AMY GOODMAN: British Prime Minister David Cameron has announced plans to hold an emergency session of Parliament Wednesday to discuss the growing phone-hacking scandal that’s threatened Rupert Murdoch’s media empire and rocked the British government. Cameron’s call comes one day after Britain’s top police official, the commissioner of the Metropolitan Police Service, resigned yesterday amid the phone-hacking scandal.

SIR PAUL STEPHENSON: I have this afternoon informed the Palace, Home Secretary and the Mayor of my intention to resign as commissioner of the Metropolitan Police Service. 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, who, as you know, was arrested in connection with Operation Weeting last week.

AMY GOODMAN: That was the commissioner of the Metropolitan Police in London, Sir Paul Stephenson, Britain’s highest-ranking police official, the head of Scotland Yard. His resignation came just hours after the arrest of one of media baron Rupert Murdoch’s most trusted deputies, Rebekah Brooks. Brooks, who was chief executive of Rupert Murdoch’s British newspaper division, was later released on bail. She admitted to paying police for information as early as 2003, while testifying before a select committee of members of Parliament in the U.K., along with Andy Coulson.

CHRIS BRYANT: Tonight I’ll just ask whether they ever paid the police.

ANDY COULSON: Sorry?

CHRIS BRYANT: It’s just the one element of whether you ever paid the police for information?

ANDY COULSON: Yeah.

REBEKAH BROOKS: We have paid the police for information in the past, and it’s been—

CHRIS BRYANT: And will you do it in the future?

REBEKAH BROOKS: It depends on—

ANDY COULSON: We operate within the code and within the law, and if there’s a clear public interest and within, then the same holds for private detectives, for subterfuge, for video bags, whatever you want to talk about. If it’s within—

CHRIS BRYANT: It’s illegal for police officers to receive payments.

ANDY COULSON: No, no, no. We don’t—I just said “within the law.”

AMY GOODMAN: That was Rebekah Brooks and Andy Coulson, then of News of the World in 2003, responding to a question from Labour MP Chris Bryant. Coulson was arrested earlier this month. He’s the former spokesperson for the British Prime Minister, David Cameron.

The expanding scandal is raising numerous questions about the future of Murdoch’s media empire. In a move that surprised many, Murdoch’s longtime ally and friend, Les Hinton, resigned late on Friday. Hinton had worked for the tycoon for 52 years and was chair of Dow Jones and the publisher of the Wall Street Journal. Pressure is growing to investigate Rupert Murdoch’s holdings here in the United States. The FBI has confirmed it’s launched a probe into allegations News Corp.

To discuss this further, we’re joined by two guests: from the newsroom of The Guardian newspaper, which broke the story, Ian Katz, the paper’s deputy editor; and in Washington, D.C., Sarah Smith, the Washington correspondent for Channel 4 News in Britain.

Let’s go to Ian Katz first. The significance of all of the developments over the weekend, the latest—the resignation of the head of Scotland Yard, and before that, Rebekah Brooks being arrested and then released? Ian Katz, welcome.

IAN KATZ: Hello, good morning.

Well, the most significant thing, without a doubt, over the weekend, was the resignation of Britain’s top policeman, Paul Stephenson. And it wasn’t just that fact that he resigned. I think a lot of people had been expecting that, at least to come soon. What was most striking was that in resigning, he pretty much fired a shot straight at David Cameron by saying that he had been unable properly to discuss the investigation with the Prime Minister, because the Prime Minister employed this chap Andy Coulson, who was the editor of The News of the World at the time that a lot of this hacking was taking place. He also pointed out that the chap who he had hired—that’s Paul Stephenson—this gets confusing—he had hired a chap called Neil Wallis, who was the deputy editor of The News of the World. That’s one of the things that he got in trouble for. But he pointed out, rather tartly, that Neil Wallis had not resigned because of hacking, whereas Andy Coulson, the Prime Minister’s director of communications, had resigned because of hacking. So he pretty forcefully turned the fire back on the Prime Minister, and it’s going to be very interesting to see what Paul Stephenson says tomorrow, when he comes before MPs.

AMY GOODMAN: Now, also tomorrow, the Murdochs will be testifying, along with Rebekah Brooks, or at least that’s what we know at this point—on Tuesday, Rupert Murdoch, his son James and Rebekah Katz sic. Can you talk about the significance of this?

IAN KATZ: Hope that was Rebekah Brooks, not Rebekah Katz.

