News: Leveson Inquiry, Week 17 – The Murdochs … and other proprietors – Natalie Peck

29 04 2012

This week the Leveson Inquiry resumed after a two week break, with a long-awaited appearance by News Corporation chairman Rupert Murdoch and his son James. Lord Justice Leveson heard from the Barclay and Lebedev families in a week of evidence bridging modules two and three of the inquiry.

The Monday morning hearing began with evidence from John Ryley, head of news at Sky News, who was called to give evidence on authorising one of his reporters to break the law and hack into the email account of “canoe man”.

He said journalist Gerard Tubb had accessed an alias account owned by John Darwin – who reappeared five years after faking his own death in a canoe accident – after sources close to the prosecution said email contact between Darwin and his wife would not be examined in the court case against them. He was briefed weeks after Tubb was given confirmation from then managing editor Simon Cole.

Ryley apologised to the inquiry after David Barr, junior inquiry counsel, said a statement sent from Sky News to the inquiry last year failed to mention the hacking incidents. He said the letter had been drafted with phone hacking in mind and had mistakenly not included email hacking, which was known to senior management at the time of writing.

Emails between the John and Anne Darwin, later passed from Sky News to the police, showed Anne Darwin had been aware of her husband’s activities, resulting in her changing her defence in court. Police statements following the conviction referred to the evidence as “pivotal” in the case. Tubb accessed the emails on June 13 2008 after gaining authorisation from Cole and accessed further emails on June 18 and 19.  Ryley said:

“Sources close to the prosecution were clearly suggesting it might be worth looking at the emails… sources close to the prosecution made clear that they weren’t going to be following up on the emails.”

He denied Tubb received encouragement from the police to access the account or had started investigating the case rather than reporting it. Ryley was first briefed on the case a month after the hacking took place, in July 2008. The email account was accessed for a second time in an unsuccessful attempt to track the money received by the Darwins. Lord Justice Leveson said:

“What you were doing wasn’t merely invading somebody’s privacy, it was breach the criminal law… where does the Ofcom broadcasting code give any authority to a break of the criminal law?”

 Ryley later told the judge:

“I think it’s highly unlikely in the future that Sky will consider breaking the law… I am pretty much ruling it out. Journalism is at times a tough business and we need to at times shed light into wrongdoing, so there might be an occasion but I think it would be very, very rare”.

He was also asked about the hacking of an account owned by Lianne Smith, the wife of convicted paedophile Martin Smith, in 2010. The couple and their young daughter fled to Spain in 2007. After Martin Smith was extradited back to the UK in 2010, Lianne Smith killed her daughter and infant son, fearing they would be taken by social services. Ryley said the email account had been accessed after Tubb, working on the case, suspected Lianne Smith may have had contact with local authority employees while living in Spain, believing the children could have been saved if the police were informed of their whereabouts. He added: “The local authority, we believed, could have done more to find out the whereabouts of where the Smith family had run off to.”

He admitted the search had instead shown correspondence between Lianne Smith and several media outlets following her partner’s arrest, and said according to Tubb, the local authority had stonewalled several requests from Sky News journalists. Sky News released a statement earlier this month admitting to email hacking but standing by the actions as “editorially justified and in the public interest”. Broadcasting regulator Ofcom has announced an investigation into the incidents.

The afternoon hearing was taken up with proprietors. The inquiry heard the chairman of the Telegraph Media Group exchanged text messages with David Cameron. Junior inquiry counsel David Barr read out a series of messages from Aidan Barclay to the Prime Minister, including a suggestion that Cameron contact editor Tony Gallagher daily during the 2010 election, and Barclay’s views on economic policy. Barclay told the inquiry:

“There hasn’t been a lot of them over time. I like to think it’s more useful because it goes directly to the recipient rather than getting lost in the system… could I have equally sent an email? Probably.”

The chairman, son of Sir David Barclay who owns TMG with his brother Sir Frederick Barclay, described his relationship with the Prime Minister as “friendly and cordial”. He admitted discussing Rupert Murdoch’s proposed BSkyB takeover bid with Cameron at an informal dinner but said after giving his views, the conversation moved on.

Barr referred to a handwritten note from TMG chief executive Murdoch MacLennan, sent before the general election, telling Cameron “we desperately want there to be a Conservative government and you as Prime Minister”. Barclay agreed his newspapers were conservative “with a small c and a big C” as suggested by Barr during questioning.  He said he often sent articles on economics to senior politicians, including Gordon Brown during his time at Number 10, as they do not always have time to read newspapers. Asked about regulation, he said:

“Layer on top of layer it does have a cumulative effect and I am concerned that we do not go too far with the regulatory proposals…The media industry employs about 250,000 people in this country and those who transgress are a minority.”

