The transcripts of the official inquiry into the culture, practices and ethics of the press. More…

  • MR KEITH RUPERT MURDOCH (continued).

  • That's one of the points, Mr Murdoch, we're going to start off with. Do you remember yesterday we were talking about the date of the Sun headline, which was "Labour Lost It", when the Sun switched its support to the Conservative Party. That was 30 September 2009. I understand that you were in New York on that date and therefore there could have been and was no meeting with Mr Cameron on that date.

  • That's correct. Thank you.

  • So the exhibits have been revised now to bring those facts into line.

    May I be clear, Mr Murdoch, on one thing you said yesterday in relation to a conversation you had with Mr Gorham Brown which was either on 30 September 2009 or shortly after it, and you'll remember that conversation and your evidence about it. There has been, as it were, real time commentary by Mr Brown and he strongly denies that there was any such conversation, and he says that the only conversation he had with you took place in relation to a letter he wrote to the mother of a soldier killed in Afghanistan.

    Can I take it in stages: do you remember a conversation with Mr Brown over that matter?

  • Over that matter, namely the letter he wrote to the mother of a British soldier killed in Afghanistan?

  • I don't remember a conversation with Mr Brown about that, although at the time I think I spoke to the editor and I thought it was too hard on Mr Brown. He had taken the trouble to write to a mother, obviously in a hurry, his handwriting wasn't very good, but it seemed to be very cruel because he had taken the trouble. But I don't think I rang him personally to apologise or talk about it. I may have.

    But as for the other conversation, which he's denied, I said that very carefully yesterday under oath, and I stand by every word of it, and I would just point out -- you didn't touch on it yesterday, but in the materials you put to me in questions, Mr Mandelson, or Lord Mandelson, who was then the most senior member of the Cabinet, charged News International with having done a deal with Cameron, and I think I pointed out in my answer, which I would like to do now on the record, that Mr -- Lord Mandelson, in his book, said he did this under order from Mr Brown, knowing it to be false. That's in his own autobiography, that he reluctantly went out to do what he was told, and I think that just reflects on Mr Brown's state of mind at the time.

  • According to a piece in the Guardian on 12 November 2009, the conversation I referred to between you and Mr Brown relating to the story about the letter to the mother of the soldier killed in Afghanistan had been reported in the Financial Times. It's not a huge point, Mr Murdoch, but are you sure that that conversation didn't take place?

  • No, I'm not sure. But I certainly didn't defend it. I might have apologised for it, but I didn't defend it. I remember my thoughts at the time about it, but whether I spoke to Mr Brown or anyone else about it, I don't know.

  • Fair enough. Yesterday, Mr Murdoch, I put to you various viewpoints of your editors from time to time: Sir Harold Evans' viewpoint, the charismatic authority, Mrs Brooks' viewpoint reported in the House of Lords communications first report, Mr Neil's viewpoint in full disclosure, the Sun King.

    There's one further perspective, if I may, and they may or may not all be consistent. This is Mr David Yelland. Did you remember him? He was editor of the Sun I think in the late 1990s.

  • In an interview he gave to the Evening Standard in 2010, there's this very small paragraph:

    "Did Murdoch interfere in his editorship?"

    The "his" is Mr Yelland. And this quote from Mr Yelland:

    "All Murdoch editors, what they do is this: they go on a journey where they end up agreeing with everything Rupert says but you don't admit to yourself that you're being influenced. Most Murdoch editors wake up in the morning, switch on the radio, hear that something has happened and think: what would Rupert think about this? It's like a mantra inside your head, it's like a prism. You look at the world through Rupert's eyes."

    Do you see the point, Mr Murdoch, that all your editors --

  • I understand what you're saying, Mr Jay, but I think it's nonsense and I think you should take it in the context of Mr Yelland's very strange autobiography, when he said he was drunk all the time he was at the Sun, which we didn't notice.

  • When you said yesterday, Mr Murdoch, "If you want to judge my thinking, look at the Sun", the Sun would only know your thinking either because you directly told them about it or because the editors went on the sort of thought process we see coming through Mr Yelland's piece. Would you not agree?

  • Well, I think Mr Yelland's nonsense, but certainly I don't flinch from my responsibilities and I certainly do take part in the policy decisions of the Sun. I think that is my job.

  • I'm not saying it isn't, Mr Murdoch, but the point I was gently putting to you is that you said, "If you want to judge my thinking, look at the Sun" --

  • "Look at the editorials in the Sun."

  • There are only two ways the editors could logically know your thinking. Either because you tell them or because they work it out. Do you agree with that?

  • I wasn't talking about the editors, I think I was talking about the politicians, but --

  • No, you were talking about -- the direct quote, it's page 36 of the transcript in the morning, lines 15 to 16:

    "If you want to judge my thinking, look at the Sun."

    That's what you said.

  • Yes. I don't say it's absolutely parallel in every detail, it's not. But generally speaking what the -- the issues that we get interested in, that we fight for, you'll find them in the Sun and you'll find that I would agree with most of them, if not all.

  • There are details which I don't agree with only recently, but --

  • Just how they work out what your thinking is. There are only two possibilities. Either you tell them --

  • They sit and talk to me or I call them -- I don't call and say, "Do this or do that", you know, there are conversations pretty constantly. Not daily.

  • Therefore, over time, your editors will get to know you very well because you're not shy about expressing your opinions --

  • Well, if we're talking about the Sun, yes. Or, you know, papers like the New York Post, who are in the next room.

  • If you look at the process as to what happens with your advisers and confidantes, the position is exactly the same. They can assess your thinking because they get to know you well and they talk to you about important issues, don't they?

  • What do you mean by confidantes, Mr Jay?

  • People like Mr Stelzer or indeed even someone like Mr Gove, but we'll come to him in a moment.

  • They might know my thinking, but they don't have to agree with it. They can have very vigorous discussions. I can often have to agree that they're right and I was wrong.

  • I'm sure your discussions were vigorous, Mr Murdoch.

  • Again, can I --

  • Not really, but I accept your approach.

  • As regards your relations with politicians, has it occurred to you that they might know what you want or what you are thinking by exactly the same processes: either because you have discussions with them about your views, or because they get to know you over the fullness of time and work it out?

  • Yes, I really see very little of them. I'm only in this country a lot less than 10 per cent of my time, except in this last immediate period. And, yes, I think they know my philosophy, yes.

  • Fair enough. May I ask you about Mr Gove. Is he a politician who is close to you?

  • No, I wish he was. He was -- I don't say that any other than to say that he worked with me, had a very distinguished career at the Times for a long time. I might have met him very occasionally then, walking through the Times. I think he and his wife, who is also a distinguished journalist there, they've come to dinner once in the last two or three years, that's with his wife. Then I think there was another occasion when Mr Joel Klein was with me and he came over because he was to do a conference with Mr Gove on education. That was -- he was invited when he was -- long before he joined me, when he was chancellor of the New York City school system. And there might have been another one. I like to get a few people around me of interest and different, from different fields, not just politicians.

    But on education, I want to say very clearly, if I can take this opportunity: I/we are passionate about it. We believe that it's an absolute disgrace, the standard of public education here and in America. In America, nearly 30 per cent of children do not get through high school. They drop out three years early and are committed to the underclass forever. And there are being efforts in different states to try and tackle this, but it's very difficult. Not for lack of money, but for lack of teacher co-operation, and I believe that there are a lot of issues here, the sort of society and the way it's going and our civilisation is going, but from being in the first, I think, two or three or four recognised best education systems in the world, both Britain and America had dropped into the mid-20s, and I believe this is a crime against the younger generation and we want to do something about that.

    We keep, keep, keep hammering at it. So I'm sorry to divert from the business of the Inquiry, but it's just an example of -- I mean, it's not for profit, it's not for us to sell papers off, but to try and get people involved in this issue.

  • Thank you, Mr Murdoch. May I move on now to the BSkyB bid, please? At paragraph 33 of your witness statement it clearly denies that you had any discussion with Mr Cameron or Mr Osborne about the bid; is that right?

  • Did you have any discussions with Mr Jeremy Hunt about the bid?

  • I don't believe I've ever met him, but I'm not sure he didn't come to a dinner once a couple of years ago, but I don't know. I certainly didn't discuss it.

  • We know that he was in New York between 30 August and 4 September 2009. Did you meet with him on that occasion, Mr Murdoch?

  • I don't think so, no. Why? Why would I?

  • Well, according to the register of parliamentary interests, he met representatives of News Corp "to discuss local media ventures", but did he meet with you?

  • I don't think so. I have no memory of it.

  • Have you had any telephone discussions with him?

  • Has your son spoken to you about Mr Hunt?

  • No, he told me when Mr Cameron removed Mr Cable's responsibilities and put the person of Mr Hunt, but I don't believe he commented on it. We were shocked by both what Mr Cable said and the unethical means in which that was deleted from the story in the Telegraph, who were clearly running the paper for their own commercial interests.

  • When your son told you about the replacement of Dr Cable, did he tell you words to this effect: "Well, we've got someone better now"?

  • I don't think he used those words. We couldn't have had anyone worse, but --

  • I'm sure he didn't use those words precisely. I'm communicating to you the gist of an idea. Surely you were concerned: look, we have Dr Cable, he was dead against News International --

  • No, but you did on 21 December because it all came out?

  • It came out in the BBC, yes.

  • So it must have passed through your mind: Dr Cable is being replaced by Mr Hunt; what is Mr Hunt like? Didn't you ask your son about that?

  • I may have. I don't remember that.

  • But you must have done, mustn't you?

  • No. I mustn't have done anything.

  • I explained to you yesterday: I never saw anything wrong in what we were doing. It was a commonplace transaction. A large one, but a commonplace one.

  • That wasn't the question --

  • So why would I be worried about the politics of it?

  • You were worried about the politics because Dr Cable had demonstrated, on your hypothesis, that there was a political dimension, moreover an anti-Murdoch dimension. That had come out, hadn't it?

  • Yes. Well, we'd seen all our competitors in the newspaper industry form a consortium, very publicly, and hire Slaughter & May and a lot of public relations people to lobby against it and see if they could stop it.

  • So it had a -- because I think they felt that if we had the cash flows of BSkyB, I think they said this very clearly, we would be a more formidable competitor for them.

  • Which, of course, is quite wrong, but --

  • Is it your evidence, Mr Murdoch, that when Mr Hunt replaced Dr Cable, you were quite oblivious to whether Mr Hunt would be on side or off side?

  • No, we just -- no greater on side or off side. We just thought we'd probably get a fairer -- a fairer go from anyone other than Dr Cable.

  • Didn't your son explain to you that Mr Hunt was very much onside, for example see what he put up on his website, he's a cheerleader for News International --

  • I did not know of that.

  • As the months wore on, by which I mean the early part of 2011, you were presumably concerned by all the delay, weren't you?

  • Not intentionally, but I don't remember my exact feelings then, but no, this wasn't -- it was a very big move by our company, but I was a lot more concerned about the -- in 2011 about the unfolding hacking scandal.

  • Well, we'll come to that, Mr Murdoch.

