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

  • MR FINBARR PATRICK RONAYNE (affirmed).

  • Mr Ronayne, sit down and make yourself comfortable. In file 1, the bundle in front of you, under tab 5, you should see a witness statement that bears your name. For our record, could you give us your full name?

  • Finbarr Patrick Ronayne.

  • Thank you. The statement you'll see is dated 14 October of last year, is signed by you and has a statement of truth at the end; is that correct?

  • You have an accounting background. You worked at Trinity Mirror between 1991 and 2008, when you left to take up your present position at the Daily Telegraph in October; is that right?

  • And you are the finance director of the group. Can I ask you a general question: what are the differences, if any, in cultural terms, if I can so describe it, between Trinity Mirror and the Daily Telegraph?

  • Okay, the key difference probably is Trinity Mirror is a plc and I worked in one of the operating divisions. I was finance director for the national newspapers, which covered the Daily Mirror, the Sunday Mirror and the People, so I was more involved in implementing strategy, which was basically decided on -- at board level.

    At the Telegraph, I'm obviously a main board member and involved in actually setting the strategy.

  • But in aspects of the day-to-day job, it's pretty similar actually in terms of the operating day-to-day base.

  • Trinity Mirror is a public limited company. Daily Telegraph is a limited company.

  • But the requirements of the Companies Act 2006 are the same?

  • Thank you. A lot of your evidence we're going to take as read, Mr Ronayne, given the time available. Can I ask you this: when you arrived in October 2008, the country was in the middle of a recession. Did that lead to the taking of measures of financial stringency at the Daily Telegraph?

  • That's correct. As you mentioned, when I arrived in October 2008, it was shortly after the credit crunch crisis, and in terms of actually budgeting for business performance the following year, we expected a significant reduction in advertising revenue, as indeed the entire industry faced, and that required basically a detailed review of our current cost base, our decline(?).

  • You explain the systems in place to ensure the correct allocation of funds. The framework is in paragraph 9. The first element is a robust budgeting process, which starts under paragraph 10, and it involves, if I can summarise it in this way, preparing a detailed annual budget and then reviewing that budget on a monthly basis; is that correct?

  • The Inquiry is probably specifically or more interested in two aspects, which are the authority levels and then the policies. You tell us in paragraph 14 that the authority levels were lowered in December of 2008 as part and parcel of the cost reduction programme; is that correct?

  • And you explain how the authority levels are applied. May I cover one issue, which in fact was not addressed in your statement, and this is authority for settling litigation. How does that work?

  • That would be covered basically under the policy of central control of certain aspects of the business, under paragraph 9 for central control of the key functions, would include basically litigation settlements or, I think, the decision whether to defend or settle the case, depending on magnitude of that. The legal director would basically bring that advice to myself and the chief executive.

  • To decide the best course of action.

  • Thank you. Then from a financial governance perspective -- I'm now on paragraph 18 -- there are two key policies. There's a procurement policy, which is no doubt designed to bring the Telegraph in line with its obligations under the public contracts regulations and the similar secondary legislation. I think we're probably more interested in the expenses and business travel policy, which is subparagraph (b) of paragraph 18, Mr Ronayne.

  • The commissioning of content would actually fall under the procurement policy. The expenses and business travel policy is in respect of editorial employees, and indeed all employees reclaiming expenses incurred on behalf of the business.

  • Have these policies been tightened during your time as finance director?

  • Yes. When I joined in October 2008, I basically rewrote both policies, mainly due to the economic climate at the time.

  • Yes. You tell us that the policies were revised in October of 2008 but did you have a feeling therefore that they were too loose beforehand or was this merely a response to the background economic situation in the country as a whole?

  • I think in the main it was a response to the economic climate, but yes, we did actually use the opportunity to tighten certain policies and procedures.

  • Before October 2008, can you recall what -- this is when you arrived -- the position was in relation to cash payments expenses?

  • We undertook basically -- the business doesn't encourage cash payments but we undertook a very detailed financial review to -- you know, in support of our witness statements to this Inquiry, and we have not identified any cash payments that were made to purchase editorial content back to January 2005. We have identified, I think, through the expense system, that there were about 12 claims basically between 2005 and 2008, you know, where employees paid cash payments directly to secure stories, I think the amount to £2,500 in total.

  • Sorry, what was the sum in total?

  • And that was for 12 stories?

  • This is where there were 12 expense claims where cash payments were made in respect of stories around sensitive material. It was basically around stories in respect of the sex industry and around army barrack bullying.

  • But there has been none since the policies were revised in October 2008.

  • The position therefore is, if I've correctly understood paragraph 19 of your statement, that cash payments by journalists to sources simply have not taken place since October or December 2008; is that right?

  • Different titles have expressed a concern or raised this point: that some sources don't want to be paid in other than cash, through fear of being identified. Is that an issue which you're aware of?

  • I've certainly experienced that when I worked at Mirror Group. There was a very tight procedure over cash payments and -- where cash payments were actually made. In the case of the Telegraph, all contribution payments are actually processed on the system, where we take addresses, postcodes, bank account details, VAT registration numbers, if appropriate.

  • Yes, but to your knowledge, has that acted as a disincentive for sources giving stories to Telegraph journalists?

  • Not that I've been made aware of.

  • Okay. The Telegraph also has a whistle-blowing policy. That's paragraph 20. Then in paragraph 25 you refer to the letter which we have seen as an exhibit to Mr MacLennan's evidence.

  • Are there any specific financial issues which arise -- this is in the context of paragraph 27 -- from the challenge which your company faces to transition from traditional print base to multimedia digital business?

  • I think, as Mr MacLennan explained, obviously I think it's a priority for any print business to transition itself into a multimedia business, and I think we've taken the view basically as a board that we would set realistic profit targets for the traditional side of the business and reinvest those profits into technology and digital operations to diversify our revenue streams.

  • You were involved in organising the payment for the computer disk in relation to the MPs expenses story?

  • That's correct. Mr MacLennan was on holiday at the time and I was the most senior executive in the business.

  • You explain what the payment was in paragraph 31. A deposit also had to be paid for, as it were, a ten-day review period to satisfy yourself that the material was what it purported to be?

  • And you were responsible for signing this off, as it were; is that correct?

  • Can I ask you about paragraph 35? You point out that from time to time, editorial executives will claim expenses in respect of entertaining police or public officials, and then I paraphrase: you aren't involved or have any knowledge of indirect payments made to police, public officials, mobile phone companies or intermediaries. What sort of expenses are we looking at in respect of entertaining? Are these the cost of a dinner --

  • I think they generally take the form of lunch, dinner or a drink. Having undertaken this detailed financial review, I mean, I wasn't concerned that there were any extravagant expense claims made by the editorial team.

  • And the expense claims, is this correct, are always in respect of entertainment and not for the provision of information, for example, from these sources?

  • No, these would all be in respect of expense claims. I mean, they need to support any expense claim with a detailed receipt of the entertaining.

  • And presumably public officials also includes politicians; is that correct?

  • That would be correct, yes.

  • Thank you, Mr Ronayne. Those are all the questions I have.

  • Mr Ronayne, I'm grateful to you for leading the review of the records, which permitted the letter to be written, which I have seen. It's not just important, obviously, that I see all this, but it's important that it's seen publicly to have been done and to achieve the results that it's achieved. Thank you very much.

  • Shall we take six minutes?

  • The next two witnesses will be much lengthier.

  • (A short break)

  • The next witness is Mr William Lewis.