Evgeny Lebedev, who manages UK media operations of Lebedev Holdings Ltd, owner of the Evening Standard, the Independent and Independent on Sunday, for media tycoon father Alexander Lebedev, said he championed “world class journalism” and revealed he has spent £75 million funding the Standard and the Independent titles.  He urged Lord Justice Leveson to protect freedom of the press when considering possibilities for future regulation. He said:

“If there is a creation of a system where everything is so regulated that you have to think twice about everything you do in life… it creates that tyranny of consensus I was talking about.”

He later added: “It’s a really expensive element of British democracy that needs to be protected at any cost.”  Lebedev said he would not oppose a statutory backstop for regulation if it ensured all newspaper groups were included in a regulatory system.

He said he often offers stories he has written to his newspapers, but puts editors under no obligation to publish them, and hinted to the inquiry that while his interest in politics was the result of “curiosity”, other proprietors attempt to exert influence over politicians. He added:

“I enjoy finding out what is happening in each different party, discovering new political talent and discussing the latest developments in Westminster and beyond… I think it’s unfeasible to erect Chinese Walls between proprietors and newspapers.”

The Tuesday morning and afternoon hearings focused on evidence given by James Murdoch. It was revealed he had discussed the BSkyB takeover bid with David Cameron at a private dinner hosted by Rebekah Brooks. The pair attended the dinner on December 23, 2010, just two days after Business Secretary Vince Cable was removed as minister in charge of the deal. Downing Street has previously refused to clarify whether the deal was spoken about during the occasion.  Cable was stripped of the powers after journalists from the Daily Telegraph secretly recorded him referring to a “war on Murdoch”. Jeremy Hunt MP, Secretary of State for Culture, Media and Sport, was then given responsibility for approving the takeover.

Murdoch told the inquiry the discussion had been a “tiny conversation” before the main dinner, where he expressed concerns that the bid should be handled appropriately, and accused Cable of an “acute bias” against News Corp.  He said:

“I imagine I expressed the hope that things would be dealt with in way that was appropriate and judicial. It was a tiny side conversation, it was not a discussion.”

 The inquiry was shown a series of emails in 2010 between Murdoch, head of press Frederic Michel and others at News Corp, on the government’s approach to the takeover. They indicated Michel was in regular contact with Hunt, referred to by inquiry counsel Robert Jay QC as a “cheerleader” for Murdoch’s empire. The messages described Cable’s concern over phone hacking at the News of the World and pressure from the Liberal Democrats and Labour over Rupert Murdoch’s political agenda.

Murdoch denied an inappropriate relationship between Hunt and News Corp, saying the minister had acted appropriately during the bid.  He also rebutted claims the Sun switched support to the Conservatives prior to the 2010 general election to garner political power. He added:

“At every turn Mr Hunt took the advice of the independent regulators, Ofcom and the OFT in particular, at every single decision point… the question of support of an individual newspaper for politicians one way or another is not something that I would ever link to a commercial transaction like this, nor would I expect that political support one way or another ever translate into a minster behaving in an inappropriate way, ever. I simply wouldn’t do business that way.”

Jay QC put it to Murdoch that his lack of knowledge on the phone hacking scandal at the News of the World was the result of a cover-up or lack of governance at the paper, which he denied. Repeating evidence given to the Culture, Media and Sport Committee, Murdoch said he had been ill informed by then editor Colin Myler and legal affairs manager Tom Crone. He maintained he was not shown the “For Neville” email, a document potentially implicating other NoW journalists in phone hacking. He added:

“By the time I arrived the whole issue of 2006 and 2007 was packed away, if you will and the company defence that it was a rogue reporter, that it had been investigated and the police had closed the case was already and had been firmly in place for a while. “

Jay QC asked why Murdoch had not questioned a phone hacking settlement of £350,000 offered to PFA chief executive Gordon Taylor by Crone, when barrister Michael Silverleaf QC had advised the company the amount should be no more than £250,000. Murdoch said he was unaware of the details of the case and the suggestion Taylor had been paid “hush money” to prevent accusations of widespread hacking being made.

