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

  • MR FREDERIC MICHEL (affirmed).

  • Thank you, Mr Michel, make yourself comfortable.

  • You provided us kindly with two witness statements, which I'm going to ask you to bring to hand. The first is dated 18 April, and the second 21 May of this year.

  • Are you content to attest to the truth of both of those statements? There's a statement of truth over your signature in each.

  • You joined News Corp in May 2009 as Director of Public Affairs, Europe and were promoted in December 2011 to Senior Vice-President of Government Affairs and Public Policy, Europe. Can I ask you in just a few words to describe the nature of your role for News Corp from May 2009 to December 2011, please?

  • I was at the time Director of Public Affairs, Europe, and I represented News Corporation's operating businesses in Europe, with governments across Europe, European institutions, working also with each business unit and their public affairs team.

  • When the BSkyB bid was launched in June 2010, what percentage of your time was devoted to that enterprise?

  • It became a very full job from probably September 2010, and then it increased further and further throughout the bid, especially when we entered negotiations around the UIL. So I would say 80 per cent.

  • So many hours a week; is that right?

  • Many hours a week, day and night?

  • The bid was launched in June 2010. When was it decided internally to bid for the remaining publicly owned shares in BSkyB?

  • Is it your evidence that it was only in June 2010 that you became aware of the bid, or is it your evidence that you were warned beforehand?

  • No, I was only aware, I think, the day before the announcement. I was not part of the sort of small confidentiality club that there was preparing the bid.

  • So it was completely news to you, was it, when you were told the day or so before that the bid was going to be launched?

  • It was news in terms of the concrete launch. I guess there had been some mentions that there was always an intention from News Corp to acquire the remaining shares, but ...

  • When did you hear those mentions for the first time?

  • Oh, when? So remind me the exact date, do you have the exact date when it was announced? Because I was told the day before.

  • I think it was mid-June --

  • 15th or something. So I would have been told the 14th, probably.

  • Yes, but I'm trying to explore when this was mentioned to you before 14 June, Mr Michel. Do you understand?

  • Yes, but it was never mentioned to me as a sort of fait accompli or something that was in -- you know, in full process. I probably had discussions in sort of very broad way, but that's it.

  • As a burgeoning idea, when was it first mentioned to you?

  • I think when I joined, there was always discussions, either internally or in the press, that this would be something that News Corp would want to contemplate. As a public affairs item for me, it's never been raised -- it's never been raised as a priority until it was launched.

  • It's just if you were going to be responsible for the public affairs aspects of the bid, you would need to prepare yourself to do that. It's just somewhat surprising that it's the day before that you're told. There must have been some preparation so that you could spring into action, as we know you did. Would you agree?

  • So the day before, when I was told, we swung into action and the key thing from my point of view was to be able to inform the Secretary of State for Business and Industry on the morning of the announcement, and so there was a bit of a panic in terms of how to reach him.

  • Yes. Mr Michel, to cut to the quick, you must have had a plan in place before 14 June. The basic information must have been given to you before, and I think you're telling me it was a matter of internal discussion since May 2009; is that right?

  • No, this was a broad item. It was never -- we never had -- I was never part of specific meetings to discuss it.

  • Did you have any involvement then in the timing of the launch, in particular the fact that apparently coincidentally, it was one month after the General Election of May 2010?

  • Did you have any view as to whether the Conservative Party or some different party might be more or less favourable to the bid once it was launched?

  • On -- on the -- at the time of the launch?

  • At any stage, Mr Michel.

  • No, I didn't have a particular view, because when it was launched, it was very much launched as an M&A announcement, and we discussed much more the sort of merits of the case and how, on the regulatory front, we were going to address it. The first item was very much to work on the phase one in Brussels for the competition side.

  • Yes. You're focusing now on the legal or competition law aspects of the bid, but that wasn't your role. Your role was more the public affairs aspects, which involved a political dimension, did they not?

  • So you were well aware as to who in government and opposition was likely to be favourable to the bid and not favourable to the bid, weren't you?

  • I didn't have a specific view on it.

  • Was it part of your role then, from 15 June, to ascertain what Dr Cable's view might be?

  • Were there concerns internally that his view might not be favourable?

  • I wouldn't say there was a concern from June. I think the concerns started to be raised when we were worried that there was no particular process in place in order to make a presentation to the Secretary of State, which alarmed us.

  • Yes. But you were putting out feelers everywhere, Mr Michel. You were in contact, as we're about to see, with the Secretary of State for Culture, you were in contact with other people in government. You could work out pretty quickly, with your astuteness, could you not, who was on side and who was not on side; is that fair?

  • I was definitely able to ascertain the sort of political climate when the launch was announced.

  • Yes. And in the immediately succeeding period, once you started to make contact with relevant people?

  • Because you no doubt saw it as your role to see who were the people who you could deploy -- I don't use that word disparagingly -- on your side, and those people who needed to be worked on more because they were anti. That was part of your assessment, wasn't it?

  • I think my role was to represent, as best as I could, our arguments for why this bid was strong -- had a strong case, and to make representations across all political parties as much as I could.

  • In that answer, you're ignoring from account the personalities occupying ministerial or shadow ministerial posts and their likely -- by their favouring of the bid or disfavouring of the bid. This was something you were very keen to know, weren't you?

  • I think given that the decision rested ultimately in the hands of politicians, I had, as one of the attributes of my decision-making process, to try to understand what their personal view could be.

  • Did you understand the legal issue here, namely that the Secretary of State for Business Innovations and Skills had a quasi-judicial role?

  • I understood in broad terms. I think it was something -- first of all, it's the first time I had to deal with such a transaction, and I think it was the case for many people in the event. I didn't have a specific detailed sort of reminder of what it meant to have a quasi-judicial process.

  • But it is a specifically legal concept. Did any lawyer explain it to you at any stage?

  • Did you not want to know? I mean, this is stepping into deep waters, and you'd want to make sure that whatever happened happened appropriately and didn't give rise to potential risk to your employers.

  • Yes. I think we had discussions on the fact that it was very important that the decision rested with the Secretary of State, that it was not appropriate to have direct discussions with the Secretary of State unless they were formal and minuted, but beyond that we were in unchartered territory in terms of -- and I'm speaking in hindsight as well -- in terms of the level of representations that could be made below the Secretary of State.

  • But presumably News Corp had lawyers for whom it wasn't unchartered territory?

  • We had a regulatory and strong regulatory and legal team, and I think they also had assessed that the key element of a quasi-judicial process was not to have inappropriate contact with the Secretary of State, who had to take his own view on it.

  • The gist of the advice: not to have inappropriate contact with the Secretary of State, is that it?

  • Yes, and also -- I mean, the definition of quasi-judicial process is also that the Secretary of State had to take an unbiased view as to the decision he's likely to make.

  • Was it explained to you that the term Secretary of State included his civil servants and his special advisers?

  • Do you have a view as to whether the term Secretary of State included civil servants and special advisers?

  • What do you mean, do I have a view as if that's -- it includes his office?

  • As not making representations to them?

  • No. I was never of the view that it was inappropriate to at least try to put the argument or make representations to these officers.

  • Can I just test that, Mr Michel, because you in your first statement explain that references to JH in the emails --

  • -- either include references to a special adviser or in fact mean a special adviser. Do you follow me?

  • Yes, for me it meant the office of the Secretary of State.

  • That's right. Because in one sense there's no difference between them. They are all within the envelope of the Secretary of State, and the label JH covers the Secretary of State personally, covers his officials and it covers his special advisers?

  • Yes. And for me -- yes, it's to your previous question as to whether or not civil servants, officials and special advisers are part of the office, yes, they are.

  • So inappropriate contact with the Secretary of State, that's clearly off limits, but surely inappropriate contact with the special adviser is equally off limits, wouldn't you agree?

  • No, I don't think anything inappropriate was -- never took place.

  • That's a different issue. I think we're dealing with the principle. As a matter of principle, there should not be inappropriate contact either with the Secretary of State in the person of Mr Hunt, or the Secretary of State in the person of his special adviser. Are we agreed?

  • Can I ask you this other general question: given that you fully appreciated that the decision resided, until 21 December 2010, with BIS, why did you trouble to make such efforts to lobby other government departments who had no role in the decision?

  • Our view was that although the decision was ultimately in the hands of the Secretary of State for Business and Industry, we didn't have much chance to make representation to him, although we did ask, and that it would also be part of my work to at least air the arguments of why we thought we had a very good case from a plurality point of view to other departments, especially if you refer to DCMS, for example, because it was the department in charge of media.

  • Was it part of your aspiration that a different government department who was on side, take DCMS, might be able to influence the relevant government department, which was BIS?

  • I think the intention was that for me to put the argument to them, to explain as much as I could, to even also share some of the expert evidence.

  • And see -- and then for them to make -- to take a view as to whether or not they want to represent them.

  • But you wouldn't have done it, Mr Michel, you wouldn't have wasted your time, unless you thought that that might happen. Would you agree?

  • Yes, but this was something I did across both departments and political parties as well, including the opposition.

  • Yes. Because it was necessary -- there were three limbs to this. There was the other limb of the Coalition, or you saw there might be difficulties with the Liberal Democrats, and of course there was the Labour opposition, who you might not be able to win over but try and do the best you could with them. Was that your thinking?

  • Yes. And also I have to say they were all very interested in hearing our case, the details, and sometimes because those issues were quite difficult to understand, and they always welcome the opportunity, for example, to have a debrief on the undertakings or on the type of data that was used by Ofcom, things like that.

