Douglas Caddy

James Cusick: They were under pressure – but the police could still have been open about this The Independent Friday, 14 October 2011 At the beginning of April 2002 there was media speculation that the missing schoolgirl Amanda Dowler may have met a mystery boyfriend on an internet chatroom. She had left a message and the police, it was understood, were investigating. As prayers were said for her at an Easter Sunday church service in Walton, the police were promising to review any new material – anything that came their way – including clues that may have been left in a chatroom. Nothing in The Independent's investigation today criticises the efforts Surrey Police made in first trying to find Milly and then investigate who murdered her. Yet something that passed through their inquiries which they have been reluctant to speak about since 2002 is their early contact with the News of the World. It was not until July this year that it emerged that Milly Dowler's mobile phone had been hacked by the NOTW shortly after she went missing. None of these recent events will have been much of a surprise for some officers in Surrey. But had they been open and transparent about the meetings The Independent reveals today, the extent and impact of the use of illegal phone intercepts inside the NOTW's newsroom would, in all probability, have been dramatically lessened. Phone hacking had its first arrests in 2006; its first convictions in 2007; and the Metropolitan Police's Operation Weeting and other police inquiries into the use of illegal intercepts may yet reveal an extended timeline. This puts into perspective the importance of the events in April 2002 that were being dealt with by the officers leading the investigation. As they have stated, there was a "huge amount of professional interaction between Surrey Police and the media throughout that time". Given the pressures on the tabloid media discussed in the initial seminars of the Leveson Inquiry, it is understandable for the police at the centre of a high-profile case to have felt a parallel pressure in doing their job. But "interaction" does not explain, nor excuse, senior officers meeting with the News of the World and discussing evidence gained from the illegal practice of phone hacking. This evidence was never followed up – and after nine years is finally emerging.

Exclusive: New hacking shame Police were given evidence in 2002 that News of the World had access to illegally obtained messages from Milly Dowler's phone – but did nothing about it The Independent By Cahal Milmo and James Cusick Friday, 14 October 2011 Senior Surrey Police detectives investigating the disappearance of Milly Dowler held two meetings with journalists from the News of the World and were shown evidence that the newspaper held information taken from the voicemails of the murdered schoolgirl. An investigation by The Independent which focuses on this crucial period of the phone-hacking scandal reveals that the force subsequently failed to investigate or take action against the News International title. One of the officers who attended the meetings was Craig Denholm, currently Deputy Chief Constable of Surrey. He was the Detective Chief Superintendent in charge of Operation Ruby, the code name for the investigation launched following the disappearance of the teenager on 21 March 2002. The Independent Police Complaints Commission is currently investigating claims that a junior detective on Operation Ruby passed information gathered by the inquiry to the NOTW. According to Surrey Police, the officer was removed from the investigation after he passed confidential information about it to a friend outside the force. The Independent has confirmed the identity of the officer, who is still a member of the Surrey force. But his name is being withheld following a claim from his lawyers that revealing his identity could prove "catastrophic" for him and his family because of public anger at the hacking of the schoolgirl's phone. The extent of the Sunday paper's meddling in the Dowler inquiry raises new questions about how far up the executive ladder at News International knowledge of phone hacking had spread at this early stage, and why Surrey Police decided not to follow up evidence that the NOTW had illegally obtained information relevant to one of the most high-profile inquiries in its history. The failure to pursue the Sunday tabloid meant that phone hacking by its journalists continued for another four years until Scotland Yard arrested the private investigator Glenn Mulcaire and the NOTW royal editor Clive Goodman in August 2006. Both were later jailed. Mark Lewis, the Dowler family's lawyer, said: "Questions have to be asked as to whether Surrey Police were more concerned with selling papers than solving crimes. What was it with them that, when the public dialled 999, the police dialled NOTW?" The Independent has established that, in April 2002 as police followed multiple leads, the NOTW approached the Surrey force and arranged two meetings during which it was made clear that the paper had obtained information that could only have come from messages on Milly's phone. The meetings, which took place at a Surrey police station, were attended by at least two journalists from the Rupert Murdoch-owned paper and two of the force's most senior detectives, Mr Denholm and Detective Chief Inspector Stuart Gibson, who had day-to-day control of the inquiry. A third Surrey officer also attended. Mr Denholm declined to comment on the meetings when approached by The Independent. Mr Gibson, who has retired from the police, could not be reached for comment despite repeated requests made to Surrey Police. One former Surrey officer said: "The meetings were clearly significant. It was obvious that the newspaper had got hold of details from Milly's phone messages." The Independent has been told that the minutes of at least one of the meetings feature among up to 300 items of unused evidence submitted for the prosecution of Levi Bellfield, the former bouncer who was convicted this summer of Milly's murder. The revelation that the NOTW had accessed and then allegedly deleted some of the schoolgirl's voicemails, providing false hope for her family and friends that she was still alive, proved a tipping point in the hacking scandal, forcing the closure of the Sunday tabloid. It emerged last month that NI is near to finalising a £3m settlement with the Dowler family, including a £1m payment to charity made personally by Mr Murdoch. The contacts between the NOTW and Surrey Police in the early weeks of Operation Ruby are alleged to have begun after the officer under investigation by the IPCC revealed to an individual outside of the inquiry details that were being pursued by the Operation Ruby team. The IPCC is looking at whether the officer gave away confidential material and, if so, whether he received payment for it. Surrey Police has acknowledged that a detective was removed from the investigation and given "words of advice" – the lowest form of admonition – before being transferred to duties at another police station. The Independent has established that, prior to the disciplinary action, executives at the NOTW requested the first of two meetings with the officers leading the Dowler inquiry. Mr Gibson – who later left the investigation – and Mr Denholm met the paper's journalists on two occasions within a number of days. It became clear that the paper had obtained Milly's phone number and accessed her voicemails when the journalists revealed they knew about an apparent offer of a job interview to Milly made on 27 March 2002 at a Midlands factory. Subsequent inquiries by detectives established that the message had been mistakenly left on the schoolgirl's phone. Despite this knowledge, Mr Denholm and his force appear to have taken a decision not to investigate the evidence of phone hacking. The Independent has not been told the identity of the journalists who attended the meetings. However, one of them is understood to be a senior newsroom executive. Surrey Police's lack of action may be due to officers on Operation Ruby wanting to avoid being distracted from the task of locating Milly. Just how the NOTW obtained Milly's phone number remains unclear. The Independent has been told that the schoolgirl was using an unregistered SIM card, meaning her details could not have been "blagged" from her mobile-phone provider by Mulcaire. There is also no suggestion that the information could have been provided by her family, leaving only friends and the police as potential sources. In a statement, Surrey Police said it was prevented from discussing allegations surrounding the Dowler inquiry because of the ongoing IPCC investigation and Scotland Yard's investigation into phone hacking. It added: "In 2002, Surrey Police's priority was to find Milly and then find out what had happened to her and to bring her killers to justice. Clearly, there was a huge amount of professional interaction between Surrey Police and the media throughout that time." Surrey Police said it had taken the decision to refer the conduct of the detective constable involved in the Dowler murder to the IPCC "in order to be open and transparent". The police watchdog told The Independent its inquiry terms were limited, stating: "The terms of reference ... are specifically in relation to the actions of one detective constable and do not cover whether senior Surrey officers knew about the News of the World hacking Milly Dowler's phone in 2002. However, if during the course of our investigation ... we uncover any evidence of wrongdoing by anybody else in the force, we would of course deal with that." The NOTW made little effort to conceal its success in accessing Milly's voicemails from the public. On 14 April 2002 – within a few days of the meetings with Surrey Police – the paper printed a remarkably candid story in its first edition which detailed three separate voicemails left for the missing schoolgirl between 27 March and 2 April. By this time Bellfield is likely already to have murdered her. The paper reported a voicemail message from a woman purporting to be from a Midlands employment agency. It concerned a job interview. By the time the later editions of the paper came out the story had been radically altered, removing all direct quotations from the voicemails. In evidence to MPs this summer, News International identified four people who, it said, had primary responsibility for reviewing articles in April 2002. This was the then editor Rebekah Brooks, the legal manager Tom Crone, the paper's news editor Neville Thurlbeck and the night editor Peter Smith. It was revealed by The Wall Street Journal in August that Mr Thurlbeck, who has been arrested and bailed on suspicion of conspiracy to intercept voicemails, authorised a stakeout by NOTW journalists of the Epson factory referred to in the 27 March voicemail. Ms Brooks, who resigned as NI chief executive in July, has said she was on holiday when the 14 April story was published. Mr Crone suggested to the Commons Media Select Committee this summer that the changes to the article between editions could have been made because the details of the voicemails were supplied by Surrey Police officers who then changed their minds about the extent of the disclosures when they saw the first edition. The Independent understands that NI has identified the journalist who commissioned Mulcaire to target Milly's voicemails, but his or her name is being withheld for legal reasons. In a statement, a News International spokesperson said: "We are unable to comment on any of the detail in the case. We continue to co-operate fully with the police." Tom Watson, the Labour MP on the Commons committee investigating phone hacking, said The Independent's investigation pointed to one unanswered question: "Who knew at News International?" Under scrutiny: The officers who knew Stuart Gibson As a Detective Chief Inspector, Mr Gibson was in charge of the hunt for Milly Dowler, responsible for co-ordinating the inquiry into a number of leads and theories about her disappearance. Craig Denholm As Deputy Chief Constable he found himself in overall charge of one of the biggest inquiries in Surrey's history when the 13-year-old vanished. Timeline: Dowler case 21 March 2002 Milly Dowler vanishes. 27 March A mystery caller leaves a message apparently inviting Milly to a job interview in the Midlands. Early April The News of the World requests meetings with officers on the case, at which it becomes clear that the newspaper has information from voicemails on Milly's phone. A detective is taken off the case after claims that he disclosed confidential information to a friend ("not a journalist") outside the force. 14 April In its first edition, the NOTW details three voicemails left on Milly's phone, including the message about the job interview. In later editions the details are removed. 20 September Milly's remains are found in woodland in Hampshire. 30 March 2010 Levi Bellfield accused of Milly's murder. 4 July 2011 A fortnight after Bellfield is convicted, The Guardian reveals that Milly's voicemails were hacked by the NOTW. After an outcry the title is closed. 12 August 2011 The Independent Police Complaints Commission announces an investigation into the suspended detective's actions.

