House of COMMONS









Tuesday 21 July 2009



Evidence heard in Public Questions 1329 - 1792





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Transcribed by the Official Shorthand Writers to the Houses of Parliament:

W B Gurney & Sons LLP, Hope House, 45 Great Peter Street, London, SW1P 3LT

Telephone Number: 020 7233 1935


Oral Evidence

Taken before the Culture, Media and Sport Committee

on Tuesday 21 July 2009

Members present

Mr John Whittingdale, in the Chair

Mr Peter Ainsworth

Janet Anderson

Philip Davies

Paul Farrelly

Mr Mike Hall

Alan Keen

Adam Price

Mr Adrian Sanders

Mr Tom Watson


Witnesses: Mr Tom Crone, Legal Manager, News Group Newspapers, and Mr Colin Myler, Editor, News of the World, gave evidence.


Chairman: Good morning. This is the second session as part of the Committee's further inquiry into press standards, privacy and libel, concentrating particularly on the stories that appeared in The Guardian nearly two weeks ago. I would like to welcome as our first witnesses this morning Tom Crone the Legal Manager of News Group, and Colin Myler the Editor of the News of the World. Before we start, I would like to make a declaration that I am an elected member of the Board of the Conservative Party which is currently the formal employer of Mr Andy Coulson. I have stood aside from my membership of the Board whilst this inquiry is taking place. I believe Tom Watson would also like to make a statement.

Q1329 Mr Watson: Thank you, Chairman. I am a member of the United Union and, having had time to review the evidence of this case which I had not had last Tuesday, I would also like to add that in my dispute with the Sun I am represented by Carter-Ruck on a CFA agreement, which Committee members will know is relevant to the inquiry, but not the evidence-taking today.

Mr Crone: Yesterday evening we delivered a letter from our outside solicitors to you, and I think to be copied to the rest of the Committee, pointing out that Mr Watson is in litigation with us at the moment; and pointing out that under parliamentary rules and also the principles I think of natural justice and Article 6 of the Human Rights Act it seems to us quite improper that Mr Watson is sitting on this panel dealing with News Group Newspapers Ltd with whom he is in litigation. If he remains we will be making a complaint to the Parliamentary Commissioner.

Chairman: I am aware of the letter, as indeed is Mr Watson and the Committee. The advice from Speaker's Counsel is that it does not interfere with his ability to take part in this inquiry; and he has made a formal declaration. Obviously you are able to make any complaint you wish. Do you wish to add anything?

Mr Watson: Only to say, when the allegation was made late last night, Chairman, I took advice from the Clerks who took advice from Speaker's Counsel. I happen to think that this is News International trying to interfere with the work of this Committee; and I think it is improper.

Q1330 Chairman: Both of those statements are now on the record. Perhaps we should proceed. The major story that appeared in The Guardian some ten days ago was that News International had made a payment to three individuals, principally Gordon Taylor, in settlement of a court action. Is that correct?

Mr Myler: Before we start, Chairman, may I make an opening statement?

Q1331 Chairman: Yes, you may.

Mr Myler: I am glad of the opportunity to appear before you to put our case today. I hope I can help the Committee reach conclusions that will enable us as an industry to put this episode behind us. It seems that there are three issues which need to be addressed by us arising from the allegations made by The Guardian and the evidence given by its representatives to this Committee last week. The first is the Information Commissioner's report arising from Operation Motorman. His reports are three years old, and the activities they refer to are seven years old. This Committee fully investigated these matters in early 2007 and recorded its findings over five pages of its report entitled Self-Regulation of the Press, which was published on July 11 of that year. Nothing new has emerged since then and there is no connection, and never has been a connection, between those matters and the allegation of accessing telephone voicemails. The second issue is whether we knew of others in the News of the World newsroom to have been involved with Goodman, or separately from him, in accessing confidential information illegally via Mulcaire. This relates to the evidence given to this Committee by Les Hinton, then Executive Chairman of News International on March 6, 2007. By then the nine month long police investigation into the illegal activities of Glenn Mulcaire and Clive Goodman had concluded with their convictions. No evidence or information had emerged to suggest to senior executives at News International that others at the News of the World knew of these activities or were complicit in them. Both the prosecution and the judge at the Goodman/Mulcaire trial accepted that the annual retainer agreement between the News of the World and Glenn Mulcaire, and the work he did under it, did not involve criminality. At no stage did the police arrest or question any member of the News of the World staff besides Mr Goodman. Mr Hinton's evidence was based upon what was known at the time, and was entirely truthful. The third issue is the evidence that came to light in April 2008, and the reasons for settling our litigation with Gordon Taylor. The Committee may disagree but we consider this issue and the facts surrounding it to be the only new matters in this affair. We are here to answer whatever questions you have on this subject today. Finally, I would like to take this opportunity to set out the rigorous new safeguards I did put in place with my staff when I became Editor in January 2007. The first of these was to send an email on February 2007 to every member of staff and all casual or contract workers at the News of the World setting out the PCC Code and data protection compliance requirements. This email included the PCC Code in full. The following week I mirrored that email with a letter sent to all members of staff at their home addresses, once again including the Code in printed form, which was provided by the PCC. Included in these steps was the rewriting of the relevant clause in staff contracts which was replaced with an emphatically stronger and broader new clause. This letter also stated that failure to comply with the PCC Code would lead to disciplinary proceedings and may result in summary dismissal. I have brought with me copies of the available documents should the Committee wish to see them. We have also put in place a series of measures to guard against the situation arising again in the News of the World, and these include: the introduction of strict protocols on cash payments; and on the level of justification, authorisation and auditing of cash payments - since I took over as Editor cash payments for stories and tip-offs have been reduced by between 82% and 89%; regular internal training on justification for using subterfuge with the PCC and legal issues as its core; attendance by all staff was mandatory. A series of seven two and a half hour in-house PCC seminars was held for all News of the World staff led by Tim Toulmin the Director of the PCC and his team; and a rolling programme of further PCC seminars is planned for 2009. The News of the World continues to work with its journalists and its industry partners to ensure that they fully comply with both the relevant legislation and the rigorous requirements of the PCC Code of Practice. Thank you.

Q1332 Chairman: Thank you. I think we will wish to take up a number of those points in due course. Perhaps I could return to my first question. You confirmed I think in your statement that a payment was made to settle the action by Gordon Taylor and two others?

Mr Myler: Yes.

Q1333 Chairman: Was the size of that payment greater in order that the proceedings should be kept secret?

Mr Myler: Absolutely not as far as I am aware.

Mr Crone: No.

Q1334 Chairman: On what basis was it decided to keep the proceedings secret?

Mr Crone: "Secret" is not the word I would use. This was an action against us for breach of confidence and privacy. We get quite a lot of those now since the privacy law has expanded somewhat in the last five years. Every single case against us for breach of privacy - unless the information is already out within the public domain - results in a very strict term of confidentiality at the end of the case. When you think about it, there would be absolutely no point in anyone seeing us to stop their privacy being revealed if they did not at the end of the case tack on an absolutely strict and binding confidentiality term, and that is what happened in this case.

Q1335 Chairman: Was it at Gordon Taylor's request?

Mr Crone: Actually I think he mentioned it first.

Q1336 Chairman: He mentioned it first?

Mr Crone: It was raised by him before it was raised by us, but we fell in with it. We always fall in with it, being privacy, because if the litigant goes in front of the judge the judge will order the injunction immediately - so certainly when we have accepted that there was a breach.

Q1337 Chairman: Have there been any other cases relating to Clive Goodman and the telephone hacking?

Mr Crone: No, not so far.

Q1338 Chairman: You have not received any?

Mr Crone: We have had complaints since this arose last week. Three effectively: two complaints and one Information Act request.

Q1339 Chairman: If the position was that, as you have previously said, Clive Goodman was acting entirely alone and that nobody else had knowledge, why did News International agree to settle with such a large sum?

Mr Crone: In the aftermath of Clive Goodman and Mulcaire's arrest and subsequent conviction various internal investigations were conducted by us. This was against the background of a nine month massively intense police investigation prior to arrest and then a continuing investigation in the five months up until conviction. The police raided Mulcaire's premises; they raided Goodman's premises; and they raided the News of the World offices. They seized every available document; they searched all the computers, the files, the emails et cetera. Subsequent to the arrests they came to us, the News Group Newspapers Ltd, and made various requests to us to produce documents which they felt may be relevant. At no stage during their investigation or our investigation did any evidence arise that the problem of accessing by our reporters, or complicity of accessing by our reporters, went beyond the Goodman/Mulcaire situation. The first piece of evidence we saw of that, in terms of the management investigating, was in April 2008 when Mr Taylor's lawyers produced two documents: the first was a February 2005 holding contract and the second was the email that was discussed here last week.

Q1340 Chairman: Those two documents were both supplied to us last week by The Guardian; so you were unaware of either of those until 2008?

Mr Crone: Yes. It is possible actually that the first one had been mentioned in the Old Bailey hearing in January 2007 - mentioned; but I certainly did not have knowledge beyond that.

Q1341 Chairman: When you did become aware of these two documents what did you do?

Mr Crone: We settled the case. We agreed to settle the case.

Q1342 Chairman: Besides settling the case, what did you do about the fact that there appeared to be two documents which suggested that others beside Clive Goodman were involved?

Mr Crone: I tasked myself, with Mr Myler's knowledge, with finding out what exactly had happened; what was known; who knew what other documents there might be. My first task on that mission was to contact our IT department and to ask them to conduct a search of the creator of the email files, the junior reporter; and I wanted to find out who else had been sent that email either internally or externally by him. They came back and told me that there was no trace of it having gone anywhere else. I then questioned the junior reporter. He had very little recollection of it, but he did know that about this time he had only just become a reporter; prior to that actually I think he had been a messenger and he was being trained up off the floor. In the early weeks and months of him being trained up as a reporter what he did more than anything else was transcribe tapes of journalists' interviews - whatever tapes were relevant to the News of the World. He does not particularly remember this job in any detail; he does not remember who asked him to do it; and he does not remember any follow-up from it. He saw the email and he accepts that he sent the transcript where the email says he sent it.

Q1343 Chairman: Does your IT department suggest that this email was sent to Glenn Mulcaire and nobody else?

Mr Crone: It was sent to something called shadowmenuk, which turns out to be Glenn Mulcaire.

Q1344 Chairman: The email says, "Hello, this is the transcript for Neville", suggesting that it was either going to be given to Neville by Mr Mulcaire, or copied from the junior reporter. Did Neville Thurlbeck say that he had ever received it?

Mr Crone: I questioned Neville Thurlbeck then and I have spoken to him about the same subject since then. His position is that he has never seen that email, nor had any knowledge of it. He says that he was brought into the relevant editorial project, the story, at the end of the story and his task was to go and knock on the door of one of the story subjects, which was either in Blackburn or Manchester, and put the essence of the story to the person in order to get their comments, which is mostly standard practice in what we do. In order to conduct that task he says he was briefed; and when I spoke to him the first time he said he was briefed by one of our executives, Greg Miskiw who was then based on Manchester; and he also said it was very much a Greg Miskiw/Glenn Mulcaire project. He subsequently came back to me and said that he had refreshed his memory and in fact it could not have been Greg Miskiw, because Greg Miskiw left the News of the World on 30 June 2005, which was the day after that email was created. He had worked out his redundancy package, I think, a week or two weeks before that, and he was no longer on active duty. Neville Thurlbeck told me that his refreshed memory told him that in fact the briefing that he received was from the London news desk

Q1345 Chairman: So the London news desk was aware of the contents of this?

Mr Crone: Well, no, I went to speak to the relevant person at the London news desk who told me that he had no knowledge of the email and he had never seen it.

Q1346 Chairman: Neville Thurlbeck was sent off to ask about a story which came from a transcript which none of them were aware of?

Mr Crone: I do not know whether the story entirely came from the transcript; but certainly part of it must have come from the transcript, yes.

Q1347 Chairman: Despite this, the transcript, which was sent in an email to Glenn Mulcaire, as far as you are aware never went anywhere beyond Glenn Mulcaire?

Mr Crone: I cannot find any evidence that it did.

Q1348 Chairman: The second piece of paper, the contract between Greg Miskiw and Paul Williams, Paul Williams in this case is Glenn Mulcaire?

Mr Crone: Yes.

Q1349 Chairman: Did you ask Greg Miskiw about what this contract comprised and why Mr Mulcaire was referred to as "Paul Williams"?

Mr Crone: He told me that Glenn Mulcaire had come to him with a view to selling a story as an independent project - that is independent of any work that he did under the general retainer he had with us. His story was based on information he had gained, as I think he is a member of the PFA having been a professional footballer; he had gained it in that context and he was concerned that if his real name was attached to the story he would obviously upset his PFA colleagues et cetera if that ever came out. Therefore he wanted to contract under an alias, and "Paul Williams" was the alias he supplied.

Q1350 Chairman: This story did not require any phone hacking or activity of that kind?

Mr Crone: I am unaware that it did. The contract was in February 2004 - the holding contract. It has a very brief description of what the story is. As I understand it, from the end game on that project, which actually was a legal letter that we received in early July 2005, the story went beyond what was written on that original contract. There were other factors, which actually took it very much into the public interest. I was completely satisfied about that.

Q1351 Chairman: As far as you are concerned, the fact that the News of the World agreed to pay 7,000 to Glenn Mulcaire for a specific story which related to Gordon Taylor, and Glenn Mulcaire then hacked into Gordon Taylor's telephone and provided or received a transcript of those - those two things are unrelated?

Mr Crone: I can only tell you what I have found out since, because at the time I certainly did not know about the original February 2005 contract. I certainly did not know about the email and the transcript. Let me just put this in context: when the door knock took place, which I think was July 2 - I was on holiday that week - I came back the following week and one of the legal complaints that was on my desk by about Wednesday, I think, was a complaint from one of the story's subjects. I went and made enquiries of Neville Thurlbeck actually, because I knew that he was the reporter on the story; and I was told that it was based on a source and he had gone up and had a conversation with the person whose door he knocked on; there were stringent denials; the legal letter that was in front of me contained stringent denials. I went and spoke to the Editor, Andy Coulson. I said, "It seems to be based on a source, but if it's true the source is probably never going to come forward"; and Andy Coulson told me to "Forget it. Tell them that we won't be running the story", and that was the end of it. That is the last I heard of that story until the email was produced in April 2008.

Q1352 Chairman: Glenn Mulcaire was being paid 100,000 plus bonuses by the News of the World. We know that he hacked into the voicemails of quite a number of people and the police chose only to prosecute on five out of quite a large number. The information he obtained by hacking into other people besides members of the Royal household and Gordon Taylor, did that end up at the News of the World?

Mr Crone: Not to my knowledge, no. Just one small point of information: you said "quite a large number"; Mr Andy Hayman, who was heading the investigation, wrote an article about all this - he is retired now - and he says it is perhaps "a handful"; that was the phrase he used. I think John Yates said something similar the day before.

Q1353 Chairman: The police prosecuted and he admitted, I think, to eight individuals who have been identified for the purposes of the prosecution's case; but the police did then say that they were a selection of the ones where the evidence was strongest?

Mr Crone: Sure, and the head of the inquiry says that is perhaps "a handful". It is on record. We can give you what he said actually; it is in a pack that we want to give you eventually.

Q1354 Chairman: Let us just continue on this theme. Let us agree there were at least a few more whose phone messages were hacked into. As far as you know, no information regarding those other individuals ever reached the News of the World?

Mr Crone: I have seen no evidence of that.

Q1355 Chairman: Was Mr Mulcaire, do you think, working for somebody else when he was doing this?

Mr Crone: I think he was working for other people, yes.

Q1356 Chairman: The fact that he was being paid 100,000 by the News of the World, that sounds like a full-time job?

Mr Crone: It may be, but I believe he was working for other people.

Q1357 Paul Farrelly: The Sunday Times in quite a forensic piece went beyond perhaps a handful and said "fewer than 20", which is not necessarily inconsistent, but they also named Boris Johnson and an unnamed senior BBC executive?

Mr Crone: I have read that article. I do not know where it came from.

Q1358 Paul Farrelly: You would cast doubt on the accuracy of the Sunday Times article?

Mr Crone: I am not going to speculate on it.

Q1359 Paul Farrelly: Just to cover more loose threads before I come to Mr Myler and the investigations and the basis of your evidence to the PCC: how long does the IT department of News International keep records of emails?

Mr Crone: This is not something that has been in my mind until you are asking these questions but my understanding is that if the individual reporter deletes, as opposed to leaves the email on the system, it disappears after 30 days; if he leaves it there it goes automatically into archives after a period and is kept.

Q1360 Paul Farrelly: How long are the archives kept?

Mr Crone: They go back that far, I believe.

Q1361 Paul Farrelly: Over three years?

Mr Crone: Yes. I am not absolutely certain about that.

Q1362 Paul Farrelly: If your checks are thorough then it is important to be certain. Whether or not you have checked with your IT department, it would not tell you whether a transcript had been printed off. That is the purpose of a transcript actually, to be read in hardcopy usually. Would it?

Mr Crone: No.

Q1363 Paul Farrelly: Did you ask Mr Thurlbeck whether he had received a hardcopy of the transcript?

Mr Crone: He says he has never seen it and did not know anything about it.

Q1364 Paul Farrelly: Why then would the junior journalist say this specifically: "This is the transcript for Neville"?

Mr Crone: I have no idea. The junior journalist is currently in Peru, I believe. It may be inconvenient but that is where he is. It has got nothing to do with us sending him there!

Mr Myler: There is a far more simple explanation.

Q1365 Paul Farrelly: Have you asked the junior journalist - and we are not naming him but respecting the wishes -----

Mr Crone: No, I asked him at the outset. I asked him in detail.

Q1366 Paul Farrelly: ----- why he said, "This is the transcript for Neville"?

Mr Crone: Yes. He said, "I can't remember". He said, "Perhaps I gave it to Neville, but I can't remember". Then Neville said he did not give it to him.