  • Your first statement, between paragraphs 13 and 18, which is pages 03263 and 03264, you make two points, Mr Michel. The first point is that between 24 December 2010 and the end of July 2011 -- this is paragraph 18 -- you did not have the any direct conversation with Jeremy Hunt relating to the BSkyB proposal.

  • That remains your evidence?

  • The second point is that, however, there were a limited number of text messages, which you list -- you provide the content of in some respects between paragraphs 13 and 17; is that right?

  • We'll look at the text messages in due course.

    The other point on your first statement, given you've now clarified for us that JH means special adviser, why didn't you make that clear in the emails themselves, in other words --

  • I think it's a shorthand I decided to use, both because I was having a lot of conversation came the beginning of January with the office of Secretary of State, but also because I was probably trying to be as quick and sort of generic as I could when I was writing those.

  • Okay. Did you have any direct text or email contact with any other individual or official in DCMS? I'm thinking in particular the civil servant who had the policy lead, Mr Jon Zeff.

  • During December and June?

  • Yes, I think we had one or two texts, which I think we've given in evidence, which were related to redactions or process --

  • We've counted less than five.

  • You think it's of that order, do you?

  • The other general point on your first statement, which I'll ask you to clarify: if you look at paragraph 20, on page 03264, you see in the fourth line:

    "His advisers were there to assist and advise Jeremy Hunt. It was my understanding that when they told me something it was always on behalf of the minister, and after having conferred with him."

    Where do you get that idea from?

  • I think it's -- for me it's self-evident that a special adviser is someone who represents the Secretary of State. That's why they're there for, when they interact across the policy community or with anyone, and I would have to assume that a special adviser -- and there aren't many around the Secretary of State, there were two in that case -- always represent the view of their boss.

  • But they were representing their boss, that is absolutely true, and constitutionally it is self-evident, but I suppose I'm asking you about the last part of it, "and after having conferred with him". Is that just an assumption you're making or do you have evidence for that?

  • First of all, it's a general assumption I'm making and I had to make in terms of interacting with special advisers. And, yes, I think there's two or three events when I probably had the sort of impression that some of the feedback I was being given had been discussed with the Secretary of State before it was given to me.

  • Okay. In order to make good that point, we're going to have to look at the detail.

  • Because it's -- I don't think it can be made further as a general proposition.

    We're going to take your second statement as read, but note that you were having communications until 21 December 2010 with SpAds and officials from other government departments, and we're going to cover that in your evidence in due course.

    The other general issue which we need to introduce is the first exhibit to your first statement, you divide materials up into three categories. They're largely emails and text messages which preceded or sometimes immediately succeeded a relevant email in the bundle KRM18; is that correct?

  • So we need to examine KRM18 in the context of that, where relevant.

    Can I move on now to your communications with Mr Adam Smith. Would you agree that there was a pattern of very frequent text messages, telephone calls and emails with Mr Smith, which certainly increased from December 2010?

  • Overall, over the period June 2010 to July 2011, we have counted the following: 191 telephone calls, 158 emails, 799 texts, of which over 90 per cent were exchanged with Mr Smith. Does that feel about right?

  • I didn't know the quantum, but I trust your counting.

  • Over the period 28 November 2010 to 11 July 2011, we have counted 257 text messages sent by Mr Smith to you, and given that you were more prolific in your texts to him than he was to you, there would be more than that which you sent. Would you agree?

  • Do you think, Mr Michel, that Mr Smith was supportive of the BSkyB bid?

  • I don't have any reason to believe either way. Whether I -- I can't assess whether or not he was a supporter of the bid or not.

  • Well, you might be able to on the basis of what he told you, but I think your evidence is that on the basis of what he told you, you weren't informed one way or the other whether he was supportive of the bid?

  • That's a very fair answer.

    Can I ask you generally, if you don't mind, for your view of Mr Smith, his diligence, his integrity, from your own dealings with him? Can you assist us with that, please?

  • Sure. I think Adam has always been a very warm professional, available adviser, and always very diligent in his work with me, and any interactions I've had with him were always professional and reliable.

  • Do you feel in your dealings with him that he was being straightforward, he was being evasive or he was being something different altogether? Can you put your own epithet on this?

  • Yes. During all the contacts we've been referring to, at the moment only quantitatively. We're going to come to the quality in a moment.

  • I would say he was always very straightforward, and then in the analysis of whatever we were discussing, you could infer whether or not he was evasive sometimes or not, but overall he was very straightforward and clear with me.

  • Yes. I've asked you that general question of Mr Smith. I'm going to ask you this general question of Mr Hunt: do you think Mr Hunt was supportive of the bid?

  • It's something I can't say.

  • There's nothing that you could point to from your own dealings with him which might illuminate that question, is that your evidence?

  • So is it your evidence then that Mr Hunt was keeping an open mind, he was impartial and would decide the bid on its merits at the appropriate time?

  • There's two more general questions. In relation to the emails we see in KRM18, have you exaggerated the position in this way: that you have, as it were, spun it in the most favourable light, in other words what Mr Smith told you, simply for the reason to provide reassurance to your boss, Mr James Murdoch?

  • I think my memos, as they were internal emails, were an accurate account of the conversations I've had. There might have been some contextualisation sometimes added to the feedback I would be getting. Whether there was any exaggeration or -- or spin, it depends -- I would say probably during the period of when we were dealing with BIS, the morale was quite low, because we had not much success in representation to BIS. Maybe I was trying to keep the morale up internally.

  • The period from 21 December 2010, you weren't trying to big it up, as it were, to score points with your employer because some people might say that if you were giving the impression that you were working on Mr Smith and that was in some way influencing the fate of the bid, that would put you in a good light. You could see that, at least intellectually, but can I ask you to say whether you might agree with that?

  • No, I don't agree with that.

  • I'd just like to ask you about a statement you just made. You said, "Maybe I was trying to keep the morale up internally". Doesn't that suggest that maybe you were trying to put the most favourable gloss on what was happening in order that people's morale would be kept up?

  • Yes, there's a distinction between whether or not I was trying to big things up, as you described it, because I wanted it to be seen in a positive light internally, which is I think something I didn't need to do. But yes, sometimes I was trying probably to energetically try to convince internal audience that we needed still to try to make representation for our case.

  • Okay. And now you've used the word "probably" as well. I'm sure you've reread and read these emails many times recently.

  • Would you agree that -- well, let me ask. You've said "maybe" and "probably". Do you mean "Yes, that's what did happen"?

  • No, I think it's very few rare occasions, I would say, where this happened.

  • Are you intending to identify the period in the autumn of 2010, when things were not going too well with BIS, and you were trying to lift morale, and you're keeping that as one area, or are you saying the same applies to the period 21 December 2010 onwards?

  • Yes, I mean it's very few examples, I would say.

  • Okay. Maybe we will need to look at individual examples and see where we get. I'm going to deal with this chronologically when we look at the material, which we're now going to start to do. In June 2010 to 21 December 2010, do you follow me? That's the first relevant period.

  • Let's look at some text messages, just a few. We can bring them up on the screen. These are all going to be MOD3 numbers. The first one is 12596.

    There's a technical hitch. I'm going to read it out. It will be on the transcript.

    Date, 27 August 2010. You sent this message to Mr Hunt and it relates to a speech Mr Mark Thompson had given about governance of the BBC. Do you remember that one, Mr Michel?

  • Mr Hunt writes back by text, 012597, he says:

    "Thanks, I agree nothing about BBC role in competitive market."

    And then you express an opinion about it at 12598, 28 August 2010:

    "My view is that MT [that's Mr Thompson's speech] was a failure, a whimper, really. It wasn't bright or inspiring in any way. The research was self-serving and laughable. He failed to respond at all to criticism that's warranted or really explain any reason why the BBC is criticised at all. He's in a trap over many things, most of all trying to whip up fears about Sky's success. I'm flying back to family in France now."

    And then he replies, 012599:

    "Because he trains his guns on you he failed to make his case to me."

    The purpose of these texts was to see if you could find out Mr Hunt's view in relation to the BBC and Sky, wasn't it?

  • I think it was a reaction to the MacTaggart speech that Mr Thompson gave in Edinburgh, and I was just making some, I will accept, colourful comments on his speech to Mr Hunt. But as I can see, there's very few things mentioning, it was just at the end mentioning that Sky is a successful company.

  • Mm. But was this part the beginning of a campaign to (a) test out Mr Hunt's opinion and (b) to win him over in relation to the BSkyB bid, which of course by then had been launched?

  • There's a later text, 12612, 7 October 2010, which you sent to Mr Hunt. This one says:

    "Shall I send Adam the briefing memo on plurality? Fred."

    This was an internal briefing memorandum which News Corp had prepared, which dealt with the plurality aspects of the bid; is that correct?

  • And you were asking the Secretary of State whether it should be sent to his SpAd and the Secretary of State says, "Yes please", at 12613. Do you see that in your schedule?

  • What was the purpose of doing that?

  • We had built a memo with our arguments on the plurality aspects of the bid, which we were making available to policy-makers in order to inform them of the debate which was very much developing.

  • Did you ever hear back from Mr Smith as to what Mr Hunt's reaction was to that memo?

  • I think I might have. I can't -- there may be ... I'm trying to remember that. There might be an email back from Adam on Jeremy Hunt's reaction.

