Douglas Caddy

What the Murdochs DIDN'T say that spoke volumes: Body language expert exposes chalk and cheese double act... while 'frail and submissive Rebekah Brooks is full of remorse' Daily Mail By Judi James Last updated at 7:24 PM on 19th July 2011 Judi James is one of the UK’s leading body language and behaviour experts. Here she reveals the truth behind the gestures and facial expressions of the Murdochs and Rebekah Brooks as they face tough questioning JUDI SAYS: It was a stunning double act. From the outset the mirrored body language of Rupert Murdoch and his son James showed they were presenting a united front. The two sat side-by-side at the table, facing forwards with their hands in a uniform gesture, clasped loosely on the desk in front of them. The handclasp is a restraining gesture – it prevents the speaker from over-gesticulating and stops them fiddling, which can be seen to be a suspicious, nervous act. Crucially, with both hands on the table and out in the open, this is a gesture that conveys honesty and openness. If there had been media coaching before the interview, it was here that it showed, and throughout the interview, the two returned to this ‘pole position’ many times. Reflective: The Murdochs' mirrored pose - hands clasped in identical position on the table - clearly showed they were presenting a united front. Rupert's wife Wendi (centre) put on an animated performance and stole the show Never did either party place their hands in their lap or out of sight. When they started talking though, it was clear that James Murdoch and his father were chalk and cheese. You have the very wordy James, who clearly wanted to do the talking. He is the PR face of the company. He speaks in long paragraphs, adopting a wide, open-eyed expression that he scans around the room to suggest openness and honesty. He wanted to make scripted apologies, continually trying to return to the topic. In his opening words he wanted to make a company statement, but was denied. Still, he was dominant and fought, even though he lost. The seating position of the Murdochs was surprising. James was sitting on the right of his father, while usually that position would be taken by the dominant person – in Parliament, Cameron always has George Osborne on his left – so you would have expected Rupert Murdoch to sit there. When I saw James in the hot seat, I guessed he would front the double-act – and he did. Chalk and cheese: While James was the eloquent PR face of the operation, Rupert Murdoch was monosyllabic, giving closed answers and moving little, with the exception of a few incidents where he became emphatic Where James was wordy, Rupert Murdoch was monosyllabic. Rupert was almost impossible to question. If the panel asked him a closed question, he would give them a closed answer. He would not elaborate – I’m surprised the panel took so long to realise that. It was difficult to analyse his body language, simply because he hardly spoke, and hardly moved. He revealed very little. You could barely see his eyes, he hardly moved his head, and his hands stayed mostly in the same loosely-clasped position as they were at the start, apart from a few incidents where Rupert Murdoch became passionate. His main gesticulation while he spoke was the movement of his right hand towards his son - he wanted to hand the speaking back to James. Like father, like son: The Murdochs presented a 'stunning double act', says Judi, with Rupert instigating comments and the more verbose James continuing for him It appeared the Murdochs had expected James would be the one to answer all the questions, and Rupert was frequently keen to hand over. Rupert didn’t take a back seat though – often, he would instigate an answer, then James would continue. Rupert’s main objective throughout was to convey his apology. He claimed not to remember details and dates and gave very little in the way of historical comment, but seemed determined to put across his message. He used very strong words at the start, interrupting his son to say that this was the most humble day of his life. Judi says: Wendi has been a reasonable distraction throughout - leaning forward, looking anxiously towards her husband, wringing her hands and even at one point digging her nails into her knees. When Marbles attacked, Rupert remained stock still and his son reeled back and shouted - but Wendi's reaction was most surprising. Her spontaneous and aggressive defence, launching herself out of her chair to slap her husband's attacker clearly shows she is someone who likes to get stuck in. Even when security guards intervened, Wendi was still on the attack, she was like a rottweiler. This is Wendi's 'Pippa Middleton' moment - where she upstages the father and son double act. What's even more astonishing is that she managed to still look elegant as she attacked - a true Amazonian, powerful woman. While for much of the first half of the inquest he was very static, when he did come to life, he became extremely emphatic. He slapped the desk with his palm many times when saying his employees were distinguished and honest. He jabbed his finger when he talked about meeting Milly Dowler’s family. These were the parts of the message that he had an objective to put across, and he used those metronomic gestures to emphasise his points. There was also an interesting emphatic headshake early on, when James was questioned about Rebekah Brooks possible impropriety. Rupert Murdoch immediately shook his head. It was an instinctive gesture that he may not have been aware he was making, but it revealed that she still has his full support. Was he worried, scared? I’d say the over-riding feeling seemed to be disappointment. Murdoch seemed unhappy. There were no signs of distress – lip-licking, sweating, changing in breathing patterns. He was almost immobile. The tone and tack was very much one of disappointment: he wants to get across that he is disappointed in people he trusted. And now for Rebekah Brooks... JUDI SAYS: Rebekah Brooks did something the Murdochs didn't manage - she looked genuinely sorry. Her appearance is low-key, she looks wan and tired. Mrs Brooks is isolated - there are rows of empty seats behind her while the Murdochs had a full team. Her chin is down, her eyebrows up and her voice is softer, quieter - she seems frail and submissive in front of the panel. Subdued: Rebekah Brooks appeared frail and submissive while being questioned over the phone hacking scandal by the committee However there are signs of the power she once wielded in the upper echelons of News International. During one point of disagreement, she pursed her lips showing the firmness with which she can make her point and how she would have acted in charge. After the show from the Murdochs, this was a calm performance. There is no accelerated blink rate or raised shoulders - not revealing particular stress or suppressed anger. She is quietly firm but there is no show-boating and the regret seems genuine. Making her point: Mrs Brooks did purse her lips when there was a point of disagreement showing strength of character The former chief executive is wordy in her responses but this is not evasive or slippery. There is no obvious dishonesty - she is not over or under-performing which is a sign someone is not telling the truth. She is also making direct eye contact as she answers the questions. Mrs Brooks aim appears to be to fly under the radar and not turn the situation into an even greater drama. Judi James is the author of The Body Language Bible (published by Vermillion) and The You Code – What Everything You Do Says About You, and appears regularly on Sky News and the BBC analysing politicians during the election Read more: http://www.dailymail.co.uk/news/article-2016527/PHONE-HACKING-SCANDAL-What-Rupert-James-Murdoch-DIDNT-say.html#ixzz1SbJvo7CK

Hacking crisis edges closer to Cameron Fresh links to former NOTW executive pile pressure on PM The Independent By Andrew Grice, Oliver Wright, Ian Burrell, Martin Hickman and Cahal Milmo Wednesday, 20 July 2011 David Cameron will be forced to explain damaging new revelations today that have dragged him deeper into the phone-hacking scandal. It emerged last night that Neil Wallis, the former News of the World deputy editor who was arrested last week, worked for the Conservative Party before last year's election. He gave "informal" advice to Andy Coulson, his former boss at the NOTW, who resigned from the paper over the hacking affair but was later appointed Mr Cameron's director of communications. In a second blow to the Prime Minister, it was revealed that his chief of staff, Ed Llewellyn, had appealed to Scotland Yard not to mention hacking during a Downing Street briefing last September, four months before Mr Coulson quit his No 10 post. Labour said the disclosure showed Mr Cameron could not do his job properly because of the cloud cast by the hacking controversy. Related articles •Ed Llewellyn: The old school chum in trouble for not communicating •Leading article: Questions that need to be answered •Brooks claims she was repeatedly told phone allegations were untrue •Flashes of passion from the mogul on his 'most humble day' We may still be paying Milly hacker's bills, admits Murdoch •From ruthless boss of his media empire to frail octogenarian •Leading article: This was a day of evasion, not humility •Christina Patterson: On one thing, Murdoch is right •Toxicology tests after death of whistleblower will take weeks •Martin Hickman: Was Sean Hoare killed by the Murdoch empire? The short answer is no •Matthew Norman: Boris Johnson embodies the amorality of the passing age •Mark Steel: My guess is the cleaners are to blame •The Sketch: The mega-rich boys club too often given enough slack by their accusers •Police investigate who dumped laptop in the bin •Vulnerable heir defends gagging deals •Murdoch's No 10 visits made through the back door •News Corp directors rally support behind Murdoch family •NI tries to curb advertising exodus at remaining papers •Market relief at lack of 'bombshell' •Hacking group targeted in US arrests •David Prosser: Investors look forward to change at the top of News Corp Search the news archive for more stories Mr Cameron returned last night from a trip to Africa he was forced to cut short by a growing crisis which some Tory MPs fear is in danger of destabilising his premiership. Loyalists believe the Prime Minister looks increasingly isolated and are concerned that cabinet members, including the Chancellor George Osborne and the Tory chairman Baroness Warsi, have failed to rally behind him while he has been away. But one backbench leader said: "The feeling is that this is a crisis of his own making – he employed Andy Coulson." The Prime Minister's plan to go on the offensive today during a Commons statement on the affair suffered a setback with the disclosure that his party had links to two people arrested during the current police investigation – Mr Coulson and Mr Wallis. A Tory spokesman said: "We have double-checked our records and are able to confirm that neither Neil Wallis nor his company has ever been contracted by the Conservative Party, nor has the Conservative Party made payments to either of them. It has been drawn to our attention that he may have provided Andy Coulson with some informal advice on a voluntary basis before the election. We are currently finding out the exact nature of any advice." The Tories insisted that neither Mr Cameron nor any senior member of the party's campaign team were aware of Mr Wallis's involvement until this week. It is believed the advice was given on a one-off project during 2009. Ed Miliband will quiz Mr Cameron over the precise nature of Mr Wallis's role and over his chief of staff's apparent attempt to insulate the Prime Minister from the hacking scandal. Mr Llewellyn has already been accused of not passing on to Mr Cameron warnings from senior Liberal Democrats and newspaper executives about appointing Mr Coulson after last year's election. Yesterday it emerged that Mr Llewellyn sent an email to John Yates, the former Metropolitan Police Assistant Commissioner, last September, saying he "would be grateful" if hacking were not raised by him during an imminent briefing on national security. "I am sure you will understand that we will want to be able to be entirely clear, for your sake and ours, that we have not been in contact with you about this subject," Mr Llewellyn wrote. The briefing was held shortly after allegations in The New York Times that Mr Coulson knew about hacking while he was NOTW editor and "actively encouraged" it, claims he strongly denies. Downing Street defended Mr Llewellyn, saying he cleared his request with Jeremy Heywood, the permanent secretary at No 10. Cameron aides said the plea was nothing to do with Mr Coulson but reflected a desire that politicians should not be involved in operational police matters. However, Mr Llewellyn's request appears to have been in the mind of Sir Paul Stephenson, the Met Commissioner, when he decided last week not to tell Mr Cameron or the Home Secretary Theresa May that Mr Wallis had been employed as a PR adviser to Scotland Yard. Mr Yates confirmed to the Home Affairs Select Committee that Mr Llewellyn made the request. "Ed for whatever reason – and I completely understand it – didn't think it was appropriate for him, the Prime Minister or anyone else in No 10 to discuss this issue... and [said he] would be grateful if it wasn't raised." Sir Gus O'Donnell, the Cabinet Secretary, dismissed a complaint by the Labour MP John Mann that Mr Cameron had breached the ministerial code by meeting James Murdoch and Rebekah Brooks last Christmas while the Government was considering News Corporation's bid for full control of BSkyB. Sir Gus O'Donnell, the Cabinet Secretary, said after studyng the exchange of emails that Mr Llewellyn "acted entirely properly." Was he compromised? Cameron and the Murdoch empire 2007 July Andy Coulson is appointed director of communications to Opposition leader David Cameron, some seven months after his resignation as editor of the News of the World. The appointment is reportedly made following recommendations from Rebekah Brooks, editor of The Sun, and George Osborne. 2010 24 February Commons Media Committee accuses News International executives of "collective amnesia" concerning voicemail hacking and concludes it is "inconceivable" that managers at the paper did not know about the practice. April (date not specified) Cameron meets Rupert Murdoch, and according to Downing Street, they hold a "general discussion". Neil Wallis, former deputy editor of the NOTW, provides "informal advice" to his old boss, Andy Coulson, prior to the general election. The Conservative Party last night confirmed the arrangement but said it had never employed or paid Mr Wallis. 12 May David Cameron becomes Prime Minister. May In his first three weeks as PM, Cameron holds five meetings with News International – Rebekah Brooks at Chequers; Dominic Mohan, editor of The Sun, for a general discussion; the News International summer party; James Harding, editor of The Times, for an interview; Times CEO Summit for a speech. 14-16 June First disclosure of the Murdochs' plans to take full control of BSkyB. The broadcaster's board asks for at least 800p per share. June The Prime Minister attends The Sun Police Bravery Awards reception and dinner awards ceremony and meets Dominic Mohan for a general discussion and Colin Myler, editor of the NOTW, for general discussion. July Rebekah Brooks visits Cameron at Chequers. August Cameron meets John Witherow, editor of The Sunday Times, for a general discussion. 1 September The New York Times publishes an article alleging widespread knowledge of phone hacking at the NOTW, including interview with former reporter Sean Hoare alleging that Andy Coulson knew of the practice. September Ed Llewellyn, Cameron's chief of staff, turns down the offer of a briefing from Met police Assistant Commissioner John Yates about a review of the phone-hacking investigation. Llewellyn, whose boss appears to be at risk of being compromised by his employment of Coulson, says he would be "grateful" if the matter was not raised. September Cameron meets James Harding, Dominic Mohan, Rebekah Brooks, above, and John Witherow separately at the Conservative conference; he also attends the NI reception at the event. 11 October An alliance of media companies opposed to the News Corp/Sky deal – including BT, Channel 4 and the publishers of The Guardian, Daily Mirror, Daily Mail and Daily Telegraph – writes to Business Secretary Vince Cable saying the deal could have "serious and far-reaching consequences for media plurality". 9 October Rebekah Brooks attends PM's 44th birthday party at Chequers. October James Murdoch and his wife Kathryn visit PM's country retreat. November Coulson is interviewed as a witness by Metropolitan Police detectives investigating the phone-hacking allegations. He is not cautioned or arrested. 3 November News Corporation notifies European Commission of its intention to acquire the shares in BSkyB that it does not already own. 4 November Vince Cable intervenes in proposed bid to gain full ownership of BSkyB, ordering media regulator Ofcom to review deal on the grounds of "media plurality". 18 November James Murdoch warns the Government that if it blocks bid, News Corp could focus future investments overseas, adding that Government must decide whether it wants to risk "jeopardising an £8bn investment in the UK" with a prolonged investigation. November Cameron attends The Sun military awards reception and dinner awards ceremony; meets Rebekah Brooks and James Murdoch for "social" purposes; meets Rebekah Brooks separate for "social purposes". 9-10 December Andy Coulson gives evidence to the perjury trial of disgraced MSP Tommy Sheridan. Coulson tells the jury he had no knowledge of phone hacking or private investigator Glenn Mulcaire. 10 December A Scotland Yard inquiry has not found any new evidence of criminal activity. The Crown Prosecution Service says no further charges will be brought over the News of the World phone-hacking scandal because witnesses refused to co-operate with police. 15 December Documents lodged at the High Court by lawyers for Sienna Miller allege that NOTW executive Ian Edmondson had knowledge of phone hacking. 21-22 December Vince Cable is stripped of role deciding on takeover after The Telegraph reveals he has "declared war on Murdoch". Brussels clears the deal on competition grounds and responsibility for media competition issues is passed to Culture Secretary Jeremy Hunt. Broadcaster's shares close up 14p – nearly 2 per cent – at 743p. Thursday 23 December Cameron and his wife attend a dinner at Brooks' Oxfordshire home. Also in attendance are James and Kathryn Murdoch and Jeremy Clarkson and his wife Francie. Clarkson later revealed that within the following days the Camerons and the Brooks also had a picnic. 2011 5 January NOTW suspends and later sacks Edmondson after claims of phone hacking in 2005-06. 6 January Hunt meets with News Corp to set out the process he proposes to follow in assessing the takeover deal. 7 January Scotland Yard asks the NOTW for any new material it may have in relation to hacking. 21 January Andy Coulson resigns as Cameron's director of communications, saying he has become a distraction. 25 January Hunt says he considers the merger "may operate against the public interest in media plurality" but before referring it to the Competition Commission he says he will take more time to consider News Corp's proposal to protect the independence of Sky News. 26 January Scotland Yard launches Operation Weeting, a new investigation into phone hacking, under Deputy Assistant Commissioner Sue Akers. Police vow it will leave "no stone unturned". 15-16 February Hunt writes to News Corp saying that unless it amends the Sky News proposal to meet the concerns of the regulators, he will refer the merger to the Competition Commission. News Corp replies with a revised Sky News plan. February Cameron attends NOTW's Children's Champions reception at Downing Street. 1-2 March News Corp to bypass media plurality concerns by spinning off Sky News into separately listed company. Hunt all but nods through takeover in the long term. March Meets James Harding, of The Times, for a general discussion. April Coulson invited to Chequers to thank him for his work for Cameron. This month the PM also meets Mohan for a general discussion; James Harding for a general discussion; and he attends the News International summer party and addresses The Times CEO summit. 5 April Edmondson and NOTW chief reporter Neville Thurlbeck are arrested and bailed on suspicion of conspiracy to intercept voicemails. 14 April James Weatherup, another senior NOTW journalist, is arrested and bailed by Weeting. 20 June NI submits recently rediscovered emails relating to the phone-hacking scandal and new allegations that NOTW executives authorised corrupt payments to police. June PM Attends The Sun's police bravery awards. 1 July Government says it is ready to give clearance to deal. Jeremy Hunt gives opponents a week to raise objections. 6-12 July Ofcom intervention fuels fears deal will not go ahead. NOTW closed down. Ofcom says it has "a duty to be satisfied on an ongoing basis that the holder of a broadcasting licence is 'fit and proper'". 8 July Coulson and former NOTW royal editor Clive Goodman, who was jailed in January 2007 for intercepting voicemail messages of members of the royal household, are arrested and bailed as part of Operation Weeting and Operation Elveden – the Met's investigation into alleged illegal payments to police officers. 14 July News Corp withdraws bid. 14 July Neil Wallis, former NOTW deputy editor, arrested and bailed by Weeting. 17 July Brooks, by now former News International chief executive, arrested and bailed by Weeting and Elveden.

