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Murdoch sued for nepotism over £400m deal for daughter's firm

The Independent

By Ian Burrell, Media Editor

March 18, 2011

Rupert Murdoch's News Corp is being sued by shareholders for the alleged "nepotism" of buying his daughter Elisabeth's television production company Shine for more than £400m. The Amalgamated Bank of New York (ABNY) and the Central Labourers Pension Fund (CLPF), both shareholders in News Corp, have filed complaints that accuse the media mogul of treating the business "like a wholly-owned family candy store".

The action surprised the company, which had considered the matter a done deal. But as a trustee for several funds, the ABNY holds about a million shares in News Corp and filed its complaint in Wilmington, Delaware. The CLPF, based in Illinois, filed a separate complaint and demanded access to the News Corp books and the records which explain its decision-making process in buying Shine.

Lawyers for the bank said in the complaint that the News Corp board should have done more to ensure the deal represented good value for shareholders. "Although the transaction makes little or no business sense for News Corp and is far above a price any independent, disinterested third party would pay for Shine, it is unsurprising that the transaction was approved by News Corp's board," it said. "In addition to larding the executive ranks of the company with his offspring, Murdoch constantly engages in transactions designed to benefit family members."

ABNY said the Shine transaction was an attempt to further the "selfish" interests of News Corp's controlling shareholder at the expense of the company. "The transaction violates the entire fairness standard both on the basis of price and process," it said. "Once the prodigal daughter is back into the News Corp fold, she will vie with her brothers, board members James Murdoch and Lachlan Murdoch, for the position of successor to Rupert Murdoch's global media dynasty." News Corp described the claim as "without merit".

ABNY's shares amount to only 0.003 per cent of News Corp stock. The company argues that Shine, one of Britain's largest independent production companies with a turnover of £396m, is a "great fit" for the business which will give it more international reach. The deal – which still has to go before News Corp's audit committee – is expected to pave the way for Elisabeth, 42, to take a seat on the board. She had previously declined invitations to join, although she has attended meetings as an observer. When the deal was agreed in principle, Rupert Murdoch said: "Shine has an outstanding creative team that has built a significant independent production company in major markets in very few years, and I look forward to them becoming an important part of our varied and large content creation activities. I expect Liz Murdoch to join the board of News Corporation on completion of this transaction."

His daughter expressed delight that Shine, which she founded in 2001 and which has a portfolio that includes Spooks and Masterchef, would be joining "such an extraordinary group of companies" as News Corp. She said: "In a rapidly consolidating global TV industry, this alliance uniquely provides the conditions in which Shine can continue to lead and prosper. News Corporation is the partner that enables us to maintain our aspiration to be best in class."

Mr Murdoch is trying to buy all the shares he does not own in the satellite broadcaster BSkyB. Although the Culture Secretary Jeremy Hunt controversially decided not to refer the deal to the competition authorities, Mr Murdoch faces a period of tough negotiations with BSkyB's minority shareholders over the price of the 61 per cent of company shares he does not own.

How the tycoon bestrides News Corp

Rupert Murdoch dominates News Corp, a company that began with his father's newspaper, The Adelaide News, and which now spans the globe. But that does not mean he can do with it as he pleases.

The Murdoch family owns 40 per cent of one category of shares in the company. The rest are traded on the stock market in the US, among individual shareholders who want a piece of the vast profits Mr Murdoch generates, and among institutions who invest other people's pension fund money or savings. The owners of these shares have a say in how the company is run, even if they rarely gang up in sufficient numbers to trouble Mr Murdoch. They have a say in the election of directors – and have been happy to go along with the appointment to the board of James Murdoch, Mr Murdoch's son, and two other siblings, Elisabeth and Lachlan before him. They have a say, also, on spending, on outside advisers, and on any other issue that shareholders want to raise at their annual meeting.

But when they think directors are squandering the company's money on a bad deal – squandering, in effect, profits that should be given to them in dividends or reinvested in new business ventures that could boost the value of their shares – sometimes the quickest and best way to get a hearing is through the courts.

The two shareholders who have revolted over the Shine deal own only a tiny sliver of the company, little more than 1 million shares out of more than 2 billion, but they are standing up for even smaller voices. Amalgamated Bank of New York is a trustee for funds popular with individual investors, while the Central Labourers Pension Fund invests on behalf of 500,000 workers from 12 unions, mainly in the construction industries in the Midwest.

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Met must hand over News of the World phone-hacking evidence

Police must pass documents seized from Glenn Mulcaire to lawyers representing growing number of people suing paper

By James Robinson

guardian.co.uk,

Friday 18 March 2011 19.44 GMT

The growing number of public figures suing the News of the World won a major high court victory when a judge said Scotland Yard must hand over a mass of phone-hacking evidence that has never before been disclosed.

The ruling by Justice Geoffrey Vos, who was appointed this week to handle the 14 phone-hacking cases currently going through the courts, means the Metropolitan police will be forced to pass reams of documents seized from Glenn Mulcaire, the private investigator who worked for the News of the World, to lawyers acting for the politicians, celebrities and football figures who are suing the paper. They include Sienna Miller, Paul Gascoigne, Steve Coogan and the former culture secretary Tessa Jowell.

Vos ruled on Friday that the Met must give unredacted documents – including Mulcaire's emails, address and contacts books, and phone bills – to another hacking victim, the football agent Sky Andrew. The decision sets a precedent for the other hacking cases and has far-reaching implications for the NoW, police and other litigants. It will lead to a flood of hacking documents being released to other claimants, all of whom are seeking copies of papers seized by police in a 2006 raid on Mulcaire's home.

That could lead to more NoW journalists being named in connection with phone hacking. So far six reporters and executives have been publicly linked to the practice. One, former royal editor Clive Goodman, was convicted and jailed. A second, assistant editor (news) Ian Edmondson, has been sacked by the paper.

