The Leveson Inquiry into the practices and ethics of the British press reconvened this week to hear a second tranche of evidence detailing illegal activities by Rupert Murdoch’s News International publications, the now defunct Sunday newspaper, News of the World, and its sister daily, the Sun.

The inquiry widened the scope of its hearings by moving on from phone hacking to allegations of bribery of police officers and other public officials.

In her opening statement, Sue Akers, deputy assistant commissioner at the Metropolitan Police Service, stated, “There appears to have been a culture at the Sun of illegal payments and systems created to facilitate those payments”.

Andy Hayman, who led the original police investigation into hacking in 2006, was asked about his hiring as a columnist by the Times, another News International paper, for which he was paid £10,000 a year. The former policeman was asked, “Do you think it creates or runs the risk of creating a perception of a relationship which goes beyond that which is appropriate?”

Last July Hayman was criticised by MPs for having dinners with News International journalists while inquiries were ongoing, with one MP suggesting he appeared to be a “dodgy geezer”.

The inquiry had previously taken evidence from former counter-terror chief John Yates, who resigned in July 2011 amid allegations that he misled parliament when he reported there was evidence of just 10 to 12 cases of phone hacking, rather than the massive numbers the Metropolitan Police were in fact aware of. Yates was put on the spot due to his close relations with former News of the World executive editor Neil Wallis.

Giving evidence via video link from Bahrain, where he is overseeing reform of the police force, Yates was questioned about a compilation of his diary entries involving contact with the media. He denied having an inappropriate relationship with Wallis, with whom he attended football matches. The former policeman said he had been close to Wallis, but told the inquiry they did not have any improper conversations related to work.

He admitted that he may have drunk champagne with News of the World crime reporter Lucy Panton, who is married to a Scotland Yard detective and who was arrested in December on suspicion of making corrupt payments to police officers.

The collaboration between the police and the Murdoch press intensified in line with the deepening crisis of British capitalism. While Murdoch used phone hacking to dig up stories and help the sales of the Sun, the practice was also valuable for the police as a means of keeping tabs on the population at large.

So entrenched was collusion between police and Murdoch’s publications that when the phone hacking allegations first emerged in 2006, the Met held meetings with Rebekah Brooks, then editor of the Sun, before taking the decision to do nothing. This was only one of many meetings between Brooks, arrested last July, and police officials.

Another leading News International employee, Andy Coulson, former editor of the News of the World, was taken on by Conservative Party leader David Cameron as his chief of staff in 2007, before the latter became prime minister in 2010. Cameron then appointed Coulson as Director of Communications for the government. Coulson was forced to resign in January 2011 as a result of the growing hacking scandal. Otherwise, he would still be in charge of organising the lies and cover-ups for a government in a spiralling crisis over the National Health Service, public service cuts, wars on three fronts, growing youth unemployment and a plethora of other social ills.

Although the Leveson Inquiry has been forced to expose some aspects of the News International’s relationship with the state apparatus and the political establishment, its main aim is to obscure the truth.

Murdoch is well aware that no one wants to deliver a death blow to his corporate interests in the UK. In a show of bravado on the eve of the inquiry, therefore, he launched the first edition of the Sun on Sunday amid great fanfare and celebration.

By re-employing his old journalistic team, alongside establishment figures such as the Archbishop of York, as columnists on his new enterprise, Murdoch hopes he can create the illusion of having cleaned up the News International’s Augean stables while keeping his employees firmly on board.

When the phone hacking by his reporters became a major scandal, Murdoch reacted by making out of court settlements with a list of high-profile dignitaries and celebrities. He then abruptly closed down the News of the World, retreating to News International’s parent company in New York, News Corp, to work on strategy with his cohorts.

His return to London and the launching of the Sun on Sunday means they have decided to go on the offensive. This is underlined by the announcement that his son, James, who is heavily implicated in the scandal, is to leave News International and take up a leading position in News Corp in New York. By setting the Sun on Sunday’s cover price at just 50 pence, the media baron has also ignited a price war aimed at forcing other newspapers on the back-foot.

If a worker were accused of far lesser crimes than those attributed to Murdoch’s empire, his or her feet wouldn’t have touched the ground on the way to prison. But if you are the chief of a mighty global conglomerate, you can essentially do whatever you like. It doesn’t matter if your organisation hacks thousands of phones or bribes the police and other public officials. Being embedded in the state means you know where all the bodies are buried and you can silence or otherwise come to terms with accusers and opponents.

A significant element in the ability of Murdoch and his cronies to remain almost unscathed is the complicity of the Labour Party. The Blair Labour government was just as much in thrall to the multi-billionaire as the present coalition.

Lord Prescott, former Labour MP and deputy prime minister, received a £40,000 settlement over the hacking of his phone by News International. He was asked by the inquiry about the relationship between the press and News International. He replied, “I always thought it was wrong that politicians at the highest level were too close to Murdoch, there is always a price”.

But he then added; “It’s not exactly corruption and I’m not accusing them of that … I thought it gave a corrupting influence that they had too much influence and power”.

If phone hacking on an “industrial scale” and bribery that helps subvert the course of justice are “not exactly corruption”, then what is?

Prescott owes his position to the working class that elected him to office and kept the Labour Party and trade unions going for years. But Baron Prescott, now in the House of Lords and seeking election as Humberside Police Commissioner on a £70,000 salary, does not believe he has any responsibility to expose what he knows of the collusion between the state and Murdoch.