Allende Was a Suicide, an Autopsy Concludes The New York Times By ALEXEI BARRIONUEVO and PASCALE BONNEFOY July 19, 2011 SÃO PAULO, Brazil — A new autopsy has determined that President Salvador Allende of Chile killed himself with an assault rifle, Chilean officials said Tuesday, dispelling doubts that have persisted for 37 years about the exact circumstances of his death, including whether troops storming the presidential palace had murdered him. The forensic analysis, overseen by a team of Chilean and international experts, did not find any evidence of third-party involvement in Mr. Allende’s death, concluding that the head injuries he sustained were consistent with bullets fired from a single AK-47 assault rifle. Even as leftist supporters like Fidel Castro declared that Mr. Allende died in a gun battle on Sept. 11, 1973, the day of the coup, his family members had long found credible the original autopsy and accounts of witnesses, including palace detectives and doctors, who said he had taken his own life before the military entered the palace. But doubts had lingered, and in recent years some independent forensic experts had argued that there was evidence of a second bullet wound to Mr. Allende’s skull, raising the possibility that a second weapon may have been involved in his death. In May, at the behest of a judge investigating 726 human rights cases related to Chile’s 17-year dictatorship, Mr. Allende’s remains were exhumed. After a thorough analysis, the forensic and anthropological team issued a 20-page report on Tuesday. “We are in a position to assure that this was a violent death that was suicidal in nature,” said Dr. Francisco Etxeberría, a forensic expert appointed by the Allende family. “Of that we have absolutely no doubt.” Forensic experts said there was only a single entry and exit wound in Mr. Allende’s skull. They said they found no evidence of a second weapon, but there was evidence that two bullets may have been discharged by an AK-47. “There were two bullets fired at the scene, two shells were recovered, but only one bullet was recovered,” said David Pryor, a British consultant in forensic ballistics who used to work for Scotland Yard. For the Allende family, the team’s findings brought relief, confirming Mr. Allende’s suicide, which had come to be a source of family pride. He “made the decision to end his life before being humiliated or having to go through some other situation,” Senator Isabel Allende, his daughter, said Tuesday. But for Dr. Luis Ravanal, a forensic doctor who concluded in 2008 that the gunshots were most likely fired by two different weapons, the latest autopsy “did not reveal anything different than was already known.” He contended that the forensic team had failed to “resolve fundamental doubts” by not having recovered a bone fragment in the back of the skull that had formed what appeared in the original autopsy report to be a second exit wound, he said. Dr. Ravanal also said the latest autopsy had confirmed his fears that a 1990 exhumation had been botched and produced “postmortem fractures” in Mr. Allende’s remains, which he said made it difficult to come to a definitive conclusion about his death. Alexei Barrionuevo reported from São Paulo, and Pascale Bonnefoy from Santiago, Chile.

John Yates calls for more resignations at News International Scotland Yard officer tells MPs that others at the company should 'face their responsibility' over phone-hacking cover-up By Vikram Dodd, crime correspondent guardian.co.uk, Tuesday 19 July 2011 21.03 BST One of Scotland Yard's most senior officers said more people at News International should consider resigning over the company's alleged cover-up of phone hacking. Assistant commissioner John Yates said the example set by himself and Scotland Yard commissioner, Sir Paul Stephenson, in resigning over the scandal, should be followed at News International. The remark was interpreted as a reference to James Murdoch, given that former chief executive Rebekah Brooks quit on Friday. Yates, who announced on Monday he would resign, told MPs Tuesday he had paid "a heavy price". Testifying before the home affairs committee which is investigating the controversy, he said: "In light of what I now know, the fact seems to be that News International have deliberately covered up." Then, closing his evidence, he said not just the police had failed, but that NI had too in failing to hand over evidence to detectives showing that phone hacking was more widespread than just one rogue reporter. Yates, having told MPs he was accountable, said: "I do think it is time for others to face their responsibilty and do likewise." Asked by committee chair, Keith Vaz, who he meant, Yates said: "News International." Asked if he believed people there should follow his and Stephenson's example, Yates replied: "I absolutely do." The hearing heard from Yates, the Met's top spin doctor, Dick Fedorcio, making a rare public appearance, and Stephenson. The revelation that the Met had hired the former News of the World deputy editor Neil Wallis as a temporary but senior PR consultant, which came hours after his arrest over alleged phone hacking last week, led to the resignations of Stephenson and Yates. Stephenson confirmed a Guardian report that the Met had approached Wallis to perform the role and that he had been consulted: "Neil Wallis was known to me. When his name came up I had no concernsI was not discomforted that Mr Wallis came out of that process." Lunch and dinner Wallis, while a NoW executive, and Stephenson had lunch and dinner at least seven times, part of 18 declared contacts the commissioner had with the former Sunday tabloid over a five-year period. Fedorcio, the Met's director of public affairs, never asked Wallis about phone hacking before he gained a contract to advise the force on PR. Fedorcio, who was referred to the Independent Police Complaints Commission over his dealings with Wallis shortly before giving evidence to the committee, said it was left to Yates to check if Wallis had any involvement with phone hacking: "He said to me that as far as he was concerned, having spoken to Mr Wallis, there was nothing that could embarrass us in this appointment," he said. Fedorcio, whose surname MPs kept mispronouncing, told the committee he did this despite knowing that Yates was a friend of Wallis. He told the MPs: "I had no reason to doubt Mr Yates's integrity." Giving evidence directly afterwards, Yates said he had "sought assurances" in a single phone call to Wallis that nothing would come to light implicating him in the hacking scandal. "What I did was not due diligence in the truest sense," he said. Yates added that he was not a close friend of Wallis but merely saw him "two or three times a year", mainly to go to sporting events. Wallis was deputy editor of the News of the World under Andy Coulson when the paper was alleged to have been engaged in large-scale phone hacking, before leaving to set up his own PR consultancy, Chamy Media. Shortly afterwards, in October 2009, he won a two-day-a-month contract to assist the Met, worth £24,000 a year. Fedorcio said he needed assistance with corporate PR as his deputy was on long-term sick leave. Following advice from the force's procurement department he requested three tenders for the contract, with Chamy submitting "by far" the lowest bid. Even though the Met had recently reinvestigated alleged phone hacking, Fedorcio said, he had no worries about giving Wallis the contract given that Yates carried out due diligence. Facing questioning from the MPs, Fedorcio said Yates appeared well placed to carry out this role as "he had been leading the work on phone hacking". He told the committee that he had only "in the past few years" learned of the pair's friendship. He added: "I knew he (Yates) had contact with Mr Wallis but I did not know he was a close friend of Mr Wallis." Fedorcio said he had met Wallis previously "on a number of occasions" but they were not friends. He added that he could not recall who suggested the ex-journalist as someone from whom to request a tender bid, but that he "did not believe" it was someone from News International. The contract with Wallis ended in September 2010 following the publication of a New York Times article making new allegations about phone hacking. Stephenson said: "Just let me say, with the benefit of what we know now, I'm quite happy to put on the record I regret that we went into that contract, quite clearly, because it's embarrassing." Yates denied anything improper in his relationship with Wallis and denied a claim he had helped his daughter get a job with the force. Yates said he had acted merely as a "postbox" in handing a CV to the force's director of human resources from Wallis's daughter. Downing Street Key Scotland Yard figures believed Stephenson's resignation speech contained a swipe at David Cameron, and numerous news organisations reported it as an attack on the PM, who had hired Coulson as his director of communications, despite him leaving the paper over the phone-hacking scandal. But Stephenson told MPs: "I was taking no such swipe at the prime minister … I do agree with the prime minister when he says this was something entirely different." Yates said there was "some comfort" in Cameron hiring a former NoW executive, meaning the Yard thought there was nothing wrong in them doing likewise. It emerged that in September 2010 after allegations appeared in the New York Times about the extent of phone hacking at the NoW, the Met offered the PM a briefing. Cameron chief of staff Ed Llewellyn rejected this. Yates said: "There was an offer in the early part of September 2010 for me to put into context some of the nuances around police language in terms of what a scoping exercise is, what an assessment is..." he said. "That offer was properly and understandably rejected." The commissioner said that 17% of his press contact has been with the News of the World, which had 16% of the newspaper Sunday market. He rejected claims of the force being in thrall to the Murdoch empire by saying 30% of his press contacts were with News International papers while it had 42% of newspaper readership. The hearing heard that 10 out of the Met's 45-strong press office had worked for News International in some capacity, including work experience. Guardian and the Met In December 2009 Stephenson met Guardian executives to try to persuade them the paper's coverage was exaggerated and incorrect. On Tuesday he admitted he had not read the evidence about the case, seemingly relying only on the Yates July 2009 review and said: "Mr Yates gave me assurances there was nothing new to the Guardian article. I think I have a right to rely on those assurances." He went to the Guardian because the paper continued to run the campaign – something for which he has now acknowledged "we should be grateful". He said after that meeting failed to persuade the paper, he suggested senior Guardian executives should meet directly with Yates, a meeting that took place. Yates said his July 2009 "examination of the facts" around hacking took hours to complete but was "reasonably sophisticated. This was an article in a newspaper, it wasn't a body being found … It's just 'is there anything new in the Guardian article on 9 July [2009]'? Answer: there wasn't." Health spa Stephenson claimed the London mayor, Boris Johnson, had been "emotional" when he told him of his intention to resign on Sunday and the home secretary, Theresa May, had been "very cross". He said: "No one forced me to go." The commissioner said many tried to talk him out of his decision. "It was against the advice of many, many colleagues – and, indeed, my wife." But he said the weekend revelations about his acceptance of hospitality running into £12,000 at a luxury health spa made it clear to him that the controversy would not go away and would continue to be a distraction. He said: "I think it was very unfortunate for me. I had no knowledge previously. I think that, together with everything else, I thought this is going to be a significant story, and if I am going to be a leader and do the right thing by my organisation, I'd better do something quickly." Stephenson, wearing uniform, in what he said was probably his last public engagement in office, said: "I'm going because I'm a leader. Leadership is not about popularity, it's not about the press, it's not about spinning." Yates said that the furore meant in the last fortnight meant he had been able to concentrate on his role as the most senior counter terrorism officer, for just two or three hours a week. The outgoing commissioner said the force needed to change its media relations: "It is quite clear we need to change the way we do it." The Met needed to be more "transparent" and Sir Paul had asked the former commissioner for parliamentary standards, Elizabeth Filkins, to advise the force on the "ethical underpinnings" for relations with the media.

News Corp board shocked at evidence of payments to police, says former DPP Lord Macdonald tells committee it took him 'three to five minutes' to decide NoW emails had to be passed to police By Owen Bowcott, legal affairs correspondent guardian.co.uk, Tuesday 19 July 2011 21.26 BST "Blindingly obvious" evidence of corrupt payments to police officers was found by the former director of public prosecutions, Lord Macdonald, when he inspected News of the World emails, the home affairs select committee was told. Explaining how he had been called in by solicitors acting for Rupert Murdoch's News Corporation board, Lord Macdonald said that when he inspected the messages it took him between "three to five minutes" to decide that the material had to be passed to police. "The material I saw was so blindingly obvious that trying to argue that it should not be given to the police would have been a hard task. It was evidence of serious criminal offences." He first showed it to the News Corp board in June this year. "There was no dissent," he recalled. "They were stunned. They were shocked. I said it was my unequivocal advice that it should be handed to the police. They accepted that." That board meeting, the former DPP said, was chaired by Rupert Murdoch. Lord Macdonald shortly afterwards gave the material to Assistant Commissioner Cressida Dick at the Metropolitan police. The nine or 10 emails passed over led to the launch of Operation Elveden, the police investigation into corrupt payments to officers for information. Lord Macdonald, who had been in charge of the Crown Prosecution Service when the phone-hacking prosecution of the NoW's royal correspondent took place, said he had only been alerted to the case due to the convention that the DPP is always notified of crimes involving the royal family. Members of the committee were highly critical of the CPS's narrow definition of what constituted phone hacking, claiming that it was at odds with the Regulation of Investigatory Powers Act. Mark Reckless, the Conservative MP for Rochester, said that the original police investigation was hindered by the advice from the CPS that phone hacking was only an offence if messages had been intercepted before they were listened to by the intended recipient. However, Reckless said, a clause in the RIPA makes it an offence to hack in to messages even if they have already been heard. Keir Starmer, the current DPP, said that the police had been told that "the RIPA legislation was untested". Listening to messages before they had been heard by the intended recipient was illegal, the police were told, but the question of whether intercepting them afterwards constituted a crime was "untested", he said. Mark Lewis, the solicitor who has followed the scandal since its start, said he was the first person to lose his job over the affair when the firm in which he was a partner said it no longer wished him to pursue other victims' claims. Lewis also told MPs that he had been threatened by lawyers acting for John Yates, the former assistant commissioner at the Metropolitan police, because of comments he had made about phone hacking. "I have copies of a letter from Carter Ruck [solicitors] threatening to sue me on behalf of John Yates," Lewis told the home affairs select committee. He said the Guardian and the Labour MP Chris Bryant had also received threats of being sued. "The costs of the action were paid for by the Metropolitan Police, by the taxpayer," he added. Lewis said the reason for the investigation taking so long was not due solely to the police. "The DPP seems to have got it wrong and needs to be helped out," he said.

