Douglas Caddy

Hacking Case Linked to News Corp Referred to FBI Published: Thursday, 21 Jul 2011 | 2:28 AM By: Alan Rappeport, Financial Times A legal battle over alleged computer hacking of a US marketing company by a News Corp subsidiary has been referred to US authorities by a senior lawmaker, exposing the company at the centre of the UK phone-hacking scandal to further questions about how it operated in the US. Frank Lautenberg, a Democratic senator, asked the justice department and Federal Bureau of Investigations to examine the details of a case settled between News America Marketing and Floorgraphics Inc, an in-store marketing company. Floorgraphics alleged that its rival hacked its computer system as many as 11 times in 2003 and 2004 to gain business. “I wanted to make sure that you were fully aware of the case of Floorgraphics and News America, as it may be relevant to your current investigation,” Mr Lautenberg of New Jersey wrote to Eric Holder, US attorney general, and Robert Mueller, head of the FBI, in a letter sent on Wednesday. The FBI is looking into an unsubstantiated claim that representatives of the tabloid News of the World sought access to voicemails of US 9/11 victims, and the DoJ is examining whether alleged payments to UK police may have contravened the Foreign Corrupt Practices Act. Senator Lautenberg’s letter came as two other Democratic senators, Barbara Boxer and Jay Rockefeller, moved to turn up the US heat on News Corp [NWS 17.06 0.64 (+3.9%) ] by asking an editorial oversight committee at Dow Jones, the News Corp-owned publisher, to investigate whether any misconduct had occurred in the US. The committee, set up when News Corp bought the publisher of the Wall Street Journal in 2007, has powers to access “all books, records, facilities and personnel” across News Corp, the senators noted. They requested particular information on Les Hinton, who ran News Corp’s UK newspapers for 12 years before becoming Dow Jones chief executive. After it lost several marketing contracts from consumer goods companies, Floorgraphics filed a lawsuit in 2004 against rival News America, a News Corp unit that sells newspaper inserts, coupons and in-store advertising. The complaint alleged that News America “attacked FGI directly by breaking into FGI’s computer system to acquire past and future contract information; improperly acquiring confidential FGI documents.” The case was settled in 2009 for $29m and News Corp bought Floorgraphics soon after for an undisclosed price. In the last two years, News Corp has spent more than $500m to settle claims of anti-competitive behaviour. The payments show the lengths to which News Corp has gone to quash legal problems beyond those related to the News of the World, which Rupert Murdoch, its chairman, told a UK parliamentary hearing on Tuesday represented less than 1 per cent of his company. “Around the world it is customary to reach out-of-court settlements in civil litigations and civil matters,” James Murdoch, News Corp’s deputy chief operating officer, told the same hearing. An attorney who represented FGI had no comment. George Rebh, an FGI founder, did not respond to an interview request. During the trial in New Jersey in 2009, Mr Rebh’s allegations were explicit. He told the court that there was unauthorised access to FGI’s computer system by people using computers registered with an IP address linked to News America Marketing. He alleged that over four months, News America accessed its computer system through a password protected website 11 times. The site contained information on FGI’s past advertising prices and Mr Rebh alleged that with such information a competitor could undercut its prices. Mr Rebh said that a member of his company’s board, Bill Berkley, had faxed a letter to David DeVoe, News Corp’s chief financial officer. According to Mr Rebh, there was no response from Mr Devoe. News Corp did not respond to a request for comment but previously denied the charges. Body

What did PM tell Murdoch about the BSkyB takeover? Cameron admits he may have discussed controversial deal The Independent By Andrew Grice and Oliver Wright Thursday, 21 July 2011 David Cameron admitted that he may have discussed the bid by News Corp for full control of BSkyB during his 27 meetings with Murdoch executives since last year's election. Downing Street had previously insisted that the £8bn takeover was not mentioned. Mr Cameron also came under pressure to explain why he failed to review Andy Coulson's position as No 10's director of communications last September when The New York Times alleged that hacking was widespread while he was editor of the News of the World. The same report led to Scotland Yard ending the PR role of Neil Wallis, Mr Coulson's friend and deputy at the NOTW. Both Mr Coulson and Mr Wallis have recently been arrested by police investigating hacking. Last night Cameron aides offered the surprise disclosure that Mr Wallis had "probably" visited Mr Coulson in Downing Street since last year's election, although they insisted that any informal advice to Mr Coulson took place before the election. Senior Palace officials also believe Mr Cameron's office was "aware" of their misgivings about him ever hiring Mr Coulson in the first place, The Independent understands, following the jailing of a reporter and a private detective for hacking into the phones of royal aides. During a Commons statement, the Prime Minister was asked on nine occasions whether he had discussed the now-aborted News Corp bid for BSkyB. He replied that he had not had any inappropriate conversations about the takeover. Later, aides suggested Mr Cameron may have been lobbied by Murdoch executives but would have merely told them the decision was a matter for Jeremy Hunt, the Culture Secretary. Last night Mr Hunt appeared to confirm that the issue did arise during the Prime Minister's meetings. He told MPs the discussions were "irrelevant because the person making this decision was myself". Labour described Mr Cameron as "slippery" and urged him to publish full details of any talks with Murdoch executives about the bid. "Until he does so there will continue to be serious questions about his judgement," said Ivan Lewis, the shadow Culture Secretary. However, Mr Cameron settled Tory nerves by taking a tougher line