Q1367 Paul Farrelly: You are basically taking people's word on trust?

Mr Crone: I can only work on the evidence. I can only work at and pass on the evidence. I cannot speculate; I cannot guess. These are serious matters and I am not going to speculate or guess in front of this Committee. I can tell you what I asked and the information I was given and the evidence I have seen.

Q1368 Paul Farrelly: I am not surprised a junior journalist, who has now had to go to Peru, might ------

Mr Crone: He is on a holiday. He is going around the world.

Q1369 Paul Farrelly: He has not been posted there?

Mr Crone: He is 20 years old.

Q1370 Paul Farrelly: If he was transcribing lots of these things I can quite understand why he might not remember whether it was printed off and whether it was handed; but given that it says, "This is a transcript for Neville", it invites a conclusion, does it not?

Mr Crone: Sure, but I do not know what he wrote on top of all the other transcripts he did. I just do not know.

Q1371 Paul Farrelly: So you have not seen any more emails from this journalist, despite your investigation?

Mr Crone: No, I have not.

Mr Myler: To be fair, Mr Farrelly, you are accusing a young journalist, who has not been named, of being involved in other issues here. What Mr Crone is saying is there is absolutely no evidence to support that.

Q1372 Paul Farrelly: I am not saying that at all, Mr Myler. I am saying, you have conducted an investigation but you have now just said you do not know what he wrote on covering notes to possibly other transcripts which may have come from Mr Mulcaire?

Mr Crone: I am investigating this email; I am investigating matters relating to Gordon Taylor; why should I look at other emails that have nothing to do with that. Apart from the fact that it actually breaches his own Data Protection Rights et cetera, I cannot go on a general fishing expedition; I have to look for what I know exists.

Q1373 Paul Farrelly: If you want to be thorough and you have become aware that this junior journalist is transcribing conversations which have come from Mr Mulcaire, whom you know has been convicted and has served a jail sentence, you may wish then to look at other transcripts which Mr Mulcaire may have provided to this junior journalist to see what he was writing down and who they were allegedly for; and you are saying you have not done that?

Mr Crone: No I asked about this email.

Q1374 Paul Farrelly: That is not a very thorough investigation, is it?

Mr Myler: Can I just come in here. When I came back in January 2007 I interviewed senior executives on the newspapers, and with the Director of Human Resources -----

Q1375 Paul Farrelly: Mr Myler, forgive me. I want to come to this, but Mr Crone's answers are now begging more questions as we go on. A final question on this point and this is a loose end: you made a point regarding the use of the name Paul Williams in a contract, but related that to the possible use of the name in a story. The two are not connected, are they?

Mr Crone: No, not the name in a story. He just did not want his name associated with the story. If it is on contractual paperwork - his own name, Glenn Mulcaire - he is clearly associating his name with the story.

Q1376 Paul Farrelly: The account you have given us, you have said, "This is what I have been told", who have you found this out from?

Mr Crone: Greg Miskiw.

Q1377 Paul Farrelly: You have interviewed him since he left?

Mr Crone: I think I said that, yes.

Q1378 Paul Farrelly: It sounds very, very strange indeed; or is this a usual practice?

Mr Crone: What is "usual practice"?

Q1379 Paul Farrelly: Using pseudonyms in contractual paperwork which may lead to the payment of large sums of money.

Mr Crone: No, it is not.

Q1380 Paul Farrelly: It is not unusual.

Mr Crone: No, it is not usual.

Q1381 Paul Farrelly: It is not usual?

Mr Crone: It is not usual.

Q1382 Paul Farrelly: Therefore, if it is not usual it might strike you or any reasonable person as strange, would you not agree?

Mr Crone: It is not usual. It is strange; it is not usual.

Q1383 Paul Farrelly: Mr Myler, I do not want to take up too much time because lots of other people want to come in, but I wanted to explore the basis for the evidence you gave the PCC, I believe, in February 2007 just after you arrived at the News of the World. At that stage what stage had investigations reached at the News of the World to your knowledge, because you gave the evidence to the PCC?

Mr Myler: What had happened internally?

Q1384 Paul Farrelly: Yes.

Mr Myler: I think the first thing to remember is that as soon as Mr Goodman and Mr Mulcaire were arrested News International had an outside firm of solicitors to absolutely oversee the investigation to cooperate with the police, to be a bridgehead, to give whatever facility the police required. It was completely hands-off, if you like, for transparency from the company's point of view. It was a nine month investigation. At the end of that nine months two people were convicted, tried and went to jail. No other member of the News of the World staff was questioned. It is important, if you would allow me to say so, that John Yates's statement on 9 July after the first Guardian story appeared says this: "This case has been the subject of the most careful investigation by very experienced detectives. It has also been scrutinised in detail by both the CPS and leading counsel. They have carefully examined all the evidence and prepared the indictments ------"

Q1385 Paul Farrelly: We have seen this; we have this in evidence.

Mr Myler: With respect, can I just finish this one sentence: "No additional evidence has come to light since this case has concluded; I therefore consider that no further investigation is required".

Q1386 Chairman: Can I just check one point to be absolutely clear. The police had the copy of the email saying "This is for Neville", but the police never questioned Neville?

Mr Myler: As I understand it, he was not questioned. As I understand it no other member of the News of the World staff, other than Clive Goodman, was questioned by the police after their nine month investigation.

Q1387 Chairman: Grey Miskiw, whose name was on the contract which the police also had, he was not questioned?

Mr Myler: I do not believe he was.

Q1388 Paul Farrelly: Who were the solicitors who handled the investigation?

Mr Crone: Burton Copeland. They are probably the leading firm in this country for white collar fraud.

Q1389 Paul Farrelly: Did that investigation go wider than investigating the circumstances because the court case was coming up of the Mulcaire/Goodman connection? Did it go wider and ask people such as the deputy editor, the managing editor, the news editor, the chief reporter as to whether they had been involved in any way with Mr Mulcaire? Did it go wider?

Mr Crone: Sorry, this is for me?

Q1390 Paul Farrelly: No, this is to Mr Myler because Mr Myler gave evidence to the PCC.

Mr Myler: I think Mr Crone is the best person to answer.

Q1391 Paul Farrelly: This is the basis of the evidence you gave to the PCC.

Mr Myler: Mr Crone was there. This arrest took place, I believe, in August 2006. I think you should allow Mr Crone ------

Q1392 Paul Farrelly: To your knowledge, did that investigation go wider?

Mr Myler: Wider than what?

Q1393 Paul Farrelly: Than simply the relationship between Goodman and Mulcaire. Did the people either interview them or ask them to come forward under the basis of an amnesty if they had done something wrong to reveal themselves? Did it go to the accounts department?

Mr Myler: I do not know whether or not the police ------

Q1394 Paul Farrelly: No, it is not the police. It is the News International investigation when you arrived. I want to know what your knowledge was of how far the remit went?

Mr Myler: My recollection was that a very thorough investigation took place where there was a review of everything from how cash payments were processed. You have to remember that the Mulcaire contract, which the judge in the Goodman/Mulcaire trial said was absolutely above board and legal, meant that the staff had access to him 24/7. He was conducting enquiries perfectly legally and lawfully that meant journalists could call him for checks on electoral rolls or whatever. As I understand it, the inquiry was thorough; and to the executives that were there at the time they were happy with that.

Q1395 Paul Farrelly: Mr Crone, how wide was the inquiry? You understand the questions I am asking?

Mr Crone: Yes. I got back the Tuesday after the arrests. They were arrested on one Tuesday and I was there the week after. By the time I got back, which must have been August 15, Burton Copeland were in the office virtually every day or in contact with the office every day. My understanding of their remit was that they were brought in to go over everything and find out what had gone on, to liaise with the police ------

Q1396 Paul Farrelly: Everything to do with Mulcaire and Goodman?

Mr Crone: Yes, but what you have got to realise is, at the time the only case being looked at was an access of a Royal household - voicemails. The other names did not become known to us or, as far as I know, anyone else apart from the prosecution and the police, and the defence lawyers probably knew slightly earlier; the other names did not come out until November 29, which is five months later. What I think was being enquired into was what had gone on leading to the arrests; what, in the relationship with Mulcaire, did we have to worry about. Burton Copeland came in; they were given absolutely free-range to ask whatever they wanted to ask. They did risk accounts and they have got four lever-arch files of payment records, everything to do with Mulcaire, and there is no evidence of anything going beyond in terms of knowledge into other activities.

Q1397 Paul Farrelly: I want to wrap-up fairly shortly. When the other names came into the frame after November 29, did the remit of the investigation in News International broaden?

Mr Crone: Yes, to some extent but the questions had already been asked. Was anyone involved with Mulcaire, or doing this, that or the other? Burton Copeland had looked at all of the financial records; and there was subsequently an email check done which went to 2,500 emails; and that produced no evidence either.

Q1398 Paul Farrelly: The question: was anyone else involved with Mulcaire? The answer was: no. Nothing else was found?

Mr Crone: No evidence was found.

Q1399 Paul Farrelly: Mr Myler, in evidence to the PCC you said in February 2007, and tell me whether the PCC's quote is accurate in their report, "This was an exceptionally unhappy event in the 163 year history of News of the World involving one journalist". They quote you as saying that Goodman was a "rogue exception". That is accurate, is it? But in the court case in January the judge has said, "As to counts 16-20", which were the counts involving Max Clifford, Simon Hughes, Elle Macpherson, Sky Andrew and Gordon Taylor, who are not Royals, to Mulcaire, "you had not dealt with Goodman but with others at News International". On the basis of that import, how could you say that this was one rogue exception involving one journalist?

Mr Crone: I was in court actually and I remember him saying that and my immediate reaction - obviously nothing I could voice - was "Why is he saying that?", because the prosecution did not open it, saying there was such a connection.

Q1400 Paul Farrelly: So the judge's summary is wrong?

Mr Crone: I cannot remember hearing anything in court from the prosecution to justify that.

Q1401 Paul Farrelly: One final question. Clive Goodman, Mr Myler, he pleaded guilty in August 2006 and he was convicted on 26 January 2007. Was he still employed by the News of the World when you arrived?

Mr Myler: He has been suspended. His contract allowed him to appeal against his summary dismissal when he was released, and that is what happened.

Q1402 Paul Farrelly: He was summarily dismissed when he was released?

Mr Myler: No, he was summarily dismissed I think on conviction; but his contract allowed him to appeal once he was released from prison and that appeal took place.

Q1403 Paul Farrelly: Why was he not dismissed when he pleaded guilty, Mr Crone?

Mr Myler: I was not there, Mr Farrelly.

Mr Crone: Does it make any difference? I am asking a rhetorical question. He was in the middle of a process; he was independently represented so we were not privy really to how he was going to give his mitigation or whatever else. At the end of the process, it seemed to us - and I was not part of that dismissal process, by the way - it seemed to News International and News Group Newspapers to be the appropriate time to take that step.

Mr Myler: I think that was an HR legal situation.

Q1404 Paul Farrelly: It raises the question of what actually constitutes gross misconduct for News International; that a journalist who pleads guilty was not dismissed at the time?

Mr Myler: I do not think you will find that that is a News International contract. I think you will find that is a contract with almost any employer and employee.

Mr Crone: The fact is he was dismissed and he was dismissed for this. Your question suggests we were not going to dismiss him for this but we did dismiss him for this.

Mr Myler: He failed in his appeal process.

Q1405 Philip Davies: Can I just explore a bit further the idea about how many people at News International were involved in what was going on because, coming back to the point that Paul made, the idea that it was one rogue maverick journalist appears now to be a somewhat discredited theory. Given that the people who have been the victims of this - people like Gordon Taylor, Elle Macpherson - have nothing to do with the Royal Family, as Paul mentioned, surely that in itself would indicate to people that this must be going beyond Clive Goodman who was the Royal Editor; because why on earth would Clive Goodman be interested in the taped conversations of Gordon Taylor and Elle Macpherson?

Mr Myler: No evidence, Mr Davies, has been produced internally or externally by the police, by any lawyers, to suggest that what you have said is the truth, is the case. Can I just make the point that Mr Farrelly touched upon. In the course of talking to executives when I arrived to go through obviously what had happened - as I said, I conducted this inquiry with Daniel Cloke our Director of Human Resources - over 2,500 emails were accessed because we were exploring whether or not there was any other evidence to suggest essentially what you are hinting at. No evidence was found; that is up to 2,500 emails.

Q1406 Philip Davies: Although there may not have been any evidence that you came across that fingered a particular individual or individuals involved in this, would you at least acknowledge that the circumstantial evidence would suggest that more people than Clive Goodman at News International were involved in this particular practice?

Mr Myler: Mr Crone said earlier, how can we speculate on something like this? For an investigative newspaper I do not know of any newspaper - and this is the fourth national newspaper that I have had the privilege of editing - or broadcasting organisation that has been so forensically investigated over the past four years - none.

Q1407 Philip Davies: The theory I advanced, would you accept that that would be a perfectly reasonable theory?

Mr Myler: No, I am sorry, how much more does the News of the World staff, who have been accused of systematic illegality, have to continue --- Where is the evidence?

Q1408 Philip Davies: You would say it is perfectly reasonable and perfectly logical that the Royal Editor - the Royal Editor - was involved with somebody in the tapping of phones of people -----

Mr Myler: No, I do not.

Q1409 Philip Davies: --- who had nothing to do with -----

Mr Myler: No, I do not; but I think, Mr Davies, with respect you know full well that is not condoned either by me personally or anybody else on the staff of the News of the World. You know that.

Q1410 Philip Davies: I am not saying you condone it; I am just saying you think it is perfectly believable that the person at News International who was behind the tapping of the phones was Clive Goodman, and people who were nothing to do with Royal Family; you think that is perfectly believable?

Mr Myler: Mr Goodman has paid the price for the illegal conduct that he engaged in. It seems that Mr Mulcaire was the person who was perhaps engaged in more tapping of phones than other people on the News of the World. I cannot answer for Mr Mulcaire; I have not got an idea what was in his mind. I have never met the man; I do not know the man. He worked for the News of the World as far back as I think the late 90s in fact.

Q1411 Philip Davies: We heard in a previous session that an allegation was made, I believe in Private Eye, that Mr Mulcaire had been paid, and I think the figure and this is from memory, was 200,000, in order to remain quiet about what had happened and who might have been involved. Was that report true, that he has been paid by News International to keep quiet about what happened?

Mr Myler: I am not aware of any payment that has been made.

Mr Crone: I had nothing to do with that area, because if there is any sort of payment or dealings with Mulcaire it is not going to be in my area.

Q1412 Philip Davies: Who at News International would have been? If that did take place who at News International would have been involved?

Mr Crone: It did not take place, I do know that.

Q1413 Philip Davies: It did not take place?

Mr Crone: No. I am not saying no payment, but that is an inaccurate report.

Q1414 Philip Davies: Has a payment been made.

Mr Crone: I am about to tell you. Mr Mulcaire raised legal issues over his status, I think probably after he came out of prison. The employment laws as they stand as I understand it, and I am certainly not an expert in this area, mean that if someone works for you for X hours a week it does not matter whether he is staff, he is freelance, he is on a contract, whatever, he has certain employment rights. Given those employment rights there is a process that has to be followed when that relationship comes to an end. Because of failures, and we can possibly check it out - I do not have the information in detail - I believe that as a result of failures in the process there was a sum of money paid to him. I do not know exactly what it is but it bears no relation to the figure you have given us.

Q1415 Philip Davies: Just to clarify this point. I understand you do not know the figure, but you were saying that payment may have been made because of the contractual obligations that News International had to him as an employee of one form or another. The question I was asking was: has he been paid to keep quiet, which is a different issue from any employment?

Mr Crone: Absolutely not.

Q1416 Philip Davies: Just while we are on the theme, has any payment been subsequently made to Clive Goodman?

Mr Crone: I am certainly not aware of it.

Mr Myler: Again, likewise, I am not aware of any payment.

Q1417 Philip Davies: If a payment had been made, would you be aware of it?

Mr Crone: Not necessarily. Mr Kuttner would.

Q1418 Philip Davies: So this is a question for Mr Kuttner?

Mr Crone: I would say so.

Q1419 Philip Davies: Okay, thank you for that. If I might just ask briefly, Mr Myler, and this is a general question because I appreciate you were not there at the time, but I am just asking a general question. The fact that Mr Mulcaire was paid a retainer of 100,000 - and you indicated earlier the stuff he was doing was legitimate which was included within it, in terms of looking at electoral rolls and things - as an editor of a newspaper, and this is what I am asking you generally, if somebody was on a retainer of 100,000 plus bonuses, as we have seen in the contracts, simply to do things like look at electoral rolls, would you as an editor, first of all, know about that; that that person was being paid that amount of money?

Mr Myler: I would expect to. I think so perhaps, yes.

Q1420 Philip Davies: Would you consider that sum of money to be a reasonable sum of money for looking up electoral rolls?

Mr Myler: I think we need to get on record it was a little bit more than just electoral rolls, because Mr Crone has just reminded me actually what he did. He gathered facts for stories; used to analyse the extent of proof before publication; he did credit status checks; he did Land Registry checks; he did directorship searches; analysis of businesses and individuals; he would trace individuals from virtually no biographical details; date of birth searches; electoral roll, as we have talked about; checks through data bases; county court searches; analysis of court records; surveillance - sometimes he would be involved in that specialist kind of work; he gave advice on crime issues; he had obviously a vast professional football knowledge; as a former footballer he would be involved and was involved in all aspects of the game; from what I understand he would come up with other story ideas and tips on other stories, some that worked and some that did not; he had a vast database of contact numbers in the sport and show business world, which was obviously useful for reporters who did not have those contacts; he used to do analysis of documents and handwriting checks. If you went onto the open market his rate per hour probably averaged less than 50 which, even then, is felt commercially a very good rate.

