News International and Phone-hacking - Culture, Media and Sport Committee Contents


Formal Minutes


Monday 30 April 2012

Members present:


Mr John Whittingdale, in the Chair
Dr Thérèse Coffey 
Damian Collins
Philip Davies 
Paul Farrelly
Louise Mensch
Steve Rotheram
Mr Adrian Sanders
Jim Sheridan
Mr Gerry Sutcliffe
Mr Tom Watson



Tom Watson declared an interest in relation to the Committee's inquiry into phone hacking, in that Mr Max Mosley had offered to pay any legal costs incurred by Mr Watson in drawing up written evidence to be submitted to Lord Justice Leveson's inquiry.

Draft Report (Phone-hacking), proposed by the Chair, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 148 read and agreed to.

Paragraph 149 read, amended and agreed to.

Paragraph 150 read and agreed to.

Paragraph 151 read, as follows:

Some of the evidence we received from third parties supported James Murdoch's account. Neville Thurlbeck surmised in written evidence that "if Mr Murdoch had been told of the existence of the email, he would have asked questions of me. He didn't". Similarly, a note taken by Julian Pike of a telephone call that he had with Colin Myler on 27 May 2008 finished with "Les no longer here—James wld say get rid of them—cut out cancer". The conditional statement "James wld say" shows that Colin Myler was indicating the reaction James Murdoch would have if he knew: Colin Myler thought that, if James Murdoch had been aware of a problem, he would have insisted on cutting out the "cancer" and dismissing those involved. James Murdoch himself suggested this interpretation, telling us on 10 November that the note "shows that perhaps [Colin Myler] was worried about raising these issues with me, because I would have said, 'get rid of them all', and I would have said 'Cut out the cancer'—ie people who are suspected of wrongdoing, we would pursue and hold accountable. That was the way that I would approach it". This is not what happened at the conclusion of the Gordon Taylor case, so either both Neville Thurlbeck and Colin Myler were wrong about the hard line that James Murdoch would have taken, or else James Murdoch was never properly informed about what was going on.

Amendment proposed, in line 11, to leave out from "Gordon Taylor case" to the end of the paragraph and add "but nothing definitive can be concluded from this. It can support, indeed, a number of interpretations: that James Murdoch was not fully informed about the extent of wrongdoing; that both Neville Thurlbeck and Colin Myler were wrong about the hard line that James Murdoch might have taken; or that he was informed, but his priorities lay elsewhere and he left Colin Myler to deal with the issue as the new editor of the newspaper."—(Paul Farrelly)

Question put, That the Amendment be made.

The Committee divided.

Ayes, 6

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 4

Dr Thérèse Coffey

Damian Collins

Philip Davies

Louise Mensch

Amendment agreed to.

Paragraph 151, as amended, agreed to.

Paragraphs 152 and 153 read and agreed to.

Paragraph 154 read, amended and agreed to.

Paragraph 155 read, as follows:

In view of both Tom Crone's recollection that he had been unable to make any copy of the 'for Neville' e-mail and of James Murdoch's insistence that he did not see a copy of the document until he saw the redacted version published in the Committee's 2010 Report on Press standards, privacy and libel, we are inclined to accept that James Murdoch did not see a copy of the 'for Neville' e-mail at the time that the Gordon Taylor settlement was agreed.

Amendment proposed, to leave out paragraph 155 and insert the following paragraphs:

"Under oath at the Leveson inquiry, however, Tom Crone insisted he had indeed shown James Murdoch the "for Neville" e-mail: "I'm pretty sure I held up the front page of the e-mail….I'm also pretty sure that he already knew about it."

"At the inquiry, Tom Crone also went further. Before Rhodri Davies QC, counsel for News International, cut the interrogation short, on the grounds that the company had not waived legal privilege, in relation to the specific advice that Tom Crone gave to James Murdoch in this meeting, Tom Crone said that the Silverleaf opinion had also been discussed:

I think I certainly took a copy and possibly spare copies of the opinion. I probably took the pleadings, because that certainly is what I would normally do. And I think I took a copy plus spare copies of the front page of the 'For Neville' email.

What was certainly discussed was the e-mail. Not described as 'for Neville', but the damning email and what it meant in terms of further involvement in phone-hacking beyond Goodman and Mulcaire. And what was relayed to Mr Murdoch was that this document clearly was direct and hard evidence of that being the case. At the same time, I think I must have referred at some stage to Operation Motorman, because that would explain the quite hard references in senior counsel's opinion.

"In testimony to the Leveson inquiry, James Murdoch also said of the conversation with Colin Myler on 27 May 2008 (which neither of them could recall, but which was referred to in the file note made by Julian Pike):

The note suggests that the conversation was brief. It records the outcome of the discussion as being 'wait for the silks [sic] view', so it is likely that, if the conversation took place, I would have suggested postponing any further discussion until we had advice from the QC. This is consistent with my recollection that the decision was based on advice from external counsel.