AMY GOODMAN: Ha, ha. Rebekah Brooks.

IAN KATZ: Well, it’s a monumental day. I’ve been scratching my head, trying to think of comparisons of any events similar in the U.K. None of us can think of that. We’re reduced to thinking of the biggest pop concerts that there have been in London in the last 50 years, and it’s simply the most dramatic event, I think, in Parliament in perhaps decades.

We’re going to see Rupert Murdoch, his son, Rebekah. It’s just been confirmed, I think, that Rebekah will go in front of the committee, despite the fact that she was arrested, as you reported earlier, yesterday. This is just going to be an extraordinary encounter, in which the man, who until two weeks ago was probably the most powerful media figure in the world, is going to have to explain how this monumental scandal and cover-up unfolded on his watch supposedly without him knowing about it. And I think we can expect that there would have to be pretty extraordinary performances for both Rupert Murdoch and James Murdoch to emerge unscathed by the end of it.

Rebekah Brooks, of course, has already resigned, so it’s not a question of how it will impact her future. But one really key question about her performance tomorrow is how much will she say about her relationship with the Prime Minister, David Cameron. The government has admitted, on Friday, that the Prime Minister had a number of meetings with Rebekah Brooks over the course of the last year, two of them at Chequers, his official residence, and two of them over one Christmas week last Christmas in their constituency. But a lot of people believe they had a lot more contact than that. And now that Rebekah Brooks is one of the most tainted figures on the British media scene, that’s going to start to create some very difficult questions for the Prime Minister.

AMY GOODMAN: And the significance of the Prime Minister, Ian Katz, calling for an emergency session of the British Parliament Wednesday?

IAN KATZ: Well, I think that’s terribly significant, because it gives you an indication of the way in which this scandal is really increasingly lapping at the doors of Downing Street. I think a lot of people, when we began reporting this story two years ago, thought it was a kind of internecine media spat, and maybe it spilled over a little into the issue of press regulation. But what you saw with the resignation of Paul Stephenson yesterday is this goes right to the heart of other institutions, like the police. And inch by inch, this is now closing in on Downing Street. I think David Cameron realized that if he didn’t come and give a statement to the House on Wednesday, probably the opposition would have demanded that Parliament be recalled. The real question is, is he going to submit to a grilling as well as just giving a statement?

AMY GOODMAN: We’re going to break and then come back within 60 seconds. Please stay with us. We’re talking to Ian Katz. He’s deputy editor of The Guardian newspaper, which broke this story. And we want to talk about the history of this story, because The Guardian has been reporting on it, not just for a few weeks, but for years. We’ll also be joined by Sarah Smith of Channel 4 in Washington D.C. That’s Channel 4 News based in Britain. Stay with us.

[break]

AMY GOODMAN: Our guests right now, as we continue to cover the unfolding scandal that is engulfing the Murdoch media empire, we’re joined by Ian Katz, deputy editor of The Guardian newspaper, which first broke the story, and Sarah Smith, the D.C. correspondent for Channel 4 News, she’s joining us from Washington.

One last issue of the late, developing news, the second in command at Scotland Yard, Ian Katz, who’s taking over command right now, it looks like he also could be sacked.

IAN KATZ: Well, he’s not quite the second in command. He’s the number three at the Met, but he’s a terribly significant figure. He’s in charge of all anti-terror policing in the U.K., which is obviously a critical role. His name is John Yates. And he is the man who picked up the investigation into hacking after The Guardian began running stories about it in July 2009. He is the man who came out, within the space of 12 hours, and said, “There is no new evidence here. There’s no reason to look at this.” And that’s a terrible, terrible error, because obviously we’ve seen subsequently that they were sitting on masses of information that needed to be investigated. He hasn’t gone just yet, but I think we’ll see him either suspended or resign any minute now.

AMY GOODMAN: I want to bring Sarah Smith in. Ian Katz, I’d like to ask you to stay with us. The significance of this, what this means for the relationships between the media, the government, the police in your country, in Britain?

SARAH SMITH: It’s going to change everything. It’s going to change how things work inside Britain. It’s going to change, I fear, how Britain is perceived outside, as well. You could call this the British Spring, as you watch every part of the British establishment being tainted by this scandal, as Ian Katz was just saying. It’s clearly reached the police already. It is lapping at the doors of the Prime Minister’s office. It’s being heavily debated in Parliament as they get sucked into it. There’s no part of British public life that isn’t being touched by this scandal now.