  • Here we had a multi-billion pound bid. You were very keen to acquire the remaining publicly owned shares in BSkyB. It wasn't happening, there was delay. You must have been concerned about that as a businessman, weren't you?

  • Yes, we didn't have to have it. We were doing other things with the money now. It's fine.

  • Well, it's something you wanted, isn't it?

  • Well, we did indeed. We thought it was a good investment.

  • Did not your son give you in general terms a progress report as to how the bid was getting on?

  • Not on a daily or probably even a weekly basis, but yes, I don't remember it, but I have no doubt.

  • And was it along these lines: here are the likely time scales, it's going well for us, it's not going so well for us? Was it that sort of conversation?

  • What was it then?

  • I don't remember any conversation, to be honest with you, but I'm assuming that he kept me up to date to some extent. You know, I delegated the situation to him, left it to him, and he had a lot on his plate and did not report perhaps as often, but we did talk, of course.

  • You mentioned, Mr Murdoch, there was a coalition ranged against you who had been lobbying Dr Cable. Were you aware that you had your own lobbyists, who were, as it were, on the other side lobbying government?

  • I don't know what date you're talking about, but no, it's only much more recently that I've learnt of the extent of Mr Michel's -- I think -- you call it lobbying, certainly his seeking of information and the progress of things.

  • That's something you've only discovered recently when the 163 pages of emails were disclosed; is that right, Mr Murdoch?

  • Oh, I knew of Mr Michel's existence a few months before that.

  • When you became acquainted then with these 163 pages, were you surprised by the extent of Mr Michel's activities?

  • I didn't see anything wrong with his activities. Was I surprised that it had gone on so long and there were so many emails? Yes, sir.

  • Was your surprise only on this footing: well, it should have happened much sooner, namely we should have got the bid much sooner?

  • No, I was just surprised at the success of the -- our competitors' lobbying, and of course they would never have succeeded if it hadn't coincided with the hacking scandal.

  • Were you not surprised by the success of Mr Michel's own lobbying with Mr Hunt's department?

  • I don't think there was success. We were made to make very, very big concessions for reasons which I can't understand.

  • Were you not surprised by the degree of apparent closeness between Mr Michel and Mr Hunt's office?

  • No, and I don't want to say anything against Mr Michel, but I think there could have been a little bit of exaggeration there.

  • Maybe you weren't surprised because you would or you might assume that Mr Hunt's office would be onside in support of News International, in which case there would be nothing in KRM18, this is the 163 pages, which would cause you surprise or your eyebrows to be raised?

  • I didn't read the 163 pages, I'm sorry, but I certainly tasted them, if you will.

  • What about an answer to my question, Mr Murdoch?

  • Did I assume that Mr Hunt was on our side?

  • Yes, that's right.

  • No. I assumed that any responsible minister would be responsible and deal with it in a completely unbiased way. I thought that Dr Cable was an exception.

  • We understand Dr Cable anti-Murdoch, but surely turning it the other way around, Mr Hunt pro-Murdoch. That must have been something which you understood?

  • No, I don't think it's an anti and a pro.

  • Is it true that the longer this went on, the higher the price might have to be?

  • No. Well, the longer it went on, the greedier the hedge funds got and their big -- big talk to assist the start of ... that was their way of negotiating. It always is.

  • Is it your feeling, Mr Murdoch, that were it not for the -- really the apogee of the hacking scandal, the Milly Dowler voicemail deletions allegations, you would have got the remaining shares in BSkyB?

  • Well, I don't know whether we can put it down to the Milly Dowler misfortune, but the hacking scandal, yes. I mean, the hacking scandal was not a great national thing until the Milly Dowler disclosure, half of which -- look, I'm not making any excuses for it at all, but half of which has been somewhat disowned by the police, but not for many weeks afterwards. We didn't know -- we didn't have any information, because the police had under lock and key the Mulcaire diary, still do, and we still have had no access to it, and we've been limited in our enquiries at all times by that.

  • Can I ask you this direct question, Mr Murdoch: I told you that Mr Hunt was in New York until 4 September 2009. The meeting between your son and Mr Cameron in a private club called The George was on 9 September 2009. Is there any connection between those two events? I should make it absolutely clear that on 9 September, Mr Cameron was told that the Sun --

  • 4 September Mr Hunt left New York --

  • Oh, Mr Hunt had nothing to do with the matter at that stage.

  • That's my understanding.

  • And Mr Cameron wasn't even Prime Minister, so --

  • I'm not sure you're talking about the same matter, Mr Jay. I think you're at cross purposes. I think you're turning to a different subject -- I think you are.

  • May I come back to that?

  • May I move on now Mr Murdoch to the issue of phone hacking? Are you with me?

  • You tell us in your witness statement at paragraphs 169 and 170 -- turn those up, our page 03028 -- that you learned of the arrests of Mr Goodman and --

  • No, I'm sorry, excuse me. In my witness statement, paragraph 160?

  • Just getting our bearings here in the chronology. You say that you believe that you learned about the arrests in a telephone call with Les Hinton, which may have been -- or when do you think that was? September 2006?

  • I think I have said here I was with my family in August, not in London. Mr Hinton could reach me at any time and it may well have been wherever I was in August.

  • At the top of paragraph 170, page 03029, you say that:

    "I recall being told, probably by Les Hinton, that News International were co-operating with the police..."

    Do you see that?

  • The evidence to the Inquiry might be said to demonstrate that News International were not co-operating with the police --

  • Well, I don't agree with that. We -- if I may defer? We appointed a special law firm to look into this and to aid our co-operation with the police, and when the police -- after the charging of -- I think after the charging, not just the arrest, after the charging of Mr Goodman, said that was it, they were closing the file, I can't believe they would have done that if they were unhappy with our co-operation.

  • Well, that's not the evidence we've had at all, Mr Murdoch. The evidence we've had conclusively demonstrates that the law firm you mentioned produced, I think, just one document, which we know did not represent the position at all, and one way or another, News International were being obstructive. Does that not shock you?

  • That shocks me deeply, and I was unaware of it and I've not heard of it until you've just said that.

  • News International are still claiming privilege in relation to advice given by the law firm you mentioned. This is Burton Copeland. You know that, don't you?

  • I'm not aware of that detail, but I'll take your word for it.

  • Well, it's a detail which emerged when you gave evidence before the Select Committee on 19 July of last year. You knew the position then.

  • I think I spoke about a second law firm.

  • Harbottle & Lewis, privilege was waived; Burton Copeland, privilege has not been waived. Do you know why that is?

  • No, I don't know. You'd have to ask them why they gave us that advice.

  • That's not quite the question Mr Jay is asking. You appreciate that communications between a lawyer and his client are privileged?

  • And the only way people can see what is said is if the client, not the lawyer, the client, waives privilege. And in the spirit of openness, your firm or your company, the company, waived privilege in relation to the work that was done by Harbottle & Lewis, so Harbottle & Lewis were able to talk, I think both to the Select Committee and indeed to this Inquiry, about what they did for News International and how they went about what they did.

    The other firm that were involved, Burton Copeland, a specialist criminal law firm, were apparently very heavily involved, but in respect of that firm, the company has not waived privilege. Now, they don't have to, it's a matter for them, but that's the position.

  • I was not aware of that. But it doesn't alter the fact that the police said they were satisfied this was a rogue reporter and were closing their file.

  • Well, that may be one aspect of this, but News International would have the means of knowing to what extent this cancer, to use a term related to your son's evidence, to what extent this cancer was prevalent in the organisation. Did it stop at one individual, the one rogue reporter, or was it more prevalent? It was in News International's power to ascertain that, wasn't it?

  • I think the senior executives were all informed, and I -- were all misinformed and shielded from anything that was going on there, and I do blame one or two people for that, who perhaps I shouldn't name, because for all I know they may be arrested yet, but there's no question in my mind that maybe even the editor, but certainly beyond that someone took charge of a cover-up, which we were victim to and I regret and, you know, I'm getting ahead of myself now, perhaps, or getting ahead of you when I say that, you know, we did take steps after the conviction and the resignation of Mr Coulson. A new editor was appointed with specific instructions to find out what was going on. He did, I believe, put in two or three new sort of steps of regulation, if you like, but never reported back that there was more hacking than we'd been told.

    Harbottle & Lewis were appointed, and given a file. Now, it's argued that they were only given a very specific brief, but I've got to say that I have not gone through that whole file that they were given of emails, but I have again tasted them and I cannot understand a law firm reading that and not ringing the chief executive of a company and saying, "Hey, you've got some big problems."

  • That goes back to the question about whether News International would contemplate letting us see what Burton Copeland did in fact say, but that's a matter --

  • Well, we were perhaps wrong about Burton Copeland, but we were not about Harbottle & Lewis.

  • You mentioned the term "cover-up" --

  • I mean, I regret this greatly, but we'll just go through the chronology before I tell you.

  • Yes. Mr Murdoch, you used the term "cover-up". May I suggest to you that throughout this story there is a consistent --

  • Would you please sit down. I would be grateful if you wouldn't do that again.

  • Throughout this story, this narrative, there's a consistent theme until April 2011 of cover-up. Cover-up in relation to the police, cover-up by Burton Copeland, either on News International's instructions or of their own notion, and then cover-up subsequently. Where does this culture --

  • From where does this culture of cover-up emanate, Mr Murdoch?

  • I think from within the News of the World and -- there were one or two very strong characters there, who I think had been there many, many, many years and were friends with the journalists -- or the person I'm thinking of was a friend of the journalists, drinking pal, and was a clever lawyer, and forbade them to go and see the evidence -- or there had been statements reporting that this person forbade people to go and report to Mrs Brooks or to James. That is not to excuse it on our behalf at all. I take it extremely seriously that that situation had arisen.

  • May I move forward to January 2007, Mr Murdoch, and paragraph 172 of your statement, where you say:

    "... after Mr Goodman pleaded guilty, I recall learning that Mr Coulson resigned and that Mr Hinton replaced him with Mr Myler."

    Do you see that?

  • Were you not directly involved in the decision to appoint Mr Myler as editor of the News of the World?

  • Mr Hinton sent me -- I suppose he spoke to me, I forget, but he certainly sent me an email saying he proposed this and did I agree and I said yes.

  • Did you know Mr Myler?

  • Yes, and, you know, he would not have been my choice, but Mr Hinton felt that he was someone who had never had any contact with the News of the World, that there wouldn't be personal allegiances there, and that he could look at it and he could rely on him to report back to Mr Hinton.

  • Why would Mr Myler not have been your choice?

  • Well, I could think of some stronger people who were on the Sun.

  • Is it your assessment then that Mr Myler was a weak individual and therefore the wrong man for this job?

  • I would say that's a slight exaggeration.

  • How would you put it then, Mr Murdoch, in your own words?

  • Well, I'd hoped that Mr Myler would do what he was commissioned to do, and certainly during the remaining seven or eight months of Mr Hinton's regime, he did not report back to him.

  • May I ask you --

  • Maybe he didn't find anything out, but he certainly didn't report that.