Rupert Murdoch's phone-hacking humble pie Tycoon expresses regret for News Corporation's involvement in scandal but insists he was kept in dark By Patrick Wintour, political editor guardian.co.uk, Tuesday 19 July 2011 23.54 BST Rupert Murdoch defiantly insisted on Tuesday he was not responsible for what he called "sickening and horrible invasions" of privacy committed by his company, claiming he had been betrayed by disgraceful unidentified colleagues, and had known nothing of the cover-up of phone hacking. During a three-hour grilling at the culture select committee, disrupted by a protester throwing a plate of shaving foam, the once all-powerful News Corp chairman and chief executive told MPs: "I am not responsible." In a halting performance, at times pausing, mumbling and mishearing, Murdoch said those culpable were "the people I hired and trusted, and perhaps then people who they hired and trusted". But he denied the accusation he had been "willfully blind" about the scandal. Flanked by his son James, the chairman of News International, Murdoch said he and his company had been betrayed in a disgraceful way, but argued he was still the best person to clean up the company, adding in a rehearsed soundbite that his day in front of the committee represented "the most humble day of my life ". In a Westminster hearing screened worldwide, he repeatedly tried to avoid identifying the specific culprits in his company, often blaming earlier legal counsel for inadequate advice or leaving his son to explain his behaviour. But in separate testimony to the home affairs select committee, Lord Macdonald, the former head of the DPP, now on contract with News International, revealed it had taken him three to five minutes to examine documents kept by the company's solicitors showing widespread criminality at the company. Macdonald said in his view the criminality revealed was "completely unequivocal", adding when he reported his findings to the News International board recently there was surprise and shock. He said: "I cannot imagine anyone looking at the file would not say there was criminality," including payments to police. The file was kept at the solicitors Harbottle & Lewis, and the police investigation is now centring on which executives tried to conceal its contents. In May 2007 Harbottle & Lewis sent a two-paragraph letter to News International executives claiming their examination of the documents showed there was no evidence any senior executives knew of illegal activities by the reporter Clive Goodman, or of any other illegal activities. The physical assault on Murdoch came near the end of the evidence session, prompting gasps as his wife Wendi Deng leaped up to hit the assailant, Jonathan May-Bowles, a participant in UK Uncut events. May-Bowles was detained by police as James Murdoch angrily asked officers why they had not protected his father. The Commons Speaker John Bercow called for an inquiry. The culture and home affairs select committee between them took more than eight hours of evidence about the phone-hacking scandal. Under the cover of the drama of the hearings, the Conservatives revealed that Neil Wallis, a former News of the World deputy editor, had given "informal unpaid advice" to Andy Coulson when he was director of communications at the Conservative party. In a statement the party said: "It has been drawn to our attention that he may have provided Andy Coulson with some informal advice on a voluntary basis before the election. We are currently finding out the exact nature of any advice." Wallis was arrested last week on suspicion of phone hacking, and the furore surrounding his hiring by the Metropolitan police between October 2008 and September 2009 has led to the resignation of Sir Paul Stephenson, the Metropolitan police commissioner, and the Met's assistant commissioner John Yates, who both gave evidence on Tuesday. Separately emails were released by Downing Street showing David Cameron's chief of staff, Ed Llewellyn, had on 20 September 2010 turned down the opportunity of a briefing by the Metropolitan police on the phone hacking. Labour claimed it showed an extraordinary dereliction of his duty to find out the scale of the wrong-doing, and the potential involvement of Coulson, the former No 10 director of communications. Cameron will be pressed on the issue when he makes a statement to MPs on how he is handling the crisis. He has been summoned to a 1922 backbench committee meeting to justify his response, including his decision to hire Coulson. The bulk of the cross-examination of the Murdochs was largely designed to locate how high the apparent cover-up of systematic law breaking went. James Murdoch was forced to admit, after much wriggling, that his company was still paying the legal costs of Glenn Mulcaire, one of the private detectives on the payroll of News of the World found guilty of hacking phones. James Murdoch said he was shocked and surprised to learn the payments were continuing, and denied it had been done to buy silence. Pressed by the Labour MP Paul Farrelly, Rupert Murdoch said he would stop the payments if he was contractually free to do so. James Murdoch denied the large out-of-court settlements to the PFA chief executive, Gordon Taylor, (£700,000) and publicist Max Clifford (£1m including legal costs), authorised by him in 2008, had not been pitched so high to buy their silence. He insisted the settlement level was based on legal advice, or in the case of Clifford due to the ending of a wider contract. James Murdoch also revealed he had authorised the settlements but had not told his father until 2009 after the case became public, saying the payments were too small to be reported to a higher board. He refused a request from MP Tom Watson to release Taylor from his confidentiality agreement. Both James Murdoch and Rebekah Brooks, the former chief executive of News International who gave evidence later to the committee, said they had acted as soon as evidence emerged in civil cases at the end of 2010 that phone hacking had not been confined to Mulcaire and Goodman. James Murdoch apologised for the scandal and told MPs: "These actions do not live up to the standards our company aspires to." The trio came under pressure over a letter in May 2007 prepared by Harbottle & Lewis on the instruction of Jon Chapman, the former director of legal affairs, and Daniel Cloak, the head of human resources, suggesting phone hacking had not been widespread. The files on which the Harbottle & Lewis letter is based were re-examined in April by senior News International executives including Will Lewis and Lord Macdonald. In tense opening exchanges Murdoch revealed he had mounted no investigation when Brooks told parliament seven years ago that the News of the World had paid police officers for information. He said: "I didn't know of it." He also admitted he had never heard of the fact that his senior reporter at the News of the World, Neville Thurlbeck, had been found by a judge to be guilty of blackmail. Watson interrupted to prevent Rupert Murdoch's son answering the questions saying "Your father is responsible for corporate governance, and serious wrongdoing has been brought about in the company. It is revealing in itself what he does not know and what executives chose not to tell him." Rupert Murdoch denied he was ignorant of his company, banging the table and saying News of the World "is less than 1 %" of News Corp. . He was asked about his connections to the Conservative party and revealed it had been on the advice of the prime minister's staff that he had gone through the back door to have a cup of tea with David Cameron after the election to receive Cameron's personal thanks for supporting his party in the election. "I was asked if I would please come through the back door," Murdoch told the committee. Rupert Murdoch denied that the closure of the News of the World was motivated by financial considerations, saying he shut it because of the criminal allegations. In one flash of anger he complained his competitors had "caught us with dirty hands and created hysteria". Aware that he must prevent the scandal spreading across the Atlantic, he insisted he had seen no evidence that victims of the 9/11 terror attack and their relatives were targeted by any of his papers

The trembling at News Corp has only begun July 19, 2011: 10:26 AM ET http://management.fortune.cnn.com/2011/07/19/the-trembling-at-news-corp-has-only-begun/?hpt=hp_t1 The scandal's potential damage to News Corp. has already gone beyond News of the World. But will the company's directors remember their duty to represent the interests of shareholders not named Murdoch? By Geoff Colvin, senior editor at large FORTUNE -- Some people aren't at all surprised by the unending scandal at Rupert Murdoch's News Corp. They are the investors, insurers, lawyers, and others who had read the "Governance Analysis" report on the company from The Corporate Library, a research firm. The firm grades companies' governance from A to F, and for the past six years News Corp. has received an F -- "only because there is no lower grade," says Nell Minow, who co-founded The Corporate Library in 1999 on the premise that governance "can be rated like bonds, from triple-A to junk." News Corp.'s overall risk, says the prophetic report: "very high." Risk of class-action securities litigation: "very high." Scandal-related lawsuits are already piling up. For those who think corporate governance is the concern of prissy do-gooders who don't understand real-world business, News Corp. (NWS) is the latest example that the truth is just the opposite: Governance is the foundation of real-world business. If it isn't solid, trouble is inevitable. For News Corp., it's the reason the trouble is far from over. News Corp.'s variety of lousy governance is simple -- one man exerts control wildly out of proportion to his stake in the business. As at many companies with bad governance, the mechanism is dual-class stock. News Corp.'s class A shares account for about 70% of the company's market cap (recently $41 billion total) but have no voting power. Only class B shares, which account for the other 30% of the market cap, get to vote, and Rupert Murdoch has almost 40% of the class B shares. Economically he owns just 12% of the company, but he wields total control because he can elect all the directors. While the other class B shareholders (about 1,300 of them) could in theory gang up on him and vote against his wishes, in practice that doesn't happen. It's especially unlikely since long-time Murdoch supporter Prince Alwaleed bin Talal of Saudi Arabia owns 7% of the class B shares. Ultimate responsibility for protecting News Corp.'s 48,000 total shareholders thus rests with a board comprising three directors named Murdoch (Rupert plus sons James and Lachlan; daughter Elisabeth is scheduled to join next year), four additional News Corp. employees (COO Chase Carey, CFO David DeVoe, executive VP Joel Klein, and senior adviser Arthur Siskind), two former News Corp. employees, and seven other directors, including a 31-year-old opera singer, Natalie Bancroft, from the family that owned Dow Jones, which News Corp. bought in 2007. News Corp. says her "youth" and "female perspective" bring value to the board. Under such guardianship, it's unsurprising the stock has disappointed investors; it has underperformed the S&P 500 over the past five and 10 years. This board meets the independence requirements of the Sarbanes-Oxley Act and Nasdaq, where the stock trades, but if it doesn't seem very independent to you, that's understandable. In any case, it doesn't matter. While legally the board can fire Rupert Murdoch, practically he can fire the board, and the board knows it. Truly the company has earned its F in governance. The effects are insidious and more far reaching than you might imagine. "It creates a culture with no accountability," says Charles Elson, director of the University of Delaware's John L. Weinberg Center for Corporate Governance. In companies where directors are genuinely subject to the shareholders' will, CEOs get fired; BP's (BP) board fired Tony Hayward last year, for example, and Hewlett-Packard's (HPQ) board fired Mark Hurd. The message cascades down through the organization: Bad behavior gets you fired here. But at companies where the CEO can fire the board, a different message cascades down: We don't answer to the shareholders, we answer to just one person. It's the rule of man, not the rule of law. To see the results, consider the most infamous scandal companies of the past several years – Enron, Worldcom, Healthsouth, Adelphia, Parmalat. Like News Corp., each had risen from nothing to huge success under one man, and through various means he had maintained total effective control. Employees felt they were beholden to a person who was beyond outside governance. The results were devastating to shareholders, employees, customers, suppliers, and communities. Based only on what has been confirmed, the scandal's potential damage to News Corp. is already considerable, beyond the closure of the highly profitable News of the World. Confiscated notebooks name thousands of people whose phones may have been hacked -- a staggering docket of lawsuits if hacking is confirmed. Payments to police officers, which, News Corp. has admitted, seems a clear violation of the U.S. Foreign Corrupt Practices Act, as several senators have observed. If News Corp. is guilty, the FCC licenses of its 27 U.S. television stations could be in peril. That's not a theoretical danger; RKO General had to give up all its broadcast licenses some 20 years ago after it was found to have bribed foreign officials and committed other unsavory acts. See also: Murdoch's Sun newspaper hit by hackers A large question for News Corp. now is how much further the scandal will extend. Company officials first maintained it ended with one rogue reporter at The News of the World. Then they acknowledged it was several but involved only phone hacking and only at that paper. Then the scandal spread to the Sun and to police bribery. With 10 employees or former employees arrested so far, it would seem foolish to assume now that all other employees have been behaving like Boy Scouts. With that in mind, recent events cast a new light on the company's News America Marketing Group, which produces free-standing ad inserts for newspapers and magazines and for years has been sued by competitors alleging grossly unfair practices. One of the suits went to trial in 2009; after two days of proceedings, News Corp. settled out of court for the stunning sum of $500 million. Another suit went to trial earlier this year, and after one day, News Corp. settled for $125 million. Now, investigators in at least three countries -- the U.K., the U.S., and Australia -- are combing carefully and widely through the company's affairs. What they might find seems to worry investors, who have clipped News Corp.'s market value by $6.6 billion since the scandal broke in early July, reflecting far more than the immediate economic damage. For example, if the FBI finds that News Corp. employees hacked the phones of 9/11 victims or their families, the American public's fury will know no bounds. That could be bad news for Murdoch's treasured Wall Street Journal plus his U.S. movie studios (Twentieth Century Fox and others), U.S. cable networks (Fox News, FX, and others), and U.S. TV stations and broadcast network (Fox), which together earn most of News Corp.'s profit. See also: Poof! News Corp. loses $8 billion market cap What's next? Suddenly under intense scrutiny and in the crosshairs of lawsuits, the directors may remember they have a legal duty to represent the interests of all shareholders (See also: What's next for Murdoch?). They could finally defy Murdoch, firing him or kicking him upstairs to non-executive chairman or otherwise rehabbing the company's tattered governance. With the world watching, Murdoch may feel that the one time he needs to exercise his power to fire the directors, he can't. Or, since the class B voting shares are publicly (though thinly) traded, someone could mount an old-fashioned proxy fight to reform the board. Murdoch has long argued that News Corp.'s governance is public information, and investors who don't like it needn't buy the stock. That's obviously true and perhaps explains why sophisticated institutional investors don't buy shares of companies with dual-class stock nearly as heavily as they invest in the overall market, according to research. News Corp.'s shareholders, says Charles Elson, "have no one to blame but themselves for buying this stock." The scandal is further evidence that governance disasters are like earthquakes: You can never predict when they'll happen, but you can predict pretty confidently where they'll happen. The trembling under News Corp. has only begun