Wall Street Journal circulation scam claims senior Murdoch executive Andrew Langhoff resigns as European publishing chief after exposure of secret channels of cash to help boost sales figures By Nick Davies guardian.co.uk, Wednesday 12 October 2011 12.27 One of Rupert Murdoch's most senior European executives has resigned following Guardian inquiries about a circulation scam at News Corporation's flagship newspaper, the Wall Street Journal. The Guardian found evidence that the Journal had been channelling money through European companies in order to secretly buy thousands of copies of its own paper at a knock-down rate, misleading readers and advertisers about the Journal's true circulation. The bizarre scheme included a formal, written contract in which the Journal persuaded one company to co-operate by agreeing to publish articles that promoted its activities, a move which led some staff to accuse the paper's management of violating journalistic ethics and jeopardising its treasured reputation for editorial quality. Internal emails and documents suggest the scam was promoted by Andrew Langhoff, the European managing director of the Journal's parent company, Dow Jones and Co, which was bought by Rupert Murdoch's News Corporation in July 2007. Langhoff resigned on Tuesday. The highly controversial activities were organised in London and focused on the Journal's European edition, which circulates in the EU, Russia, and Africa. Senior executives in New York, including Murdoch's right-hand man, Les Hinton, were alerted to the problems last year by an internal whistleblower and apparently chose to take no action. The whistleblower was then made redundant. In what appears to have been a damage limitation exercise following the Guardian's inquiries, Langhoff resigned on Tuesday, citing only the complaints of unethical interference in editorial coverage. Neither he nor an article published last night in the Wall Street Journal made any reference to the circulation scam nor to the fact that the senior management of Dow Jones in New York failed to act when they were alerted last year. The affair will add weight to the fears of shareholders in Murdoch's parent company, NewsCorp, that the business has become a 'rogue corporation', operating outside normal rules. Some shareholders have launched a legal action in the US, attacking the Murdoch family after the phone-hacking scandal at the News of the World and following lawsuits in which NewsCorp subsidiaries have been accused of hacking into competitors' computers and stealing their customers. The Journal's decision to secretly purchase its own papers began with an unusual scheme to boost circulation, known as the Future Leadership Institute. Starting in January 2008, the Journal linked up with European companies who sponsored seminars for university students who were likely to be future leaders. The Journal rewarded the sponsors by publishing their names in a special panel published in the paper. The sponsors paid for that publicity by buying copies of the Journal at a knock-down rate of no more than 5¢ each. Those papers were then distributed to university students. At the bottom line, the sponsors enjoyed a prestigious link to the Journal, and the Journal boosted its circulation figures. The scheme was controversial. The sponsoring companies were not reading the papers they were paying for; they were never even seeing them; and they were buying at highly reduced rates. The students to whom they were distributed may or may not have read them; none of the students paid for the papers they were being offered. But the Audit Bureau of Circulation ruled that the scheme was legitimate and by 2010, it was responsible for 41% of the European edition's daily sales – 31,000 copies out of a total of 75,000. In early 2010 the scheme began to run into trouble when the biggest single sponsor, a Dutch company called Executive Learning Partnership, ELP, threatened to back out. ELP alone were responsible for 16% of the Journal's European circulation, sponsoring 12,000 copies a day for which they were paying only 1¢ per copy. For the 259 publishing days in a year, they were sponsoring 3.1m copies at a cost to them of €31,080 (£27,200). They complained that the publicity they were receiving was not enough return on their investment. On 9 April 2010, Andrew Langhoff emailed ELP to table a new deal, explaining that "our clear goal is to add a new component to our partnership" and offering to "provide a well-branded showcase for ELP's valuable services". On 30 April, ELP agreed to continue to sponsor 12,000 copies at the same rate. But that deal included a new eight-page addendum, which the Guardian has seen. The addendum included a collection of side deals: the Journal would give ELP free advertising and, in exchange, the ELP would produce "leadership videos" for them; they would jointly organise more seminars and workshops on themes connected to ELP's work; but, crucially, Langhoff agreed that the Journal would publish "a minimum of three special reports" that would be based on surveys of the European market which ELP would run with the Journal's help. It is this agreement that is now being cited as the reason for Langhoff's resignation on Tuesday. It led to the Journal publishing a full-page feature on 14 October 2010 that reported a survey conducted by ELP about the use of social media in business, quoting ELP's chief executive at length. The story carried no warning for readers that it was the result of a deal between the Journal and ELP, nor that ELP were sponsoring 16% of the paper's European circulation. Similarly, there were no warnings attached to a second story, published on 14 March 2011, which consisted of an interview with one of ELP's senior partners, Ann de Jaeger, about the role of women in company boardrooms. The ELP deal continued to cause more serious problems. Some Journal staff complained the agreement to run stories promoting ELP was unethical. On 12 July 2010, one London executive emailed that "some elements of the deal do not fit easily within best practice, brand guidelines and company policy". Others warned about the quality of the surveys on which the stories were to be based. By the autumn of 2010, ELP were complaining that the Journal was failing to deliver its end of the agreement. They threatened not to make a payment of €15,000 that was due at the end of December, for the copies of the Journal which they had sponsored since April 30. Without the payment, the Journal could not officially record the sales and their circulation figures would suddenly dive by 16%, undermining the confidence of advertisers and readers. So Langhoff set up a complex scheme to channel money to ELP to pay for the papers it had agreed to buy – effectively buying the papers with the Journal's own cash. This involved the use of other companies although it is not suggested that they were aware they were taking part in a scam. The best-documented example involves an Indian technology company, HCL, who had separately agreed to pay the Journal €16,000 to organise a special event at the Grosvenor House hotel in London on 30 September 2010. Langhoff proposed that instead of paying the Journal, HCL should pass some of this money to a middleman – a Belgian publishing company – who would then pass it on to ELP. Invoices and emails seen by the Guardian show that in November 2010, ELP sent two invoices, for €2,000 and €6,000, to the Belgian publishers of a magazine called Banking and Finance. The Belgians duly paid €8,000 to ELP, even though ELP had not provided any goods or services for which they owed this money. According to the invoices, however, the magazine were paying ELP sponsorship money for an event run by the Journal in the Belgian towns of Bree and Schilde in November 2010. The Belgian magazine was sent €2,000 by HCL. A second payment of €6,000 was never made because HCL fell into dispute with the Journal. In December 2010, as part of an attempt to persuade the Journal to pay them the missing €6,000, the Belgian publishers' managing director, Michel Klompmaker, signed a formal letter that "hereby states that there has never been a contract between us and ELP regarding the sponsorship of a Wall Street Journal Bree/Schilde summit for €6,000. We agreed to be a facilitator in a payment process between the Journal, HCL and ELP per request of the Journal". An email from Andrew Langhoff on 26 November 2010 includes a diagram that indicates money was channelled to ELP through two other middlemen. This suggests that Langhoff wanted €15,000 sent to ELP via a Belgian company called Think Media, which sells space on billboards. An invoice dated 2 December 2010, shows that ELP invoiced Think Media for €15,000. An email from 20 December shows that Think Media had paid the €15,000 to ELP. In a series of phone calls and emails to Think Media, the Guardian put it to the company that ELP had provided no goods or services in exchange for this payment, and that the payment was made at the request of the Journal. Think Media declined to respond. The same diagram suggests Langhoff wanted a further €2,000 channelled to ELP through a Belgian technology company, Nayan, which had occasionally sponsored Journal events. Nayan confirmed to the Guardian that they had paid ELP €2,000 in December 2010. They say they understood that ELP were owed this money by the Journal because they had put in some work on a Journal event, and that Nayan paid it as part of their agreement to sponsor the event. A Journal source with direct knowledge of the event says that Nayan were misled by the paper, and that ELP provided no services at the event for which they were due to be paid. While these payments were being made, a whistleblower from the Journal in Europe contacted the management of Dow Jones in New York and alerted them to the circulation scam and to the controversial agreement to publish articles promoting ELP. Emails seen by the Guardian indicate that the whistleblower's complaint was seen by New York executives, including Les Hinton – then the chief executive of Dow Jones and a close confidant of Rupert Murdoch. Hinton resigned in July in the wake of the phone-hacking scandal at the News of the World. The emails show that the chief human resources officer for Dow Jones, Gregory Giangrande, organised a meeting in London on 14 December at which the whistleblower detailed his allegations to a Dow Jones lawyer from New York, Tom Maher, and Dow Jones' European human resources executive Carol Bosack. After the meeting, Bosack emailed the whistleblower: "You are expected to keep details and your reaction or beliefs about the recent events confidential and not shared with anyone external or internal to the business. This matter is to be kept between us, Andrew [Langhoff], Internal Audit and Corporate Legal." No action was apparently taken at that time on the whistleblower's allegations. The whistleblower, who had worked for Dow Jones for 9 years, was made redundant in January. According to one source, recent Guardian inquiries among former Journal staff and companies who were involved in the payments to ELP "caused a panic" at Dow Jones, resulting in Andrew Langhoff's resignation on Tuesday. The Wall Street Journal last night reported that Langhoff's resignation "following an internal investigation into two articles published in the Wall Street Journal Europe that featured a company with a contractual link to the paper's circulation department." It quoted an email sent to staff yesterday by Langhoff about the agreement to publish the ELP stories: "Because the agreement could leave the impression that news coverage can be influenced by commercial relationships, as publisher with executive oversight, I believe that my resignation is now the most honorable course." Disclaimers have now been added to the two stories, warning readers that the "impetus" for the stories was an agreement between the Journal's circulation department and ELP. Asked about the payments from the Journal to ELP via the various middlemen, the chairman of ELP, Nick van Heck, said it was the company's policy not to make public comment on their contracts. He added: "I am confident that every member of our staff is fully aware of the European norms, which are very rigid when it comes to accounting. I'm pretty confident that what we did was in line with the law." On Tuesday afternoon Dow Jones issued a statement saying said it initiated the original investigation into the deals in question and the employees involved in late 2010. "The circulation programs and the copies associated with ELP were legitimate and appropriate, and the agreement was shared with ABC UK before the deal was signed," the statement said. "All circulation periods during the ELP arrangement have been certified." "We came to the conclusion that ELP was only compensated for valid services; however, we were uncomfortable with the appearance of these programs and the manner in which they were arranged. We subsequently eliminated the position of one of the employees responsible for those deals in January 2011. "At this point, we no longer have relationships with the employees or third parties directly involved in these agreements, and we continue to believe that these deals were valid. They were however of poor appearance. We were not fully aware of the details of the editorial component of the relationship until last week, when we immediately took action

http://www.youtube.com/watch?v=11Fl9ZVJ7B8&NR=1

Phone hacking: Les Hinton to give evidence to MPs for third time Rupert Murdoch's former right-hand man to be interviewed over News of the World phone hacking on 24 October By James Robinson guardian.co.uk, Tuesday 11 October 2011 11.10 EDT Rupert Murdoch's former right-hand man, Les Hinton, will give evidence to MPs on the culture, media and sport select committee for a third time on 24 October, it was announced today. Hinton, who chaired the UK newspaper arm of News Corp, Murdoch's media empire, will be interviewed via videolink from the US by MPs investigating phone hacking by the News of the World. Hinton was executive chairman of News International (NI) from 1995 to 2007. He subsequently became chief executive of Dow Jones, after News Corp bought the company, before resigning in July at the height of the phone-hacking scandal. He had told MPs in March 2007 that he believed that Clive Goodman, the News of the World reporter jailed for phone hacking, had acted alone. In September 2009, after the first allegations that hacking was more widespread, he said he had seen no evidence to suggest that was the case. At the time of his resignation Hinton said he had "watched with sorrow from New York as the News of the World story has unfolded" but said that although he had seen "hundreds of news reports of both actual and alleged misconduct during the time I was executive chairman of News International", he was "ignorant of what apparently happened". However, he said he chose to quit because "in the circumstances I feel it is proper for me to resign from News Corp and apologise to those hurt by the actions of News of the World". Julian Pike, of News International's solicitors Farrer & Co, will also be questioned by the committee on 19 October, along with Mark Lewis, the solicitor who represents phone-hacking victims, including the family of murdered schoolgirl Milly Dowler. Pike acted for NI when the company settled a phone-hacking case with the Professional Footballers' Association chief executive, Gordon Taylor, in April 2008. Farrer has defended News International in a number of other phone-hacking cases. The select committee is keen to establish the facts around a settlement with Taylor, which was reached after his legal team discovered an email sent by a News of the World journalist, containing a transcript of messages left on Taylor's phone. Marked "for Neville", the transcript is understood to have been earmarked for Neville Thurlbeck, the former chief reporter on the title. Mark Lewis meanwhile represented Taylor in a case that was settled with a confidential £425,000 payout plus costs made in 2007. In 2009 details about the settlement first emerged, suggesting for the first time that phone hacking had gone beyond Clive Goodman. The paper's former editor, Colin Myler, and its legal director, Tom Crone, told the committee earlier this year they had told James Murdoch about the existence of the email and that it was the reason for settling the Taylor case. Murdoch denied this when he appeared before the committee.