  • You sent him two memoranda at this time. His reaction to one of them was persuasive, wasn't it, do you remember that?

  • Did that message come back to you? At the time in October 2010?

  • Yes, I think the email is to me?

  • You would have known from that that Mr Hunt was, to put it at its lowest, reasonably favourably disposed to the bid, wouldn't you?

  • I think he was just commenting on whether or not the way we were putting our arguments was convincing.

  • If I may add, sorry, it was something many people recognised at the time.

  • I don't think it's just a matter of the presentation of the argument. It's also the substance of the argument.

  • If an argument is persuasive, one has been persuaded by it. Doesn't that suggest that he might be on side?

  • I wouldn't have drawn that conclusion from just that feedback.

  • Maybe not from one piece of evidence, but it's a jigsaw, or one piece of the jigsaw, isn't it?

    There's a later text, this is 12621, 9 November 2010. This is you to Mr Hunt:

    "Can you meet James tomorrow morning for a catch up? Would be good, even early morning."

    You remember that one?

  • And then there are various texts confirming the arrangements. There was going to be a meeting on Monday. But I think what happened then is that advice was given that Mr Hunt could not meet you. Do you remember that?

  • And that advice is contained in one of the KRM 18 emails at page 016667. We're now in the proprietor bundle.

  • Do you know the date, Mr Jay, because I have a different pagination, I think.

  • On the internal numbering, page 26.

  • 15 November 2010 at 11.32.

  • That's the one. What exactly happened on this date is not 100 per cent clear, but the email says:

    "Jeremy tried to call you. He has received very strong advice not to meet us today as the current process is treated as a judicial one (not a policy one) and any meeting could be referred to and jeopardise the entire process. Jeremy is very frustrated about it but the Permanent Secretary has now also been involved."

    So you learnt that presumably from Mr Smith, did you?

  • And then you say:

    "My advice would be not to meet him today as it would be counter-productive for everyone ..."

    Can I ask you whether that was advice which came from Mr Smith or was it just your advice?

  • I'm sure Adam shared that view as well, but it was certainly my advice, yes.

  • The next bit:

    "... but you could have a chat with him on his mobile which is completely fine, and I will liaise with his team privately as well."

    Can I be clear, Mr Michel, is that your view or is it a view which also came from Mr Smith?

  • Yes, I think we probably -- given the frustration on both sides that that meeting couldn't take place -- probably had the conversation about the idea that they could have a quick call to the mobile to refer to the fact they couldn't meet, apologise to each other, and that's it. I'm not sure if the call took place.

  • From a later text, which we're about to look at, it did. Are you sure it's limited to an apologetic chat on the mobile, or might it include a conversation about anything on the mobile?

  • So the meeting was going to be a sort of catch-up meeting on a whole range of things, and at the time I think we were -- we wanted to talk about intellectual property issues, which was the Hargreaves review. There were some items that the Secretary of State wanted to mention like local TV networks, new generation access networks, maybe the sort of plurality debate around the bid as well.

    I'm not sure the call was -- if it did take place, would have been very long.

  • You don't know one way or the other, do you?

  • It's also clear that your thinking was that a private liaison with Mr Hunt's team would be fine, but what's the difference between that and a face-to-face meeting, apart from the fact that one is more clandestine?

  • What's clandestine, the mobile phone call?

  • No, liaising with his team privately as well.

  • No, I think the word privately here is not really appropriate. To reflect what I meant, it's probably more liaising in order to make sure the things that would have been raised at the meeting between the two principals would at least be taken on at a lower level between advisers, which we would have done with Adam on an ongoing basis.

  • The text which followed this email, 12626, 16 November, 15.52 and 23 seconds, you send to Mr Hunt:

    "Thanks for the call with James today, greatly appreciated. We'll work with Adam to make sure we can send you helpful arguments. Warm regards, Fred."

    The helpful arguments are relating to the BSkyB bid, aren't they?

  • I don't know. I can't remember.

  • But it is clear that you're working with Adam to send Mr Hunt the helpful arguments and that Adam is closely involved in the process as being the messenger?

  • That much is clear, isn't it?

  • Yes. He is the special adviser, so he ... I don't know if "helpful arguments" were meant to be for the forthcoming speech or for something related to the bid, sorry.

  • Mm. Mr Hunt's reply at 12627 is simply the word "Pleasure".

  • If I can just complete this sheaf of texts, although it does go slightly beyond the date I'd given as being the cut-off point of this period. Christmas Eve 2010, 12630, this is a text which you sent to Mr Hunt:

    "Hi. James has asked me to be the point of contact with you and Adam throughout this process on his behalf."

    Do you see that?

  • "Glad Jon Zeff is in charge of dossier."

    Why were you glad of that?

  • Because I appreciated Jon Zeff as an official, someone I had worked with several times before.

  • "Have a great Christmas with baby. Speak soon, Fred."

    Your respective children were born more or less on the same day, weren't they? You explain that in your first witness statement.

  • My third child was born on the same night as -- in the same hospital.

  • And then Mr Hunt's reply at 12631:

    "Thanks, Fred. All contact with me now needs to be through official channels until decision made."

    And then there's a personal greeting. What did you understand that to mean, the "official channels"?

  • The "official channels" would be his office and not him. Which is why from then on I stopped having any contact with him apart from private -- a few private texts during the bid.

  • And then you reply to his text at 12632 with a personal greeting relating to the Christmas period.

    Can I ask you though in the context of those texts what you said in one of the KRM 18 emails at 01683, which is page 42 on the internal numbering. Are you with me?

  • You say:

    "Just spoke to JH."

    That bit is literally JH, because we know that from what we've just been looking at.

    "Said he was very happy for me to be the point of contact with him/Adam on behalf of JRM going forward. Very important to avoid giving the 'anti' any opportunity to attack the fairness of the process and fine to liaise at that political level, while also DCMS/NWS legal teams are in touch."

    Mr Michel, that doesn't accurately reflect the texts we've been looking at, does it?

  • I think the first line does. But the rest is my view -- I'm giving my view to the rest of the team as to how I think things should be taken forward. At the time I was abroad, it was Christmas Eve, I was in Lanzarote, and we couldn't do a conference call probably with the entire team, so I reflect what I was told by Jeremy Hunt and then I sort of put a caveat to the rest of the team as to how I think things should be approached.

  • Even if one accepts that the sentence beginning "very important" is your interpretation of what should happen next --

  • -- rather than anything Mr Hunt said --

  • -- but hadn't you in any event exaggerated what he said? Because this states "said he was very happy to be the point of contact"; all he said in his text was:

    "All contact with me now needs to be through official channels."

    That's a much lower, softer light rather than the very green light that this email is apparently giving us the impression of. Would you accept that?

  • Well, the official channel would be Adam, so ...

  • So you don't feel that you've exaggerated the position in this email?

  • Okay. We're now going to look at contact you had with Mr Smith over this self-same period, from June to December. I think we can do most of these through KRM 18. If you look at 01643, which on your number is going to be page 2 --

  • Just before you do, could you just explain to me what you mean by "fine to liaise at that political level"?

  • Yes. A special adviser is a political adviser. Political appointee, sorry, which is different from Civil Service.

  • But are you saying to your team it's fine for the team to be in touch with Mr Smith to such extent as they want to be, and that's the way to proceed? I'm just trying to understand.

  • Yeah, yeah. So first of all it wouldn't be my team. I was pretty much the sole individual in this -- in the role of liaising with the political level. So I was indicating that it was fine for me to liaise with the political level, and there was another layer, which was to also make sure, because I was putting the legal team on that email, to make sure that there was another level of contact, which would be the one between the two legal teams.

  • If the special adviser was in effect speaking for the Secretary of State, although he's wearing a political hat, and you'd been told in November that a meeting with the Secretary of State was inappropriate and this was in the context before the Secretary of State had responsibility --

  • -- as he acquired on 21 December, how and why did you think it appropriate to have political contacts with the special adviser after 21 December 2010?

  • I think it was fine because I was -- it was an official channel, and a special adviser is part of the office of the Secretary of State.

  • It's your interpretation then of "official channel" in Mr Hunt's text, which gives you the --

  • -- go-ahead, as it were?

  • And I was never told otherwise from the Secretary of State's office at any stage in the bid.

  • Can I ask you, I'm looking now at this page 01643. This is a conversation or rather an email which refers to a call from Hunt's adviser. That's Mr Smith, isn't it, Mr Michel?

  • It must be, yes. Probably.

  • "Said there shouldn't be media plurality issue and believed the UK government would be supportive throughout the process."

    Are you sure he said that?

  • I can't remember -- I mean, I can't remember precisely that conversation on the phone. It was two years ago, nearly, but I'm sure we'd had a conversation which would be about whether or not the idea overall of whether or not the bid was good for the UK economy would be supported by the government, yes.

  • But this is the special adviser apparently speaking on behalf of the whole of the UK government, which is apparently supportive of the bid. It's quite a sweeping statement for a special adviser to make at a stage at which he wouldn't know, would he?

  • No, and also probably, you know, we would be having a lot of chatty conversations, if I might use that term.

  • And so it was probably a passing comment. But overall we were -- I would probably try to ascertain, of course, if there would be some sort of support from the UK government.

  • Yes, because part of the purpose of all these calls was to find out whether there was support for the bid, wasn't it?

  • It was to check on an ongoing basis sort of temperature around the bid.