Scotland Yard has been slow to hand over the paperwork, arguing in court that to do so would undermine a fresh investigation into hacking it began at the start of the year. It also claimed a potential suspect would be tipped off if unredacted evidence were made public. Vos rejected that argument, giving the Met 28 days to comply with his order and 21 days to appeal.

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Phone hacking: Met and DPP clash over legal advice on stolen voicemails

John Yates and Keir Starmer each imply the other has misled parliament in evidence about phone hacking

By Nick Davies

guardian.co.uk,

Thursday 24 March 2011 14.40 GMT

The phone-hacking scandal has spilled over into an extraordinary public clash between the Metropolitan police and the director of public prosecutions, with each side implying the other has misled parliament.

The immediate focus of the dispute is a point of law. Its underlying significance is the light it may shed on whether the police have tried to hide the truth about the number of people whose phones were hacked by journalists and private investigators working for the News of the World.

In evidence to the House of Commons' culture, media and sport committee, Scotland Yard's acting deputy commissioner, John Yates, listed a series of occasions on which prosecutors had advised police that the Regulation of Investigatory Powers Act 2000 (Ripa) made it an offence to intercept voicemail only if the voicemail had not already been heard by its intended recipient.

He said this advice had been given repeatedly during the original inquiry in 2006 that led to the jailing of the News of the World royal correspondent Clive Goodman. "It permeated every aspect of the investigative strategy." It was on this basis, Yates said, that he had previously told parliament police had found only 10 or 12 victims of the hacking even though the emerging evidence suggests there were many more.

Yates's evidence directly clashes with a written submission from the director of public prosecutions, Keir Starmer QC, last October. Starmer said the question of how to interpret Ripa had not arisen during the original inquiry. The prosecution had attached no significance to the point in preparing charges or presenting the facts. "It is evident that the prosecution's approach to Ripa had no bearing on the charges brought against the defendants or the legal proceedings generally," he wrote.

Yates's new evidence on Thursday follows a claim in the House of Commons by Chris Bryant that Yates misled parliament over this point. Yates responded in a letter to the Guardian, quoting an earlier written submission from the DPP to the culture, media and sport committee. Starmer then replied with a further letter to the Guardian saying that it was "regrettable" Yates had quoted a single sentence from him out of context. This afternoon the DPP's office declined to comment on the new evidence produced by Yates.

The committee has heard that the family of one of the Soham murder victims was phone-hacked.

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Phone hacking: News of the World locates 'lost' archive of emails

Millions of emails from 2005 and 2006 are likely to include those by Andy Coulson and three former editors implicated in affair

By James Robinson

guardian.co.uk,

Monday 28 March 2011 21.17 BST

The News of the World has revealed that its computers have retained an archive of potentially damning emails, which hitherto it had claimed had been lost.

The millions of emails, amounting to half a terabyte of data, could expose executives and reporters involved in hacking the voicemail of public figures, including former deputy prime minister John Prescott, actor Sienna Miller, and former culture secretary Tessa Jowell.

The archived data is likely to include email exchanges between the most senior executives, including former editor Andy Coulson, who resigned as David Cameron's media adviser in January, as well as three former news editors – Ian Edmondson, Greg Miskiw, and Neville Thurlbeck – implicated in the affair by paperwork seized from Glenn Mulcaire, the private investigator who was on the News of the World's books. Edmondson was sacked in January. Miskiw and Thurlbeck were interviewed by police last autumn. No charge has been brought against any of them. Coulson and the three former news editors have all denied all involvement in criminal activity.

MPs on the home affairs select committee are likely on Tuesday to ask about the emails to John Yates, acting deputy commissioner of the Metropolitan police, when they question him over allegations he misled parliament in evidence he gave about the number of hacking victims originally identified by Scotland Yard. Yates told the committee six months ago the Met had only identified "10 to 12" individuals in a 2006 inquiry because the Crown Prosecution Service advised it to adopt a narrow legal definition of what constituted an offence. The Director of Public Prosecutions, Keir Starmer, has said that prosecuting counsel never adopted this narrow definition.

Several News of the World journalists have since been linked with phone hacking after victims began legal battles, raising questions about why Scotland Yard failed to conduct a more comprehensive inquiry. Only one reporter, former royal editor Clive Goodman, was convicted of a crime along with Mulcaire. Both men were sentenced to jail terms in January 2007.

No other reporters or executives were questioned by the initial police investigation and only Goodman's computer was seized. Only a series of high court cases brought by Sienna Miller and others have forced the Met to make available the material seized in a 2006 raid on Mulcaire's home, including his handwritten notes.

But the disclosure of internal emails from 2005 and 2006, when Mulcaire was at his most active, could reveal the full extent of phone-hacking at the paper and the identities of those involved.

In a ruling on Friday, a high court judge ordered the News of the World to make them available to the growing list of people suing the paper. Justice Geoffrey Vos, in charge of the hacking cases, ordered "rolling disclosure" to all claimants on Friday; hundreds of thousands of emails will now be handed over to alleged victims.

Parts of the first tranche, which contains up to 8,000 emails, will be passed to Sienna Miller's legal team in April. Lawyers acting for Sky Andrew, the football agent who is also suing the paper, will then receive all the News of the World emails in which Andrew is mentioned days later.

News Group told the high court it is close to completing a search through archived emails it claimed had been lost when transferred to India by its IT provider; its lawyers formally apologised to the court for previous claims the archive was not available. David Sherborne, for Sienna Miller, added that it remained 'mysterious' that the editor of the Scottish edition of the News of the World, Bob Bird, had given evidence on oath at the trial of Tommy Sheridan last year that the email archive had been lost on the way to India.

