Dial M for Murdoch: News Corporation and the Corruption of Britain (13 page)

In the light of these facts there is a powerful case that there is (or was) a culture of illegal information access used at NGN [the News International subsidiary which owned the
News of the World
] in order to produce stories for publication. Not only does this mean that NGN is virtually certain to be held liable to Mr Taylor, to have this paraded at a public trial would, I imagine, be extremely damaging to NGN’s public reputation.
³

Silverleaf estimated that if the case went to court a judge could award up to £250,000 damages – off the scale for a privacy case. (At that stage the highest privacy payout had been the £14,600 a court had ordered
Hello!
to pay Michael Douglas and Catherine Zeta-Jones in 2000 for publishing unauthorized photographs of their wedding.) The trouble for News International was that Gordon Taylor was furious that he had been illegally targeted and that Hinton had misled Parliament by suggesting that Clive Goodman was a rogue reporter when, Taylor knew, phone hacking had been more widespread.

On 3 June, News International offered Taylor an extraordinary £350,000 plus his costs, a total of about £550,000, in a Part 36 offer, which meant that Taylor could be left with a bill of hundreds of thousands of pounds even if he won the case in court. News International probably thought its offer, and the risks of not accepting it, were high enough.

On 6 June, Mark Lewis phoned Julian Pike and demanded a jawdropping figure of no less than £1 million damages and £200,000 costs. In his file notes, Pike noted down the rationale of Lewis’s client: ‘I [Taylor] want to carry on because of issues because NGN is wrong then carry on – one way or another this is going to hurt. Want to show NoW stories – NoW doing this – rife in organization – Palt [Parliament] inquiries told this not happening when it was. I want to speak out on this.’

At 2.31 p.m. on Saturday 7 June, Colin Myler informed his chairman James Murdoch in an email, which neither of them could ever have expected to be made public four years later:

James

Update on the Gordon Taylor (Professional Football Association) case.

Unfortunately it is as bad as we feared.

The note from Julian Pike of Farrer’s is extremely telling regarding Taylor’s vindictiveness.

It would be helpful if Tom Crone and I could have five minutes with you on Tuesday.

Colin
⁴

He forwarded Pike’s account to Crone of his conversation with Mark Lewis the night before, 6 June, which referred to Taylor’s belief that hacking had been ‘rife’ at the
News of the World.
Pike wrote
:
‘He [Taylor] wishes to see NGN suffer: one way or another he wants this to hurt NGN. He wants to demonstrate that what happened to him is/was rife throughout the organization.’
⁵

Three minutes after receiving the email chain at 2.34 p.m., Murdoch replied: ‘No worries. I am in during the afternoon. If you want to talk before I’ll be home tonight after seven and most of the day tomorrow.’ He later said he did not ‘review the full e-mail chain at the time or afterwards’.
⁶

Whether Myler and Murdoch discussed the case that weekend is not known. What was clear was that Gordon Taylor and James Murdoch were engaging in a high-stakes game of bluff and counter-bluff. If Taylor insisted on humbling News International in court he risked losing hundreds of thousands of pounds, but Taylor also knew that News International desperately did not want the case to reach court because a public hearing would be hugely embarrasing and sink its ‘rogue reporter’ defence. Other victims of hacking would also realize that they too could sue and the costs of those cases would far outweigh the amount that Taylor was demanding.

Colin Myler, Tom Crone and James Murdoch had a half-hour meeting at Wapping on Tuesday 10 June to discuss the case. What happened would be hotly disputed three years later: Tom Crone said that he had taken in the ‘For Neville’ email and the Silverleaf opinion to show Murdoch – but Murdoch insisted he saw neither. What is indisputable is that James Murdoch agreed to pay Gordon Taylor £425,000 plus his legal fees of £220,000. Taylor had wanted to expose News International’s lies but he was prepared to stay silent if he was paid enough. For him the balance was tipped at £425,000 – almost thirty times the record payout to Michael Douglas and Catherine Zeta-Jones by
Hello!
magazine. How and why such an extraordinarily high settlement came to be made would be one of the greatest controversies in the phone hacking affair.

