How much did Rupert Murdoch know about the phone hacking felonies committed by reporters at the News of the World, his suddenly defunct British tabloid–and when did he know it?

Today Michael Wolff, the journalist and author of “The Man Who Owns the News,” a definitive biography of the international media mogul, told The National Memo that the hacking affair is a “structural scandal because I do think it implicates the executives at the highest levels” of News Corporation–including Murdoch himself.

“It’s almost inconceivable that he was not knowledgeable about this [conduct],” said Wolff. “Let’s remember a couple of key things about when this was going on…Certainly nobody was thinking that this was grotesquely illegal. This is tabloid journalism, you’re always stepping on the line here. There’s a culture that respects this [hacking]. Rupert respects this. There would be no reason to conceal this from him. This is the way to get into Rupert’s favor–you bring this to him, you bring gossip to him.”

Wolff said that at this point, he has “no reason” to believe that other Murdoch publications and broadcasting operations are implicated in phone hacking. But he said that the Murdochs are “scared out of their heads” by what is happening to them and their company–and that Murdoch’s son and heir James is “as germane to this discussion as anyone.” It is worth recalling, he noted, that “in the early days of this scandal, when they tried to hush up the people who had been hacked and were threatening to sue and take depositions and break this thing open, James signed very large checks, a million pounds, checks so large that you wouldn’t sign them if you weren’t buying something.”

“He’ll fire Rebekah Brooks first and then Les will go, and they will be taken care of in a way that we will never hear from them. The more immediate problem is firing the 400 people at News of the World, who will talk–suddenly there are 400 sources on the street…The body that you’ve thrown, you have to throw more and more bodies…It further undermines credibility and begins to divide people against each other and you have a functional meltdown.