News Group also admitted a work computer used by Edmondson had been destroyed before Christmas. They agreed to provide detailed information about its destruction to computer specialists advising Sienna Miller.

Computers used by other News of the World journalists have also been replaced or disposed of, but News Group's lawyer, Anthony Hudson QC, said the data they contained had been copied and retained.

Sherborne told the high court on Friday that evidence of "a scheme" between News Group and Mulcaire to hack into Miller's mobile phone had been recovered by the Met during the raid on his home. It included an agreement to provide "daily transcripts" to the paper and monitor the activities of the actor's friends and associates, Sherborne said.

Further disclosures have been ordered by Vos. They include a copy of an email sent to Mulcaire asking him to target a "wish list" of 17 footballers.

News International maintains it will take tough action against any employee who is found guilty of wrongdoing.

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Phone hacking: Yates defiant over claims he misled parliament

Scotland Yard acting deputy commissioner defends himself after criticism from MPs

By Nick Davies

guardian.co.uk,

Tuesday 29 March 2011 20.54 BST

Scotland Yard's acting deputy commissioner, John Yates, has continued to fight his corner in the face of further allegations that he misled parliament over the phone-hacking scandal.

In written evidence to the home affairs select committee, Chris Bryant MP, who first laid the charge against Yates in the House of Commons earlier this month, claimed that:

• Yates had always maintained there were very few victims in the affair, yet a briefing paper produced by Scotland Yard during the original inquiry had recorded that "a vast number of unique voicemail numbers belonging to high-profile individuals have been identified as being accessed without authority."

• Yates had told the home affairs committee last September that there was no evidence that MPs' phones had been tapped, yet "at least eight MPs that I am aware of, have now been shown evidence that has been in police possession since 2006 that shows precisely that."

• Yates claimed that police had approached all known and suspected victims, yet they had failed to inform a number of people who had now been confirmed as victims including, Bryant said, the former deputy prime minister, John Prescott, actor Sienna Miller and her friends and family and interior designer Kelly Hoppen.

• Yates had failed to tell select committees that police never fully searched the material which they seized in 2006 from Glenn Mulcaire, the private investigator at the centre of the affair, and since this had later proved to include 2,978 mobile phone numbers, "it is difficult to see how his assertion that there were very few victims can possibly have been based on fact."

Yates emphatically denied he had ever misled parliament. He defended his position on the central point of law which has become the subject of a public dispute between him and the director of public prosecutions (DPP), Keir Starmer QC.

Yates has consistently said that it is an offence to intercept voicemail only if it has not already been heard by its intended recipient. On this narrow interpretation, the hacking affair involved few victims and few offenders.

However, the DPP has told the committee in writing that prosecuting counsel in the original inquiry in 2006 never adopted this interpretation and that it played no part in the charges brought against Mulcaire and the News of the World's royal correspondent, Clive Goodman, or in the legal proceedings generally.

Yates stood his ground. He said Bryant had been wrong to claim in the House of Commons on 10 March that the CPS had never advised police to adopt this narrow interpretation.

He provided the committee with a written summary of evidence which he gave last week to the media, culture and sport committee listing a series of occasions on which the CPS had specifically told police that they had to prove not only that voicemail had been intercepted but this had happened before their intended recipients had heard them. "That advice permeated the entire inquiry," he said.

Yates told the committee that the advice had remained unchanged until October 2010, when Scotland Yard started a new inquiry and the CPS advised them to take a broader approach, simply regarding all interception of voicemail as illegal.

He said Bryant had been wrong to suggest that in October 2010 the CPS had formally warned police that the previous advice had been wrong.

"A different QC had provided some differing advice. It signalled an intention to take the broader view for the future." He said Bryant had now "absolutely conceded" that he had been wrong on the point.

However, in his written evidence, Bryant conceded only that "it is true that during the very early days, a lawyer at the CPS may have advised" adopting the narrow version of the law. He quoted the DPP's claim that this advice "had no bearing on the charges brought against the defendants or the legal proceedings generally."

He suggested that that the original CPS advice had been set aside during the original inquiry, in August 2006, when David Perry QC was brought in as prosecuting counsel. "Perry expressly wrote to the CPS on October 3 2006 that all that they had to prove was that the message had been listened to by Mulcaire, not that the message was virgin."

Bryant went on to accuse Yates of misleading the culture, media and sport committee last week: "Even in his evidence to the DCMS committee last week, he disingenuously only referred to advice prior to August 9th 2006, before the first meeting at which David Perry gave the advice that secured the conviction of Goodman and Mulcaire." The committee chairman, Keith Vaz, said the DPP would be giving evidence on the matter.

The committee also asked Yates whether police had ever questioned Rebekah Brooks, the former editor of the News of the World and the Sun, over her 2003 evidence to a select committee that her journalists had paid the police for information. Yates said she had not been questioned but that Scotland Yard was currently 'researching' the matter to see what had been done about it.

Yates was challenged by Mark Reckless MP to explain why he was willing to use public money to pay for lawyers to threaten newspapers whose reports he found objectionable, while victims of the hacking affair had had to spend large amounts of their own money to take civil actions to uncover the truth about crimes committed against them. Yates said the two points were completely separate and that, while he had asked for authority to use public funds for his legal advice, he had no intention of suing.

Bryant referred to recent disclosures about a series of dinners where Yates and other senior officers met News of the World editors: "The Met have not helped themselves by having regular meetings with the News of the World at the same time as they are supposed to be investigating them." There was, he said, "a serious risk that they might be perceived to be in collusion with the newspaper." Yates said police were "duty bound to engage at various levels with politicians, businessmen and media" and suggested that he had probably had more lunches with the Guardian than with the News of the World.