  • Precisely. Well, Mr Smith denies that he said anything of the sort, but we'll have to wait to hear his version. But if a statement was made along those lines, "UK government would be supportive throughout the process", why did you tell me earlier that you weren't aware that Mr Hunt was supportive of the bid?

  • Because I was not aware that he particularly had expressed a view on whether or not he was aware -- supportive --

  • But if the special adviser in Mr Hunt's department is expressing a view that the UK government would be supportive, it's a fairly obvious deduction that Mr Hunt himself would be supportive, which contradicts what you told me earlier which was in fact he was neutral. Do you see the point?

  • Yes, although I think, if I may contextualise this email, Mr Jay, I think apparently we're having a conversation based on the back of a Standard article which was probably suggesting otherwise, and which led to that conversation with Adam, probably, and I would take the idea that the UK government would be supportive as a sort of very general observation, not as something which would mean that every Cabinet member or, you know, would go along those lines.

  • Isn't the truth here, Mr Michel, that this is an example of exaggeration by you to -- whether it's to boost morale or to frankly puff yourself up, it's not what happened?

  • No, I don't think I need to puff myself up.

  • Okay. Mr Smith also denies the last line:

    "I will be working with Jeremy/Ed [that's the Minister of State, Mr Vaizey] going forward to prepare it."

    Which is a speech, which is suggesting that a speech is going to be collaborated in between News Corp and government ministers, which again Mr Smith denies. Can I ask you to be clear that that's what he said?

  • Probably the last line is probably me saying I will be working with those officers on going forward to help prepare it.

  • Okay. Page 5, 01646. Is the reference to Jeremy Hunt there Mr Hunt personally or Mr Smith?

  • I don't know if there's been conversation or text exchanges at that time. There probably were texts I had with Jeremy Hunt, I think.

  • There is, in fact. At 12601, Mr Hunt sends a text which says:

    "Don't know anything."

    And the way you've interpreted that in the email is:

    "Jeremy Hunt is not aware", which is consistent with the text, "and thinks it's not credible at all", which is inconsistent with the text and is your gloss or spin on it; do you see that?

  • Yes, I mean I don't know if there had been calls as well with his office at the time or if -- when the piece came out. I think it was on the back of a Peston piece on the BBC website.

  • We've seen no evidence of any telephone call. I'm just politely suggesting to you that this is a piece of exaggeration by you for whatever reason. Would you agree or not?

  • Can I ask you, please, to move to page 9, 01650. You referred to:

    "Rebekah and I had a very useful meeting with Jeremy Hunt today on the bid which I will debrief each of you on."

    That, I think, was at the Conservative Party Conference, wasn't it?

  • Was Mr Hunt supportive on that occasion?

  • The bid, Mr Michel.

  • I think it was a meeting where, because it was Rebekah Brooks holding the meeting, it was very much around other issues which were related to newspapers, and I think the bid was mentioned at the very end and we probably discussed the state of the debate on the plurality issue. I can't remember whether or not anything else was expressed.

  • The email does refer to the meeting on the bid, which of course might include other topics as well.

  • The bid must have been discussed. The question was a simple one: was Mr Hunt supportive on that occasion or not?

  • I can't remember. I mean, the -- what I remember is that we had a collection of four or five meetings that day, and that there was a lot of media attention around the bid, and that -- maybe there was a discussion on the state of the debate.

  • You don't appear very willing to tell us, Mr Michel, whether Mr Hunt was supportive or not. Are you saying that he maintained a studied neutrality throughout, even when he wasn't responsible for carriage of the bid, or are you frankly not assisting us? Can we be clear, Mr Michel?

  • My view is that Jeremy Hunt was probably supportive of some of the arguments we were putting forward, and I think he's made the argument public, sometimes, on the plurality concerns that had emerged on the bid.

  • Okay. Your page 33, our page 01674. This is an exchange or relates to an exchange you had with Mr Smith. You see the sentence:

    "Jeremy has also asked me to send him relevant documents privately."

    Mr Smith disputes the adverb "privately". Why did you put "privately" in?

  • Probably meaning "directly". Um ...

  • If it's "directly", why not put in "directly"? Why did you put in "privately"?

  • I think the -- that probably suggests I was going to send the documents directly to him. I used the word "privately" probably not appropriately, I don't know. I can't --

  • You can't take that point any further?

  • 01679, page 38. Email at the bottom of the page. Do you see this one?

  • The call record shows a 22-minute call you had with Mr Smith before this email was sent, okay?

    "Very good debrief with Hunt on the issues letter. He's pretty amazed by its findings, methodology and clear bias."

    Well, the reference to "clear bias" is denied by Mr Smith, you follow me, but are you sure about the rest of what you say there, particularly the quite strong language "he's pretty amazed by its findings, methodology"?

  • Yes, I think we had a long conversation at the time just before I wrote that email which was on, as it says, the issues letter, the metrics data used by Ofcom to measure plurality, and I think there was an agreement that as there was also a very strong opinion internally on this as well, I think there was an agreement during that conversation that the use of those metrics and of that data showed some sort of bias in the way -- on the analysis.

  • Right, and you've written down:

    "He very much shares our views on it."

    Which is an inference I suppose you've drawn from the tenor of the conversation; is that right?

  • You must have derived considerable reassurance from that conversation, at least as regards the view of Mr Smith, and possibly the view of Mr Hunt; is that correct?

  • Yes, and I also think it's -- at the time there were many experts expressing the same view who had taken the time to read very thoroughly the report itself.

  • So in terms of the government departments, who were by now onside, the DCMS were one of those such departments, weren't they?

  • In favour of your bid, Mr Michel.

  • I think they were probably in favour of -- or in agreement with the arguments we had put forward in terms of plurality, definitely.

  • Okay. Those are the relevant pre-21 December 2010 exchanges with Mr Smith. There are one or two others, though, in material which was provided to us much more recently. I hope I can find it. Bear with me, I'm in the wrong place. There are only about four or five of these. It's at page 10871. Yes. I had mentioned this earlier. We can see the reaction of relevant people.

    On 7 October 2010, you sent a confidential email to Mr Smith. He had two email accounts, were you aware of that, Mr Michel?

  • Did you see there as being any difference between the two accounts? Obviously apart from the address being different.

  • What you say in this email:

    "As promised, attached briefing memo for Jeremy on the transaction, including Sky News audience shares."

    And this was a confidential memorandum which has been redacted for the purposes of this Inquiry because it contains confidential information, commercially sensitive information.

    Later at 10875, Mr Smith emails you saying:

    "This is very interesting, thanks, Fred, I've passed it on to Jeremy."

    And you say:

    "Glad you find it helpful."

    And then on the following day you do the same thing in relation to a briefing note on competition issues. Do you remember doing that?

  • No, I don't have the document in front of me.

  • 10878. It's very similar to the one on plurality issues. Or at least in terms of its form.

    Mr Smith then emails you back on the Monday, 11 October, this is our page 10881, saying:

    "Jeremy's response to this persuasive."

    Do you recall that?

  • Yes. I think it's the one you mentioned earlier.

  • And that gave you suitable reassurance, did it?

  • As to the prevailing view on an important aspect of the bid, at least in one relevant government department; is that right?

  • Yes. I mean there's two items here. There's the plurality side and the competition side. Very shortly, on the plurality side it was definitely something the UK debate was focusing on; the competition side, as you know, was being dealt with in Brussels.

  • Were you doing the same sort of thing with other government departments: getting hold of the special adviser, sending that individual briefing notes and trying to find out what the boss' response was in each case?

  • No, I think I was only doing it with this because they were in charge of the transaction process. And DCMS because they were in charge of media sector. I don't think I've sent it to anyone else.

  • You probably correctly had identified the second most influential department because this at least fell within the media remit?

  • That was your rationale, wasn't it?

  • Yes, and also on the competition side, I think it was important for the UK government to know the arguments we were putting to the European institutions.

  • Thank you. Over this self-same period, there are just a few emails in KRM 18 which evidence your interactions with BIS, do you follow me, until 21 December 2010, when everything suddenly changed. We're just going to look at a few of them. The first is page 1, 01642. Do you have it there, Mr Michel?

  • I think we heard from Mr James Murdoch that there was a conference call -- tell me whether this chimes with your recollection. You, Mr James Murdoch, Dr Cable. Is that right?

  • So I -- very early that morning when the bid was announced, I tried to get hold through his office of Mr Cable for him to speak to Mr Murdoch, but I didn't witness the call. I was debriefed afterwards by James.

  • And I then sent an email to the rest of the team as to what took place in the call.

  • "Vince Cable call went very well. He did say he thought there would not be policy issue in this case."

    And then you say, perhaps as a joke:

    "We should have recorded him."

  • Yes, it was a joke. It was a bad joke.

  • Well, it is what happened to him later on, on 21 December, as we know.

    Things, however, didn't go quite so well with that department subsequently. At 01649, page 8, this is a conversation I think you're having with Lord Oakeshott, is it?

  • I think so. I can't remember who I was speaking to then. But it would have been one of ...

  • It's interesting, in the second bullet point there are three issues which colour in his judgment:

    "The way Sky News handled the General Election coverage and the quality of news debate; the News of the World/Coulson ongoing saga, which he is being reminded of on a daily basis by people like Simon Hughes and Huhne, as a proof of the need to provide safeguards; and a very strong pure political pressure from the Lib Dems and Labour over the way the Murdoch press has treated his own party/policies and Labour over last 12 months."

    All this must have worried you somewhat, Mr Michel?