  • Did you make it clear to Mr Hinton that Mr Coulson needed to resign when Mulcaire and Goodman were sent to prison?

  • No. I have to say for Mr Coulson that he came forward and said, "I knew nothing of this, but it happened on my watch and I think I've got to go, I should go."

  • Did you have a conversation with Mr Coulson about this issue?

  • Did you have a conversation with Mr Hinton about Mr Coulson leaving the company?

  • I think he'd called me and told me this, and I thought that Mr Coulson was doing the honourable thing. And we all agreed the fact that somebody, we thought one person, the police thought one person, had engaged in hacking was a very, very serious matter.

  • Were you aware of any aspects of Mr Coulson's settlement package?

  • You told the Select Committee that Mr Myler was appointed to find out "what the hell was going on"; that's right, isn't it?

  • Well, given that was his brief, what steps did you take to see whether Mr Myler was discharging his brief?

  • Nothing. I relied on Mr Hinton, who had been with me for 50 years.

  • You've told us that this was a very serious matter. It was capable of affecting the whole reputation of News International in the United Kingdom, and its poison was capable of seeping --

  • Just wait, Mr Murdoch. Its poison was capable of seeping far further. Was this not an issue which required your personal attention?

  • Look, in hindsight, as I said later -- which I thought we'd come to it --

  • I said that the buck stops with me, so I have to agree with you.

  • Well, we have to be clear, Mr Murdoch. In one sense, the buck always stops with the chairman of the holding company. That's axiomatic, but it might not tell us a huge amount, but I was talking more directly about why you, given it was such an important issue, did not find out whether Mr Myler was discharging his brief. Do you see that point?

  • I don't know what else I was doing at the time, but I trusted Mr Hinton. I delegated that responsibility to Mr Hinton.

  • Did you have discussions at least with Mr Hinton about this?

  • Some might say that all this picture is consistent with one of a desire to cover up rather than a desire to expose. Would you agree with that?

  • Well, people with minds like yours, yes, perhaps.

  • I'm sorry, I take that back. Excuse me.

  • I'm very thick skinned, Mr Murdoch.

  • Do not worry one moment.

  • You could point the point slightly differently. It is very, very clear, Mr Murdoch, that among the vast commercial interests that you have developed over your life, you have a particular interest in the print media.

  • And, if I may say so, you have shown that interest is more than just a commercial interest, it's more than just an intellectual interest, it is an interest that is within your being, if I could put it like that.

  • Well, I'm only trying to summarise what I think you've said to us.

  • Therefore, the question might be asked in this way: here was a newspaper that was in your family, that you had built up to be the largest-selling newspaper in the UK, as I think the News of the World was.

  • I think when we bought it, it was.

  • And it had lost more than half its circulation by the time we got to this stage, but yes. As had everybody else.

  • But quite apart from the commercial side of it, you would really want to know, as you yourself put it, what the hell was going on, because the news media was your -- printing was running through your veins, I think somebody has said about you.

  • Then that's the way that I might ask the question that Mr Jay was trying to ask and indeed did ask. This wasn't just a matter of commercial interest for you. This was at the very core of your being. So that's why I think you're being asked: well, were you not really intensely concerned to know what was going on, quite apart from everything else, because this was you?

  • I have to admit that some newspapers are closer to my heart than others, but I also have to say that I failed.

  • Well, that may be, and I --

  • And I am very sorry about that.

  • No, no, I recognise that and I understand that you've made that clear, not just to the Inquiry, not just in your statement, but on a number of your public appearances discussing this matter. But it doesn't actually quite answer the question whether you really did try to understand what was going on or whether you felt: well, I don't need to understand what's going on, it's over and let's just move on. That's the question.

  • Well, I think when the police said, "We're satisfied this was a rogue reporter, we're closing our file", I think Mr Hinton did that, probably, if I'd been in his place, I have to admit that I would have said I'd close it too, but with hindsight --

  • Hindsight's always very good, Mr Murdoch.

  • Very, very easy. I can only say what I should have done.

  • The question that I wanted to come to was this: this wasn't just a question of a reporter doing what the reporter did with the private detective. I wonder whether you wouldn't want to know what was the atmosphere or the climate within your newspaper that had encouraged the reporter to think that this was a correct way to proceed. That this was justifiable. Quite apart from how he got away with it, that's a separate question, but that actually the paper would be prepared to let this happen, would be prepared to go that extra illegal mile to get a story. So that's quite apart from whether it is one rogue reporter. It goes to: what's going on in the paper, not just with the people? Do you see what mean?

  • I think in newspapers reporters do act very much on their own, they do protect their sources, they don't disclose to their colleagues what they're doing. I think you had an instance of this, a really rogue reporter but harmless, when you came across the Times and the NightJack case. That didn't reflect the newsroom of the Times, and this might have reflected the newsroom of the News of the World, and I think I said yesterday that I am guilty of not having paid enough attention to the News of the World, probably throughout all the time that we've owned it. I was more interested in the excitement of building a new newspaper and doing other things, and that's -- and the challenges of the Times and the Sunday Times, and it was an omission by me, and all I can do is apologise to a lot of people, including all the innocent people in the News of the World who lost their jobs, but -- as a result of that.

  • The article in the Guardian in July 2009, Mr Murdoch, can you recall --

  • -- whether that one was brought to your attention at the time?

  • It was indeed, but I think at the same moment, probably, as the police totally disowned it and said it was wrong.

  • Your son told us that he had discussions with you after the Guardian article was published and about the Gordon Taylor settlement. Do you remember anything about that?

  • Yes, he probably did explain that, but that was a year after the Gordon Taylor settlement and I didn't know anything in 2008 about the Gordon Taylor settlement.

  • No. So in 2009 you get to learn of the Gordon Taylor settlement. Did that not surprise you?

  • It did indeed surprise me.

  • The size of it?

  • Oh, yes. I mean ... I didn't know who had hacked him or if he had really been hacked or what it was, but it -- just the size seemed incredible. Still does seem incredible.

  • Did you ask your son words to this effect, "Why the hell have we paid him so much money"?

  • And what was his answer?

  • He said, "I was given a short time and was given like two boxes. Which one do you tick? One for a relatively low sum of money, relatively low, or one infinitely bigger?" and his advice was to tick the lower one and that's what happened. He was pretty inexperienced at the time, he'd just been there a few months, and Mr Crone and Mr Myler came to him and put it to him in a relatively short conversation.

  • Yes, can I just understand that, Mr Murdoch?

  • I think Mr Murdoch meant tick the higher one.

  • Your two boxes, the lower box and the infinitely higher one, is it your evidence that your son was told to tick the lower box or the infinitely higher one?

  • I've forgotten what all they were, but tick the one that didn't involve the risk of an appeal and triple damages and God knows what else.

  • I see. Weren't you told that the much higher box was the one which said, "If we don't settle this case, there's a risk that there will be many more cases"?

  • No, I was never told that.

  • Yes. I mean, anyone who puts faith in confidentiality agreements with contingency lawyers is too naive to be true.

  • So you knew that there was a confidentiality agreement associated with the Taylor settlement, didn't you?

  • So you might have assumed that that wasn't worth the paper it was written on --

  • If I'd thought about it, yes.

  • Didn't you think about it?

  • No. I have a lot of things to think about. I'm sorry, I didn't give it enough attention. But, you know, that wouldn't have changed anything. But the real change came --

  • Can we just wait for that, Mr Murdoch? We will come to the real change with the MSC in July of 2011, but --

  • Oh, that? I was going to come before that. Okay.

  • If you just bear with me. These conversations with your son, was there any discussion about the need to avoid reputational risk to the company?

  • Not in those terms, no. I mean -- anything that involves ethical behaviour or unethical behaviour involves reputational behaviour. You don't have to state it in those words.

  • Is not the conversation with your son perhaps along these lines, "Look Dad", or whatever he calls you, "this guy was in effect blackmailing us, we had to pay him a lot of money in the hope of keeping him quiet because if we didn't, there was a real risk of reputational harm to our company"?

  • No, he did not say that.

  • Or anything like that?

  • Did you suspect, certainly by July 2009, that the one rogue reporter defence was wearing a bit thin?

  • No, because that article in the Guardian, very hostile, the Guardian, and personalised, but put that aside, was instantly disowned, or within 24 hours, by the police and we chose to take the word of the police over the word of the Guardian, and, you know, I'd just go a little further forward. We rested on that until I think the beginning of 2011, the Sienna Miller thing came forward, we immediately realised there was a great danger, and we gave the police the name of [redacted].

  • Mr Murdoch, can we --

  • I'm getting ahead of you, am I?

  • Shall we just take five minutes.

  • (A short break)

  • Mr Murdoch, I've been asked to make it clear by the Metropolitan Police that they've never said, "We are satisfied there's only one rogue reporter". That was News International's assertion, not theirs. Do you understand?

  • I understand what you're saying. That was not my understanding until then.

  • It was Mr Myler's evidence to this Inquiry, Day 18, page 7, line 18, Day 18, page 26, line 22. According to the News Corp's website, the entry for 10 July 2009, it says this:

    "News International has delayed making this detailed statement until all relevant facts have been analysed and checked internally and externally. News International has completed a thorough investigation into the various allegations made since the Guardian broke the story on Wednesday."

    So News International were claiming, following the Guardian article, that they weren't relying merely on what the police said, but had carried out their own investigation. Were you aware of that?

  • Yes, it's very true. I meant to mention it before: there was a committee set up, consisting of Mr Myler, the corporate council and the corporate human relations executive, to make their enquiries. There was Harbottle & Lewis, and they all seemed to confirm what the police had said.

  • Was this communicated to you at the time?

  • And we relied on that too much. As it turned out.

  • I think it was your son who used the term "aggressive defence" in relation to the Guardian article, a knee-jerk reaction, perhaps, based on the visceral hatred, if I can put it as high as that, that News International feel for the Guardian.

  • Is it a little too high or --

  • I've often expressed admiration for them. I think they look after their audience pretty well.

  • Were it not for the Guardian, do you accept, the phone hacking story would never have entered the public domain?

  • I don't know. The Independent seemed to be pretty active.

  • Well, who else would have brought this out? You certainly weren't investigating it --

  • We were investigating it. Indeed we were investigating it. I've just explained we had an investigation committee and we had Harbottle & Lewis.

  • Whatever investigation --

  • And when you're talking two years later, the Guardian and the police disowning the thing, I agree with my son, the statement we made then was far too defensive.

  • We know almost by definition that your own internal investigations yielded nothing. You have to accept, Mr Murdoch, if it wasn't for the good work of the Guardian, if I can be forgiven for putting it in those terms, all of this would have remained concealed, wouldn't it?

  • I don't think so. But perhaps.

  • Can you tell me, just help me. How would it have come out?

  • I don't know. I mean, there's plenty of investigative journalists around. I mean, maybe the police would have -- the police were sitting on Mr Mulcaire's diaries all this time. They still are. And that seems to be the major source of information on hacking.

  • Well, the major source on hacking was never anything that News International did, do you accept?

  • Oh, we looked, but we didn't find anything.