The Way Forward Moving From the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness By Daniel Alpert, Westwood Capital; Robert Hockett, Professor of Law, Cornell University; and Nouriel Roubini, Professor of Economics, New York University October 10, 2011 | New America Foundation Notwithstanding repeated attempts at monetary and fiscal stimulus since 2009, the United States remains mired in what is by far its worst economic slump since that of the 1930s.1 More than 25 million working-age Americans remain unemployed or underemployed, the employment-to-population ratio lingers at an historic low of 58.3 percent,2 business investment continues at historically weak levels, and consumption expenditure remains weighed down by massive private sector debt overhang left by the bursting of the housing and credit bubble a bit over three years ago. Recovery from what already has been dubbed the “Great Recession” has been so weak thus far that real GDP has yet to surpass its previous peak. And yet, already there are signs of renewed recession. It is not only the U.S. economy that is in peril right now. At this writing, Europe is struggling to prevent the sovereign debt problems of its peripheral Euro-zone economies from spiraling into a full-fledged banking crisis – an ominous development that would present an already weakening economy with yet another demand shock. Meanwhile, China and other large emerging economies--those best positioned to take up worsening slack in the global economy--are beginning to experience slowdowns of their own as earlier measures to contain domestic inflation and credit-creation kick in, and as weak growth in Europe and the United States dampen demand for their exports. Nor is renewed recession the only threat we now face. Even if a return to negative growth rates is somehow avoided, there will remain a real and present danger that Europe and the United States alike fall into an indefinitely lengthy period of negligible growth, high unemployment and deflation, much as Japan has experienced over the past 20 years following its own stock-and-real estate bubble and burst of the early 1990s.3 Protracted stagnation on this order of magnitude would undermine the living standards of an entire generation of Americans and Europeans, and would of course jeopardize America’s position in the world. Our economic straits are rendered all the more dire, and the just mentioned scenario accordingly all the more likely, by political dysfunction and attendant paralysis in both the United States and Europe. The political stalemate is in part structural, but also is attributable in significant large measure to the nature of the present economic crisis itself, which has stood much familiar economic orthodoxy of the past 30 years on its head. For despite the standoff over raising the U.S. debt ceiling this past August, the principal problem in the United States has not been government inaction. It has been inadequate action, proceeding on inadequate understanding of what ails us. Since the onset of recession in December 2007, the federal government, including the Federal Reserve, has undertaken a broad array of both conventional and unconventional policy measures. The most noteworthy of these include: slashing interest rates effectively to zero; two rounds of quantitative easing involving the purchase of Treasuries and other assets, followed by Operation Twist to flatten the yield curve yet further; and three fiscal stimulus programs (including the 2008 Economic Stimulus Act, the 2009 American Recovery and Reinvestment Act, and the 2010 Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act) and the 2008 Troubled Asset Relief Program to recapitalize the banks. These actions have undeniably helped stabilize the economy—temporarily. But as evidenced by continuing high unemployment and the weak and now worsening economic outlook, they have not produced a sustainable recovery. And there is no reason to believe that further such measures now being proposed, including the additional tax relief and modest spending found in the administration’s proposed American Jobs Act – which look all too much like previous measures – will be any more successful. Indeed, there is good reason to worry that most of the measures tried thus far, particularly those involving monetary reflation, have reached the limits of their effectiveness. The questions now urgently before us, then, are these: First, why have the policies attempted thus far fallen so far short? And second, what should we be doing instead? Answering these questions correctly, we believe, requires a more thorough understanding of the present crisis itself – its causes, its character, and its full consequences. Regrettably, in our view, there seems to be a pronounced tendency on the part of most policymakers worldwide to view the current situation as, substantially, no more than an extreme business cyclical decline. From such declines, of course, robust cyclical recoveries can reasonably be anticipated to follow in relatively short order, as previous excesses are worked off and supply and demand find their way back into balance. And such expectations, in turn, tend to be viewed as justifying merely modest policy measures. Yet as we shall show in what follows, this is not an ordinary business cycle downturn. Two features render the present slump much more formidable than that – and much more recalcitrant in the face of traditional policy measures. First, the present slump is a balance-sheet Lesser Depression or Great Recession of nearly unprecedented magnitude, occasioned by our worst credit-fueled asset-price bubble and burst since the late 1920s.4 Hence, like the crisis that unfolded throughout the 1930s, the one we are now living through wreaks all the destruction typically wrought by a Fisher-style debt-deflation. In this case, that means that millions of Americans who took out mortgages over the past 10 to 15 years, or who borrowed against the inflated values of their homes, are now left with a massive debt overhang that will weigh down on consumption for many years to come. And this in turn means that the banks and financial institutions that hold this debt are exposed to indefinitely protracted concerns about capitalization in the face of rising default rates and falling asset values. But there is more. Our present crisis is more formidable even than would be a debt-deflation alone, hard as the latter would be. For the second key characteristic of our present plight is that it is the culmination of troubling trends that have been in the making for more than two decades. In effect, it is the upshot of two profoundly important but seemingly unnoticed structural developments in the world economy. The first of those developments has been the steady entry into the world economy of successive waves of new export-oriented economies, beginning with Japan and the Asian tigers in the 1980s and peaking with China in the early 2000s, with more than two billion newly employable workers. The integration of these high-savings, lower wage economies into the global economy, occurring as it did against the backdrop of dramatic productivity gains rooted in new information technologies and the globalization of corporate supply chains, decisively shifted the balance of global supply and demand. In consequence, the world economy now is beset by excess supplies of labor, capital, and productive capacity relative to global demand. This not only profoundly dims the prospects for business investment and greater net exports in the developed world — the only other two drivers of recovery when debt-deflation slackens domestic consumer demand. It also puts the entire global economy at risk, owing to the central role that the U.S. economy still is relied on to play as the world’s consumer and borrower of last resort. The second long term development that renders the current debt-deflation, already worse than a mere cyclical downturn, worse even than other debt-deflations is this: The same integration of new rising economies with ever more competitive workforces into the world economy also further shifted the balance of power between labor and capital in the developed world. That has resulted not only in stagnant wages in the United States, but also in levels of income and wealth inequality not seen since the immediate pre-Great-Depression1920s. For much of the past several decades, easy access to consumer credit and credit-fueled rises in home values – themselves facilitated by recycled savings from emerging economies’ savings – worked to mask this widening inequality and support heightening personal consumption. But the inevitable collapse of the consumer credit and housing price bubbles of course brought an end to this pattern of economic growth and left us with the massive debt overhang cited above. Government transfer payments and tax cuts since the crash have made up some of the difference over the past two years; but these cannot continue indefinitely and in any event, as we argue below, in times like the present they tend to be saved rather than devoted to employment-inducing consumer expenditure. Even current levels of consumption, therefore, will henceforth depend on improvements in wages and incomes. Yet these have little potential to grow in a world economy beset by a glut of both labor and capital. Only the policymakers of the 1930s, then, faced a challenge as complex and daunting as that we now face. Notwithstanding the magnitude of the challenge, however, this paper argues that there is a way forward. We can get past the present impasse, provided that we start with a better diagnosis of the crisis itself, then craft cures that are informed by that diagnosis.5 That is what we aim here to do. The paper proceeds in five parts: Part I provides a brief explanatory history of the credit bubble and bust of the past decade, and explains why this bubble and bust have proved more dangerous than previous ones of the past 70 years. Part II offers a more detailed diagnosis of our present predicament in the wake of the bubble and bust, and defines the core challenge as of the product of necessary de-levering in a time of excess capacity. Part III explains why the conventional policy tools thus far employed have proved inadequate – in essence, precisely because they are predicated on an incomplete diagnosis. It also briefly addresses other recently proposed solutions and explains why they too are likely to be ineffective and in some cases outright counterproductive. Part IV outlines the criteria that any post-bubble, post-bust recovery program must satisfy in order to meet today’s debt-deflationary challenge under conditions of oversupply. Part V then lays out a three-pillared recovery plan that we have designed with those criteria in mind. It is accordingly the most detailed part of the paper. The principal features of the recovery plan are as follows: First, as Pillar 1, a substantial five-to-seven year public investment program that repairs the nation’s crumbling public infrastructure and, in so doing, (a) puts people back to work and ( lays the foundation for a more efficient and cost-effective national economy. We also emphasize the substantial element of “self-financing” that such a program would enjoy, by virtue of (a) massive currently idle and hence low-priced capacity, ( significant multiplier effects and © historically low government-borrowing costs. Second, as Pillar 2, a debt restructuring program that is truly national in scope, addressing the (intimately related) banking and real estate sectors in particular – by far the most hard-hit by the recent bubble and bust and hence by far the heaviest drags on recovery now. We note that the worst debt-overhangs and attendant debt-deflations in history6 always have followed on combined real estate and financial asset price bubbles like that we have just experienced. Accordingly, we put forward comprehensive debt-restructuring proposals that we believe will unclog the real estate and financial arteries and restore healthy circulation – with neither overly high nor overly low blood pressure – to our financial and real estate markets as well as to the economy at large. Third, as Pillar 3, global reforms that can begin the process of restoring balance to the world economy and can facilitate the process of debt de-levering in Europe and the United States. Key over the next five to seven years will be growth of domestic demand in China and other emerging market economies to (a) offset diminished demand in the developed world as it retrenches and trims back its debt overhang, and ( correct the current imbalance in global supply relative to global demand. Also key will be the establishment of an emergency global demand-stabilization fund to recycle foreign exchange reserves, now held by surplus nations, in a manner that boosts employment in deficit nations. Over the longer term, we note, reforms to the IMF, World Bank Group, and other institutions are apt to prove necessary in order to lend a degree of automaticity to currency adjustments, surplus-recycling, and global liquidity-provision.7 To read the full paper, click on link: http://newamerica.net/publications/policy/the_way_forward

October 10, 2011, 5:26 pm Advisory Firm Urges Ouster of Murdoch and His Sons The New York Times By MICHAEL J. DE LA MERCED 8:00 p.m. | Updated A major investor advisory firm recommended Monday that shareholders of the News Corporation vote against the re-election of a vast majority of the media conglomerate’s board, including Rupert Murdoch and his sons, who control the company. The firm, Institutional Shareholder Services, wrote in a report that the News Corporation’s incumbent directors, 13 out of 15 board members, failed to prevent the company from stumbling into a morass of corporate troubles. Chief among these is the phone-hacking scandal in Britain that has led to the arrests of several News Corporation executives, parliamentary hearings and a public apology by Mr. Murdoch. The scandal flared up in July, when The Guardian newspaper of London reported that reporters for a News Corporation publication, News of the World, had hacked into the voice mails of a 13-year-old murder victim, Milly Dowler. It eventually grew to encompass charges of widespread hacking and illicit bribes paid to British police officers. The scandal has cost the News Corporation financially. The company eventually closed News of the World after 168 years and scuttled plans to buy control of a major satellite television provider, British Sky Broadcasting, for about $12 billion. Institutional Shareholder Services wrote that the phone-hacking revelations had exposed “a striking lack of stewardship and failure of independence by a board whose inability to set a strong tone-at-the-top about unethical business practices has now resulted in enormous costs — financial, legal, regulatory, reputational and opportunity — for the shareholders the board ostensibly serves.” Only two of the News Corporation’s director nominees, Joel I. Klein and the venture capitalist James Breyer, received the advisory firm’s approval, since they have served on the board for only a few months. Mr. Klein, who formerly served as the chancellor of New York City’s public schools, is helping supervise the phone-hacking inquiry. Firms like Institutional Shareholder Services can hold great sway over public companies’ investors. Many large shareholders often follow proxy advisers’ recommendations. Still, the firm’s call to arms is largely symbolic, since Mr. Murdoch, the News Corporation’s chairman and chief executive, controls about 40 percent of the company’s voting shares. Prince Walid bin Talal of Saudi Arabia, who owns about 7 percent of News Corp.’s stock, publicly backed the company’s management in July. Institutional Shareholder Services also took issue with the News Corporation’s executive compensation plans, particularly the near-tripling of Mr. Murdoch’s cash bonus for the 2011 fiscal year to $12.5 million. It noted that Chase Carey, the News Corporation’s deputy chairman and chief operating officer, received a tax benefit when his contract was renewed, although his base salary was cut in half to $4.05 million. The firm recommended voting against the executive compensation proposal, although it is only advisory. As expected, the News Corporation took issue with the recommendations, saying it “strongly disagrees” with them. “The company takes the issues surrounding News of the World seriously and is working hard to resolve them,” Teri Everett, a company spokeswoman, said in a statement. “However, I.S.S.’s disproportionate focus on these issues is misguided and a disservice to our stockholders. Moreover, I.S.S. failed to consider that the company’s compensation practices reflect its robust performance in FY 2011 driven by its broad, diverse group of businesses across the globe.” Shares in the News Corporation closed up more than 4 percent on Monday, at $16.97. Copyright 2011 The New York Times CompanyPrivacy PolicyNYTimes.com 620 Eighth Avenue New York, NY 10018