  • Yes. I -- it did worry me for many reasons, as you could imagine, given my role. And more importantly it reflected two things, that what I call here the News of the World/Coulson sort of saga was going to be an issue in terms of the way the Sky bid was going to be looked at by the political community and the media, and secondly that there might be a sort of political element in a decision that the Secretary of State might take.

  • But none of this is rocket science, is it? You knew all of this anyway, didn't you?

  • You mean pre that conversation?

  • I don't pretend it's rocket science. I think it's always good to check the temperature. I mean, as I went on in September/October, it was clear that many Liberal Democrats of senior position were telling me that it -- and Labour, sorry, as well, were telling me that the News of the World issue was an item that they considered being a problem.

  • We're just going to take a break for the shorthand writer, Mr Michel.

  • (A short break)

  • There's 15 texts to Mr Jon Zeff, not five texts.

  • 01659, your page 18, Mr Michel. Email 1 November 2010, doesn't involve Mr Smith in any way. Can we be clear that you'd had a conversation with a Liberal Democrat MP who was a former employee of Sky, that was a direct conversation you had, and does it follow that what we see in this email is correct?

  • What about the reference to Mr Alex Salmond? Can you help us with the source of that information?

  • Yes, on that day, which explains the top line, "Mission accomplished", I had taken upon myself to go to Scotland and try to make representation to policy-makers on the bid, given that we were the biggest (inaudible) investor in Scotland, and there was a relevance for the Sky business in Scotland.

    I met with the Lib Dem MP and then I met with one of Alex Salmond's advisers that afternoon.

  • I understand. 01663, page 22. This is a direct citation of a text message you received from Dr Cable's adviser:

    "Put a very strong case which will stand you in good stead on this."

    This relates to a particular submission, doesn't it?

  • Sorry, I'm on the wrong page.

  • 22 on your bundle.

  • Sorry, you said this relates to?

  • A text message from Dr Cable's adviser. 00163.

  • Yes. I can't remember the exact text, sorry.

  • 01664, however, you refer to a "private call with Vince's main adviser". This is one of his SpAds, Mr Michel?

  • Yes. It's either a call or a text or an email. I can't remember.

  • It refers to a conversation, "a private call", do you see that?

  • It's the substance which is more interesting.

  • "He said he believed there were huge risks for me to meet with him to talk about anything that has to do with the 'Ofcom business', which he rules out completely."

  • So any meeting with Dr Cable's special adviser is off limits, is that it?

  • "Too much scrutiny. They also want to be able to say they took an independent view. Asked me to be in touch regularly in coming weeks, if only to provide him with any evidence/materials we would like Vince/him to read."

    He's making it clear that the limit of what you can do is provide him with evidence and materials, but any other form of contact is inappropriate, would you agree with that?

  • Yes, and this was something -- a point he was making on an ongoing basis throughout. Very clearly. Sometimes commenting on the evidence I would send as being helpful or not, but no meeting would be possible.

  • Didn't you think it a bit strange then that DCMS's stance was rather different, both during this period, but perhaps most saliently after 21 December 2010?

  • No, I thought DCMS stance was more normal than the stance adopted by BIS.

  • You felt DCMS's stance was a correct one and this was an obsessively incorrect stance, taking too strict a view, is that it?

  • My view was that at least even though we had, of course, to respect the fact that the Secretary of State couldn't meet with anyone from News Corporation, that at least making representation to advisers or officials would be the normal way to proceed.

  • How could you conclude it was more normal if you'd never been involved in this sort of process before, the quasi-judicial process?

  • Because we were internally of that view, and it was something that maybe Mr Murdoch has expressed as well in his evidence, but there was a view internally that we understood the situation in which the Secretary of State was, but that that shouldn't prevent at least for us to make recommendations, put our arguments to other advisers or officials.

  • I think representations can take place in two ways. They can take place formally --

  • -- above board, written representations, so it can all transparently be viewed by the general public, if necessary, the administrative court on a judicial review application if necessary --

  • -- and the other side, the Coalition, if necessary. So there's all of that activity which no one can, as it were, dispute. And then there's the more clandestine activity, which is text messages, private phone calls to special advisers, which people might not found out about. Do you see the distinction?

  • Yes. There's different things you have mentioned here. The idea of a formal meeting, minuted, with an official and advisers and the Secretary of State seemed to be the normal course of action. It's the one Jeremy Hunt took. He had two of those meetings with News Corp. There was none of those meetings with BIS. Then in terms of making representation or advocating the case with special advisers or officials, I wouldn't qualify that as clandestine. I would qualify that as advocacy.

  • But this advocacy which Dr Cable's main adviser is specifically ruling out, isn't he?

  • Yes, in this particular department there was definitely a view that no representation would be taken.

  • How can it be advocacy which is above board if by its very nature people would not find out about it unless there happens to be a public inquiry such as this, or possibly a judicial review application where documents have to be disclosed?

  • What do you mean, meetings with special advisers, for example?

  • All what we see and are about to look at post the 21 December period, these are the fruits of text messages on mobile phones, emails which are internal emails. You wouldn't expect this to enter the public domain, would you?

  • No, I -- I don't think the -- I mean, the inference from your question is that this is a clandestine sort of back channel covert communication. I wouldn't agree at all with that sort of characterisation.

  • And why not, Mr Michel?

  • Because I think it was a transaction which was extremely intense and at any stage, if anyone from the Secretary of State's office thought this was an inappropriate way of working, they would have told me or us.

  • It might have been known about within the department as a whole, do you follow me, but that's a proposition we're going to have to examine with other witnesses.

  • If it's known about within the department as a whole, certain inferences might be drawn. But it's not known about to the world at large, is it, because it's something which is occurring privately, to use your adverb, between you and Mr Smith, isn't it?

  • Are you asking me whether or not I think this should be made more public in terms of the interactions in a future case of such -- I think there's a lot of lessons to learn from this process, and one of which is certainly that I will agree that it's probably normal -- but it's not for me to say how a Secretary of State's office should work and, you know, should publish its work.

  • But I can understand your argument.

  • Test it this way. If you had known that the public relations advisers for the Coalition ranged against the bid were having the same sort of contacts with Mr Smith or whoever as you were having with Mr Smith, you would be concerned about that, wouldn't you?

  • No, I would have thought that Mr Smith was doing his job. He was taking representations. Which is what I think a special adviser would do in that case on behalf of his Secretary of State.

  • So you wouldn't have batted an eyelid. We'll hear whether there were such communications but it would have caused you no concern one way or the other, is that so?

  • No, and when BIS was in charge, I did hear that representations were being made to the Secretary of State's office, but I didn't -- I just I think mentioned it once to Mr Cable's adviser to check if it was true or not, but I didn't build a whole case around that.

  • But you told us a while back that that caused low morale within your office, didn't you?

  • I think we were frustrated about the fact that we couldn't put our arguments at least forward.

  • Because as it appeared to you, whether it's right or not we may have to examine, they were having more access to Dr Cable than you were and you thought that was unfair, that caused low morale. I'm just turning it around and saying imagine what the Coalition might think about what you were doing with Mr Smith, if I can put it in that way, post 21 December. They would be a little bit surprised, wouldn't they, at the level of contact?

  • So I have no visibility as to how the Coalition interacted with other bits of DCMS.

  • We'll find out in due course. Look at 01665 at page 24. Just to test the source of your information here, it may be relevant in due course.

  • You have a meeting with Mr Rupert Harrison, who is George Osborne's special adviser; is that correct?

  • Yes, his Chief of Staff.

  • Where does what we read here come from? Does it come from a text? I'm not sure that it does. Or does it come from a phone call? Can you remember now?

  • No, I think I had lunch with Rupert the day before.

  • It was a general conversation. It was actually quite a rushed lunch, as I remember.

  • And he said that there were Coalition tensions around Dr Cable and his current policy positions; is that right?

  • Yes, I think it was widely reported that was the case.

  • Nearly finally, 01670, your page 29, you have another go at meeting with the special adviser Mr Wilkes, don't you?

  • After you'd been told that this was off limits, hadn't you?

  • I, I think, raised with him the idea that maybe we could meet at least -- I don't remember the exact exchange, but I think there's also other items that I've put to him that I wanted to discuss with him at the time.

  • Because you'd been warned off once at 01664. Mr Wilkes properly says at 01670, your page 29:

    "What did you have in mind as an agenda? Obviously there are huge risks in talking about anything whatsoever to do with the Ofcom business, which I would rule out, but I imagine that you chaps can think of little else right now, which leaves me puzzled."

    And then you recognise that. You have to go back a page, 01669, page 28, and then Mr Giles says, up the email chain:

    "Let us assume it is when a Google of 'Vince Cable', 'News International' and 'Sky' doesn't turn anything up."

    So he's saying that the meeting is off until the bid has been resolved one way or the other, isn't he?

  • Yes, I found this comment a bit flippant, I didn't really understand what it meant. I do understand the context of it, and I do understand that for him there was a very strong view that absolutely no representation on the Sky bid should be made.

  • And he then says, to continue, at 01668, one has to go backwards through this, your page 27, level with the lower hole punch:

    "I'm sure we're both equally interested in staying within the bounds of proper conduct. Forgive my caution."

    Couldn't be clearer, could it, Mr Michel?

  • Yes. I think I reply that I am keen to make sure things are done properly from my side as well. And I think --

  • Sorry. Just to complete, I think in that exchange of emails I also outlined the other issues I wanted to discuss with him, which were related to skills and other matters.