  • In Mr Watson's latest book, "Dial M for Murdoch", you probably haven't read it yet as it only came out last --

  • I'm not planning on reading it.

  • Well, it has been read in our team. Page 94, this allegation is made that Mr Brown called Mr Watson to tell him that Mr Murdoch had spoken to Mr Blair and had asked him to tell the MPs to back off. Did you telephone Mr Blair with that request?

  • I believe Mr Brown says -- if you continue that quote as it has been read to me, Mr Brown says he doesn't remember it either.

  • That's right. But you don't remember it?

  • I'm certain it never happened. I would never do that.

  • When you were interviewed by your own company, Fox News, in 2009, which was after the Guardian article, you apparently refused to talk about the issue of phone hacking. Why was that?

  • When are you referring to?

  • 2009, after the publication of the Guardian article.

  • Yes. I was in Sun Valley, I believe, I think that's what you're referring to, and Fox Business News, which was a start-up, had a booth there, they begged me to go for ten minutes and they asked me that. I said I can't talk about that. I just didn't know. I wasn't up to date. I wasn't -- thousands of miles away and I get into a discussion about phone hacking.

  • Although you had had discussions with your son about it, hadn't you?

  • I don't think he called me in Sun Valley. He may have. I don't remember that.

  • Why did you say, Mr Murdoch, when you were here in July of last year, when asked what your priority was, "This one", pointing to Rebekah Brooks?

  • I don't know whether you've seen the video of that.

  • I was walking across the street from my apartment to a hotel. We were mobbed by journalists and paparazzi, I had a microphone stuck in my mouth, said, "What's your main consideration?" and I said, "Her, here".

  • Are you suggesting you were acting under duress in any way?

  • No. Oh, if you've got 30 journalists and paparazzi and microphones in your mouth, yes, you are under duress.

  • Are you suggesting --

  • I think we might come back to discuss that later.

  • My question was: are you suggesting, Mr Murdoch, that this pack of journalists and paparazzi were acting in any way inappropriately?

  • I think it's part of the game.

  • And what's the game?

  • Harass people. I mean, I was being harassed. I was trying to walk all of ten yards across the street. I had another 20 or so outside my apartment this morning.

  • But part of the game is harassment, intrusion, these are recurring themes in the behaviour of the press for decades. Would you not accept that?

  • Yes, it can take many forms, but yes.

  • Why is this the case?

  • Well, I think they're very competitive. You know, a lot of these paparazzi don't work for anybody. They're trying to get photographs they can sell to agencies like Getty Images and so on and make a living that way, and that would be true every corner of the world.

  • I may come back to that.

    Why wasn't your instinctive response, when the microphone was thrust under your nose, as it were, instead of saying, "This one", pointing to Rebekah Brooks, "We need to clean up my company"?

  • Because I was concerned for Rebekah Brooks, who was seeking to resign under great pressure and I was seeking to keep her confidence. I mean, her self-confidence.

  • Can I ask you, please, about the --

  • I think before we get into Ms Brooks, it's only fair to leave that subject until we've heard from her.

  • Well, Mr Murdoch, we're not getting into --

  • -- Mrs Brooks. We're getting into another topic. The brand. It's, I think, a term you use in relation to the Sun and the News of the World. Can I ask you to look at paragraph 73 of your statement. Page 03006.

  • Fourth line, there's a reference to the "brand definition" of the News of the World, which you say was fairly consistent over the last 30 years. Do you see that?

  • How would you define the brand definition of the News of the World?

  • It's a campaigning newspaper. I think I -- when I first went there, it was more interested in covering the courts all over the country, which were not covered by other newspapers then, except very quickly at the Daily Telegraph, which covered them in much greater and grimier detail but in infinitely smaller type. But yes, we did -- it went from being more of a court coverage to being more of a campaigner.

  • You're careful not to include within the parameters of that an interest in celebrity gossip, kiss-and-tell stories, intrusion into the sex lives of celebrities, sports persons and the like, and salacious tittle-tattle. Should that not be included --

  • I was not careful to exclude that. I would say that's a vast exaggeration. It's very easy for you to stand there and say that but that is not the case. Certainly it was interested in celebrities, just as the public is, and a much greater investment went into coveraging -- covering the weekend soccer.

  • These aspects of the brand -- I'm not saying that they are definitive of the brand, they're just aspects of it -- contribute to the commercial success of the paper, don't they?

  • Well, the aspects I've just mentioned, yes.

  • What about the aspects I've just mentioned?

  • No, I don't agree with you, because I don't agree they were there. Coverage of celebrities, yes. Salacious gossip? Meaning -- I take gossip as meaning unfounded stories about celebrities: no. I certainly hope not.

  • Something Sir John Major said in his autobiography, page 359, I was just reading it overnight, I'll read it out to you to see whether you agree with it:

    "One route of the press hostility was a circulation war at a time when overall newspaper sales were falling by a million a year. Across Fleet Street, sensational and exclusive stories sold extra copies. Straight reporting did not. Accuracy suffered, squandered for something, anything new. Quotes were reconstructed, leaks and splashes abounded, confidentiality was not respected, and reputations sacrificed for a few days' hysterical speculation."

  • He must have been talking about other newspapers.

  • Is that a serious answer, Mr Murdoch?

  • The Sun and the News of the World are not being embraced by that statement, I would suggest --

  • He didn't say News of the World. He said Fleet Street.

  • But I would agree with you that circulations were falling then, they're still falling for various reasons, which I can discuss later, and I just -- and there was great competition between -- but there was great competition when they were selling many millions more. It has always been -- look, we have a great, vibrant press here, 10, 11 newspapers. I don't know why, because only three or four of them could be possibly making money, but it is --

  • Mr Murdoch, we're slightly off the point --

  • -- a fact of life that there is great competition and -- but I don't think it leads to lying --

  • I get all that, Mr Murdoch. I just want to understand whether you're saying that Sir John Major's comments only applied to non-News International newspapers. Is that your evidence?

  • No, that may be a little too broad, but they don't certainly apply -- do that exclusively.

  • There has been great competition between us. I mean, you want to see some of the front pages of the Daily Mirror when Mr Piers Morgan was there. He had me there, full-page picture, with horns out of my head.

  • This is fully understood, Mr Murdoch. I just want to understand whether you think that the Sun and the News of the World over the years performed better or worse than other newspapers in terms of the sort of matters Sir John Major is referring to?

  • I think -- in the sort of matters he's referring to?

  • Well, what is he referring to? He's referring to the falling circulation, their being very competitive, them telling lies.

  • No. And I really want to distinguish, I've tried to distinguish, throughout this, the difference between the Sun and the News of the World. You lump them together all the time and I think it's grossly unfair to the Sun.

  • Well, this Inquiry is into the culture, practice and ethics of the press. Sir John Major's comment relates to Fleet Street.

  • Yes. Which, I suppose, is a reference to everyone, isn't it?

  • Well he probably has reasons to be bitter about the press and his treatment. He became an unpopular Prime Minister and lost an election. It's very natural that he would make sweeping allegations against the press, in which there may be an element of truth.

  • Can I ask you, please, about the letter Max Mosley wrote you, 10 March 2011? It's MOD1 this time, 00031562. I think you remember this letter, don't you, Mr Murdoch? It's going to come up on the screen in a few moments, I hope. We can find it for you.

  • No. I have looked into the question of correspondence with Mr Mosley, and I did not read -- I was out of town or something and my assistant sent them to whoever was the chief executive of News International to handle and I received an email, a coded email only yesterday about it from him, passed again to Mr Mockridge, the chief executive, to handle.

  • The point Mr Mosley was making accurately was that Mr Justice Eady, in a judgment given out of this building, referred to blackmail being committed by journalists employed by the News of the World. You were aware of Mr Justice Eady's comments, weren't you?

  • I am aware now, and with great respect to Mr Justice Eady I think he suggested that one of the ladies in the picture of this Nazi orgy had been offered to have her face pixelated out if they would co-operate with the story. Again, with great respect to Mr Justice Eady, I'm not as shocked as he is by that. I'm much more shocked by the behaviour of Mr Brett in not telling him the truth of a lot of things.

  • Don't worry about Mr Brett, Mr Murdoch. Have you read Mr Justice Eady's judgment?

  • Because he, in a very careful and considered judgment, having analysed all the evidence, oral and written, came to the clear conclusion, some may say it was the only conclusion he could possibly have reached, that your journalists, or at least one of them, had perpetrated blackmail of these two women. Is it really your --

  • Yes. Is it really your position: we don't have to worry about what he says?

  • No, it's not my position at all. I respect him and I accept what he says, I'm just simply saying that a journalist doing a favour for someone in returning for a favour back is pretty much everyday practice.

  • I'd just like to go into that for just a moment, please, Mr Murdoch. First of all, I think it ought to be made very, very clear that Mr Justice Eady rejected the allegation there were Nazi overtones to this incident, but I merely identify that fact. It's not what I want to ask you about.

    Do you say, from all your experience of journalists and journalism, that it's appropriate to say to a member of the public, "We have this photograph of you, we can do this two ways: we can embarrass you by unpixelating your photograph, even though there may not be a public interest in identifying who you are, and that's what we will do, or alternatively, we'll give you some money and you tell us the inside story"? Is that an appropriate way for a journalist to behave?

  • I don't know that she was offered money, but it happens.

  • She certainly was offered money.

  • Well, I accept that sir, if you say so, and I apologise --

  • Look, Mr Murdoch, I wasn't there, I've only read the judgment.

  • And I've heard the evidence about it. But I ought to make it very clear to you, and I would be very grateful for your help on the topic, that I find that approach somewhat disturbing, because I don't think Mr Justice Eady is using too strong a word if he describes it as a form of "blackmail". And therefore, if it is the culture and the practice of the press that this is acceptable or justifiable, then I would like to know that, I really would.

  • Look, I apologise, sir. I have not read Mr Justice Eady's thing.

  • And I may well agree with every word if I read it. But it's a common thing in life, way beyond journalism, for people to say, "I'll scratch your back if you scratch my back."

  • To seek to go beyond that, I disagree.

  • And I accept your words. Or Mr Justice Eady's words, but I have not read it, I'm sorry.

  • No, but you can see why this is at the very core of part of what I am doing?

  • And therefore, without asking you to return, I think I would ask you, if you don't mind, to look at that judgment and let me know whether you think what Mr Eady there describes, if it be right -- and I don't ask you to reach a judgment on right or wrong, the newspaper could have appealed the judgment, they didn't -- reveals a culture and practice that you think is (a) accurate in the sense that it's more widespread and therefore everything everybody does, or (b) inappropriate. Do you understand the question?

  • I understand it, sir, and I will be very happy to read it and to write to you and submit a document.

  • That's perfect, that's fine. But I would like your considered view on that question.

  • Yes. I'm sorry that I haven't got one.

  • No, no, that's quite -- you've had more than enough to cope with, although one might ask whether the fact that a High Court judge in England had reached this conclusion about one of your papers would itself be brought to your attention, but I rather gather it wasn't.