Q1421 Philip Davies: You would have thought that paying 100,000 plus bonuses, for what you have just read out - I do not know, I am not involved - I am just asking whether you would as an editor question that; or do you think that would be a reasonable sum?

Mr Myler: I think the element of "plus bonuses" is a separate issue. The contract or the piece of paper that he received under the name of Paul Williams is very common, very common practice in newspapers and indeed broadcasting, I would say.

Mr Crone: Can I just clarify this because we keep hearing about this word "bonus" and that stems, I think, from Nick Davies's first report. It is clearly referring to that holding contract of February 5, 2005. That is not a bonus; that is a completely separate, independent offering of a story by Mulcaire. In the same way as anyone rings up the News of the World or comes into the News of the World and says, "I've got a great story for you". Let me tell you how this happens though because it is quite important and will lead to understanding that document. They say, "I've got a great story for you", and we say, "What is it?" and they say, "I'm not telling you 'cause if I tell you you'll publish it and I won't get paid". So we give them that contract, a holding contract, which says we cannot publish anything unless we agree a financial deal first; and the deal on this case will not be less than 7,000. That is what that is; it is not a bonus; it has got no connection whatsoever to the retainer agreement.

Mr Myler: If the story does not work out he is not paid.

Q1422 Philip Davies: Just one final question to Mr Crone if I might, Chairman. Obviously, given your role at News International, you must look over stories before they go then to the press to make sure that they are not libellous or going to end up with News International in trouble?

Mr Crone: It is an old-fashioned principle but we think it works - not always.

Q1423 Philip Davies: Absolutely. The question I have is: at any point when that has happened, and stories have been put in front of you, were you ever suspicious at any stage that any story that was being put in front of you to look at before it went to print had to have been or the likelihood is that it would have been obtained through any kind of illegal activity?

Mr Crone: No. It is a very broad question. If you are talking about phone hacking - absolutely not: never, ever.

Q1424 Philip Davies: What about any other illegal activity?

Mr Crone: I am trying to think of what it might be. No, I do not think so, not really.

Q1425 Philip Davies: "Not really"?

Mr Crone: Journalists trespass and journalists do other things; but criminal activity, no.

Q1426 Adam Price: Mr Myler, you said you have never met Mr Mulcaire. Have you met Clive Goodman since his conviction at all?

Mr Myler: Only when I conducted the appeal with our Human Resources Director.

Q1427 Adam Price: You mentioned, Mr Crone, that payment was made to Mr Mulcaire. Was there a non-disclosure agreement attached as a condition to that payment?

Mr Crone: I do not know. It was not something I was involved in.

Q1428 Adam Price: Mr Kuttner will probably be aware of it?

Mr Crone: I do not know.

Q1429 Adam Price: The issue of the payment made to Mr Taylor, the sum that has been quoted was nearly seven times the amount paid to Mr Mosley. How do account for the size of payment made?

Mr Myler: Mr Crone perhaps can give you the legal answer to that. First of all, it is not comparable. In any negotiation one party wants one thing and another party wants another. That is exactly what happened in the Taylor case: a settlement was reached. The case with Mr Mosley obviously was through the courts and that was an award made by a judge.

Q1430 Adam Price: Some people have said that the fact you agreed to such a large sum suggests that you were concerned about some of the information which would leak out as a result of that case?

Mr Myler: It was actually quite simple: our outside lawyers' advice, who had taken counsel's advice was very strongly that we had to settle, and should settle. That advice was shared internally by our internal lawyers and I agreed. It really was a straightforward as that.

Q1431 Adam Price: Were there other bonus payments you were aware of that were offered to Mr Mulcaire?

Mr Crone: There were no bonus payments to Mr Mulcaire at all, as far as I am aware.

Q1432 Adam Price: Contracts as bonuses.

Mr Crone: Could I invite your attention to the repeated use of "bonus". Not that I am aware of, no.

Q1433 Adam Price: Neville Thurlbeck, in the original inquiry was he interviewed by you or by the firm of solicitors that you engaged?

Mr Crone: No. You mean after the arrests?

Q1434 Adam Price: Yes.

Mr Crone: No. I do not know whether he was spoken to by the solicitors. I am sorry, I cannot answer that question.

Q1435 Adam Price: Did not his by line appear on at least one story in relation to the Royals which could only have come from phone hacking?

Mr Crone: Not that I am aware of, no. I do not think there were any stories actually; that was the whole thing about Mr Goodman's mitigation - nothing had ever been published. I think there may be one story about Prince William, which was a Goodman story.

Q1436 Adam Price: There was a story in the paper on 9 April 2006 "Chelsy tears a strip off Harry", which has verbatim a message from Prince William left on Prince Harry's phone. It could only have come from phone hacking. The by line is Clive Goodman and Neville Thurlbeck.

Mr Crone: I am sorry, I was not aware of that.

Q1437 Adam Price: You were not aware of that?

Mr Crone: I certainly cannot remember it, put it that way.

Q1438 Adam Price: You did not see the story before it went to press? You have not reviewed the story as part of your investigation? Did you not go through all the Royal stories?

Mr Crone: There are over 100 pages in the News of the World each week; I am there each week; I have been there each week for nearly 25 years; I do not remember. It is a little story about the Royal Family.

Q1439 Adam Price: It was on page 7 and it actually had in big bold red letters "Exclusive".

Mr Crone: I have absolutely no recollection whatsoever about that story

Q1440 Adam Price: You have no recollection.

Mr Myler: I remember quite a few big, big scoops, like Jeffrey Archer, going way back, and things like that - David Beckham and so forth. I remember the stories we get sued on, generally; I do not remember page 7 leads, ever.

Q1441 Adam Price: The story says: "Yesterday the repentant Prince, Prince Harry, took an ear-bashing 'phone call as news broke". It goes on to repeat the message left, it says, by Prince William. The whole basis of that story is a 'phone message left on the 'phone of one of the Royals.

Mr Crone: That is what you are telling me now, but I am sorry I just do not remember.

Q1442 Adam Price: Are you aware now whether that story was based upon the hacking into the 'phone of the Prince?

Mr Crone: No, I am not aware of it. I cannot answer that question. It may well have been one of the issues that Clive Goodman was accused of. I seem to remember in court that his whole mitigation was that nothing came out of this; there was never anything published. Check the court transcript. His counsel was standing up and saying: "He may have been doing these things but it was pretty futile because nothing was ever published". The point he was trying to make was that you get hold of someone's information but if you do not ever release it you have not abused them quite as much as if you had released it. Just check the court transcript; Mr Sanders was his name.

Q1443 Adam Price: The Princes, of course, were not actually the subject of the court case itself, but are you saying that you are not aware at all whether their 'phones were hacked?

Mr Crone: Are you saying (I obviously read it once) that the information was left on the voicemail of either Prince Harry or Prince William?

Q1444 Adam Price: That is what the story says.

Mr Crone: They were not charged with that; they were charged with accessing three members of the Royal household.

Q1445 Adam Price: They were not charged with that; what I am asking you is whether your reporter actually hacked into the 'phones of the Princes?

Mr Crone: Well ----

Q1446 Adam Price: Themselves; not their staff.

Mr Crone: I would say no and I would say for absolute fact there is no evidence of that whatsoever, and the prosecution did not have anything to do with accessing the Princes' voicemails; it was to do with accessing household members.

Q1447 Adam Price: You mentioned the contract between Greg Miskiw and Paul Williams. If that was irrelevant to 'phone hacking, which was I think your suggestion, why was it mentioned by prosecuting counsel during the case?

Mr Crone: I cannot remember exactly; I just remember there was a reference to it.

Q1448 Adam Price: I remember. Actually, what he said was: "It really demonstrated the relationship between the defendant, Glenn Mulcaire, and the newspaper."

Mr Crone: That is right, because it was on News of the World headed notepaper, yes, the document. So that is probably why it was mentioned; because it was a connection between the News of the World and Glenn Mulcaire beyond the retainer. As I have tried to explain, that was separate and above the retainer; it was something that he came to Greg Miskiw with a piece of story information, and was trying to sell it quite separately. It was not part of his normal relationship with the newspaper. That is what that proves, actually.

Q1449 Adam Price: Can I ask, finally: apart from Clive Goodman and Andy Coulson, has anyone else been reprimanded, disciplined or demoted in any way as a result of this entire affair at News of the World?

Mr Myler: The affair with Mulcaire and Goodman?

Adam Price: 'Phone hacking.

Paul Farrelly: The Gordon Taylor case was settled at great expense.

Q1450 Adam Price: Has anyone been disciplined or reprimanded in relation to this entire issue of 'phone hacking from News of the World? Apart from the two ----

Mr Myler: No. In relation to Gordon Taylor, Mr Farrelly was saying because of the issue of settlement; the settlement was made based on legal advice at the highest level.

Q1451 Adam Price: There are no disciplinary proceedings against Neville Thurlbeck as a result of this email?

Mr Myler: No. No, there is no evidence. Mr Thurlbeck says he has no recollection of receiving it. There is no IT evidence to support that he did.

Q1452 Adam Price: We often talk about a smoking gun. If there is one in this case this is it, surely? It is amazing, is it not? We hear last night that the police had this email but they did not hand over to the Crown Prosecution Service; you did not see it until April 2008 and, apparently, you went through 2,500 separates. We are told that the sender of the email does not remember sending it, and the recipient does not remember receiving it. It is, quite frankly, completely implausible.

Mr Crone: Who do you mean by the "recipient"?

Q1453 Adam Price: This is the transcript for Neville, the intended recipient of the transcript.

Mr Crone: The recipient was Mulcaire, very clearly.

Q1454 Adam Price: The intended recipient for the transcript, it says, is Neville. Are you saying that this is a forgery?

Mr Crone: No. I wish it was.

Q1455 Adam Price: You accept this email was actually sent.

Mr Myler: Yes. There is no suggestion that it is a forgery, from what we can establish. We have just had two months of frenzied reporting about MPs' expenses. Does it follow that because you sit next to an MP who is one of the most guilty parties of huge excesses that you are guilty too? That you are a crook? If you share a Commons office with somebody who breaks the law, is it right that people think that you are party to it? That is, essentially, what is happening with the News of the World over something that happened three years ago. Is that fair? Is that reasonable?

Q1456 Adam Price: With due respect, we are given documentary evidence here, are we not, which names your chief reporter?

Mr Myler: That was not, by the way, redacted, like MPs' expenses were.

Philip Davies: It was, actually.

Q1457 Adam Price: It was in relation to the junior reporter in terms of publication.

Mr Myler: In the legal process it was not.

Mr Crone: It was redacted by the Government.

Mr Myler: I am sorry, I apologise. That was, yes.

Chairman: Can I appeal to Members to be relatively brief from now on.

Q1458 Janet Anderson: Mr Crone, as Legal Adviser to the News of the World, and when you are asked to make a judgment about a particular story, I imagine you would want to know the background and source of a controversial story. Is that right?

Mr Crone: Yes. I need to know the evidence in support.

Q1459 Janet Anderson: So when making those judgments have you ever listened to taped telephone conversations or messages left on other people's telephones?

Mr Crone: I have listened to many, many taped conversations - telephone conversations.

Q1460 Janet Anderson: Telephone conversations?

Mr Crone: I do not think I have ever listened to a voicemail. In fact, I am sure I have never listened to a voicemail - unless the person telling us the story had brought in their voicemail tape and say: "Listen to it", which happens.

Q1461 Janet Anderson: Did you ever wonder whether any of that was discovered illegally by subterfuge? Did that ever cross your mind? Were you ever suspicious?

Mr Crone: Subterfuge? Subterfuge is not illegal. Subterfuge is not illegal.

Q1462 Janet Anderson: Let us stick to illegal then. Did you ever wonder or worry that any of this was obtained illegally?

Mr Crone: You mean all the different conversations I listened to?

Q1463 Janet Anderson: Yes.

Mr Crone: No, because 99.9% of the time - possibly all the time - the person on one end of the conversation has recorded it, and is allowing us to listen to it in order to prove their story. It is with permission.

Q1464 Janet Anderson: Were you, therefore, shocked when you discovered that Mulcaire had been engaged in these illegal activities ----

Mr Crone: Yes, absolutely.

Q1465 Janet Anderson: ---- and that your newspaper had been paying him for that?

Mr Crone: No, we did not pay him for that. He was not paid for that. I am sorry, in the Clive Goodman context, yes, there were payments.

Mr Myler: As a member of the legal profession, were you not worried about that: that your newspaper had been paying someone who is engaged in illegal activities?

Mr Crone: Let me just put this in absolute clear context: I came back from my holidays on, whenever it was, back in the office on August 15 2006. The Royal reporter for the News of the World was under arrest and facing charges of accessing the Royal household. There was someone called Glenn Mulcaire who, actually, I had never heard of his name.

Q1466 Janet Anderson: So you had never met or spoken to Glenn Mulcaire?

Mr Crone: I have never met or spoken to Glenn Mulcaire and until August 8, when the arrests were made, I had never heard of him. I have never seen or heard of any voicemails being accessed until those arrests were made, and there has never, apart from what came out - the payments that went from Goodman to Mulcaire - I have never come across any payments for that sort of illegal activity or, indeed, any other sort of illegal activity. Criminal illegal activity.

Q1467 Janet Anderson: So when you are looking into a story and you are being asked to make a judgment - because, of course, you have to make sure that the newspaper, if it comes to the worse case scenario, has to defend that story in court - you categorically tell us that you have never listened to any conversations which you think were obtained as a result of 'phone hacking?

Mr Crone: Yes, I can definitely say that.

Q1468 Janet Anderson: You never have?

Mr Crone: I never have.

Janet Anderson: Thank you.

Q1469 Mr Hall: Mr Myler, you gave the Press Complaints Commission an absolute assurance that you had fully investigated the Goodman case and that this was a one-off. If I have understood what you have said to the Committee this morning, you actually did conduct quite as serious an investigation into this affair, but you also relied very heavily on the police investigation. Is that correct?

Mr Myler: Well, both, yes. The police investigation had lasted for nine months and, as we have explained, it was outside solicitors who came in to co-operate with them; in other words, it was complete transparency.

Q1470 Mr Hall: It was not a matter of you just asking other people to do it and you signing your name off, was it?

Mr Myler: No, because it was the police asking any enquiry, any question, that they wished to get; whether it was financial, whether it was emails, whether it was contracts, it was financial records - whatever the police asked for it was Burton Copeland that provided it. Obviously, it would have been very easy for anyone to accuse News International of saying: "You only got what we gave you".

Q1471 Mr Hall: In your opening statement to the Committee you mentioned that on your arrival at this newspaper you imposed very strict protocols on cash payments to any sources that the newspaper uses, and that you have reduced expenditure by between 81% and 89%. Did I understand that correctly?

Mr Myler: The cash payments.

Q1472 Mr Hall: Cash payments.

Mr Myler: Between 82% and 89%?

Q1473 Mr Hall: Yes. Could you put a figure on that for us?

Mr Myler: Gosh. Mr Kuttner might have a better idea. The point is that those cash payments have been reduced and that, I think, is the most important part of it - considerably so. The constraints and restrictions before anything like that happens are far tighter.

Q1474 Mr Hall: If Mr Kuttner cannot give us the answer would you be prepared to put that in writing to the Committee?

Mr Myler: Yes. It is not the greatest "Crown Jewel" commercial secret, so I am sure we can look at that.

Q1475 Mr Hall: I am quite intrigued about the fact that you said that you did a thorough trace through 2,500 emails. It occurred to me that there is a very good saying: "Don't put anything in an email that you don't want to see on the front page of the News of the World!" Were you not surprised that you did not find anything?

Mr Myler: The investigation, actually, was done by one of our internal lawyers and our IT department, and they are not affiliated to one title; they work across the company and they are just told to do the search. As I said, it was overseen by our Director of Human Resources, who I think is as impartial, if you like, as most people can be in that situation.

Q1476 Mr Hall: Did you take the same approach to financial payments? Clearly, if you wanted to know whether this was a more widespread practice within your newspaper, the money would actually show you whether it was or it was not - not emails. How much you actually spent.

Mr Myler: In relation to what?

Q1477 Mr Hall: Cash payments into sources for stories that appear in your newspaper and stories that sometimes do not even appear.

Mr Myler: After the Goodman/Mulcaire affair, I think it is safe to say that everything was pretty transparent.

Q1478 Mr Hall: This is before, is it not? This is clearly before.

Mr Myler: I think before, there were stringent restrictions and very clear guidelines about how payments should be made at any level - whether or not just cash, but on anything.

Q1479 Mr Hall: You have gone through the whole of those cash payments and payments in other ways and you are absolutely clear in your evidence to the Committee that that investigation into the cash payments made by the newspaper also confirmed that this is an isolated incident restricted to Goodman and Mulcaire?

Mr Myler: Which period are you talking about?

Q1480 Mr Hall: The period before we actually had the prosecution. Up until then this is a practice that is taking place. I do not know if Mulcaire was the only source for the newspaper to go to -----

Mr Myler: He would not have been the only source, but, again, let us be clear: there was nothing wrong with the Mulcaire contract. Lawyers, banks - one of the most respected legal firms in the land - used people like Glenn Mulcaire to gather information. There was nothing wrong with that contract.

Q1481 Mr Hall: You are quite confident that that contract would now still apply - the terms of that contract with Mulcaire would meet your strict protocol?

Mr Myler: Yes, if it did, it would, yes, but it would have to. But it did then.

Q1482 Mr Hall: You are saying in evidence to the Committee that there were no payments made to anybody within the organisation or outside the organisation that would pay for illegal activities like 'phone tapping and listening to people's voicemails.

Mr Myler: Absolutely not.

Q1483 Mr Hall: Your examination of the financial evidence shows that to be correct?

Mr Myler: I have not come across any evidence that would support payments being made for illegality - at any level.

Q1484 Mr Hall: You have looked for that specifically, have you?

Mr Myler: I have put in place absolutely stringent rules about how we conduct our business.