Murdochs Say Top Executives Didn’t Know of Phone Hacking The New York Times By ALAN COWELL and GRAHAM BOWLEY July 19, 2011 LONDON — A protester disrupted the appearance of Rupert Murdoch and his son James at a parliamentary committee hearing on Tuesday, apparently by attempting to hit Rupert Murdoch with a paper plate full of shaving cream. Mr. Murdoch appeared unhurt. The disruption happened near the end of nearly three hours of sustained questioning by British lawmakers over the phone hacking scandal that has seized public life in Britain, raising questions about the police, politicians and the media elite in the worst crisis to confront Prime Minister David Cameron. After questioning the Murdochs, the committee heard terstimony from Rebekah Brooks, the former head of News International, the British newspaper outpost of the Murdoch empire, who resigned last Friday and was arrested and questioned by police on Sunday. Ms. Brooks insisted that the Murdoch company acted “quickly and decisively” against phone hacking once it had seen new evidence of the extent of the practice in December 2010. Ms. Brooks is a former editor of The News of the World, the tabloid at the epicenter of the hacking scandal, which the company shut down earlier this month. She told the committee that while she was editor she employed private investigators, but only for legitimate inquiries, and she denied paying police officers for information. Earlier, television pictures showed a young man in a checked shirt holding a plate near Mr. Murdoch’s head, and minutes later showed the man outside the committee room in police custody, his face covered in foam. Inside the room, a woman’s voice was heard shouting “no, no, no” as the man seemed to approach Rupert Murdoch and was intercepted by his wife, Wendi Deng, who launched herself at the attacker. “Why didn’t you see what was happening?” James Murdoch was heard asking police, British news reports said. The session was suspended, but resumed some 15 minutes later. Rupert Murdoch was no longer wearing a jacket. The identity of the attacker was not immediately known. In a separate development, the BBC reported the existence of previously undisclosed indirect links between figures under investigation in the scandal and Prime Minister Cameron, who has been criticized by the opposition for hiring a former editor of The News of the World, Andy Coulson, as his head of communications. In a new disclosure that threatened to bring the scandal closer to Mr. Cameron, the BBC said that, in the run-up to last year’s elections, Mr. Coulson sought advice from another former News of the World executive, Neil Wallis, who has since been arrested in connection with the phone hacking investigation and had worked for Scotland Yard after he left The News of the World. The Murdochs spent much of their time before the committee, both before and after the disruption, insisting that they were deeply sorry over the revelations of widespread unethical practices at their British newspapers, that they knew little or nothing about them and that they had not tried to cover them up. “This is the most humble day of my life,” Mr. Murdoch senior said early in the hearing, speaking in a modest committee room with his words broadcast live around the world. He repeated that view nearly verbatim in a prepared statement that he read at the end of his testimony, saying it was the most humble day of his career. Towards the end of his testimony, Rupert Murdoch was asked by Louise Mensch, a Conservative lawmaker, if he had ever considered resigning. “No,” he said. Why not? “Because I feel that people that I trusted let me down, I think that they behaved disgracefully,” he said. “Frankly, I am the best person to clean this up.” The hearing offered the remarkable spectacle of one of the world’s most powerful media magnates under the harsh spotlight of public scrutiny, sometimes seeming unfamiliar with the matters raised by the panel and frequently denying knowledge of them, while at the same time insisting that no one at their company had been “willfully blind.” The Murdochs’ appearance preceded a separate appearance before Parliament’s select committee on culture, media and sport by Rebekah Brooks, who resigned four days ago as head of the Murdoch’s British newspaper group. James Murdoch said he had “no knowledge, and there’s no evidence that I’m aware of,” that Ms. Brooks or other senior executives who have resigned from Murdoch companies as a result of the crisis had knowledge of phone hacking. Asked about the departure of Ms. Brooks and of Les Hinton, once Rupert Murdoch’s most senior lieutenant, the senior Mr. Murdoch said both executives asked to leave and were not pushed out. He said he had not accepted earlier efforts by Ms. Brooks to resign because “I believed her, I trusted her and I trust her.” “In the end she just insisted,” he continued. “She was at the point of extreme anguish.” The hacking scandal was a “matter of great regret of mine, my father’s and everyone at News Corporation,” James Murdoch told the committee. “These actions do not live up to the standards that our company aspires to everywhere around the world.” Lawmakers questioned Mr. Murdoch senior about news reports suggesting that The News of the World might have sought the phone numbers of victims of the Sept. 11, 2001, attacks in the United States. He said he had “seen no evidence of these allegations.” Slapping the table to underscore his points as he spoke to the committee, Rupert Murdoch said The News of the World, the tabloid at the center of the scandal, represented about 1 percent of his company’s global business. “I employ 53,000 people around the world who are proud, ethical, distinguished people,” Mr. Murdoch said. The 80-year-old father and the 38-year-old son, both American citizens, sat side by side facing their questioners, each in a dark suit, white shirt and tie. Rupert Murdoch said he ordered The News of the World shut down two weeks ago because “we felt ashamed of what happened and felt that we would bring it to a close — we had broken our trust with our readers.” He denied a suggestion that the decision was made for commercial reasons. The appearance of the Murdochs overlapped with a separate committee hearing, begun earlier in the day, into the involvement of the police in the scandal. The issue, smoldering for months, exploded fully about two weeks ago with reports that The News of the World, under the editorship of Ms. Brooks, ordered the hacking of voicemail of a 13-year-old girl, Milly Dowler, who had been abducted and was later found murdered. Ms. Brooks has denied knowledge of the hacking. “I was absolutely shocked, appalled, ashamed when I heard about the Milly Dowler case two weeks ago,” Rupert Murdoch told the committee on Tuesday. In a written statementwhich he read to the committee after three hours of hearings, he added: “I would like all the victims of phone hacking to know how completely and deeply sorry I am. Apologizing cannot take back what has happened. Still, I want them to know the depth of my regret for the horrible invasions into their lives.” “I have lived in many countries, employed thousands of honest and hard-working journalists, owned nearly 200 newspapers and followed countless stories about people and families around the world,” he said. “At no time do I remember being as sickened as when I heard what the Dowler family had to endure — nor do I recall being as angry as when I was told The News of the World could have compounded their distress.” At some points where Mr. Murdoch senior was pressed on detailed points and seemed not to have a ready response, his son James sought to intervene, but committee members insisted on answers from his father. At other times, James Murdoch seemed to be shielding his father, sometimes combatively, sometimes disclaiming knowledge, sometimes declining to answer on the ground that many issues were part of separate criminal inquiries by the police. For his part, Rupert Murdoch, who has a reputation for blunt, tough talk, often answered lawmakers’ questions with a long pause and a curt monosyllable. Asked directly whether he was ultimately responsible for what he has called the “fiasco” at his company, he said simply, “No.” Who was responsible, then? “The people that I trusted and then, maybe, the people they trusted,” he replied. Sitting behind the father and son were Ms. Deng, Rupert Murdoch’s wife, and Joel I. Klein, a senior executive of News Corporation, the Murdochs’ global media company, who has been put in charge of an internal investigation of the scandal. British lawmakers focused some of their questioning on out-of-court settlements paid by News International, the British newspaper subsidiary of News Corporation. Some of them ran to hundreds of thousands of dollars, but James Murdoch said such amounts were “below the approval thresholds that would have to go to my father as chairman and chief executive of the global companies.” The day of hearings began with testimony from Sir Paul Stephenson, who resigned on Sunday as commissioner of the Metropolitan Police Service, commonly known as the Met or Scotland Yard. In full uniform, Sir Paul quoted from Shakespeare to explain that once he had decided to tender his resignation, “It were best it were done quickly.” The decision to quit was “my decision and my decision only,” he said at the beginning of 90 minutes of testimony. He was followed by John Yates, the former assistant commissioner who resigned on Monday, and by Dick Fedorcio, the communications director for the police force. Much of the questioning at that hearing focused on allegations of coziness between the police and the newspapers and on the hiring of former News of the World executives and journalists by the police either as employees or as consultants. At the same time, Mr. Cameron cut short an African trade tour to return home for a showdown at an emergency session of the full Parliament on Wednesday with the opposition Labour leader, Ed Miliband. Both hearings on Tuesday were held in bland committee rooms across from the House of Commons, close to the River Thames in the Westminster area of central London. The Murdochs appeared before the House of Commons culture, media and sport committee in the Wilson Room of Portcullis House. Lines of people waiting to attend the Murdoch hearings began forming eight hours before their scheduled start. The home affairs select committee hearing testimony about the police met in the Grimond Room of the same building. Given the time pressure of the interviews with Rupert and James Murdoch and Ms. Brooks, the 10 House of Commons lawmakers on the media committee, drawn from the three main political parties in Parliament, agreed in advance on lines of questioning for the hearing. According to a senior member of the committee, the focus would be on the culture of the newsrooms at Murdoch newspapers; when phone hacking first started; who was involved; who sought to cover up the scandal; and why James Murdoch authorized settlement payments earlier in the scandal to well-known people whose voice mail was known to have been hacked. Because of the intense interest by the public and the small seating capacity of the hearing rooms, both hearings were broadcast live. In British parliamentary hearings, witnesses do not testify under oath. Instead, they are obliged to answer “on their honor.” The committees do not have the power to punish those it questions, but any misbehavior unearthed would deepen the opprobrium associated with those linked to the scandal. In political terms, the weight of the hearings lies in the opportunity they offer Parliament to assert an authority weakened in recent years by a scandal over lawmakers’ expense accounts. That could nudge the balance of power toward legislators. The witnesses can choose not to answer — in American terms, plead the Fifth — if they judge their comments could be self-incriminating. “The trick for this committee is getting comments on the record,” said Brian Cathcart, a former journalist who worked as an adviser to the committee in the past. “They don’t expect to convict and lock up their man but to get people to say things that they will have to stand by.” The questioning of Ms. Brooks is likely to be limited by the fact that she is a subject of the police investigation into the hacking. But she is certain to face questions about a comment she made to the committee in 2003 that her newspaper had paid the police for information — a comment she later retracted. Ms. Brooks was asked to appear before the committee at its 2009 hearing but refused to do so in person and instead sent written testimony.

10 things we learned from the Met police at the phone-hacking hearing Sir Paul Stephenson, John Yates and Dick Fedorcio provided some illuminating moments in front of the select committee By Peter Walker guardian.co.uk, Tuesday 19 July 2011 16.07 BST 1. David Cameron's chief of staff, Ed Llewellyn, turned down the opportunity for the prime minister to be briefed on the fact that Neil Wallis was giving PR advice to the Metropolitan police, according to the force. The outgoing Met commissioner Sir Paul Stephenson first alluded to an unnamed "No 10 official" who briefed the force that Cameron should not be "compromised" over the issue. The outgoing assistant commissioner John Yates subsequently named the official as Llewellyn. 2. The buck does not always stop at the top in the Met. Stephenson deflected a number of tough questions by telling MPs this was a matter for Yates, giving evidence later. 3. No one properly checked Wallis before he began work for Scotland Yard. The force's head of PR, Dick Fedorcio, told MPs that "due diligence" was carried out by Yates, even though Yates and Wallis were friends. Not so, said Yates: all he did was make a single phone call to Wallis to ask whether anything he had done could "embarrass" the force. 4. Stephenson resigned despite, he believed, still having the full support of Theresa May, the home secretary, London's mayor, Boris Johnson, and the bulk of the force. He told MPs: "It was against the advice of many, many colleagues – and, indeed, my wife." He added: "I'm not leaving because I was pushed or threatened." 5. Yates passed on the CV of Wallis's daughter within the force, thus possibly assisting her to get a job with the Met. He insisted he had done nothing wrong but "simply acted as a postbox". 6. The Metropolitan police has 45 press officers, 10 of whom previously worked for News International, figures revealed by Stephenson. 7. Corporate PR consultancy can be a lucrative business. The Met received three tenders for a two-day-a-month contract to advise senior officers on press matters. The winning bid and "by far the cheapest", came from Wallis's company, at £1,000 a day. 8. Stephenson is not a fan of ex-colleague Andy Hayman's new career as a journalist. Asked whether he reads Hayman's Times column, the response was: "No, I do not." 9. Stephenson was determined to go out with a bang. He began quoting (inexactly) Macbeth on his resignation – "If it's done then best it's done quickly" – before vehemently defending his £12,000 free stay at Champneys health spa. He signed off with a clearly pre-prepared statement of defiance, describing his resignation as "an act of leadership". 10. We are living in strange times: there have been very few previous select committee hearings at which a Conservative MP (Mark Reckless) and a commissioner of the Metropolitan police go out of their way to praise the Guardian

News Corp faces global investigation into bribery Pressure mounting in US for a full-scale inquiry into News Corporation under the Foreign Corrupt Practices Act By Ed Pilkington and Dominic Rushe in New York guardian.co.uk, Monday 18 July 2011 19.18 BST News Corporation faces a global investigation of all its businesses to ascertain whether they engaged in the same acts of bribery revealed to have taken place in the UK between News of the World reporters and police. With pressure mounting in the US for the launch of a full-blooded inquiry into News Corporation under the Foreign Corrupt Practices Act (FCPA), the daunting consequences of such a move are becoming evident. Mike Koehler, a law professor at Butler University who is an expert in the act, said a costly and expensive worldwide investigation into possible bribery activities on the part of the company's subsidiaries in America, Australia, Europe, India and China was now almost inevitable. "Once the US authorities have started investigating the UK phone scandal, their next question is where else?" he said. A full-scale FCPA investigation could also see News Corporation forced to hand over to US authorities its most sensitive legal documents, even those covered by lawyer-client privilege. US investigators have the right to call for a waiver to the privilege in order to obtain key documents including witness statements and all legal advice given to the company. The US attorney general, Eric Holder, has confirmed that a preliminary investigation is under way into News Corporation's activities. Several members of Congress have called on the justice department to launch investigations under the FCPA and anti-phone-hacking legislation, and Holder said he was "progressing in that regard using the appropriate federal agencies in the United States". It is too early in the proceedings to know precisely in which direction the justice department will take its investigation, or possibly multiple investigations. A justice department spokesman said: "Any time we see evidence of wrongdoing, we take appropriate action. The department has received letters from several members of Congress regarding allegations related to News Corp and we are reviewing those." Experts in US company law believe it is increasingly likely that an FCPA inquiry will now follow. The law was introduced in the 1970s to penalise US-based companies from profiting from the spoils of bribery and corruption in other countries. Brad Simon, a white-collar defence lawyer with Simon and Partners who has represented several FCPA defendants, said the spate of resignations in the UK, including those of two of the most senior police officers in the country, would boost the case for an full-blown investigation. "The US justice department traditionally responds to fast-breaking news developments and the fact that there have been resignations and arrests in the UK make it more likely than not that the US authorities will pursue this matter," he said. In anticipation of any legal action, Rupert Murdoch has begun assembling a crack legal team to represent him before the US authorities, suggesting he is readying himself for a bitter legal battle in America as a result of the phone-hacking scandal. At the centre of the team is Brendan Sullivan, one of America's most experienced lawyers, who during 40 years in litigation has acquired a reputation for taking on difficult and sensitive cases. He represented Oliver North, the US marine corps officer, in congressional hearings over the Iran-Contra affair. At the time of the hearings in 1987, Sullivan was described by the Washington Post as "the legal equivalent of nuclear war". A fellow lawyer said: "He asks no quarter and gives no quarter." Koehler said a full investigation would be likely to last for up to four years and cost News Corporation tens of millions of dollars. "The Department of Justice has a very sharp stick at its disposal," he said. The US authorities can bring criminal charges against a firm they believe is not co-operating. Criminal charges were brought against accountant Arthur Andersen after the collapse of the energy firm Enron. The case in effect killed the accountancy firm. Speculation has also focused on whether News Corporation employees have engaged in any phone hacking within the US. A US liberal campaigning group, ProtectOurElections.org, has put up a sum of $100,000 as a reward for any information leading to the arrest and conviction of "News Corp employees who hacked the phones of American citizens in the US, or bribed officials or others for information about Americans." The group promised to pass any hard evidence it received to the FBI.