Bryant told the committee that he commended the current Yard inquiry under Deputy Assistant Commissioner Sue Akers. But he added: "The Met not only failed to do a full investigation in 2006; they have consistently and repeatedly failed to interrogate the evidence they seized in 2006; they have misled individual victims and potential victims; they have opened themselves to charges of collusion by frequently socialising with journalists and executives at the very organisation they were supposedly investigating; and they have consistently failed to give the full picture to this committee. Most worryingly, they have, for whatever reason, failed to expose the full degree of criminality involved, leaving victims to fend for themselves by dragging information out of the Met in civil

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Hacking MPs' phones 'could amount to contempt of parliament'

Select committee also says MPs who believe they are victims of phone hacking should pursue the matter in court

By James Robinson

guardian.co.uk,

Thursday 31 March 2011 14.46 BST

A powerful committee of MPs said on Thursday that hacking mobile phones belonging to members of the House of Commons could amount to contempt of parliament.

A report on phone hacking published by the select committee on standards and privileges concluded hacking could be in contempt, "if it can be shown to have interfered with the work of the house or to have impeded or obstructed an MP from taking part in such work".

That might result in fines being levied in exceptional circumstances, MPs said. The committee added that in the vast majority of cases MPs who believe they have been victims of phone hacking should pursue the matter through the courts.

Former culture secretary Tessa Jowell is one of more than half a dozen public figures who are suing either the Metropolitan police or the News of the World for breach of privacy, alleging journalists on the paper worked with a private investigator to illegally access their mobile phone messages.

Chris Bryant, the Labour MP for Rhondda, has said "at least eight" MPs had their mobile phone voicemails hacked by the paper.

MPs passed a motion tabled by Bryant in September asking the cross-party committee to urgently consider whether hacking could be considered to be in contempt of parliament.

In their report, MPs said it was not within the committee's remit to consider the law surrounding hacking, which is currently the subject of a separate inquiry being carried out by the home affairs select committee.

But it said that if it was proved that hacking "impede[d] a member in the performance of his or her duty ... there would be little if any room for doubt that hacking could be a contempt".

It added that the house did not have the power or resources to investigate hacking and that this was a matter for the police. Members should notify the police if they suspected an offence had taken place, it said.

MPs recommended that a privileges bill due to go through parliament later this year should include a description of what constitutes contempt, which is currently not clearly defined.

The committee also said parliament's power of imprisonment should be removed in the bill but it should retain the right to reprimand offenders in person and levy fines.

"The imposition of a fine, where justified by the facts and by the circumstances, is more consistent with modern practice and would be more likely to be proportionate to an offence such as hacking".

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Phone hacking: NoW journalists arrested

Former news editor and current chief reporter arrested after presenting themselves at separate London police stations

by Amelia Hill

guardian.co.uk,

Tuesday 5 April 2011 12.36 BST

The former news editor and current chief reporter from the News of the World are in police custody after being arrested on suspicion of unlawfully intercepting mobile phone voicemail messages.

Ian Edmondson and Neville Thurlbeck had voluntarily presented themselves at different London police stations this morning and were arrested. It was expected their homes would be searched by officers at midday.

Scotland Yard has confirmed that two men, aged 50 and 42, "were arrested this morning after attending separate police stations in south-west London by appointment".

"They remain in custody for questioning after being arrested on suspicion of conspiring to intercept communications, contrary to Section 1(1) Criminal Law Act 1977, and unlawful interception of voicemail messages, contrary to Section 1 Ripa [Regulation of Investigatory Powers Act] 2000," the briefing added.

"The Operation Weeting team is conducting the new investigation into phone hacking. It would be inappropriate to discuss any further details regarding this case at this time."

The Guardian understands that Edmondson, NoW's former head of news, is being questioned by officers at Wimbledon police station. Thurlbeck, the paper's chief reporter, is at Kingston police station.

The arrests are the first salvo in Operation Weeting, whose tasks include establishing whether there are grounds for bringing further prosecutions in the phone-hacking scandal.

Edmondson and Thurlbeck will probably be released later this afternoon after the search of their homes is complete.

The two men have been implicated in the long-running scandal through documents seized from Glenn Mulcaire, the private investigator employed by the newspaper.

Edmondson, who was sacked from NoW in January, denies any wrongdoing.

Thurlbeck was interviewed by police last autumn. No charge has been brought against either man, both of whom have denied all involvement in criminal activity.

The arrests come on the day that Keir Starmer QC, director of public prosecutions, gives evidence at a home affairs committee from witnesses into the unauthorised intercepting of communications.

Only one reporter, the former royal editor Clive Goodman, has been convicted of a crime as part of the scandal. He and Mulcaire were sentenced to jail terms in January 2007.

No other reporters or executives were questioned by the initial police investigation. It was only after a series of high court cases brought by the actor Sienna Miller, the football pundit Andy Gray and others that the Metropolitan police were forced to reveal material found on Mulcaire's computer, during a 2006 raid of his home.

Last Friday, a high court judge ordered NoW to make available Mulcaire's notes to the growing list of people suing the paper. Justice Geoffrey Vos, who is in charge of the hacking cases, ordered "rolling disclosure" to all claimants.

Hundreds of thousands of emails will now be handed over to alleged victims.

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This is indeed a significant development. Both men held very senior positions at the News of the World. Neville Thurlbeck, is chief reporter and Ian Edmondson, was news editor until he was suspended in January.

Another important development today was Keir Starmer QC, the director of public prosecutions, gave fresh evidence to MPs which appeared to contradict the evidence of John Yates, acting deputy commissioner of the Metropolitan Police. Yates had previously told the home affairs committee that there were only a small number of victims. That was based on what he said had been legal advice that the police would have to prove that messages had been intercepted and also listened to before being heard by the recipient. But in a letter clarifying the affair, Starmer said that advice from CPS lawyers to detectives "did not limit the scope and extent of the criminal investigation". The letter says that even though parts of the law were very much untested, one particular offence did not require police to prove that a message had been intercepted before the recipient heard it.