Les Hinton recalled in hacking inquiry The Independent By Andrew Woodcock Tuesday, 11 October 2011 Former News International executive chairman Les Hinton is to give further evidence to a parliamentary committee investigating allegations of phone-hacking at the News of the World, it was announced today. Mr Hinton, who lives in the USA, will be questioned by the Commons Culture, Media and Sport Committee via videolink on October 24. He is expected to be asked about the period during which payments were made to News of the World royal correspondent Clive Goodman and private investigator Glenn Mulcaire, who were jailed in 2007 for eavesdropping on private voicemail messages. On October 19, the committee will take evidence from Julian Pike of Farrer & Co, the solicitors who advised News International in case of Professional Footballers Association chief executive Gordon Taylor, as well as from solicitor Mark Lewis, who represents many of the News of the World's alleged victims. Committee chair John Whittingdale said last month that he wanted to gather evidence from Mr Hinton and Farrer's before recalling James Murdoch - the European chief executive of News Corporation, which owns News International, the publishers of the defunct Sunday tabloid - for what is expected to be the final session in the long-running inquiry. Mr Murdoch is expected to be asked about apparent discrepancies in evidence received by the committee about exactly when he was informed that the hacking problem may extend beyond a single rogue reporter. Mr Hinton was a close lieutenant of News Corp chairman Rupert Murdoch until he resigned as CEO of the company's Dow Jones operation in July. PA

Why Europe's debt crisis is a storm warning for Wall Street The debt crisis engulfing Europe is heading for the US, former Wall Street bond trader Michael Lewis warns in his latest book By Paul Harris guardian.co.uk, Monday 10 October 2011 14.30 EDT The fire alarm goes off as Michael Lewis descends in the lift from his hotel room. As a security guard warns nervous-looking guests that the screaming sound was not a drill, it seemed the perfect introduction for a man whose new book about Europe's debt crisis is flying off American shelves. "The world does seem to be falling apart," Lewis says. Even the briefest glance at the headlines would seem to confirm that opinion. As civil unrest flares in a near-bankrupt Greece and European leaders struggle to avert "contagion", it is hard not to worry that the Great Recession caused by the collapse of debt-laden banks might – horribly – be just a prelude to the even greater disaster of debt-laden countries toppling like dominoes. That cheerful scenario is precisely the subject of Boomerang: Travels in the New Third World, Lewis's jaunty yet scary account of his travels in four countries at the heart of the crisis. He visits Iceland to investigate just how a tiny island nation in the middle of the North Atlantic could go through one of the most spectacular banking boom-and-busts in history. He trawls through the sorry tale of the Irish real estate bubble and the epic tragedy that is Greece before examining Germany: Europe's reluctant rescuer. But finally, and harrowingly, he ends his journey back in the US, warning that Americans have little reason to feel safe from the danger. Instead, they are simply last in line. To put it mildly, Lewis – whose position as a former bond trader gives him more than just journalistic insight – sees big trouble ahead. "There is going to be a change in the idea that each generation of Americans is going to live a lot better than the one before it," he says. "Imagine an America where you have got a long recession. It does not become a Great Depression, but you get negative growth or low growth or no growth for a long time and high unemployment. What does that generate? It generates anger." Indeed it does. Just a 20-minute taxi ride south from the fancy New York hotel where Lewis is tucking into high quality Japanese food, the Occupy Wall Street movement has now camped out in a downtown Manhattan park for more than three weeks. From small beginnings, the protests have spread to dozens of American cities. There have been hundreds of arrests and speculation that a new political movement – a sort of Tea Party of the left – is being born. Lewis welcomed the phenomenon. "If you ask the average Wall Street boss what he thought of those people, he'd say it was a joke," he says. "I don't think it's a joke. I think there is actually an incredible frustration and legitimate anger in the country that arises from the unfairness of the treatment of the financial sector." That treatment, Lewis says, is the real joke. He points out how Wall Street banks, having helped cause the Great Recession and then been bailed out to the tune of hundreds of billions of taxpayer dollars, have now set about gutting attempts to reform their industry. "It is outrageous. It is totally outrageous and it is so obvious that you can say it until you are blue in the face and you think there's no hope for change in the world. But now this protest in lower Manhattan happens and it seems to me there are a lot of people who share the sentiment." Of course, one person who is not suffering is Lewis himself. Boomerang is one of the most spectacularly well-timed books in recent publishing history, and Lewis is rapidly becoming one of America's most successful modern writers. His first work, xxxx's Poker, was an account of his disillusioning time as a bond trader in the late 1980s. It was intended as a cautionary tale of foolish excess, though, perhaps presciently, Lewis was shocked when some young graduates saw it more as a sort of handbook to working in the finance industry. But Lewis, who now covers business issues for Vanity Fair, has never restricted himself to just finance. His book about baseball, called Moneyball, has just been turned into a film starring Brad Pitt. Another tome, about American football, featured material that eventually became the Oscar-nominated movie The Blind Side. He is currently working on a potential TV show for HBO. Such is Lewis's success that New York magazine ran a profile of him this week under the headline: "It's good to be Michael Lewis." Not that it goes to his head. He speaks in the chatty, friendly style of a professional journalist, with an accent hinting at his southern roots in New Orleans. He exudes a charm and affability that is present throughout the pages of Boomerang. It allowed him to travel to the destinations on his "economic disaster tour" and meet everyone – from the prime minister of Iceland, to sneaking into the Greek monastery where the monks' dodgy financial shenanigans inadvertently helped bring the Greek crisis into being. Yet, far from kicking him out, the monks ended up happily showing him around. He is good company throughout the book, though he has received a lot of flak for indulging in national stereotypes – both expected and unexpected – as a sort of explanation for why different countries made the mistakes they did. In particular, he has been slammed for a lengthy examination of why German attitudes towards money and human excrement mirror each other (a public sense of order masking a secret fascination with the dark side, since you ask). But such sideshows are merely that: a distraction from the main theme of the book, which is simply that the European crisis now unfolding is eventually heading for America's shores. To illustrate the point, Lewis opens the book with an introduction to one of the most unnerving characters in modern American finance: Texan hedge fund manager Kyle Bass. Lewis found Bass while working on his previous book on the banking crisis, The Big Short. He interviewed Bass in 2008 after realising he had made a fortune predicting the bursting of the American real estate bubble. While everyone else had piled in to the boom, Bass had bet against it, and it had earned him a fortune. But Bass by then had moved on and would only talk about the coming debt crisis that would, he predicted, eventually overwhelm Europe, probably starting in Greece. And what was Bass's investment advice to prepare for this? It was to buy guns and gold; and on a second visit in 2011, Lewis found Bass had not changed his mind. Indeed, he had purchased 20m nickels, solely for the value of their metal. It is scary stuff, especially as each day brings fears of a Greek default another step closer. Though even Lewis shies away from saying that Bass is going to be right about everything. His vision of an almost literal doomsday scenario is not one Lewis shares. "It does not necessarily mean sitting on top of your pile of gold and shooting people who get near your broccoli patch," Lewis says. He believes the US government will act to stem the crisis heading its way. It may mean tough times, even a fundamental realigning of what Americans expect out of life, but it will not be a Greek-style imminent collapse. "Americans are pretty self-preservatory," he says. "The crisis will create pressures here that will arrest the crisis before it causes the US treasury to stop paying its bills." But then Lewis pauses: "I think. I don't know." By then the hotel fire alarm that had greeted Lewis's arrival had long been turned off. There had been no real fire. Hopefully, the same will be true for some of the direst warnings in his book.

"9/11, JFK, and WAR”: THOUGHTS ON A PAPER BY PETER DALE SCOTT October 10, 2011 By Joseph P. Farrell [see links at end of article] Those who’ve read my LBJ and the Conspiracy to Kill Kennedy will know that I have a great deal of admiration and respect for the research and thought of Professor Peter Dale Scott, a political science professor who has delved more deeply into the “deep politics” and what he calls the “parapolitical power structure” in the USA. Recently I ran into a paper of his online, and wanted to bring it to everyone’s attention, and to comment a bit about it here. The paper is entitled “9/11, JFK, and War: Recurring Patterns in America’s Deep Events.” You can access the paper here by copying and pasting the link: http://www.journalof911studies.com/volume/2007/ProfScottJFK,911,andWar.pdf\'>http://www.journalof911studies.com/volume/2007/ProfScottJFK,911,andWar.pdf\ The reason I admire Prof. Scott’s work is not only because he delves deeply into the structure – and criminality – of the deep power political structure in the U.S.A., but also into its motivations and “playbook.” This article is no different. We may summarize Prof. Scott’s conclusions as follows: There are deeply parallel patterns between the JFK assassination and the events of 9/11, indicating that the same forces were behind both events: 1) Both events were attributed “to insignificant and very marginal people” and yet both had deep impact and served to redirect American history and policy (p. 1), in that both were followed “by America’s longest military involvements in the nation’s history”(p. 2); 2) Events such as the JFK assassination, Watergate, Iran-Contra, and 9/11 also involved what Prof Scott calls “the deep state, that part of the state which is not publicly accountable, and pursues its goals by means which will not be approved by a public examination”(p. 1), a fact that I indicated in my JFK book effectively means the U.S.A.’s deep political structure is so corrupt that it is little more than a banana republic….with nukes; 3) The parallels between the JFK assassination and 9/11 “seem to indicate a recurring modus operandi or scenario,” (p. 2), in other words, a standard playbook with standard methods, tactics, and strategies of accomplishing its aims; We must pause to consider the specific parallels adduced by Prof. Scott. Among these are: a) Both events were preceded by suspicious stock market speculations and trades (p. 2); Both events occurred when “a number of senior officers were out of the country”(p. 4); c) Both events were followed by what may best be described as official cover-up commissions which offered a cover-story that was absurd or at least highly dubious, and in both cases, the commissions called for an increase in the power of intelligence agencies, and hence, of the deep state (p. 5); d) Both events also exhibited similarities that strongly suggest they “were pre-designed to a common scenario”(p. 6), which include (i) the almost instant identification of the culprits/patsies(p. 6); (ii) paper trails laid “by the designated suspects to facilitate their identification”(p. 8); (iii) questions about the identity of the suspects (for example, the clear evidence of more than one Lee Harvey Oswald and the similar unclear identification of some of the suicide hijackers)(p. 11); (iv) suspension or impedance of investigations of the eventual designated culprits prior to the events (p. 11); (v) the probable presence of double agents in each operation, i.e., Lee Harvey Oswald and Ali Mohamed (p. 13); (vi) the maintenance of a cover-story in which the culprit(s) acted alone, with no deeper levels involved (p. 18); and finally, and most importantly, (vii)many of those connected as designated culprits in both events had ties to organized international drug trafficking. (p. 22). Beyond the obvious merits of these comparisons, however, I think there lie deeper significances, and we may boil these down to three basic propositions or hypotheses: (1) The connection to organized international drug trafficking indicates a possible connection to a very deep player, namely, the Nazi or Fascist International, with its deep ties to the drug trade, connections I have referred to in LBJ and the Conspiracy to Kill Kennedy, and that I cover from a slightly different perspective in my forthcoming book, Saucers, Swastikas, and Psyops: A History of a Breakaway Civilization. I have maintained elsewhere that I believe there are certain indicators that the 9/11 events were not only orchestrated by a surface player (radical Muslim suicide hijackers) and a deep player (what Prof. Scott calls the parapolitical or deep political power structure of the U.S.A.), but by yet a third and deepest layer, working inside of the other two and unbeknownst to either, constituting this network of international criminal drug syndicates and this Fascist-Terror International); (2) The call for ever-expanded powers for the American component of this deep power structure is an indicator that it is becoming a breakaway civilization, for it evidences its own policies, its own (very dubious) “morality”, and pursues its objectives independently of the state that funds it and called it into existence; and finally, (3) A crucial component of this power structure’s “playbook” is that of ritual mockery, i.e., the parading of patently dubious “official stories” that begin to collapse almost as soon as they are put forward, for as its shortcomings are increasingly exposed by investigators, the feeling of helplessness and powerlessness is by that very act reinforced. It is, in short, a component of all such operations to socially engineer a traumatized, shocked state in the public consciousness. In that state, the deep political structure is able to channel the energies of its host society into support of its own policies. Whatever one makes of my three hypotheses, however, it remains nonetheless true that Prof Scott has exposed a disturbing series of parallels between the events of the JFK assassination and 9/11, and that should give everyone pause, for it means that the JFK assassination remains the key defining moment of modern American history, and of everything that has followed since. http://gizadeathstar.com/2011/10/911-jfk-and-war-thoughts-on-a-paper-by-peter-dale-scott/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+GizaDeathStar+%28Giza+Death+Star%29&utm_content=FaceBook http://www.journalof911studies.com/volume/2007/ProfScottJFK,911,andWar.pdf