Murdoch Aides Long Tried to Blunt Scandal Over Hacking The New York Times By JO BECKER and RAVI SOMAIYA July 19, 2011 LONDON — Two days before it emerged that The News of the World had hacked the cellphone of a murdered schoolgirl, igniting a scandal that has shaken Rupert Murdoch’s media empire, his son James told friends that he thought the worst of the troubles were behind him. And he was confident that News Corporation’s $12 billion bid for the British satellite company British Sky Broadcasting would go through, according to a person present. Now, with their most trusted lieutenant, Rebekah Brooks, arrested on suspicion of phone hacking and paying police for information, the broadcasting bid abandoned, the 168-year-old News of the World shuttered, and nine others arrested, Rupert and James Murdoch are scheduled to face an enraged British Parliament on Tuesday. It is a spectacle that Rupert Murdoch’s closest associates had spent years trying to avoid. Interviews with dozens of current and former News Corporation employees and others involved in the multiple hacking inquiries provide an inside view of how a small group of executives pursued strategies for years that had the effect of obscuring the extent of wrongdoing in the newsroom of Britain’s best-selling tabloid. And once the hacking scandal escalated, they scrambled in vain to quarantine the damage. Evidence indicating that The News of the World paid police for information was not handed over to the authorities for four years. Its parent company paid hefty sums to those who threatened legal action, on condition of silence. The tabloid continued to pay reporters and editors whose knowledge could prove embarrassing even after they were fired or arrested for hacking. A key editor’s computer equipment was destroyed, and e-mail evidence was lost. Internal advice to accept responsibility was ignored, former executives said. John Whittingdale, a Conservative member of Parliament who is the chairman of the committee that will question the Murdochs, said they need to come clean on the depth of the misdeeds, who authorized them and who knew what, when. “Parliament was misled,” he said. “It will be a lengthy and detailed discussion.” Mr. Murdoch has indicated he wants to cooperate. “We think it’s important to absolutely establish our integrity in the eyes of the public,” he said last week. “It’s best just to be as transparent as possible.” Ms. Brooks’s representative, David Wilson, said she maintained her innocence and looked forward to clearing her name, but declined to answer specific questions. As a trickle of revelations has become a torrent, the company switched from containment to crisis mode. Ms. Brooks and others first made the case, widely believed to be true, that other newspapers had also hacked phones and sought to dig up evidence to prove it, interviews show. At a private meeting, Rupert Murdoch warned Paul Dacre, the editor of the rival Daily Mail newspaper and one of the most powerful men on Fleet Street, that “we are not going to be only bad dog on the street,” according to an account that Mr. Dacre gave to his management team. Mr. Murdoch’s spokesman did not respond to questions about his private conversations. Former company executives and political aides assert that News International executives carried out a campaign of selective leaks implicating previous management and the police. Company officials deny that. The Metropolitan Police responded with a statement alleging a “deliberate campaign to undermine the investigation into the alleged payments by corrupt journalists to corrupt police officers.” Mr. Murdoch was attending a conference in Sun Valley, Idaho, in early July when it became clear that the latest eruption of the hacking scandal was not, as he first thought, a passing problem. According to a person briefed on the conversation, he proposed to one senior executive that he “fly commercial to London,” so he might be seen as man of the people. He was told that would hardly do the trick, and he arrived on a Gulfstream G550 private jet. Inquiries on Several Fronts The storm Mr. Murdoch flew into had been brewing since 2006, when the tabloid’s royal reporter and a private investigator were prosecuted for hacking into the messages of the royal household staff in search of juicy news exclusives. For years afterward, company executives publicly insisted that the hacking was limited to that one “rogue reporter.” Andy Coulson resigned as editor of The News of the World after the prosecution, but said he knew nothing. “If you’re talking about illegal tapping by a private investigator,” Rupert Murdoch declared in February 2007, “that is not part of our culture anywhere in the world, least of all in Britain.” But it turns out that almost from the beginning, executives of News International, the British subsidiary that owns the tabloid, had access to information indicating other reporters were also engaged in the practice. The information came from thousands of pages of records containing names of thousands of possible hacking targets that Scotland Yard seized during the royal hacking case from the home of the private investigator, Glenn Mulcaire, who worked for the tabloid. While the police largely limited their investigation to the royals, lawyers representing suspected victims of hacking fought for access to Mr. Mulcaire’s records and made them available to the tabloid executives during the litigation. In the initial cases, News International saw documents naming other journalists, according to details of those cases obtained by The Times. Notes in Mr. Mulcaire’s files contain the names “Ian” and “Neville,” apparent references to the news editor, Ian Edmondson, and the chief reporter, Neville Thurlbeck. James Murdoch, who oversees Europe and Asia operations for News Corporation, signed off on a £700,000 settlement with Gordon Taylor, a soccer union boss who was first to sue. One condition of the payment was confidentiality. This month, James Murdoch acknowledged he was wrong to settle the suit, saying he did not “have a complete picture of the case” at the time. Ms. Brooks personally persuaded Max Clifford, a celebrity publicist, to drop his case in return for even more compensation, Mr. Clifford said. He was paid to provide story tips to the paper — a deal he said totaled £1 million. Beyond Mr. Mulcaire’s files, another likely source of information about hacking by The News of the World are its internal e-mails. Even as the company faced a flood of claims over the last several years, News International has acknowledged that it did not take any steps to preserve e-mails that might contain evidence of hacking until late last fall. When The News of the World moved offices late last year, the computer used by Mr. Edmondson was destroyed in what the company describes as a standard procedure. The company asserted in court that a vast amount of its e-mails from 2005 and 2006 — believed to be the height of the hacking activity — had been lost. Company officials blamed the erasures on bungling, not conspiracy. News International has subsequently acknowledged that some messagesmight be recoverable on backup disks, and the police are trying to recover that information now, said Tom Watson, a Labour Party member of Parliament. Last year, a forensic computer specialist the company hired to help it comply with a court order to turn over documents made a surprising discovery: three e-mails sent to Mr. Edmondson containing PIN codes that could allow access to voice mail, as well as names and telephone numbers, one official said. The paper fired Mr. Edmonson and turned over the e-mails to the police. That prompted the new Scotland Yard inquiry into hacking, according to its head, Sue Akers. Mr. Edmondson referred questions to his lawyer, who did not respond. In April, the police arrested Mr. Edmondson, along with Mr. Thurlbeck. A few days later, News International issued a blanket apology, saying: “It is now apparent that our previous inquiries failed to uncover important evidence.” News International has for years said a 2007 internal investigation showed that hacking was not widespread, but recent interviews with company officials indicate that the inquiry had a different purpose. It was aimed at defending the company from a lawsuit filed by Clive Goodman, the paper’s royal reporter who had been fired for hacking. He claimed that the dismissal was unfair since others were hacking as well, according to two company officials with direct knowledge. Colin Myler, who succeeded Mr. Coulson as editor of The News of the World, told Parliament in 2007 that News International had turned over as many as 2,500 e-mails to the law firm of Harbottle & Lewis, which the company had retained in the matter. In a letter to Parliament at the time, the firm said it did not find anything in the e-mails linking hacking to three top editors — Andy Coulson, Neil Wallis or Mr. Edmondson. But a company official speaking on condition of anonymity said that the 2,500 e-mails given to the law firm related only to Mr. Goodman and represented only a small portion of the company’s e-mail traffic. Since Scotland Yard began its new investigation late last year, with access to more internal documents, all three of the editors, who are no longer at the paper, have been arrested. Two company officials said the 2007 internal inquiry was in fact overseen by Les Hinton, then executive chairman of News International and who resigned Friday as chief executive of Dow Jones. Mr. Hinton told Parliament in 2007 that Mr. Myler “went through thousands of e-mails.” But Mr. Myler was not given direct access to the e-mails, the company officials said. Mr. Hinton did not respond to a message, but in a statement announcing his resignation, he said he “was ignorant of what apparently happened.” While the e-mails reviewed for the internal inquiry in 2007 showed no direct evidence of hacking, according to three company officials they did contain suggestions that Mr. Coulson may have authorized payments to police for information. Yet News International turned over those documents to the police in recent months, prompting yet another investigation, this one into possible police bribery. It is not clear who at News International saw the e-mails in question, nor whether the law firm flagged them. The firm, citing client confidentiality obligations, declined to comment, as did News Corporation. More recently, as lawsuits and arrests mounted, dissension grew inside News International, interviews show. After Mr. Edmondson was fired and arrested, Ms. Brooks pressed to pay him a monthly stipend, according to a person with knowledge of the transaction. After an internal disagreement, the payments were moved from the newsroom budget to News International’s. The company put other journalists on paid leave after their arrests, reasoning that they were innocent until proven guilty, a company spokesperson confirmed. By the middle of last year, News International’s lawyers and some executives were urging that the company accept some responsibility, said two officials with direct knowledge. Ms. Brooks disagreed, according to three people who described the internal debate. “Her behavior all along has been resist, resist, resist,” said one company official. Scandal Erupts Over the last several months, Ms. Brooks spearheaded a strategy that seemed designed to spread the blame across Fleet Street, interviews show. Several former News of the World journalists said that she asked them to dig up evidence of hacking. One said in an interview that Ms. Brooks’s target was not her own newspapers, but her rivals. Mr. Dacre, The Daily Mail editor, told his senior managers that he had received several reports from businesspeople, soccer stars and public relations agencies that the News International executives Will Lewis and Simon Greenberg had encouraged them to investigate whether their phones had been hacked by Daily Mail newspapers . “They thought it was unfair that all the focus was on The News of the World,” said one News International official with knowledge of the effort. The two men have told colleagues they did not make such calls, but two company officials disputed that. Mr. Dacre confronted Ms. Brooks over breakfast at the plush Brown’s hotel. “You are trying to tear down the entire industry,” Mr. Dacre told her, according to an account he relayed to his management team. Ms. Brooks, whose tenacity is legendary, was not deterred. At a dinner party, Lady Claudia Rothermere, the wife of the billionaire owner of The Daily Mail, overheard Ms. Brooks saying that The Mail was just as culpable as The News of the World. “We didn’t break the law,” Lady Rothermere said, according to two sources with knowledge of the exchange. Ms. Brooks asked who Lady Rothermere thought she was, “Mother Teresa?” The scandal that smoldered for years ignited this month with news reports that the tabloid had hacked into the messages of Milly Dowler, a missing 13-year-old girl who was subsequently discovered murdered. Ms. Brooks, who was News of the World’s editor during the Dowler hacking, issued an apology, saying that she would be appalled “if the accusations are true.” In the last two weeks, a series of leaks landed in other British news media that appeared intended to shift blame from News International’s current leadership and onto Mr. Coulson and the Metropolitan Police. According to political aides and News Corporation executives, the leaks most likely came from within the company. Leaks to The Sunday Times, the BBC, and to outlets like Mr. Greenberg’s former employer, The London Evening Standard, gave details of Mr. Coulson’s alleged payments to the police and blamed previous News International management. Mr. Greenberg did not respond directly to messages seeking comment. But a News International spokeswoman referred reporters to a statement from Ms. Akers, the head of the police investigation, praising him and Mr. Lewis for their cooperation with the police. The Metropolitan Police said it was “extremely concerned” that the release of selected information “known by a small number of people” present at meetings between News International and the police “could have a significant impact on the corruption investigation.” Late last week, Rupert Murdoch told The Wall Street Journal that News Corporation had handled the situation “extremely well in every way possible,” except for a few “minor mistakes.” This weekend, as Mr. Murdoch was coached to face Parliament on Tuesday by a team of lawyers and public relations experts, a full-page advertisement from News Corporation appeared in every major British newspaper. “We are sorry,” it said. Don Van Natta Jr. contributed reporting from London.

Police examine bag found in bin near Rebekah Brooks's home Former NI chief executive's husband denies bag – containing computer, paperwork and phone – belonged to his wife By Amelia Hill guardian.co.uk, Monday 18 July 2011 20.54 BST Detectives are examining a computer, paperwork and a phone found in a bin near the riverside London home of Rebekah Brooks, the former chief executive of News International. The Guardian has learned that a bag containing the items was found in an underground car park in the Design Centre at the exclusive Chelsea Harbour development on Monday afternoon. The car park, under a shopping centre, is yards from the gated apartment block where Brooks lives with her husband, a former racehorse trainer and close friend of the prime minister David Cameron. It is understood the bag was handed into security at around 3pm and that shortly afterwards, Brooks's husband, Charlie, arrived and tried to reclaim it. He was unable to prove the bag was his and the security guard refused to release it. Instead, it is understood that the security guard called the police. In less than half an hour, two marked police cars and an unmarked forensics car are said to have arrived at the scene. Police are now examining CCTV footage taken in the car park to uncover who dropped the bag. Initial suspicions that there had been a break in at the Brooks' flat have been dismissed. David Wilson, Charlie Brooks's official spokesman, told the Guardian that Charlie Brooks denies that the bag belonged to his wife. "Charlie has a bag which contains a laptop and papers which were private to him," said Wilson. "They were nothing to do with Rebekah or the [phone-hacking] case." Wilson said Charlie Brooks had left the bag with a friend who was returning it, but dropped it in the wrong part of the garage. When asked how the bag ended up in a bin he replied: "The suggestion is that a cleaner thought it was rubbish and put it in the bin." Wilson added: "Charlie was looking for it together with a couple of the building staff. "Charlie was told it had gone to security, by which stage they [security] had already called the police to say they had found something. "The police took it away. Charlie's lawyers got in touch with the police to say they could take a look at the computer but they'd see there was nothing relevant to them on it. He's expecting the stuff back forthwith." Rebekah Brooks was arrested on Sunday under suspicion of conspiring to intercept communications, and of corrupting police officers. She is due to appear before the Commons culture, media and sport select committee today on Tuesday afternoon.

IPCC to probe four senior officers The Independent Monday, 18 July 2011 The police watchdog has been asked to investigate four former and serving senior Metropolitan Police officers over their handling of the phone-hacking scandal. This includes an allegation that former assistant commissioner John Yates "inappropriately" secured a Scotland Yard job for the daughter of hacking suspect Neil Wallis, a source said. The conduct of ex-commissioner Sir Paul Stephenson will also be examined. Both he and Mr Yates announced their resignations after coming under intense pressure as the hacking scandal widened. Five separate issues have been referred by the Metropolitan Police Authority, which oversees Scotland Yard, to the Independent Police Complaints Commission (IPCC).

Troubles That Money Can’t Dispel The New York Times July 18, 2011 By DAVID CARR “Bury your mistakes,” Rupert Murdoch is fond of saying. But some mistakes don’t stay buried, no matter how much money you throw at them. Time and again in the United States and elsewhere, Mr. Murdoch’s News Corporation has used blunt force spending to skate past judgment, agreeing to payments to settle legal cases and, undoubtedly more important, silence its critics. In the case of News America Marketing, its obscure but profitable in-store and newspaper insert marketing business, the News Corporation has paid out about $655 million to make embarrassing charges of corporate espionage and anticompetitive behavior go away. That kind of strategy provides a useful window into the larger corporate culture at a company that is now engulfed by a wildfire burning out of control in London, sparked by the hacking of a murdered young girl’s phone and fed by a steady stream of revelations about seedy, unethical and sometimes criminal behavior at the company’s newspapers. So far, 10 people have been arrested, including, on Sunday, Rebekah Brooks, the head of News International. Les Hinton, who ran News International before her and most recently was the head of Dow Jones, resigned on Friday. Now we are left to wonder whether Mr. Murdoch will be forced to make an Abraham-like sacrifice and abandon his son James, the former heir apparent. The News Corporation may be hoping that it can get back to business now that some of the responsible parties have been held to account — and that people will see the incident as an aberrant byproduct of the world of British tabloids. But that seems like a stretch. The damage is likely to continue to mount, perhaps because the underlying pathology is hardly restricted to those who have taken the fall. As Mark Lewis, the lawyer for the family of the murdered girl, Milly Dowler, said after Ms. Brooks resigned, “This is not just about one individual but about the culture of an organization.” Well put. That organization has used strategic acumen to assemble a vast and lucrative string of media properties, but there is also a long history of rounded-off corners. It has skated on regulatory issues, treated an editorial oversight committee as if it were a potted plant (at The Wall Street Journal), and made common cause with restrictive governments (China) and suspect businesses — all in the relentless pursuit of More. In the process, Mr. Murdoch has always been frank in his impatience with the rules of others. According to The Guardian, whose bulldog reporting pulled back the curtain on the phone-hacking scandal, the News Corporation paid out $1.6 million in 2009 to settle claims related to the scandal. While expedient, and inexpensive — the company still has gobs of money on hand — it was probably not a good strategy in the long run. If some of those cases had gone to trial, it would have had the effect of lancing the wound. Litigation can have an annealing effect on companies, forcing them to re-examine the way they do business. But as it was, the full extent and villainy of the hacking was never known because the News Corporation paid serious money to make sure it stayed that way. And the money the company reportedly paid out to hacking victims is chicken feed compared with what it has spent trying to paper over the tactics of News America in a series of lawsuits filed by smaller competitors in the United States. In 2006 the state of Minnesota accused News America of engaging in unfair trade practices, and the company settled by agreeing to pay costs and not to falsely disparage its competitors. In 2009, a federal case in New Jersey brought by a company called Floorgraphics went to trial, accusing News America of, wait for it, hacking its way into Floorgraphics’s password protected computer system. The complaint summed up the ethos of News America nicely, saying it had “illegally accessed plaintiff’s computer system and obtained proprietary information” and “disseminated false, misleading and malicious information about the plaintiff.” The complaint stated that the breach was traced to an I.P. address registered to News America and that after the break-in, Floorgraphics lost contracts from Safeway, Winn-Dixie and Piggly Wiggly. Much of the lawsuit was based on the testimony of Robert Emmel, a former News America executive who had become a whistle-blower. After a few days of testimony, the News Corporation had heard enough. It settled with Floorgraphics for $29.5 million and then, days later, bought it, even though it reportedly had sales of less than $1 million. But the problems continued, and keeping a lid on News America turned out to be a busy and expensive exercise. At the beginning of this year, it paid out $125 million to Insignia Systems to settle allegations of anticompetitive behavior and violations of antitrust laws. And in the most costly payout, it spent half a billion dollars in 2010 on another settlement, just days before the case was scheduled to go to trial. The plaintiff, Valassis Communications, had already won a $300 million verdict in Michigan, but dropped the lawsuit in exchange for $500 million and an agreement to cooperate on certain ventures going forward. The News Corporation is a very large, well-capitalized company, but that single payout to Valassis represented one-fifth of the company’s net income in 2010 and matched the earnings of the entire newspaper and information division that News America was a part of. Because consumers (and journalists) don’t much care who owns the coupon machine in the snack aisle, the cases have not received much attention. But that doesn’t mean that they aren’t a useful window into the broader culture at the News Corporation. News America was led by Paul V. Carlucci, who, according to Forbes, used to show the sales staff the scene in “The Untouchables” in which Al Capone beats a man to death with a baseball bat. Mr. Emmel testified that Mr. Carlucci was clear about the guiding corporate philosophy. According to Mr. Emmel’s testimony, Mr. Carlucci said that if there were employees uncomfortable with the company’s philosophy — “bed-wetting liberals in particular was the description he used” Mr. Emmel testified — then he could arrange to have those employees “outplaced from the company.” Clearly, given the size of the payouts, along with the evidence and testimony in the lawsuits, the News Corporation must have known it had another rogue on its hands, one who needed to be dealt with. After all, Mr. Carlucci, who became chairman and chief executive of News America in 1997, had overseen a division that had drawn the scrutiny of government investigators and set off lawsuits that chipped away at the bottom line. And while Mr. Murdoch might reasonably maintain that he did not have knowledge of the culture of permission created by Mr. Hinton and Ms. Brooks, by now he has 655 million reasons to know that Mr. Carlucci colored outside the lines. So what became of him? Mr. Carlucci, as it happens, became the publisher of The New York Post in 2005 and continues to serve as head of News America, which doesn’t exactly square with Mr. Murdoch’s recently stated desire to “absolutely establish our integrity in the eyes of the public.” A representative for the News Corporation did not respond to a request for comment. Even as the flames of the scandal begin to edge closer to Mr. Murdoch’s door, anybody betting against his business survival will most likely come away disappointed. He has been in deep trouble before and not only survived, but prospered. The News Corporation’s reputation may be under water, but the company itself is very liquid, with $11.8 billion in cash on hand and more than $2.5 billion of annual free cash flow. Still, money will fix a lot of things, but not everything. When you throw money onto a burning fire, it becomes fuel and nothing more.

