of balance. And I don’t think it's a good development.

ROBERTSI'm Steve Roberts. And you're listening to "The Diane Rehm Show." We got a -- I wanna get a couple more callers in. And let's talk to Ken in St. Louis. Ken, welcome to "The Diane Rehm Show." Ken? OK, let's go to Mac in Greenville, N.C. Mac, you're on the air.

MACYes. Thank you for taking my call. The only question I have is, is Rupert Murdoch's scandal is going to affect at all his clout on Capitol Hill? I mean, if certain, Fox News has a very large effect on the Republican Party. And I'll gladly take my answer off the air.

ROBERTSOK, thanks a lot. What do you think, Tom?

ROSENSTIELWell, you know, it's not the same as it is in the United -- in the U.K. because the American public has not particularly engaged in the story. They're not following it closely. They don't know what the News of the World is. They don't know the Fowler case. So all they know is that the owner of Fox News is caught in some scandal in England and the press is covering it a lot, more than the public is following it.

ROSENSTIELI think more would have to happen before we could say that there was a real fallout. One other point that is worth making, a lot of people think that Americans now get their news from ideological sources, primarily in that we've gone to a sort of red truth and blue truth and we -- and our news consumption is now ideological. That is objectively not true. The data is very clear that the most popular websites and the most popular news sources are ones that produce news in very conventional ways.

ROSENSTIELYahoo News, which is an aggregator that sort of like an aggregator of news -- of wire service copy, is overwhelmingly the number one news source online, followed by CNN, AOL, MSNBC, and then the fifth is The New York Times. You have to go way well down the list before you start bumping into ideological sources.

CROOKCould I just comment on that? So, you mean to tell me that you don't think MSNBC and The New York Times would -- could plausibly be regarded as a, you know, as liberal news products?

ROSENSTIELMsnbc.com is a very, very different product run by different people and with different structure and owners even than MSNBC on television, yeah, I'd say there are very meaningful differences there. And they are largely an aggregator of content that is produced by others.

CROOKI think, I'd want to question the, you know, the data that Tom's referring to there. I think a very important dimension of this is the energy that readers of the material bring to the material. The political debate in the U.S. is driven increasingly by extremes, and I think they are able to live in an intellectual space where they're spared much engagement with opposing points of view. I mean, I think that is a big issue, a big problem.

ROBERTSWe have time for one more caller, and here's an email from, Linda, in New York, "Isn't the public some what complicit in this scandal? The readers of the News of the World, numbering over 1 million, craves the sort of details that Murdoch's tabloid reveals and provides the fuel for this journalistic fire." Jim O'Shea, isn't there some truth that the tabloids give people what they want?

O'SHEAI think, that people generally view the tabloids as entertainment, not news. And so, when they're looking at this kind of lurid headlines and all of that, I don't really think they view that as a credible news source. I think they view that as more entertainment, and I don't believe that -- and so they're giving them this kinds of little -- it's like a popular TV show or something like that.

ROBERTSRight.

O'SHEAI don’t think that's the same as The New York Times and other credible news articles.

ROBERTSClive, could you give me the last word? What's the outlook here for Rupert Murdoch and News Corp. after the testimony this morning?

CROOKWhy, I think, well, the testimony, I think, may not be that big of a deal. I think the largest scandal does put the company, obviously, in very serious difficulties. They've made some dramatic move to try and stop the rot, starting with closing the News of the World, which I was startled by when they first announced it, then the big resignations and so forth. But nothing they've done so far shows any sign of, you know, putting a floor under this thing.

CROOKIt's still a developing story, and, you know, if I were a shareholder in News Corp., which thank God I'm not, I would be very worried about where, you know, where the value of my portfolio, where is it gonna end up?

ROBERTSWhich it already has taken a hit.

CROOKAbsolutely.

ROBERTSThat's Clive Crook, he works for both the Financial Times and the Atlantic Monthly. Jim O'Shea, has been with us on the phone, formerly of the Chicago Tribune and Los Angeles Times, and Tom Rosenstiel, as always welcome here as head of the Project Excellence in Journalism. I'm Steve Roberts, sitting today for Diane, and thanks for spending an hour with us.

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