So it’s bound to change the relationships—people hope, for the good, a less cozy relationship between politicians and the press. Hopefully in the future, no press baron will ever have the power to bully politicians into doing what they want, to render them so terrified of bad publicity that they don’t even dare investigate things, like this hacking scandal, in the first place. We could have been dealing with this years and years ago if it weren’t for the fact that people were too scared to take on the power of Rupert Murdoch. That’s not healthy for any kind of democratic society. And people very much hope that’s something that will fundamentally change—but not before a lot of British institutions have been very, very badly damaged in public perception nationally, and probably internationally, because what’s Britain about? We don’t have a commanding military that can go around the world changing things. What we have is diplomatic soft power, a large part of which is built on respect for our institutions, our democracy, our parliament, our free press, our upstanding police force and the rule of law. And all of that has been so badly undermined by this scandal, one wonders what element of British public life will not be touched by this by the time it’s all over.

AMY GOODMAN: I want to go back to Ian Katz with Sarah’s point of this should have been dealt with years ago. Bring us back to the beginning of what you knew, for example, what The Guardian was reporting years ago.

IAN KATZ: Well, we began reporting on this story almost exactly two years ago, in the summer of 2009. My colleague, Nick Davies, who has really been the sort of extraordinary figure in this drama, beavering away at this absolutely indefatigably for more than two years, got an extraordinary story that summer, which was that Rupert Murdoch’s News International had written a check for about a million pounds to settle some claims that were being made by a chap called Gordon Taylor and two other people, who had complained that they were being hacked and were taking News International to court. Now, this was just quite simply hush money. This was a sum of a million pounds that was paid to make these allegations, and whatever evidence had been supplied behind them, to go away.

Now, at that point, it would have been very easy for the police, News International, to say, “Goodness gracious me! This really is pretty shocking. We have to get to the bottom of this.” But instead, what happened is that News International, the police, the press watchdog, to some extent some elements of Parliament, all simply came straight out of the blocks and said, “Oh, it doesn’t look like there’s anything too worrying here. This is just The Guardian banging on. This is The Guardian with some strange tribal obsession. They’re politically motivated.” In fact, Rebekah Brooks wrote a rather memorable letter right away, saying that The Guardian was willfully misleading the British public. It’s a letter I hope she’ll be reminded of tomorrow.

AMY GOODMAN: Andy Coulson was editor of The News of the World from 2003 until his resignation in 2007, then served as director of communications for Prime Minister David Cameron until January. He was arrested July 8th over suspicions he knew about or had direct involvement in the hacking of mobile phones during his editorship of The News of the World. Last week, leader of the opposition Labour Party, Ed Miliband, criticized Prime Minister David Cameron’s decision to hire Coulson.

ED MILIBAND: I say this to the Prime Minister. He was warned by the Deputy Prime Minister about hiring Andy Coulson. He was warned by Lord Ashdown about hiring Andy Coulson. He has now admitted in the House of Commons today that his chief of staff was given complete evidence which contradicted Andy Coulson’s previous account. The Prime Minister must now publish the fullest account of all the information that was provided and what he did and why those warnings went unheeded. And he should do—most of all, he should apologize for the catastrophic error of judgment he made in hiring Andy Coulson.

AMY GOODMAN: Yes, that was Ed Miliband. Sarah Smith, could this scandal bring down David Cameron’s government? And since—though you’re a British reporter for a British channel, you are based in Washington. Talk about how this is widening, the scandal in the United States, as well, with the Murdoch empire here. But start with could Cameron go down.

SARAH SMITH: I doubt you’re going to see the government go down. I doubt you’re going to see the Prime Minister go down. It is hugely embarrassing for him, for all the reasons that you heard Ed Miliband, the leader of the opposition, enumerating there. It was also a dreadful mistake hiring Andy Coulson. It was also a mistake to continue to meet with him socially after he had resigned from Downing Street. And Cameron’s cozy and close relationship with Rebekah Brooks and with the Murdoch family will come under a great deal of scrutiny, all of which will prove embarrassing. It won’t, in itself, destroy his government, but what it has done is given new lease of life to the opposition, to the Labour leader, who you heard just there making a very strong attack on him. And it’s changed the dynamic in British politics, because you have the Prime Minister on the back foot, on the defensive now. You have an issue on which the Labour leader has really been able to make his name. And that will ultimately have huge consequences for Cameron’s government, but you’re not going to see them toppled immediately over this scandal, I don’t think.