News of the World phone-hacking whistleblower found dead Death of Sean Hoare – who was first named journalist to allege Andy Coulson knew of hacking – not being treated as suspicious By Amelia Hill, James Robinson, Caroline Davies guardian.co.uk, Monday 18 July 2011 18.04 BST Sean Hoare, the former News of the World showbiz reporter who was the first named journalist to allege Andy Coulson was aware of phone hacking by his staff, has been found dead, the Guardian has learned. Hoare, who worked on the Sun and the News of the World with Coulson before being dismissed for drink and drugs problems, is said to have been found dead at his Watford home. Hertfordshire police would not confirm his identity, but the force said in a statement: "At 10.40am today [Monday 18 July] police were called to Langley Road, Watford, following the concerns for the welfare of a man who lives at an address on the street. Upon police and ambulance arrival at a property, the body of a man was found. The man was pronounced dead at the scene shortly after. "The death is currently being treated as unexplained, but not thought to be suspicious. Police investigations into this incident are ongoing." Hoare first made his claims in a New York Times investigation into the phone-hacking allegations at the News of the World. He told the newspaper that not only did Coulson know of the phone hacking, but that he actively encouraged his staff to intercept the phone calls of celebrities in the pursuit of exclusives. In a subsequent interview with the BBC he alleged that he was personally asked by his then-editor, Coulson, to tap into phones. In an interview with the PM programme he said Coulson's insistence that he didn't know about the practice was "a lie, it is simply a lie". At the time a Downing Street spokeswoman said Coulson totally and utterly denied the allegations and said he had "never condoned the use of phone hacking and nor do I have any recollection of incidences where phone hacking took place". Sean Hoare, a one-time close friend of Coulson's, told the New York Times the two men first worked together at the Sun, where, Hoare said, he played tape recordings of hacked messages for Coulson. At the News of the World, Hoare said he continued to inform Coulson of his activities. Coulson "actively encouraged me to do it", Hoare said. In September last year, he was interviewed under caution by police over his claims that the former Tory communications chief asked him to hack into phones when he was editor of the paper, but declined to make any comment. Hoare returned to the spotlight last week, after he told the New York Times that reporters at the News of the World were able to use police technology to locate people using their mobile phone signals in exchange for payments to police officers. He said journalists were able to use a technique called "pinging" which measured the distance between mobile handsets and a number of phone masts to pinpoint its location. Hoare gave further details about the use of "pinging" to the Guardian last week. He described how reporters would ask a news desk executive to obtain the location of a target: "Within 15 to 30 minutes someone on the news desk would come back and say 'right that's where they are.'" He said: "You'd just go to the news desk and they'd just come back to you. You don't ask any questions. You'd consider it a job done. The chain of command is one of absolute discipline and that's why I never bought into it, like with Andy saying he wasn't aware of it and all that. That's bollocks." He said he would stand by everything he had told the New York Times about "pinging". "I don't know how often it happened. That would be wrong of me. But if I had access as a humble reporter … " He admitted he had had problems with drink and drugs and had been in rehab. "But that's irrelevant," he said. "There's more to come. This is not going to go away." Hoare named a private investigator who he said had links with the News of the World, adding: "He may want to talk now because I think what you'll find now is a lot of people are going to want to cover their arse." Speaking to another Guardian journalist last week, Hoare repeatedly expressed the hope that the hacking scandal would lead to journalism in general being cleaned up and said he had decided to blow the whistle on the activities of some of his former News of the World colleagues with that aim in mind. He also said he had been injured the previous weekend while taking down a marquee erected for a children's party. He said he had broken his nose and badly injured his foot when a relative accidentally struck him with a heavy pole from the marquee. Hoare also emphasised that he was not making any money from telling his story. Hoare, who has been treated for drug and alcohol problems, reminisced about partying with former pop stars and said he missed the days when he was able to go out on the town.

Former Fox News producer claimed network’s ‘Brain Room’ led to phone hacking www.rawstory.com By Stephen C. Webster Monday, July 18th, 2011 -- 9:32 am A former producer with Fox News claimed in a lengthy essay gaining new traction this week that the conservative television station has a "Brain Room" in its New York headquarters which enables employees to view private telephone records with ease. Though published years ago, the allegations have returned to relevance in the wake of the phone hacking scandals that have rocked News Corporation to its very core, threatening to topple one of the world's largest and most powerful media conglomerates. According to former Fox News executive Dan Cooper, whose gripes with his former employer run quite deep, Fox News chief Roger Ailes allegedly had him design the so-called "Brain Room" to facilitate counter-intelligence efforts and other "black ops." In a lengthy 2008 diatribe said to have doubled as a book pitch, Cooper claimed his own phone records had been hacked by Fox News employees, who he says used them to pinpoint him as a source used by David Brock, who founded liberal watchdog group Media Matters. "Ailes knew I had given Brock the interview," he wrote. "Certainly Brock didn't tell him. Of course. Fox News had gotten Brock's telephone records from the phone company, and my phone number was on the list. Deep in the bowels of 1211 Avenue of the Americas, News Corporation's New York headquarters, was what Roger called the Brain Room. Most people thought it was simply the research department of Fox News. But unlike virtually everybody else, because I had to design and build the Brain Room, I knew it also housed a counterintelligence and black ops office. So accessing phone records was easy pie." That wasn't the last time word of Ailes's "Brain Room" surfaced: in a recent piece for Rolling Stone, journalist Tim Dickenson discusses Cooper's allegations too, focusing on the man Ailes allegedly picked to run the secretive office. "Befitting his siege mentality, Ailes also housed his newsroom in a bunker," Dickenson wrote. "Reporters and producers at Fox News work in a vast, windowless expanse below street level, a gloomy space lined with video-editing suites along one wall and an endless cube farm along the other. In a separate facility on the same subterranean floor, Ailes created an in-house research unit – known at Fox News as the 'brain room' – that requires special security clearance to gain access. 'The brain room is where Willie Horton comes from,' says Cooper, who helped design its specs. 'It’s where the evil resides.' TAKE ACTIONPetitions by Change.org|Get Widget|Start a Petition »"If that sounds paranoid, consider the man Ailes brought in to run the brain room: Scott Ehrlich, a top lieutenant from his political-­consulting firm. Ehrlich – referred to by some as 'Baby Rush' – had taken over the lead on Big Tobacco’s campaign to crush health care reform when Ailes signed on with CNBC." While none of these claims have been substantiated, they seem increasingly plausible given the widening coverup of Murdoch's British hacking scandals, which have grown from the desk of just one allegedly "rogue" journalist to topple some of Murdoch's top deputies, including the former publisher of The Wall Street Journal and the chief of News International, which oversees News Corp.'s British newspapers. Cooper's phone records as well would not be the first time Fox News or U.S. News Corp. employees have been accused of hacking. According to The New York Times, a New Jersey company called Floorgraphics accused News Corp. in 2009 of hacking into their password-protected computer systems to obtain proprietary information, then allegedly spreading "false, misleading and malicious information" about the firm, causing them to lose important contracts. News Corp.'s response to the scandal was to buy Floorgraphics outright, after offering a $29.5 million settlement. Cases like Floorgraphics' are hardly unique: in recent years, the Times noted, News Corp. has paid over $655 million in settlements and hush money to keep allegations of anti-competitive and illegal behavior under the rug. The Federal Bureau of Investigation and the Department of Justice have launched their own investigations into whether News Corp. participated in the hacking of 9/11 victims or U.S. officials. (H/T: The Nation)

Wall Street Journal hits back over phone-hacking scandal Wall Street Journal accuses Guardian and BBC of driving phone-hacking story for 'commercial and ideological motives' By Ed Pilkington in New York guardian.co.uk, Monday 18 July 2011 04.52 BST The Wall Street Journal has attempted to redirect the criticism that has been levelled against its owner, Rupert Murdoch, against the journalists who uncovered allegations of illegal phone-hacking at the News of the World. In an angry, unsigned editorial, the paper accuses the Guardian and the BBC of driving the phone-hacking story for "commercial and ideological motives". It implies the Guardian did not have the right to make "lectures about journalistic standards" because of the newspaper's involvement in publishing the WikiLeaks embassy cables. At the end of a weekend in which Murdoch and top News Corporation executives have made a round of apologies for the illegal behaviour of News of the World, the Wall Street Journal's editorial takes a strikingly opposing posture. It adopts a peevish tone, noting "the irony of so much moral outrage devoted to a single media company, when British tabloids have been known for decades for buying scoops and digging up dirt on the famous". The investigative website ProPublica's disclosure in the Guardian that some members of the Bancroft family harboured regrets about selling the Journal to Murdoch is also criticised. The editorial ridicules ProPublica's reporting of the former owners' opinions as an act of "righteous hindsight". The editorial writer runs to the defence of Les Hinton, the Journal's former publisher who resigned as chief executive of Dow Jones on Friday. Hinton is praised for presiding over four years of investment in the newspaper since Murdoch took it over in 2007. "We shudder to think what the Journal would look like today without the sale to News Corp." The editorial also accuses the Guardian and other unnamed publications of trying to smear News Corporation journalists, saying "they want their readers to believe, based on no evidence, that the tabloid excesses of one publication somehow tarnish thousands of other News Corp. journalists around the world". The editorial gives no evidence behind its own statement. Members of Congress who have called for official inquiries into News Corporation affairs under the Foreign Corrupt Practices Act that prohibits US-based companies from engaging in bribery abroad also incur the Journal's wrath. The editorial dismisses Barbara Boxer, Peter King and other prominent politicians from both main parties who have asked for investigations as "the political mob". The editorial provoked an instant outpouring of comment on Twitter, much of it unfavourable. As one tweet, by Jesse Elsinger, put it: "Best adj to use for this WSJ editorial: delusional, oedipal, sycophantic or craven

Murdoch Struggles for Control as Scandal Grows Bloomberg.com By Carol Hymowitz, Jeffrey McCracken and Amy Thomson - Jul 18, 2011 News Corp. (NWSA)’s Rupert Murdoch is struggling to control the destiny of the company he began building six decades ago after a trusted deputy was arrested and Scotland Yard’s top official quit over ties to a suspect in the phone-hacking probe. Independent directors of New York-based News Corp. have begun questioning the company’s response to the crisis and whether a leadership change is needed, said two people with direct knowledge of the situation who wouldn’t speak publicly. Rebekah Brooks, the former News International chief who Murdoch backed until last week, was arrested yesterday in London. “The shell of invulnerability that Rupert Murdoch had around him has been cracked,” said James Post, a professor at Boston University’s School of Management who has written about governance and business ethics. “His credibility and the company’s credibility are hemorrhaging.” Murdoch and his 38-year-old son, James Murdoch, are spending most of their time with advisers preparing for tomorrow’s hearing before a U.K. parliamentary committee. They will face questions over their role in and responsibility for phone hacking that took place at their now-defunct News of the World tabloid. The company took out advertisements in national U.K. newspapers this weekend to apologize for the scandal. Shares Slump News Corp. (NWS) fell 66 cents, or 4.2 percent, to $14.98 on the Nasdaq Stock Market at 11:18 a.m. New York time. Before today, it had lost 13 percent since July 4, when the Guardian reported that News of the World employees had intercepted the voice mail of Milly Dowler, a schoolgirl who was later found murdered. The tabloid is also alleged to have hacked into the phones of terror victims and dead soldiers, as well as politicians and celebrities. The slump has shaved more than $6 billion off the combined value of the Class A shares and the Class B voting stock that gives the Murdochs control over the company. “Apologising for our mistakes and fixing them are only the first steps,” News International said in the ads. The company vowed to cooperate with the police and compensate those affected, saying it is “committed to change.” Board Stirrings On the board, venture capital executive Tom Perkins and Viet Dinh, a law professor at Georgetown University who was the chief architect of the USA Patriot Act, are leading the efforts of independent directors, according to one of the people. Dinh also represented Perkins, a former Hewlett-Packard Co. director, during a scandal at that company. News Corp.’s independent directors, who hold nine of 16 board seats, have expressed frustration over the quality and quantity of information they’ve received about the scandal and concern about management’s ability to handle the crisis given how slowly the company has responded, the person said. Some directors said Murdoch, the company’s 80-year-old chairman and chief executive officer, appeared to be in denial over the fallout from the scandal in an interview he gave last week to the Wall Street Journal, one of News Corp.’s newspapers. “People’s faith in the family’s management is diminished,” said Claire Enders, founder and CEO of media researcher Enders Analysis in London, whose clients include the U.K. government and the broadcast regulator Ofcom. “That too may be very hard to restore quickly,” she said in an interview. Brooks Resignation In April, News Corp. said it would settle lawsuits and offer compensation to some of the celebrities and politicians that had sued the company. That followed a settlement related to a phone-hacking lawsuit in 2010 in which, according to the Guardian, News Corp. paid celebrity publicist Max Clifford more than 1 million pounds ($1.6 million) to drop his case. In the past three years, News Corp. paid more than $600 million to settle cases in which it was accused of competing unfairly. In February, News Corp. said it will pay $125 million to Insignia Systems Inc. in a case related to the U.S. in-store advertising market. Last year, it agreed to pay $500 million to Valassis Communications Inc. (VCI), and in 2009 it paid $29.5 million to settle a claim brought by Floorgraphics Inc., which also compete in in-store advertising and promotions. As allegations of phone-hacking escalated this month, Murdoch abandoned a 7.8 billion pound bid for all of British Sky Broadcasting Group Plc (BSY), shut the 168-year-old tabloid on which his U.K. media business was founded and lost the support of all Britain’s main political parties. Brooks resigned on July 15, a week after Murdoch voiced his “total” support for the U.K. newspaper executive at a media conference in Sun Valley, Idaho, and flew to London to address the growing crisis. Brooks Released Les Hinton, CEO of Dow Jones and previously chairman of News International for 12 years, resigned the same day. The 67- year-old newspaper man had worked for 52 years for Murdoch, starting as a copy boy at the age of 15. In developments yesterday, Brooks, 43, went to a London police station voluntarily by appointment, her spokesman David Wilson said in a phone interview. As head of the unit that runs Murdoch’s U.K. newspaper operations, she is the most senior News Corp. employee detained in the probe. “Undoubtedly she should have been arrested,” said Mark Lewis, a lawyer for victims of phone-hacking including the parents of the murdered schoolgirl. “She was editor of the newspaper at the time that Milly Dowler was abducted and killed. The police undoubtedly have to ask her questions about what happened and what she knew or doesn’t know.” Brooks was released on bail around midnight, police said. Special Committee Hours after the arrest, Metropolitan Police Commissioner Paul Stephenson announced his resignation over speculation about his force’s links to another former journalist at the tabloid. Neil Wallis, a former editor who was arrested last week, was a paid communications consultant for the police in 2009 and 2010. Another senior Met officer, Assistant Commissioner John Yates, resigned today. A News Corp. spokeswoman reiterated the company’s intention to fully cooperate with the police. Brooks, in a memo accompanying her resignation, said leaving would give her “the freedom and the time to give my full cooperation to all the current and future inquiries.” News Corp. will take over from News International a committee set up to work with police investigating the scandal. The company today appointed Anthony Grabiner, a U.K. lawyer and chairman of retailer Arcadia Group Plc, to lead the management and standards committee. Simon Greenberg, corporate affairs director at News International, and General Manager Will Lewis will be employed full-time by the committee, which will report to Joel Klein, Murdoch’s top adviser, who in turn will report to Dinh. Both Klein and Dinh will update News Corp.’s board. Independent Directors News Corp. today said that Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information. With the FBI in the U.S. beginning a preliminary probe of the company, News Corp. has hired criminal defense lawyer Brendan V. Sullivan Jr. of the Washington law firm Williams & Connolly LLP, according to a person familiar with the situation. Sullivan’s clients have included former Alaska Senator Ted Stevens, ex-New York Stock Exchange Chairman Richard Grasso and Reagan White House aide Oliver North. Sullivan didn’t return a phone and e-mail messages from Bloomberg News seeking comment. The company also began interviewing large public relations firms last week in New York to serve as its outside crisis communications adviser, said two people familiar with the matter. News Corp. has already retained Rubenstein Associates in New York and Edelman in London. Family Control News Corp.’s independent directors, including Dinh, Perkins and former British Airways CEO Rod Eddington, may have limited influence, given the Murdochs’ stock holdings, said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. Murdoch controls News Corp. through a 38 percent stake in the Class B voting shares, according to company filings and data compiled by Bloomberg. Those shares represent a 12 percent economic interest in the company, when non-voting shares are counted as well. In addition to Rupert Murdoch, News Corp.’s board includes his son Lachlan, 39, as well as James, the company’s deputy chief operating officer. Murdoch’s daughter Elisabeth, 42, was set to become a director after selling her Shine Group TV production outfit to News Corp. for $673 million in February. “Rupert Murdoch controls the votes of the company through the Class B shares,” Elson said in an interview. “He can just replace them if he wants. They may do something, but it will be temporary. Maybe he becomes chairman, but this is still his company and he can do what he wants. When he controls the stock, he controls the board.” To contact the reporters on this story: Carol Hymowitz in New York at chymowitz1@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Amy Thomson in London at athomson6@bloomberg.net To contact the editors responsible for this story: Cesca Antonelli at fantonelli@bloomberg.net .