Q1485 Mr Hall: This is for now; I am talking about before ----

Mr Myler: How far back do we have to go, Mr Hall?

Q1486 Mr Hall: Just to the time when this story emerged would be helpful.

Mr Myler: All I can say is this: I have never worked or been associated with a newspaper that has been so forensically examined both internally, by outside solicitors, by the police, by the CPS and by the DPP. If it comes down to this Committee and others not being satisfied by those inquiries, I really do not know what more I can say.

Q1487 Mr Hall: Just one final question: the News of the World used Mulcaire. They had him on a retainer, I understand, of 100,000 and he was paid additional money for specific stories that he would like to sell to the newspaper.

Mr Myler: If they worked.

Q1488 Mr Hall: Did the News of the World employ any other organisations on the same kind of work?

Mr Myler: I do not think so.

Mr Crone: I am not aware if they did, but Mr Kuttner may be able to help you.

Mr Myler: I think it was felt that given the contract that Mr Mulcaire was on and he was working 24/7, I think it was felt that he could cover most of the ----

Q1489 Mr Hall: Would he be the first point of contact for reporters that wanted to either fact-check a story or follow up a lead?

Mr Myler: I do not know how it operated then, but I think depending on the level of experience of a journalist, if you are just in Fleet Street and you are trying to find your way round the block maybe you would have called in other, older more experienced people, perhaps, not as much, but that is normally the rule of thumb.

Q1490 Mr Hall: Would a journalist have to ask the editor's permission to go to Mulcaire?

Mr Myler: I do not believe so, no.

Q1491 Alan Keen: Just a few quick questions. I am trying to get a picture of the management structure. Could you explain, Mr Crone, for instance, are you part of the management or do you sit there waiting till somebody asks your advice?

Mr Crone: I am in the legal department, so that sits there outside the editorial process. This is the editorial legal department. My job is to look after the legal interests of the paper which consists of prepublication checking to avoid problems and then post-publication, clearing up all the problems that you did not avoid in the first place. So it is a mutually perpetuating role. The editor is the head of editorial, the deputy editor is the number two and the managing editor would be in charge, I think, of budgets and, also, I think, primarily, on staff matters - so internal disciplinary matters and that sort of thing would probably go across his desk and HR's desk. Other than that, you have the departments within the newspaper which consist broadly of news, sport and features. Mr Myler can probably answer this better than I can, but that is it.

Q1492 Alan Keen: So it is the managing editor who really sets the budget.

Mr Crone: No, the budget would be set by News International, the holding company.

Q1493 Alan Keen: Do you have any contact formally or informally with the structure above the News of the World, for instance? If you see something which you feel is not right from a legal, moral point of view, have you any formal reporting upwards?

Mr Crone: I could, yes. I would report, primarily, for News of the World matters, to the editor of the News of the World, but if there are important issues that I think the executive chairman needs to know about then I would email or ring or speak to the executive chairman.

Q1494 Alan Keen: The other way round: he would ask you on a regular basis his ----

Mr Crone: No, not regular, because those issues do not arise very often. So, no, he would not come to me very often - or she.

Q1495 Alan Keen: What was your background before you came to journalism?

Mr Crone: I practised at the Bar from 1975-1980, I worked at the Mirror Group from 1980-1985 and I have worked here since.

Q1496 Alan Keen: When you came into the newspaper world, were you surprised by the looseness? All my experience before I came here was in management in the engineering industry, where if somebody said: "Make the cheque out not to me as normal but to Fred Smith this time", that would be the end of that relationship for ever more. Were you shocked at some of the looseness of ----

Mr Crone: No, because I do not have a lot to do with payments, to be perfectly honest. I do remember when I first worked at the Mirror Group thinking: "They are paying the most incredible sums of money to put across two pages and I am being paid a bit less to work for a year", and I just thought the finances were just amazing.

Q1497 Alan Keen: Could I ask Mr Myler: you said you made quite firm changes to the management of the people who worked for you, and you cut out the cash payments to almost 90%. What other changes did you make as far as the authorisation for cheques and for other payments other than cash? Did you have the final say?

Mr Myler: Yes.

Q1498 Alan Keen: Before you made these changes, how did it work before you came? Why did you feel you had to make the changes?

Mr Myler: I think we have to remember that there was a system in place before. It was not like the Wild West; it was not a matter of somebody coming up and giving cash all the time. I just felt that we could strengthen up where we were before, which is what we did. Equally, I felt that personal contracts, particularly relating to the PCC Code, could and were strengthened, which meant that if you are a reporter and you are going out knocking on somebody's door, to turn around and say: "The news editor was putting me under pressure to get the story so I could do want I wanted and then blame the news editor for doing that" was no longer acceptable; it was about personal accountability. As a result of that, that clause relating to employment and breaking the PCC Code was strengthened, which meant that if you broke it you could be fired.

Q1499 Alan Keen: I was not exactly sure: did Glenn Mulcaire want to use the name Paul Williams just in the publication of a story or did he want paying as Paul Williams?

Mr Myler: I do not know.

Mr Crone: I have looked at the payment records and no, he had two different companies, I think. In the early days it was one company and it was subsequently a company called Nine Consultancy Limited.

Q1500 Mr Watson: Mr Crone, on the Taylor case, your advice was to settle in April 2008, I think you said?

Mr Crone: I agreed with the outside advice that was given, yes.

Q1501 Mr Watson: So you took it to the Board in June 2008?

Mr Crone: No, I did not take it to the Board; I reported to Mr Myler as editor, and at one stage we both reported it upwards together.

Q1502 Mr Watson: A 700,000 payment would be a decision taken at Board level. Is that right?

Mr Crone: I am not aware of that.

Q1503 Mr Watson: So the News International Board did not agree the payment in any way?

Mr Myler: What do you mean by the "Board"?

Q1504 Mr Watson: Your managing Board; the directors of the company.

Mr Myler: Why would they need to be involved?

Q1505 Mr Watson: Because it is a huge amount of money and they have got a responsibility to the proprietor and shareholder, I assume?

Mr Myler: Yes. As I have said, Mr Watson, the sum of money that Mr Taylor first set out to receive was significantly higher than the sum he did receive.

Q1506 Mr Watson: I am sorry, I thought that was the easy question. So the Board did not know about the payment ----

Mr Crone: I do not know. I am sorry, I do not know. All I do is report to the next stage up.

Q1507 Mr Watson: So you could let us know afterwards; you could write to us and let us know whether the Board took the decision?

Mr Crone: I could ask the question and give you the answer, yes.

Q1508 Mr Watson: Would that be minuted? Could you let us have the Minute?

Mr Crone: If it was raised at the Board I assume it is minuted.

Q1509 Mr Watson: Could you tell us how it would appear in the accounts?

Mr Crone: No, I do not know the answer to that. It would appear against - I probably do know the answer to that. It would appear against the legal department budget.

Q1510 Mr Watson: When did you tell Rupert Murdoch?

Mr Crone: I did not tell Rupert Murdoch.

Mr Myler: The sequence of events, Mr Watson, is very simple, and this is very clear: Mr Crone advised me, as the editor, what the legal advice was and it was to settle. Myself and Mr Crone then went to see James Murdoch and told him where we were with the situation. Mr Crone then continued with our outside lawyers the negotiation with Mr Taylor. Eventually a settlement was agreed. That was it.

Q1511 Mr Watson: So James Murdoch took the ultimate decision?

Mr Myler: James Murdoch was abridged of the situation and agreed with our legal advice that we should settle.

Mr Crone: What you have to understand about litigation, which I do not think you do, is that if you are in it then you are in it until it is over. You can stay in it and have a full trial and pay 3 million or you can get out at a certain stage and pay 600,000.

Q1512 Mr Watson: I am just trying to find out who took the decision to make the payment.

Mr Myler: It was an agreed, collective decision. It is how newspapers work. Indeed, Mr Watson, I think you probably know that it is good, sensible, practical business practice across most industries. Are you telling me that you have never come across an agreed payment between two companies or an individual that falls out over something that is done? Is that what you are saying?

Q1513 Mr Watson: No, I am just trying to find out ----

Mr Crone: Mr Watson, because we are on a CFA in your litigation against us ----

Q1514 Mr Watson: I do not want to get into that.

Mr Crone: ---- you have no knowledge of how litigation finances work?

Q1515 Mr Watson: All I am trying to find out is who took the decision to settle ----

Mr Myler: Very simple, and I think we have given you the simple answer.

Q1516 Mr Watson: Could I ask about the payments to Mulcaire, just for clarity? You said that he had been working for the paper since the late-1990s.

Mr Myler: I believe that the association may have gone back that far. I think his first contract was, I believe - and, again, perhaps Mr Kuttner ----

Mr Crone: The first one I have seen is 2001.

Q1517 Mr Watson: You have seen 2001. Would you be able to let us know if it goes back before that?

Mr Crone: Yes, sure.

Q1518 Mr Watson: I think the only thing in the public domain is that he was paid 100,000 in 2003 to Nine Consultancy. Is that right?

Mr Crone: I do not know.

Q1519 Mr Watson: It could be that he was paid that amount in the years before that.

Mr Crone: It was an annual contract, and the last annual contract was a touch over - it was about 104,000 a year.

Q1520 Mr Watson: That contract ended when he was convicted?

Mr Crone: Yes.

Q1521 Mr Watson: Then you said there was an employment disagreement. He, presumably, thought that because he had worked for you for more than a year he had employment rights and, therefore, you needed to afford him the same employment just as you gave Clive Goodman. Is that what you understand?

Mr Crone: No, I was not privy; I was not part of that process, but my understanding of the employment law (as I say, I am only repeating what I have been told) is that freelancers or contractors, if they do more than a certain number of hours a week for you, then they have rights.

Q1522 Mr Watson: So when he came out of jail, was his company paid or was he paid directly?

Mr Crone: I do not know.

Q1523 Mr Watson: You could let us know that afterwards. Is that right?

Mr Crone: Yes. I hope someone is writing down what I need to let you know.

Q1524 Mr Watson: And the amount?

Mr Crone: I do not know.

Q1525 Mr Watson: You could confirm that afterwards as well?

Mr Crone: I am sure.

Q1526 Mr Watson: Mr Myler, I was going to say to you that people whose judgment I respect tell me that you are a very decent man and that if there was wrongdoing in the company when you took over you would have cleaned it up. My final question to you, on which I am trying to get light in this Inquiry, is how a newspaper decides what is in the public interest. The judge in the case said that in certain circumstances illegal activity is allowed in the public interest. Am I right to say that under your leadership that public interest test would be taken by you, having sought legal advice, and would not be taken further down the food chain?

Mr Myler: I think it is safe to say, Mr Watson, that in 40 years in this business I spend, probably, equal amounts of time and, depending on the story, more time with lawyers than I do with journalists.

Mr Watson: Thank you.

Q1527 Mr Sanders: I think the Committee is very grateful for the way you have explained certain things and how things work, but I am still a bit confused about this junior journalist who transcribed a tape of 'phone recordings. Is that common, for a junior journalist to act as transcribers, rather than to use secretaries?

Mr Myler: I was a junior journalist once, and I was given many tasks, and one of the things would be to transcribe a tape, yes.

Q1528 Mr Sanders: That is you. What I am saying is, why was this junior journalist asked to transcribe this tape? From the fact that he cannot remember transcribing this tape it suggests that he transcribed many tapes. So why would you have a junior journalist transcribing lots of tapes?

Mr Crone: I would think that on the News of the World floor there four secretaries - five - all of whom have their own jobs, all very busy. A junior reporter might not have anything to do for days on end, so it seems a useful use of facilities to give it to him or her.

Q1529 Mr Sanders: This does not quite gel - horses for courses.

Mr Crone: It is not a difficult task; you do not need a great deal of skill for it, to transcribe a tape. That is what he was doing; he was doing an awful lot of it.

Mr Myler: For example, there will be reporters back in the office now taking a note of this meeting, transcribing it over the television feed. It depends who is around; it depends who is in the office. It might be a secretary who is doing it; it might be a reporter; it might be a junior reporter.

Q1530 Paul Farrelly: Just in terms of the payment, let us get this quite correct: Clive Goodman was dismissed when he was convicted summarily and he lost his appeal. So, therefore, after he was summarily dismissed on conviction neither he nor anyone associated with him was made any further payments by News International or any companies or individuals or agents acting on behalf of News International, or associated with the company. Is that correct?

Mr Crone: I am not aware of that.

Mr Myler: I am not aware either.

Q1531 Paul Farrelly: So Clive Goodman was the Royal editor and, as far as you are aware, no further payments were made to Clive Goodman, who was convicted on one charge of conspiracy and pleaded guilty to it. Yet Mr Mulcaire, who was arrested at the same time ----

Mr Crone: I am sorry. I think I misunderstood your question. Are you asking whether, at the end of whatever employment issues were raised, Mr Goodman received a payment?

Q1532 Paul Farrelly: I am asking: there were no further payments to Mr Goodman after he was summarily dismissed? Or anyone associated with him by anyone associated with News International?

Mr Myler: I am not aware of any payment.

Q1533 Paul Farrelly: The answer was clear. I am moving on to Mr Mulcaire now. Mr Mulcaire was convicted on six counts: one of conspiracy and five of the actual deed; he is a convicted criminal, he has breached the press code of conduct all over the place and any other, no doubt, what would be called gross misconduct in any organisation; yet, at the end of the day, you consider that he still has claims against the company in terms of some sort of employment rights and a payment is made to him.

Mr Crone: That explains my confusion. I am sorry, that does explain my confusion. You are assuming that no payment was made to Clive Goodman.

Q1534 Paul Farrelly: I asked whether or not ----

Mr Crone: If I could finish, then we will both understand each other, I hope. Your question seems to be premised on the facts, and that is my understanding, that at the end of his employment appeal and everything else process there was no payment. I do not know whether that is right - it may not be right, in fact.

Q1535 Paul Farrelly: You said "No" ----

Mr Crone: That is because I misunderstood the question, which is why I ----

Q1536 Paul Farrelly: Would you clarify that to us?

Mr Crone: I am not absolutely certain, but I have a feeling there may have been a payment of some sort.

Mr Myler: With?

Mr Crone: Clive Goodman.

Mr Myler: I would have to check.

Q1537 Paul Farrelly: Can you clarify that afterwards? Clive Goodman was summarily dismissed and yet, having been convicted on six counts, your company felt that ----

Mr Crone: Are you talking about Mulcaire?

Q1538 Paul Farrelly: Yes, Mr Mulcaire still had some claims in terms of some unspecified employment rights and you made him a payment.

Mr Crone: Yes, apparently he did. I do not know employment law, but apparently (as I have now said for the third time) the law means that if you do so many hours a week there are certain rights. Alongside those rights you have rights of process as to how you are dismissed. If you do not get the process right ----

Q1539 Paul Farrelly: Having pleaded guilty and having been convicted?

Mr Crone: Ask an employment lawyer. You are asking the wrong person. If you do not get the process right, as I understand it, you are going to have to pay a bit of money.

Q1540 Paul Farrelly: Would you let us know the grounds on which ----

Mr Crone: This is the law that you guys have passed and we are stuck with it.

Q1541 Paul Farrelly: As well as the amount, would you let us know the grounds on which your employment lawyers advised you that he still had a claim against you?

Mr Myler: Mr Farrelly, I was just going to say, in all seriousness, the human resources laws today with employment are incredibly complicated, and indeed, I think, allow people to do rather extraordinary things and still come back on an employer and say: "But you still haven't got a right to fire me." There are extraordinary examples out there of people receiving payment where, under most people in the street's view, would be unreasonable, but you are dealing with law.

Q1542 Paul Farrelly: If we have the details then we will find out more about this extraordinary case, will we not, so that we can better try and grapple with it. Mr Myler, can I ask you this final question: the PCC issued a report based on your evidence that said that Mr Mulcaire had a second clandestine relationship with the paper?

Mr Myler: I am sorry?

Q1543 Paul Farrelly: The PCC said in its report, based on your evidence, that Mr Mulcaire had a second, clandestine relationship with the paper through Clive Goodman. We have seen, through the documents that The Guardian produced to us last week and which became evident to you in April 2008, that there were at least two further relationships with the newspaper. Have you taken any steps with the PCC to correct the record?

Mr Myler: I think, as Mr Crone will explain, the Taylor settlement bound us and binds us on a matter of confidentiality. We are between a rock and a hard place. So the Court has bound us by a legal obligation. You have heard from Mr Crone and me about what happened, and no further evidence emerging. That is where we are.

Q1544 Paul Farrelly: The answer is, quite clearly, you did not take any steps to correct the record?

Mr Myler: With the PCC?

Q1545 Paul Farrelly: With the PCC.

Mr Myler: No, no.

Q1546 Paul Farrelly: Mr Crone, can I ask you - this is the final question, Chairman - Mr Hinton came to us and gave similar evidence that Mr Myler gave to the PCC. As the Legal Adviser for News International, did it ever occur to you to come back to the Committee in the light of what you discovered in the Taylor case, again, to correct the record?

Mr Crone: I do not see how I could have without breaching the obligation of confidentiality to Mr Taylor that had been agreed. I do not see how I could have.

Q1547 Adam Price: One very specific question: in the appeal that you heard, Mr Myler, with Clive Goodman, did he produce or did he mention that he had in his possession any email messages from Andrew Coulson that were material to this case?

Mr Myler: Not that I can recall, no.

Q1548 Chairman: Thank you both.

Mr Myler: Thank you.

Witnesses: Mr Andy Coulson, former Editor, and Mr Stuart Kuttner, Managing Editor, News of the World, gave evidence.

Chairman: For the second part of this morning's session, can I welcome the Managing Editor of the News of the World, Stuart Kuttner, and the former Editor, Andy Coulson. To begin, having shown remarkable restraint so far, Peter Ainsworth.

Q1549 Mr Ainsworth: Good morning. Do you want to say something first?