"Again, the fact that James Murdoch was awaiting the Silverleaf opinion proves nothing definitively one way or the other as to what he was shown, or of what he was made aware. It would be surprising in the circumstances, however, if it had not been discussed in some form. Whatever the reliability of other evidence given by Tom Crone, it is also unlikely that an in-house lawyer would go into such a meeting empty-handed. What we are being asked to believe by James Murdoch, however, was that he was neither told, nor asked to see, the essentials of the opinion he was waiting for. Once again, his and Tom Crone's accounts regarding the Silverleaf opinion are contradictory.

"Tom Crone has given conflicting accounts as to whether he showed James Murdoch the 'for Neville' email, while James Murdoch has been consistent in insisting that he did not see a copy of the document until he saw the redacted version published in the Committee's 2010 Report on Press standards, privacy and libel. Whilst this may seem surprising in itself—as the e-mail had been widely published during the summer of 2009—it is possible that he did not see a copy at the time the Gordon Taylor settlement was agreed. Given the conflicting accounts, however—and the reliability of evidence we have been given previously by witnesses from News International—the reality is that we cannot come to a definitive conclusion, one way or the other.

"Surprising as it may seem that James Murdoch did not ask to see this crucial piece of evidence, nor the independent Counsel's opinion, his lack of curiosity—wilful ignorance even—subsequently is more astonishing. This stretched from July, 2009—when the 'for Neville e-mail' first became public—through the Committee's critical report in February 2010 and further allegations in the New York Times in September 2010, to as far out as December 2010, when disclosures in the Sienna Miller case finally led him to realise, according to his own account, that the 'one rogue reporter' defence was untenable." (Paul Farrelly)

Question put, That the Amendment be made.

The Committee divided.

The Committee divided.

Ayes, 6

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 4

Dr Thérèse Coffey

Damian Collins

Philip Davies

Louise Mensch

Amendment agreed to.

Paragraph 155, as amended, agreed to.

Paragraph 156 (now paragraph 161) read, as follows:

In 2009 Tom Crone and Colin Myler asserted that they had investigated the 'for Neville' e-mail and that there was no concrete evidence to support the allegation that journalists other than Clive Goodman had been involved in phone-hacking. If they admitted to us that in 2008 they had made James Murdoch aware of the serious implications of the e-mail, they would have had to admit to having misled the Committee. As it stands, when pressed, their evidence turned out to be consistent with that given by James Murdoch. All three witnesses agreed that it had been made plain to James Murdoch that the 'for Neville' e-mail meant that the Gordon Taylor case had to be settled. None of them stated that James Murdoch was told that the e-mail had any wider significance for the company or that he had specifically asked them about any wider significance.

Amendment proposed, to leave out from "Committee." to end of the paragraph and insert "They clearly did not tell truth to us then. Though their evidence has been demonstrably unreliable in other respects, however, it does not necessarily follow that they are not telling the truth with respect to James Murdoch and the 'for Neville' e-mail and Silverleaf opinion. We simply cannot adjudicate with confidence either way and suspect, as with so much to do with the phone-hacking saga, that more light will be shone on this as more documents and evidence emerge in the future. We may well revisit our conclusions in this Report if more information, currently subject to criminal proceedings or to legal privilege which has not been waived, is disclosed."—(Paul Farrelly)

Question put, That the Amendment be made.

The Committee divided.

Ayes, 6

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 4

Dr Thérèse Coffey

Damian Collins

Philip Davies

Louise Mensch

Amendment agreed to.

Paragraph 156 (now paragraph 161), as amended, agreed to.

Paragraph 157 (now paragraph 162) read, as follows:

James Murdoch told us that, with the benefit of hindsight, News International should have taken note of the Committee's 2010 Press standards, privacy and libel Report and investigated the provenance of the "for Neville" e-mail more thoroughly. He also expressed regret that the company had moved to an "aggressive defence" so quickly. We would add to these admissions that, as the head of a journalistic enterprise, we are astonished that James Murdoch did not seek more information or ask to see the evidence and counsel's opinion when he was briefed by Tom Crone and Colin Myler on the Gordon Taylor case. Even for a large company, £700,000 is a not inconsequential sum of money, and it is extraordinary that the Chief Executive should authorise its payment on the basis of such scant information. There is, however, no conclusive evidence that James Murdoch saw the "for Neville" e-mail, or that he understood its wider significance.

Amendment proposed, to leave out from "astonished" to end of the paragraph and insert "surprised that James Murdoch did not seek more information or ask to see the evidence and counsel's opinion when he was briefed by Tom Crone and Colin Myler on the Gordon Taylor case. Even for a large company, £700,000 is a not inconsequential sum of money and we don't believe that the Chief Executive should authorise its payment on the basis of such scant information. This is where James Murdoch, 'fell short' as he himself acknowledged in his letter to the committee of the 12th March 2012 and as stated in the same correspondence must take his 'share of responsibility' for the failure of News Corporation to expose and take action against wrong doing sooner. We have seen no conclusive evidence that James Murdoch saw the 'for Neville' email or that he understood its wider significance."—(Damian Collins)

Question put, That the Amendment be made.

The Committee divided.

Ayes, 4

Dr Thérèse Coffey

Damian Collins

Philip Davies

Louise Mensch

Noes, 5

Paul Farrelly

Steve Rotheram

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Amendment disagreed to.