on Mr Coulson. He told the Commons he was "extremely sorry" for the furore and that "with hindsight" he would never have recruited him. "You live and you learn – and believe me, I have learnt." He said Mr Coulson should face "severe" criminal charges if it turned out that assurances he gave that he knew nothing about phone hacking were lies. "If it turns out I have been lied to, that would be a moment for a profound apology, and in that event I can tell you I will not fall short," he said. He insisted that Mr Coulson should be seen as "innocent until proven guilty". The Prime Minister dismissed Labour's attacks over the scandal as "conspiracy theories" and "political point-scoring". Despite private fears among Tory MPs about his links to Mr Coulson, they rallied strongly behind him when he addressed their weekly meeting last night. He told the 1922 Committee his actions on hacking had been "decisive, frank and transparent" and the issue was not raised when backbenchers asked him questions. Ed Miliband seized on Downing Street's plea to Scotland Yard not to brief Mr Cameron on hacking last September after The New York Times article appeared: "The Prime Minister was caught in a tragic conflict of loyalty between the standards of integrity that people should expect of him and his staff and his personal allegiance to Mr Coulson. He made the wrong choice." The Labour leader suggested Mr Cameron's "conflict of interest" led to Sir Paul Stephenson's resignation as the Metropolitan Police Commissioner on Sunday after it emerged that the force had hired Mr Wallis as an adviser. He said: "Sir Paul Stephenson was trapped between a Home Secretary angry about not being told about the hiring of Mr Wallis and Sir Paul's belief, in his own words, that doing so would have compromised the Prime Minister." In the Commons, Mr Cameron agreed to examine allegations that an unnamed senior government official was subjected to "disgraceful and illegal" phone hacking and hostile media briefing while Mr Coulson worked in Downing Street. He said he would look "closely" at the claims by the former Labour minister Nick Raynsford and refer them to Sir Gus O'Donnell, the Cabinet Secretary. Mr Raynsford had asked: "Will the Prime Minister confirm that, a year ago, during the period when Mr Coulson was director of communications, the Cabinet Secretary was alerted to evidence of illegal phone hacking, covert surveillance and hostile media briefing directed against a senior official in the government service? What action, if any, was taken to investigate what appears to have been disgraceful and illegal conduct close to the heart of government?" The key exchanges Ben Bradshaw In the Prime Minister's conversations with the Murdochs [and] Mrs Brooks, was there ever any mention of the BSkyB bid? PM Perhaps [Mr Bradshaw] will now be transparent, as he was culture secretary, about all of the contacts he has had with News International over many years. John Cryer The Prime Minister said that he had commissioned a company to do a basic background check on Coulson. I am asking for the name of the company. PM We did hire a company to do a basic background check. Jack Straw When the Prime Minister read of the investigation in The New York Times last year, what did he do? PM There was no information in that article that would lead me to change my mind, but if it turns out that [Coulson] knew about hacking, it will be subject to criminal prosecutions. Nick Raynsford Will the Prime Minister confirm that, during the period when Mr Coulson was director of communications, the Cabinet Secretary was alerted to evidence of illegal phone hacking? What action was taken to investigate? PM In the period that Andy Coulson worked at No 10 there was no complaint about the way he did his job.

Phone hacking: Met police to investigate mobile tracking claims Whistleblower Sean Hoare claimed the News of the World would pay officers to illegally procure phone-tracking data By Paul Lewis guardian.co.uk, Thursday 21 July 2011 12.52 BST Scotland Yard has been asked to inspect thousands of files that could reveal whether its officers unlawfully procured mobile phone-tracking data for News of the World reporters. There were half a million requests by public authorities for communications data in the UK last year – of which almost 144,000 were demands for "traffic" data, which includes location. A Metropolitan Police Authority (MPA) member has asked the force to investigate allegations that News of the World reporters were able to purchase this data from police for £300 per request. The claims were made by Sean Hoare, the News of the World whistleblower, days before he was found dead at his home on Monday. His disclosure about the purchase of illicit location data was first made to the New York Times, which said the practice was confirmed by a second source at the tabloid. Police have said Hoare's death was not suspicious. Mobile phone location data, which is highly regulated, would give tabloid reporters access to a method of almost total surveillance, arguably even more intrusive than hacking into phone messages. Jenny Jones, a Green party member of the MPA, has written to the commissioner requesting an audit of all cases where the Met obtained tracking data from mobile phone companies. She has also asked the commissioner to guarantee that anyone with reason to suspect a tabloid may have gleaned their whereabouts from their mobile phone signal will have their case looked into. Two police surveillance sources with knowledge of the system said location data was routinely used by police. Both said any corrupt purchase of information would require a fabricated request under the Regulation of Investigatory Powers Act (Ripa) and therefore the knowledge of a senior officer. The Met and other forces have central databases where they record Ripa authorisations for audits by the interception of communications commissioner. Police are also compelled to keep Ripa authorisations files under the same rules that compel them to keep evidence connected to criminal investigations, which in some cases can mean paperwork is stored for decades. Records are also kept by mobile phone providers, with at least one company maintaining an "indefinite" database of Ripa requests since 2009. This detailed audit trail