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Ian Burrell: A disturbing day for News International's heavyweights

The Independent

Wednesday, 6 April 2011

Rupert Murdoch's News International, publisher of the News of the World, yesterday issued a statement about its pro-activity in the current police investigation. "News International has consistently reiterated that it will not tolerate wrongdoing and is committed to acting on evidence," it said.

But although the publisher has already sacked one of the two men arrested yesterday – Ian Edmondson, the NOTW head of news, who was dismissed in January – the other, the NOTW's chief reporter, Neville Thurlbeck, has remained a key and active member of its newsroom.

The Met's new investigation team will now seek to ascertain whether the two men were part of, or knew of, a culture of phone hacking at the Sunday paper that went beyond Goodman.

Related articles

•Hacking: senior News of the World pair arrested

•Prosecutor questions evidence of Met's Yates

Detectives already have access to a treasure trove of information seized during the original police investigation after a raid in 2006 on the home of Glenn Mulcaire, the private investigator on the NOTW's payroll who was jailed for six months for hacking into voicemails. These detailed notes, along with thousands of emails recently uncovered by News International, are to be made available to lawyers acting for a long queue of celebrities, including Sienna Miller and Steve Coogan, who believe their phones were hacked by the NOTW and are taking legal action against Murdoch's company.

The biggest question is how far up the chain of command at News International the phone hacking goes – and whether the questioning of Edmondson and Thurlbeck will lead to further arrests.

Last week Rupert Murdoch announced that his son James, who has been in charge of his British operation since the hacking scandal re-emerged two years ago, would relocate to New York. It means that the media empire's most senior full-time executive in London will be Rebekah Brooks, a former editor of the News of the World. Ms Brooks has some explaining to do herself as the deadline approaches for her to reply to the Home Affairs Select Committee about how her paper paid police officers for information

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Phone hacking: Mobile companies challenge John Yates's evidence

Four phone companies dispute that police 'ensured' they warn potential News of the World phone-hacking victims

by Nick Davies

guardian.co.uk,

Thursday 7 April 2011 19.48 BST

John Yates, the senior police officer at the centre of the phone-hacking scandal, faces a new set of allegations that he has misled parliament.

A Guardian investigation has found that all four leading mobile phone companies dispute evidence that Yates has given to a select committee about police efforts to warn public figures whose voicemails were intercepted by the News of the World.

During the original police inquiry in 2006 phone companies identified a total of at least 120 politicians, police officers, members of the royal household and others whose voicemail had been accessed by Glenn Mulcaire, the NoW's private investigator. Yates told the home affairs select committee last September that police had "ensured" the phone companies warned all of their suspected victims. But all four companies have told the Guardian police made no such move and that most of the victims were never warned by them.

Two of the companies, Orange and Vodafone, wrote to Scotland Yard last autumn, spelling out the fact that they had told none of their customers that they had been hacked and that police had never asked them to. The home affairs committee on Thursday said that more than four months after those letters were sent to the Yard, it was unaware of Yates having made any attempt to tell it that there might be a problem with the evidence he gave.

The committee chairman, Keith Vaz, said he would write to Yates and to the phone companies to clarify the position.

The latest allegations come after a public dispute in which Keir Starmer, the director of public prosecutions, has challenged Yates's account to parliament of the advice that police were given by prosecutors and the impact this had on the original investigation of the affair and the number of victims who were identified. At a session of the committee on Tuesday, Vaz said the DPP's evidence clearly contradicted the account which Yates had given to the committee the previous week and that he would be writing to Yates to ask for an explanation. Yates is currently acting deputy commissioner of the Met.

In relation to the phone companies, the key evidence from Yates was given to the committee in September last year when Vaz asked him whether police had warned all the public figures whose pin codes had been found in Glenn Mulcaire's paperwork.

Yates said: "We have taken what I consider to be all reasonable steps in conjunction with the major service providers – the Oranges, Vodafones – to ensure where we had even the minutest possibility they may have been the subject of an attempt to hack or hacking, we have taken all reasonable steps."

MP Mary Macleod asked what he meant by "reasonable steps", and Yates replied: "Speaking to them or ensuring the phone company has spoken to them."

The four leading mobile phone companies all say that this is not correct and that the police did not ask them to warn any victims among their customers. All of them searched their call data as part of the police inquiry in 2006 and all initially followed the standard procedure, which is to keep such inquiries confidential.

Vodafone found about 40 customers whose voicemail had been intercepted. They told none of them that they had been victims but warned a small number in particularly sensitive positions to check their security. A spokesman said: "We were not asked by the Met police to contact any customers but believed it was important that we inform as many as we could. As it was a live investigation, however, we were very limited in the information we could pass on to customers. We were only able to remind customers, where we believed it was appropriate, of the importance of voicemail security."

Orange identified about 45 customers whose voicemail had been dialled from Mulcaire's phone numbers. It said it warned none of them but passed the customers' details to Scotland Yard. A spokesman for Orange said: "At no point during the investigations were we asked, nor did we feel it right, to take further action in relation to these customers. The Metropolitan police are fully aware of our position on this."

T-Mobile gave police information from its call records but says it never finally identified customers who were victims and therefore warned none. A spokesman said: "We have never been supplied with a list of names or telephone numbers by the police of customers who may have been compromised, nor were we asked by the police to contact any of them."

O2 identified about 40 customers whose voicemail had been successfully accessed. It is the only company to have taken a corporate decision to approach and warn all of them. Asked about Yates's evidence, a spokesman for O2 said: "We weren't contacted by the police and asked proactively to get in touch with customers to warn them if they had been victims."