Another Amendment proposed, leave out from second "information." to end of the paragraph and insert "If he did, indeed, not ask to see either document, particularly the counsel's opinion, this clearly raises questions of competence on the part of News International's then Chairman and Chief Executive."—(Paul Farrelly)

Question put, That the Amendment be made.

The Committee divided.

Ayes, 7

Damian Collins

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 2

Dr Thérèse Coffey

Louise Mensch

Amendment agreed to.

Paragraph 157 (now paragraph 162), as amended, agreed to.

A paragraph—(Paul Farrelly)—brought up and read, as follows:

There is, however, a bigger picture—and longer timeframe—that is relevant beyond the Gordon Taylor settlement. Not specifically being shown evidence, nor asking to see it, nor discussing explicitly its ramifications is not the same as not being aware. From the conflicting accounts, and despite our surprise, we cannot say whether in 2008 James Murdoch was aware of the significance of the Taylor case, or of the importance attached by his executives to it being settled in confidence. We have been told that notwithstanding our 2010 Report, the further media investigations including the New York Times, the settlement with Max Clifford and further civil cases by non-royal victims, it was as late as December 2010 that James Murdoch - and Rupert Murdoch - realised that the 'one rogue reporter' line was untrue. This, we consider, to be simply astonishing.

Question put, that the paragraph be read a second time.





The Committee divided.

Ayes, 9

Damian Collins

Philip Davies

Paul Farrelly

Louise Mensch

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 1

Dr Thérèse Coffey

Paragraph inserted (now paragraph 163).

Paragraphs 158 to 170 (now paragraphs 164 to 176) read and agreed to.

Paragraph 171 (now paragraph 177) read, as follows:

The e-mail exchange that took place on 7 June 2008 demonstrates that James Murdoch was given the opportunity to appraise himself of the Gordon Taylor case and to make himself aware of its significance. Had he read the e-mail chain properly he ought to have asked searching questions of Colin Myler and Tom Crone. There is, however, no strong evidence to suggest that he did read the e-mail chain. If he did not read the e-mail chain, there is no good excuse for this and it betrays an astonishing lack of curiosity on the part of a Chief Executive. Had James Murdoch been more attentive to the correspondence that he received at the time, he could have taken action on phone-hacking in 2008 and this Committee could have been told the truth in 2009. We have, however, seen no firm evidence that James Murdoch had any significant involvement in negotiating the Gordon Taylor settlement until he authorised the increased settlement amount on 10 June 2008.

Motion made, to leave out paragraph 171 and insert the following new paragraphs:

"An email exchange took place on 7 June 2008 between Colin Myler and James Murdoch, in which Mr. Myler asked for the meeting on 10 June. Within that email string, an email from Julian Pike to Tom Crone, dated 6 June 2008, and one from Tom Crone to Colin Myler, dated 7 June, were forwarded to Mr. Murdoch.

  In his letter of 12 March, Mr. Murdoch asserts that he only noticed the request for a meeting and did not read the full string, because it arrived on 7 June, a Saturday, when he was alone with his two small children. He states his response "sent from my BlackBerry just over two minutes after he had sent his email, confirmed that I was available on 10 June 2008 for a meeting and said that I was home that evening if he wished to call before then. I have no... recollection of his calling that weekend."

  The contents of the email string are ambiguous. Colin Myler states "unfortunately it is as bad as we feared" and Tom Crone speaks of a "nightmare scenario". This could be interpreted as a warning of widespread phone hacking at the News of the World. Mr Murdoch's letter to the Committee asserts that the email related specifically to the settlement and "unfortunately it is as bad as we feared" relates to the amount of money needed to settle the case, while Mr Crone's "nightmare scenario" refers to a potential additional claim by Joanne Armstrong, an associate of Mr Taylor's. There is no conclusive evidence one way or another as to what these phrases meant, or if it would therefore have made any difference had Mr Murdoch read the entire string. There is no suggestion, nor, indeed, evidence that Colin Myler took Mr Murdoch up on his offer to call him that evening to discuss the email string, before the meeting Mr Myler had requested for the 10 June."—(Louise Mensch and Dr Thérèse Coffey)

Question put, That the amendment be made.

The Committee divided.

Ayes, 3

Dr Thérèse Coffey

Philip Davies

Louise Mensch

Noes, 7

Damian Collins

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Amendment disagreed to.

Another Amendment proposed, to leave out sentence beginning "There is".—(Paul Farrelly)

Question put, That the Amendment be made.

The Committee divided.

Ayes, 6

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 4

Dr Thérèse Coffey

Damian Collins

Philip Davies

Louise Mensch

Amendment agreed to.

Paragraph 171 (now paragraph 177), as amended, agreed to.

Paragraphs 172 to 176 (now paragraphs 178 to 182) read and agreed to.

Paragraph 177 (now paragraph 183) read as follows:

The Committee has been told by several witnesses, including Rebekah Brooks, that the documents relating to the settlement between Max Clifford and NGN form part of the Metropolitan police's investigations. For this reason we simply publish the facts that have been disclosed to us in evidence and have decided not to probe any further into this case.

Motion made, to leave out paragraph 177 and insert the following new paragraphs:

"Notwithstanding her role in settling Max Clifford's claim and our 2010 Report, in evidence on 9 July 2011 Rebekah Brooks told us that—like James Murdoch—she only realised in the final days of 2010 that the 'one rogue reporter' defence was untrue.

