The Guardian unloaded a big-time scoop today that News Corp. paid more than $1.6 million to settle phone-hacking cases by its journalists in order to prevent further damage of their “repeated involvement in the use of criminal methods” from emerging.

An editor, Clive Goodman, at News Corp. tabloid News of the World was convicted and imprisoned a couple of years ago after he paid a private investigator to hack into the phones of the royals.

This was already a helluva scandal, but The Guardian’s reporting makes clear it may be much bigger than has been understood. For example:

At the time, News International said it knew of no other journalist who was involved in hacking phones and that Goodman had been acting without their knowledge.

However, one senior source at the Metropolitan police told the Guardian that during the Goodman inquiry, officers had found evidence of News Group staff using private investigators who hacked into “thousands” of mobile phones. Another source with direct knowledge of the police findings put the figure at “two or three thousand” mobiles. They suggest that MPs from all three parties and cabinet ministers, including former deputy prime minister John Prescott and former culture secretary Tessa Jowell, were among the targets. News International has always maintained that it has no knowledge of phone hacking by anybody acting on its behalf.

Ruh roh. “Thousands,” huh? Including the deputy prime minister, who we’re told later wasn’t even informed by authorities that his phone had been hacked.

More:

Scotland Yard files included paperwork which revealed that, contrary to News Group’s initial denial, Mulcaire had provided a recording of the messages on Taylor’s phone to a News of the World journalist who had transcribed them and emailed them to a senior reporter; and that a News of the World executive had offered Mulcaire a substantial bonus payment for a story specifically related to the intercepted messages.

Now, we normally wouldn’t write about a tabloid scandal in Britain. But the executive who oversaw News’ UK papers at the time is Les Hinton, who is now CEO of Dow Jones & Company, parent of The Wall Street Journal. The Guardian writes that he has “misled” Parliament and the public, “albeit in good faith.” Basically, the exec ultimately responsible for News of the World at the time of the scandal is now the guy in charge of The Wall Street Journal.

The piece also reports that the authorities didn’t exactly pursue these egregious violations to the fullest. Read between the lines and it’s not hard to see the implication that Murdoch’s outsize clout in the country may have come in handy there.

And Hinton didn’t exactly invite the sunlight in:

Hinton was chairman of the (Press Complaints Commission) code committee, which enforces the code of conduct, but after Goodman was jailed, he persuaded the PCC not to impose further sanctions.

Perhaps most importantly, he secured the resignation of Andy Coulson, then News of the World editor, accepting his decision to step down with: “deep sadness” and calling him a “newspaperman of great talent”. By resigning, Coulson avoided being questioned by the PCC, which began its investigation into phone-tapping shortly afterwards, and News International was spared further embarrassment.

The Guardian’s Roy Greenslade writes this:

So what should happen now? Well, I guess the culture, media and sport select committee might like to ask the NoW’s executives - including former News Int chief Les Hinton - to return to the Commons and explain themselves. Fat chance of that happening.

If the Guardian is right that the phone hacking culture was widespread at News of the World it’s hard to imagine how Hinton could not have known about it, especially after the scandal broke.

One of Murdoch’s former editors, Andrew Neil, who edited the respected Sunday Times of London, calls this “one of the most significant media stories of modern times.”

And Neil smells a cover-up:

“The police learn that the deputy prime minister has had his mobile phone compromised and they don’t tell him. I just don’t understand that.

“The police investigation unearthed evidence of clear wrongdoing and the Crown Prosecution Service does nothing.”

He added: “The court is faced with evidence of conspiracy and systemic illegal actions and agrees to seal the evidence. All that is completely wrong, I just don’t understand it.”

Much more to come on this, you can be sure.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.