Mr Coulson: Would you mind? I know that time is of the essence, but I wondered if I might take a couple of minutes just to make a few comments that might save some time in the long term. Good morning. I was, as you know, Editor of the News of the World for four years from January 2003 until January 2007. During that time I never condoned the use of 'phone hacking and nor do I have any recollection of incidences where 'phone hacking took place. My instructions to the staff were clear: we did not use subterfuge of any kind unless there was a clear public interest in doing so; they were to work within the PCC Code at all times. I arranged for the staff to attend seminars with the PCC and the in-house lawyer, where they were given regular refreshers. I gave the reporters freedom as professional journalists to make their own judgments and I also gave them plenty of resource (?). We spent money in the pursuit of stories at the News of the World, more money than most newspapers, and I make no secret of the fact. In an average week the News of the World would publish around 100 news and feature stories; the amount of stories being actively worked on with resource being spent on them would be two to three times that amount. As Editor, my duties, other than obviously editing the paper itself, included overseeing the marketing of the paper and overseeing the advertising layout, campaigns, any events and whatever else the week inevitably threw up. So I would invariably concentrate on only a handful of those 100 stories and focused mainly on the first 13 to 15 pages, the under-spread sport, the leaders and other comment pages; I was not able to micromanage every story, and nor did I attempt to. In relation to the Clive Goodman/Glenn Mulcaire case, I would like to make the following points: I never met, emailed or spoke to Glenn Mulcaire; I knew the name of what I was later to discover was his company, Nine Consultancy, because the newspaper paid around 100,000, as you know, a year for legitimate investigation services. The judge in the court case accepted that this was a perfectly legal arrangement, as I believe did the prosecution. I am sure the contract sounds expensive, but the fact is at the News of the World, where I would regularly spend five figures on a single story or a picture, this payment did not stand out. The extra payments paid to Glenn Mulcaire by Clive Goodman were unknown to me and were concealed from the Managing Editor. I should add that, as I made clear in my statement, I have no knowledge of a News International settlement with Gordon Taylor or anyone else involved in this Inquiry. I do not recall ever commissioning a Gordon Taylor news story, I do not remember ever reading one and I certainly did not publish one. Before you begin your questions I would also like to stress that these matters that we are going to discuss took place three or more years ago. Finally, I would like to say this, Chairman: things went badly wrong under my editorship of the News of the World; I deeply regret it; I suspect I always will. I take the blame because, ultimately, it was my responsibility. I am not asking for any sympathy (I suspect I am unlikely to get any today), but when I resigned I gave up a 20-year career with News International and, in the process, everything that I had worked towards from the age of 18. However, I think it is right that when people make mistakes they take responsibility, and that is why I resigned. Thank you, Chairman, for that time.

Chairman: Thank you.

Q1550 Mr Ainsworth: We have just heard, Mr Coulson, from Mr Myler that one of the very first things he did when he came and took over from you in February 2007 was to instigate a whole raft of new control mechanisms within the organisation to ensure compliance with the PCC Code, to ensure that contracts were revised so that misdemeanours could be penalised appropriately - a whole series of measures. I know he said earlier that it was not the Wild West when he arrived - that there was a sort of system in place - but does not the fact that so much had to be done suggest that when you were editor there was a kind of slackness in terms of the way that disciplinary issues were handled and that compliance was enforced.

Mr Coulson: I have to accept, looking back on my editorship, as I think I touched on in my opening remarks, that mistakes were made. I have to accept that the system could have been better - I think it is self-evident that the system could have been better - but I would argue the point that no efforts were made to properly control reporters' activities and to properly control the finances.

Q1551 Mr Ainsworth: Can we speculate a little as to if the system had been better, in your words, you would probably have known about the whole Mulcaire issue?

Mr Coulson: I probably would have known?

Q1552 Mr Ainsworth: About what was going on with Mulcaire.

Mr Coulson: No, I do not think I can ----

Q1553 Mr Ainsworth: Even if the system had been as it is now you still would not have known?

Mr Coulson: Sure, I understand. I do not think I can say that with certainty, no, because what we had with the Clive Goodman case was a reporter who deceived the managing editor's office and, in turn, deceived me. I have thought long and hard about this (I did when I left): what could I have done to have stopped this from happening? But if a rogue reporter decides to behave in that fashion I am not sure that there is an awful lot more I could have done.

Q1554 Mr Ainsworth: So your immediate response on hearing this was, presumably, surprise?

Mr Coulson: Yes, and anger.

Q1555 Mr Ainsworth: Can we turn to the money? You touched on this in your opening remarks. It may just be that what we are looking at here is a difference in scale as well as, perhaps, a difference in culture between yourselves and The Guardian. (When I say "yourselves" I mean the News of the World as it was and The Guardian.)

Mr Coulson: There are many differences between us.

Q1556 Mr Ainsworth: There are, indeed, many differences. We heard from Alan Rusbridger that he would expect to have been told that The Guardian had paid 100,000, and I know that Mr Myler objects to the use of the word "bonus" payment, but there were also additional payments made which, again, Alan Rusbridger said he would expect to be told about in his situation. Is the reason that you were not told about this simply to do with the difference in scale of operations between The Guardian and the News of the World, or is it some other procedural thing?

Mr Coulson: The budget that I was given at the News of the World far exceeds that, I am sure, with all due respect to The Guardian, of The Guardian newspaper, I suspect. As I said in my opening remarks, I would regularly pay vast sums of money for a single story or a single picture, so the idea that I would micromanage the budget, I am afraid - it just was not the case. Can I add this as well, because I am sure that you will be asking more specific questions about the budgeting process, both of me and of Mr Kuttner: I accept that the system was not perfect and I take ultimate responsibility for it. If I could give you some examples of things that I wish I had done that could have prevented the Mulcaire case, I would give them to you today. I am not able to do that, but as a general point, obviously, looking back, I wish that I had done more.

Q1557 Mr Ainsworth: What would you like to have done?

Mr Coulson: It is difficult to say. I cannot give you a specific set of measures. To give you an example, once we knew that Clive Goodman had been arrested, obviously, we wanted to find out pretty quickly what had happened. So we instigated an internal inquiry; I brought in an independent set of solicitors with the primary purpose, I have to say, of trying to find out what happened in relation to Clive, and we discovered that these cash payments had taken place. So, yes, could I have tightened up the cash payment process? Maybe yes, and maybe I should have done.

Q1558 Mr Ainsworth: Although you have just said that even if the new systems that Mr Myler put in place had been in place when you were there you still would not have known ----

Mr Coulson: I cannot be sure. I am trying to be ----

Q1559 Mr Ainsworth: It is not a question of you ----

Mr Coulson: I am trying to be as upfront with you as I possibly can on this point. I have thought long and hard about this since I left the News of the World; I cannot pin a specific thing: "I wish I had done that and if I had done that this would not have happened". I have to accept, do I not, where did it all end?

Q1560 Mr Ainsworth: Is it really the case that you are saying not only did you not know, which is clearly the established position, but that you could not have known?

Mr Coulson: In relation to Clive's payments to Glenn Mulcaire, no, I would not have known about those and could not have known.

Q1561 Mr Ainsworth: You could not have known?

Mr Coulson: I do not think so. I did not sign off on individual cash payments.

Mr Ainsworth: Thank you.

Q1562 Alan Keen: Mr Kuttner, how did you see Mr Coulson fitting into the management control system? Do you feel guilty that you left him to sink, really? Do you feel he should have known more about the payments that were being made, or did you feel that was not really his job and he was a journalist first and not a manager?

Mr Kuttner: First things first: I deeply regret the circumstances in which Andy Coulson left the News of the World. He was a very fine editor of that newspaper and it was a very unhappy, traumatic time for the management of what I will call "my newspaper", although I do not edit it. Do I think that Andy Coulson should have been told more, could have been given more information, that I left him down? No, I do not. He has said that he and I were deceived. There are in life, I am afraid, people who engage in such activity. In the grand scheme of things, with thousands and thousands of payments for stories, pictures, features and articles and sports reports going through our systems, and, as you have heard from previous witnesses, the entirely valid, legitimate Mulcaire contract, a relatively small but regrettable number of false cash payments were created and were approved, on the whole - not always but generally - by me, unknowing, and in those circumstances, as I said a few moments ago, I think the arrests and what followed, and the bringing in of the independent lawyers, right from the start, was, in my long experience, one of the most traumatic and unhappy events that I have known in newspapers.

Q1563 Alan Keen: I presume your background was as a journalist before you became Managing Editor?

Mr Kuttner: I am a journalist. Managing Editors can and may be journalists, in some circumstances.

Q1564 Alan Keen: It is the structure we are interested in. Is there a lack of management expertise, then, in this? What about the accountancy aspect of it? To make large cash payments is always open to problems. We have seen, by coincidence, Gordon Taylor, the PFA General Secretary, is involved in some of this; and football agents are probably the worst case example of unauthorised payments, hidden payments ----

Mr Kuttner: I am sorry; I did not catch that.

Q1565 Alan Keen: I am sorry. I am saying that it is a coincidence that Gordon Taylor from the PFA was involved, and football agents are probably the area where unauthorised payments are made and that has been tightened up tremendously by the football authorities. Where does the accountant fit into this management structure? Surely there is somebody who has to make sure that when the books go to the auditors in the end that there is not anything wrong with what is going on?

Mr Kuttner: First of all, we work - particularly, I work and managing editor colleagues work - very closely with an internal accountant. Secondly, there are both internal and external audits, as there are in any big company. The improper payments were a serious but tiny percentage of the overall number of payments that a big newspaper makes and came to light, as you know, as a result of a very substantial police investigation. When they did, we took a number of actions to do what we could to prevent anything of that nature occurring again.

Q1566 Alan Keen: I understand that as a percentage it is small. Obviously, if you are paying 50,000 to somebody as an informant or to tell a sex story that has occurred in their life, that is a lot of money and that is not a difficult decision to make; it is very straightforward, you are paying somebody 20,000, 25,000 or 100,000 even, but where you are paying somebody for getting information, that should have been looked at, should it not much more carefully?

Mr Kuttner: It was, Mr Keen; these things were looked at, and are looked at. Where you have long-serving, experienced and trusted journalists coming forward - and, I have to say, relatively occasionally in the sense that, with perhaps one exception, there was no large pattern - with information and saying: "Look, in order to get this information from someone who is in a sensitive position, I need to make this payment in cash"; where that journalist is a long-serving, relatively senior and trusted person, with hindsight one would do all sorts of different things but I do not have hindsight - I guess nobody else here does either - you accept the information being laid before you at face value, unless there is some reason to be suspicious of it. In my experience, and as you have heard from Andy Coulson, in his too, at the News of the World, there was no reason to be suspicious of it.

Q1567 Alan Keen: Did Mr Coulson report directly to you then?

Mr Kuttner: On the contrary.

Q1568 Alan Keen: What was the management structure then? Who was Mr Coulson's boss?

Mr Coulson: Les Hinton.

Q1569 Alan Keen: So your job, Mr Kuttner, is really more as a manager than a journalist? Is that the case?

Mr Kuttner: As I said a few moments ago, the way my job has operated for many years at the News of the World has been, if you like, to bridge both the journalism and the management; a bridge between the journalists and the management; a bridge between managerial and admin tasks and journalism. So that, for example, I would fairly regularly write articles for the newspaper; I would go out, from time to time, and conduct interviews, on the one hand, and, at the same time, I would be overseeing the budget of the newspaper, on the other.

Q1570 Alan Keen: So Mr Coulson did not know what payments were being made. What, Mr Coulson, was your link with the journalist who was writing the story? Did you not want to know where his information was coming from? Especially if it was referring to tittle-tattle from inside the Royal family. Did you not want to know how he got the information? Was that not your job? If you were not part of the management of the organisation, surely that would have been your job - to know where the actual information came from? How the story was put together.

Mr Coulson: Sure, I took responsibility for everything that appeared in the paper, that is the job of an editor, but I certainly did not have the time and nor, as I said in my opening remarks, did I micromanage every story. I certainly did not micromanage every piece of tittle-tattle as you correctly put it.

Q1571 Alan Keen: When we talked to Paul Dacre a few weeks ago I think he said that the Mail Group stopped using agents soon after the turn of the century, but you obviously continue to use them right up until, well --- has it stopped now? While you were Editor you used agents like Mr Mulcaire. Did you not think about stopping that practice? Did you know that the Mail Group had stopped it?

Mr Coulson: No, I did not know that. My understanding is that investigation agencies of this type are used by pretty much every media company. I stand to be corrected, I have been out of newspapers for a while, as you know, and maybe things have changed, but my understanding is that these kind of agencies are used by all types of media organisations, print and broadcast.

Chairman: Philip Davies?

Q1572 Philip Davies: Mr Kuttner, could I start with you, if I might ---

Mr Kuttner: Forgive me, Mr Davies, no discourtesy but since you are about to address me I would like to raise a matter with the Chairman in respect of yourself. Ten or 11 days ago - and you clearly know what is coming ---

Q1573 Philip Davies: I do know what is coming, yes.

Mr Kuttner: Your position on the veracity of my conduct and my evidence was clearly prejudged and in very prejudicial terms, you are quoted - and forgive me if The Guardian got it wrong - when you say: "Stuart Kuttner has resigned. As someone who does not believe in coincidence, it is far-fetched to say that his resignation had nothing to do with it." In those circumstances - and perhaps I should, with respect Chairman, have raised this when I first sat in this chair, I am concerned that Mr Davies is in effect acting as judge and jury and has already made up his mind as to the reliability of anything I say and in those circumstances I would ask that he withdraws and takes no further part in these proceedings. I am glad you find it a laughing matter.

Q1574 Chairman: I am sure Mr Davies will answer for himself.

Mr Kuttner: I am glad he finds it a laughing matter, sir, because I do not.

Chairman: However, this is not a court and Members of Parliament are entitled to express views and it does in any way disbar them from asking questions in a select committee hearing.

Q1575 Philip Davies: Mr Kuttner, as somebody who at in previous sessions, if you have been following our inquiry closely, has been arguing in most of them that I believe the press should have more freedom in order to express their views, it seems quite extraordinary that you should take the view that because I expressed an opinion with which you were not happy that I should be barred from any proceedings, but we will let that pass. This is an open session and everybody in the world can see what questions I ask and everybody in the world can see what answers you give, and I trust the public who watch it and listen to it to come to their own conclusions, as I am sure as a journalist you would too. I do not really see where your problem lies but perhaps you could clear up this particular issue of your resignation because you announced your resignation either the day before the story in The Guardian broke or the day of it. Given that you think that that was not linked in any way could you explain to us why you announced your resignation at that time.

Mr Kuttner: I hear what you say and thank you for your comments. I think that your use of the word "think" is very revealing. I do not think that my resignation is not linked to this matter; I know it is not linked to this matter and, moreover, there are legal documents in existence with News International's counsel and my own lawyers that make that position perfectly clear, I only regret that you clearly have a position in your mind which bears no relationship to reality whatsoever. I do not wish to personalise it, this is not about me, but since you said what you have said and just said what you have said just now it is a very simple situation. Discussions after a very long career in journalism about a retirement, a stepping aside, a stepping down, call it what you will, had gone on for months and arrangements were agreed quite some time before anything appeared in The Guardian newspaper and, if you will allow me to repeat, there are legal documents in possession of lawyers which confirm that fact.

Q1576 Philip Davies: Sure, and I am perfectly happy to accept that, but would you not accept that it is slightly curious that you announced it at that particular time? If this had been something that was on the go for quite some time, would you not think that somebody in your position, given the high profile nature of that story might think, "Well, I will not announce it today of all days, I might just wait a week before I announce it." Was there any particular reason why you had to announce it that particular day?

Mr Kuttner: Mr Davies, why would I delay or why would, more accurately, the announcement of my retirement be delayed in respect of something of which I had no foreknowledge whatsoever? I am clearly not going disabuse you, Mr Davies, you either accept from me that there was no connection whatsoever, and that can be easily evidenced, or you do not, and I suspect you do not, and for the avoidance of doubt I very much regret that.

Q1577 Philip Davies: Do you not think though that it does raise a question that people are entitled to ask? You are a journalist. You keep telling us that you are a journalist, so do you not think that people are entitled to ask questions that are begged by certain actions? If somebody did something which raised a question, would you say to your journalist "Don't ask the question; just accept it at face value"? Is that really what you are saying - that I should not be asking you this question?

Mr Kuttner: Mr Davies, you keep in different forms of words - much like a journalist - asking pretty much the same question. You get the straightforward answer; you do not like it, and I am sorry you do not like it, but it happens to be the fact of the matter and there are people in this room who can very simply attest to that.

Q1578 Philip Davies: We are obviously not going to make any further headway there. Have you made any payments to either Glenn Mulcaire or Clive Goodman since they were convicted of their offence?

Mr Kuttner: So far as I know agreements were made with them. I have no details at all of the substance of those agreements and so I cannot go beyond that.

Q1579 Philip Davies: Could you tell us who can because when I asked Mr Crone the same question he seemed to think that you were the person to ask.

Mr Kuttner: Well, in which case that is simply not so.

Q1580 Philip Davies: I am asking the question as to who would know if a payment had been made for any particular reason to Mr Mulcaire or Mr Goodman since they were convicted. Mr Crone said he did not know and could not be expected to know. You seem to be saying that you do not know. Who at News International would know?

Mr Kuttner: There is no point in me speculating on what I do not know. What I do know is some kind of agreements or arrangements were made, I think individually, in fact I am sure individually, with both persons. As to who would know I can make enquiries about that.

Q1581 Philip Davies: So you have no idea who would know at the moment? Whether payments have been made to one of your journalists and his accomplice who have been convicted and sent to prison, you are trying to tell me that you have no idea who in News International might or might not know that?

Mr Kuttner: No, I did not say anything of the sort. I said I do not know and I can make enquiries about it.

Q1582 Philip Davies: So you do not know who at News International would authorise that payment? You must know who would authorise such payments, surely?

Mr Kuttner: Mr Davies, it is quite a large company and I have given the answer I have given.