contrasts with the paucity of evidence in cases of phone hacking, due to the fact that records of phone activity are generally destroyed after 12 months. The New York Times first reported that the News of the World may have had access to phone-tracking data last week, days before Hoare's death. It said Hoare, a reporter who was sacked from the News International title in 2005, alleged that his editor Greg Miskiw could locate information about a person's precise whereabouts via their mobile phone number. Hoare claimed that Miskiw had once helped him locate a person in Scotland, and said the information came from "the Old Bill". The following day he told the Guardian that 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 added: "You would just go to the news desk and they would come back to you. You don't ask any questions. You would consider it a job done." Hoare made no reference to which police force may have sold the data, although the Metropolitan police are currently investigating evidence that corrupt officers from within its ranks were selling information to the News of the World. Mobile phone companies can provide police with real-time location information about the whereabouts of suspects or missing people at 15-minute intervals. More commonly, police request a "cell site dump", which gives a complete historical record of the whereabouts of person's mobile phone. There are two ways the data is obtained. When a phone is used for a call or SMS message, details of its location are logged. Alternatively so-called "pinging" can be used when a phone is not in use, by sending the device signals and triangulating the results from cellphone masts. The level of accuracy ranges from a few hundred metres to around two kilometres, depending on proximity to the masts. Mark Lewis, a solicitor who represents phone-hacking victims, said: "I have sources that I can't reveal who tell me they could do it [obtain the data]." He said he had clients who suspected they had been tracked: "One or two were very suspicious about how they had been found – simply because they were where they were not supposed to be." If police want to monitor the contents of emails or calls to combat terrorism or serious crime they require a warrant from the home secretary. Far more common however is the interception of communications data, which relates to the "who, where and when" of messages or calls. There is a complex framework through which the data is channelled from phone companies to police. Phone companies provide data to "police liaison units" – funded by the Home Office – which contain a handful of people with maximum security clearance to deal with incoming requests. Police in turn have special points of contact (Spocs), who liaise with the mobile phone companies and process the requests. They are trained and accredited by the National Policing Improvement Agency and given unique pin numbers. There are almost 600 accredited Spocs in police forces on a nationwide register maintained by the Association of Chief Police Officers. Under Ripa, these gatekeepers require detailed justifications from a senior officer to request phone information as part of an investigation, in a process that can take up to ten days. In emergencies, senior police can request the information orally, but paperwork is retrospectively filed centrally. Anyone who suspects their phone was inappropriately tracked is able request details from police or their phone provider under the Data Protection Act.

Les Hinton faces US calls for Dow Jones inquiry over phone hacking Senators press Dow Jones to investigate whether Les Hinton had any knowledge of or role in alleged illegal activities By Ed Pilkington in New York guardian.co.uk, Wednesday 20 July 2011 21.03 BST Two US senators have turned up the heat on Les Hinton, the former chief executive of Dow Jones who resigned last week, calling on the panel that oversees the company's editorial integrity to investigate his role in the scandal. Barbara Boxer of California and John Rockefeller of West Virginia have written to the special committee of Dow Jones and company demanding that they set up an inquiry into whether senior Dow Jones executives, Hinton especially, had any knowledge or role of alleged criminal activity at News Corporation. They wrote: "Allegations of illegal phone hacking and bribery in the UK at properties owned by News Corporation, a US-based company, have outraged people around the world. The American people need to be reassured that this kind of misconduct has not occurred in the US and that senior executives at News Corporation properties in our country were not aware of, or complicit in, any wrongdoing." The special committee of Dow Jones was set up at the time of the company's sale to Rupert Murdoch in 2007 in order to assuage fears that the media tycoon would affect its journalistic integrity. The committee was tasked with ensuring the "continued journalistic and editorial integrity and independence of Dow Jones' publications and services." Dow Jones is the publisher of the Wall Street Journal, the most prized possession within Murdoch's newspaper holdings. Hinton resigned as head of Dow Jones last Friday, becoming the most senior member of Murdoch's inner circle to fall foul of the billowing phone-hacking scandal. He was chairman of News International, the UK newspaper arm, at a time that illegality took place, though he has denied any knowledge of it. He twice told parliament that the hacking was limited to one News of the World reporter, a claim that is now known to be a gross underestimate. The two senators, who have already pressed the US justice department to launch an investigation into News Corporation activities within America, asked the special committee whether they raised any concerns about Hinton's appointment as head of Dow Jones in 2007, and whether or not they investigated the extent of his knowledge of illegality at News International. The senators' intervention is the latest move to increase pressure on News Corporation on the US side of the Atlantic. An FBI investigation is underway into allegations that NoW reporters tried to gain access to the phone records of 9/11 victims and the justice department has launched a preliminary investigation into whether Murdoch companies broke any other US laws.

