Scandal Grows at News Corp. Former Senior Executive Is Arrested in Hacking Probe; Top Police Official Resigns

By CASSELL BRYAN-LOW, SARA SCHAEFER MUñOZ and ALISTAIR MACDONALD

LONDON—The head of Scotland Yard stepped down on Sunday and Rebekah Brooks—a close confidante of News Corp.'s top executive, Rupert Murdoch—was arrested as a convulsive phone-hacking scandal raced into the loftiest ranks of Britain's business and law-enforcement worlds.

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Rebekah Brooks, right, with former boss, Rupert Murdoch, last week.

The surprise resignation of Metropolitan Police Commissioner Paul Stephenson came amid a spreading onslaught of allegations that some members of his force were corrupt and had forged too-close ties with the discredited newspaper at the heart of the scandal, News Corp.'s now-defunct News of the World.
Ms. Brooks is at the center of a web of political and media elite that has come under intense scrutiny as details have spilled out about the lengths to which British newspapers have gone to get scoops and the cozy ties that may have protected their actions.
She was arrested Sunday in connection with the central allegations in the saga: the illegal intercepting of phone voice mails and the alleged bribery of police officials by News of the World, a paper she once edited. More recently she headed News Corp.'s U.K. newspaper group, until resigning on Friday. Her friendship with U.K. Prime Minister David Cameron has become emblematic of the close ties between politicians and the press.

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News Corp head Rupert Murdoch apologizes to family of Millie Dowler as hacking scandal claims more top executives. Video courtesy of Reuters.

A spokesman for Ms. Brooks said "she is assisting police."
Police released Ms. Brooks around midnight Sunday, local time. No charges were filed.
The former police commissioner, Sir Paul, said: "I may wish we had done some things differently, but I will not lose sleep over my personal integrity."
Sunday's events come just days before British police officials and current News Corp. executives, as well as Ms. Brooks, are expected to face a grilling by politicians at parliamentary-committee hearings over their handling of the scandal. Ms. Brooks is scheduled to appear at one of the hearings on Tuesday alongside Mr. Murdoch and his son, James Murdoch, News Corp.'s deputy chief operating officer.
Following Ms. Brooks's arrest Sunday, the chairman of Parliament's Culture, Media and Sport committee was seeking legal advice as to whether Ms. Brooks could still attend and, if so, what kind of questions she would be able to answer, according to a person familiar with the matter.

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The trio will face questions about the hacking and whether News Corp. officials previously misled Parliament.
Executives from the firm's U.K. newspaper business, News International, as recently as 2009 told the committee that the phone hacking was limited to just one reporter at the News of the World.
The committee also has previously asked Ms. Brooks about payments to police. In 2003, when she was the editor of another News Corp. tabloid, the Sun, she told the committee: "We have paid the police for information in the past."
At the time, she didn't elaborate on that statement. In April, Ms. Brooks said in a letter to lawmakers that her intention was to comment on a "widely held belief" rather than suggest she knew of specific cases of payments to police.
James Murdoch earlier this month said that News of the World and News International had failed to "get to the bottom of repeated wrongdoing that occurred" and, as a result, "wrongly maintained that these issues were confined to one reporter." The company now had handed police evidence that he believed "will prove that this is untrue," he said.
News Corp. owns Dow Jones & Co. and The Wall Street Journal.

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Commissioner of the Metropolitan Police, Sir Paul Stephenson, in April 2009.

For Scotland Yard, the resignation of Sir Paul from his senior position pushes the scandal further into difficult terrain. The Metropolitan Police Service (Scotland Yard's formal name) has come under fire from politicians for failing to investigate the phone-hacking issue thoroughly in 2006 and, more recently, for allegedly taking bribes from the News of the World. In recent weeks, Scotland Yard opened an investigation into the possibility that police officers accepted bribes from journalists in connection with the News of the World phone-hacking scandal.
The police have also come under fire for hiring a former News Corp. tabloid editor to advise the police on public relations. That editor, Neil Wallis, last week was arrested in connection with the criminal investigation.
A lawyer for Mr. Wallis declined to comment on the allegations his client faces. Mr. Wallis hasn't been charged.
Sir Paul said he first met Mr. Wallis in 2006, when he still worked at the News of the World, to discuss policing, as he did with other journalists. In 2009, after Mr. Wallis left the paper, Scotland Yard entered into a contractual arrangement with Mr. Wallis that ended in 2010. "I played no role in the letting or management of that contract," Sir Paul said on Sunday.