Q1583 Philip Davies: But you will find out who has?

Mr Kuttner: I said that I can make enquiries.

Q1584 Philip Davies: Mr Coulson, perhaps we might get somewhere with you because we are clearly getting nowhere with Mr Kuttner. Am I right in thinking from your opening statement that you said that you were aware of the 100,000 a year payment to Mr Mulcaire's company but you just had no idea about the activities that he was indulging in?

Mr Coulson: The 100,000 was for a legitimate contract. I think the Committee has discussed that before as to what Mr Mulcaire did for that 100,000. Separately, the cash arrangements with Clive Goodman I knew nothing about.

Q1585 Philip Davies: That is fine. I think you behaved honourably in the sense that you resigned, which is perhaps a lesson that many politicians could learn when things go wrong on their watch.

Mr Coulson: It is not for me to say.

Q1586 Philip Davies: You said again today that you were not and could not be aware of the activities of a rogue reporter.

Mr Coulson: Yes.

Q1587 Philip Davies: Would you now accept given what has subsequently been in The Guardian and the evidence that they have produced that the likelihood is that Mr Goodman was not actually a rogue maverick reporter at the News of the World and there was actually more of a systemic culture at the News of the World about these activities?

Mr Coulson: No, I would not accept that.

Q1588 Philip Davies: So you think that it is perfectly reasonable to presume that because phone tapping was taking place of people like Gordon Taylor and Elle Macpherson, who had nothing at all in any way as far as I can see to do with the Royal Family, and that Clive Goodman was the Royal Editor, that that must have been down to Clive Goodman's activities?

Mr Coulson: As far as I am aware there is no evidence linking the non-Royal phone hacking allegations that were made against Glenn Mulcaire to any member of the News of the World staff.

Q1589 Philip Davies: So you do not think the suspicion arises even?

Mr Coulson: There is no evidence.

Q1590 Philip Davies: What about the emails that were sent by other reporters on the News of the World that we heard about earlier?

Mr Coulson: I will try and be as helpful as I possibly can be today but I will say this about the documentation that The Guardian produced: I have never seen any of it before. As I said in my opening statement, I have no recollection of a Gordon Taylor story. I heard Mr Crone's evidence earlier that mentioned that it may have come up in a conversation. I have absolutely no recollection. I am not suggesting that Tom is wrong about that, by the way, but I have no recollection of it. Dozens of stories come through the News of the World in a given week. Some weeks more than dozens. I can tell you that I never asked for a Gordon Taylor story, I never commissioned a Gordon Taylor story, I never read a Gordon Taylor story, to the best of my recollection, and, as you will know, we did not publish a Gordon Taylor story. I would add this: Gordon Taylor, with all respect to him, is not exactly a household name, so he may have appeared in the sports pages of the News of the World from time to time but I certainly would not have been interested in a story on him or about him at the front end of the newspaper.

Q1591 Philip Davies: So you do not think therefore that the chances are that perhaps somebody who works on the sports pages might have also been involved in this activity?

Mr Coulson: You are now hypothesising about the allegations stretching through every aspect of the News of the World. Forgive me but where is the evidence that even the other people involved in the Mulcaire charges were linked to the News of the World? Where is the evidence for it?

Q1592 Chairman: We do have the copy of the contract which was signed by the Assistant Editor of the News of the World to employ Paul Williams (in other words Glenn Mulcaire) to find a story about Gordon Taylor, so clearly it was not just Clive Goodman.

Mr Coulson: The first time I saw that document was when The Guardian produced it. I have no knowledge of it whatsoever.

Q1593 Chairman: So whilst Greg Miskiw would have signed that contract he had not talked to you about it?

Mr Coulson: No, Greg Miskiw was based in Manchester. He did not talk to me about it in any way.

Q1594 Janet Anderson: Mr Kuttner, you are the Managing Editor. I wonder if you could perhaps give us a job description. What does being Managing Editor involve and can you set out for us what exactly is the chain of command for authorising payments? When would you have been involved in making payments and when would you not?

Mr Kuttner: Okay, a two-part question, can I try and condense the answer to the first part. I will not say a jack-of-all-trades but a managing editor on a newspaper can do all sorts of things. In my particular case, as I said at the outset, I have made contributions to the paper in terms of articles. Occasionally I would negotiate with publishers for the rights to books. I would help with the writing of the editorial column, the leader column. I would deal with disciplinary matters involving staff. I guess it is a separate matter but I sat and I do still as a trustee of the pension fund. I was actively involved in the creation of the newspaper's annual budget and the division of that budget between different departments such as news and features and sport and pictures and so forth. I liaised closely with the heads of those departments as to their weekly and monthly spending patterns and to some substantial extent I or a colleague (though more often myself) would sign off or approve, or in some cases disapprove, journalists' expenses claims or challenge them, and finally, although I may have left something out of that litany, I would approve payments, by far the bulk of them being payments by cheque or by bank transfer or what are called retainer payments, regular payments to columnists, and occasionally (occasionally in the sense of not a great quantity) oversee cash payments.

Q1595 Janet Anderson: You said earlier that you were not aware of a continuing contract with Goodman and Mulcaire.

Mr Coulson: Forgive me, which contract are you speaking of?

Q1596 Janet Anderson: Well, you said you were not aware of details of any payments subsequent to their conviction?

Mr Kuttner: Of the payments in relation to the annual contract?

Q1597 Janet Anderson: Yes?

Mr Kuttner: I was aware of that. If I gave that impression I am surprised because I was perfectly well aware of that.

Q1598 Janet Anderson: Could you explain for us the chain of command when it comes to authorising payments by the News of the World from the bottom to the top.

Mr Kuttner: Okay, let us take a for instance. A news reporter gets to hear of a possible story and in that case there may be a demand from an informant or from a freelance agency for a payment. That journalist will speak to the department head, who could be the features editor or the deputy features editor, and agree a sum payable on publication of the story, and then in due course, either on a screen or in paper, the documentation for that story would come to me. I would check it against what had been reported previously, so if a features editor had said to me, "Look story X will cost 3,000 for example," and along comes a payment for 3,000, that is fine. If along comes a payment for 4,000 that is not fine, and that is batted back.

Q1599 Janet Anderson: So you would generally be aware of all the payments that were made. Can you describe circumstances in which you might not be aware?

Mr Kuttner: In which I might not be aware? If I dealt with them personally I would be aware of them.

Q1600 Janet Anderson: But in what kind of situation would you not deal with them personally?

Mr Kuttner: Only if for example I was away and my deputy dealt with them.

Q1601 Janet Anderson: So otherwise everything would pass across your desk?

Mr Kuttner: Much of it would pass across my desk, yes.

Q1602 Janet Anderson: Mr Coulson, I think you said in your opening statement that you would never condone or tolerate subterfuge unless it was in the public interest. Do you believe that phone hacking is ever in the public interest?

Mr Coulson: No, I do not and I do not, as I said, have any recollection of there being any instances, public interest or otherwise, where it was used. I would also add this: the Clive Goodman case it is blatantly clear from the stories that were published that there would not be a hope of a public interest defence. This was, as I think Mr Keen pointed out earlier, largely tittle-tattle so the idea that there could be a public interest defence applied to those activities is nonsense.

Q1603 Janet Anderson: So you state categorically that you had no knowledge of these activities when you were at the News of the World but you have a very long and distinguished career spanning 20 years as reporter for The Sun, and you worked for Piers Morgan on the Bizarre show business column and then the Daily Mail and then back to Deputy Editor of the News of the World. Are you telling us in the whole of that time you never, ever had a suspicion of any kind of illegal activities such as phone hacking, such as hacking into people's voicemails and so on?

Mr Coulson: There have been rumours about that kind of activity, I suppose, and media commentators have written about it. It has been in the ether of the newspaper world for some time but, no, I have never had any involvement in it at all.

Q1604 Janet Anderson: There was of course the instance of The Sunday Times, I believe, planting a trainee reporter in the Cabinet Office to steal Government documents, so that kind of thing does go on.

Mr Coulson: Talk to John Witherow, with respect.

Q1605 Janet Anderson: But in your experience you have never been involved with anything like that?

Mr Coulson: No.

Q1606 Mr Farrelly: Mr Coulson, in the story that appeared in The Guardian you issued the following statement: "I took full responsibility at the time for what happened on my watch but without my knowledge and resigned." That is a very big catch-all. What were you denying knowledge of when you made that comment to The Guardian?

Mr Coulson: I was denying knowledge of what was being largely alleged in The Guardian. Can I hazard a guess as to what might lie behind your question, why did I not give a more fulsome reaction to it in the way that perhaps I have with my statement this morning?

Q1607 Mr Farrelly: No, that is not behind it but if you want to ---

Mr Coulson: Fine, then I will not bother.

Q1608 Mr Farrelly: If you want to expand, please do.

Mr Coulson: I was merely going to point out that this was not exactly a high point of my career. I do not particularly enjoy talking about it, I do not particularly enjoy seeing stories in the newspapers about it, although I think I have probably lost that battle, and so I have not talked much about it since I left the News of the World, largely for those reasons.

Q1609 Mr Farrelly: Can you just remind me when did you become Deputy Editor of the News of the World?

Mr Coulson: In 2000.

Q1610 Mr Farrelly: Let us just go to Operation Motorman then and payments to Stephen Whittamore. Were you aware of any relationship between the News of the World and Stephen Whittamore?

Mr Coulson: This is a long time ago so I am not going to pretend that I have an encyclopaedic knowledge of what went on at the time but I will do my best. The Motorman inquiry, as you know, was industry wide. The reaction to it, I think, was industry wide. As for the involvement of individual News of the World journalists, I knew very little about that. I knew only what was published. I cannot remember the exact date but in 2006 I think I am correct in saying the What price privacy now? report, or possibly it was the second report, detailed a number of reporters. It also published a league table and I think the News of the World was fifth in that league table and The Observer, from memory, was ninth.

Q1611 Mr Farrelly: We know this.

Mr Coulson: Forgive me for repeating it.

Q1612 Mr Farrelly: Just for a moment, had you come across that name Stephen Whittamore before?

Mr Coulson: My recollection of our reaction to Motorman was to tighten procedures internally and was to look at the PCC Code more forensically. I think I am right in saying that the code changed as a result of the Motorman inquiry and we reacted accordingly. As I said in my opening statement, we worked hard, I have to now accept perhaps not hard enough, to ensure that our reporters knew what the PCC Code was and what it meant and what it meant in terms of their day to day job.

Q1613 Mr Farrelly: Had you heard the name Stephen Whittamore before the story?

Mr Coulson: No.

Q1614 Mr Farrelly: You had never heard it?

Mr Coulson: No.

Q1615 Mr Farrelly: If while you were Deputy Editor, Editor or a senior journalist on the News of the World had anyone used an enquiry agent such as Stephen Whittamore would you have insisted before the fact that their use of such an enquiry agent, if it involved anything potentially illegal would be accompanied by a public interest defence?

Mr Coulson: I think every reporter knew that they had to work within the PCC Code. The PCC Code is very clear about the public interest defence. On that basis I felt that it was covered.

Q1616 Mr Farrelly: So you would not have specifically insisted?

Mr Coulson: No.

Q1617 Mr Farrelly: Or specifically known whether anybody had access ---

Mr Coulson: I do not recall ever doing so. I do not recall any conversations specifically about Whittamore. I really do not think that I knew the name until it came out in the proceedings.

Q1618 Mr Farrelly: It is just that your denial was very broad and anything that may have gone on that was illegal, which is why I am asking. Mr Kuttner, we had a third set of documents from the The Guardian. Have you seen this?

Mr Kuttner: I do not believe I have, sir.

Q1619 Mr Farrelly: Can I pass it to you. Do you recognise that sort of invoicing?

Mr Kuttner: I beg your pardon?

Q1620 Mr Farrelly: Do you recognise that form of invoicing as the managing editor?

Mr Kuttner: It looks and in fact it clearly is it is what is called a self billing tax invoice.

Q1621 Mr Farrelly: It is a self billing tax invoice?

Mr Kuttner: It is marked something and clearly it would have said, if it were all there, something and then "contributor" and I think possibly "self-billing tax invoice". I am not sure who it relates to though.

Q1622 Mr Farrelly: The first two entries are address from telephone number but can I just turn you to the final page. The sixth item down relates to a payment of 70.50 for the obtaining of an ex-directory telephone number.

Mr Kuttner: Please bear with me a moment. I can see 70.50, yes.

Q1623 Mr Farrelly: Would you as a managing editor authorise that sort of payment to an enquiry agent?

Mr Kuttner: I think the answer to that is it depends on how the enquiry agent obtained the information.

Q1624 Mr Farrelly: Presumably the request that has gone out - and I have been an investigative journalist although I have never had to do this, I have done it longhand as fortunately we have been in a position in papers I have been on to pay for this information, but this sort of request would go out for the obtaining of an ex-directory telephone number. It would be a specific request of an enquiry agent and the means by which the enquiry agent gets it will inevitably have to have as the source the telephone company.

Mr Kuttner: I beg your pardon?

Q1625 Mr Farrelly: The means by which the enquiry agent gets the information will have to go at some stage back to the telephone company. Have you authorised as a managing editor payments like this?

Mr Kuttner: I have authorised many, many, many payments where to my knowledge the work has been done in a proper and lawful fashion. I see no evidence here that anything has been done unlawfully.

Q1626 Mr Farrelly: That is not my question. You would always as a matter of course as Managing Editor ask the question whether this was in the public interest?

Mr Kuttner: Whether a specific payment?

Q1627 Mr Farrelly: With the enquiry for the obtaining of an ex-directory telephone number to which payment of 70 in this but there could be other cases where more or less had been made whether that information was sought with a public interest defence? Would you ask that question before authorising payment?

Mr Kuttner: On an individual item-by-item basis?

Q1628 Mr Farrelly: Yes?

Mr Kuttner: I think that is unlikely.

Q1629 Mr Farrelly: Because our predecessor inquiry received evidence that any such questions would have had a public interest defence, and that was from the then Editor of the News of the World before your tenure, Mr Coulson.

Mr Kuttner: But the authorisation of the payment does not necessarily mean that anyone has behaved unlawfully or that the kind of questions you just instanced have not already been asked.

Q1630 Mr Farrelly: Mr Coulson, you have denied also when The Guardian story came out knowing about the Taylor settlement. That is understandable. Can I ask you when you first learned of the Taylor litigation?

Mr Coulson: When I read about it in The Guardian I think.

Q1631 Mr Farrelly: You had not been informed even though this went back to April 2008?

Mr Coulson: I was not involved in any way.

Q1632 Mr Farrelly: That Gordon Taylor was suing the News of the World?

Mr Coulson: I was not involved in any way.

Q1633 Mr Farrelly: Nobody from News International communicated this to you?

Mr Coulson: No. My only knowledge of Gordon Taylor at all was in relation to the court case. Obviously he was one of those named in the Mulcaire case.

Q1634 Mr Farrelly: Right, so neither by way of gossip nor chatting to old friends at the News of the World?

Mr Coulson: I do not recall any of it at all.

Q1635 Mr Farrelly: Or being asked for advice?

Mr Coulson: Advice?

Q1636 Mr Farrelly: Or being summonsed by Gordon Taylor? Nobody from April 2008 informed you that there was any litigation in progress?

Mr Coulson: To the very best of my recollection, no.

Q1637 Mr Farrelly: So it was news to you when The Guardian printed that story?

Mr Coulson: Yes.

Q1638 Mr Farrelly: I find that remarkable but we have to take your answers at face value. When Clive Goodman pleaded guilty as the Editor of the News of the World why did you not sack him?

Mr Coulson: Well, I thought that an HR decision on Clive should be made once the proceedings came to a full end. For the same reason, I resigned two weeks before I actually left and kept it from the staff. I made that decision two weeks before Clive's sentencing because I felt that the legal issues had to reach their absolute conclusion.

Q1639 Mr Farrelly: We have heard that there was a continuing relationship and payments were also made subsequently to Glenn Mulcaire. Why did you not make sure that that arrangement was terminated when Glenn Mulcaire pleaded guilty?

Mr Coulson: For the same reason I think. There was a very serious legal situation on-going. With Clive I think maybe looking back on it I was pondering whether or not it would affect his mitigation in some way. I do not know. I just felt the proper thing to do was to let the legal matters come to an end. I decided two weeks prior to that that I would resign and then subsequent to that obviously I was not involved.

Q1640 Mr Farrelly: You are a very senior adviser to the leader of the Opposition and presumably if not now then in the future if the leader of the Conservative Party becomes the Prime Minister you will have to deal with spokesmen at the Palace, for example. Do you think it is sustainable to have a relationship with the Palace when you were the Editor while journalists on your watch hacked into the phones of the private and personal secretaries to the Princes and future King of England and also of your counterpart, then Paddy Harverson, at the Palace and yet when you learned of this you did not immediately sack either the reporter or the person who had hacked into the phones?

Mr Coulson: No, but I resigned.

Q1641 Mr Farrelly: Do you think it is sustainable for you to have a relationship of trust in the future?

Mr Coulson: In relation to Paddy Harverson, with the greatest of respect, ask Paddy Harverson. I have no problem with it. I have seen Paddy socially since this case. I apologised fully several times, quite properly, to the Royal Family and to all those who were affected by Clive's actions. In relation to this job now I have done my best to work in as upright and as proper a fashion as I possibly can. Ultimately though I guess it is for others to judge.

Q1642 Mr Farrelly: Do you think in your heart of hearts that you can have a proper relationship of trust with the Palace given the circumstances of what went on?

Mr Coulson: As I say, there is no problem my end.

Q1643 Mr Farrelly: Mr Kuttner, just a few final loose ends. Did you authorise the arrangements entered into by Greg Miskiw with Paul Williams, which was an alias for Glenn Mulcaire?

Mr Kuttner: No, Mr Farrelly.

Q1644 Mr Farrelly: That was done without your knowledge, was it?

