>> do you accept that ultimately, you are responsible for this whole fiasco? >> no. >> you are not responsible? who is responsible? >> the people that i trusted to run -- and then maybe the people they trusted. >> the murdochs did their best to distance themselves from the worst allegations, but the question still remains what exactly did they know? and what actions did they condone? one lawmaker thinks they know more than they let on. >> are you familiar with the term willful blindness? >> mr. sanders, would you care to elaborate? >> it is a term that came up in the enron scandal. willful blindness is a legal term. if there is knowledge that you could have had and should have had, but chose not to have, you are still responsible. >> mr. sanders, do you have a question? respectfully, i don't know what you'd like me to say. >> my question is are you aware -- >> i'm not aware of that particular phrase. >> now are you aware of the term because i've explained it to you. thank you, mr. chairman. >> we were not ever guilty of that. >> it got more interesting. at one point, the hearings turned chaotic as a man attacked rupert murdoch with a plateful of shaving cream. >> oh, oh! >> i want you to take a look at this again. you can see on the far left of your screen someone breaking out of the seats and heading straight for rupert murdoch. the first to act? his wife. who comes out swinging. you see her to the left of your screen there his son, james and a police officer seem frozen in action. murdoch may not have the reflections he once did, but he was still able to dodge some verbal attacks today. we'll go indepth on the murdoch hacking scandal tonight. first, here are other aspects of the story we're drilling down on tonight. the fall of scotland yard? britain's beacon of law and order, rocked by allegations of bribery. top brass resigning in disgrace, and today, a stunning breach of security. time to call in sherlock holmes? and death of a whistle blower. sean hoare lived the tabloid life to the limit. drugs, booze, and cell phones. that's how he got his sensati sensational stories. looks like he saved the best one for last. then, news corp. and politicians, we've seen the cozy connection in britain, but here in america, for political contributions, you'll never guess who gets the most murdoch money. back now to our in-depth report, the murdoch hacking scandal and a key question, how deeply involved were the police and exactly why did they shut down their original phone hacking investigation back in 2007? my guests tonight worked with murdoch as senior editor for the times of london and has insider's knowledge of the close or perhaps too close relationship between the police and the tabloids. welcome, nicholas waptchak. i want to get to the hearing, but this was fascinating to watch. >> i can't think of anything that was so gripping and on the expectation that something new was going to come out the murdochs wriggling on the end of the hook. >> once the police investigation closed in 2007, that was it. do you think news corp. executive has some hand in closing that investigation? were they influential in that? >> it's very difficult to know in entirety. it's difficult to abandon the case in the beginning. what we do know, the senior policeman in charge of that investigation, ended up first of all being smeared with information about his private life. we'd like to know i guess where those rumors came from in the first place. he was headed up on on people that find out dirty tricks about people, and then shortly afterward, he was given a column on the london times. a column he still has today. >> right. >> so this guy, the man who called off the investigation is the man who is now employed by the sister publ kagz of the vcp. don't you think rupert murdoch mipt have asked this single question, how come this guy is now being paid? >> sometimes it's a too-close relationship. but a tackled web of the same people working for the police department, then go into government and then work for news corp. >> absolutely. a revolving door. it turns out ten people in the public relations department of scotland yard that came from news international. the people that used to give -- report tips is the person who ended up giving tips, and who pays whom? in a way it doesn't really matter this is sort of chump change. the actual details of who was paid. the fact is, they were same personnel going round and round. >> round and round. did you see that? >> no, i didn't. the london times has been kept insulated from many of the tabloid tricks that the sun and nuftz world were up to? >> what is it like to have a working relationship with rupert murdoch? is he the same man you knew? the same person with all of his faculties? >> i was rather saddened today. he's 80 years old, and he has been dented. he looks like someone has come across him with a cricket bat or baseball bat. in australia, cracket bat. he looks very down in the dumps. most humbling day of his life. a very low point of his career. >> yeah. >> on the other hand, it's difficult to feel entire sympathy for someone who can give it out but can't take it. 1980 is when i met him so over 30 years i've known him. he's always been the cock craw on the marquee. strutting around and doing pretty well, with a combination of personal charm, but he has an organization that spends it's whole time looking into dirty little secrets of politicians, and every time he needs a business favor done, lo and behold, politicians fall in with his plans. >> he mentioned thousands of employees he has around the world. does it surprise to you he seems so out of touch with the organization, especially when you're paying so much money to make things go away? is this -- i was watching saying the emperor has no clothes. >> this doesn't ring true to me. he made great play that only 1% of news corp.'s business came from news of the world. and he blamed everybody else. he wasn't told. he delegated power and people abused him. the fact is that he delegated large parts of his empire, he delegates to tv which he doesn't particularly understand. he moved to beverly hills and came back with his tail between his legs. he's very bad on online. and he bought myspace, a very peculiar thing. but when it comes to newspapers, he loves newspapers. >> is that because of his father? hang on, he spoke about his father. stop, i want you to watch it. >> i just say i -- perhaps addressing -- i just wanted to say that i was brought up by a father who was not rich, but was a great journalist. and he just before he died bought a really small paper, specifically