News Corp investors urged to be cautious over re-election of Murdochs Glass Lewis, an influential shareholder adviser, adds its voice to those recommending a shakeup of the News Corp board By Terry Macalister guardian.co.uk, Sunday 9 October 2011 12.21 EDT The campaign to unseat members of the Murdoch family from their positions as directors of News Corporation may have spread to the US with cautionary advice about them from an influential adviser. Glass Lewis, which advises institutions holding $15tn (£9.6tn) worth of investments, has recommended that investors vote against the re-election of Rupert Murdoch's two sons, James and Lachlan, at the News Corp annual meeting next week in protest at the phone-hacking scandal. A report from Glass Lewis advises investors to "carefully consider the nature of the relationship each director has with the company and with its controlling shareholder, the Murdoch family, in order to establish a board with proper independence levels and strong oversight". The move follows advice in Britain from the Local Authority Pension Fund Forum that Rupert and James should step down. The institutional shareholder advisory service, Pirc, has called for a shakeup. The Australian Council of Superannuation Investors said last month that the News Corp board structure "does not reflect good corporate governance" and called for six directors to stand down. Glass Lewis is also recommending shareholders carefully consider the re-election of Natalie Bancroft, David DeVoe, Andrew Knight and Arthur Suskind as well as the Murdoch sons on the grounds that they are not sufficiently independent. Concerns about personnel on the board have existed for many years but the phone-hacking scandal unearthed by the Guardian and which led to the closure of the News of the World newspaper in Britain has been seen as a symptom of wider problems at the company. A corporate governance specialist who asked not to be named said the move by Glass Lewis could trigger other influential organisations such as Institutional Shareholder Services (ISS) to come out against News Corp directors. The California Public Employees' Retirement System (Calpers), the largest US public pension fund and a leading campaigner on corporate governance issues, has yet to comment, but in summer it launched an attack on the dual-class structure that gives the Murdoch family almost 40% of the voting rights in the company despite owning only 12% of the equity. Calpers described this as "a corruption of the governance system". News Corp declined to comment last night on the growing row before its 21 October annual general meeting but the Murdochs know their voting strength makes it difficult for investors to unseat the family members or other directors who have close ties with them. The Murdochs have been under fire since July when it emerged that the News of the World had illegally targeted the missing schoolgirl Milly Dowler and her family in March 2002, interfering with police inquiries into her disappearance. An inquiry was launched by Scotland Yard and soon led to the resignation of the then editor of the paper, Rebekah Brooks, who was more recently Rupert Murdoch's chief executive in the UK. The police investigation continues, and last week Lord Justice Leveson began a government-backed review of press behaviour and ethics.

Kenneth H. Dahlberg, Watergate Figure and WWII Ace, Dies at 94 The New York Times October 8, 2011 By DOUGLAS MARTIN “Who the hell is Ken Dahlberg?” President Richard M. Nixon asked on June 23, 1972, his voice captured on tape in the Oval Office. He would find out soon enough. Without Kenneth H. Dahlberg, Nixon might not have become ensnared in the Watergate scandal and been forced to resign. Mr. Dahlberg, who died on Tuesday at 94, became the unwitting link between the Nixon re-election campaign and the five men who, only days before Nixon’s remark, were charged with breaking into the Democratic National Committee headquarters at the Watergate complex in Washington. He had been a fund-raiser for Nixon’s re-election campaign, and his name was on a $25,000 cashier’s check that had been deposited in the bank account of one of the burglars, Bernard L. Barker. The money was to help cover the burglars’ expenses, and Mr. Barker had withdrawn that amount in $100 bills. He was carrying more than $5,000 when he was arrested on June 17. Bob Woodward, a young reporter for The Washington Post who with Carl Bernstein unraveled the Watergate affair, has called the Dahlberg check the “connective tissue” that turned what they thought was a story about a common crime into one of historic dimensions. Nixon professed not to know who Mr. Dahlberg was, but he was in fact a prominent Minnesota businessman, Republican fund-raiser and former war hero. He sided with Republicans because he thought they, more than Democrats, understood the problems of business. He had raised money for Senator Barry M. Goldwater’s presidential campaign in 1964 and Nixon’s in 1968. In 1972, Mr. Dahlberg was head of Midwestern fund-raising for the Nixon re-election campaign when he was approached by his friend Dwayne Andreas, who had turned the Archer Daniels Midland Company into a farm-products giant. Mr. Andreas wanted to contribute to the Republicans, but he also wanted to conceal it from his friend Hubert H. Humphrey, the Democratic senator and former vice president. Hoping to avoid disclosing the contributions under new campaign finance laws, Mr. Andreas gave $25,000 to Mr. Dahlberg. Mr. Dahlberg converted the money into a cashier’s check written to himself and gave the check to Maurice Stans, finance chairman for the Nixon campaign. The check ended up in the account of Mr. Barker, a Cuban-American former C.I.A. agent, in a bank in Boca Raton, Fla. Mr. Dahlberg later said that he had no idea how the money got there. He was never charged. The Barker account, and the Dahlberg check, came to light after a Miami prosecutor, Martin F. Dardis, received a tip from a police friend in Washington that the bills Mr. Barker had carried were brand new and numbered consecutively, suggesting that they had come from a bank. Mr. Dardis traced the bills to the Boca Raton bank and subpoenaed its records to learn the identities of Mr. Barker and Mr. Dahlberg. By then, Mr. Woodward and Mr. Bernstein were pursuing the story. Meeting with Mr. Bernstein in Miami, Mr. Dardis told him of the Dahlberg connection. “We’re still trying to find out who this Dahlberg guy is,” the reporters quoted Mr. Dardis as saying in their 1974 book, “All the President’s Men.” “You ever hear of him?” Unable to reach Mr. Dahlberg at his home in Boca Raton and having no other number, Mr. Woodward, in Washington, asked a Post librarian to see if there was anything on Mr. Dahlberg in the paper’s files. The librarian found a picture of Mr. Dahlberg with Mr. Humphrey. Mr. Humphrey was from Minnesota. On a hunch, Mr. Woodward called information in Minneapolis and got a number for a Kenneth H. Dahlberg. Mr. Dahlberg answered the phone, acknowledged the $25,000 check and, saying, “I know I shouldn’t tell you this,” according to the Woodward-Bernstein book, proceeded to reveal that he had given the check to Mr. Stans. On Aug. 1, The Post was able to report the connection between a Nixon fund-raiser and a Watergate burglar. In the book, Mr. Woodward and Mr. Bernstein recounted what Barry Sussman, the city editor, said as he edited the article: “We’ve never had a story like this. Just never.” Kenneth Harry Dahlberg, whose family said he died at his home in Deephaven, Minn., was born in nearby St. Paul on June 30, 1917. He grew up in rural poverty in Wisconsin. In World War II, serving in the Army Air Forces, he was a flight instructor with Mr. Goldwater, sharing a tent with him in Yuma, Ariz. Mr. Dahlberg was a triple ace in the European theater, shooting down 15 German planes. He himself was shot down and captured three times, escaping P.O.W. camps twice. His many decorations included the Distinguished Service Cross, the Army’s second-highest award for bravery. His wife of 64 years, the former Betty Jayne Segerstrom, survives him, as do two daughters, Nancy Dahlberg and Dede Disbrow; a son, K. Jeffrey; a brother, Arnold; two sisters, Marcella Savage and Harriet Dolny; seven grandchildren; and five great-grandchildren. In business, Mr. Dahlberg started the Miracle-Ear Hearing Aid Company, which developed one of the first hearing aids to fit inside the ear; it was also one of the first consumer products to use transistors. He sold the company in 1994 for $139 million. Mr. Dahlberg attended Nixon’s funeral in 1994, though he disapproved of some of the president’s behavior. He wrote in The New York Times in 1976: “The revelations of Watergate were so repulsive that I am grateful for their exposure.”

http://www.telegraph.co.uk/finance/financialcrisis/8812260/World-facing-worst-financial-crisis-in-history-Bank-of-England-Governor-says.html http://www.rawstory.com/rs/2011/10/07/imf-adviser-the-global-economy-could-collapse-in-two-to-three-weeks/ --------------------------------------------------- http://www.garynorth.com We Face the Worst Financial Crisis in History, Says Head of the Bank of England Gary North Oct. 8, 2011 The headline in the London Telegraph is a shocker: World facing worst financial crisis in history, Bank of England Governor says. Frankly, I have never read a headline like this. This is the highest-level figure I have ever heard of who used language this strong. It is unprecedented. He could be wrong, of course. But when the head of the model of all modern central banks says this, we are facing a major problem. It is so big that it has persuaded him to go public with his concerns. The world is facing the worst financial crisis since at least the 1930s "if not ever", the Governor of the Bank of England said last night. Sir Mervyn King was speaking after the decision by the Bank's Monetary Policy Committee to put £75 billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession. Economists said the Bank's decision to resume its quantitative easing [QE], or asset purchase programme, showed it was increasingly fearful for the economy, and predicted more such moves ahead. Sir Mervyn said the Bank had been driven by growing signs of a global economic disaster. "This is the most serious financial crisis we've seen, at least since the 1930s, if not ever. We're having to deal with very unusual circumstances, but to act calmly to this and to do the right thing." I cannot imagine Bernanke saying this. Even in the midst of the 2008 crisis three years ago, he said almost nothing. He let Paulson do the talking. So, what is the problem? The Eurozone. Announcing its decision, the Bank said that the eurozone debt crisis was creating "severe strains in bank funding markets and financial markets". The Monetary Policy Committee [MPC] also said that the inflation-driven "squeeze on households' real incomes" and the Government's programme of spending cuts will "continue to weigh on domestic spending" for some time to come. The "deterioration in the outlook" meant more QE was justified, the Bank said. Central banks inflate. They do little else. But they do not justify their policies with rhetoric this intense. This is bad news for pensioners, of course: more inflation. By the way, the reporter actually explained the Bank's action -- and explained it accurately. Now, that's news! Under QE, the Bank electronically creates new money which it then uses to buy assets such as government bonds, or gilts, from banks. In theory, the banks then use the cash they gain to increase their lending to businesses and individuals. By increasing the demand for gilts, QE pushes down the interest rate yields paid to holders of these and other bonds. Critics of the policy say it pushes up inflation and drives down sterling. There is opposition to the move. The National Association of Pension Funds yesterday called for urgent talks with ministers to address the negative impact of lower gilt yields on pension funds. Joanne Segars, its chief executive, said QE makes it more expensive for employers to provide pensions and will weaken the funding of schemes as their deficits increase. "All this will put additional pressure on employers at a time when they are facing a bleak economic situation," she said. Ros Altman, of Saga, said the latest round of QE was "a Titanic disaster" that would increase pensioner poverty. As well as fuelling inflation, she said, falling bond yields would make annuities more expensive, "giving new retirees much less pension income for their money and leaving them permanently poorer in retirement". The MPC also voted to keep the Bank Rate at its historic low of 0.5 per cent, another decision that hurts savers. Yesterday, protesters outside the Bank's headquarters smashed a giant piggy bank to symbolise the situation of pensioners and others forced to raid savings to keep up with the rising cost of living. King of course justified the Bank's action. He is a Keynesian, and for Keynesians, there must be inflation, always. Asked about the plight of savers, Sir Mervyn said it was more important to support the wider economy than to support them. He suggested that savers would not be helped by deliberately pushing the British economy into recession. Yesterday's decision was the first move on QE since 2009, during the global credit crisis, when the Bank injected £200?billion into the economy. Price inflation is moving up sharply. The Bank is supposed to keep inflation near a target of 2 per cent. Inflation now stands at 4.5 per cent, and the Bank admitted it is likely to hit 5 per cent as soon as this month. The Bank's own research shows that as well as stimulating the economy, QE pushes up prices. Sir Mervyn insisted that yesterday's move was still consistent with the 2 per cent inflation target, saying that the slowing economy means inflation could actually fall below that mark "by the end of next year or in 2013". Because the policy subsidizes the government, the government cheered. George Osborne, the Chancellor, welcomed the Bank's move, saying: "The evidence shows that it [QE] will help keep interest rates down and boost demand and that will be a help for British families." When the Bank of England holds rates this low, despite criticism, there is a crisis brewing. Bernanke gets no criticism from the Establishment. He can get away with boring speeches. King cannot. He and the other decision-makers at the bank perceive that Europe is at the edge of the abyss. The pound fell. In the USA, anyone who uses this sort of language is dismissed as a crank. Mervyn King is not a crank. He represents the Establishment in Great Britain. Those of us who see the European debt crisis as King does have no authority in the USA. The experts cannot easily dismiss King. So, they will ignore him. If you want to understand why King said what he did, read this. If the Greeks quit, Europe will have to raise the equivalent of a trillion dollars in euros in one day, and $2 trillion in euros over the next three years. A banking collapse would be likely if this money were not forthcoming. Would it come? Of course. The European Central Bank would illegally create it. On that day, own gold.