Everyone at News International has great respect for Parliament and for this Committee. Of course, to be criticised by your Report was something that we responded to. We looked at the report. It was only when we had the information in December 2010 that we did something about it.

We subsequently wrote to Rebekah Brooks asking further questions about the Clifford settlement, but she declined to answer on the basis that the circumstances of the case were of interest to the Metropolitan Police. The Management and Standards Committee also cited similar concerns. Following his settlement, Max Clifford also passed evidence in his possession to the police. This has not been volunteered to the Committee and, given the police investigation, the Committee decided not to press Max Clifford further over this.

The settlement with Max Clifford certainly did not draw a line under the affair—far from it. During 2010, eight further claims were issued; and by October 2011, the number had escalated to 65.

A claim by the designer Kelly Hoppen, in March 2010, was the first from a victim not named in the criminal charges. She also alleged that hacking had continued in 2009-10, long after the criminal convictions. As well as NGN and Glenn Mulcaire, she sued Dan Evans, another News of the World journalist (who was suspended in April 2010 and later arrested). The claim was settled in October 2011, after NGN paid £60,000 in damages, plus legal costs.

The case brought by Kelly Hoppen's step-daughter, the actress Sienna Miller, is—by Rebekah Brooks' and James Murdoch's admission—particularly significant. Following a court order forcing the Metropolitan Police to provide unredacted disclosures from Glenn Mulcaire's notebooks, her letter before action was sent to NGN on 6 September, 2010.

She alleged that three of her phones, and those of friends and her publicist, were hacked from January 2005 to August 2006 as part of an exercise called 'Project Sienna Miller'. The claim stated that from January 2005, NGN agreed a scheme with Glenn Mulcaire whereby 'he would, on their behalf, obtain information on individuals relating to the following: 'Political, Royal, Showbiz/ Entertainment' and that he would use electronic intelligence and eaves- dropping in order to obtain this information. He also agreed to provide daily transcripts.'

The particulars also described Glenn Mulcaire's alleged modus operandi, in which he would mark the first names of his journalist contacts in the top left hand corner of the pages of his notebooks. From the pages disclosed by the police, Sienna Miller's lawyers inferred the involvement of a named, senior News of the World journalist, who was not Clive Goodman. These disclosures were provided by Sienna Miller's lawyers to NGN in December, 2010.

NGN eventually admitted liability in Sienna Miller's case in May 2011, agreeing to pay £100,000 damages, plus legal costs. In February, 2011, however—despite the disclosures in December—NGN still served a defence, stating Clive Goodman had a 'direct and personal and clandestine relationship' with Glenn Mulcaire and denying its journalists had authorised Glenn Mulcaire to hack into voicemails; that it could be inferred that the other named, senior journalist had been involved; and that the personal stories cited came from 'independent (and confidential) sources'. NGN also denied that its conduct amounted to harassment and that, in any event, its 'course of conduct was, in all the circumstances, reasonable'.

We comment further on this defence with respect to News International in the next section.

In January and February 2012, all but five of the first wave of claims were settled under a case management procedure overseen in the High Court by Mr Justice Vos. Admissions made by NGN show that hacking started long before 2005. Glenn Mulcaire had been working with the newspaper from 1998 and by February, 2005 had signed at least five agreements for his services. But the practice appears to have escalated substantially between 2005 and 2006.

At least three of the victims were targeted from 2001-2002: Guy Pelly, a friend of Prince Harry; the singer Charlotte Church; and Claire Ward, the former Member of Parliament for Watford and then a member of this Committee.

Chris Bryant, MP for the Rhondda and another Member of this Committee at the time, was targeted from 2003, and victims in 2004 included Christopher Shipman, son of the serial killer Harold Shipman, whose e-mails were also hacked by Glenn Mulcaire. Victims during the escalation between 2005 and 2006 included Deputy Prime Minister John Prescott, former Olympics minister Tessa Jowell, and rugby and football players Gavin Henson and Ashley Cole.

The final case to be settled so far, that of Charlotte Church and of her family in February 2012, involved the biggest publicly announced settlement - £600,000 in all. Charlotte had been targeted since 2002, when she was just 16, and her parents James and Maria Church, too. The illegal interception—as well as the wider harassment to which it contributed - had lasting and damaging consequences:

'People working for the News of the World were paid to watch their every move,' the agreed Statement in Open Court related. 'Maria in particular is a vulnerable person, with a complex medical history. The News of the World found out about this and published private details of her hospital treatment. At her lowest moment, the News of the World issued her with an ultimatum and coerced her into giving them an in depth interview about herself harming and attempted suicide. She felt she had no choice...and was deeply traumatised by the publication of the story in the News of the World.'

In December 2011, before the settlements, NGN finally admitted that Glenn Mulcaire had helped News of the World journalists to hack voicemails themselves; that four employees—other than Clive Goodman—had instructed him to do so 'on a large but unquantifiable number of occasions'; and that his services were known about by other employees of NGN.

These names are contained in confidential schedules to the civil claims, which Mr Justice Vos has ordered not to be published, so as not to prejudice possible future criminal trials.

