In September 2011, a major scandal erupted threatening the media empire created by Australian media baron Rupert Murdoch and his family when it was revealed that their tabloid paper News of the World had hacked into cell phones of the royal family, celebrities, politicians and others to gain information for their papers. When it was revealed that one of the victims was the family of Milly Dowler, a teen-aged girl who had been kidnapped and missing, and later was found dead, there was an international outcry. It was revealed that the Murdoch press had hacked thousands of telephones and computers, had paid private investigators to stalk celebrities, politicians, and members of the royal family, leading to criticisms that the Murdoch media empire had subverted journalistic ethics and bribed police and other authorities for stories. Considering the political power wielded by the Murdoch empire it was especially scandalous that such an unethical lot had assumed so much political power, and in the fall of 2011 there were wide-spread criminal investigations of the Murdoch scandal, and the British parliament brought James and Rupert Murdoch to testify in a televised hearing, along with the editor of the News of the World, creating a global media spectacle. In this paper, I describe the Murdoch scandal, the ethical issues involved, and the threats to democracy.