Andy Coulson was never given top security clearance in government Andy Coulson was granted only mid-level clearance, so avoiding the most rigorous security checks into his background By Richard Norton-Taylor, Robert Booth and James Ball guardian.co.uk, Wednesday 20 July 2011 20.48 BST Andy Coulson did not face the rigorous government security checks into his background that most recent Downing Street press chiefs have undergone, it emerged on Wednesday. The former News of the World editor was granted only mid-level security clearance when he was appointed by David Cameron as his director of communications, so avoiding "developed vetting" involving a detailed interview by government investigators looking for anything in his past that could compromise him. The checks would have involved a review of his personal finances and cross-examination by investigators of referees, who could include friends and family. Coulson would have been asked by government vetters, some of whom are former police officers, such questions as: "Is there anything else in your life you think it appropriate for us to know?" Alastair Campbell and Dave Hill, who ran communications for Tony Blair, and Michael Ellam, who did the same job for Gordon Brown when he was prime minister, were all subject to the more rigorous checks which are said to be in part targeted at uncovering potentially damaging secrets in an employee's background. In the Commons, Cameron said Coulson had gone through the "basic level of vetting" and was not able to see the "most secret documents in government". The prime minister added: "It was all done in the proper way, he was subject to the special advisers' code of conduct." The disclosure will fuel suggestions that Cameron failed to take proper steps to check allegations that Coulson had been involved in illegal behaviour at the NoW. The Cabinet Office denied that Coulson was spared high-level security vetting to avoid any potentially embarrassing information coming out which could have compromised his appointment. A spokesman declined to comment in detail on Coulson's security status but said he would have been consulted by a senior official over which level of vetting he should undergo. "In normal circumstances at a senior level the postholder would be consulted. You get the standard level and you discuss whether to go higher." Jonathan Powell, Blair's former chief of staff, said: "In our time in No 10, the press officers were all cleared at the highest level. It is essential if you are going to work on international matters to be able to read intelligence and other relevant material." The Cabinet Office said that, unlike Campbell and Powell, Coulson's job did not require him to have high-level security clearance. He did not attend cabinet meetings, the bi-weekly national security council meetings, or Cobra, the government's emergency committee. "He had 'security check' level of security clearance which most officials in No 10 and most special advisers would be subject to," a spokesman said. "The only people who will be subject to developed vetting are those who are working in security matters regularly and would need to have that sort of information. The only special advisers that would have developed vetting would be in the Foreign Office, Ministry of Defence and maybe the Home Office. Andy Coulson's role was different to Alastair Campbell's and Jonathan Powell. Alastair Campbell could instruct civil servants. This is why [Coulson] wasn't necessarily cleared. Given [the nature of] Andy Coulson's role as more strategic he wouldn't have neccesarily have been subject to developed vetting." Coulson was also screened by a private company when he started working for the Conservatives in 2007. Asked in the Commons, Cameron refused to name the firm involved. Electoral Commission returns show that the party last year used Control Risks Screening to vet several staff at a cost of £145.70 per check. If this is the level of vetting undergone by Coulson it is likely to have involved only the most cursory checks of online records. The party said last night it would not comment on the company or the level of scrutiny involved in Coulson's clearance, which involves a check of health records, police files, financial history, MI5 records and possible interview if recommended by the security service

James Murdoch: hack victim's payout sparks queries over hush-money denial Despite telling parliamentary committee that astronomical sums were not paid, total cost of Gordon Taylor payout was £1m By David Leigh and Nick Davies guardian.co.uk, Wednesday 20 July 2011 21.32 BST James Murdoch appears to have given misleading parliamentary testimony about a key phone-hacking cover-up, according to evidence obtained by the Guardian. Rupert Murdoch's son sought to deny that "astronomic sums" had been secretly paid out to a hacking victim as hush-money. He told MPs the company's legal advice was that the likely award of damages was £250,000, and that this explained the size of a confidential payout he agreed could be paid in 2008 to hacking victim Gordon Taylor, chief executive of the footballers' union the PFA. But full details of the legal negotiations obtained by the Guardian show that in fact Murdoch's company executives paid far more than that to buy Taylor's silence. After consulting James Murdoch, they eventually agreed to pay £425,000 damages, almost twice as much as the alleged likely award. With Taylor's legal costs at £220,000, and their own solicitors' fees of some £300,000, the total cost to the News of the World to keep the case out of court amounted to almost £1m. This huge confidential settlement succeeded in concealing the fact, detailed in the lawsuit papers, that Neville Thurlbeck, the paper's chief reporter, was implicated by an email referring to "Neville". Police had been forced to hand over a copy of this email to the other side's lawyers. James Murdoch further claimed to the MPs that this email had been concealed from him by two company executives, the lawyer Tom Crone and the editor Colin Myler, when he was persuaded to sign off the secret deal. Had the email come to light at the time, it would have destroyed the News of the World's public stance that phone hacking was the work of a single "rogue reporter" who had