Dial M for Murdoch: News Corporation and the Corruption of Britain (36 page)

In the US, Rupert Murdoch moved to bolster his personal position, raising News Corp’s share buyback programme from $1.8 billion to $5 billion dollars to support its share price.

On Wednesday 13 July, the Commons was braced for an historic day. The Liberal Democrats let it be known that they would vote for the motion against the BSkyB bid, tipping the voting arithmetic away from Murdoch. The Conservatives then announced they would vote with Labour and the Liberal Democrats. Extraordinarily, all three parties were planning to thwart the man who had frightened politicians for decades.

At Prime Minister’s Questions, David Cameron acknowledged the scale of the crisis, telling MPs: ‘There is a firestorm engulfing parts of our media, parts of our police and even our political system’s ability to respond.’ He called for ‘root and branch change’ at News International, adding crucially: ‘It has now become increasingly clear that while everybody, to start with, wanted in some way to separate what was happening at News International and what is happening at BSkyB, that is simply not possible. What has happened at this company is disgraceful. It has got to be addressed at every level and they should stop thinking about mergers when they have to sort out the mess they have created.’

He had done a complete U-turn on Brooks, and now on BSkyB. He was pressed by Ed Miliband to explain what had happened to the warnings passed to his chief of staff about Andy Coulson. Cameron responded: ‘All these questions relate to the fact that I hired a tabloid editor. I did so on the basis of assurances he gave me that he did not know about phone hacking and was not involved in criminality. He gave those self-same assurances to the police and to a select committee and under oath to a court of law.’ Cameron – who only five days earlier had described Andy Coulson as a friend – added: ‘If it turns out he lied, then it will not just be that he shouldn’t have been in government, it will be that he should be prosecuted … . But I can say that I did not receive that information.’ The Prime Minister was, in effect, blaming his staff for not passing on the
Guardian’
s warnings about Coulson’s employment of Jonathan Rees.

Faced with the prospect of all three main parties voting, albeit symbolically, against the takeover, News Corp finally withdrew it. Rupert Murdoch left the announcement to his deputy, Chase Carey, who said: ‘We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies, but it has become clear that it is too difficult to progress in this climate.’ The aborted takeover had cost £40 million in fees alone. Quoting News Corp sources, Sky’s business editor Mark Kleinman reported that on the conclusion of the phone hacking inquiries, the company could revive the bid. Under cover of the announcement, News International slipped out the news that Tom Crone, the
News of the World’
s director of legal affairs who in July 2009 had told the Culture Committee there was ‘no evidence’ that more than one journalist had used Glenn Mulcaire, had left the company.

The Commons debate still went ahead. Gordon Brown made a spectacularly angry contribution. Two days earlier, on Monday morning, the former Prime Minister had recorded an interview with the BBC’s Glenn Campbell in which he had complained about two News International stories. In 2000
The Sunday Times
had used subterfuge to obtain an ‘unfounded’ story that he had bought a London flat from the administrators of a collapsed firm of the disgraced newspaper proprietor Robert Maxwell, for a ‘knock-down price’. Criminals acting for
The Sunday Times
, Brown said, had successfully blagged details of his bank account from Abbey National, which had written to him to explain that it had been the target of ‘a well-orchestrated campaign of deception’. Brown added that he and his wife Sarah had been ‘in tears’ in 2006 when he heard the
Sun
was going to publish a story revealing his son Fraser’s cystic fibrosis, which was known only to a few people. ‘I have not made any allegations about how it appeared. But the fact is, it did appear,’ he said.

Murdoch’s newspapers acted to rebut Brown’s complaint. The day before the debate, Tuesday 12 July,
The Sunday Times
issued a statement that did not deny the subterfuge, but added: ‘We believe no law was broken in the process of this investigation, and contrary to Mr Brown’s assertion, no criminal was used and the story was published giving all sides a fair hearing.’
¹¹
On Wednesday – the day of the BSkyB debate – the
Sun
ran the front page ‘Brown Wrong’ adding the strapline: ‘We didn’t probe son’s medical records. Source was dad of cystic fibrosis child.’