Murdoch's minions keep drawing lines but to no great effect Blog by Roy Greenslade Guardian.co.uk October 5, 2011 Ever since Nick Davies's first major phone hacking revelation in July 2009, News International has been in damage limitation mode. The problem, as the latest crop of lawsuits exposes yet again, is that the damage is just too large to limit. Every attempt by Rupert Murdoch and his executives to draw a line under the affair has proved utterly futile. They must have run out of pencils by now. Line one - pushing the infamous single rogue reporter defence - seems like ancient history now. Line two - throwing mud at Davies and The Guardian in the expectation that they would get fed up - was always a flawed tactic. Line three - relying on the Met police and the Press Complaints Commission for their "official" opinions to defuse the row - was exposed as imperfect. Line four - putting aside a £20m contingency fund to see off a couple of irritating legal actions - looked like an attempt to bury bad news by a wealthy magnate. Today's revelation that the company now faces more than 60 writs, including actions by people such as Sara Payne, Paul Dadge and Shaun Russell, also shows that the financial cost is likely to escalate way beyond that total. Line five - closing the News of the World - did made not the least difference to the continuing saga of revelations. Line six - dealing direct with Milly Dowler's family as a way of defusing their hurt and public anger - proved to be no more than a synthetic PR exercise. Line seven - creating a supposedly arm's-length management and standards committee - has not assuaged public concern Line eight - Rupert and James Murdoch appearing before the Commons media select committee - simply engendered more speculation and has resulted in James being recalled. Line nine - sacking various former News of the World staff and refusing to stump up for legal fees for ex-employees - will surely prove to be the worst responses of all. Once people in the know are released from their obligations, and are fired with righteous anger because they have previously remained loyal, then the game is bound to be up. It was surely in News International's interests to keep everyone in the tent. Now, with so many people facing the possibility of being charged while others are already facing heavy legal costs, they have given the Wapping exiles every reason to work against them. Murdoch's minions can go on drawing lines, hoping that this one or that one will finally do the job. But it will fail. And News Int should certainly think again about

http://www.juancole.com/2011/10/palin-was-right-about-those-government-death-panels.html

Secret panel can put Americans on "kill list" Reuters Wed, Oct 5 2011 By Mark Hosenball WASHINGTON (Reuters) - American militants like Anwar al-Awlaki are placed on a kill or capture list by a secretive panel of senior government officials, which then informs the president of its decisions, according to officials. There is no public record of the operations or decisions of the panel, which is a subset of the White House's National Security Council, several current and former officials said. Neither is there any law establishing its existence or setting out the rules by which it is supposed to operate. The panel was behind the decision to add Awlaki, a U.S.-born militant preacher with alleged al Qaeda connections, to the target list. He was killed by a CIA drone strike in Yemen late last month. The role of the president in ordering or ratifying a decision to target a citizen is fuzzy. White House spokesman Tommy Vietor declined to discuss anything about the process. Current and former officials said that to the best of their knowledge, Awlaki, who the White House said was a key figure in al Qaeda in the Arabian Peninsula, al Qaeda's Yemen-based affiliate, had been the only American put on a government list targeting people for capture or death due to their alleged involvement with militants. The White House is portraying the killing of Awlaki as a demonstration of President Barack Obama's toughness toward militants who threaten the United States. But the process that led to Awlaki's killing has drawn fierce criticism from both the political left and right. In an ironic turn, Obama, who ran for president denouncing predecessor George W. Bush's expansive use of executive power in his "war on terrorism," is being attacked in some quarters for using similar tactics. They include secret legal justifications and undisclosed intelligence assessments. Liberals criticized the drone attack on an American citizen as extra-judicial murder. Conservatives criticized Obama for refusing to release a Justice Department legal opinion that reportedly justified killing Awlaki. They accuse Obama of hypocrisy, noting his administration insisted on publishing Bush-era administration legal memos justifying the use of interrogation techniques many equate with torture, but refused to make public its rationale for killing a citizen without due process. Some details about how the administration went about targeting Awlaki emerged on Tuesday when the top Democrat on the House Intelligence Committee, Representative Dutch Ruppersberger, was asked by reporters about the killing. The process involves "going through the National Security Council, then it eventually goes to the president, but the National Security Council does the investigation, they have lawyers, they review, they look at the situation, you have input from the military, and also, we make sure that we follow international law," Ruppersberger said. LAWYERS CONSULTED Other officials said the role of the president in the process was murkier than what Ruppersberger described. They said targeting recommendations are drawn up by a committee of mid-level National Security Council and agency officials. Their recommendations are then sent to the panel of NSC "principals," meaning Cabinet secretaries and intelligence unit chiefs, for approval. The panel of principals could have different memberships when considering different operational issues, they said. The officials insisted on anonymity to discuss sensitive information. They confirmed that lawyers, including those in the Justice Department, were consulted before Awlaki's name was added to the target list. Two principal legal theories were advanced, an official said: first, that the actions were permitted by Congress when it authorized the use of military forces against militants in the wake of the attacks of September 11, 2001; and they are permitted under international law if a country is defending itself. Several officials said that when Awlaki became the first American put on the target list, Obama was not required personally to approve the targeting of a person. But one official said Obama would be notified of the principals' decision. If he objected, the decision would be nullified, the official said. A former official said one of the reasons for making senior officials principally responsible for nominating Americans for the target list was to "protect" the president. Officials confirmed that a second American, Samir Khan, was killed in the drone attack that killed Awlaki. Khan had served as editor of Inspire, a glossy English-language magazine used by AQAP as a propaganda and recruitment vehicle. But rather than being specifically targeted by drone operators, Khan was in the wrong place at the wrong time, officials said. Ruppersberger appeared to confirm that, saying Khan's death was "collateral," meaning he was not an intentional target of the drone strike. When the name of a foreign, rather than American, militant is added to targeting lists, the decision is made within the intelligence community and normally does not require approval by high-level NSC officials. 'FROM INSPIRATIONAL TO OPERATIONAL' Officials said Awlaki, whose fierce sermons were widely circulated on English-language militant websites, was targeted because Washington accumulated information his role in AQAP had gone "from inspirational to operational." That meant that instead of just propagandizing in favor of al Qaeda objectives, Awlaki allegedly began to participate directly in plots against American targets. "Let me underscore, Awlaki is no mere messenger but someone integrally involved in lethal terrorist activities," Daniel Benjamin, top counterterrorism official at the State Department, warned last spring. The Obama administration has not made public an accounting of the classified evidence that Awlaki was operationally involved in planning terrorist attacks. But officials acknowledged that some of the intelligence purporting to show Awlaki's hands-on role in plotting attacks was patchy. For instance, one plot in which authorities have said Awlaki was involved Nigerian-born Umar Farouk Abdulmutallab, accused of trying to blow up a Detroit-bound U.S. airliner on Christmas Day 2009 with a bomb hidden in his underpants. There is no doubt Abdulmutallab was an admirer or follower of Awlaki, since he admitted that to U.S. investigators. When he appeared in a Detroit courtroom earlier this week for the start of his trial on bomb-plot charges, he proclaimed, "Anwar is alive." But at the time the White House was considering putting Awlaki on the U.S. target list, intelligence connecting Awlaki specifically to Abdulmutallab and his alleged bomb plot was partial. Officials said at the time the United States had voice intercepts involving a phone known to have been used by Awlaki and someone who they believed, but were not positive, was Abdulmutallab. Awlaki was also implicated in a case in which a British Airways employee was imprisoned for plotting to blow up a U.S.-bound plane. E-mails retrieved by authorities from the employee's computer showed what an investigator described as " operational contact" between Britain and Yemen. Authorities believe the contacts were mainly between the U.K.-based suspect and his brother. But there was a strong suspicion Awlaki was at the brother's side when the messages were dispatched. British media reported that in one message, the person on the Yemeni end supposedly said, "Our highest priority is the US ... With the people you have, is it possible to get a package or a person with a package on board a flight heading to the US?" U.S. officials contrast intelligence suggesting Awlaki's involvement in specific plots with the activities of Adam Gadahn, an American citizen who became a principal English-language propagandist for the core al Qaeda network formerly led by Osama bin Laden. While Gadahn appeared in angry videos calling for attacks on the United States, officials said he had not been specifically targeted for capture or killing by U.S. forces because he was regarded as a loudmouth not directly involved in plotting attacks.

Phone hacking: PR firm Bell Pottinger puts its money behind Rebekah Brooks Rebekah Brooks, the former chief executive of News International, is being supplied with the services of Bell Pottinger free of charge. Daily Telegraph 7:30AM BST 07 Oct 2011 Although she must now be reconciled to receiving somewhat fewer Christmas cards this year, Rebekah Brooks, the ousted chief executive of News International, can still count on the support of one of Baroness Thatcher’s most trusted allies. Lord Bell’s public relations firm Bell Pottinger is attending to her somewhat battered image on a pro bono basis. The company has been representing Brooks in all her dealings with the media since she stepped down at the height of the News of the World phone-hacking scandal in July. It would normally charge thousands of pounds for its services.“ This is most intriguing,” says one media figure. "They’re obviously not representing her for the prestige, so they must see her as a good long-term bet.” In August, I disclosed that Brooks remained on the payroll at Rupert Murdoch’s News International. “My understanding is that Rupert has told her to travel the world on him for a year and then he will find a job for her when the scandal has died down,” said my informant. Tim Bell is the chairman of Bell Pottinger’s parent company, Chime Communications. While he worked for the Saatchi & Saatchi advertising agency, he ran Lady Thatcher’s successful 1979 and 1983 general election campaigns. Bell Pottinger’s clients have included the governments of Bahrain and Belarus, as well as the controversial oil company Trafigura. “We don’t comment on the financial arrangements between ourselves and our clients,” a spokesman says.