already been jailed. The details of the negotiations between Taylor and the News of the World also show that James Murdoch was incorrect in assuring MPs that the confidentiality deal was normal. Sources familiar with the negotiations say that not only was the size of the settlement to be kept confidential, but that News International also got an agreement that the very fact of a confidential settlement was also to be kept confidential. This was so unusual that a special court hearing by a judicial figure, Deputy Master Mark, had to be held in September 2008, before it was agreed that the court file could be sealed, because it possibly contained evidence of criminal behaviour. James Murdoch was accompanied by his father, Rupert, at the culture, media and sport committee hearing. Rupert told the MPs his son had only been in charge of the News of the World for a few weeks when he was persuaded to agree to the secret payoff. Crone and Myler have since lost their jobs. Neither responded last night to requests for comment. James Murdoch told MPs that Myler and Crone told him "outside legal advice had been taken on the expected quantum of damages … the amount paid rested on advice from outside counsel on the amount we would be expected to pay in damages, plus expenses and litigation costs … we had senior distinguished outside counsel to whom we had gone to ask, 'If this case were litigated, and if the company were to lose the case, what sort of damages would we expect to pay?' The company received an answer that was substantial … Their advice was that the damages could be £250,000 plus expenses and litigation costs, which were expected to be between £500,000 and £1m." James did not explain to the MPs why he was willing to pay far more than the going rate in damages to keep the case out of the public courtroom. On his version of events, the company ended up paying just as much to stop the case as if they had gone on to make a fight of it and lost. In commercial terms, the deal apparently made no sense. The history of the negotiations was as follows, according to the Guardian's evidence. It appears to show the News of the World was willing to pay almost any price to hush up the case. • In early 2008, Taylor's lawyers obtained evidence of the "Neville" email. NoW, which had been refusing to pay up, immediately offered to settle. By 9 May 2008, NoW raised its £50,000 offer to £150,000. This contrasted with the previous highest comparable award of £14,600 to Catherine Zeta Jones. • By 9 June, the offer was increased to £350,000. Taylor refused. By now Crone and Myler had approached James Murdoch and orally asked permission to offer more, saying counsel had advised the case could be worth £250,000. Murdoch says they never told him of the "Neville" email. • By mid July, the offer was raised to £400,000, making £610,000 in total, including costs. NoW wanted a draconian confidentiality clause, however. On 24 July 2008, the Max Mosley privacy case was won, with an award of only £60,000. On the same day, according to James Murdoch's office, Taylor's lawyers decided to accept the £400,000 offer in principle. It would have looked huge. Nevertheless, sources familiar with the deal say the Taylor payout was eventually further slightly increased by the final settlement which came around 8 August 2008. The company said last night: "News Corporation's management and standards committee has looked in detail at the Gordon Taylor settlement. In response to media inquiries, the MSC can confirm that News Group Newspapers and Mr Taylor agreed final financial terms on 10 July 2008, two weeks before the Max Mosley decision. "In June 2008, James Murdoch had given verbal approval to settle the case, following legal advice. He did this without knowledge of the 'for Neville' email. All other details, including any confidentiality clauses, are bound by a confidentiality agreement."

David Cameron spoke to Rupert Murdoch's executives about BSkyB bid David Cameron insists conversations were 'appropriate' and comes close to apologising over decision to hire Andy Coulson By Patrick Wintour, political editor guardian.co.uk, Wednesday 20 July 2011 21.30 BST David Cameron's hopes of putting a lid on the phone-hacking scandal were floundering on Wednesday after he was forced to concede he had talked to Rupert Murdoch's executives about their bid to take control of BSkyB. It is the first time he has made the admission, but he insisted the conversations had been "appropriate" because he did not convey any of those discussions to the politician in sole charge of handling the bid, the culture secretary, Jeremy Hunt. Cameron also came close to an apology over his decision to appoint Andy Coulson, as No 10's director of communications, admitting with hindsight he should not have offered him the job. Making an exhaustive 139-minute emergency statement to MPs, he edged towards the much-demanded apology about Coulson: "Of course I regret, and I am extremely sorry, about the furore it has caused. With 20/20 hindsight, and all that has followed, I would not have offered him the job, and I expect he would not have taken it." He added: "I have an old-fashioned view about innocent until proven guilty, but if it turns out that I have been lied to, that would be the moment for a profound apology. In that event, I can tell you that I will not fall short." The Labour leader, Ed Miliband, said it was not about hindsight. Cameron had ignored five warnings of Coulson's activities, he said, including a damning article by the New York Times in September 2010 that prompted major changes at the Metropolitan police, but not in Downing Street. Cameron repeatedly tried to avoid admitting he had discussed the BSkyB deal at one or other of the 26 meetings he has held with Murdoch's executives since the election. Faced by repeated Labour questioning, he said he had not had any inappropriate conversations about BSkyB with Murdoch's executives. He said there was not a single conversation that could not have taken place in front of a select committee, a phrase first used by the former News International chief executive Rebekah Brooks on Tuesday. Later, Cameron's aides said he could not prevent company executives lobbying him in meetings. They added that the cabinet secretary, Sir Gus