  • Well, you said it was a common thing in life, "I'll scratch your back if you scratch my back", and that's true, that's human nature, but it's interesting that you say that's no part of the implied deal in your relations with politicians over 30 years, Mr Murdoch. Is that right?

  • Uh ... yes. I don't ask any politician to scratch my back.

  • That's a nice twist, but no, I'm not falling for it.

  • You probably don't, but I should put this to you. Do you remember being interviewed by a British TV presenter called Anne Diamond, probably in the 1980s, who asked you about Princess Diana and Elton John?

  • No. I saw that allegation a few days ago and I have no memory of either the interview or even who Anne Diamond is. I'm sorry.

  • I think the general point --

  • I'm too remote from this country, perhaps.

  • Well, the point she made was simply this: that your newspapers, she said, were ruining some people's lives and how did you feel about that and how could you sleep at night, knowing what was going on? And she said that you brushed that aside. Might you have done that?

  • No, I try to answer every question that's put to me. I may have, but I don't think so.

  • The claim is also made that you then decided in collusion with your editors to target her. Is that right or not?

  • No, that's absolutely wrong. I know who made that claim, and it was my housekeeper, a very strange bird indeed. Though we did keep it clean.

  • Another quote from Lord Wyatt:

    "The trouble is newspapers will bring anybody down just for the hell of it these days. They find it shows their power, titillates their readers and helps sell their newspapers."

    Is he wide of the mark?

  • Yes, I think that's a very unkind thing. Of course Mr Wyatt felt that when he wrote a column for the News of the World he was the most powerful man in the country and greatly resented when the editor wanted to stop it, but this is many years later when he wrote that, but no, let's be serious about this.

    Only yesterday, maybe the day before, the Daily Mail had all of its page 1, had a double page inside attacking Google for not deleting porn from its servers. Maybe I'm old-fashioned, but I happen to agree with every word of it, but that was a very, very strong attack and I think that's fair. I think the newspaper, if it wants to, if it feels that someone's doing wrong or a company is doing wrong, I think it's fair to debate it and debate it in strong terms.

  • And equally if another newspaper is doing wrong, it's right to expose it and debate it in strong terms?

  • Because one of the problems is that whereas the press hold all of us to account, politicians, even judges, there's nobody actually often holding the press up to account.

  • I must say, I don't feel that. I feel that I'm held to account every day.

  • I think that might be so at the moment --

  • I'm held to account by the British people every day. They can stop buying the paper. I stand for election every day, as I said yesterday, but I'm constantly attacked. They love attacking me. Whether it's the Daily Mirror, whether it's the Guardian or whatever. And I've developed a pretty thick skin over the years. And I'm under strict instructions by my lawyers not to say this, but I'm going to. I feel --

  • I think you've just caused three coronaries.

  • But I was really shocked by the statement of Mr Dacre the other day, that his editorial policy is driven by commercial interests. I think that is about the most unethical thing I've read for a long time and, what's more, from the most surprising source, as I have great respect for his abilities. Indeed, many years ago when he was editor of the Evening Standard, he agreed to leave then and come and edit the Times and I was extremely pleased and Associated quickly made him editor of the Daily Mail, I have no doubt at a vastly increased salary, where -- some friends of mine may disagree with this strongly, but I think he's been a great success. But I was shocked when he said that his policies now, the editorial policy of the Mail is driven by commercial interests. That's on a record here somewhere.

  • I think to be fair to him, Mr Murdoch, that was said in the context of the alliance which was forming against the BSkyB bid, and he made it clear, quite frankly, that the philosophy underpinning that alliance was commercial considerations rather than legal considerations. He wasn't making a broader statement as regards the Daily Mail more widely --

  • No, he said that they were going to do just the sort of thing he'd been attacking -- alleging that I do. That he was going to be driven by commercial interests in his editorial policy. The words are very clear. And I might expect it of other newspapers. I didn't expect it of the Mail.

  • Well, I'll stand to be corrected, or probably affirmed by those behind me, but I'm pretty sure I'm right on this, but let's not debate Mr Dacre today, Mr Murdoch.

    Would you agree that the --

  • I'll look at the transcript. I can -- but go ahead.

  • Would you agree that maintaining high ethical standards in newspapers costs money?

  • No. I don't. I agree that failure to maintain ethical standards can be immensely expensive, as I'm here witness of today.

  • Yes. That's certainly true. We'll come to that. But in order to have proper systems in place internally, to ensure that ethical standards are installed in the first place and then maintained and preserved, there is a commercial cost, isn't there?

  • No. We have compliance officers, we have more now as a result of this, but the cost is -- even though they're highly paid people and distinguished lawyers, it's peanuts compared to what this whole scandal and Inquiry has cost us. I mean, I'm talking now hundreds of millions.

  • I think -- well, you may want to go through a couple of other instances first before I -- I would like to just expand on that at some stage.

  • May I put to you a point Mr Andrew Neil said in an interview he gave to CNN and just see your reaction, please, Mr Murdoch. He said this:

    "Of course Rupert Murdoch can't be held responsible for every individual act, just as when I was editor of the Sunday Times I couldn't be held responsible for every individual act that my tens of, scores of journalists would take, but you create a climate in which people think it's all right to do certain things, and I would argue that Rupert Murdoch, with his take no prisoners attitude to tabloid journalism, the end will justify the means, do whatever it takes, that created the kind of newsroom climate in which hacking and other things were done with impunity on an industrial scale."

    Is he right or wrong?

  • I don't think he knows the first thing he's talking about. I would say, at the beginning of that quote, that I may not be able to know what every journalist is writing, but it is certainly the duty of the editor to take responsibility for every word in his newspaper. It's harder for someone, the chairman of a company of a lot of newspapers. That's by way of explanation, not excuse.

  • So the second part of the quote about the --

  • Mr Neil seems to have found it very profitable to get up and spread lies about me, but that's his business. I mean, several people that goes for, now. It's something of an industry, which I hope this Inquiry has done a lot yesterday to dispel a lot of those myths. We have given you hard written third-party evidence to show that a lot of these are just myths. I hope that -- I take it that they will go up on your website in time. Is that fair to assume?

  • Mr Murdoch, if I can proceed --

  • No, can I have an answer?

  • I don't give answers to questions, Mr Murdoch. I just ask them.

  • The evidence that you have presented and the exhibits to your statements will be placed on the website.

  • Thank you very much, sir.

  • If one takes out some of the loaded language in Mr Neil's interview and puts it in this way: is not the ethical tone of a newspaper or group of newspapers set by the chairman, particularly if the chairman has been there for decades?

  • Well, I hope I've had that effect for the most part. We employ 6,000 journalists around the world. As a result of this hacking, we have not only spent hundreds of millions here, we've been through every email, every check possible, the New York Post, all our Australian newspapers in Australia under the supervision of two retired Supreme Court justices. We want to be absolutely certainly that this was only in here in the -- in London. And I think we've satisfied ourselves we have great journalists, great, great journalists, who have done some amazing work, if you go back a week, a month or three months or three years, all over the world in different countries. I mean, we exposed the whole Chinese scandal days ahead of it in public in China.

  • Mr Murdoch, may I ask you about your attitude to self-regulation, although this was some years ago now? We had some evidence from Mr Piers Morgan at the time when he was editing the News of the World, which was, I think, in 1994 and 1995, and what happened was that the Press Complaints Commission upheld a complaint by Earl Spencer over private photographs of his wife. Publicly you supported the Press Complaints Commission and upbraided Mr Morgan, yet Mr Morgan's diaries say, 22 May 1995, that you called him into your office and said this:

    "I'm sorry about all that press complaining thingamajig."

    Did you say that?

  • Did you say anything like that?

  • I might have said, "Look", I said, "I have confidence in you as editor, let's put that behind us, let's remember it, but get on with it."

  • He also has you saying:

    "We had to deal with it the way we did or they'd have all been banging on about a privacy law again and we don't need that right now."

    Might you have said that?

  • I don't think so. Generally I don't believe in a privacy law, but we discussed privacy yesterday. I think it's their -- privacy laws are always proposed for the protection of the great and the good and not for the mass of people who make up our democracy.

  • I've been asked to put these questions to you by another core participant, Mr Murdoch: have you ever instructed or encouraged your editors to pursue stories which promote your own newspapers, TV channels or other business interests?

  • I don't have any other business interests. I certainly would ask -- or suggest, I don't think it needs suggesting -- the editor of the Sun that it could be good to mention what's coming in our new paper on Sunday. There is self-promotion of newspapers. I mean, it goes back -- I remember my first training days, 55 years ago or more, on the Daily Express, we had something every day promoting the glories of the next day's Express.

  • Mm. I am not sure that's what the question is being addressed to at all.

  • No, you suggested that I was telling journalists to promote other business interests. I'm saying I have no other business interests.

  • Well, your other business interests are within other newspapers and TV channels, aren't they?

  • Yes, but I certainly do not tell journalists to promote our TV channels or our TV shows or our films. You ought to read the critics in the New York Post of all our Fox films. They kill them.

  • Have you ever instructed or encouraged your editors to pursue negative stories about competitor businesses or rival individuals?

  • No. I can't think of it. Any. Who, for instance?

  • I'm just asking these general questions which have been put.

    Have you ever asked your newspapers to make life uncomfortable for regulators such as Ofcom or the Competition Commission when they're considering action that might be to the detriment of News Corp's businesses?

  • Why did you close the News of the World rather than tough it out, Mr Murdoch?

  • Well, I think that's explained in my statement, but I could put it a little more succinctly in that when the Milly Dowler situation was first given huge publicity, I think all the newspapers took this as the chance to really make a really national scandal. It -- it made people all over the country aware of this, who hadn't been following. You could feel the blast coming in the window almost. And, as I say, I would say it succinctly: I panicked. But I'm glad I did.

  • It's obvious that closing it was a disaster both --

  • Only I'm sorry I didn't close it years before and put a Sunday Sun in. Though I tell you what held us back: the News of the World readers. Only half of them ever read the Sun, all surveys showed that. In fact, only a quarter of them read it regularly. So that probably was brought into consideration at the time.

  • Closing the News of the World was a disaster, both financial and reputational, wasn't it?

  • You love this word "reputation". It certainly hasn't stopped the record -- excellent sales every day of the Sun and our other newspapers.

  • But would you agree that --

  • I think -- let me agree with you. I think that historically this whole business of the News of the World is a serious blot on my reputation.

  • Would you agree, Mr Murdoch, that reputation is a vital commercial asset, which needs actively to be managed in any business?

  • Yes. I think it's what keeps the public relations business going.

  • Mm. Did your business register the risk of a compound commercial disaster of these proportions?

  • Could you ask that again? Did our?

  • Did your business register the risk of a compound commercial disaster of these proportions?

  • No. It was a decision taken very quickly by my son --

  • Sorry, you've missed --

  • -- I think Mrs Brooks was still there and myself. It was done like that.

  • I think you misunderstood the question, Mr Murdoch. I'm not looking now at the decision you took, I think on 7 July --

  • Did we sit down and write out the costs and how many millions? No.