Mr Kuttner: Correct.

Q1645 Mr Farrelly: As Managing Editor would you have been expected to have been informed that such a relationship was entered into?

Mr Kuttner: That Greg Miskiw had entered into a holding contract for a potential story? Not necessarily, no.

Q1646 Mr Farrelly: For 9,000.

Mr Kuttner: I think the figure is 7,000 but the answer to your question is no. The point at which I would have expected, and indeed I believe would have become aware, is if the story was working out and if we were likely to put it in the paper. I think I would then have been told - in fact more than think, I know that I would have been told, "Look we have such-and-such a story involving a gentleman and it is intended to publish it in the paper, and the financial impact in terms of the cost will be X," but it clearly never reached that stage.

Q1647 Mr Farrelly: Clearly but what level of payment then would you expect to be consulted on before it was paid and to authorise before it was paid?

Mr Kuttner: To be consulted on?

Q1648 Mr Farrelly: To be informed?

Mr Kuttner: To be informed in advance?

Q1649 Mr Farrelly: Yes.

Mr Kuttner: Anything in or about the order of 1,000 plus.

Q1650 Mr Farrelly: And authorisation?

Mr Kuttner: Well that would follow. Do you mean authorisation in terms of making the payment or authorisation in agreeing?

Q1651 Mr Farrelly: Authorisations on making the payment.

Mr Kuttner: Making the payment? That would follow once the story had been published and something was generated to create that payment in the system, and then, having been made aware of it in advance, I would check it, as I think I said earlier, against whatever I had been alerted to and if it was a very substantial payment, whatever the Editor had been alerted to, and I would authorise the payment.

Q1652 Mr Farrelly: So you are telling me you would normally be expected to be informed about payments of around 1,000 ---

Mr Kuttner: Plus.

Q1653 Mr Farrelly: And yet for the entering into of a contractual agreement that would trigger a payment of 7,000 you are saying that you would not necessarily expect to be informed?

Mr Kuttner: Not at that stage since it was not a firm contractual arrangement in the sense that, as I understand it, it was an agreement to pay X for a story if and when that story was confirmed and published.

Q1654 Mr Farrelly: It seems a pretty straightforward contractual agreement to me. It says "The News of the World agrees to pay a minimum sum of 7,000 on publication of a story based on information provided by Mr Williams."

Mr Kuttner: Contingent upon publication.

Q1655 Mr Farrelly: So under your control as Managing Editor you are asking us to believe that they were so lax that you would allow people to enter into contractual agreements to pay someone seven times the minimum at which you would expect to be informed?

Mr Kuttner: No, I think that is a misunderstanding of the position.

Q1656 Mr Farrelly: Well, can you enlighten me?

Mr Kuttner: If we were about to make a firm commitment to pay for a story, once the story was confirmed, once it was prepared for publication, I would then be advised "Look, we have such-and-such a story, it will cost whatever it will cost and I have been made aware of it," and I might indeed say at that point, "This sounds a lot of money for this story, or "Are we going to put this story on the front page or do it as a double page spread?" and the editor, depending on the amount, is involved to a degree in that debate.

Q1657 Mr Farrelly: Before that stage the paper would not be worth what it is written on really?

Mr Kuttner: I do not accept that at all.

Q1658 Mr Farrelly: That seems to be the implication.

Mr Kuttner: I do not accept that. Whatever that says is what it represents.

Q1659 Mr Farrelly: How many agreements like this are you aware of where agreements have been made to make payments while you have been Managing Editor to pay people in a false name?

Mr Kuttner: I think the answer is I am not aware of them.

Q1660 Mr Farrelly: This is unique?

Mr Kuttner: I did not say that. I am not saying that it is unique but I am not aware of ---

Q1661 Mr Farrelly: Any further instances?

Mr Kuttner: No.

Q1662 Mr Farrelly: Can I just ask you about Clive Goodman. You say you were deceived. How was Clive Goodman able to pay 12,300 to Glenn Mulcaire? Was it actually in readies or did it go through the accounts department in a masked way?

Mr Kuttner: I think the answer to the first part is it was in cash, it was a cash payment. The answer to the second part is that it was all accounted for in the documentation and that is the material that either directly on their own account to the investigating police team, or through Burton Copeland, the solicitor who was looking into these things at News International, was all disclosed.

Q1663 Mr Farrelly: And over what period was the 12,300?

Mr Kuttner: I would have to refresh my memory. I think it covered quite an extensive period but I would need to do a document search for that. But I think it was over quite a long time.

Q1664 Mr Farrelly: It would be very interesting because 12,300 in cash, it is a question of ---

Mr Kuttner: That imagery is misleading. I do not know what 12,000 looks like, unfortunately, but it was spread over quite a time period. I could look into that and I am not unhappy to do so.

Q1665 Mr Farrelly: I would be very grateful. When you found out that this had been received, did you report this to the Inland Revenue? Did you report the income Mr Mulcaire had received to the Inland Revenue?

Mr Kuttner: All payments made by News International, by the News of the World, and I think I can speak for the other newspapers in its group, all the payments, to the best of my knowledge, whether they be by cheque, whether they be by bank transfer or whether they be in cash are returned to HMRC when the company makes its tax returns.

Q1666 Mr Farrelly: Including this amount?

Mr Kuttner: Including which amount?

Q1667 Mr Farrelly: The 12,300?

Mr Kuttner: I have no reason to doubt that whatsoever.

Q1668 Mr Farrelly: Could you confirm that?

Mr Kuttner: I can certainly enquire.

Mr Farrelly: Thank you.

Q1669 Adam Price: Mr Coulson, Piers Morgan described Clive Goodman at the time of his conviction I think as "the convenient fall guy for an investigative practice that everyone knows was going on for years". Do you agree with that?

Mr Coulson: I think you would have to talk to Piers. I think that Clive was a rogue case on the News of the World. I am not going to speak for the entire newspaper industry. I can only speak for the newspaper that I edited for a period and I am absolutely sure that Clive's case was a very unfortunate rogue case.

Q1670 Adam Price: So essentially you disagree with Piers Morgan's description that he was the fall guy for a practice that was common within the industry?

Mr Coulson: With the greatest of respect, ask Piers; he is not backwards in coming forwards!

Q1671 Adam Price: We may consider broadening our inquiry. Let us see where we go.

Mr Coulson: Sure.

Q1672 Adam Price: Nevertheless, Piers Morgan is I believe a feted, celebrated former Editor of the News of the World.

Mr Coulson: He would certainly like that description!

Q1673 Adam Price: When he makes a statement like that that this practice was going on for years what did he mean by saying that?

Mr Coulson: Please do not think me unhelpful but ask Piers. I think I am here to answer questions about my time as Editor of the News of the World. I have given you my view. I really do not want to be unhelpful but I have to say that I was not expecting to be asked questions about Piers Morgan.

Q1674 Adam Price: I think it is reasonable for me to put to you what a former Editor has said about the news culture at the News of the World.

Mr Coulson: Sure, I understand.

Q1675 Adam Price: If we take both your statement and his statement at face value the conclusion we are forced to form really is that these practices were going on previously and under you, apart from Goodman, they suddenly stopped.

Mr Coulson: I think I was asked earlier as to whether or not this was a wider industry problem. Of course it has been in the ether, as I say, in the industry but I can only really talk today about my experience and what I had direct involvement in and I have answered that question.

Q1676 Adam Price: Just to be clear, under your tenure as Editor and Deputy Editor, as far as you were aware at the time, the News of the World did not pay people to obtain information illegally?

Mr Coulson: Yes, that is right.

Q1677 Adam Price: We heard reference a moment ago to the evidence in relation to Stephen Whittamore that Nick Davies produced. He also told us that Greg Miskiw used the agency in question on 90 separate occasions I believe from which the Information Commissioner concluded that the information accessed was definitely illegal. This put him in the top ten of the 305 journalists identified by the Information Commissioner as part of Operation Motorman, at number nine in fact. Are you surprised that an associate editor under your editorship was actually responsible for this level of illegal activity?

Mr Coulson: Again, I really do not want to be unhelpful, Mr Price, but I only learned of Greg Miskiw's name in relation to Motorman I think probably about the same time as you did. I have no evidence and I have not seen any evidence as to whether or not this is correct or incorrect, what the cases that are listed against Greg's name are, and whether or not this is a fair or an unfair accusation. I do not know. I know as much as you do, and you may even know more, in relation to what has been published in relation to Motorman.

Q1678 Adam Price: If that evidence were forthcoming, and we are trying to get the evidence from the Information Commissioner in full, would you be surprised if that were proven to be correct?

Mr Coulson: It is a hypothetical question. I do not know. If you put the evidence in front of me and asked me the question, I would try and give a direct answer. It is hypothetical as to whether I would be surprised.

Q1679 Adam Price: If we get the evidence you would be prepared to sit before the Committee again and respond to that?

Mr Coulson: Let us see whether or not you get the evidence. I would be happy to listen to whatever request the Chairman has of me.

Q1680 Adam Price: There were a further 200 attempts, from my reading of the evidence, by Mr Miskiw that the Information Commissioner graded as probably illicit. Looking at the round figures we have seen a price list for blagging under a previous Information Commissioner report. We must be talking about over 10,000 here over a three-year period. Mr Kuttner, would you have been aware of this level of use by a single journalist of a particular agency?

Mr Kuttner: This level of use by a single journalist of a particular agency?

Q1681 Adam Price: Yes, the cumulative amount.

Mr Kuttner: Of which agency are we speaking at the moment?

Q1682 Adam Price: Stephen Whittamore?

Mr Kuttner: Right, I think I probably would be aware that journalist X or journalist Y was perhaps on behalf of himself or herself and other colleagues making enquiries of an agent, yes.

Q1683 Adam Price: Did you not think to ask Mr Miskiw whether the information being formally requested was legal?

Mr Kuttner: Well, I think that presupposes that I would have some reason to be suspicious and I did not.

Q1684 Adam Price: Before this information came to light you have never come across cases in the past where journalists on the News of the World have tried to obtain information illegally or from sources that tried to obtain illegal information? It has never occurred to you before that this could happen?

Mr Kuttner: No, it has not and I have to say to you that bearing in mind the requirements of their contracts before the clauses were strengthened, bearing in mind the number of times that various editors have asked that we be sure that people follow the PCC Code, as I think I said earlier, the events of the day that the police came and Clive Goodman was arrested are seared into my brain. It was a traumatic event and I cannot state too strongly how alarming that was, and "surprising" is not even an adequate term.

Q1685 Adam Price: In 2002 it emerged as a result of covert police surveillance that a News of the World journalist had been paying thousands of pounds to a detective agency, Southern Investigations, for information obtained illegally from corrupt police officers. Were you aware of those payments, Mr Kuttner?

Mr Kuttner: Am not specifically aware of those, no. I would need some prompting. How long ago did you say that was?

Q1686 Adam Price: Well, the events stem from 1998 but it emerged in 2002.

Mr Kuttner: So 11 years ago and seven years ago, I would need some prompting and I will try and help you if you could provide it.

Q1687 Adam Price: You yourself I think, Mr Coulson, when you appeared last time before the Committee six years ago, along with Rebekah Wade, did admit that the News of the World did pay police officers for information. Is that correct?

Mr Coulson: Did I? I do not think I did.

Q1688 Adam Price: That amounts to misconduct in public office.

Mr Coulson: I am not being facetious here but if I did I would like to be told and have the quote read to me because I do not think I did. I think what I said is that the only circumstances under which - and please correct me if I am wrong here - a payment to a policeman could be condoned was if there was a legitimate public interest. I think that is what I said but it was a long time ago and you will have to remind me.

Q1689 Adam Price: That still amounts to misconduct in public office. You are essentially corrupting a police officer.

Mr Coulson: I was making the point, as I recollect, that there is no excuse for illegality unless there is a clear public interest.

Q1690 Adam Price: Corrupting a serving police officer is always illegal. There is no justification for it.

Mr Coulson: I am not disputing that but I did not say, as I think you said at the start - and again my apologies if I am wrong about this - that I had knowledge of any policeman being paid, because I do not.

Q1691 Adam Price: So as far as you were aware the News of the World while you were Editor or Deputy Editor never paid a serving police officer for information?

Mr Coulson: Not to my knowledge.

Q1692 Adam Price: No journalist on the News of the World?

Mr Coulson: No.

Q1693 Adam Price: Going back to the payments to Glenn Mulcaire through Clive Goodman that he received as Alexander, the code name or whatever that was used. These were weekly instalments, were they, Mr Kuttner?

Mr Kuttner: I am not sure at this distance whether there was a strict pattern but I do think they were on the whole weekly, yes. That is my recollection.

Q1694 Adam Price: Presumably at some point you would have asked for some evidence that these were useful stories and they were actually appearing in the paper?

Mr Kuttner: Yes I did from time to time.

Q1695 Adam Price: So some of the stories that emerged through Alexander (that we now know as Glenn Mulcaire operating under subterfuge) did appear in the paper?

Mr Kuttner: I believe that is right.

Q1696 Adam Price: Could we have a list of the stories that appeared in the paper through this route that came in through Alexander, aka Glenn Mulcaire, paid for by the 12,400 additional payment?

Mr Kuttner: All I can say, sir, is that I will do my best to see if it is possible to research that.

Q1697 Adam Price: Okay. You said as well, Mr Kuttner, that you would make enquiries as to who would know who has made the payments to Clive Goodman and Glenn Mulcaire. When you have made those enquiries presumably you would be happy to report back to the Committee?

Mr Kuttner: What I have undertaken to do is to make enquiries as to who handled the arrangements or agreements with Glenn Mulcaire or Clive Goodman.

Q1698 Adam Price: Do you know at this stage whether there were any conditions attached to those payments, particularly a non-disclosure or confidentiality agreement?

Mr Kuttner: No, I do not know.

Q1699 Adam Price: Finally, Mr Coulson, I think you were quoted in the Press Gazette, that august publication, as saying that if a journalist comes to you with a great story, one of the first questions you ask is, "How did you get it?" Did you ever ask that question of Clive Goodman?

Mr Coulson: I do not recall specific circumstances where I did. I think in that interview I was laying out a broad idea of how things worked on the News of the World. Certainly from time to time I would ask how stories came about. I was generally though more concerned about how a story could be stood up and how a story could be in a fit state to be published.

Q1700 Adam Price: Everyone who knows you says that you were a hands-on editor, that you would probe stories relentlessly at editorial conversation, you would roam the news floor, you were a constant presence. If your Royal reporter or chief reporter was presenting a story would you not always ask about the provenance of these stories?

Mr Coulson: Not always, no, and, as I said in my opening statement, I did not micromanage every story, nor did I micromanage every reporter. It is possible in all walks of life - and perhaps Mr Watson will back me up on this - to work very close to someone who is doing something that they should not be doing, perhaps sending emails or whatnot, and not have full knowledge of what it is they are up to and being completely oblivious to what it is they are up to.

Q1701 Adam Price: I think Mr Watson will probably want to come in. I referred to a particular story in the earlier session involving the two Princes and I was surprised that Mr Crone feigned ignorance of this particular story because Neville Thurlbeck was actually cross-examined in relation to this exact story by counsel for Max Mosley at the Mosley case?

Mr Coulson: You will have to forgive me, which story are you referring to?

Q1702 Adam Price: We have a copy of the News of the World somewhere: "Chelsy tears a strip off Harry". It is a story which is essentially based around a phone message left by Prince William imitating Chelsy, Prince Harry's girlfriend, on Prince Harry's phone. Either the story was untrue or it was based on the phone hacking of the Prince's phone. It also appeared on the front in inset. Are you saying that as an Editor, a page 7 story about the Princes, about a message left on their phone, and you as an editor of a national newspaper, with an inset on the front, would not have checked the provenance of that story?

Mr Coulson: Not necessarily, no, and I do not remember the story. I will have a look at it now.

Q1703 Adam Price: Are you aware now whether the Prince's phone was hacked?

Mr Coulson: No, I am not aware either way.

Q1704 Adam Price: Should you not find out?

Mr Coulson: Well I suggest --- I do not remember the story, I am sorry.

Q1705 Adam Price: Is that not astonishing? You are an Editor of a national newspaper and here is a story which is based around a verbatim account of a phone message left by one Prince on the other Prince's phone. You put an inset on the front, you brand it as exclusive, it is high up the paper and you are telling me that as Editor you do not even remember the story and you did not ask Clive Goodman or Neville Thurlbeck, who we now know of course it would appear received a transcript in relation to other phone hacking, that you did not know and you did not ask at the time?

Mr Coulson: Mr Price, I am sorry, but I can only tell you what I remember and I do not remember this story at all. I am trying to remind myself of what the week may have been like by looking at the rest of the paper. It seems that we had a buy-up with an Eastenders star, we were in the middle of a DVD promotion, there is a very good story about David Cameron on page 2. I am afraid I simply do not remember this story so I can only therefore conclude that I played no part in it. I can only tell you what I know. I do not know what edition it is and I would like to know what edition this is. I am sorry, I can only tell you what I remember and I do not remember the story at all.

Q1706 Tom Watson: I think last time we met I was your guest at the News International reception at the Labour Party Conference. It is good to see you again.

Mr Coulson: Very good, nice to see you.

Q1707 Tom Watson: Do you think Clive Goodman deserved a jail sentence?

Mr Coulson: I think Clive paid a price for his crimes.

Q1708 Tom Watson: So you think he deserved it?

Mr Coulson: I think that Clive paid a price for his crimes and I would not argue with what happened in any way, shape or form.

Q1709 Tom Watson: But that price of four months in jail was deserved?

Mr Coulson: That was a judgment for the judge, was it not?

Q1710 Tom Watson: What is your judgment?

Mr Coulson: I am not arguing with the judgment at all.

Q1711 Tom Watson: What is your judgment?

Mr Coulson: On what?

Q1712 Tom Watson: On the four-month sentence?