O'Donnell, had said the discussions did not breach the ministerial code. But Cameron's admission that he held such discussions arguably gave BSkyB a commercial advantage in that it would help inform the company's representations to the culture secretary. The shadow culture secretary, Ivan Lewis, said: "Despite claiming he was prepared to answer 'any and all' questions, he still hasn't given full details on these meetings, including when they took place and what exactly was discussed. Cameron needs to come clean and provide complete transparency. Until he does so, there will continue to be serious questions about his judgment." Cameron implicitly admitted there was a problem about any ministerial involvement in the BSkyB takeover bid. "I think that there might be a case, when it comes to media mergers, for trying further to remove politicians." He added: "We should be frank: sometimes in this country, the left overestimates the power of Murdoch, and the right overdoes the left-leanings of the BBC. But both have got a point, and never again should we let a media group get too powerful." Nick Clegg, the deputy prime minister who has struck a defiantly independent tone during the crisis, will hold his first solo press conference on Thursday in a sign of his determination not to be dragged into the mire with Cameron. Clegg advised against the appointment of Coulson last year, and Chris Huhne, his home affairs spokesman in opposition, was approached by the Met to lay off criticisms of the way they had conducted their inquiries. But Conservatives are hoping the start of the long parliamentary recess and the finalisation of the judicial inquiry into the hacking will see the feverish energy surrounding the scandal finally dissipate as the public focuses on the economy and the euro crisis. Conservative strategists sense scandal exhaustion has crept in, even if Labour claimed Cameron was heading for the beaches with a cloud over him. An Ipsos MORI poll showed the recent furore had left Cameron's personal satisfaction ratings at their lowest point since he became prime minister, and lower than any of his ratings as leader of the opposition since September 2007. As Rupert Murdoch left the UK on a private jet, his executives were still moving slowly to end any remaining signs of a cover-up over the wrongdoing. News Corporation terminated arrangements to pay legal fees of private investigator Glenn Mulcaire "with immediate effect". It also instructed solicitors Harbottle & Lewis that it was released from a confidentiality agreement that prevented it from telling the police how it had come to write a wholly inaccurate letter to the culture select committee in 2007 insisting the phone hacking and illegal activities had been confined to a sole reporter. In hindsight John Yates: "I should have cogitated and reflected, but it's so bloody obvious there was nothing there [that we didn't already know]. I didn't do a review. Had I known then what I know now – all bets are off. In hindsight there is a shed load of stuff in there I wish I'd known." James Murdoch: "So if I knew then what we know now and with the benefit of hindsight we can look at all these things, but if I knew then what we know now we would have taken more action around that and moved faster to get to the bottom of these allegations." David Cameron: "Of course I regret, and I am extremely sorry about the furore it has caused. With 20/20 hindsight and all that has followed I would not have offered him [Coulson] the job and I expect that he wouldn't have taken it. But you don't make decisions in hindsight, you make them in the present. You live and you learn and believe you me, I have learned." Sir Paul Stephenson: "As commissioner I carry ultimate responsibility for the position we find ourselves in. With hindsight, I wish we had judged some matters involved in this affair differently. I didn't and that's it."

News Corp investor urges reform to weaken Rupert Murdoch's influence US public pension fund says company must end its unusual dual share structure By Jill Treanor guardian.co.uk, Wednesday 20 July 2011 16.30 The largest public pension fund in the US, and one of the country's most influential investors, is stepping up the pressure for a drastic overhaul of the way News Corporation is run as the fallout from Rupert Murdoch's appearance before MPs begins. The California Public Employees' Retirement System, which manages $237bn (£147bn) of assets and prides itself on its tough corporate governance stance, wants the unusual dual share structure of News Corp to end so it will be able to influence the media company more effectively. Anne Simpson, the Briton who is in charge of corporate governance at Calpers, told the BBC that it was time for change at the company, which gives special voting powers to shares held by the Murdoch family. "News Corp does not have one share one vote. This is a corruption of the governance system. Power should reflect capital at risk. Calpers sees the voting structure in a company as critical. The situation is very serious and we're considering our options. We don't intend to be spectators – we're owners," she said. While the Murdochs own 12% of the company, their special B shares give them voting rights over 40% of the company. Calpers holds 6.4m shares. Other investors have also raised this share structure – which is very unusual in the UK – as a concern while this is not the first time that Calpers has had concerns about the Murdoch family. In 2003, Calpers had attempted to oppose the appointment of James Murdoch as chief executive of BSkyB. "This is a very unsatisfactory situation with a father and son chairman and chief executive at the head of a major FTSE company," Daniel Somerfield of US investors USS and Calpers said at the time. Calpers is also known for its successes in the US. In 2004 it led the shareholder revolt that forced Michael Eisner to give up the chairman's role at Walt Disney and when the head of the New York Stock Exchange, Dick Grasso, was handed a $188m pay deal, it was Calpers that was involved in the charge that led to his departure. Public sector pension funds are well known in the US as the protagonists for change at major companies, and regarded as more influential that more typical institutional investors.

