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Phone-hacking scandal disrupts Murdoch succession

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NEW YORK — The phone-hacking scandal brought simmering tensions in the Murdoch clan to the fore and disrupted a succession plan to News Corp. chief executive Rupert Murdoch, according to an article in the upcoming edition of Vanity Fair.

Vanity Fair, in the December issue of the magazine, also reported that Rupert Murdoch’s elder children have “been in family counseling with a psychologist over the issue of succession” to their 80-year-old father.

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James Murdoch, 38, Rupert Murdoch’s second-oldest son, has been seen as the heir apparent to his father but he has come under fire for the scandal that led to the closure of the tabloid weekly The News of the World.

James Murdoch heads News International, News Corp.’s British newspaper arm, and was named deputy chief operating officer of the entire company in February.

Vanity Fair said James Murdoch’s 43-year-old sister, Elisabeth, “blamed her brother for allowing the phone-hacking crisis to spiral out of control.”

It said she suggested to their father at one point that James needed to go on leave and that Rupert Murdoch was “open to the idea.”

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“He and James had been at odds for months,” the magazine said.

Rupert suggested to James that he take a leave “but after a sleepless night he changed his mind,” Vanity Fair said.

The magazine also reported that Elisabeth declined a seat on News Corp.’s board of directors earlier this year to distance herself from the scandal.

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Rupert Murdoch, James Murdoch and another brother, Lachlan Murdoch, 40, all sit on News Corp.’s board of directors although Lachlan does not play an active role in the company.

Elisabeth was nominated to the board earlier this year after News Corp. bought her television production company Shine but she decided against taking the seat.

“Her lawyers and her husband advised her that it was best to not take the seat, in order to stay as far away from the scandal as possible,” Vanity Fair said.

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The magazine said that while a succession plan is still up in the air James Murdoch could eventually end up as chief executive of News Corp.

His father, however, was likely to first hand the reins over to chief operating officer Chase Carey, it said.

Vanity Fair said Rupert Murdoch has four votes in the family trust that controls News Corp. and that four of his children — Elisabeth, Lachlan, James and another daughter, Prudence — have one vote each.

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His two young daughters from his current marriage do not have any votes, it said.

Vanity Fair said the arrangement was part of the settlement When Rupert Murdoch divorced his second wife, Anna, in 1999.

Photo credit: Esther Dyson

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