James Murdoch said claims he had stormed into the Independent’s officers with Rebekah Brooks in 2010 were exaggerated, but admitted he confronted editor Simon Kelner after a series of billboards saying “Rupert Murdoch won’t decide this election – you will” were erected around the country before the election. He accused the paper of personalising an inappropriate agenda against his father. He added:

“I went into the front door, they didn’t really have a desk, or a lock for that matter. So you’re automatically in the middle of the newsroom, which I wasn’t intending to do. I didn’t storm in anywhere. I told him of my concerns and I told him – whether or not I used colourful language, I wouldn’t dispute. But it wasn’t in the open in the newsroom and I was particularly upset because Mr Kelner had been availing himself to the hospitality of my family for years and I thought it was beyond the pale and not a decent way to go about his business.”

The inquiry were shown a series of emails between Hunt’s office and News Corp, including sensitive information about the progress of News Corp’s takeover bid for BSkyB and private feedback passed from the politician to James Murdoch.

They included details from a meeting between Hunt and David Cameron in July 2011 on proposed two phone hacking inquiries, which later merged to become the Leveson Inquiry, sent to Murdoch by Michel.  He wrote:

“[Bid] was not discussed at the No 10 meeting that Hunt had with the PM – discussing the two enquiries [“police“ one led by a judge; and “media practices” one not with a judge and led by DCMS].”

A series of messages between Michel, Murdoch and other News Corp staff were published on the inquiry’s website after a selection were read out in court by inquiry counsel. The emails included information sent from Hunt’s advisors, Adam Smith and John Zeff, often referred to collectively as ‘JH’, to Michel. A list of text message exchanges between Michel, Smith and others was published alongside the email archive.

A previous email from November 2011 informed Murdoch that Hunt had received “strong legal advice” not to meet with News Corp as the takeover process was treated as a judicial decision.  Michel added on the email:

“My advice would be not to meet him today as it would be counter productive for everyone, but you could have a chat with him on his mobile which is completely fine, and I will liaise with his team privately as well.”

Murdoch replied to his email: “You must be fucking joking, fine, I will text him and find a time.”

He told the inquiry he was displeased with the position, and did not believe having a formal meeting with the minister was inappropriate. Jay QC suggested Hunt may have shown News Corp preferential treatment to garner favourable coverage from the Sun. He added: “It was clear that you were receiving information along the lines that the UK government as a whole would be supportive of News Corp.”

James Murdoch denied the claim, stating it was not the way he did business within the company. An email from January 2011 showed Michel claiming to have obtained information from Hunt’s office. He told Murdoch: “Managed to so get some infos on the plans for tomorrow [although absolutely illegal.” Murdoch said the message was a joke. Hunt’s advisors apparently told Michel that Hunt shared the same objectives as News Corp but wanted Murdoch to understand he needed to “build some political cover on the process”.

In early emails from 2010, Michel describes Hunt as “amazed” by opposition to the bid from Ofcom, and says the minister he was very happy for me to his point of contact with Murdoch, to avoid giving opposition an opportunity to “attack the fairness of the process”.

Jay QC suggested the process had continued in Scotland, when the Sun’s coverage of Alex Salmond became supportive. Michel told Murdoch he had met with Salmond’s advisors, who said the minister would call Hunt on News Corp’s behalf. Murdoch denied the paper’s reporting had changed to gain political support. James Murdoch defended the contact, telling the inquiry:

“This is a large scale transaction that was in the hands, with the respect to the decision-making process to the Department of Culture, Media, and Sport… it was entirely reasonable to try to communicate with the relevant police-makers about the merits of what you were proposing.”

On Hunt, he added: “I think throughout the process what we saw is that he consulted widely, he took advice from all sides, he followed the advice, at every decision point, of the OFT and Ofcom, and I can’t say that he didn’t.”

Wednesday and Thursday at the inquiry were taken up with evidence from media tycoon Rupert Murdoch. During the morning and shortened afternoon hearing, he accused Gordon Brown of making misleading statements over the publication of his son’s medical details in the Sun, saying the former prime minister had not been in a balanced state of mind when the Sun withdrew support of the Labour Party in 2009. He added:

“When the hacking scandal broke, [Brown] made a totally outrageous statement, which he had to know was wrong, when he called us a ‘criminal organisation’, because he said that we had hacked into his personal medical records when he knew very well how the Sun had found out about his son, the condition of his son, which was very sad.”

Murdoch told the inquiry Rebekah Brooks, then chief executive of News International, had pulled the story, sent in by father of another patient at hospital where Brown’s son was being treated, from the newsdesk and personally contacted Sarah Brown to ask how the story should be handled. He said Brown’s wife had later written to Brooks thanking her after the story was published, and the letter was now with police investigating alleged criminality at his company.