For the purposes of assessing aggravated damages in the civil claims, NGN also agreed that the cases could proceed on the basis that unnamed 'senior employees and directors' of NGN knew of the wrongdoing and sought to conceal it by knowingly putting out false public statements; deliberately failing to provide the police with all the facts; by deceiving the police over payments to Glenn Mulcaire; and destroying evidence, including e-mails and computers.

In January 2012, in a judgment ordering further disclosures by NGN, Mr Justice Vos commented, indeed, on what he had now seen regarding the alleged destruction of evidence:

'I have been shown a number of emails which are confidential and therefore I will not read them out, but suffice it to say that they show a rather startling approach to the email record of NGN and they show, because this much has been said in open court, that only three days after the solicitors for Sienna Miller had written their letter before action, asking specifically that NGN should retain any emails concerned with the claim in relation to phone hacking, what happened was that a previously conceived plan to delete emails was put into effect at the behest of senior management,' the judge stated.

From the civil claims to date, it is clear that phone-hacking at the News of the World started as far back as 2001. Given the confidentiality of disclosures in the civil cases and the wishes of Mr Justice Vos not to reveal names before possible criminal proceedings, we only set out certain of the facts which are on the public record, as we have gathered them, in order to bring this Report up to date. The Metropolitan Police are currently investigating and we also do not wish to run the risk of prejudicing any future trials by going beyond what is already publicly available.— (Paul Farrelly)

Question put, That the amendment be made.



The Committee divided.

Ayes, 5

Paul Farrelly

Steve Rotheram

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 4

Dr Thérèse Coffey

Damian Collins

Philip Davies

Louise Mensch

Amendment agreed to.

Paragraph 178 (now paragraph 201) read and agreed to.

Paragraph 179 (now paragraph 202) read, amended and agreed to.

Paragraph 180 (now paragraph 203) read and agreed to.

Paragraph 181 (now paragraph 204) read, amended and agreed to.

Paragraph 182 (now paragraph 205) read and agreed to.

Paragraph 183 (now paragraph 206) read, as follows:

It seems to us that there is very little difference between delegation, as described to us by the Murdochs, and senior executives deliberately being kept at one remove from decisions that are taken. The Gordon Taylor settlement was sizeable (approximately £700,000), and the claims made by Gordon Taylor had potentially very serious reputational consequences for the company. However keen senior executives may have been to delegate, it seems extraordinary that they would not have sought greater involvement in the decisions that were made given how much was at stake for the company. Yet we have been told that this is precisely what happened. Rupert Murdoch was apparently completely unaware of the Gordon Taylor settlement. James Murdoch, we have been told, authorised the settlement on the basis of a possible rushed conversation in the corridor or over the phone; a single meeting that lasted between 15 and 30 minutes; and an e-mail exchange that he took no longer than three minutes to peruse.

Amendment proposed, to leave out the first sentence.—(Dr Thérèse Coffey)

Amendment agreed to.

Another amendment proposed, to leave out from "However" to end of paragraph and insert:

"However much senior executives of the parent company were used to delegating to managers in their national territories, it is regrettable that they did not seek greater involvement where reputational matters were concerned. Yet we have been told this is precisely what happened. James Murdoch authorised the Gordon Taylor settlement on the basis of a single meeting that lasted between 15 and 30 minutes, relying completely on the assurances of his editor and the company's longstanding legal director."—(Louise Mensch and Dr Thérèse Coffey)

Question put, That the amendment be made.


The Committee divided.

Ayes, 3

Dr Thérèse Coffey

Damian Collins

Louise Mensch

Noes, 7

Philip Davies

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Amendment disagreed to.

Another amendment proposed, after "happened" to insert "We were told that the level of financial delegation did not require the payout of that size to be referred to the board of News Corp. This might explain why".— (Dr Thérèse Coffey)

Question put, That the amendment be made.

The Committee divided.

Ayes, 2

Dr Thérèse Coffey

Louise Mensch

Noes, 7

Damian Collins

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Amendment disagreed to.

Paragraph 183 (now paragraph 206), as amended, agreed to.

Paragraph 184 (now paragraph 207) read as follows:

  We have struggled to understand such executive carelessness and have considered whether it can be explained by deliberate policy of "don't ask don't tell" designed to shield senior executives from events taking place beneath them. This hypothesis is given weight by Neville Thurlbeck's evidence to the Committee, in which he describes being frustrated by trying to bring evidence about phone-hacking to the attention of Rebekah Brooks, by then Editor of News of the World, and allegedly being repeatedly denied access to her by the Managing Editor, Bill Akass. A note made by Solicitor Julian Pike of Farrer & Co of a conversation that he had had with Colin Myler on 27 May 2008 illustrates just how reluctant senior employees at the company may have been to approach James Murdoch. In the note, Colin Myler is reported as saying "James wld say get rid of them—cut out the cancer". The use of the conditional tense is striking because it shows that the issue at hand—the possible culpability of journalists at the News of the World—had not actually been brought to Murdoch's attention, perhaps in order to avoid the consequences that might ensue if it had been. In September 2011, we heard from Jonathan Chapman that on the papers at News International "when someone messes up badly and commits a crime, I think there was also a feeling that, yes, they have done a terrible wrong, but their family should not suffer", in other words that the cancer should not always be cut out. We considered whether employees at News International went out of their way to try to please the Murdoch family. On 19 July 2011, Rupert Murdoch told us that "I am sure there may be people who tried to please me. That could be human nature, and its up to me to see through that."