Hacking inquiry team named The Independent PA Wednesday, 20 July 2011 David Cameron today named the panel of independent experts who will help Lord Justice Leveson examine media practices in the wake of the phone hacking scandal. They include Shami Chakrabarti, the director of human rights group Liberty, who said: "It was a daunting privilege to be invited to join Lord Justice Leveson's panel for such an important public inquiry under the Inquiries Act 2005. "My acceptance is a vote of confidence in the vital role of independent judicial process in times of national difficulty. "It comes from an optimism in the ability of a great democracy to look itself in the mirror in the spirit of re-building public trust. "It reflects Liberty's belief in an appropriate balance between personal privacy and media freedom and above all in the Rule of Law." Other panel members are former Daily Telegraph and Press Association journalist George Jones; former political editor for Channel 4 News Elinor Goodman; former chairman of the Financial Times Sir David Bell; Lord David Currie, former chairman of Ofcom; and former chief constable of West Midlands police Sir Paul Scott-Lee. The inquiry will look at the phone hacking scandal specifically but also at broader issues involving politics, the media and the police. It is expected to report within 12 months. When he was appointed, Lord Justice Leveson said: "The press provides an essential check on all aspects of public life. That is why any failure within the media affects all of us. "At the heart of this inquiry, therefore, may be one simple question: who guards the guardians?" Ms Chakrabati has become a regular face on television since her appointment as director of Liberty in 2003. She trained as a barrister before working as a lawyer in the Home Office from 1996 until 2001. Ms Goodman now works as freelance journalist after 20 years as political editor of Channel Four News. She also serves on the Commission on Rural Communities which acts as an independent adviser to the Government on rural issues. Sir David was chairman of the Financial Times from 1996 until his retirement at the end of 2009 and also served on the board of Pearson plc for 13 years. Educated at Cambridge University and the University of Pennsylvania, he is also chairman of the Media Standards Trust. Crossbencher Lord Currie stepped down as head of communications regulator Ofcom in 2009. Before that he worked as an economics professor, government adviser and a non-executive director of the Abbey National. Sir Paul Scott-Lee joined the police in his home town of Coventry after leaving school and rose through the ranks to become chief constable. He also spent time on the forces in Northamptonshire, Kent and Suffolk. Mr Jones served as political editor of the Daily Telegraph before joining the Press Association as a special correspondent. He retired in 2010 having reported on 11 general elections and eight prime ministers since 1969.

British Panel Says Murdochs Are Blocking Inquiries The New York Times By ALAN COWELL July 20, 2011 LONDON — A parliamentary panel investigating Britain’s spreading phone hacking scandal accused the Murdoch empire on Wednesday of “deliberate attempts” to thwart its investigations. The House of Commons home affairs select committee was one of two panels that questioned some of the main players in the scandal on Tuesday, interviewing senior police officers and releasing a scathing report on Wednesday that pointed to “a catalog of failures” in handling the hacking investigations. The report was issued on Wednesday just hours before Prime Minister David Cameron went before a rowdy session of Parliament on Wednesday to defend his relationships with former senior figures at News International, the British subsidiary of Rupert Murdoch’s global News Corporation. A second panel, the select committee on culture, media and sport, on Tuesday questioned Mr. Murdoch, his son James and Rebekah Brooks, the former chief of News International. Ms. Brooks resigned from the company last week and was arrested on Sunday to face nine hours of questioning by police conducting a separate criminal inquiry into allegations of phone hacking and making illicit payments to corrupt police officers — charges she again denied on Tuesday. The separate home affairs select committee interviewed senior officers including Sir Paul Stephenson, the outgoing commissioner of London’s Metropolitan Police Service, and John Yates, the assistant commissioner who also is leaving. Both men resigned this week amid questions about their ties to Neil Wallis, a former deputy editor of The News of the World — the now defunct Sunday tabloid at the core of the scandal — and the failure to reopen an earlier inquiry into phone hacking after a brief review in 2009. The report said there had been “deliberate attempts by News International to thwart the various investigations” into the illicit hacking of voice mail. At the hearings on Tuesday, both Rupert and James Murdoch denied that they knew of the hacking at the time it happened, as did Ms. Brooks. But, the panel said, Scotland Yard had shown no “real will” to penetrate those attempts. It said Mr. Yates’s review of evidence in 2009 had been “very poor” and he had shown a “serious misjudgment” in failing to order the hacking inquiry reopened. “There has been a catalog of failures by the Metropolitan Police, and deliberate attempts by News International to thwart the various investigations,” the home affairs committee chairman, Keith Vaz, said. He was referring to new attempts by both the police and a separate inquiry, set up by Mr. Cameron, to be led by a judge investigating what happened. “The new inquiry requires additional resources and if these are not forthcoming, it will take years to inform all the potential victims,” he said. The questioning of the Murdochs was suspended briefly on Tuesday after a man attacked Rupert Murdoch with a foil plate of shaving cream. The police said the man, identified as Jonathan May-Bowles, 26, from Windsor, west of London, was charged on Wednesday with “causing harassment, alarm or distress in a public place” under the Public Order Act. He was released on bail and ordered to appear in court again on July 29. While the hacking scandal has been simmering for years, it exploded into a full-blown scandal earlier this month with reports that the voice mail of 13-year-old abducted girl, Milly Dowler, had been hacked on the orders of The News of the World in 2002 when Ms. Brooks was its editor. News Corporation said Wednesday, news agencies reported, that the company had stopped paying legal fees for Glenn Mulcaire, a private investigator for The News of the World who pleaded guilty to phone hacking charges and went to jail in January 2007. Both Mr. Murdoch and his son James told members of Parliament on Tuesday that they were surprised to learn that the company had been paying his legal fees, as well as those of Clive Goodman, the tabloid’s royal reporter, who has also pleaded guilty to phone hacking. The announcement followed a promise by Rupert Murdoch at Tuesday’s hearing to end the financial support for the former employees.The scandal has spread to encompass Mr. Cameron’s decision to hire another former editor of The News of the World, Andy Coulson, as his media director both before and after the elections that brought him to power at the head of a coalition government in May 2010. Mr. Coulson, who resigned from the prime minster’s office in January, and Ms. Brooks are among 10 people arrested since January in connection with police investigations of phone hacking. But, as the report on Wednesday by the home affairs committee showed, lawmakers sense they have an initiative to pursue the issue much further. Additionally, the Labour opposition seems to sense a new vulnerability after disclosures that Mr. Coulson consulted with another former News of the World executive, Neil Wallis, while Mr. Coulson worked for the prime minister. Mr. Wallis is also among those arrested in recent days.

