Murdoch and son to testify, FBI probes US claims

Media mogul Rupert Murdoch and son James yielded to intense pressure Thursday and agreed to testify to British lawmakers, as the phone-hacking scandal widened to US shores with an FBI probe.

In another dramatic day in the saga that has killed off the News of the World tabloid and wrecked Murdoch's takeover bid for pay-TV giant BSkyB, the Murdochs reversed their earlier refusal to give evidence to a parliamentary committee on Tuesday.

Meanwhile, US investigators said they were looking into claims made on Monday by British tabloid The Mirror that News Corp. employees may have targeted the phone records of September 11 victims.

"We are aware of the allegations and we are looking into it," a spokeswoman from the FBI's New York office told AFP.

Murdoch sought on Thursday to calm the fears of News Corp. shareholders, telling the Wall Street Journal that the crisis was being handled "extremely well in every way possible."

The 80-year-old tycoon said the damage to News Corp. in Britain was "nothing that will not be recovered" and promised an independent committee would "investigate every charge of improper conduct."

Earlier Thursday, British police arrested Neil Wallis, a former News of the World executive, but were later forced to admit that Scotland Yard itself had previously employed him as an advisor, raising fresh concerns about police corruption in the case.

The Murdochs' climbdown came only five hours after parliament's media select committee formally summoned them to attend, having received letters from the pair saying they were "unable" to attend but giving no reasons.

That left Rebekah Brooks, the chief executive of Murdoch's British newspaper arm and a former editor of the News of the World from 2000-2003, to appear by herself before the committee.

But a spokeswoman for Murdoch's News Corp. later said: "News Corp. can confirm that we are in the process of writing to the select committee with the intention that James Murdoch and Rupert Murdoch will both attend on Tuesday."

Committee chairman John Whittingdale had said that if the Murdochs did not answer the summons then the matter would be dealt with by the House of Commons, which can then order the person to attend.

"If that is not obeyed then it becomes a matter of contempt of parliament and there are penalties," he said, adding: "I understand that it can include imprisonment."

For the tabloid's ex-editor Brooks, it promises to be a tough session.

At her last committee appearance in 2003 she admitted: "We have paid the police for information in the past", though she later said she was referring to the industry in general.

Saudi billionaire Prince Alwaleed bin Talal, News Corp.'s second biggest shareholder, on Thursday demanded that Brooks quit.

"For sure she has to go, you bet she has to go," the seven-percent stakeholder told BBC's Newsnight programme.

The extent of payments made by the media group is part of a Scotland Yard investigation which is also dealing with the voicemail hacking, and of a full public inquiry announced by Prime Minister David Cameron.

Australian-born Murdoch has been in London in crisis mode since Sunday, the day the 168-year-old News of the World published its last ever edition.

The row had rumbled on for months but exploded last week after it emerged that the paper had targeted the messages of Milly Dowler, a murdered 13-year-old girl, and of the families of the veterans of the wars in Afghanistan and Iraq.

On Wednesday, Murdoch's News Corp. announced it was dropping its bid for full control of BSkyB.

In London, police arrested Wallis, 60, the former executive editor and deputy editor of the News of the World, who left the paper in 2009. Wallis is the ninth person to be arrested since the inquiry was reopened in January.

Wallis was deputy editor from 2003 to 2007 under editor Andy Coulson. Coulson quit the paper in 2007 after its royal reporter and a private investigator were jailed for hacking mobile phone voicemails.

Coulson, who went on to become Prime Minister Cameron's media chief before quitting that job in January, was arrested on Friday in connection with the scandal and later bailed.

But Scotland Yard later confirmed that a media company owned by Wallis "was appointed to provide strategic communication advice and support to the MPS (Metropolitan Police Service)".

It said the contract, which ran from October 2009 to September 2010, included advice on speech writing and public relations.

Home Secretary Theresa May wrote to police chief Paul Stephenson "to get the full picture," a spokeswoman for Britain's interior ministry confirmed Thursday.

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