He contradicted evidence given to the inquiry by former Sun editor Kelvin MacKenzie, who said Brown had “roared” down the phone at Murdoch for 20 minutes after the paper switched allegiance to the Conservatives. He added:

“I must stress, no voices were raised. He said ‘well, your company has declared war on my government. And we have no alternative but to make war on your company’ and I said, ‘I’m sorry about that Gordon, thank you for calling’, end of subject.”

He told Jay QC: “If he wanted my opinion he only had to read editorials in the Sun.”

Following Tuesday’s revelations News Corp had an alleged backdoor channel to the office of culture secretary Jeremy Hunt, the proprietor said his BSkyB bid had coincidentally come a month after the 2010 general election.  This contradicted evidence from his son James, who told the inquiry the bid was held back until after the election to prevent it becoming “a political football”.

Rupert Murdoch said his main concern at the time was independent directors driving the price of the remaining shares to “something unrealistic”, adding the idea he used the influence of the Sun or supposed political power to sway decisions was a “complete myth”.

The proprietor was questioned over his relationships with other senior politicians, including the Sun’s backing of Tony Blair before the 1997 general election. Murdoch said he had never asked Blair for anything during his time as Prime Minister and denied a link between the Sun’s endorsement of Labour and articles written by Blair for the Sun and the Times. He added: “I think we all like to back a winning racehorse, you like to be on the winning side, but no, that was not a motivation.”

Murdoch denied being the one of the “main powers behind Thatcher’s throne” and said his desire to crush the trade unions in Wapping played no part in the success of the acquisition. He admitted berating MacKenzie for the infamous Sun headline “It was the Sun wot won it” following Conservative success at the 1992 elections, calling it “tasteless and wrong”. He added:

“I don’t remember it. I thought it was a little overenthusiastic but my son, who is here today and was apparently beside me, said I did indeed give him a hell of a bollocking.”

Murdoch said he regretted the Times decision not to buy a disc containing information on MPs expenses and said he was “jealous” of the story, eventually run in the Daily Telegraph.

He said he was disappointed with Times editor James Harding for publishing the NightJack story, exposing anonymous blogger Richard Horton, and appalled at lawyer Alastair Brett for misleading the High Court as to how his identity was uncovered by journalist Patrick Foster. He added: “I am appalled that the lawyer misled the court and disappointed that the Editor published the story.”  Murdoch’s witness statement revealed News International’s management and standards committee is handing over information to the United States government’s Department of Justice, who are investigating alleged phone hacking.

On Thursday, consisting of an elongated morning hearing, the proprietor admitted to a cover-up of phone hacking at the News of the World. He said he was “misinformed and shielded” from the extent of hacking at the paper, owned by News International, and blamed other newspapers for turning the hacking of Milly Dowler’s phone into a national scandal.

Murdoch admitted his decision to close the News of the World was made because he panicked, but blamed other newspapers for turning the hacking of Milly Dowler’s phone into a “national scandal”. He said he was kept in the dark over the extent of phone hacking at his newspaper. He added:

“I do blame one or two people for that, who perhaps I shouldn’t name, because for all I know they may be arrested yet, but there is no question in my mind that maybe even the editor, but certainly beyond that, someone took charge of a cover-up, which we were victim to.”

The proprietor referred to “one or two very strong characters”, friends with journalists at the paper, one an unnamed lawyer described as “a drinking pal” of reporters at the paper who “forbade people to go and report to Mrs Brooks or James [Murdoch]”. He later contradicted this, telling the inquiry:

“There was no attempt, by me or several levels below me, to cover it up. We set up inquiry after inquiry, we employed legal firm after legal firm, perhaps we relied too much on the conclusions of the police.”

He was asked by Jay QC whether he had questioned the paper’s decision to offer Gordon Taylor, chief executive of the Professional Footballers’ Association, £100,000 after his phone was hacked. He said his son had been advised by then editor Colin Myler and head of legal Tom Crone to offer a larger sum, despite barrister Michael Silverleaf QC, representing News International in all phone hacking claims, suggested a smaller amount.  Murdoch said the decision had been taken to avoid “the risk of an appeal and triple damages, and God knows what else” and not because of a cover up.  He said he should have personally questioned former royal editor Clive Goodman, arrested for phone hacking along with private investigator Glenn Mulcaire in 2006. He said:

“He’d been an employee for a long time, and cross-examined him myself and made up my mind… if I had come to the conclusion that he was telling the truth [about widespread hacking] I’d have torn the place apart and we wouldn’t be here today.”

Murdoch called the phone hacking scandal a “serious blot” on his reputation and admitted neglecting the paper “probably throughout all the time that I’ve owned it”, saying he regretted not closing the paper sooner and replacing it with a Sunday Sun. He added:

“I have to admit that some newspapers are closer to my heart than others, but I also have to say that I failed.”