After the wrangling was over, Tom Crone invited Mark Lewis to a conciliatory lunch at the Fleet Street wine bar El Vino’s in November 2008. The atmosphere was jovial until Crone settled the bill, at which point Lewis announced that he had two other clients whose phones had been hacked by News International. Crone quickly left the bar.

In early 2009, Lewis’s team won further payouts of around £100,000 damages for Jo Armstrong, who had left messages on Gordon Taylor’s phone, and another sports lawyer who had dealt with Taylor, John Hewison, a partner at George Davies, who received £10,000. At the insistence of News International, the settlements remained confidential: there was a risk that if the other four non-royal victims found out, they too would start legal actions.

This was a disappointment to Lewis and Harris, who had been hoping that publicity about the cases would trigger new claims, which would dismantle what they suspected was a cover-up. But because the deals were private they received no coverage in the media. Signing a confidentiality agreement also meant that Gordon Taylor could not relay his experience of phone hacking to members of the Professional Footballers’ Association, several of whom later turned out to have been victims too.

Gordon Taylor had not been vindicated in court, but he had been made rich.

While News International battled Mark Lewis, the Information Commissioner, Richard Thomas, was becoming ever more insistent about the need for stiffer penalties for information misuse. On 13 December 2006 he had made good on his promise in ‘What Price Privacy?’ to publish a six-monthly update on his campaign to secure an option of a prison term for breaches of data protection. In the foreword to his new report, ‘What Price Privacy Now?’, he wrote: ‘Progress has been significant and encouraging.’ Underlining the need for action, he published a league table of Steve Whittamore’s customers, naming for the first time thirty-two national newspapers and women’s magazines which had ordered searches from him – and the number of journalists ordering searches at each publication, showing that, for the five most prolific titles, Whittamore had dealt with fifty-eight journalists at the
Daily Mail
, fifty at the
People
, forty-five at the
Daily Mirror
, thirty-three at the
Mail on Sunday
and twenty-three at the
News of the World
. The table put the number of transactions at 3,757 rather than the 17,489 calculated by Alec Owens. With the support of Lord Falconer’s Department for Constitutional Affairs, the Ministry of Justice had incorporated a custodial sentence for breaches of the Data Protection Act into the Criminal Justice and Immigration Bill which, by October 2007, had received its second reading in Parliament and was heading towards the statute book.

In early 2008, Richard Thomas became aware that several newspaper groups were applying pressure on ministers to scrap the new custodial term, or, as he put it, ‘press organizations were engaged in a powerful campaign against the proposal’.
⁷
On 11 February 2008, the Justice Secretary, Jack Straw, who like most cabinet ministers sought to maintain a warm relationship with the press, informed Thomas that the clause introducing the option of a custodial sentence was likely to be withdrawn. On 5 March, Thomas met Gordon Brown in Downing Street, afterwards emailing colleagues in Wilmslow to report back on a disappointment. While the Prime Minister considered the trade in personal information to be ‘entirely unacceptable’ and had been a victim of it himself in the past, ‘he is concerned to strike the right balance with protecting freedom of expression, especially in relation to legitimate investigative journalism. Now that some time has been bought, he wants a compromise position to be achieved to minimize media concerns.’
⁸

On 3 April, the government dropped Clause 129.
*
Instead, ministers would be given a reserve power to introduce custodial terms at a later, unspecified date. At the time of writing, this power has not been activated. The press had killed off tougher penalties for data theft. In 2011, Richard Thomas told Lord Leveson: ‘Whatever was precisely known about the nature and extent of misconduct across the industry as a whole, it became increasingly clear that the press were able to assert very substantial influence on public policy and the political processes.’