  • Mm. Did you take this message back internally and ask for a high-powered legal view as to whether Mr Wilkes was correct?

  • There was always, as you probably noticed in KRM 18, I was always informing everyone internally of whatever conversation I would be having.

  • I'm sure you were doing that, but he was giving you a very clear warning, saying it was the wrong thing to do, inappropriate, don't do it. Either you say to yourself, "Fine, I accept that, he's got legal advice after all", or you say, "He's wrong, we need to test this". Which of the two steps did you take?

  • The latter. The latter. I wouldn't have taken the view whether it was right or wrong, but I think I would have taken the view that -- yes, it deserved to be tested.

  • Yes. I think there was a strong view internally about -- to understand why representation was not possible.

  • Okay. 01677 now. Your page --

  • But actually that's the same day -- this is 15 November -- it's exactly the same day when you're receiving information from Mr Hunt or Jeremy that he's received very strong legal advice not to meet, because it's a process that's judicial, not a policy one. It's the same day, 15 November. 1667.

  • You have a convergence of view, haven't you, Mr Michel, from two government departments. Do you see that?

  • Yes, I think the reaction from the Secretary of State's office at DCMS was very much frustration as to the impossibility to make their representation.

  • That may be right, indeed it is right, but what is also right is the legal advice within the department seems to be convergent?

  • Yes, I mean it's a very -- it's a very different behaviour from one department to another, as you can observe, between that period when BIS was in charge and when DCMS were in charge. I've noted when the bid switched to DCMS that there was much more openness and willingness to at least hear the view and the arguments that could meet the plurality concerns.

  • That's certainly correct.

  • And that was not the case at BIS.

  • You could send any document in to them, couldn't you, you could make written submissions?

  • You can, but I think there's a view that probably there is some relevance in trying to have a discussion about it, rather than correspond through legal documents, especially when it's to explain a remedy, a structural solution to a plurality concern, which was the case.

  • This is a point I made in a different context with a different witness, Mr Michel, namely the value of human interaction. You understand in your job that there's one thing sending in legal submissions and briefing notes, they have their utility, they appeal at a cerebral level, I suppose, but you're very good at the text message, the chat on the mobile phone, the personal interaction, one-to-one, face-to-face, preferably. That's what you're great at and that's why they employ you, in effect, and that's what you want to open up and achieve, isn't it?

  • I hope that's not the only reason why they employ me.

  • No, I don't suggest exclusively.

  • I am a compulsive texter, I will accept, but also can I just contextualise this? We were at a time in November where we were hearing very strongly that this matter was being looked at from a political prism by the Secretary of State, and although we were sending legal submissions and other things, we were also told by people around Mr Cable that that decision would be political. So I guess me trying to make representations or at least create an opportunity to do so was borne out of the fact that we were worried that this was not going to be solely based on the merits of the case.

  • That bit is understood, but I'm not quite sure I got the answer to my question.

  • Did I, which is the value of human interaction, whether it's by jokey text message, warm text message, mobile conversation or face-to-face meeting. You understand that because amongst other things you're very good at that, aren't you?

  • I don't know if I'm good at it. I do accept that it's part of any sectors where probably people would rather have interaction and talk things through rather than just correspond through letters and emails.

  • And I apologise if my texts are too jokey sometimes.

  • It's not a question of apology. These are private texts and it's for you to decide the appropriate tone. These texts were never designed to enter the public domain, were they?

  • 01677. This refers to two meetings or conversations you had with advisers to the Deputy Prime Minister and the Prime Minister. Do you see that?

  • Nick's adviser is Tim Colbourne, isn't he?

  • You sent him an email, I've seen a witness statement which contains it, saying this:

    "It would be good to discuss the current agenda around the creative industry."

    Do you remember that?

  • He has made a note of the meeting, which again is annexed to his witness statement, and it says this:

    "Frederic Michel IP [which is intellectual property] speech DEA [Digital Economy Act], BSkyB, Ofcom looking at plurality, not competition, Ofcom report to News Corp with questions, Ofcom report to Vince, Vince decides whether to go to Competition Commission."

    If you look at your email, which sets out or purports to set out what was discussed with the special adviser, it's not reflected by the note. For example where did you get the bit "honest discussion on the importance for us of getting Labour on board, comfortable with the transaction as it will influence Cable a lot"?

  • Well, if I put it in the memo, it's because it was discussed at the meeting. I understand that from a Liberal Democrat adviser it might not be comfortable to be reminded that it was discussed, but we definitely discussed this.

  • And then:

    "He will insist on the need for Vince to meet with us once Ofcom report published."

    Again that is not in the contemporaneous note that was taken. Are you sure about that?

  • Yes, so we -- I remember that we discussed and I made the plea, if I may use that term, for trying -- first of all, for the inadequacy of the process, that I thought that at least we could try to have some representation at some stage, and I think because of the time of the meeting, which was beginning of December, I suggested that once the Ofcom report is published, it would be relevant for us to have a meeting with the Secretary of State and that I was asking him to maybe put the case to his counterpart at the Secretary of State's office, and I think we had an agreement that that was a good idea. That's what I remember.

  • But in any event, even if you're right that the topic was discussed, you've put it much too high because even if the SpAd is speaking on behalf of Mr Clegg, the Deputy Prime Minister, query whether it would have been possible for him to insist on the need for you to meet with Dr Cable, given that it was Dr Cable's decision. It wasn't Mr Clegg's decision. Do you see that?

  • I see that completely, but I think we agreed in the meeting that it would be a good idea for us to be able to meet with Mr Cable.

  • Okay. David's adviser now on this page. This is Mr Rohan Silva. There's a witness statement from him. Less of an issue, though, between you about this. Do you see at the bottom of your page 26, 01677:

    "On Sky transaction: recognised need to look at it only from a plurality point of view."

    His evidence is that he made it clear on behalf of the Prime Minister that the Prime Minister wanted to see plurality in media ownership and the SpAd also explained that the bid process was nothing to do with Number 10?

  • I don't think it contradicts at all what I've put. What happened, I think, is actually Steve Hilton was also in the room, and as a marker from the meeting I remember saying in a flippant way, you know, "We're not going to discuss Sky because it's not something I should be discussing with you", and I think he asked me how the process was going and I said the debate was very much around plurality, and I think he probably said seems the right thing. But that's it. It was a very short exchange, it was not with Rohan, it was actually with Steve.

  • There's no issue there. 01681, page 40, the discussion you had with the Chief of Staff to the Deputy Prime Minister, who is Mr Jeremy Oates.

  • Jonny Oates, pardon me.

    "Everything you say here I'm sure is 100 per cent agreed because it's made absolutely clear that Dr Cable will make up his own mind, not be influenced by anyone and will take the decision on its merits in accordance with his statutory obligations."

    And then you say:

    "I told him it was hard to believe, given all the feedback we're getting."

    So I'm sure no one's going to dispute anything you say there.

  • Can I contextualise this?

  • Yes, if you wish.

  • If I may. This was an exchange that I had with the Deputy Prime Minister's office where I was reporting the feedback I was getting from senior Lib Dems around Vince Cable, and I was also putting to him the sort of things I was being told that would trigger the decision, which were very political and nothing to do with the merits of the case, and I think he came back to me in a formal way to reassure me on 19 December, the date is important, that this was only going to be looked at the merits and I shouldn't at all have any qualms, if I can use that term, that this decision wouldn't be made in any other way.

  • But your worst suspicions were borne out within a couple of days, weren't they?

  • This happened the day before the famous Cable tape.

  • And therefore that wasn't a surprise to you because it chimed with your antecedent suspicions and the feedback you'd been receiving; is that correct?

  • And when DCMS acquired carriage of the bid, I think you've already told us this, there was a change of style, of tone and of access, wasn't there?

  • I think there was a process. I think there was a process which the view from the department that had been given the responsibility, it was that there was a need to have the right legal process, but also a very diligent way of receiving representation but also organise consultations publicly on any -- at any stage of the process.

  • It was a very, very different approach.

  • It was much more open, it was much more accessible, and if you needed information, you could ask Mr Smith and he would provide it to you; is that right?

  • I think it was an approach based on transparency and to give people, not just me as News Corp, but everyone, the chance to argue, debate on any part of that process. Any remedy, any solutions, any issues raised by regulators or by us, could be put in the public domain.

  • Do you feel that Mr Smith gave you a running commentary on the bid?

  • No. I think Mr Smith gave me updates on timing, on process, on the atmospherics of the day. I mean, I have to say we were, as you pointed out at the outset, we were in contact a lot. There were a lot of things to get on with and to decide upon, and I guess he was both being helpful on the process but also, you know, for example, when there was the question of publishing a report or preparing a consultation, he was giving me the sort of support so that we could help the department as well.

  • Well, we're going to look at some of the emails. Were your lawyers aware of the sort of level of contact you were having with Mr Smith?

  • Yes. As you know, I was always copying everyone on any representation I would have made and received.

  • We're now looking at the period 21 December 2010. First of all, the contact which you had with Mr Hunt, which I said earlier we were going to look at quite quickly. This is page 12633 in the MOD3 file. 20 January 2011, which was the evening after the second meeting you had with the Secretary of State's office. Actually, I don't think you were there, Mr Michel, but News Corp had --

  • You were there?

  • I was. That was one of the two minuted formal meetings.