  • No, I'm looking at a much earlier stage, whether your business, as a matter of business practice, registered the risk of compound commercial disaster of these proportions. So going back to 2005 or 2000 or even 1995. Did you think about these risks?

  • We're talking about the risk of this sort of reputational catastrophe. Did it enter onto your radar at all?

  • No, we were always interested in people thinking well of our company and thinking well of our newspapers.

  • Do you accept that the evidence demonstrates that your company managed the legal risk by covering it up?

  • Even though, as you've said, the Sun --

  • There was no attempt, either at my level or several levels below me, to cover it up. We set up inquiry after inquiry. We employed legal firm after legal firm. And perhaps we relied too much on the conclusions of the police.

    You know, I think that -- well, you may want to take me forward, but just in dates, you saw our response to Sienna Miller. We realised we had a major problem then. The Select Committee at Parliament met and heard from some of our executives and accused them of collective amnesia, and I think that our response to that was far too defensive, and, what's more, worse, disrespectful of Parliament. And then, of course, there was a further thing, I think there was something in July last year, when I appeared, and one of the members challenged me and said, "Are you the person to clean this up?" and I said, "Yes, the buck stops with me and I pledge I will clean it up", and I did. I have spent hundreds of millions of dollars -- Ms Akers I think said that we had electronically examined 300 million emails, of which we chose 2 million, which Linklaters, ourselves examined, and anything that was frankly suspicious was passed to the police.

    That led to, I think, a dozen midnight arrests because of my pledge, not because of the police, they did not ask us to go into that extent, we went way beyond what they'd asked us to do, and I remain greatly distressed that people who have been with me for 20 or 30 years, great journalists, some friends of mine -- but, of course, my distress, it would have been presumptuous to compare it with the immense disturbance, if you like, and hurt to the people who were arrested.

    And I feel responsible for that but I am glad we did it. We are now a new company, we have new rules, we have new compliance officers, and I think we're showing in the Sun that you can still produce the best newspaper without the bad practices that were disclosed.

  • Okay, Mr Murdoch. Might it be said that what that answer demonstrates is that when the decision was taken in the summer of last year to clean out the Augean stables, as it were, that was almost, arguably at least, an overreaction because you realised that the history before, between 2006 and last year, demonstrated cover-up, therefore it was necessary to go to arguably excessive lengths to put your vote --

  • I think you use emotional words like "cover-up". Certainly it disclosed -- not the Select Committee but what was coming out on hacking, and we were only at hacking at that stage, although we then went in and we went way beyond it, and way beyond anything that the police asked us to do, but I had made my personal pledge to Parliament, and although it's caused great pain, huge pain, in fact, for families and, as I say, distress to myself, but we did it, I'm glad we did it. We are now a new company altogether, and Mr Justice Leveson rather reprimanded me for talking about hindsight, but if I may just for a minute.

    If I again had really got into it when Mr Goodman wrote that letter in 2007 saying he shouldn't have been -- making accusations that other people were involved, we appointed Harbottle & Lewis, we went through a lot of things, I should have been -- I should have gone there and thrown all the damn lawyers out of the place and seen Mr Goodman one-on-one -- he'd been an employee for a long time -- and cross-examined him myself and made up my mind, maybe rightly, maybe wrongly: was he telling the truth? And if I had come to the conclusion that he was telling the truth, I would have torn the place apart and we wouldn't be here today. I'm talking 2007.

    But that's hindsight, which, of course, is a lot easier than foresight, but ...

  • Looking back on this, Mr Murdoch, presumably you see the link between ethical misbehaviour and legal misbehaviour, don't you?

  • Oh yes. But I -- legal rules are certainly devised to try to encourage ethical behaviour, I think that's a fair generalisation.

  • Although what I would call unethical behaviour, if, for instance, I'd asked prime ministers for favours in return for -- I would have said that would be very unethical, but I doubt if it would have been criminal. But it would have been bad, and that's why I didn't do it. And I invite you to ask them.

  • I think it may be right to take another five minutes.

  • (A short break)

  • Yes.

  • Mr Murdoch, we've discussed the nexus between ethics and the law in your last answer. Would you agree that the magnitude of legal risk to a company is merely a function of the magnitude of ethical misbehaviour within a company?

  • No. Clearly it may be. Serious breaches of the law are certainly unethical, but I think I can think of other unethical things which I would call unethical and extremely serious, but -- which are not criminal. And I hope I'm not guilty of either. I try in my life, private and public, to be without that.

  • By "not criminal", also do you mean not giving rise to civil action?

  • No, no, no, that's fine, because it does raise the question, which is what Mr Jay might be coming on to, about the whole question of regulation. We'll see how Mr Jay develops it.

  • I'm trying to get you, Mr Murdoch, to see this as all on a spectrum. Ethical misbehaviour perhaps at the lowest end of gravity, overlapping into civil wrong, which is in the middle, and then criminal wrong at the most serious end, but it's all part of a continuum or spectrum. Do you see that?

  • Yes. But -- I suppose so, yes.

  • Can I put this --

  • I mean there are a lot of personal unethical things that one could do which don't come very close to civil, but yes, okay.

  • If you were serious about managing the business risk of wrongdoing in itself, you would have to do so not at the most serious end, which is criminal behaviour, but holistically by instilling a strongly ethical culture, wouldn't you?

  • Would you put that again?

  • Yes. If you were serious about managing the business risk of wrongdoing in itself, you would have to do that not at the most serious end only, namely criminal behaviour, but holistically by instilling a strongly ethical culture, would you agree?

  • There are, however, business costs in doing that, aren't there?

  • I think I explained: minor, compared to serious unethical or criminal things.

  • You're right about that, Mr Murdoch, but could it not be said that your failure to ensure that there were proper systems of internal governance in place in your --

  • In the News of the World.

  • -- in the News of the World demonstrates a cavalier attitude to the business risk I have referred to?

  • No, I think it's unfair to put that to me. If you -- I think I've explained that I'm guilty of not paying enough attention to the News of the World at any time that I was in charge of it, certainly, but to say that it's me around the world, no.

  • I'm asking you to separate out in your mind, Mr Murdoch, that which may be purely personal, which I'm not actually talking about now --

  • -- and that which may relate to systems failures, but insofar as there's a personal responsibility in you, at least in relation to what I'm talking about now, it is the failure to insist on proper internal systems of corporate governance being in place at all material times, particularly in relation to a newspaper such as the News of the World, whose very being was to take risk. Would you agree with that?

  • No. Its being was not to take risks. It had a full-time law -- legal officer there who was meant to check every story.

  • And yes, we had systems, they proved inadequate and I'm sorry about that.

  • But we have put in new systems and it's more -- almost new people, and a few additional people, but of the highest calibre. I think we learned a lot about how to control compliance and so on, which takes place pretty naturally in all our newspapers, but certainly did not in the News of the World.

  • The only system in place at the News of the World at the time on which we're focusing was the human personality of Mr Crone, who is the legal manager, and that of the editor. There was nothing else, was there, Mr Murdoch?

  • No. And not -- well, there were above him.

  • There were corporate lawyers. There were HR people.

  • The whole system --

  • With major responsibilities in this area.

  • The whole system --

  • They were at the cutting edge, those two.

  • So the whole system, in inverted commas, stood or fell by the personalities, abilities and qualities of Messrs Myler and Crone, and before Mr Myler, of course, the editors who were responsible. Are we agreed?

  • Yes, I think editors are all responsible for their papers. I certainly hold them that -- for that.

  • If you say that the cost of installing proper systems, I would suggest to you, of internal governance was not that great, could it not be said that there's even greater force in the proposition that you showed a swashbuckling or cavalier attitude to these matters?

  • No, I don't think it can be said. I think we made mistakes. I think we should not have allowed -- not have had one legal officer at the News of the World for 20 years. I think those sort of people should be changed every five or, at the worst, every ten years.

  • May I suggest this to you, that any claim that a paper such as the News of the World was an agent of the public interest is in danger of seriously overstating the position. What the News of the World provided is either what the public wanted or what you believed commercially the public wanted. Is that not right?

  • I think that's true of any newspaper. I certainly tried to provide newspapers which I think will find a strong market and loyalty. We have the greatest newspaper in America, double the circulation of its major competitor, and I receive nothing but praise for it, and we have a great staff of 2,000 journalists there.

    The News of the World, I'll be quite honest, was an aberration and it's my fault.

  • Mr Murdoch, I believe you want to share with this Inquiry some ideas about the future of press regulation, but quite narrowly, I think, in the context of your concerns about the Internet; is that right?

  • I think it goes beyond that, but yes. I would say that the laws that you've seen in force in the last few months, still being -- the consequences are still being felt -- are perfectly adequate. It's been a failure of enforcement of the laws. By us. It may be going on in other papers, I don't know. I certainly haven't heard -- I've heard admissions, but not heard inquiries. But pass, let that pass.

    You said that I had at the very beginning a great -- and I should have corrected you -- understanding of technology. I don't. I am not a technologist. I can't run -- I can't write computer code or anything like that. But the fact is that the Internet came along, slowly developed as a source of news, and now is absolutely in our space, and I think it's been responsible for a lot of loss of circulation.

    I don't know, I should ask the judge: this Inquiry, I presume, is for the press in this country, not just the press in Fleet Street?

  • We're seeing everybody under extreme pressure. We've seen only this week an announcement of three newspapers ceasing publication as dailies and becoming weeklies, at a high price. Now, there's a reason for that, because of disruptive technology. Certain things can be done, I think, to control the major players, but in the long run it is just too wide. You know, people can send their blogs from Beijing or from the Cayman Islands and whatever you do, you can't regulate that.

    I think you have a danger of regulating -- putting regulations in place which will mean there will be no press in ten years to regulate, and I honestly believe that newspapers and all they mean, mistakes and qualities, are a huge benefit to society. What we have here, and I take some -- I don't want to sound boastful -- some credit for it, the industry was on its knees before the craft unions and 20 years behind the rest of the world and I took a very unpleasant and painful strike for a year, and as a result every newspaper has had a very good run. It's coming to an end as a result of these disruptive technologies.

    I could go on a great deal about it. We're spending a lot of money trying to -- and succeeding in presenting every word of our newspapers on modern tablets. There will be -- I would be very confident in saying that in very a short time, less than five years, there will be billions of tablets in the world. Furthermore, I think there would be more billions, maybe twice as many what we call smart telephones. Already some buy newspapers, but other people present the news on a smart telephone.

    There's very little cost of entry in that, there's great costs of entry in newspapers. I'm old enough, old-fashioned enough, I don't know about you, I understand that you're one of the few people that like Le Monde, but that's another matter. You also paid a very nice compliment about the Times. I'm repeating a private conversation, I'm sorry.

    But I like, and probably a lot of the people in this room, prefer the tactile experience of reading a newspaper. Or a book. And so I think we will have both for quite a while, certainly ten years, some people say five, I'd be more inclined to say 20, but 20 means very small circulations. And the day will come when we'll just have to say, "It's not working, we can't afford all the trucks, we can't afford all the huge presses and so on", and we'll be purely electronic.