Amendment proposed, to leave out "such executive carelessness" and insert "a lack of openness with senior management". —(Louise Mensch)

Question put, That the amendment be made.

The Committee divided.

Ayes, 5

Dr Thérèse Coffey

Damian Collins

Philip Davies

Louise Mensch

Mr Tom Watson

Noes, 4

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Amendment agreed to.

Paragraph 184 (now paragraph 207), as amended, agreed to.

Paragraph 185 (now paragraph 208) read, amended and agreed to.

Paragraph 186 (now paragraph 209) read as follows:

  In reaching our conclusions, we have asked ourselves why Tom Crone and Colin Myler and other senior News of the World, News Group Newspapers and News International personnel might not have shared all the information that they had about phone-hacking with James Murdoch. Two pieces of evidence suggest a possible reason. In a telephone conversation with Julian Pike, Colin Myler noted that James Murdoch "wld say get rid of them—cut out cancer." Neville Thurlbeck told us that "it is inconceivable to me that so soon after the Clive Goodman/Glenn Mulcaire case which had rocked the company to its foundations, that he would not have initiated an internal inquiry. He didn't". Perhaps Tom Crone and Colin Myler did not want these things to happen and kept quiet for that reason. Perhaps there was a "don't ask, don't tell" culture at News International that inhibited them from involving James Murdoch. Whatever the reason, Tom Crone and Colin Myler ought to have acted upon the information they had on phone-hacking and, in failing to do so, they misled this Committee.

Motion made, to leave out paragraph 186 and insert:

The portrayal, furthermore, that we have been given to believe, of Rupert and James Murdoch being at one remove from events at the News of the World, as it was such a small part of the global News Corporation empire, is at odds with other evidence we have received, and which has been subsequently given to the Leveson inquiry.

Rupert Murdoch is certainly not, as part of his evidence would have us believe, a 'hands-off proprietor'. We have Rebekah Brooks' testimony for that:

'Q549. Philip Davies: How many times would you speak to Rupert Murdoch when you were chief executive of News International?

Rebekah Brooks: I would speak to Mr Murdoch and James Murdoch much more regularly since I have become chief executive than I did when I was editor.

Q550. Philip Davies: Once a day? Twice a day?

Rebekah Brooks: James Murdoch and I have offices next to each other, although he has his travel schedule because of his wide responsibilities, and I would talk to Rupert Murdoch quite regularly.

Q551. Philip Davies: Once a day, twice a day - can you give me any other idea?

Rebekah Brooks: On average, every other day, but pretty regularly.'

James Murdoch, too, has testified to the Leveson inquiry about his father's role which in February 2012 with respect to launching a replacement for the News of the World appears to have extended to bypassing his son entirely, despite his position as Chairman and Chief Executive Officer, International, of News Corporation:

'The decision to launch a Sunday edition of The Sun was made by my father, in conjunction with the management of News International. There had previously been discussions about a Sunday paper, but the timing of the launch, the pricing of the paper and the reinstatement of the journalists were all decisions made by my father and the management of News International.'

Rupert Murdoch's close involvement with his newspapers is entirely understandable: he built his empire from a single publication in Australia and print and ink, it can be said, are in his blood. James Murdoch, clearly, has a different background. Until he took responsibility for all of News Corporation's operations in Europe and Asia, which included News International's print publications, his career had focused on broadcasting and digital media,

Nonetheless, though James Murdoch's main interests and priorities may have lain elsewhere, before authorising the Gordon Taylor settlement, he was not content to rely solely on advice from Colin Myler and Tom Crone—two experienced newspaper hands—but wanted to wait for independent counsel's opinion. As we have explored earlier, why then he did not ask to read that opinion is one of the many astonishing things about this whole affair.

As for corporate culture, James Murdoch's characterisation of the epiphany moment in December, 2010—when they allegedly realised that the 'one rogue reporter' defence could not be true and leapt into action—is also at odds with the company's behaviour afterwards. Despite contacting the police—and suspending and sacking a senior member of staff—the organisation continued to maintain that no more of its journalists had been involved with Glenn Mulcaire in its defence to Sienna Miller's claim several weeks later in February, 2011.

Far from having an epiphany at the end of 2010, the truth, we believe, is that by spring 2011, because of the civil actions, the company finally realised that its containment approach had failed, and that a 'one rogue reporter' - or even 'two rogue journalists'—stance no longer had any shred of credibility. Since then, News Corporation's strategy has been to lay the blame on certain individuals, particularly Colin Myler, Tom Crone and Jonathan Chapman, and lawyers, whilst striving to protect more senior figures, notably James Murdoch. Colin Myler, Tom Crone and Jonathan Chapman should certainly have acted on information they had about phone-hacking and other wrongdoing, but they cannot be allowed to carry the whole of the blame, as News Corporation has clearly intended. Even if there were a 'don't ask, don't tell' culture at News International, the whole affair demonstrates huge failings of corporate governance at the company and its parent, News Corporation.