It is now clear that police failed to inform not only those victims who were identified by the phone companies but a large number of others whose details were found in notebooks, computer records and audiotapes seized from Mulcaire in August 2006 but never properly investigated until the Yard began its third investigation into the affair in January.

The failure means that police broke an agreement with the DPP that they would contact "all potential victims". It also means many of the victims were deprived of the chance to check the call data, which is kept by the phone companies for only 12 months, and that they had no opportunity to change their pin codes or to assess the damage done by the interception of their messages.

The immediate problem for Scotland Yard is that the phone companies, like the DPP, are now challenging the evidence given to the public and parliament by the most senior officer in the affair, John Yates.

In July 2009, he made a public statement: "Where there was clear evidence that people had potentially been the subject of tapping, they were all contacted by police." In February 2010 he wrote to the culture, media and sport committee: "Where information exists to suggest some form of interception of an individual's phone was or may have been attempted by Goodman and Mulcaire, the Metropolitan police has been diligent and taken all proper steps to ensure those individuals have been informed."

Yates's evidence about the phone companies last September prompted an exchange of letters. According to one senior police source, speaking on condition of anonymity, Detective Chief Superintendent Philip Williams, who works directly under John Yates, wrote to mobile phone companies in October, claiming that he believed that the companies had contacted "all of the people potentially identified as being victims."

On November 2, Orange wrote back to DCS Williams. The company is understood to have told him that police had never asked them to contact victims and that they had not done so. On November 22 Vodafone also wrote to DCS Williams. It is understood that the company expressed surprise that he was claiming to believe that it had contacted victims in 2006; it pointed out that it was for the police, not for the phone companies, to establish who had been victims of crime; and indicated it had no record of the police ever asking it to contact customers.

Last month – more than four months after that exchange of letters – Yates gave evidence on phone-hacking to the home affairs committee and to the culture, media and sport committee. He made no reference to the letters. Nor did he tell the committee that the two companies had challenged his previous account. However, in evidence to the media committe, he did indicate some awareness of a problem. He said: "I think there is some confusion with some of the mobile phone companies as to who was doing what, and we need to get some clarity around that … I am not sure that the follow-up was as thorough as it could have been."

In a statement on Thursday night, Scotland Yard said Yates had told the home affairs select committee in September 2010: "We think we have done all that is reasonable but we will continue to review it as we go along." A spokesman said the correspondence with the phone companies was part of that review and Yates had acknowledged in recent evidence to both select committees that more should have been done for victims. A spokesman said the current inquiry was reviewing the victim strategy

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Phone hacking: NI to apologise to victims including Sienna Miller

NoW publisher admits liability for hacking into phones of eight public figures and offers to set up compensation fund

By James Robinson

guardian.co.uk,

Friday 8 April 2011 15.25 BST

News International is to apologise and offer to pay damages to eight News of the World phone-hacking victims who are currently suing the paper, including actor Sienna Miller, former culture secretary Tessa Jowell and former Sky Sports commentator Andy Gray.

In one of the most dramatic apologies in the history of Fleet Street, Rupert Murdoch's News International said its previous inquiries into phone hacking were "not sufficiently robust" and issued an "unreserved apology" for the fact hacking took place at the News of the World.

The others who will be offered apologies and damages are Jowell's former husband David Mills, football agent Sky Andrew, publicist Nicola Phillips, Joan Hammell, an former aide to former deputy prime minister John Prescott, and interior designer Kelly Hoppen. News International will offer to pay damages and legal fees.

In the Hoppen case, News International is admitting her phone was hacked on several occasions from 2004 to 2006. It still contests her claim that her phone was hacked in 2009.

News International is likely to offer to settle more cases. A total of 24 people have begun legal actions but the company believes that in many of the cases too little evidence has so far been produced to judge whether or not it was culpable. Others taking legal action including actors Steve Coogan and Leslie Ash.

It will propose next week to Justice Vos, the high court judge in charge of all the hacking cases, that all the cases should be heard together.

The publisher said: "Following an extensive internal investigation and disclosures through civil legal cases, News International has decided to approach some civil litigants with an unreserved apology and an admission of liability in cases meeting specific criteria.

"We have also asked our lawyers to establish a compensation scheme with a view to dealing with justifiable claims fairly and efficiently."

It added: "We will, however, continue to contest cases that we believe are without merit or where we are not responsible."

No executives are expected to resign as a result of the apology.

Charlotte Harris, a media lawyer at Mischon de Reya, which represents agent Sky Andrew, said her firm will be considering whether to accept News International's offer of damages after taking advice from clients. She added: "An admission from the News of the World is something we've been working towards for years now. They persisted with their 'one rogue' defence for far too long.

"It was clear for a very long time that the practice of phone hacking was rife and that the News of the World should take responsibility. I hope these apologies do not come at the cost of finding out precisely what happened and who was responsible for covering it up."

The Guardian revealed in July 2009 that News International had made secret payments totalling £1m to settle cases involving three people including Gordon Taylor, chief executive of the PFA.

News International claimed hacking at the paper was carried out by a "rogue reporter", former royal editor Clive Goodman. He was jailed in January 2007 along with private investigator Glenn Mulcaire for illegally intercepting voicemail messages left on mobile phones belonging to members of the royal household.

Andrew Neil, a former Murdoch executive and former Sunday Times editor, told BBC News: "This is one of the most embarrassing apologies I've ever seen from a major British corporation.

"I don't think NI had anywhere else to go. The evidence was piling up against them. It may cost them a lot more than they think. There are plenty of other people involved. They are trying to close it down with their chequebook but I don't think they're going to succeed."

He added that settling civil actions would have no bearing on the criminal investigation currently being carried out by the Metropolitan police.

Solicitor Mark Lewis said none of the clients he represents have heard from News International. "No deals have been done and no apologies have been received yet."