Different question, possibly, about the Murdoch family, whether or not this scandal is going to bring down their empire, their dynasty. The scandal laps closer to James Murdoch every day, when you see one of the faithful lieutenants resigning or fired, whichever you choose to believe—Rebekah Brooks, Les Hinton. The firewall around James Murdoch is disappearing. We’ll see him in front of Parliament tomorrow. We’ll see what happens when MPs start questioning him there. But there are very significant questions for James Murdoch. And investors in the U.K., and particularly in the U.S., are starting to worry about his leadership of this company, if he were to take over. He’s the obvious heir apparent. He’s supposed to be inheriting running News Corp. And actually, he’s been presiding over this scandal, which has done huge damage not just to the reputation of the company, but its share price. Its investors are losing a great deal of money as they’re watching the share price go down as this scandal gets bigger and bigger, and they are, of course, asking very serious questions about whether any Murdoch is the right person to be running News Corp. And that’s how it’s really going to hurt them here in the States, I think. Investors are going to be more worried about the price of this, rather than the political price of it. Robert Murdoch’s position in American public life is very different from that in Britain. He’s not the all-powerful figure here that he is in the United Kingdom. But the investors, they’ve got the power to do something about this, if they’re worried about their share price.

AMY GOODMAN: There are some very interesting figures on News Corp.'s board that are based right here in the United States. For example, Joel Klein, well known to New Yorkers, he was the former schools chancellor. And interestingly, the New York Daily News reports that a business News Corp. acquired just after Klein joined the board is now facing scrutiny, since it deals with schoolchildren's personal data, New York state awarding Wireless Generation a no-bid, $27 million contract. Now parents are questioning whether News Corp. should have access like that to their children. And you also have a familiar name in national politics on the board, Viet Dinh, who is a power attorney here, assistant attorney general under George W. Bush, principal author of the USA PATRIOT Act, the law that, among other things, prompted an unprecedented expansion of government eavesdropping. Interesting connections in the United States, Sarah Smith.

SARAH SMITH: Yes. And the fact that we’re talking about this shows you what a huge problem this is for News Corp., because, to be absolutely frank, although there are questions that need to be asked in exactly what you’re describing, we wouldn’t be sitting here talking about this if it wasn’t for the hacking scandal, if it wasn’t for the focus on every member of the News Corp. board now. People are out there looking for these stories, digging away at connections and potential scandals within News Corp. And it’s going to damage the business day after day as people keep digging these things up and go out there looking for them. So, investors will at some point need to take control of this and say, “We need to change the leadership at the top in order to get rid of the taint of this scandal. The toxic Murdoch family are no longer doing this company any good.” And until they do that, what they’re going to see is that these kind of stories are going to keep appearing in rival papers all of the time, because people think it’s open season on News Corp.

AMY GOODMAN: Let’s end with Ian Katz back in London. The Guardian broke this story, has been for years now. Especially for people in the United States, how did you hear—figure out the Milly Dowler story? And it bears repeating, because she’s not a familiar name, this incredibly unfortunate murder victim, who was just 13 years old.

IAN KATZ: I can’t tell you the answer to that. That’s a question for Nick Davies, the reporter who broke it, and I don’t think he would be wanting to discuss his sourcing or the process that took him to that story. But it is absolutely true that, you know, we’ve been writing about this for two years. And believe me, we have gone on about this. I mean, a lot of people thought we were sort of comically tedious about it.

But the Milly Dowler story changed everything. It unleashed an absolutely visceral wave of revulsion in this country, which crossed all party lines and sort of media sectarian lines. It was impossible for people not to cover. This wasn’t just listening in on the voicemail of a missing and quite possibly murdered young girl. The really killer detail was that The News of the World deleted emails on her phone in order that they could receive more messages, so that they could write about them. So I think when the history of this scandal is written, there is no doubt that that story will be seen as the kind of tipping point moment. I’m afraid I can’t tell you how we got it there.

AMY GOODMAN: Well, I want to thank you both for being with us. Ian Katz, the deputy editor of The Guardian, which broke the phone-hacking scandal that is continuing to unfold. Again, tomorrow, the Murdochs, Rupert Murdoch and his son James Murdoch, are going to be testifying before the Parliament, as is Rebekah Brooks, who was arrested yesterday, then released. An emergency session of the Parliament will take place on Wednesday. Sarah Smith also with us in Washington, D.C., correspondent for Channel 4 News in Britain.