Poster's note: The last paragraph in this article is amusing. Where has the clueless FT been for the past two years? Obviously not reading John Simkin's early observations on the emerging scandal or the postings in this topic. -------------------- http://www.ft.com/cms/s/0/8150880e-b091-11e0-a5a7-00144feab49a.html#ixzz1STCo0IRx Brooks arrest raises risk of action in US Financial Times By Andrew Edgecliffe-Johnson and David Gelles in New York July 17, 20011 News Corp is facing heightened legal risks in its home US market over the phone hacking and police bribery scandal after the arrest of Rebekah Brooks, the former News International chief executive, but legal analysts believe US authorities are unlikely to take rapid action against the company. The debate on the chances of the largely British scandal affecting News Corp’s US directors or businesses remained split along party political lines on Sunday. The “startling” UK allegations raised questions about whether News Corp had violated the US Foreign Corrupt Practices Act, Senate majority whip Dick Durbin, Democrat of Illinois, told NBC’s Meet the Press. He called for congressional hearings and said the Federal Bureau of Investigation needed to “follow through” with an investigation it opened last week. On the same programme, however, Jim DeMint, the Republican senator from South Carolina, said Congress had more pressing tasks, as it wrestles with the question of whether to raise the national debt ceiling, an issue that has eclipsed phone hacking in the US media. “We need to let law enforcement work here,” he said: “We need to handle our own business for a change.” Concern about reputational damage spreading in the US had prompted News Corp to add a US public relations firm to its team of advisers, one person close to the group said. The identity of that firm could not immediately be confirmed. Rudy Giuliani, the Republican former New York mayor, told CNN’s State of the Union he had prosecuted people for the “serious felony” of intercepting communications, but added: “Give people the presumption of innocence. I think that just how high up it goes is a big question and it’s one we shouldn’t be jumping to conclusions about.” He added that Rupert Murdoch, News Corp’s chairman, was “a very honourable, honest man,” saying: “This can’t be something that he would have anything to do with.” The FBI is investigating an unverified UK report that News of the World representatives may have sought access to the voicemail messages of victims of the 9/11 attacks, but legal analysts said News Corp may be more exposed to allegations that the UK tabloid paid the police for information. “A reporter in London who paid a few quid to a Bobby for some information about the royals would be surprised to learn he could end up in an American jail,” said Gary Stein, attorney at Schulte Roth & Zabel. “But the [Foreign Corrupt Practices Act] has tremendous reach, and it’s certainly not impossible.” News Corp executives could also be found liable, Mr Stein said. “If they had knowledge of an illicit bribery scheme, I think there could be liability on the part of the corporation,” he said. “There could even be liability even if no one in the US was in on the scheme.” John Dean, former White House counsel to Richard Nixon, and Carl Bernstein, one of the Washington Post reporters who led the investigation into the scandal and its cover-up, have both likened the crisis to the Watergate affair. Watergate unfolded slowly, however. From the arrest of five men for breaking into the Democratic National Committee offices to the resignation of Richard Nixon, the US president, took more than two years

John Yates resigns from Met police over phone-hacking scandal Scotland Yard's top counter-terrorism officer quits the day after his boss Sir Paul Stephenson By Vikram Dodd, Sam Jones and Hélène Mulholland guardian.co.uk, Monday 18 July 2011 14.53 BST The Metropolitan police assistant commissioner John Yates has become the second high-profile Scotland Yard officer to resign over the phone-hacking scandal. The resignation of Yates – the country's top counter-terrorism officer – comes a day after his boss, the Metropolitan police commissioner, Sir Paul Stephenson, stepped down. In a statement, Scotland Yard said: "Assistant commissioner John Yates has this afternoon indicated his intention to resign to the chair of the Metropolitan Police Authority (MPA). This has been accepted. AC Yates will make a statement later this afternoon." His decision to quit came as the Metropolitan Police Authority's professional standards cases subcommittee held a meeting to consider a slew of complaints against him. The mayor of London, Boris Johnson, said the resignations of Yates and Stephenson were "regrettable but right". He said: "Whatever mistakes have been made at any level in the police service, now is the time to clear them up." The MPA disciplinary committee, which met on Monday morning, announced that it had decided to suspend Yates pending an inquiry into allegations following the phone-hacking scandal. Cressida Dick would replace Yates in the interim, Johnson said. Green party MPA member Jenny Jones said the resignation should have happened earlier and left Johnson with a lot to explain. "I think it's a real pity Yates did not go before his boss," she said. "It just shows who the most honourable person is. Boris has mishandled this from the start and he obviously has lots of questions to answer." Earlier on Monday it emerged that Yates had been recalled to give evidence before the Commons home affairs select committee on Tuesday. Keith Vaz, the Labour chairman of the committee, said: "The committee has recalled Mr Yates to give evidence tomorrow to clarify aspects of his evidence that he gave to the committee last week and following the statement of Sir Paul Stephenson." When he appeared before the select committee last Tuesday, Yates expressed regret at his 2009 decision not to reopen the phone-hacking investigation. He insisted he had always told the truth to MPs investigating the issue and suggested that the News of the World "failed to co-operate" with police until the start of this year. He told the committee: "I can assure you all that I have never lied and all the information that I've provided to this committee has been given in good faith. "It is a matter of great concern that, for whatever reason, the News of the World appears to have failed to co-operate in the way that we now know they should have with the relevant police inquiries up until January of this year. "They have only recently supplied information and evidence that would clearly have had a significant impact on the decisions that I took in 2009 had it been provided to us." Vaz told Yates that his evidence was unconvincing and warned him it was "not the end of the matter

Sir Paul Stephenson turns on David Cameron Britain's top police officer has resigned and turned on the prime minister in a dramatic escalation of the phone hacking scandal By Vikram Dodd and Patrick Wintour The Guardian, Monday 18 July 2011 Britain's top police officer has resigned and turned on the prime minister in a dramatic escalation of the phone hacking scandal. In a carefully-worded resignation speech that appeared aimed directly at Downing Street, Sir Paul Stephenson, the commissioner of the Metropolitan police, said the prime minister risked being "compromised" by his closeness to former News of the World editor Andy Coulson. Number 10 stressed that David Cameron had not been pressing in private for Stephenson to stand aside. But he was caught by surprise by the attack, which came just while the prime minister was on a plane en route to South Africa. Stephenson denied that he was resigning over allegations that he accepted £12,000 worth of hospitality from Champney's health spa, focusing instead on his decision not to inform the prime minister that the Met had employed Coulson's former deputy Neil Wallis as a strategic adviser. "Once Mr Wallis's name did become associated with Operation Weeting [into phone hacking], I did not want to compromise the prime minister in any way by revealing or discussing a potential suspect who clearly had a close relationship with Mr Coulson," he said. "I am aware of the many political exchanges in relation to Mr Coulson's previous employment. I believe it would have been extraordinarily clumsy of me to have exposed the prime minister, or by association the home secretary, to any accusation, however unfair, as a consequence of them being in possession of operational information in this regard." To emphasise the point, Stephenson went on: "Unlike Mr Coulson, Mr Wallis had not resigned from the News of the World or, to the best of my knowledge been in any way associated with the original phone hacking investigation." The shadow home secretary Yvette Cooper seized on that issue saying: "People will wonder why different rules apply for the prime minister and the Met, especially as Sir Paul said that 'unlike Andy Coulson', Neil Wallis had not been forced to resign from the News of the World." Senior police sources confirmed the attack had been intentional and showed the anger at Scotland Yard that Stephenson has been willing to resign over the scandal while the political class has failed to take responsibility in the same way. An ally of Stephenson said: "The commissioner thought if the prime minister is happy employing Andy Coulson, and Neil Wallis has bid the lowest price, what reason would we have not to employ him?" Stephenson had been due to appear before the home affairs select committee tomorrow. His sudden exit increases the pressure on assistant commissioner John Yates, the officer who led the phone hacking inquiry, to quit. The crisis over hacking engulfing News Corporation began to turn toxic for Stephenson on Thursday after the arrest of Wallis, who was the News of the World's deputy editor during the period when it is alleged phone hacking was widespread at the paper. Hours after Wallis was arrested, it emerged that he had worked for the Met. The Guardian has learned that Scotland Yard chiefs invited Wallis to apply for a senior communications post with the force in 2009, a decision Stephenson was aware of. Wallis was approached to apply for the two day a month contract by the Met, following discussions involving the forces's most senior figures. A source with close knowledge of the Yard's thinking at the time said part of Wallis's attraction was his connection to former News of the World editor Coulson, who was a leading aide to Cameron, then in opposition and expected to become prime minister. Part of the Met's thinking was that Wallis's connections would help the force's relationship with Cameron: "One [Wallis] is a lot cheaper and gives you direct access into No 10," the source added. Stephenson was facing the prospect of a difficult Commons statement by Theresa May, the home secretary, and anxiety expressed by the deputy prime minister, Nick Clegg, about confidence in the Met because of the failure to tackle the scandal. In his resignation statement , Stephenson stressed his integrity and dismissed weekend claims that it was compromised by accepting a free stay at a luxury health spa where Wallis had been hired as a PR consultant. Stephenson said: "I have taken this decision as a consequence of the ongoing speculation and accusations relating to the Met's links with News International at a senior level and in particular in relation to Mr Neil Wallis who as you know was arrested in connection with Operation Weeting last week. "I have heard suggestions that we must have suspected the alleged involvement of Mr Wallis in phone hacking. Let me say unequivocally that I did not and had no reason to have done so. I do not occupy a position in the world of journalism; I had no knowledge of the extent of this disgraceful practice and the repugnant nature of the selection of victims that is now emerging; nor of its apparent reach into senior levels." John Prescott, the former deputy prime minister who had called for Stephenson to resign, wrote on Twitter: "I always thought the Met and News International were too close and now we see how close they were. Another green bottle has fallen – more to come." Peter Smyth, chair of the Met Police Federation, said: "I think it is a sad day for Paul and a sad day for the Met. He is a very private man, I have never had any reason to question his integrity." He has come to a decision based on what he knows about himself." The mayor of London, Boris Johnson, who last year described the hacking issue as a load of codswallop, was also furious that he had not been informed of the payments to Wallis until after his arrest last week. He was planning to launch an inquiry into the links between the Met and News International to examine whether the Met's refusal to pursue the phone -hacking saga, and the links with News International. "We need to turn over some of these big flat rocks and find out what is underneath," Johnson said last night. He said he was sad about Sir Paul's resignation, but thought it was "the right call" since he was likely to be distracted by the speculation about his links with News International. Cameron said: "Sir Paul Stephenson has had a long and distinguished career in the police, and I would like to thank him for his service over many, many years. Under his leadership, the Metropolitan police made good progress in fighting crime, continued its vital work in combating terrorism, and scored notable successes such as the policing of the royal wedding."