    As I say, privacy, if you have a telephone, if you have my telephone number of my iPhone, you could find out, if you're here in London, or wherever you may be you could find out wherever I was anywhere in the world any time of the day within 10 feet, because it has in it -- and I think the tablets do, I'm not sure -- a little chip worth $3 or $4 called a GPS.

    Now, as far as the press goes, it's only a part of it. It's used for industrial espionage, it's used for law enforcement and it's not going to go away. Particularly industrial espionage which is conducted internationally, and I think that what can be done, certainly with the big players, it is perfectly possible and practical to say: no pornography, no provision of links to confidential intellectual property. This is not a Hollywood Silicon Valley fight. It's been presented, of course, by Silicon Valley. It's an argument with drug companies, with people who do research or whatever. It doesn't take much to click on to Google and find the link. Or other people, I'm sure.

    Now, that can be stopped. It would take legislation, but -- and I would encourage it. I'm not saying that there are other people beyond the jurisdiction of the law who wouldn't try to do it, but it is a very, very serious thing.

    I would say one more thing, if I may, about the Internet. Not only is it a major source of information, but in this country, we have the BBC, which we haven't mentioned, but is really far the greatest force in media in this country. It does some great broadcasting. It's a very important organisation. But it also has gone online with a news service, which 12 million people in this country watch it, I don't know about every day, but at least every week, probably several days, and feel they've had enough news. That must be affecting -- one of the reasons why newspaper circulations are in decline.

    I think more seriously my criticism is it's a taxpayer funded thing we have to put up with, but it has started over the years very good websites with local news in all the major cities of Britain. Those newspapers depended almost entirely or very largely on their classified advertising. That went to the Internet, you can't do anything about that. Specialist employment sites, real estate sites, car sales, et cetera.

    But to have the one thing they had, the newspaper -- and some of them have been great newspapers, great histories -- there have been only this week three newspapers, I believe, were announced they were giving up daily publication. There'll be more. And there's nothing more certain.

    I don't think it's really added to the diversity of information of the press, and because the -- I was never in it, or very, very slightly, but the local media in this country, the local press, local newspapers, have a great history of contribution to our democracy, and I think it will be a very sad day if the major ones, if all of them, disappear.

    So I don't know that they can be saved. They could be saved from the BBC, but that wouldn't be enough, possibly.

    We really have enormous disruptive technologies, which is the history of the world, and it's fine, but we have to meet that challenge and try and turn it into an opportunity. For instance, the Times. The problem is we ask people to pay for it, but if it's good enough, they will. There's a lot of -- they're really aggregated to a large extent -- run full news services for free. I don't know how long they can do it. They -- their advertising is rising, they expect it, but so are their costs, and in fact there's more -- there's more advertising opportunities occurring every year, even than there are websites, so the rates stay very low.

    But it's a fact of life, and we have to treat it as an opportunity. For instance, the Times of London, seven days a week. We put it on the iPad. We charge for it. Unfortunately, Apple takes 30 per cent, but that's another argument. That can be seen any corner of the world. So maybe there's an opportunity there. Just as your friends at Le Monde can be seen any corner of the world.

    There's just -- as I say, I think there are some opportunities. They're not easy. We have a lot of people working at them to make attractive versions of our newspapers. You know, for instance, the Wall Street Journal. Every single word of the Wall Street Journal is a challenge to get through. It's there every day. But we add more photographs, which are of extraordinary quality on the iPad and will get better.

    But we're dealing in a very complex world with disruptive technologies, and we're suffering at the hand of those, so when it comes to regulation, I just beg for some care, because it is really a very complex situation. The press today guarantees -- a varied press guarantees democracy and we want democracy rather than autocracy. I think we would all agree with that in this room.

  • I equally agree with you that the whole question of regulation requires very great care and one has to try to ensure that one isn't merely regulating what Mr Lebedev talked about, "Work produced on dead trees", and one does encompass what's going out digitally, but therein lies a number of problems, which I'm sure I don't need to mention to you, but I want to take you back to your recognition that the whole framework runs from that which is unethical, inappropriate, it doesn't really matter what words you use, but not necessarily a civil or criminal wrong, through the civil to the criminal.

    Now, you may say that the problems of the News of the World are an issue of enforcement as much as anything else, although I might say that external enforcement by the police must be the very, very last rung, because the police have got lots of other things to do, and therefore some enforcement must come internally, and I don't think you'd disagree with that --

  • -- because of what you've said. But there also must be some mechanism for speedy resolution of complaints, and you don't need me to tell you that there are complaints about what is published, which are short of claims in libel or claims in breach of a civil wrong or criminal wrong. There has to be some mechanism to resolve them, and one would want to encompass as many as possible, including those who decide only to publish but for profit online, within the scheme. Have you considered how that could be organised? It may be you haven't, and if not -- but given that I have the opportunity of speaking to you --

  • Yes, I'm not aware -- I should be more aware of the -- all the details of the PCC. I know the number of complaints that we've received, the number that have been either dismissed by the PCC, the number that have then been mediated or resolved, and the final complaints that we've had to address and apologise, which are, over a number of years, very minor.

    Now, did this take a very long time? I don't know.

  • We should perhaps have a bigger staff or something. But I don't think it's enough to say profit. If you only make profitable organisations, you can leave out most of my newspapers here, and --

  • Yes, maybe instead of using the word "profit", I should have said, "They're doing it for money". In other words, they're in the course of a business.

  • Oh ... I think everybody's doing it for money, including the bloggers. They're trying to sell advertising, they're trying to get a bigger audience. You get a thing like the Huffington Post, which started as pretty much a political pamphlet with advertising and broadened itself quite cleverly, but mainly just stealing stories from existing newspapers. They now have a few reporters, and blogs from individual people, but it's a very big thing here, they have a British edition as well as an American edition. And I don't believe that they're making a profit yet, but they're read by many millions of people.

    The Mail Online, which is unrecognisable as part of the Daily Mail, I think Mr Dacre doesn't have a computer and said to someone else, "You do this", that just steals. But they have their own gossip, they steal gossip from everybody. It's a great sort of gossip site. Or bad, whichever way you look at it. And comes right up to the barrier of what is fair use of other people's material. They change it a little. But it has tens and tens of millions of followers around the world, but there's no profit in it, according to their public statements. Yet. Their hope is for profit. Profit motive, perhaps, but I think that would include everybody.

  • It is a very difficult subject.

  • You have my sympathy, sir.

  • Yes, your son actually said that it was above his pay grade.

  • I'll challenge that in the same way that I challenged the statement by your son. You did say, when Mr Jay asked you about ethical standards and its expense, that "failure to maintain ethical standards can be immensely expensive" and I would like to expand on this. Maybe you've since said all you wanted to say on it, but I did want to give you the opportunity of saying anything else that you wanted to say on the subject --

  • No, I think I only wanted to say that through the ethical lapses of the News of the World that we discovered, I have been through the whole of News Corporation, I have spent hundreds of millions of dollars in London alone, way beyond anything the police asked. We have examined 300 million emails; I didn't believe that many existed, but 300 million, of which 2 million were given closer -- were chosen for closer examination, and it led -- and I don't think I have anything to say other than that it led to the arrest and terrible distress of a number of families of journalists who had been with me many, many years, who were friends of mine, and it caused me a lot of pain, but --

  • And I'm sure you would want to say, because you have said and I wouldn't want it to be thought that you didn't get the opportunity to say it here, that recognising, of course, the distress and upset you've caused to your own staff, or former members of your staff, you also recognise the --

  • No, they are my staff until proven guilty.

  • Yes, but some of them are no longer, because they were News of the World.

  • I wasn't seeking to make any judgments.

  • But also you would recognise the position in relation to those who have legitimate claims that their privacy has been intercepted, but --

  • As regards the News of the World, I think that is true. I drew a line yesterday, a very vague line, about privacy.

  • Who deserves it and who doesn't.

  • Yes, I wasn't talking about that --

  • We want to live in a transparent, open society, but -- and therefore people who pay public relations agents to make themselves popular, or politicians or people who have great responsibility, I don't think deserve the same privacy.

  • I wasn't actually talking about them, I was talking about those who have in fact legitimate complaints that their voicemails or whatever were intercepted by somebody --

  • Oh yes. That was against the law, quite apart from the ethical side. It was totally wrong, and I regret it and I've said it's going to be a blot on my reputation for the rest of my life.

  • I know, but I wanted to give you the opportunity just to add that on to as you spoke about your staff.

    Right. There may be some questions and in the light of some of the things you say, there may very well be some questions. Is there anything else that you want to say that you've not had the opportunity to say?

  • No, I think I've spoken about the state of the printed word at the moment. I made some remarks about the BBC pursuing local newspapers and the danger it was to the press generally, and to the profession. Our best journalists have been trained in the provinces and have always been. I don't think I have anything to add to the privacy.

  • Thank you very much indeed.

  • Right. Yes? Well, let's start with Mr Caplan.

  • Thank you. Sir, may I just ask one question in relation to what was said this morning concerning Mr Dacre? I can do it quite shortly.

  • Mr Murdoch, I'm representing Associated Newspapers. There's a number of matters I could ask you, but I'm going to restrict myself to one matter, please, which is what you said this morning concerning Mr Dacre, and I think you told the Inquiry that you were very surprised to read recently that Mr Dacre had said that his editorial policy was driven by commercial interests. Do you remember that this morning?

  • I'm going to suggest you've made a mistake in reading something, and I'm going to ask, please, for a document to be put on screen, which is 001748. Mr Murdoch, this in fact is one of the emails passing between Frederic Michel and your son, which you produced as part of your statement. It's exhibit 18 to your statement, and it's about 160-odd emails. Do you remember that bundle of documents which you told us you had tasted but not read in detail?

    I want to direct you, please, to this email --

  • Yes, the second sentence -- third sentence?

  • Yes. This is Mr Michel, in his words, summarising to your son James what he says had happened very recently when Mr Hunt had spoken to a number of the editors, and he is reporting in his words that:

    "Paul Dacre was clear that their campaign was purely motivated for commercial reasons and fears around bundling."

    And that's a reference to a campaign by the Daily Mail and other sections of the media against News Corporation's full takeover of BSkyB. It's not any reference, I suggest, clearly, to Mr Dacre's editorial policy. It's the motives for the campaign against the BSkyB full takeover.

  • I don't see the difference. I'm sorry. I think there's no doubt the Daily Mail and maybe other newspapers were campaigning against it and against us as a means of stopping.

  • Yes, but -- sorry.

  • And that is a commercial reason. They said at the time in their public statement that they felt they were in some commercial danger, if you like, if we had succeeded in having 100 per cent of BSkyB.

  • Something which -- I might say something else I would say that -- I'm sorry, judge -- I'm very, very proud of. I nearly went broke, and I'm not talking about the company, I'm talking about myself. One night in the hands of the bankers I actually mortgaged my own apartment in New York. But we got through it and we gave great plurality to the British public. They now have 600 channels of television, some very good, some were never there before, some better than the BBC, a lot worse, but there we are. There is now great plurality and competition.