Question put, That the amendment be made.




The Committee divided.

Ayes, 6

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 4

Dr Thérèse Coffey

Damian Collins

Philip Davies

Louise Mensch

Amendment agreed to.

New paragraphs—(Mr Tom Watson)—brought up and read, as follows:

The history of the News of the World at hearings of the Committee is a long one, characterised by "collective amnesia" and a reluctance fully and fairly to provide the Committee with the information it sought. News International has repeatedly stone-walled, obfuscated and misled and only come clean, reluctantly, when no other course of action was sensible and when its wider commercial interests were threatened. In Rupert Murdoch's own words to the Leveson inquiry, News Corporation in the UK mounted a cover-up.

In any company, the corporate culture comes from the top. In the case of the News of the World this is ultimately the American parent company of News International, News Corporation and its chairman and chief executive, Rupert Murdoch. Rupert Murdoch has repeatedly claimed that News Corporation has a zero tolerance approach towards wrongdoing. He stated this, indeed, long before he gave evidence to the committee, when he gave the inaugural Thatcher Lecture in London on 21 October 2010: "we will not tolerate wrongdoing,' he told his audience. He also made similar statements at the annual general meeting of News Corporation in Los Angeles in October 2011 when, in relation to phone-hacking, he said there was 'no excuse for such unethical behaviour' at the company and that staff had to be 'beacons for good, professional and ethical behaviour'.

On 8 April 2011, News International finally issued a statement admitting that phone-hacking had indeed occurred in a number of cases and was not restricted to the News of the World's former royal reporter, Clive Goodman. It offered certain civil litigants an unreserved apology and a compensation scheme. At this point, the 'single rogue reporter' defence was clearly dead. That defence had become very questionable long before, but now that News International had finally acknowledged that hacking had been widespread, it was clearly no longer tenable.

In his testimony to us and also the Leveson inquiry, Rupert Murdoch has demonstrated excellent powers of recall and grasp of detail, when it has suited him. Had he been entirely open with shareholders on 21 October 2010 - and with this Committee on 19 July 2011 - he would have learned for the first time on some date between 21 October 2010 and 8 April 2011 that he had been misled by senior employees of his company.

Such a revelation, had it happened, would have been a shock. He was the chairman and chief executive officer of a major international company. He had repeatedly given clear and categorical assurances to the general public, and to his shareholders, that phone-hacking and other wrongdoing were not widespread and would not be tolerated at News International. These assurances had now turned out to be false. This is not a situation a chief executive would or could tolerate, still less simply ignore. Action would have been taken.

Yet, when asked by the Committee if he "knew for sure in January [2011] that the 'one rogue reporter' line was false', he replied: 'I forget the date.' [Q200]. This is barely credible. Had he really learned for the first time at some point in the six months following his Thatcher Lecture that he had been deceived, and so that he in turn had deceived the public and his shareholders, that moment would have been lodged forever in his memory. It would have been an unforgettable piece of information.

On the other hand, had he suspected all along that phone-hacking and other wrongdoing was endemic at the News of the World—that the means justified the ends in beating the competition and getting the story—and that elaborate, expensive steps were being taken to conceal it, it is entirely understandable that the precise moment between 21 October 2010 and 8 April 2011, when he recognised the game was up, might have slipped his memory. And all the more so, had he already realised the truth long before those dates.

In such circumstances, even if he took no part in discussions about what to reveal and when, there would probably not have been a clear moment of revelation. There would have been a gradual erosion of the 'one rogue reporter' fiction to the point where a collective decision to abandon it would have been taken. In those circumstances, it would be entirely understandable that he should forget the date, if indeed there was a single date on which the decision was taken, rather than an unfolding contingency plan involving gradual admissions.

The notion that—given all that had gone on, right back to evidence given over payments to the police to our predecessor Committee in 2003—a hands-on proprietor like Rupert Murdoch had no inkling that wrongdoing and questionable practice was not widespread at the News of the World is simply not credible. Given his evidently fearsome reputation, the reluctance of News International employees to be open and honest internally and in their evidence to the Committee is readily understandable. In assessing their evidence, the culture emanating from the top must be taken into account, and is likely to have had a profound effect on their approach in 2007 and 2009 in evidence given to the Committee.

A further example of this culture and Rupert Murdoch and his management's failure to focus on serious wrongdoing within the organisation was his response to the Committee's questions about attempts by Neville Thurlbeck, then chief reporter of the News of the World, to blackmail two of the women involved in the newspaper's controversial exposure of Max Mosley's private life. His reply that this was the first he had heard of this claim and that no one in the UK company had brought the allegation to his attention—if this was indeed the case—indicates a seriously wrong state of affairs in his company. Furthermore, it appears that having had the matter brought to his attention during questioning by our committee, he had still not read the Eady judgement by the time he gave evidence to the Leveson inquiry on 26th April 2012.