James Cusick: Can Leveson Inquiry remember what it's for? Our writer gets a taste of the battles ahead as hacking inquiry cranks up The Independent Friday, 7 October 2011 The advisory note from the Leveson Inquiry described the gathering in the QE2 conference centre yesterday as a "seminar". It wasn't. Resembling a very bad edition of Question Time, where normal people were banished and replaced by room-full of big egos, it became a forum trying to promote the myth that unethical or illegal activity never happened in Britain's squeaky-clean media. The opening remark from Sir David Bell, the former chairman of the Financial Times, sounded like an appeal to the Guinness book of records. "I doubt a gathering like this has ever happened before," he said. Sadly, there will be no new entry. Check the reservations at The Ivy or Soho House any night. They'll look similar. Sir David said he wanted to start "a debate". The seminar was billed as an examination of "the competitive pressures on the press and the impact on journalism". The media analyst Claire Enders offered comprehensive evidence that the UK's media landscape is a tough place to survive. Young people were using the printed media less than older people; despite the growth of everything from the iPad to smart phones, "analogue dollars still equalled digital pennies". If the media great-and-good didn't already know this, they were in the wrong place. It is the continuing fallout from News International's deployment of phone hacking and other dark arts that makes the Leveson Inquiry necessary. But yesterday's gathering suggested many may have forgotten why they were there. The former News of the World editor Phil Hall could have reminded them. Instead, he recalled his first chat with Rupert Murdoch, who told him circulation of the tabloid would fall by a million over the next few years. Rupert didn't mind at all, said Hall, because all he wanted was a "great competitive newspaper". It sounded like Hall had got "The News of the Screws" confused with The New York Times. Pressures in the NOTW newsroom? "Only our professional pride." The former Daily Star reporter Richard Peppiatt resigned last year over what he saw as the paper's Islamophobia. His seminar input was clear: tabloid newsdesks are evil and twisted and it's no fun in the gutter. Newsdesks, said Peppiatt, worked like this: "Tell us what we want to hear and we won't ask how you got it." That should have been the seminar's cue to explore the ethics of illegal phone intercepts, the hiring of suspect private detectives, the bribing of police officers, the uncomfortably close relationships between the Metropolitan Police and senior NI executives. It didn't happen. Instead, the Q&A sessions that followed descended into hybrid bar chats, with each editor saying, in their own words, why my paper, my boys, my standards, are better than yours. It took the intervention of Ian Hargreaves, professor of journalism at Cardiff University and a former editor of The Independent, to remind the inquiry that they were in danger of missing the ethical point – that phone hacking really couldn't be explained away by talk of the industry's new-found commercial pressures. Roy Greenslade, a former Mirror editor, cited the Profumo affair as the beginning of the trouble. The editor of The Sun, Dominic Mohan, said there was no trouble and repeated the Hall maxim: "Our pressure is our professional pride." The bosses from the Telegraph, The Mail on Sunday, the Mirror, and the people from The People, all agreed. Peppiatt's gutter was a land they didn't recognise. The seminar had just descended into back-patting. If Lord Leveson allows months of this, his inquiry will fail before it has started. A talking shop with a delusionary rose-tinted view of Fleet Street isn't what was ordered.

News Corp investors call for James Murdoch's head The Independent By Nick Clark Friday, 7 October 2011 James Murdoch faced further calls to quit News Corporation's board yesterday after a shareholder activist group representing £100bn in assets said he was causing the company "significant reputational damage". The Local Authority Pension Fund Forum (LAPFF), the majority of whose 54 members own shares in the US-based News Corp, called for an overhaul of the board, and added that Mr Murdoch's continued presence on the board was "no longer in shareholders' interest". News Corp declined to comment yesterday. Mr Murdoch runs News Corp's operations in Europe. In the wake of the phone hacking scandal, the LAPFF circulated a briefing paper to its members advising they oppose his re-election to the board. It also demanded a "genuinely independent chair" criticising Rupert Murdoch holding both that and the chief executive role. News Corp investors will vote on whether to re-elect the Murdochs at the company's annual general meeting in California later this month. The LAPFF said its members "want a line drawn under the hacking". Yet the forum's chairman, Ian Greenwood, said it would only be possible to move on "if the board accepts the need to demonstrate real accountability. That requires a change in the structure and make-up of the board". He concluded: "Whilst these are difficult issues for the company to address, we believe that to secure News Corp's long-term future such reform is necessary." The LAPFF's pension fund members met on Wednesday for a scheduled quarterly meeting, and the issue of the structure of News Corp's board was top of the agenda. One source close to the meeting said none of the members opposed the points raised in the briefing paper "and no dissenting voices were heard". The phone-hacking scandal, with allegations that journalists tapped the phones of celebrities and crime victims and their families, continues to engulf News Corp and prompted it to close the News of the World. The forum said that it had drawn up its recommendations for its members after "extensive research into the phone-hacking scandal" and after engaging News Corp directly. The forum said: "The News Corp board must take responsibility for the hacking scandal." The group did back three of the 15-strong board to maintain their roles. It supported lead director Rod Eddington as well as Viet Dinh, who carried out an internal review in response to the hacking allegations and which "must be given time to reach its conclusions". It also backs Andrew Knight, saying he had played a "positive role" in engaging with the forum. It is understood that the forum has not yet drawn up recommendations over Sky, which News Corp failed in its attempt to buy this year and where James Murdoch is chairman. The LAPFF was advised by Pirc, an investor advisory body that has long raised issues about James Murdoch's presence on the News Corp and BSkyB boards. In a recent note, Pirc recommended opposing all but two of the News Corp directors seeking re-election. Those two were chief operating officer Chase Carey, and chief financial officer David DeVoe. On James Murdoch, Pirc said: "There is sufficient doubt surrounding when Mr Murdoch became aware that the practice of phone hacking went beyond a rogue reporter. "We also have concerns about the failure to respond robustly to initial allegations of phone hacking."

Reporter claims 'People' hacked phones of celebrities The Independent By James Cusick Friday, 7 October 2011 The telephones of the TV presenters Ulrika Jonsson and Noel Edmonds and the nanny of footballer David Beckham's children, Abbie Gibson, were "hacked" by journalists on the People newspaper, according to allegations made by a reporter on the title. In a never-used witness statement for an employment tribunal, David Brown claimed phone hacking was common among his colleagues, according to a report by Sky News. His statement, from 2007, says that when News of the World's former royal editor, Clive Goodman, was jailed in 2006, Mirror Group executives ordered that anyone on their titles should deny any accusations. Yesterday Trinity Mirror said the accusations were unsubstantiated: "All our journalists work within the criminal law and the Press Complaints Commission Code of conduct. We have seen no evidence to suggest otherwise." Mr Brown was fired from the People in April 2006 for gross misconduct; he sued, but settled out of court.

News Corp sets up hotline for staff to report 'illegal activity' The Independent By Ian Burrell, Media Editor Friday, 7 October 2011 Journalists at News International (NI) and other staff in Rupert Murdoch's media empire have been told to call a hotline to report suspicious colleagues in a fresh clampdown on corruption and other illegal activities. The instructions to call an "alertline", following the introduction of the Bribery Act earlier this year, come after revelations that journalists from the company's defunct newspaper, the News of the World, paid serving police officers for information. The policy, circulated by Eugenie C Gavenchak, News Corp's chief compliance and ethics officer, stresses that employees are under an obligation to report colleagues, and suggests they use a dedicated line, which is "available 24 hours a day, 365 days a year". It states: "Employees who suspect... violations of this policy must report them to the legal department of the business unit or of News Corporation, or to the News Corporation alertline." News Corp promises to give legal support to those who wrongly accuse a fellow employee. "If you make an honest complaint in good faith, even if you are mistaken as to what you are complaining about, the company will protect you from retaliation," its policy states. The development comes as a team of Metropolitan Police officers is conducting Operation Elveden into suspected payments made by NI journalists to police officers. The operation was launched after NI passed a series of emails to Scotland Yard. The emails are reported to suggest that some police officers were being paid by the newspaper between 2003 and 2007. The investigation is being led by Deputy Assistant Commissioner Sue Akers and being supervised by the Independent Police Complaints Commission. NI has assigned the legal firm Linklaters to question departmental heads over past practices. Linklaters is currently conducting an audit of emails passing through the news desk of The Sun, as part of a review of journalistic standards. News Corp sources have said it is incorrect to speculate that any inappropriate activity on any other NI titles could be inferred from the review. The News Corp policy, set out in a six-page document, warns that British bribery laws and other legislation introduced in other parts of the world mean that employees can face bribery accusations over such things as charity donations or excessive hospitality. It is especially strict on the subject of bribing public servants. "Gifts and hospitality that may be perfectly acceptable among private parties can be completely forbidden when the other party is a government official." Some NI journalists receiving the circular were concerned about the implications for them entertaining valued contacts who provide them with information. The policy warns: "Under no circumstances should gifts, entertainment or hospitality be given by you to others in order to improperly influence someone to act favourably towards the company." Any hospitality "must be reasonable in value, respectable in type or venue [and] have a legitimate business purpose", it adds.

Met loses diary that may have proven former chief's links to Rupert Murdoch The Independent By James Cusick and Cahal Milmo Thursday, 6 October 2011 Scotland Yard has lost crucial documents which would have disclosed whether the former Commissioner of the Metropolitan Police, Lord Stevens, frequently met senior News of the World executives while he was in office, including an editor at the tabloid who is alleged to have been involved in the illegal hacking of emails. The Information Commissioner's Office (ICO) confirmed to The Independent that it is currently investigating the missing diaries of the former Commissioner. In response to a Freedom of Information request made by Ian Hurst, a former British Army intelligence officer who was involved in running IRA informers in Northern Ireland, the Met said that its officers had been "unable to locate the diary of Lord Stevens and cannot therefore answer your questions in relation to him". Mr Hurst, who is a "core participant" in the Leveson Inquiry that will examine illegal practices at Rupert Murdoch's News International, asked the Met whether two former Commissioners, Lord Stevens and Sir Ian Blair, had held meetings with Alex Marunchak, a former editor of the NOTW's Ireland edition, between 2000 and 2011. The Met said there were no recorded meetings with Sir Ian – but that Lord Stevens' appointments diary could no longer be located. Mr Marunchak, who left NI in 2006, denied allegations in a BBC Panorama programme broadcast in March this year that he paid a private detective to hack into emails on Mr Hurst's computer. The BBC film showed footage of a meeting between Mr Hurst and a former Army intelligence colleague who claimed he had accessed the emails under instruction from Mr Marunchak. Mr Hurst is suing the NOTW, alleging that the newspaper employed private detectives to hack into his computer and obtain information relating to his handling of a senior IRA informer. The ICO confirmed that the missing diaries cover the period 2000 to 2005 when Lord Stevens was head of the Met. During this period he conducted an external police inquiry in Northern Ireland that concluded there had been collusion between the British Army, the Royal Ulster Constabulary and loyalist terrorists that had led to the murder of nationalists in the province. One colleague of Lord Stevens during his time as head of the Met described him as "a master" of dealing with the media, and said he cultivated associations with Fleet Street's editors. The Home Secretary, Theresa May, later said she had concerns over the closeness of the relationship between News International and the police. Officials investigating the disappearance of the diaries will have to decide if there has been a breach of the Data Protection Act. The is the first time the ICO has had to deal with such a high-profile disappearance from what should be a public archive. A spokesman for Lord Stevens said last night: "The diaries of the Metropolitan Police Commissioner are the property of the Metropolitan Police and therefore they must be approached for that information." The Metropolitan Police, however, said that Lord Stevens' diaries were not a public document, and added that "there is no requirement to keep the dairy of the outgoing Commissioner, which is a working document to support the running of the office on a daily basis". How 'Captain Beaujolais' became a master of the media Lord Stevens During his time as head of the Met, from 2000 to 2005, John Stevens' colleagues noted his fondness for fine wine: he became "Captain Beaujolais". He also divided their loyalty. For some he was "a copper's copper", the man responsible for a rise in the number of officers and improved crime figures. Others noted the charm offensive deployed on Fleet Street, aided by the Met's public affairs head, Dick Fedorcio. One senior officer said he was "a master of the media" who hadn't appreciated the costs attached to close media relationships. After he left the force, his police experience delivered significant wealth: he is the executive chairman of Quest Ltd, a corporate security business, and holds four other directorships. His links to the media were maintained. A column for the NOTW saw Captain Beaujolais put to one side in favour of "The Chief". The NOTW's closure saw the chief's demise.