  • It was a formal meeting. You say:

    "Great to see you today. We should get little [it's the name of a child so it's been redacted] together in the future to socialise! Nearly born the same day at the same place. Warm regards, Fred."

    This was a bit of a warm interaction after the formal meeting to touch base, is that it?

  • First of all, I didn't expect this to become as public as it is now, and secondly, I hadn't seen him for quite a while, and I was just making a personal private reference to -- to our kids. There's nothing relating here that helps my -- or has anything to do with my work.

    I understand your point about human interaction.

  • Yes. And then the next page, 12634, his reply:

    "Good to see you too. Hope you understand why we have to have the long process. Let's meet up when things are resolved."

    Did you understand why "we have to have the long process"?

  • Sorry, I don't have the text in front of me, so I've just --

  • Is it in your schedule, there?

  • It's a quarter to midnight on 20 January.

  • "Hope you understand why we have to have the long process."

    Did you understand that?

  • Yes. I think he referred to the need -- that was after the meeting -- the second meeting was the meeting where we presented the structural remedy, which was going to trigger entire process of consultation and debate back and forth, and I think that's what he was referring to.

  • You didn't reply immediately. At 12635, it was two minutes to seven in the morning, you say:

    "We do, and we'll do our very best to be constructive and helpful throughout. You were very impressive yesterday."

    That's a reference to his performance at the formal meeting, isn't it?

  • Yes. I thought he had a very good grasp of the -- if I may just say this, that he had a very good grasp of the technicalities of the remedy, which I still consider that I have completely. There were a lot of issues being discussed at that meeting, and I thought he was technically very aware.

  • Yes. And then you say:

    "... and let's meet up when it's all done."

  • I suppose one way or another, you would say?

  • "Warmest regards."

    The next one, 12636, 3 March. This is a significant date because, as we'll see later, it was the date the Secretary of State said he was accepting UILs following the OFT report. Are you with me?

  • You say:

    "You were great at the Commons today. Hope all well. Warm regards, Fred."

    And he replies:

    "Merci. Large drink tonight."

    What was the purpose of these exchanges, Mr Michel?

  • Friendly. Not more than that. I don't drink myself, but I thought it was a very tense day for him. As you probably gathered from the evidence we provided, it was a lot of work to get to that stage, and it was just the fact that he had to go through quite a heavy debate in the Commons.

  • Just a few more. 12639, 13 March, you say:

    "Very good on Marr."

    That's, of course -- is that the Andrew Marr breakfast show on Sundays, probably?

  • "As always" you say and then he says:

    "Merci. Hopefully when consultation over we can have a coffee like the old days!"

    And then there's some later exchanges in July, when I think you're supporting Nadal against Andy Murray, rather treacherously, but let's gloss over that.

  • My wife is English and Spanish, so I --

  • Is this an example of, to use the vernacular, a form of schmoozing, Mr Michel?

  • No, it's a friendly text. I think, as you've referred to, I think it's one text every three months. It refers to specific items. I think I spotted him on the TV watching the game when I was watching Nadal, that's all.

  • Hm. Well, that's the limit, I think, of your interaction.

  • Because your interaction really over this period substantively is with Mr Smith. In relation to KRM 18, which are the emails, I think it's going to be most helpful to focus on where you are in disagreement with Mr Smith in terms of the substance. Do you follow me? Because where you're in agreement, you won't necessarily need to look at the email, for obvious reasons.

    Before I start, there's one text that we need to look at. Bear with me. 12651.

  • 13 January 2011, you to Mr Smith. You say this:

    "It would be good if you could push the point with the media that it's absolutely normal and legal for Jeremy to take representations while he is considering his decision."

  • Sorry, which day is it? I missed it, sorry.

  • 13 January 2011, 15.32 in the afternoon.

  • So by that are you referring to the sort of representations which you were endeavouring to have with him, indeed were successful in having with him over the succeeding months, or were you referring to more formal representations?

  • Yes, I think it -- I was suggesting -- this is between the first formal meeting, which took place on the 4th --

  • The 6th, sorry, pardon me -- and the second on the 20th. At the first formal meeting, the Secretary of State asked us to come back with an appropriate solution, otherwise he was minded to refer to the Competition Commission, and I think internally we were keen to be able to not just send the structural remedy but also present it and discuss it with him and the officials.

  • Right. Emails which are in dispute, okay. Can we start off, please, at 01684. This is in the proprietor's bundles, this is KRM 18. It's going to be your page 43.

  • This one may not be the biggest point. It's New Year's Eve 2010.

    "Jeremy Hunt and his team have not received it yet."

    This is the Ofcom report.

  • Which is favourable, isn't it, to my recollection?

  • Oh, it's not? I've got the wrong one.

  • "We'll let you know if they do today. We already know privately. Jeremy will not look at it before next Wednesday."

    Presumably you say because you had a conversation with Mr Smith along those lines, is that it?

  • Yes, I think I referred to the same thing on Christmas Eve where I said to the team that he won't be back before 5 January.

  • And I wanted to make sure that information was not communicated externally because it was for no one to know.

  • That may be the explanation. You're referring back to the Christmas Eve conversation, because there's no evidence of any call or text message relevant to 31 December, although Mr Smith would say in fact the report was received that day in the post, but of course you wouldn't have known that. It might have arrived after 11.35 am. But I understand the issue now on that one. As I said, it's not the biggest point.

    Can I move on to 01687, page 46. We're Monday, 10 January. I'm not sure that there are any relevant text messages or mobile phone calls here, but what is disputed, do you see the line "He saw Ed Richards today"?

  • "He challenged Ed on the 'may be' rationale. Ed was adamant that the threshold was very low."

    Is "he" there reference to Mr Hunt personally or Mr Smith?

  • Mr Smith says that the minutes of the meeting with Mr Richards were put on the DCMS website and therefore would be known about. But it might be said that they are unlikely to have been put on the website that day. Do you happen to know whether they were or were not?

  • Are you clear in your mind that Mr Smith is communicating to you sort of ahead of the game, as it were, the conversation he had with Mr Richards before that conversation was made public?

  • Did you take a note of the meeting before you wrote this email?

  • Of the conversation, you mean?

  • I think what I tended to do is just write the conversation quickly on my computer or -- as we were speaking. That's what I would tend to do. I'd check my notes, and I didn't tend to take notes of those conversations. I would, I think, just type them straight away. Very often those memos are sent internally very few minutes after I have the conversation.

  • Yes, I've misled you, Mr Michel. There were three calls which lasted in all 27.5 minutes that day between you and Mr Smith.

  • Okay. So when I said earlier no communication, I was wrong there. There was communication, and it follows that you might say, well, what we see here are the fruits of that communication; is that right?

  • Yes. And I have it here, as you said, we had two calls, the last one must have ended half an hour before I wrote that email. So it's just the timing for me to write it and send it around.

  • Okay. Thank you. The other point which is disputed, at the end you see:

    "He made again a plea to try to find as many legal errors as we can in the Ofcom report."

    That sounds rather tendentious, Mr Michel. Are you clear that that's what Mr Smith said?

  • He could probably say -- a plea was probably too strong a word. Probably encouragement or encouraged me. I remember that we discussed the report itself and the fact that we were internally looking at finding some inaccuracies on it and also we needed to come up with a very strong and impactful remedy, as it's mentioned.

  • Anybody reading this would say to themselves: if this was an accurate insight into Mr Smith's mindset, he was on your side, okay? It's not possible to read this email in a different way. But I come back to what you told me earlier where you said to me at the start of your evidence that you thought Mr Smith was neutral and impartial. I think I'd like to know what is your evidence about this? Is the truth emerging from what might be inferred from this email, or do you adhere to what you told us earlier? Do you see the point?

  • I do see the point, and I would say that on this particular part and subject of the Ofcom report you could say that he was probably agreeing with me on the fact that there were areas where we could find some -- where we could justifiably raise some criticism.

  • Are you agreeing or disagreeing with me that the tenor of this email, which after all you're refracting Mr Smith's view or commenting on it, is indicative of him supporting you at least in the important context of the Ofcom report?

  • Yes. I think the context here, if I may, is that there was a very strong debate then as to how we could, as News Corp, put our points across on our dissatisfaction on the report, and I think he was listening to that and probably understanding why we wanted to do that.

  • Okay. Sir, is that a convenient moment?

  • Yes, certainly. 2 o'clock. Thank you.

  • (The luncheon adjournment)

  • Mr Jay, tomorrow morning we'll start at 9.30. There's clearly a fair amount of ground to cover and I don't want to run short of time.

  • Indeed. Page 47 now, Mr Michel, 01688. There were a number of calls before this email, at least 15 minutes' worth. Mr Smith disputes the request for help to prepare him, so where did you get that from, may I ask you?

  • Probably from the call itself. I think we spoke for 15 minutes beforehand.

  • How did you interpret that, though, the request for your help to prepare him? It was almost as if the two of you would be working together with the same objective; is that right?

  • I think it was a normal discussion around whether or not I could provide some feedback or elements which would help Adam prepare the Secretary of State. I think it would just -- yes, the documentation on the technical aspects or ...

  • Okay. 01689, page 48. This is a very formal-looking email. We've worked out what it is. It was an email that the Secretary of State was going to send to various constituency MPs setting out his formal position, and you, as it were, were being given advance sight of it. Do you see that?

  • Yeah, I'm not sure if it's advance or it was when it was being sent.