With the Taylor settlement going unreported, it was business as usual at the
News of the World –
especially for Neville Thurlbeck. In March 2008, the paper’s sex specialist was investigating the private life of motor racing executive Max Mosley, the son of the fascist politician Oswald Mosley. After reading physics at Oxford, Mosley had been called to the bar, but his passion had been motor racing and in 1993 he had become president of the world governing body for motorsport in Paris, the Fédération Internationale de l’Automobile. In his own time, he occasionally participated in sado-masochistic orgies. Although not ashamed of this activity, he was aware that many people would disapprove of it and kept it from his wife, family and colleagues. While the world of S&M usually carefully guarded its secrets, a forthcoming participant at one of Mosley’s parties, known as ‘Michelle’, had mentioned his name to her husband, an MI5 agent, who realized Mosley might make a valuable story and contacted the
News of the World
. Thurlbeck offered ‘Michelle’ £25,000 and coached her how to record what he hoped would be Mosley performing a Sieg Heil salute. The orgy, themed on a correctional camp, duly took place at an apartment in Chelsea on Friday 28 March. After it was all over, Mosley and the women had a chat and a cup of tea.

Two days later
,
the
News of the
World
’s front page screamed: ‘F1 Boss in Sick Nazi Orgy with Five Hookers’, with the strapline ‘Son of Hitler-loving fascist in sex shame’. When Mosley showed the paper to his wife she thought her mischievous husband had mocked it up, but it was not a joke. Publication alerted Mosley’s wife, his family, his friends, his colleagues at the FIA and tens of millions of people to his secret sexual behaviour, which he had been lawfully practising in private at private premises. The
Screws
had also posted a ninety-second video clip online, where it was watched 1.4 million times.

Mosley, a genial but flinty character, set about getting his revenge. To ensure he was not being eavesdropped by the
News of the World
, he hired the Quest security consultancy, whose operatives stood watch over a walled garden in Chelsea while he met the arranger of the session, ‘Woman A’, as she was later known in court. Together they worked out he must have been betrayed by ‘Michelle’. MI5 sacked her husband after learning he had sold a story to the newspapers.

As Mosley battled to restore his reputation, the
News of the World
sought to gather more material about him for another story the following Sunday. On Wednesday 2 April, Thurlbeck emailed one of the female participants, threatening that unless she and the other women involved agreed to cooperate in the writing of a follow-up story, the paper would publish unpixilated pictures of them at the orgy and thus identify them. The women, some of whom had professional jobs, were horrified, but they did not give in to the threats.

On Friday 4 April 2008, Mosley sued the
News of the World
for breach of privacy. Tabloids usually bargained that anyone whose sex life had been exposed would not sue because a court case allowed embarrassing details to be reported by all papers and TV stations without fear of legal action. During the three-week trial in the High Court in July, the
News of the
World
’s QC, Mark Warby, subjected Mosley to an extensive cross-examination on his sex life, but he stood firm: he explained that the paper had conflated two scenes, one of an English prison camp and a second where he had happened to speak German, which, he explained, he had done as a favour to one of the women, whose fantasy was to be ordered about in a foreign language. The
News of the World
admitted it had not bothered to translate Mosley’s German remarks to check whether they contained Nazi references. ‘Michelle’ did not turn up to testify for the
NoW
because she was ‘feeling unwell’. (The paper had ‘renegotiated’ her fee down to £12,500 because Mosley had not in the event performed a Sieg Heil.) To the surprise of the
News of the
World
, the other dominatrices gave evidence for Mosley.

Delivering judgment on 24 July 2008, Mr Justice Eady described Thurlbeck’s testimony as ‘erratic and changeable’ and remarked that the
News of the World’
s failure to discipline him for sending an email verging on blackmail was ‘a remarkable state of affairs’. He ruled there had been no Nazi element to the orgy nor any public interest in publishing the story. On Mosley’s use of German, he noted: ‘It contained a certain amount of explicit sexual language about what the claimant [Mosley] and Woman B were planning to do to those women in the submissive role, but nothing specifically Nazi, and certainly nothing to do with concentration camps.’ He awarded Mosley £60,000 damages and his costs. However, the court later taxed down
*
Mosley’s costs, meaning that despite winning the case he lost £30,000.