Tom Watson had visited Brown in his room shortly before the Commons debate, and encountered him in a fierce mood. Rising to speak at 5.26 p.m., Brown vented a simmering rage that he had held inside himself for months. The phone hacking scandal involved many other forms of illicit and illegal behaviour, he said, including the sending of Trojan viruses to hack computers.

It was not the misconduct of a few rogues or a few freelancers, but lawbreaking often on an industrial scale, at its worst dependent on links with the British criminal underworld.

Others have said that in its behaviour towards those without a voice of their own, News International descended from the gutter to the sewers. The tragedy is that it let the rats out of the sewers.

His administration, he said, had angered News Corp by objecting to its demands to cut the BBC’s budget and by ordering it to sell a 16.8 per cent stake in ITV accumulated in order to frustrate a takeover by Richard Branson’s Virgin Media (Operation Weeting had informed Branson in 2011 that his phone might have been hacked by the
News of the World
). By a ‘strange coincidence’ News International and the Conservative Party had come to share almost exactly the same media policy, Brown said:

It was so close that it was often expressed in almost exactly the same words. On the future of the licence fee; on BBC online; on the right of the public to see free of charge the maximum possible number of national sporting events; on the future of the BBC’s commercial arm; and on the integrity of Ofcom, we stood up for what we believed to be the public interest, but that was made difficult when the opposition invariably reclassified the public interest as the News International interest.

Brown said that James Murdoch’s 2009 MacTaggart lecture ‘underpinned an ever more aggressive News International and BSkyB agenda adding: ‘I rejected those policies.’

The end of the BSkyB bid made the top of all the TV bulletins and the front pages of Thursday morning’s newspapers. The focus was now on whether the Murdochs would attend the select committee the following Tuesday. Rebekah Brooks, a UK citizen, agreed to give evidence, while James Murdoch, a joint UK–US citizen, wrote that ‘unfortunately’ he was not available to attend on 19 July but would be pleased to give evidence in August. Rupert Murdoch, an American citizen, said he was unable to make the hearing. ‘Dear John,’ he wrote to John Whittingdale. ‘Thank you for your letter of 12 July, on behalf of the committee, inviting me to give evidence to you on 19 July. Unfortunately, I am not available to attend the session you have planned next Tuesday …’

Downing Street issued a statement saying the Murdochs should appear, while Nick Clegg said that if they had ‘any shred of sense of responsibility or accountability’ they would do so. The Culture Committee met to determine its response. While it was still in session, its decision to compel the Murdochs to attend their hearing was silently communicated to the Commons authorities, who quickly dispatched the Deputy Serjeant-at-Arms to News International’s headquarters. Travelling on the London Underground dressed in an ordinary suit, the ancient-office holder of the Commons slipped past the reporters milling outside Wapping and arrived unannounced, causing consternation among senior NI executives. After refusing to hand over the summons to a security guard he was asked to sit in a waiting room where he watched Sky News break the news of his visit on giant flatscreen TVs. The Murdochs were not available to accept the documents in person, which were given to their lawyers. Had they refused to attend, the Commons could have arrested them for contempt of the authority of Parliament.

Faced with a crisis spinning ever more dangerously out of control, News Corp called in the PR and lobbying specialists Edelman. With Edelman in charge, News Corp became slicker. Shortly before 5 p.m., the Murdochs agreed they would give evidence after all, and Rupert Murdoch called one of his own newspapers, the
Wall Street Journal
, to defend his handling of the scandal, explaining that News Corp had dealt with it ‘extremely well in every way possible’, making just ‘minor mistakes’. He rejected criticism that James Murdoch had been too slow to clean up the stables. His father said: ‘I think he acted as fast as he could, the moment he could.’