Scotland Yard Leader Quits Over Tabloid Scandal The New York Times By SARAH LYALL and DON VAN NATTA Jr. July 17, 2011 LONDON — Britain’s top police official resigned on Sunday, the latest casualty of the phone-hacking scandal engulfing British public life, just hours after Rebekah Brooks, the former chief executive of Rupert Murdoch’s News International, was arrested on suspicion of illegally intercepting phone calls and bribing the police. The official, Sir Paul Stephenson, commissioner of the Metropolitan Police Service, commonly known as the Met or Scotland Yard, said that he had decided to step down because “the ongoing speculation and accusations relating to the Met’s links with News International at a senior level” had made it difficult for him to do his job. But he said that he had done nothing wrong and that he would not “lose sleep over my personal integrity.” He also said that because he had not been involved in the original phone-hacking investigation, he had had no idea that Neil Wallis, a former News of the World deputy editor who had become a public-relations consultant for the police after leaving the paper, was himself suspected of phone hacking. Mr. Wallis, 60, was arrested last Thursday. The commissioner’s resignation came as the London political establishment was still digesting the stunning news about the arrest of Ms. Brooks — who apparently was surprised herself. A consummate networker who has always been assiduously courted by politicians and whose friends include Prime Minister David Cameron, Ms. Brooks, 43, is the 10th and by far the most powerful person to be arrested so far in the phone-hacking scandal. Her arrest is bound to be particularly wounding to Mr. Murdoch, who, asked early last week to identify his chief priority in the affair, pointed to Ms. Brooks and said, “This one.” Ms. Brooks has not yet been formally charged, but it is significant that she is being questioned in connection with two separate investigations. One, called Operation Weeting, is examining allegations of widespread phone hacking at the News of the World, the tabloid at the center of the scandal, where Ms. Brooks was editor from 2000 to 2003. The other is Operation Elveden, which is looking into more serious charges that News International editors paid police officers for information. Ms. Brooks has always maintained that she was unaware of wrongdoing at The News of the World, which was summarily closed by Mr. Murdoch a week ago in an unsuccessful damage-control exercise. But the tide rose against her, and on Friday she resigned, saying in a written statement that her presence was “detracting attention” from the company. The arrest was a shock to the News Corporation, the parent company of News International, and the other properties in Mr. Murdoch’s media empire, which is reeling from the traumas of last week: the forced withdrawal of its cherished $12 billion takeover bid for British Sky Broadcasting and the resignations not only of Ms. Brooks but also of Les Hinton, a longtime Murdoch ally and friend who was the chairman of Dow Jones and the publisher of The Wall Street Journal. Speaking of Ms. Brooks, an official at News International said: “When she resigned on Friday, we were not aware that she would be arrested by the police.” Another person briefed on the News Corporation’s plans said that on Friday, when the company was preparing to announce her exit and the departure in New York of Mr. Hinton, the possibility of her arrest was not discussed. Until Ms. Brooks arrived at a London police station by prearranged appointment on Sunday, she believed she would merely be helping the police as a witness, her spokesman said. “She was very surprised, I think, to then be arrested,” said the spokesman, David Wilson, chairman of the Bell Pottinger public relations firm. Mr. Wilson said it all happened so quickly that both her lawyer and he were brought in to handle her case over the weekend. Ms. Brooks was arrested “under caution,” he said, meaning that she was read her rights and treated as a suspect. “She maintains her innocence, absolutely,” he said. She was released on bail after about 12 hours in police custody, news services reported. For months, Ms. Brooks had been willing to talk to the police but had been rebuffed, Mr. Wilson said. “As recently as last week, she was told she wasn’t required to do so and she wasn’t on their radar.” No formal charges have yet been brought against Ms. Brooks, or indeed against any of the others — mostly former editors and reporters at The News of the World — arrested in the phone-hacking case so far. These include Andy Coulson, who resigned as the paper’s editor in in 2007, was then hired by the Conservative Party, and most recently worked as the chief spokesman for Mr. Cameron’s government. Under British law, suspects can be detained 24 to 36 hours without being charged. Sir Paul, who took over the top police job in 2009, stepped down in large part because of a furor over his contacts with News International officials. The New York Times reported over the weekend that he met for meals 18 times with News International executives and editors during the phone-hacking investigation, and that other top other police officials had had similar meetings. These included meeting Mr. Wallis eight times while he was still working at The News of the World. Both Theresa May, the home secretary, and Boris Johnson, the London mayor, said they were angry that he had not disclosed these meetings earlier. In his statement, Sir Paul explained that he had withheld information about his contacts with Mr. Wallis, even after Mr. Wallis became a phone-hacking suspect, because he “did not want to compromise the prime minister in any way by revealing or discussing a potential suspect who clearly had a close relationship with Mr. Coulson” — Mr. Cameron’s friend and former employee. “Unlike Mr. Coulson, Mr. Wallis had not resigned from News of the World or, to the best of my knowledge, been in any way associated with the original phone-hacking investigation,” Sir Paul said, in what appeared to be a criticism of the prime minister. Indeed, Mr. Cameron is in the awkward position of counting two of the arrested parties — Mr. Coulson and Ms. Brooks — as personal friends. As leader of the opposition, he attended Ms. Brooks’s wedding in 2009 (Rupert Murdoch and Gordon Brown, then the prime minister, of the Labour Party, were also guests). Mr. Cameron was friendly enough with Ms. Brooks to socialize with her twice in December, according to records released by Downing Street last Friday. Once was at a cozy family dinner at her country house over the Christmas holiday; James Murdoch, Mr. Murdoch’s son and the head of News Corporation’s European and Asian divisions, was also present. The meetings took place while Mr. Cameron’s government was considering, favorably, the News Corporation’s bid to take over the part of BskyB that it did not already own. Oddly enough, both Sir Paul and Ms. Brooks were due to give testimony on Tuesday to different Parliamentary committees looking into phone hacking. Keith Vaz, the chairman of the home affairs committee, where Sir Paul was due to be questioned, said that there was no reason the session should not still proceed. But Ms. Brooks’s appearance, at the committee on culture, media and sport, is now in doubt. Before her arrest, she had warned that because of the investigation, she might be limited in what she could say. Now, it is unclear whether she will come at all. Although they will still get to question her former bosses, Rupert and James Murdoch, committee members seem disappointed at the prospect of losing Ms. Brooks. Some even said that they wondered if the timing of the arrest was intended to ensure that she was unavailable to answer their questions. “Being of a suspicious mind, I do find it odd that they should arrest her now by appointment,” said Chris Bryant, a Labour member of the committee, who suspects his phone was hacked by The News of the World. He said that Ms. Brooks’s arrest brings the scandal closer to the top. “The water is now lapping around the ankles of the Murdoch family,” he said. Jo Becker and Ravi Somaiya contributed reporting from London, and Jeremy W. Peters from New York.

How Sir Paul Stephenson's £12,000 spa break triggered downfall Former Metropolitan police chief says he had no reason to suspect adviser of involvement in phone hacking By Vikram Dodd, crime correspondent guardian.co.uk, Sunday 17 July 2011 23.19 BST Sir Paul Stephenson was brought in as a safe pair of hands in December 2009 with the remit of placing the Metropolitan police back on a stable footing following the turbulent reign of Sir Ian Blair. However, the confidence of senior politicians began to drain away in recent days after the phone-hacking crisis enveloped both News International and the Met. Just hours before Stephenson's resignation, Nick Clegg, the deputy prime minister, told the BBC that a growing public perception of police corruption was deeply concerning. "I think when the public starts losing faith in the police, it's altogether much more serious and you know you really are in some trouble." Announcing his resignation, Stephenson admitted he was doing so because of the speculation relating to the Met's links with News International, but also "in particular in relation to Mr Neil Wallis", the former News International executive who was arrested last Thursday, and who it then emerged had worked for the Met. The Guardian was also preparing to publish a story about how Scotland Yard chiefs invited Wallis to apply for a senior communications post with the force, a decision which Stephenson was aware of. Stephenson dated his relationship to Wallis back to 2006, a meeting that took place in the context of the latter's work as a journalist. From October 2009 to September 2010, Wallis's part-time work at the Met involved strategic communications, advising the commissioner and the assistant commissioner, John Yates, as the force said there was no need to reopen the criminal investigation into phone hacking at the News of the World. The Guardian understands Wallis was approached to apply for the two-day-a-month contract with the Met after discussions which involved the most senior figures in the force. He was the lowest bidder after a tender process and was paid more than £1,000 a day, earning £24,000. Stephenson said that he had no role in the management of Wallis's contract. His relationship with Wallis had always been "one maintained for professional purposes and an acquaintance". He went on: "I have heard suggestions that we must have suspected the alleged involvement of Mr Wallis in phone hacking. Let me say unequivocally that I did not and had no reason to have done so. "I do not occupy a position in the world of journalism. I had no knowledge of the extent of this disgraceful practice and the repugnant nature of the selection of victims that is now emerging, nor of its apparent reach into senior levels." Stephenson insisted the contract only became of relevance when Wallis's name became linked with the new investigation into phone hacking, although he admitted that "the interests of transparency might have made earlier disclosure of this information desirable". But it was with a flash of anger that he addressed the question of his acceptance of around £12,000-worth of hospitality at a health spa for which Wallis worked as a PR consultant. Yesterday's Sunday Times had revealed Stephenson stayed at Champneys in Tring, Hertfordshire, as he recovered from a serious illness. "There has been no impropriety and I am extremely happy with what I did and the reasons for it – to do everything possible to return to running the Met full time, significantly ahead of medical, family and friends' advice," he said. "The attempt to represent this in a negative way is both cynical and disappointing." Wallis had served as deputy to the then NoW editor Andy Coulson during a period when it is alleged there was wide-scale phone hacking at the paper and among private investigators it employed. Police sources said that the decision to employ Wallis is regretted now, but they insist he had nothing to do with the Met's handling of the phone-hacking controversy. Their account of the appointment is that in 2009, the Met's deputy PR chief was diagnosed with a serious illness, and there was a need for someone to be brought in temporarily. A number of PR firms were "sounded out" about the role, including Wallis's company, Chamy media. A source with knowledge of the Yard's thinking at the time said part of Wallis's attraction was his connection to Coulson, who was a top aide to David Cameron, then in opposition and expected to become prime minister. Part of the Met's thinking was that Wallis's past connections would help the force's relationship with Cameron: "One [Wallis] is a lot cheaper and gives you direct access into No 10," the source added. The contract was terminated in September 2010 after new allegations in the media about the extent of hacking at NoW. It also emerged that Charlie Brooks, the husband of the former News International chief executive Rebekah Brooks, claims to run an alternative treatment therapy centre at Champneys. Stephenson is a career policeman who was brought up in the Lancashire town of Bacup. He had once wanted to become a shoe salesman, but joined Lancashire constabulary in 1975, following in the footsteps of his elder brother. His first real test after taking the Met hotseat came within months. The Met was criticised for its handling of the G20 summit protests in London, when thousands of demonstrators clashed with officers. The most vociferous criticism came after a 47-year-old newspaper seller, Ian Tomlinson, collapsed and died on the fringes of the demonstrations after a confrontation with police officers. There were also reports that Stephenson, who received a knighthood in the Queen's birthday honours list last June, offered to stand down after a Rolls-Royce carrying the Prince of Wales and Camilla was mobbed during the riots

British Police Arrest Rebekah Brooks in Phone Hacking The New York Times By ALAN COWELL and RAVI SOMAIYA July 17, 2011 LONDON — The British police on Sunday arrested Rebekah Brooks, the former head of Rupert Murdoch’s media operations in Britain, according to a former associate at News International, the newspaper group at the heart of a phone-hacking scandal convulsing the Murdoch empire, the British political elite and the police. The development was the latest twist in a series of events that has transformed Mr. Murdoch from a virtually untouchable force in the British media landscape to a mogul fighting for the survival of his power and influence. Earlier on Sunday, the Labour opposition leader, Ed Miliband, who has taken a lead in assailing Mr. Murdoch’s operations, called for the breakup of News International, the British subsidiary of Mr. Murdoch’s News Corporation. Mr. Miliband called the newspaper group’s influence “dangerous.” A police statement did not identify Ms. Brooks by name but said a 43-year-old woman had been detained for questioning by officers investigating both the phone-hacking scandal and payments made to corrupt police officers. A News International official, speaking on the condition of anonymity, confirmed that the woman detained was Ms. Brooks. The British Press Association news agency said Ms. Brooks was arrested by appointment at a London police station around midday and remained in custody. The move came two days after Ms. Brooks quit as chief executive at News International, the latest maneuver as the Murdoch family struggled to contain the fallout. It also came two days before Ms. Brooks was to join Rupert Murdoch and his son James to testify before an investigative parliamentary panel. The body is focusing on the phone-hacking scandal that has erupted in the two weeks since reports emerged that The News of the World, once the top-selling Sunday tabloid and a central part of the Murdoch outpost in Britain, ordered the hacking of the phone of a 13-year-old girl, Milly Dowler, who was abducted and murdered. The case provoked huge public outrage and sympathy. It was not immediately clear whether the arrest would inhibit Ms. Brooks’ ability to testify to the parliamentary panel because of British laws that protect police inquiries. But it did seem to bring police scrutiny ever closer to the family that controls News International. “The water is now lapping around the ankles of the Murdoch family,” said Chris Bryant, a Labour parliamentarian who has taken legal action against The News of the World because he suspects his phone was hacked. Ms. Brooks was editor of The News of the World at the time of Milly Dowler’s abduction but has denied knowledge of the phone hacking. In response to the crisis, the Murdoch family closed The News of the World and withdrew a $12 billion bid to assume control of Britain’s biggest satellite broadcaster, British Sky Broadcasting. Mr. Murdoch and his family still own the top-selling daily tabloid, The Sun, as well as The Times of London and The Sunday Times of London. He also has a 39 percent stake in British Sky Broadcasting. Referring to Mr. Murdoch, Mr. Miliband, the opposition leader, told The Observer newspaper on Sunday that the “amount of power in one person’s hands has clearly led to abuses of power in his organization.” He called the concentration of media ownership in Mr. Murdoch’s hands “unhealthy.” Since the scandal erupted, the British police force — itself under fire for its close relationship with News International — has arrested five former editors from News International, including Ms. Brooks, whose highflying career included spells as editor of The Sun and The News of the World. She was 31- years-old when she became editor of The News of the World and in 2003, she became the first woman to edit The Sun, a tabloid that claimed its influence was so great that it could sway the outcome of national elections. Indeed, both Tony Blair in 1997 and the Conservative Party leader David Cameron in 2010 were backed by The Sun when they came to power. Her arrest followed the earlier detention of Andy Coulson, another former editor of The News of the World who later became Mr. Cameron’s director of communications — a job he quit in January as the hacking scandal grew more serious. Both Ms. Brooks and Mr. Coulson enjoyed friendly relations with Mr. Cameron, prompting the opposition Labour Party to question his judgment. Ms. Brooks was also reported to be close to Mr. Blair during his time in office from 1997 to 2007. Ms. Brooks was the most senior of former Murdoch employees to be arrested. She had been depicted as particularly close to Rupert Murdoch, who once described her as “a great campaigning editor who has worked her way up through the company with an energy and enthusiasm that reflects true passion for newspapers and an understanding of the crucial contribution that independence journalism makes to society.” At a public hearing in 2003, however, Ms. Brooks seemed to admit to lawmakers that journalists on her staffs had paid the police for information. That statement — which she later sought to retract — seems likely to offer the police a potentially rich seam of questioning. Police officers themselves are under scrutiny, the most senior of them Sir Paul Stephenson, the head of Scotland Yard, as London’s Metropolitan Police is known. News reports have accused him of hiring a former News of the World executive, Neil Wallis, as a public relations adviser. Mr. Wallis was himself arrested for questioning last week. Mr. Wallis also worked for a spa where Mr. Stephenson was treated for five weeks while recovering from a fractured leg earlier this year, the Press Association said. But Scotland Yard said Mr. Stephenson did not know that Mr. Wallis worked there. Indeed, Scotland Yard said, Mr. Stephenson’s stay at the spa, a £12,000 expense (about $17,000) that was extended to him as a gift, was arranged by a friend, who was the managing director of the establishment. Scotland Yard said the police paid for Mr. Stephenson’s “intensive physiotherapy” to hasten his return to work. Referring to the arrest of Ms. Brooks, Chris Bryant, the Labour legislator, said in a telephone interview, “It looks as though the Metropolitan Police are now doing the investigation they should have been doing years ago.” “Being of a suspicious mind,” Mr. Bryant added, “I do find it odd that they should arrest her now by appointment,” he said, suggesting that the timing might jeopardize parliamentary questioning scheduled for Tuesday.

Rebekah Brooks arrested over phone-hacking allegations Spokesman for Rebekah Brooks says she did not know she was going to be arrested when she handed in her resignation By Vikram Dodd and Juliette Garside guardian.co.uk, Sunday 17 July 2011 16.20 BST Rebekah Brooks has been arrested by police investigating allegations of phone hacking by the News of the World and allegations that police officers were bribed to leak sensitive information. The Metropolitan police said a 43-year-old woman was arrested at noon on Sunday, by appointment at a London police station. Brooks, 43, resigned on Friday as News International's chief executive. She is a former News of the World editor and was close to Rupert Murdoch and the prime minister, David Cameron. A spokesman for Brooks said she did not know she was going to be arrested when she handed in her resignation. Brooks was taken into custody at midday on Sunday, after agreeing to attend a London police station for questioning. Her spokesman, Bell Pottinger chairman David Wilson, said she did not know she was to meet with police until late on Friday, and that she did not know the appointment would result in her arrest. The News International chief executive announced her immediate departure from the company on Friday morning. She had agreed to give evidence this coming Tuesday to the culture select committee's inquiry into allegations of phone-hacking at the News of the World. Her lawyers are currently in discussion with the committee about whether she should attend. Wilson said: "It's left Rebekah in a very difficult position and has left the committee in a very difficult position". An arrest by appointment on a Sunday by police is unusual. In a statement the Met said: "The MPS [Metropolitan police service] has this afternoon, Sunday 17 July, arrested a female in connection with allegations of corruption and phone hacking. "At approximately 12.00 a 43-year-old woman was arrested by appointment at a London police station by officers from Operation Weeting [phone hacking investigation] together with officers from Operation Elveden [bribing of police officers investigation]. She is currently in custody. "She was arrested on suspicion of conspiring to intercept communications, contrary to Section1(1) Criminal Law Act 1977 and on suspicion of corruption allegations contrary to Section 1 of the Prevention of Corruption Act 1906. "The Operation Weeting team is conducting the new investigation into phone hacking. "Operation Elveden is the investigation into allegations of inappropriate payments to police. This investigation is being supervised by the Independent Police Complaints Commission. "It would be inappropriate to discuss any further details regarding these cases at this time."