he said give me a chance to do good. i remember what he was so proud and he was hated by many people in this country for many years, which was expose the scandal. which i remain very, very proud of. >> so i'm wondering, since his newspapers are such a small part of the business and a time when newspapers are losing really their profitability, he hangs on to them is this his motivation? his father, to be in the media business? hang on to the newspapers and become this wealthy? >> i wouldn't like to speculate entirely upon the relationship with his father, because it's a complex one. here today he spoke very affectionately about him. his father, sir keith, was a real establishment figure. he was knighted, old money. they were pillars of community. but somewhere along the line, rupert decided not to be old money and he decided to be an out cider. when he went to britain, he hated the very people that his father came from, if you like. he hated all those landed people, the moneyed people, that did so well purely because of their families and actually, he runs one of the tightest-knit family organizations in the world. >> but if you listen to him, my father was poor. he sort of alluded to that, and i built this from nothing, but that's not exactly -- >> not quite. there's no doubt the story of news corp. is astonishing, he inherited -- he was at oxford when he died and inherited a small newspaper in adelaide. >> you said it's over in the uk. it's over. >> i don't think he quiets gt q it yet. the influence that the murdoches have had. the way he managed to advance his business empire by heavying up on politics. these are newspapers which use personal stories of the most i'll have kind very often in order to humiliate people in power. in a way, of course, he's right. all journalists should give people in power hell. but the motivation in this case turns out to be slightly different. what he doesn't get, actually people in britain are just sick of it, and that pie in the face, you know, i think in america, why is a poor old man getting a pie in the face? a lot of people in america will feel sorry for him. not in britain. >> i kept watching it today, thinking citizen cane. thank you very much. a pleasure. still ahead tonight, tony blair's press secretary with a behind-the-scenes look at how the murdoch media empire had britain's most prominent politicians battling for its blessings. n e highw. how does it do that? well, to get there, a lot of complicated engineering goes into every one. like variable valve timing and turbocharging, active front grille shutters that close at high speeds, and friction reducing -- oh, man, that is complicated. how about this -- cruze eco offers 42 miles per gallon. cool? ♪ but i did. they said i couldn't fight above my weight class. but i did. they said i couldn't get elected to congress. but i did. ♪ sometimes when we touch ha ha! millions of hits! [ male announcer ] flick, stack, and move between active apps seamlessly. only on the new hp touchpad with webos. handle more than 165 billion letters and packages a year. that's about 34 million pounds of mail every day. ever wonder what this costs you as a taxpayer? millions? tens of millions? hundreds of millions? not a single cent. the united states postal service doesn't run on your tax dollars. it's funded solely by stamps and postage. brought to you by the men and women of the american postal worker's union. male announcer: be kind to your eyes with transitions lenses. transitions adapt to changing light so you see a whole day comfortably and conveniently while protecting your eyes from the sun. ask your eyecare professional which transitions lenses are right for you. female announcer: thanks to the eyeglass guide, it's never been easier to find the right pair of eyeglasses. check out eyeglassguide.com today, brought to you by transitions. it's like hardwiring the market right into my desktop. launch my watchlist -- a popping stock catches my eye. pull up the price chart. see what the analysts say. as i jump back, streaming video news confirms what i thought. pull the trigger -- done. i can even do most of this on my smartphone. really, it's incredible. like nothing i've ever experienced. unleash your investing and trade free for 60 days with e-trade. rupert murdoch was not the only one to appear before parliament today. rebekah brooks, former editor of news of the world testified. she was arrested sunday amid allegations that the tabloid was paying off police. she this wasn't the first time she was questioned. police payoffs have come up time and time again over the years. i'll play her testimony from today in a moment, but let's look back at what she had to say back in 2003. >> can i just ask of whether you ever pay the police? >> excuse me? >> do you ever pay the police for information? >> we have paid the police for information in the past. >> and will you do it in the future? >> it depends on -- >> we operate within the code and within the law. there is a clear public interest, and same holds for private detectives, subterfuge, whatever you want to talk about. >> it's illegal. >> no, no, no. as i said, within the law. >> over the years, brooks has tried to back away from that testimony. but it came up again today when the former editor was asked to clarify exactly what she meant by the statement. here is what she had to say. >> i can say that it -- i have never paid a policeman myself, i have never sanctioned or knowingly sanctioned a payment to a police officer. i was referring if you saw at the time of the home select committee recently, have you various crime from fleet street discussing that payments have been made to police officers. i was referring to that wide held belief, not wide held practice. in fact, in my experience, the information that police gives to newspapers comes free of charge. >> all right. well, that seems like more than just a clarification. more like a contradiction. but believe it or not, the alleged police payoffs may not be the scariest part of this story. these very newspapers, the same one as excused of payoffs and hacking are also seen as vital allies for any politician to win an election and that's led to what some call a poisonous relationship between the elite and the media and the politically powerful. brooks was asked about her close relationship with the prime minister. >> i'm afraid in this -- in this current climate many of the allegations that are putting forward, i'm trying to answer honestly, but there is a lot out there that -- that just isn't true. in particularly around this -- this subject and my relationship