He described News International's admission as "a responsible step in the right direction ... But it's a step that [they] have been forced to take ... It's still early days to work out what will be paid ... and who the victims are. It will improve tabloid journalism and it will stop people using cheap tricks to find things out."

Tom Watson, the Labour MP for West Bromwich East, said: "One of the biggest media organisations in the world has been brought to its knees in the courts." But he added: "I think we need all the facts out there."

The only reason they are offering to apologise now is because 14 civil litigant cases are currently going though the courts."

They should apologise to their readers. I would like to hear from Rupert Murdoch".

He said Murdoch should apologise for the manner in which the News of the World obtained their stories and root out the executives and reporters who were responsible for phone hacking."

Referring to the new police inquiry which began in January, Watson added: "The new investigation team are clearly doing a more thorough job [than the original 2006 inquiry] but there are still lots of loose ends in this."

He said: "News International won newspaper on the year in 2002, 2003, 2004 and 2005, when we know that phone hacking was going on. They subverted journalist. They undermined out democracy."

Keith Vaz MP, who chairs the home affairs select committee, said: "This is a step forward by those who don't want to spend entire days and months of their lives in court." He added that it would not prevent the police investigation continuing, however.

• To contact the MediaGuardian news desk email editor@mediaguardian.co.uk or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. If you are writing a comment for publication, please mark clearly "for publication".

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A Wapping payout!

Mea culpa that reaches right to the very top

The Independent

By Ian Burrell, Media Editor

Saturday, 9 April 2011

News International's admission that it was responsible for the hacking of the phones of public figures ranging from a former member of the Cabinet to a Hollywood actress represents a seismic moment for the management of Britain's biggest newspaper publisher, reverberating all the way back to Rupert Murdoch.

The acceptance of liability on a grand scale has implications which stretch across the Atlantic to the heart of News Corporation. Why, Mr Murdoch will surely ask himself, didn't he take a personal grip of this situation before it reached such a pass?

At Dow Jones & Co, the publishers of Mr Murdoch's prized Wall Street Journal, the chief executive Les Hinton might ask himself why, as executive chairman of News International (NI) throughout the period in question, he presided over an organisation responsible for such behaviour, but told MPs that "there was never any evidence delivered to me" suggesting that phone hacking went beyond Clive Goodman, the royal editor of the News of the World jailed in January 2007.

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It is a difficult time, too, for James Murdoch, whose promotion and relocation to New York last month looks like a timely escape from the firing line. Three years ago, James sanctioned a £1m payment to phone hacking victim Gordon Taylor, head of the Professional Footballers' Association, and he is open to criticism that he – newly installed as head of News Corp in Europe & Asia – failed to appreciate the seriousness of the scandal.

The chief executive of NI, Rebekah Brooks, is also damaged by yesterday's admission. She not only has a responsibility for the NOTW, but edited the newspaper between 2000 and 2003. She denies knowing about phone-hacking when it was taking place. Yesterday's statement from NI was pointedly headed "2004-2006", a period throughout which Andy Coulson edited the paper. Coulson lost his job, then had to quit as director of communications at Downing Street, and has told detectives that he was unaware of a hacking culture under his editorship. The confirmation of eight further cases – with the certainty of more to come – threatens to expose other members of his newsroom and undermine his claim to MPs that Goodman was a "rogue case".

The current editor of the NOTW, Colin Myler, must be embarrassed by yesterday's statement. In the wake of Goodman's conviction, Myler was put in charge of an investigation into the extent of hacking at the paper. Two years later he told MPs that he had studied 2,500 emails, yet had uncovered "no evidence" that required further action. But in some cases, courts have heard allegations that other NOTW journalists were party to the hacking process.

Last week, two NOTW figures, the former head of the newsroom Ian Edmondson (who has been sacked by NI) and the current chief reporter, Neville Thurlbeck, were arrested on suspicion of conspiring to access the voicemails of public figures.

In the civil case brought by football pundit Andy Gray, in which NI has admitted liability, a court was told that documents marked by Mulcaire for "Greg" referred to Greg Miskiw, a former journalist at the NOTW.

Yesterday Ms Wade emailed staff expressing regret for the company's behaviour. "It is now apparent that our previous inquiries failed to uncover important evidence and we acknowledge our actions then were not sufficiently robust," said the statement.

Emerging unscathed from this is Will Lewis, the former Daily Telegraph editor who joined NI as group general manager last autumn and has spent months preparing the strategy for yesterday's grand mea culpa.

NI hopes its offer of a compensation scheme, headed by an ex-High Court judge, will mean that Mr Justice Vos, who next Friday oversees a case management conference of the 24 suits against it, will appreciate its efforts to hasten the legal process. He is not the only person the company needs to win round.

Who should be worried at News International - and why

James Murdoch

As executive chairman of News International, he personally authorised a £700,000 pay-off to Gordon Taylor, head of the Professional Footballers' Association, after his messages were hacked.

Les Hinton

Chief executive of News International at the time covered by the apology. He told MPs: "There was never firm evidence provided that implicated anybody else other than Clive. It just did not happen."

Colin Myler

Current editor of the News of the World, who was in charge of the internal investigation. He told MPs there was "no evidence" anyone else had been involved, having trawled "thousands" of emails.

Andy Coulson

Former News of the World editor who said under oath: "I don't accept there was a culture of phone-hacking at the News of the World. There was a very unfortunate case involving Clive Goodman."

Rebekah Brooks

Now CEO of News International, she is a close friend of Andy Coulson and was his predecessor

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So far there has been no admission to hacking the phones of Labour politicians. There are two reasons for this. One is that it might suggest that is why David Cameron protected Andy Coulson for so long. His job was to provide news of scandals that would hurt Labour. The second reason concerns national security. For example, were they targeting the phones of treasury ministers? This information could be used to clean-up on the stock exchange.