  • And I feel -- you've given me the opportunity, and I'm sorry --

  • -- I'm not answering your question, but I did want to say that whatever might have happened to the News of the World, I have contributed to plurality of the press. You wouldn't be here with ten papers today. I don't know about how some papers are being financed, like the Independent, but the -- or the purpose, but I -- if I hadn't beaten the old craft unions, who I'm sure Mr Dacre remembers and would agree with me, we went through agonies. We didn't know how many papers were we were going to get every night, or what would happen -- there wouldn't be such a good democratic press, with all its faults, we have today.

  • Thank you for that, Mr Murdoch, but --

  • And in television the same.

  • -- can I just, to be fair --

  • -- to Mr Dacre, just come back please to --

  • I thought I was very complimentary to him.

  • You were, and I'm very grateful for what you said, but when you said that his editorial policy was driven by commercial interests --

  • -- what you had in mind was this email which is solely concerned -- it's not even his words, it's Mr Michel's words -- with the campaign of some sections of the media about the BSkyB takeover, isn't it? That's what this is about?

  • Yes. He just simply -- I think he was referring to Mr Hunt, I don't know, or his adviser, that all the editors have been called about his decision and that Mr Dacre said that his -- made it clear that their campaign was purely motivated by commercial reasons and fears about bundling.

  • Yes, and it's in that context that you said what you had to say this morning?

  • Thank you very much.

  • Sir, John Hendy representing the National Union of Journalists.

    We'd like to put some questions about the culture, practice and ethics of News International in relation to its own staff in the light of some of the evidence that you've heard in the Inquiry. I gave notice of the areas that I wanted to raise to Mr Jay. He took one of them up with Mr Murdoch, but not the others. I also gave notice to Mr Davies on behalf of News International. Mr Jay indicated that he wasn't going to pursue various aspects. Since then, I've refined my questions. May I just indicate what the five areas are?

  • Sir, the first is what might be thought to be the unethical treatment of journalists and photographers, a factor which we say contributed to the unethical news gathering which you've been investigating. Secondly, whether allowing the National Union of Journalists to represent members wouldn't be a good protection against unethical behaviour in the future. Thirdly, whether News International was involved in the insertion of a particular provision in the industrial relations legislation, which would appear to be protective of News International. Fourth, whether a conscience clause, as the NUJ has campaigned for, would not be a sensible protection for journalists for the future. And finally, the role of the Management Standards Committee and what we say is the absence of protection of journalists in relation to its activities.

  • I don't mind you asking about the first topics that you've identified quite briefly.

  • The last, however, does not in my judgment fall within the remit. That's part of what Mr Murdoch has described as, if you like, the clean-up operation, and I am looking at the custom, practice and ethics of the press up to that moment, as it were, rather than putting in situ what he's now established to revisit what's gone on with the News of the World.

  • But you'll have to do it quite quickly, Mr --

  • I would have welcomed the chance to answer that last one.

  • You want to answer the last one as well?

  • I just want to say that the MSC did not disclose any sources of any journalists at all.

  • All right. Right, Mr Rhodri Davies, you wanted to --

  • I was going to say that Mr Hendy was kind enough to give me a copy of the questions he wants to ask. I don't think they quite cover the first category which he mentioned just now, and I think this is the same list of questions which was given to Mr Jay and they failed to pass his editorial filter. They run to seven or eight pages, and in my submission they're not actually questions at all. What they are really is a statement, because they're rather in the form of statements with question marks appended --

  • No, Mr Hendy won't be making statements with question marks appended, he'll be asking questions, because if he doesn't ask questions, I'll stop him. Thank you very much. Right, questions, Mr Hendy, briefly on the topics that you've mentioned.

  • Mr Murdoch, we know that News International set up the Management Standards Committee and indeed you said this morning you set up inquiry after inquiry in response to the unethical practices in gathering material for publication. Are you aware that the Inquiry has heard significant evidence of unethical practices in the treatment of journalists and photographers by News International?

  • No. Let me answer this. I don't believe there is any or has been any. We have a very large staff of very, very well-paid journalists, and they are perfectly free to join the NUJ whenever they wish.

  • Yes, that's not quite the point --

  • Well, it is the point. If they were unhappy or being treated unethically, they can join the NUJ.

  • Sorry, Mr Murdoch. The evidence I'm referring to is described by Ms Stanistreet as endemic bullying, huge pressure to deliver stories, whatever the means, overwhelming commercial pressures which are allowed to dictate what is published, and the overweening power and control of editors over their journalists and of employers over their editors. It's that sort of thing. And she gave evidence to this Inquiry of bullying, in the words of journalists who had spoken to her, who she said were too scared even to come here and tell Lord Justice Leveson about that.

  • Ms Stanistreet gave the evidence as General Secretary of the NUJ.

  • Have those matters not been drawn to your attention?

  • Certainly not. Our journalists are perfectly free to make complaints and perfectly free to join the NUJ.

  • I think one has to be a bit careful, Mr Hendy. I think Ms Stanistreet was very careful that she wasn't simply limiting this to any one news operator.

  • So it is general because it's anonymous and the titles are therefore unknown. It's a general point. But, Mr Murdoch, you may not be aware of it, but I did hear evidence from a gentleman by the name of Driscoll who most certainly gave evidence of bullying and won a very large settlement from one of your titles in relation to the way that he was treated. Is that right, Mr Jay?

    Maybe you don't know anything about it, in which case we'll move on.

  • Mr Murdoch, let me give you two sentences from evidence which she recorded from a journalist.

  • This is MS1, paragraph 1.1:

    "I worked ..."

    This is a journalist of 30 years' experience:

    "I worked for the News of the World for over three years. There was tremendous pressure. Everyone talked about the byline count. Reporters had to do what they needed to get the story."

    And another journalist with six years' experience, paragraph 1.14:

    "During my time at the News of the World, I experienced pretty much constant bullying. My section editor would find fault with ..." and so on.

    Clear evidence that at the News of the World at least there was a culture of bullying.

  • Why didn't she resign?

  • I think the problem with that might be that she needs a job. That's actually been some of the evidence I've received, but if you've not seen this evidence, I don't think it's necessarily sensible that you be asked to comment on it, but it may be that in the light of what Mr Hendy has pointed to, if you wanted to, you could look at it, and if you wanted to say something about it, you can. If you don't, you don't need to.

  • I will certainly look at it.

  • Can I just ask you this: as far as you're aware, there's been no investigation within News International of allegations of bullying of staff?

  • I've never heard of it. They always strike me as a very happy crowd.

  • Struck you as a happy crowd, yes.

  • Can I turn to the second topic in relation to the NUJ itself. Everybody knows that News International derecognised all its unions in 1986 and the reasons for that are well-known. It is the case that the National Union of Journalists, indeed no independent union, is permitted to represent journalists or any other staff to this day on any United Kingdom News International title. That's right, isn't it?

  • If they could find a majority of our journalists who want to join the NUJ, we would have no choice, I think, but to --

  • You say you would have no choice. Do you mean as a matter of law --

  • -- or would you accept their democratic decision?

  • I'd accept their democratic decision, but let me be quite clear. We didn't throw out the NUJ. There was a particularly militant head of the NUJ who worked at the Sun, and when the Sun's staff overwhelmingly decided to walk through the printer's picket line, he resigned. And that sort of thing happened in each of the papers. It was not overwhelming at the Sunday Times, it was a narrow majority, but elsewhere it was. And they had no interest in the NUJ.

  • Do you accept that the absence of the NUJ having any form of recognition whatever at News International means journalists have got no independent place to go to be represented should they wish to make complaints about bullying or indeed any other matter at work?

  • No, I believe there's an internal -- a staff association, which I'm sure they're represented on. They're certainly very welcome to raise whatever issue they want to.

  • That staff association was set up by News International itself, and indeed funded by News International, wasn't it?

  • Probably. We thought it was good to have a staff association, somewhere where the staff could talk to us if they wanted to as a whole, and which could report to them on the progress of the company.

  • That staff association, News International's staff association, made an application to the public official who deals with these matters for a declaration or a certificate of independence, which failed, because the certification officer found that the organisation was under the influence of the employer. Is that right?

  • Do you accept that were the NUJ permitted to represent members in News International titles, that would be at least one step towards the eradication or prevention of the unethical story-gathering practices which Lord Justice Leveson has heard about?

  • I'm sure the people who have been arrested were once members of the NUJ.

  • Well? Didn't stop them doing what they did.

  • But if the NUJ had a presence, it would be somewhere for a journalist to turn, should they feel that they were under pressure to do something unethical.

  • It didn't work out that way when the NUJ was there.

  • And indeed, one of the journalists who gave evidence through Ms Stanistreet said that the absence of the NUJ meant that there was nowhere to turn.

  • No, there's the staff association.

  • You don't accept that?

  • And there's the editor. Everyone has access to everybody.

  • Are you aware that the NUJ has for a long time been seeking the insertion in contracts of employment, not just at News International but other titles, of a conscience clause, that's to say a provision by which it is forbidden to discipline a journalist who refuses to do something which is unethical or against the code of practice?

  • I have never heard of it.

  • Do you think it's a good idea?

  • Yes. I think -- I wouldn't do it through the NUJ, but I think for --

  • For us to say as a condition of employment in a contract for a journalist they have the right to do that, I think that's a good idea.

  • That's a good idea. Right?

  • Thank you. The final matter then is in relation to the industrial relations legislation. Mr Jay showed you an article yesterday by Mr Blair about what Labour was proposing. I think you're aware that Labour introduced a statutory mechanism whereby a trade union could apply to a state body, the central arbitration committee, for recognition, compulsory recognition, by an employer, provided it had the support of the relevant workers. That procedure contains within it a provision by which, if the employer already recognises a trade union for collective bargaining, no further union can make an application, and that's very understandable, but there's an embellishment on that principle in that the legislation says that if an employer has a voluntary agreement with a non-independent trade union, like News International's staff association, that too will prevent any independent union making an application.

    You're aware of these things, Mr Murdoch?

  • No, I'm afraid I'm not.

  • I'm not up on these issues.

  • That embellishment is referred to in Trade Union circles as the NISA clause, the News International Staff Association clause, and what I want to suggest to you is that you had some discussion or people in News International had some discussion with Mr Blair or officials on his side to ensure that that provision was in the legislation so that the NUJ or indeed any other union could not make an application for recognition for collective bargaining at News International.

  • That can either be "no" or "I don't know anything about this". Which is it?

  • Well, I know that I never approached Mr Blair or spoke to Mr Blair about it. Otherwise I have no knowledge.

  • Thank you.

    Mr Murdoch, thank you very much indeed for the time that you've devoted again to the preparation of the evidence. The statement, I think, will go on the website almost immediately. The exhibits, although one already is on the website, the exhibits will in due time go on the website. It's simply a question of time, but I do assure you, it will happen.

  • Thank you. We were just concerned, particularly about the Thomson letter --

  • Thank you very much indeed.

  • -- on the Times. Thank you, sir.

  • (The hearing adjourned until further notice)

  • Mr Eadie.