http://www.guardian.co.uk/media/interactive/2011/jul/19/rupert-murdoch-hearing-interactive-presentation

Phone hacking: Mandarin targeted 'while Coulson was in Downing Street' David Cameron promises investigation after Labour MP Nick Raynsford raises claim in parliament about senior official By Nicholas Watt, chief political correspondent guardian.co.uk, Wednesday 20 July 2011 13.22 BST The prime minister said he would look "closely" at the claims, raised in the Commons by a former Labour minister, that the cabinet secretary, Sir Gus O'Donnell, was alerted to the allegations. Nick Raynsford, the former housing minister who raised the allegations, told MPs: "The prime minister has repeatedly emphasised that he has no evidence of any complaint or questions about the conduct of Andy Coulson while he was heading the government media service. "Will the prime minister confirm that, a year ago, during the period when Mr Coulson was director of communications, the cabinet secretary was alerted to evidence of illegal phone hacking, covert surveillance and hostile media briefing directed against a senior official in the government service? "What action, if any, was taken to investigate what appears to have been disgraceful and illegal conduct close to the heart of government?" Cameron said: "I have to look very closely at what the honourable gentleman says. The point I have made – and I have never seen any evidence to go against it – is that in the period that Andy Coulson worked at No 10 Downing Street as head of communications there was no complaint abut the way he did his job. I fully accept, I take responsibility for employing him, I take responsibility for that decision. "The time he spent in Downing Street he did not behave in a way that anyone felt was inappropriate. That is important because the decision was to employ him. The decision was then his to leave. During that period people cannot point to misconduct and say that therefore was a misjudgment." The matter was later raised by Barry Sheerman, the Labour MP who chaired the commons education select committee during the last parliament. He asked the prime minister whether the intelligence services would be asked to give evidence about the monitoring of an official. Cameron said he never commented on intelligence matters. A spokesman for the cabinet secretary said: "We are contacting the office of Nick Raynsford to ask for more details of his allegations."

Glenn Mulcaire legal payments terminated by News International Private investigator at centre of News of the World phone-hacking scandal was still having certain legal fees paid By Caroline Davies and Lisa O'Carroll guardian.co.uk, Wednesday 20 July 2011 13.44 BST News International has terminated "with immediate effect" its arrangement to pay the legal fees of Glenn Mulcaire, the private investigator at the centre of the phone-hacking scandal. The move follows evidence given by James Murdoch to the Commons culture, media and sport select committee, when he told MPs he was "as surprised as you are" when he discovered "certain legal fees were paid to Mr Mulcaire" by News of the World publisher. The News Corporation management and standards committee met on Wednesday morning and decided to terminate the arrangement. It said in a statement: "News Corporation's management and standards committee met this morning and has decided to terminate the arrangement to pay the legal fees of Glenn Mulcaire with immediate effect. "The MSC is authorised to co-operate fully with all relevant investigations and inquiries in the News of the World phone hacking case, police payments and all other related issues across News International as well as conducting its own inquiries where appropriate." Mulcaire was jailed for intercepting voicemails on phones used by aides to Princes William and Harry at the behest of the News of the World, has run up a legal bill of hundreds of thousands of pounds as he battles a string of ongoing phone-hacking lawsuits. He worked under contract for the News of the World until 2006 – and took careful notes of who at the newspaper commissioned his services. Detailed paperwork from his office was seized by the Met as part of their investigation into Mulcaire and former royal editor Clive Goodman. Both men were jailed in January 2007 for plotting to intercept voicemails belonging to royal aides, with Mulcaire receiving a six-month sentence. The question of whether Mulcaire's fees were being paid by NI was raised by Labour MP Paul Farrelly, who asked: "Is the organisation still contributing to Glenn Mulcaire's legal fees?" James Murdoch replied: "As I said earlier Mr Farrelly, I don't know the precise status of that now but I do know that I asked for those things – for the company to find a way for those things to cease with respect to these things." When asked by Farrelly whether News International should stop contributing to Mulcaire's legal fees, James Murdoch said: "I would like to do that. I don't know the status of what we are doing now or what his contract was." Farrelly then asked Rupert Murdoch the same question. "Provided we are not in breach of a legal contract, yes," he replied. James Murdoch was asked would he let the committee know, and replied " I'm happy to follow up with the committee on the status of those legal fees."

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.