with david cameron. the truth is that he is -- that he is a neighbor and a friend, but i deem the relationship to be wholly appropriate, and at no time have i had any conversation with the prime minister that you in the room would disapprove of. >> my next guest says there is nothing appropriate about the relationship between the british media and politicians. and he should know. he was press secretary for former prime minister tony blair. i spoke to him earlier from london. we talked about that so-called poisonous relationship. but first, i asked him how he thought murdoch handled the hearing today. >> i think what people may be a bit surprised by in terms of his whole town before the appearance of the mp" parliament, was the sense of almost being divorced from a lot of the events have been convulsing part of his company, an important part of his company here in the uk and the metropolitan police and the british government and the british political system. and yet even questions you really would have thought he would have answers to, he didn't. one point, for example, at which somebody raised -- run of the mps raised a previous select committee report into activities at his newspaper, and he honestly looked like he was being informed about this for the first time in his life. and i think people will be quite surprised by that, and i thought with james as well, although he was clearly much more on top of the detail, that he too, there are areas where frankly he should have had more to say and more on top of the details. >> do you have any examples of political influence by rupert murdoch or anyone who worked for his companies to political leaders, tony blair or any political leaders? >> a conversation i remember we had with paul keating when he was prime minister of australia, and he used to say that you could do deals, but you never said the deal was being done. and murdoch talked about after the last election, he went around to see david cameron, because david cameron wanted to thank him during his coverage of the election, when rupert murdo murdoch's papers had supported his political party. at the time, we didn't think that important because of the bskyb takeover. there has always been a close relationship between politics and media i hope what emerges an understanding, we have i better, healthier system if the politicians could do their job without fear or favor. when the relationships get too close, that becomes difficult. >> i want to talk more about the relationship between the press, political leaders and police. you were at rebecca brooks' wedding. i want you to tell me about the interactions and who else was at that wedding? >> who else was there? gordon brown was there. prime minister. david cameron, leader of the opposition. giorgos born, chancellor. a lot of main medias were there. and piers morgan, who has gone very quiet on this issue. he was there as well. >> piers morgan has spoken about it, has done a show about it, he has not been quiet on it. >> okay. okay. >> david cameron is speaking to parliament tomorrow. can he survive this? >> i don't have any doubt about that, but i think he would be in a much stronger position if he came out and admitted he made an error of judgment in hiring andy coulson, the editor of news of the world when the known phone hacking was going on, as his communications director, and he's now sort of busy saying i wanted to give the guy a second chance. he's the prime minister, not a probation officer and there are lots of people in the world that would like to get a second chance for things they've done. that is not the point. the point is his judgment, in appointing somebody to that position, when saying this is not going to go away. too many unanswered questions for news international, for the police after the first inquiry, a complete joke, and also now for david cameron himself. >> allister campbell, thank you. >> thank you. >> i want to bring in cnn legal analyst, frank toobin. and former cnn washington bureau chief. guys, we have been talking about this cozy relationship between the press, how powerful they are in britain if they are that cozy, a lot more people here, a lot more guilty parties than the handful that have been arrested or the murdochs, right? >> that's the danger. part of the iceberg you see suggests there may be a whole lot more under the water. imagine if andy coulson was at the white house and we had this going on in this country or something like that. and you have the fbi is filled with people who are refugees from this organization that has been so out there in pursuing the indiscretions of the rich and famous and powerful. we don't really know where this is employigoing to go. and it can undermine journalism and political discourse. a fascinating and amazing thing. >> the week before the iraq war, tony blair spoke to rupert murdoch three times. that's -- that's juice. that is power. you know, rebekah brooks' wedding, both the prime minister and the leader of the opposition, these are powerful people. no comparison between how powerful journalists are there and how they are here. >> like having the president come to your wedding. >> and the leader of the republican party as well. i don't think that would happen here. >> all right. all right. jeffrey, frank, thank you very much. much more to talk about. don't go away more on the murdoch hacking scandal, right after this. [ male announcer ] introducing the ultimate business phone -- t the motorola expert from sprint. its powerful tools help you work faster and smarter so you can get back to playing "angry birds." it lets you access business forms on the go, fire off e-mails with the qwerty keypad, and work securely around the world so you can get back to playing "angry birds." it's the android-powered phone that mixes business with pleasure. so let's get our work done, america, so we can all get back to playing "angry birds." the motorola expert from sprint. trouble hearing on the phone? visit sprintrelay.com. more now on our in-depth report. the hacking and briarry scandal consuming rupert murdoch's media empire. guys, before we get back to our discussion, i want to play you this sound bite of rupert murdoch today, being pressed on claims that his staffers bribed police. take a listen. >> did you or anyone else at your organization investigate this at the time? >> no. can you explain why? >> i didn't know of it. i'm sorry. i -- do you want allow me to sa. this is not an excuse, maybe an explanation of my laxity. this is less than 1% of our company. i employ 53,000 people around the world who are proud and