Lord Justice Leveson questioned why Murdoch had not paid greater attention to the allegations. He said:

“This was the very core of your being, so that’s why I think you’re being asked, were you not really intensely concerned to know what was going on, quite apart from everything else, because this was you?”

Asked about his comments to journalists in 2011 that Rebekah Brooks was his main priority after the scandal broke, Murdoch said he had been “seeking to keep her self-confidence”. He added:

“If you’ve got twenty journalists and paparazzi and microphones in your mouth, then you are under duress…I think it’s part of the game, [to] harass people. I mean I was being harassed, I was trying to walk all of ten yards across the street.”

Murdoch then denied Jeremy Hunt was “on the side” of News Corp over the company’s failed BSkyB takeover bid, saying he did not believe he had met the Culture Secretary and had never discussed the bid with him. Murdoch said he and his son were “shocked” over comments made by Vince Cable. He added: 

“[James] told me when Mr Cameron removed Mr Cable’s responsibility and put in Mr Hunt, but I don’t believe he commented on it… We just thought we’d probably get a fairer go from anyone other than Dr Cable. I never saw anything wrong in what we were doing. It was as commonplace transaction. A large one but a commonplace one. …  It’s only much more recently that I’ve learned of the extent of Mr Michel’s – you can call it lobbying, certainly his seeking of information and the progress of things… I didn’t see anything wrong with his activities. Was I surprised that it had gone on so long and there were so many emails? Yes sir. I don’t want to sat anything against Mr Michel but I think there could have been a little bit of exaggeration there.”

The proprietor admitted he had only “tasted” the emails and had not read the entire collection, and said at the time he had been more concerned with the hacking scandal, leaving the deal in the hands of his son. He admitted being surprised with the success of a competitors’ alliance, including the Guardian and the Telegraph, opposing the bid, and implied News Corp would have been successful were it not for the hacking scandal breaking in 2011.

Rupert Murdoch then endorsed a conscience clause, proposed by the National Union of Journalists, when answering questions submitted by the union, admitting he had never heard of the idea before. The clause could be inserted into employment contracts, allowing staff to speak out on bullying and unethical newsgathering. He asked John Hendy QC, representing the NUJ, why an anonymous journalist complaining of bullying at the News of the World had not simply resigned.  Lord Justice Leveson replied: “I think the problem with that might be that she needs a job.”

To the surprise of the judge, Murdoch said he was not aware of the settlement between the News of the World and former sports reporter Matt Driscoll, who was awarded £792,736 in 2009 after being unfairly dismissed by the paper. Driscoll claimed he had experienced a culture of bullying led by editor Andy Coulson.

Murdoch said he did not believe there had been any unethical treatment of journalists and photographers at News International and said staff at the News of the World seemed to be a “happy bunch” whenever he had visited the newsroom.

The proprietor was questioned by Hendy QC over evidence submitted to the Inquiry by anonymous journalists, presented by the union’s general secretary Michelle Stanistreet in February.  Murdoch said staff can take complaints to News International’s internal staff association, funded by the company. He disagreed with Hendy, who suggested allowing the NUJ to represent NI journalists would be one step in eliminating bad practice.

The inquiry will resume the week commencing 7 May  2012.

Natalie Peck, is the web reporter for Hacked Off and a PhD researcher examining privacy law and public figures. She is @nataliepeck on Twitter.

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3 responses

1 05 2012
Law and Media Round Up – 30 April 2012 « Inforrm's Blog

[...] It was the week the newspaper proprietors came to Leveson. Predictably, Murdochs Snr and Jnr dominated the media coverage, but John Ryley (head of news, Sky News) Aidan Barclay (Telegraph Media Group) and Evgeny Lebedev (Lebedev Holdings Ltd) also supplied plenty of fresh material for the Leveson correspondents. Natalie Peck reported for Inforrm here. [...]

3 08 2012
Inforrm Summer Break « Inforrm's Blog

[...] 5, Week 6, Week 7, Week 8, Week 9, Week 10, Week 11, Week 12, Week 13, Week 14, Week 15, Week 16, Week 17, Week 18, Week 19, Week 20, Week 21, Week 22, Week 23, Weeks 24 and 25) and Week 26. Part One of [...]

31 12 2012
Media and Law Review of the Year, 2012: Part 1, January to April – Judith Townend « Inforrm's Blog

[...] a two week break, there was a long-awaited appearance by News Corporation chairman Rupert Murdoch and his son James. Lord Justice Leveson heard from the [...]

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