Rupert Murdoch's Reporters Illegally Spied on the British Prime Minister

Last week, when News International chief executive Rebekah Brooks faced down News of the World reporters to explain why the paper was being cashiered, she warned darkly that all would become clear when the full extent of the rot at her company became known. Today another shoe dropped: Reporters for News International's Sunday Times and Sun illegally accessed former Prime Minister Gordon Brown's bank account, legal files, and family medical records.

The Guardian's Nick Davies and David Leigh are reporting that investigators believe Times, Sun, and News of the World reporters and private investigators surveilled Brown ruthlessly for more than a decade, looking at his bank records, attempting to listen to his voicemails, stealing files on him from his lawyers' offices, and gaining access to his children's medical files. They also believe that an unnamed newspaper gained access to his tax records. The papers used the information for hot scoops like this one:

In October 2006, the then editor of the Sun, Rebekah Brooks, contacted the Browns to tell them that they had obtained details from the medical file of their four-month-old son, Fraser, which revealed that the boy was suffering from cystic fibrosis.

Brown is expected to release a statement confirming the charges imminently.

The ever-expanding scandal helped send News Corp.'s stock down more than 7% today, and lawyers shepherding a pre-existing shareholder lawsuit against the company have updated the complaint to accuse the board of willfully ignoring "illicit newsgathering practices" at its British papers.

In what appears to be a desperate tactical maneuver, Murdoch today announced that he no longer intends to spin off Sky News after News Corp. purchases the satellite company BSkyB. He had previously assured British regulators that, should the deal go through, he would sell the news channel—a move designed to grease the wheels and allay fears that he would turn it into a British Fox News Channel. But now, with scandal threatening to scotch the whole transaction, he's reneged on that promise. That means the deal has to be approved by the U.K. Competition Committee, which adds a regulatory hurdle but has the virtue of pushing back a decision by at least six months, by which point Murdoch is calculating the uproar will have died down.

Rupert Murdoch's Reporters Illegally Spied on the British Prime Minister

What's less clear is if there are any tactical moves that might save Les Hinton, the CEO of Dow Jones (right), who oversees the Wall Street Journal. Hinton ran News International during the initial, abortive investigations into phone hacking in 2005 and 2006, and assured Parliament—falsely, it is now known—that the practice was limited at News International and that all the culprits had been rooted out. Now Reuters and other news outlets are turning their attention toward Hinton and wondering whether the man in charge of Murdoch's American flagship helped engineer a massive cover-up or was merely galactically stupid.

[Photos via Getty Images]