When asked if he agreed with the judge in that case that this "discloses a remarkable state of affairs at News International", Rupert Murdoch replied "no". He appeared to see nothing unusual in News International failing to investigate or take action when a senior employee was cited by a High Court judge as resorting to blackmail in the course of his employment. This wilful turning of a blind eye would also explain Rupert Murdoch's failure to respond (or to have another executive respond) to a letter sent to him in New York by Max Mosley on 10 March 2011, inviting him to order an investigation at News International into the blackmail allegation.

Another example of Rupert Murdoch's toleration of alleged wrongdoing is his reinstatement, on 17 February 2012, of journalists who had been arrested. This is in contrast to most organisations this Committee can think of, which would have suspended such employees until the police had confirmed that no charges were being brought.

Rupert Murdoch told this Committee that his alleged lack of oversight of News International and the News of the World was due to it being "less than 1% of our company". This self-portrayal, however, as a hands-off proprietor is entirely at odds with numerous other accounts, including those of previous editors and from Rebekah Brooks, who told us she spoke to Rupert Murdoch regularly and 'on average, every other day'. It was, indeed, we consider, a misleading account of his involvement and influence with his newspapers.

On the basis of the facts and evidence before the Committee, we conclude that, if at all relevant times Rupert Murdoch did not take steps to become fully informed about phone-hacking, he turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications. This culture, we consider, permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International. We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company.

Question put, That the paragraphs be read a second time.

The Committee divided.

Ayes, 6

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 4

Dr Thérèse Coffey

Damian Collins

Philip Davies

Louise Mensch

Paragraphs inserted (now paragraphs 216 to 229).

Paragraphs 187 to 221 (now paragraphs 230 to 264) read and agreed to.

Paragraph 222 (now paragraph 265) read, amended and agreed to.

Paragraphs 223 to 231 (now paragraphs 266 to 274) read and agreed to.

Paragraph 232 read as follows:

On the veracity of the evidence the Committee has received, we are able to draw conclusions about some of the witnesses:

  • Les Hinton misled the Committee in 2009 in not telling the full truth about payments to Clive Goodman and in the extent of his knowledge of allegations of widespread phone-hacking.
  • Tom Crone misled the Committee in 2009 in giving a counter-impression of the significance of confidentiality in the Gordon Taylor settlement.
  • Tom Crone and Colin Myler misled the Committee in 2009 by answering questions falsely about their knowledge of evidence that other News of the World employees had been involved in phone-hacking.  

Motion made, to leave out paragraph 232 and insert:

As to the veracity of the evidence the Committee has received, we are able to draw the following conclusions about certain of the witnesses, and about News International corporately:

  • Les Hinton misled the Committee in 2009 in not telling the truth about payments to Clive Goodman and his role in authorising them, including the payment of his legal fee. He also misled the Committee about the extent of his knowledge of allegations that phone-hacking extended beyond Clive Goodman and Glenn Mulcaire to others at the News of the World.
  • Tom Crone misled the Committee in 2009 by giving a counter-impression of the significance of confidentiality in the Gordon Taylor settlement and sought to mislead the Committee about the commissioning of surveillance.
  • Tom Crone and Colin Myler misled the Committee by answering questions falsely about their knowledge of evidence that other News of the World employees had been involved in phone-hacking and other wrongdoing.
  • Corporately, the News of the World and News International misled the Committee about the true nature and extent of the internal investigations they professed to have carried out in relation to phone hacking; by making statements they would have known were not fully truthful; and by failing to disclose documents which would have helped expose the truth. Their instinct throughout, until it was too late, was to cover up rather than seek out wrongdoing and discipline the perpetrators, as they also professed they would do after the criminal convictions. In failing to investigate properly, and by ignoring evidence of widespread wrongdoing, News International and its parent News Corporation exhibited wilful blindness, for which the companies' directors—including Rupert Murdoch and James Murdoch— should ultimately be prepared to take responsibility.

The effect of these actions and omissions is that the Committee's Report to the House in February 2010 on Press standards, privacy and libel was not based on fully accurate evidence. False evidence, indeed, prevented the Committee from exposing the true extent of phone-hacking.—(Paul Farrelly)

Question put, That the amendment be made.

The Committee divided.

Ayes, 7

Damian Collins

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 3

Dr Thérèse Coffey

Philip Davies

Louise Mensch

Paragraph 233 (now paragraph 276) read, amended and agreed to.

A paragraph (now paragraph 277) inserted.

Another paragraph (now paragraph 278) inserted.

Another paragraph (now paragraph 279) inserted.

Paragraph 234 (now paragraph 280) read and agreed to.

Annex 1 amended and agreed to.

Annex 2 amended and agreed to.

Resolved, That the title of the Report be changed as follows, News International and Phone-hacking.—(The Chair)

Motion made, and Question put, That the Report, as amended, be the Eleventh Report of the Committee to the House.

The Committee divided.

Ayes, 6

Paul Farrelly

Steve Rotheram

Mr Adrian Sanders

Jim Sheridan

Mr Gerry Sutcliffe

Mr Tom Watson

Noes, 4

Dr Thérèse Coffey

Damian Collins

Philip Davies

Louise Mensch

Resolved, That the Report, as amended, be the Eleventh Report of the Committee to the House.

Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.

[Adjourned till Tuesday 15 May at 10.15 am



 
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Prepared 1 May 2012