Mr Coulson: Not in any way since Clive's conviction have I disputed the judgment and I do not think I would now.

Q1713 Tom Watson: Have you seen him since he went to jail?

Mr Coulson: No.

Q1714 Tom Watson: Or talked to him?

Mr Coulson: No.

Q1715 Tom Watson: Would you have considered him a friend before he was arrested for what he did?

Mr Coulson: I knew Clive a bit. We had a mutual friend many years ago but, no, Clive and I were not especially close.

Q1716 Tom Watson: Do you think Mulcaire deserved his prison sentence?

Mr Coulson: I feel the same way as I did about Clive's sentence.

Q1717 Tom Watson: It must have been a terrible day when they were arrested. When you conducted your inquiry did you ask detailed questions about what Mulcaire did and did not do for the company?

Mr Coulson: At what stage, sorry?

Q1718 Tom Watson: When you found out about the arrests. Presumably you commissioned an inquiry?

Mr Coulson: Yes. Obviously we wanted to know internally very quickly what the hell had gone on. Then I brought in Burton Copeland, an independent firm of solicitors to carry out an investigation. We opened up the files as much as we could. There was nothing that they asked for that they were not given.

Q1719 Tom Watson: And did it surprise you that Mulcaire had worked for the company since the late 1990s when you were Deputy Editor and Rebekah Wade was Editor?

Mr Coulson: No, I do not remember when I first learned about Nine Consultancy. Remember that I did not know the name Glenn Mulcaire. All I knew was Nine Consultancy. I cannot recall precisely when I first learned of it. I imagine that I saw it probably on an annual budget round. It would have been listed along with a whole range of other things.

Q1720 Tom Watson: He had a number of companies before Nine Consultancy that failed to file accounts at Companies House - four or five I think before Nine Consultancy - so I am assuming that if he was working for News International in the late 1990s you would have made payments to all the other companies. Does that ring any bells with you?

Mr Coulson: No and I do not have any recollection of the other companies either. I know what I have read. I do not have any reason to doubt it but I never had any involvement in that way with Nine Consultancy or any other Mulcaire company.

Q1721 Tom Watson: So as Editor as soon as you hear that an employee and a contractor had been arrested you tried to scope out the relationship and the depth of their involvement in this. Even after your enquiries you were not aware of the other companies that Mulcaire was a director of and you cannot remember when he first started working for the company?

Mr Coulson: I am afraid not, no.

Q1722 Tom Watson: Right, on the actual case, is it your belief that the Princes' phones were bugged or blagged or hacked?

Mr Coulson: No, I only know what I have read, the same as you guys. As I understand it, there were members of the Household who had their phone messages intercepted.

Q1723 Tom Watson: Did you ask Goodman or Mulcaire or any staff members whether they thought that the Princes' phones were hacked or not?

Mr Coulson: I never had an e-mail exchange let alone a conversation with Glenn Mulcaire.

Q1724 Tom Watson: What about the staff members on the paper during your enquiries?

Mr Coulson: We carried out an investigation obviously. Remember that the investigation was until November, from memory, centred only around the Royal Household, so, yes, we would have asked questions about that but as to the involvement of other celebrities and well-known people that was not known about until much later in the legal process.

Q1725 Tom Watson: When you found out that Greg Miskiw had encouraged Mulcaire to set up the Nine Consultancy, what did you think?

Mr Coulson: Sorry, could you ask that again.

Q1726 Tom Watson: When had Greg Miskiw encouraged Mulcaire to form a consultancy, Nine Consultancy?

Mr Coulson: Did he encourage them to form a consultancy?

Q1727 Tom Watson: According to the reports that we have both read.

Mr Coulson: I did not pick up on that.

Q1728 Tom Watson: Would it be unusual for a journalist based in Manchester to give that advice to a client?

Mr Coulson: I do not know the detail of the relationship between Greg and Nine Consultancy, I do not know.

Q1729 Tom Watson: But you did work with Greg Miskiw, you were his boss.

Mr Coulson: I did for a while although Greg under my editorship changed jobs and, as I say, ended up in Manchester before he left the paper.

Q1730 Tom Watson: So you had moved him out to Manchester?

Mr Coulson: "Moved him out" is a harsh, harsh way of describing it, but I think that Greg had family in Manchester, I think I am right in saying, or certainly up that way, and it suited him and us for him to work from Manchester.

Q1731 Tom Watson: Has Greg Miskiw got a financial relationship with the company, Mr Kuttner?

Mr Kuttner: No, not so far as I am aware. I wonder if I could help you with perhaps just elaborating ---

Q1732 Tom Watson: I will come back to you if that is okay.

Mr Kuttner: If I may, it is in respect of a question you just asked Mr Coulson vis--vis Greg Miskiw and Mulcaire. I do not know if this helps at all but my recollection is that we had had for some time I think, if you like, an ad hoc relationship with Mulcaire and I think it was Greg Miskiw who probably said, "Look, there is a better way of doing this as an all-in deal," and out of that because of the amount of enquiries and work that Mulcaire was doing I think the contract came as a result of Miskiw's suggestion.

Q1733 Tom Watson: So in advance of the company Nine Consultancy you were making direct payments to Glenn Mulcaire?

Mr Kuttner: I cannot be sure. I am going back a long way. What I have in my mind is that possibly the all-in contract came out.

Q1734 Tom Watson: Mr Crone has committed to giving us chapter and verse on the companies that you had a relationship with and the payments both before he was convicted and after so that would clear it up.

Mr Kuttner: Okay.

Q1735 Tom Watson: Just one last round of questioning. You knew that you were going to resign before sentencing but on the day of sentencing you resigned from the paper.

Mr Coulson: I actually resigned two weeks before I announced it.

Q1736 Tom Watson: Two weeks before. And did you get a redundancy payment for that?

Mr Coulson: I got what was contractually due to me. Obviously I did not work my notice so I received what was contractually due.

Q1737 Tom Watson: Then you were six months out of work.

Mr Coulson: About five months.

Q1738 Tom Watson: And then you went work directly for the Conservative Party.

Mr Coulson: That is right.

Q1739 Tom Watson: And you have not got any secondary income other than that have you?

Mr Coulson: No.

Q1740 Tom Watson: So you did not do any work with PR firms in the meantime?

Mr Coulson: No, I had a brief conversation with an advertising agency about being a consultant but I never received any money from them.

Q1741 Tom Watson: So your sole income was News International and then your sole income was the Conservative Party?.

Mr Coulson: Yes.

Tom Watson: That is great, thank you.

Q1742 Mr Sanders: Mr Kuttner, when you announced that you would not be continuing as Managing Editor, did you discuss this with senior management or with the paper's lawyers or both?

Mr Kuttner: In fact, it was not I who announced it but when the announcement was made ---

Q1743 Mr Sanders: Prior to your announcing.

Mr Kuttner: Sorry, I did not mean to be pedantic.

Q1744 Mr Sanders: I said that you announced but what I mean is prior to you announcing that you would not be continuing as Managing Editor, did you discuss this with senior management or the paper's lawyers or both?

Mr Kuttner: Prior to the announcement?

Q1745 Mr Sanders: Yes, that is what I said.

Mr Kuttner: The answer is yes there were weeks, perhaps months, of detailed discussion as to a stepping aside from the role of Managing Editor and a significant continuing role with the newspaper.

Q1746 Mr Sanders: And what was their advice?

Mr Kuttner: Advice in what respect, sir?

Q1747 Mr Sanders: You discussed with them that you did not wish to continue as Managing Editor. Their response was what? "Okay, goodbye," or, "We don't want you to go"?

Mr Kuttner: No, it was not quite like that. There were discussions within the company which went on for some while and out of that came the decision that I would step aside after a very long term as Managing Editor and the opportunity, if I wished to take it, to continue to represent the newspaper in other respects.

Q1748 Mr Sanders: Can I ask a similar question of Andy Coulson. Did you discuss your resignation with senior management or the paper's lawyers or both?

Mr Coulson: I do not remember having a conversation with the lawyers but I had a conversation with Les Hinton two weeks before I actually left the paper and I sat down and explained my logic and I explained why I felt the need to resign.

Q1749 Mr Sanders: And what was his reaction?

Mr Coulson: I would add that it was entirely at my instigation. There was never any pressure on me to resign.

Q1750 Mr Sanders: What was his advice?

Mr Coulson: His advice?

Q1751 Mr Sanders: Or reaction.

Mr Coulson: He accepted my decision.

Q1752 Mr Sanders: Just that? Did you not discuss other options?

Mr Coulson: No, I was very clear what I wanted to do. I thought about it over Christmas. I had been thinking about it for some time. I talked about it with my wife and I was very clear when I went into the meeting that I would resign and I laid it out very clearly.

Q1753 Mr Sanders: Did your contract of employment at that time include some sort of confidentiality clause preceding the events over which you resigned?

Mr Coulson: I correct myself, I must have had conversations with the lawyers about my departure. That would have been normal corporate practice. I know that I had some restrictive covenants put on me when I left so I was not able for example to go and work in a senior position at another newspaper and I was not able to take up another significant journalistic job when I left them.

Q1754 Mr Sanders: Was that something that was already in your contract or was that something that came out later?

Mr Coulson: That would have been subsequent to my resignation.

Q1755 Mr Sanders: Okay. And was there any change in the remuneration that you then received when you worked out your contract? You said that you had received normal payment for working within your contract.

Mr Coulson: I received what was contractually due to me because I did not work my notice period. I suppose technically I worked two weeks of notice.

Q1756 Mr Sanders: You did not receive anything in addition to what you would have received in normal salary?

Mr Coulson: My departure was, in my view, entirely proper. The amount I received was an entirely proper amount. I do not believe that there was anything improper about it, if that is what lies behind the question.

Q1757 Mr Sanders: I am not suggesting there was anything improper. It is just you used the phrase it was contractual. That was part of your original contract and not part of any subsequent conversation?

Mr Coulson: My departure was agreed and, as I say, the significant aspect to it was that I had restrictive covenants placed on me so I was unable effectively to work, at least in any significant way, as a journalist.

Q1758 Mr Sanders: Mr Kuttner, when you announced that you would be continuing as Managing Editor, was that actually your choice; did you really want to stop?

Mr Kuttner: Was it my choice?

Q1759 Mr Sanders: Yes.

Mr Coulson: No, I think on balance --- there were a number of options and I guess one was that I might have continued and there were other options and I opted by mutual agreement for the one I have.

Q1760 Mr Hall: Mr Kuttner, you were present when I was talking to Mr Myler about the reductions he says he has made in the cash budget for paying for stories and he said it was reduced from between 82% to 89% and he said that you might be able to put an actual figure on that.

Mr Kuttner: It is possible I can but once again I would need to do the research. What I can say, if it is helpful to you and to the Committee, is that although, if you like, the issue of cash payments is a key issue here, in quantity terms, the old rate on the old figures, and indeed particularly the new figures, are not only very small but are a very small percentage of overall payments, but I can research figures if that is helpful.

Q1761 Mr Hall: That would be helpful but what also would be helpful is to know if this is an actual reduction in the cash that was spent or whether the money was spent in a different way either by bank transfer or by cheque?

Mr Kuttner: All right. I will ask the accountants if they can help me in that respect.

Q1762 Mr Hall: Who signs the cheques?

Mr Kuttner: They go through a process through our accounts department in Peterborough.

Q1763 Mr Hall: And bank transfers are authorised by?

Mr Kuttner: Quite often they would be authorised by me.

Q1764 Mr Hall: By you?

Mr Kuttner: Yes.

Q1765 Mr Hall: And any cash payments that were made they would actually be signed for as well, would they?

Mr Kuttner: Yes.

Q1766 Mr Hall: Because you did say that regrettably there were a small number of improper payments that were made. Could you tell us precisely how many improper payments were made?

Mr Kuttner: When I used the term improper I was referring to the Goodman payments.

Q1767 Mr Hall: So those improper payments are exclusively to Goodman and whoever he may have paid as a third party and nobody else?

Mr Kuttner: When I used the term improper, perhaps that was the wrong term. I was referring to payments made when they were payments for information which had been obtained in what turned out to be an unlawful way.

Q1768 Mr Hall: Could you give the Committee more precise documentary evidence about that?

Mr Kuttner: That is all the material that the police gathered and formed the basis of the prosecution.

Q1769 Mr Hall: These were improper payments made by your newspaper?

Mr Kuttner: I used the term improper, Mr Hall, to mean payments made for something that should not have been done.

Q1770 Mr Hall: Sure but we would like to know what that was.

Mr Kuttner: Well, I think what it was was the subject of the prosecution.

Q1771 Mr Hall: This is information that you have got. Are you trying to rely on the fact that because of the prosecution there is confidentiality that is going to breached?

Mr Kuttner: No, I think there is a misunderstanding. I know of no other improper payments.

Q1772 Mr Hall: So improper payments were made to Goodman and nobody else?

Mr Kuttner: Not to Goodman.

Q1773 Mr Hall: Or by him?

Mr Kuttner: Yes.

Q1774 Mr Hall: To third parties? Do we know precisely how many third parties were involved?

Mr Kuttner: I do not know, no. I think they are the payments that are referred to as the Alexander payments.

Q1775 Mr Hall: And Alexander is a pseudonym for?

Mr Kuttner: As I understand it, Mulcaire.

Q1776 Mr Hall: How many other pseudonyms has he got?

Mr Kuttner: I do not know.

Q1777 Mr Hall: You know of at least two?

Mr Kuttner: I know of Alexander.

Q1778 Mr Hall: What about Williams? Who is he a pseudonym for?

Mr Kuttner: I have learned that Williams, of which I personally was unaware, is a name that I have heard that Mulcaire asked be used in respect of this, as I think we heard from Tom Crone in respect of a particular contract.

Q1779 Mr Hall: I think you have been asked this question before. Is it a widespread practice on pseudonyms and payments with the newspaper or not?

Mr Kuttner: No.

Q1780 Mr Hall: And I assume there is an audit trail to that particular answer that you can say you double-checked?

Mr Kuttner: Well, if there were such payments insofar as one could divine them then it would be possible to produce the information.

Q1781 Mr Hall: Mr Coulson, you have been very clear in your evidence that you were unaware of the activities that Goodman was involved in and that you thought that this was a one-off incident. You have been absolutely clear about that. But you were unaware of the Goodman case. How can you be so certain if you were not aware of the Goodman case, which has reached the public domain, that there were not others?

Mr Coulson: I only know what I know.

Q1782 Mr Hall: You know what you know but you did not know about Goodman, so there is a distinct possibility that there are lots of other things you do not know about.

Mr Coulson: I know what I know. I thought this might come out in evidence earlier - I am assuming that we are coming to an end - and this is not directly related to your question so apologies but I would add this: I received a call from Scotland Yard the Friday before last from a detective superintendent to be told that there is strong evidence to suspect that my phone was hacked. In fact, it would appear that there is more evidence that my phone was hacked than there is that John Prescott's phone was.

Q1783 Mr Hall: That explains a lot about the John Prescott story, does it not?

Mr Coulson: It is not directly related to your question, I know, but I think it perhaps demonstrates as to your point of what I did know and what I did not know. I clearly did not know what Glenn Mulcaire was up to.

Q1784 Chairman: Scotland Yard's suggestion was that Glenn Mulcaire had hacked into your phone?

Mr Coulson: Yes.

Q1785 Chairman: And was it suggested that he was working on behalf of the News of the World?

Mr Coulson: I sincerely hope not, Chairman!

Chairman: I am promised one final question from Mr Farrelly.

Q1786 Paul Farrelly: One final question, John, but I am about the break the promise because I hate hanging threads. We have asked questions about the payments to Goodman and Mulcaire afterwards. I was not going to ask this question because it seems impertinent, Mr Coulson, but the question of your notice period has been left hanging in the air. Was it six months or 12 months?

Mr Coulson: I will take advice from the Chairman here. I am not minded - and I will take your advice, Chairman, and please do not think me impertinent - to discuss the private details of my contractual arrangements or otherwise with News International. If you want to push me on it and you insist, then obviously I am open to your advice on it, but I feel I have given a pretty full answer to the question.

Chairman: If Mr Farrelly is determined to press this then we could receive it in confidence.

Q1787 Paul Farrelly: 12 months would not be unusual in the business, would it, for someone at your senior level?

Mr Coulson: As I say, I feel as though I have given a pretty full answer in response to it.

Q1788 Paul Farrelly: Was it made on the basis that you would be welcome back at some stage in the future to News International?

Mr Coulson: Certainly not from my end. I left on the basis that I was leaving a 20-year career in News International and I certainly did not leave on the basis that there was some way back.

Q1789 Paul Farrelly: My final question, and this would have given you the opportunity to have mentioned your call from Scotland Yard, but the question is made in a different respect: were you ever asked, Mr Coulson, during the long police investigation to help with their enquiries?

Mr Coulson: No, not directly.

Q1790 Paul Farrelly: What does that mean?

Mr Coulson: I was never interviewed and I was never asked to give any form of evidence.

Q1791 Paul Farrelly: Did that strike you as strange?

Mr Coulson: I think that is a question for the police. All I would say is I think I am right in saying that the police have made clear, The Guardian have made clear and I think the PCC have made clear that there is no evidence of my direct involvement in any of this.

Q1792 Paul Farrelly: Mr Kuttner, were you ever asked to help the police with their enquiries?

Mr Kuttner: No I was not. I took the view that both I and the newspaper generally should give the police the fullest co-operation but I was not asked.

Chairman: Mr Watson just wishes to make one short statement on the record and then we will be done.

Tom Watson: To clarify Chairman, in light of the letter sent from News International yesterday evening, I just would like to confirm that I did through the Clerks seek the advice of Parliamentary Counsel and their advice was that the letter received was very close to the line of improperly interfering with the Committee's work.

Chairman: I understand that it was Speaker's Counsel.

Tom Watson: Speaker's Counsel, yes. Did I say Parliamentary Counsel?

Chairman: Could I thank you both very much for your patience.