Hacking 'not result of pressure', says former News of the World editor Phil Hall The Independent By Ellen Branagh Thursday, 6 October 2011 The phone hacking scandal cannot be blamed on pressure to produce big stories, a former News of the World editor said today. Phil Hall, who edited the now-defunct paper from 1995 to 2000, told a seminar for the Leveson Inquiry that competitive pressures on newspapers had not led to a drop in standards. He said phone hacking had not come about because of pressure for big stories but because a group of people had "indulged in illegal activity" and the checks and balances that should have been in place had failed. The seminar, held at the QE2 Conference Centre in Westminster, is the first in a series of discussions held as part of the inquiry into media ethics and phone hacking. The session, called The Competitive Pressures on the Press and the Impact on Journalism, included a brief presentation from Mr Hall, as well as former Daily Star reporter Richard Peppiatt, and Claire Enders, from research and consultancy company Enders Analysis. Mr Hall told the seminar, which included representatives from across the media, that he was never under pressure from owner Rupert Murdoch to boost the circulation figures of the News of the World. "There was no pressure to achieve the unachievable," he said. "The pressure was to deliver a great campaigning newspaper." Mr Hall told the seminar a "publish and be damned" attitude had "long been confined to the history books of Fleet Street" and the idea that editors were pushing for big stories to boost circulation figures was "simplistic". "Some of our biggest stories - the Jeffrey Archer case, for example - delivered no increase in circulation," he said. "Yes, we broke big stories but it was not the be all and end all of the operation." He said pressures felt by reporters were due to "personal and professional pride". "As an editor I did demand high standards and I did expect journalists to produce agenda-setting stories. Is that any different to a business leader in any other industry? "Those who suggest and imply that phone hacking has arisen because of the pressures to deliver big stories are in my view wrong. "It has happened because a group of people have indulged in illegal activity and the checks and balances that should have been in place in any newsroom, or any business for that matter, have failed." Mr Hall said in his experience most journalists were professional and their stories were accurate. "My experience is that 99% of journalists do act professionally - they are impartial, thorough and work within the PCC (Press Complaints Commission) Code of Conduct. And the vast majority of stories are accurate." But he said the PCC had become "invisible", adding: "The PCC needs more clarity, more clout in what it does, and more visibility when it does act." But Richard Peppiatt, who resigned from the Daily Star earlier this year over what he claimed was an Islamophobic news agenda, said newsrooms were "bullying and aggressive environments". He claimed stories were often pre-planned, with reporters expected to get facts to fit in with the story. "Tabloid newsrooms are often bullying and aggressive environments in which dissent is often not tolerated. "The question is not, 'do you have a story on X', the question is 'today we are saying this about X, make it appear so'." He said newspapers create a "feeding frenzy" around major crimes or stories, citing the Madeleine McCann and Joanna Yeates cases. In an open discussion after the presentations, some editors questioned Mr Peppiatt's claims. Richard Wallace, editor of the Daily Mirror, said he did not recognise the description of national newspaper newsrooms. There was also agreement with Mr Hall, that commercial pressures had not led to a drop in standards. Ian MacGregor, editor of the Sunday Telegraph, said: "I don't think anyone here would ever make an excuse that commercial pressures are changing the way we operate in terms of our integrity." Daily Telegraph editor Tony Gallagher told the seminar: "There's a desire to be quick, there's a desire to be accurate, there's a desire to ensure you have got the best version of the story." Press Association editor Jonathan Grun said: "All of us want to be first with a story but, first of all, all of us want to be sure that the story is right." In a second seminar, on the Rights and Responsibilities of the Press, Guardian editor Alan Rusbridger discussed the importance of a free press. "When people talk about licensing journalists the answer should be to look at history," he said. He encouraged the inquiry to remember "how the freedoms won here became a model for much of the rest of the world", and "how the world still watches us to see how we protect those freedoms". Trevor Kavanagh, former political editor of The Sun and now an associate editor, said: "Without free speech we cannot have a free society, once lost it would be almost impossible to restore." He said it was in the public interest for newspapers to be able to assess the character of national figures. "If people are seeking our votes or our cash, it is surely right that we should know if they are masquerading as someone they are not." He said editors, sub editors and reporters knew the PCC code of conduct by heart, adding: "Sometimes they make mistakes but considering the number of stories and the number of headlines, not that many." Mr Kavanagh said despite criticisms by some, the tabloids "drive the daily news agenda". "Publishing news is not a public service, it is a ferociously competitive industry in a rapidly shrinking market," he said. But he said it did provide a public service, turning complicated issues into "crisp, easily understood copy". Mr Kavanagh said despite some flaws, the media was a "force for good", and said "gagging the media on the pretext of the public interest is one means of ensuring the public never learns the answer". Brian Cathcart, founder of the Hacked Off campaign, told the seminar: "The existence of this inquiry is proof of a failure of public trust in journalism. "Not just a failure of trust in one newspaper but in large parts of the industry and in its ethical standards and the mechanisms that uphold it." He said the industry needed to show that ethical discussions were held about stories in the newsroom, in a bid to restore public trust. In a discussion on Conditional Fee Agreements (CFAs) - no win, no fee cases - Mark Lewis, solicitor for the family of Milly Dowler, said they were an important tool. "Everybody knows that they should not have hacked Milly Dowler's phone, everybody knows the cases that have come out in the last couple of days," he said. "That is nothing to do with ethical considerations, it is to do with access to justice so people are able to fight back, to defend themselves by pursuing a claim." Richard Caseby, former managing editor at the Sunday Times and now managing editor at The Sun, said the PCC Code was a "good code", that all Sun journalists signed up to. "It's a good code, it's a very workable code," he said. "I think during the last year or so it could have done with much stronger leadership, but it's a good code and very, very many journalists adhere to it." Lord Justice Leveson said the seminars had achieved what they set out to do, creating a "broad and open discussion of a number of important issues".

Phone hacking: News International faces more than 60 claims Father of Josie Russell, who survived murder attempt, Sara Payne and 7/7 hero Paul Dadge among 13 new writs this week Guardian (U.K.) October 5, 2011 The father of Josie Russell, the girl who survived a hammer attack in which her mother and sister were killed, is among a raft of new claimants suing News International for alleged phone hacking, bringing the total to more than 60. Thirteen new legal writs, from claimaints including Sarah's law campaigner Sara Payne and 7/7 hero Paul Dadge, were issued against Rupert Murdoch's company on Monday, which followed 24 the week before. Payne campaigned with the News of the World to change the law so that parents could obtain access to information about paedophiles following the murder of her eight-year-old daughter, Sarah. Another writ was in the name of Paul Dadge, the man whose image was published across the world after he was photographed helping victims of the 7/7 tube bombings. There were also writs from singer Dannii Minogue, Paul Burrell, Princess Diana's former butler, and Shaun Russell, whose daughter Josie survived a hammer attack in which her mother and sister were killed in 1996. According to people familiar with the situation, the sudden flurry of writs occurred because of a judicial cut-off point for initial claims. It is thought the rash of lawsuits has been triggered by a deadline set by Mr Justice Vos to consider claims ahead of a January trial of a few test cases to determine how much News International should pay in damages to five of the victims. Among the high-profile names in the 63 writs are the former Downing Street communications chief Alastair Campbell and politicians, including John Prescott, Simon Hughes, Denis MacShane, Chris Bryant, Mark Oaten, Tessa Jowell and George Galloway. There are several actors in the list, such as Jude Law and Sadie Frost, and TV personalities including Steve Coogan and Ulrika Jonsson. There are also writs in the names of George Best's son, Calum, footballer Ashley Cole, rugby player Gavin Henson and jockey Kieren Fallon. Some of the writs involve more than one person. For example, Charlotte Church is joined in her lawsuit by her mother, Maria, and stepfather James. The overwhelming majority of the writs have been issued jointly against News Group Newspapers, the News International subsidiary that published the now defunct News of the World, and Glenn Mulcaire, the private investigator who worked under contract for the Sunday tabloid. However, one – by singer Cornelia Crisan – also names the former News of the World chief reporter, Neville Thurlbeck, and another of the paper's former reporters as defendants in her claim. It is the first phone-hacking lawsuit to target Thurlbeck. He was arrested and bailed in April for alleged phone hacking but has not been charged. He is suing News International for unfair dismissal. Thurlbeck said: "As I said last week, the truth will out. But this will be in the law courts and at a public tribunal." The number and range of the claims has taken some legal observers by surprise. One source said it suggests that News International's £20m contingency fund to deal with legal claims will not be anywhere near enough to cover the final total. One of the lawyers acting for some of the hacking victims, Mark Lewis, told Bloomberg News: "So far, fewer than 5% of the victims of Glenn Mulcaire have been notified. "He was just one agent used by one paper. When the final tally takes place, we will see thousands of claims and more than one paper." Lewis said that, as the number of claimants grows, estimates that Murdoch's company would need at least £100m to settle such claims looks like "a serious underestimate". His logic is based on the fact that only 200 people have been identified from the 4,000 names said to be on documents that were seized from Mulcaire's house in 2006, when he was arrested with the News of the World's former royal editor Clive Goodman. Both Mulcaire and Goodman were jailed for phone hacking in early 2007. About half of those initially identified have launched legal actions. So, if the same proportion of the full 4,000 were to sue, then News International's liability, in terms of damages plus legal costs would be colossal. News International has already offered to pay one of Lewis's clients, the family of murdered schoolgirl Milly Dowler, £3m. Media lawyer Niri Shan, of Taylor Wessing, said that victims who file claims before next year's trial could benefit because "there is a level of uncertainty about what the court will award" in January. He added: "[News International parent company] News Corp may overpay to get rid of claimants."

Phone hacking victims to face scandal inquiry live on television Celebrities, crime victims and others who allegedly had their phones hacked could be filmed live if they give evidence to the inquiry into the scandal. Daily Telegraph Among those who could be called to give evidence are Sienna Miller, Hugh Grant and JK Rowling. 8:04AM BST 05 Oct 2011 Celebrities, crime victims and others who allegedly had their phones hacked could be filmed live if they give evidence to the inquiry into the scandal. Lord Justice Leveson yesterday signalled that the evidence sessions in the inquiry could start as early as next month, and said that he plans to have them televised. Among those who could be called to give evidence are Sienna Miller, the actress, JK Rowling, the writer, Hugh Grant, the actor, and the parents of Madeleine McCann and Milly Dowler. They are among a series of high-profile figures who have been confirmed as so-called “core participants”, meaning they will play a central role in the year-long inquiry. The former Formula 1 boss Max Mosley, the former deputy prime minister Lord Prescott, the comedian Steve Coogan and the former footballer Paul Gascoigne are also on the list. Executives from News International, the owners of the News of the World, the newspaper at the centre of the scandal, will also give evidence, an experience which a lawyer for Rupert Murdoch’s media group suggested could be “daunting” and “stressful”. Rhodri Davies QC warned that the pressure of the inquiry could affect even those at the “top of their profession”. Lord Leveson said those who felt “particularly anxious or nervous” could be introduced through their own counsel to get used to talking in court. “For some, the giving of evidence is indeed a difficult exercise and I will want to make that exercise as easy an experience as possible on the basis that this is not a trial,” he said. “I am simply looking at a series of issues to obtain a series of recommendations. I am not unmindful of the pressures of giving evidence.” Mukul Chawla QC, representing Rebekah Brooks, the former News International chief executive, asked if there could be some advance warning of issues that may arise which were of “direct interest” to her. David Cameron announced the Leveson Inquiry in July in the wake of the hacking scandal. It is expected to produce a report within a year. However, because a police investigation is ongoing into specific allegations of hacking, the inquiry will first look at the wider issues of press practices and ethics and the media’s relationship with the public, police and politicians. The first witnesses could be heard by the middle of next month. In preliminary discussions at the High Court yesterday, Lord Leveson said: “The present thinking is, and I am not committing to this, that we are unable to be likely to start before the second week in November.” He told the hearing he originally wanted to press for a slightly earlier start, because of the “territory that has to be travelled before next summer”, and said he was keen to “keep the focus” because the findings of the inquiry were likely to generate debate. “A debate among the media, a debate among the political groups and a reconsideration of the way, perhaps, regulation or self-regulation, whatever comes out, is organised, which everybody is going to want to get on with,” Lord Leveson said. He repeated assurances that the inquiry would be “open, transparent and fair”. The first part of the inquiry will also include a series of seminars, each chaired by one of the inquiry’s assessors. The first of those will he held tomorrow and will include brief presentations from figures including Phil Hall, the former News of the World editor, and Alan Rusbridger, editor of The Guardian. The seminars will also include open discussion from those in attendance, which will include a range of figures from the media and members of parliamentary select committees.