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Phone hacking: Rupert Murdoch 'urged Gordon Brown' to halt Labour attacks

Former PM was asked to 'defuse' NoW row, says ex-minister

Ed Miliband calls for full details of 'criminal behaviour'

By Toby Helm and James Robinson

guardian.co.uk,

Saturday 9 April 2011 22.16 BST

Rupert Murdoch used his political influence and contacts at the highest levels to try to get Labour MPs and peers to back away from investigations into phone hacking at the News of the World, a former minister in Gordon Brown's government has told the Observer.

The ex-minister, who does not want to be named, says he is aware of evidence that Murdoch, the chairman of News Corporation, relayed messages to Brown last year via a third party, urging him to help take the political heat out of the row, which he felt was in danger of damaging his company.

Brown, who stepped down as prime minister after last May's general election defeat for Labour, has refused to comment on the claim, but has not denied it. It is believed that contacts were made before he left No 10. The minister said: "What I know is that Murdoch got in touch with a good friend who then got in touch with Brown. The intention was to get him to cool things down. That is what I was told."

Brown, who became increasingly concerned at allegations of phone hacking and asked the police to investigate, had claimed that he was a victim of hacking when chancellor. He made Murdoch's views known to a select few in the Labour party.

In January, it was revealed Brown had written at least one letter to the Metropolitan police over concerns that his phone was targeted when he was still at the Treasury.

Suggestions that Murdoch involved Tony Blair in a chain of phone calls that led to Brown have been denied by the former prime minister. A spokesman for Blair said the claim was "categorically untrue", adding "no such calls ever took place". The allegation will, however, add to concerns about the influence Murdoch wielded over key political figures at Westminster and in Downing Street.

It will also raise further questions over the decision by David Cameron to appoint Andy Coulson, a former NoW editor who resigned over phone hacking, as his director of communications.

A spokesman for News International, the paper's owner, rebuted the claim, saying: "This is total rubbish."

Labour leader Ed Miliband weighed in on the hacking scandal , saying it was important to establish who knew what about "criminal behaviour" and when. "What we have seen is a serious admission of wrongdoing by News International," he said during a visit to Swindon. "We have now got to get to the bottom of any criminal behaviour, which is a matter for the police. We need to know who knew about these actions and when. We also need to know how far across the organisation knowledge of these actions went."

On Friday, News International issued a public apology to eight victims of phone hacking, including the actress Sienna Miller and Tessa Jowell, the former culture secretary in Tony Blair's government. It was the first time the company had admitted the practice was common at the News of the World.

However, questions remain over whether the victims will settle. Miller's solicitor, Mark Thomson, of law firm Atkins Thomson, said: "She is awaiting information and disclosure from the News of the World which has been ordered by the court and will consider her next steps once this is provided."

The Department for Culture, Media and Sport said a decision on the planned takeover of BSkyB by News Corp would not be influenced by the controversy. A spokesman said: "The culture secretary has to make a quasi-judicial decision about the impact of the proposed merger on media plurality issues alone. Legally the culture secretary cannot consider other factors as part of this process and under law phone hacking is not seen as relevant to media plurality."

The scandal has focused attention on senior executives at News International, including its chief executive Rebekah Brooks, formerly Wade. Former MP George Galloway, who said he had been shown proof his phone had been hacked, claimed the NoW's apology was a "cynical attempt to protect the company's chief executive Rebekah Wade … Wade delivered the statement on Friday which sought to put an end to the controversy. However, by attempting to limit the admission of liability to the two years between 2004 and 2006 and by so doing effectively sacrificing two senior executives and former editor Andy Coulson she appears to be trying to exculpate herself from the scandal."

The publicist Max Clifford, who brought a private case against NoW that ended with a reported £1m settlement, said the newspaper had been forced into the apology. "It's now acknowledged this was widespread at News International.

-----------------------------

News of the World phone-hacking row: four years of denials

Andy Coulson and Rupert Murdoch repudiated phone-hacking allegations several times before News International's apology

guardian.co.uk,

Saturday 9 April 2011 23.55

"Clive Goodman's actions were entirely wrong and I deeply regret that they happened on my watch … I also feel strongly that when the News of the World calls those in public life to account on behalf of its readers, it must have its own house in order"

Andy Coulson, resigning as editor of the News of the World, January 2007

"If you're talking about illegal tapping by a private investigator, that is not part of our culture anywhere in the world, least of all in Britain."

Rupert Murdoch, February 2007

"I have never condoned the use of phone hacking and nor do I have any recollection of incidences where phone hacking took place … I took full responsibility at the time for what happened but without my knowledge and resigned"

Andy Coulson, 21 July 2009

"We reject absolutely any suggestion there was a widespread culture of wrongdoing at the News of the World"

News of the World spokesperson, September 2010

"We have very, very strict rules. There was one incident more than five years ago … the person who bought the bugged conversation was immediately fired. If anything was to come to light, and we have challenged those people who have made allegations to provide evidence … we would take immediate action"

Rupert Murdoch, 15 October 2010

"I don't accept there was a culture of phone hacking at the News of the World. All I can tell you is that, as far as my reporters are concerned, the instructions were very clear: they were to work within the law and within the PCC code. It's in their handbooks."

Andy Coulson at the Tommy Sheridan perjury trial, 9 December 2010

"In January, News International voluntarily approached the Met police and provided information that led to the opening of the police investigation. News International has consistently reiterated that it will not tolerate wrong-doing… We continue to co-operate fully with the police investigation."

News International, 5 April 2011

"Following an extensive internal investigation and disclosures through civil legal cases, News International has decided to approach some civil litigants with an unreserved apology and an admission of liability in cases meeting specific criteria. We have also asked our lawyers to establish a compensation scheme with a view to dealing with justifiable claims fairly and efficiently."

Edited by Douglas Caddy
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