While the Murdochs had been wondering whether to attend the committee, another drama was playing out in Scotland Yard. At ten that morning officers had arrested a long-standing friend of Commissioner Sir Paul Stephenson – Neil ‘Wolfman’ Wallis – on suspicion of phone hacking. When the Yard’s top brass dined with the
News of the World
, it was most often with Wallis, who had left the paper in August 2009 to found his own company, Chamy Media. Extraordinarily, between October 2009 and September 2010, the Metropolitan Police had taken on Wallis as a £1,000-a-day consultant to the director of public affairs, Dick Fedorcio. Wallis had been giving media advice to Scotland Yard for two days a month at the time it was refusing to reopen the inquiry and complaining to the
Guardian
about its coverage.

At 4.30 p.m., the Met issued a statement owning up to the misjudgement, explaining that Chamy Media had supplied ‘strategic communications advice’ after tendering the lowest fee. During his time advising Scotland Yard, it seemed, Wallis had been selling stories about its investigations to his old friends in the tabloids. Overall, he received more than £25,000 from the press – more than the value of his police contract. News International reportedly paid him £10,000 for one story. Among the scoops were details of a suspected assassination attempt on the Pope.
¹²

News of Wallis’s work for the Yard was met with astonishment. The government, which had been in the spotlight for its contacts with Wapping, was particularly angry. The Home Secretary Theresa May wrote to Sir Paul Stephenson to get ‘the full picture’ of the contract. The Mayor, Boris Johnson, still playing catch-up on his ‘codswallop’, told journalists he had ‘a very frank’ hour-long discussion with Stephenson, who assured him that Operation Weeting was proceeding swiftly.

Scotland Yard’s former Assistant Commissioner, Andy Hayman, also came under attack. The family of Jean-Charles de Menezes, the Brazilian electrician killed by police on the London Underground in 2005 after being mistaken for a suicide bomber, disclosed that day that police had informed his cousin, Alex Pereira, that he was in Mulcaire’s files. In a statement, the Menezes family pointed out that the Independent Police Complaints Commission had criticized Hayman for having deliberately ‘misled the public’ over claims that Menezes had been one of four men being hunted for attempted bombings in London the previous day. They wrote: ‘We are conscious that the newspapers owned by News International provided some of the most virulent and often misleading coverage around Jean’s death and its aftermath.’ Michael Mansfield, the Menezes family lawyer, revealed that his phone might have been hacked by the
News of the World.
In London, Bindmans announced that two new claimants would join Tamsin Allen’s judicial review against the police: Jude Law’s personal assistant Ben Jackson, and ‘HJK’, the friend of a politician whose messages had been intercepted.

That day in the US, Eliot Spitzer, the former New York Attorney General, called for News Corp to be investigated by the US Department of Justice over allegations of ‘bribery, illegal wiretapping, interference in a murder investigation, political blackmail, and rampant disregard for both the truth and basic decency’. Spitzer, who had brought a series of prosecutions against investment banks, said that the company could be in breach of the Foreign Corrupt Practices Act, which bars American companies from bribing foreign officials. After receiving a formal complaint from the US Congressman Peter King, the FBI began an investigation into the corrosive allegations that the
News of the World
hacked into the phones of 9/11 victims. The phone hacking scandal was now going global.

News Corp’s second biggest investor was also becoming increasingly concerned. Tracked down by
Newsnight
to his yacht in the Mediterranean, Saudi Prince Al-Waleed bin Talal Al-saud said Rebekah Brooks should resign if she was found to have been involved in wrongdoing. Sitting on the deck of his yacht, he said: ‘If the indications are that her involvement in this matter is explicit, for sure she has to go, you bet she has to go. I will not accept … to deal with a company that has a lady or a man that has any sliver of doubts on her or his integrity.’

The Business Secretary Vince Cable, who had wanted to bring down the Murdoch empire when others were still kow-towing, but who had spoken too early, ruefully reflected on a turbulent ten days in an interview with the BBC Radio 4’s
PM
programme that afternoon: ‘It is a little bit like the end of a dictatorship when everybody suddenly discovers they were against the dictator.’

17

‘We Are Sorry’

We are sorry that we have been caught

–
Private Eye
, 22 July 2011