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

  • MS SUSAN LEE PANUCCIO (sworn).

  • First of all, make your comfortable and your full name.

  • In file 1, under tab 8, you'll find a copy of your witness statement from 14 October last year.

  • There's a statement of truth and your signature at the end. Is this your truthful evidence?

  • Most of this, Ms Panuccio, we're taking as read. I'm just going to alight on a few points. You identify yourself as the chief finance officer of News International, in which post you were appointed in late June, 2008; is that right?

  • You obviously had a career as an accountant and you started working for News International in 2004; is that right?

  • Can I ask you about the payment system to third parties, which is clause 5.1 of your statement, at our page 07794. The editorial commissioning system which requires authorisation by the relevant desk head and by the managing editor's office, is that up to a threshold of £50,000?

  • Yes. I think you'll note in here the only exception was on News of the World where certain desk heads could approve up to £2,000 without the managing editor's approval, but yes, up to £50,000.

  • Thank you. Is this a system which was in place or has been in place at all material times since 2008?

  • I'm going to ask you next about cash payments. 5.1.3 on the next page:

    "Interim policy came into effect on 5 September 2011. I believe from documents I've seen that that policy is now in force."

    Is that right?

  • What, in a nutshell, are the differences if any between this policy and the previous policy?

  • I think essentially there's a couple of differences. One, we now require the journalist to sign when they collect the cash. So before, we did allow administrative members of the team or runners to come and collect the cash. So the journalist actually has to collect the cash and sign. It also requires the editor's signature -- editor or deputy editor, as well as the managing editor or deputy managing editor's signature. It also covers elements of the Bribery Act, so it goes into a few more examples than it did before.

  • So is this right: you've considerably tightened up on the controls and protections within this system?

  • We had the fundamental controls in place previously, and my understanding was that the editors were aware of the majority of cash payments that were made, but we didn't physically get them to sign, so there was no evidence that they had done that review.

  • Is there an audit trail as to why the cash payment is being made and for what?

  • It depends on the type of cash payment. So we would expect that there is paperwork, obviously, in relation to any of the cash payments, but exactly what it is being used for depends on whether it's confidential or non-confidential. So for the non-confidential ones, we would have the name and the details on there. For the confidential ones, they wouldn't name the source but there may be a generic description about what the payment relates to.

  • So would it just say "confidential enquiry" or would it say more about the story to which it related?

  • It could say "football story" or "showbiz story", something like that.

  • How often does the source insist on a cash payment? Is this frequent or rare?

  • No, I think it's probably useful to have a bit of context on -- the Times and the Sunday Times, I think -- you know, the Times has not made any confidential cash payments since I've been there as CFO. I think the Sunday Times less than 10 in three and a half years. So it predominantly relates to the tabloid model. I think in relation to overall cash payments, they would make up certainly less than 1 per cent of the editorial budget.

  • You say at the very end of 5.1.3, three-quarters of the way down page 7796, Ms Panuccio:

    "There are no limits on the amount of cash that can be requested, providing the request is appropriately authorised in line with the approved signatory list and so there's a threshold of £50,000."

  • That's correct. If any payments came to light that were above that, then I would expect they would either be approved by the CEO or myself. The Pakistani cricket story would be a good example.

  • I think the amount was £150,000?

  • Have there been other examples that high, or is that an exception?

  • That it is an exception. Certainly whilst I've been CFO there's been no other cash payments in excess of £50,000. There have been a couple that sort of are in the 30 to 40,000 range and we would pick them up via finance, because obviously we have to facilitate the cash, but it gets approved within editorial.

  • In relation to the Pakistani cricket story, what steps, if any, did you taking to satisfy yourself that (a) the payment was appropriate, and (b) you were getting value for money?

  • So the way it would typically work, obviously a story of that nature is very confidential and very sensitive, and the editor would have a conversation with the CEO in relation to that story. I then had a courtesy call from the editor to say that he required the cash. We obviously had to facilitate the cash payment. I spoke to the CEO to ensure that they were comfortable with the story and the provenance of it and we facilitated the cash payment following that.

  • You cover staff expenses, paragraph 5.2.2, page 07798.

  • Has there been any change of practice or policy in relation to these expenses?

  • In March 2010, or around that time, we automated our expense system, so we -- it used to be a paper-based system and it went online and in conjunction with that, we did do a tightening up of the editorial expense policy. That was more in relation to the fact that we were doing cost cuts across the titles and the managing editors, together with my finance team, worked on a new policy just outlining what was appropriate and what was not in relation to claiming expenses.

  • Since the demise of the News of the World in July of last year, and the media and other explosions which attended that, have you detected any change in attitude or culture or practice in the Sun in particular, I think I can ask the question, in the context of either staff expenses on the one hand or payment to sources on the other hand?

  • So we have definitely seen that the usage of cash payments has gone down considerably. So I think up until December -- so we run over a financial year ending 30 June, so up until December, so six months, our cash payments were less than £50,000, which was significantly less than what they had been in the past. So I think, you know, the journalists, certainly within that first six months, were very nervous in relation to cash payments and obviously we were doing a lot of training and reinforcing a lot of policies. So I think there's just a lot more awareness of cash payments and the fact that we always have stipulated that where possible, we should use non-cash payments as a general practice. So I would say that yes, we have seen a reduction to that.

    In relation to staff expenses, I think staff expenses, certainly over the last few years and since we implemented the new policy in March 2010, have been pretty consistent.

  • Yes, thank you very much.

  • If you take a story like the cricket scandal, presumably there's a lot more money involved in that than the cash payment for the story?

  • And all that money is paid through with an audit trail associated with it?

  • Yes. So there would be expenses incurred in getting the story -- travel expenses, accommodation expenses, depending on where the story is, and yes, all of that would be auditable, have an audit trail.

  • Thank you very much, Ms Panuccio.

    The next witness is Mr James Harding.