  • That may be right. I'll ask you a couple of points arising out of this very properly worded document. Do you see in the second paragraph:

    "In taking this decision it is open to the Secretary of State to take representations. However, it would detract from the decision-making process to provide a running commentary on what, if any, discussions he is having."

    Do you see that?

  • Did that begin to raise any alarm bells with you?

  • I think it's probably referring to not running a running commentary to the media, which is what Adam would always say, that as a position they were very keen not to be in a position where they had to answer every request all the time.

  • It would certainly include a running commentary to the media, but it might include a running commentary to News Corp, would you accept that?

  • I don't know. I don't know if -- this is aimed at constituency MP. I don't know if that's what the meaning of the sentence would be.

  • Regardless of the audience, and it is aimed at constituency MPs, we know that from other evidence it's how that would chime with you, because you were already in receipt of one piece of running commentary at page 01687, and as we're about to see, you get a lot more running commentary. Just whether that caused your antennae as it were to begin to flicker a bit?

  • I wouldn't qualify the discussion I was having with Adam as running commentary. They were back and forth discussions on the process as it was unfolding.

  • Sorry, what's that, if it's not a running commentary?

  • Well, I just think, sir, that running commentary is a very broad definition. I think -- well you've seen probably from those memos there were a lot of things on timing, process, decisions we needed to make internally, redactions of documents, stages of discussions. I think it was much more precise than just a sort of broad chit-chat commentary.

  • Let's look at another memorandum as you describe it, email, 01692, page 51. It was sent close on 9 o'clock on the Sunday morning, 23 January.

    We know from the call data that at 17.59 the previous afternoon you had a 17-minute conversation with Mr Smith. Do you follow me?

  • Yes, and I think I had also one after that email as well.

  • That's probably right, Mr Michel, but in terms of what --

  • -- went into the email, it was the 17-minute call. There's a lot of material here which was not in the public domain. Do you see, for example, the timeline for the UILs, because they'd just been announced, hadn't they, I think three days before? Do you see the sentence "He predicts it should all be done by mid-February"?

  • That's something Mr Smith told you, wasn't it?

  • And it wasn't something you knew otherwise, was it?

  • What about the next sentence, which I should make it clear is hotly disputed by Mr Smith:

    "His view is that once he announces publicly he has a strong UIL, it's almost game over for the opposition."

    Can I be clear about this, Mr Michel? Whose phraseology is "it's almost game over for the opposition"?

  • I think at the meeting on 20 January, the minuted formal meeting, the Secretary of State had already used the word "game changer" for the UIL and the fact that News Corp was providing that remedy was a game changer, so it doesn't surprise me to see that phraseology here.

  • Bit of a difference between game changer and game over, isn't there?

  • Probably. I think -- sorry.

  • The question was whose phrase was that? There are only two possibilities here. It's either Mr Smith's phrase, which you're putting down verbatim, or it's your gloss on whatever Mr Smith said, or I suppose it's an invention or exaggeration. We just need to know which it is.

  • I wouldn't say it's an exaggeration. I'm sure it comes from a discussion with Adam. I'm not surprised to read it, given that's what the remedy was providing.

  • But the remedy itself was, as it were, hotly disputed and it was going to be considered by Ofcom and OFT and people were saying that notwithstanding the UILs, the matter should still be referred to the Competition Commission, weren't they?

  • Yeah, that was the advice afterwards, subsequently.

  • That's right. So there were clearly two rooms or two opinions here, and someone was expressing the opinion that with the strong UILs, it's almost game over for the opposition.

  • And you think that's Mr Smith?

  • Yes. If I put it in the memo, I think it reflected our conversation.

  • Then the next sentence:

    "He understands fully our concerns/fears regarding the publication of the report and the consultation of Ofcom in the process; but he wants us to take the heat, with him, in the next 2 weeks."

    Again, where did you get that from?

  • From the conversation. It's probably me reflecting the fact that there was a need for everyone, ie DCMS and News Corp, whilst this remedy is being presented, to make sure we put as strong arguments as we can, because the Secretary of State was deciding not to refer and to look at the UIL and accept it.

  • Are all these "he"s the same person? "He" announces he is minded to refer, "he" predicts it should be done by mid-February, "his" view, "he" understands. Is all that the same person?

  • Yes, I assume that was -- the way I was writing those is that I assume it was the position of the Secretary of State, so I used the "he" as a -- as one for Jeremy Hunt through his adviser.

  • So is this the case, Mr Michel: you believe that actually this is a communication with the Secretary of State through the mouth of Mr Smith?

  • I believe that whatever Mr Smith tells me represents the view of the Secretary of State, yes.

  • Although, strictly speaking, the pronoun "he" is Mr Smith. Whether Mr Smith is speaking for the Secretary of State is your inference or your deduction, is that --

  • No, it's the way I process -- it's how I should -- I was to work.

  • I'm not so sure, actually, Mr Jay. Because "he wants us to take heat with him" is hardly a reference to Mr Smith.

  • Although it's -- yes.

  • Well, that's why I raised the question.

  • Maybe I should ask the question in this way: obviously it's Mr Smith talking to you on the phone, it's not Mr Hunt talking to you. But when Mr Smith is talking to you, what is he doing? Is he communicating his own view or is he referring to someone else's view?

  • He's communicating the view of him and the Secretary of State. You know, that's why -- as we discussed earlier.

  • I was representing News Corp, he was representing the Secretary of State in those discussions.

  • It continues:

    "He very specifically said that he was keen to get to the same outcome and wanted JRM to understand he needs to build some political cover on the process."

    So again you are setting out Mr Hunt's view as articulated by Mr Smith, are you?

  • Did you find any of this surprising, that this is what you were being told?

  • I think we were at a stage in the process where the decision not to refer was going to create, as the narrative goes, some heat politically for the Secretary of State, and although we believed the remedy was structured -- was very strong and said all the plurality concerns, the Secretary of State, in presenting that remedy, was going to take a lot of criticism. So, no, I was not surprised to --

  • But it isn't just a criticism which would be to, as it were, deal with the political and legal ramifications of this. It is more:

    "He very specifically said that he was keen to get to the same outcome ..."

    And a bit later on:

    "He said we would get there in the end and he shared our objectives."

    How did you interpret that, Mr Michel?

  • I think I interpreted it as he wanted the UIL to be well presented and he wanted the UIL to be properly debated, because he believed, as I mention, that it was a game changer in the entire bid process.

  • Mr Michel, with respect, I'm not satisfied with that answer. If you take the three things together, "it's almost game over for the opposition", "he very specifically said that he was keen to get to the same outcome", "he said we would get there at the end and he shared our objectives", that means only one thing, that he shared the ultimate objective of News Corp, which was to secure the remaining shares in BSkyB. That's the only reasonable interpretation which can be borne on this and it's the one you took away at the time, isn't it?

  • Although if I can put a caveat on the narrative that was being given on an ongoing basis at every stage, the Secretary of State followed the advice of regulators and --

  • No but I just want to --

  • Whether or not he did, it is what you took away from this from what you were being told by Mr Smith. Now you're agreeing with me that what you were being given was immense reassurance that we would succumb all the political and legal obstacles, we would avoid judicial review and in the end we would get what we both want, which is News Corp acquiring the remaining shares in this company. That's what Mr Smith rightly or wrongly was telling you, wasn't it?

  • No, with due respect, I wouldn't take that leap in terms of interpreting it. I would take definitely comfort that we had a strong chance to see it through in terms of our addressing plurality concerns, but I wouldn't have that broad approach.

  • Sorry, of your -- I wouldn't take that leap in terms of how you --

  • He wasn't giving you a guarantee, but he was giving you a very strong indication where departmental thinking was lying at that point, wasn't he?

  • At the next page, 01693, page 52. This is Sunday evening now. There had been another telephone call --

  • I'm sorry, did you say what time the telephone call was before the 9 o'clock am Sunday morning?

  • Yes, it was the previous afternoon at 17.59.

  • 17 minutes and zero seconds.

    The one at 8.39 in the evening, the call was 18 minutes, 50 seconds at 18.21 hours.

    Mr Smith accepts the general content of this, but he disputes the tone, Mr Michel, so we're clear about this email. You agree that he was giving you the impression that DCMS were minded to accept the UIL but would say otherwise publicly?

  • Sorry, did you say -- about the tone, what do you mean? The tone, sort of the language used or the --

  • Yes. Mr Smith disputes the tone, because the tone is -- well, people can draw their own conclusions from the tone.

  • But he will say that he didn't speak to you in quite this -- I'm not going to put an adjective around -- I think you get the point I'm making. We'll hear from him in due course but I'm indicating where the dispute is.

    The question was: do you think he was giving you the impression that DCMS were minded to accept the UIL but would say otherwise publicly?

  • 01695. Page 54. That first email is timed at 15.21, you to Mr Murdoch. Do you see that? This is the one in bold:

    "Managed to get some infos on the plans for tomorrow (although absolutely illegal)."

    And then there's a couple of squiggles there. Why did you say "although absolutely illegal"?

  • It's a very bad joke, which shouldn't have been made. I think it was out of my surprise to get a briefing on the content of the statement at such an early stage. In hindsight, which is always a good thing, I wouldn't have put such words. I have since learned that it's not unusual to get pre-notification for a statement in Parliament to be given to some of the parties to the transaction, so -- but I was -- it's just an expression of surprise from me.

  • Your thinking at the time is that you were being given advance notice of something you ought not to be, otherwise you wouldn't have put that in brackets, would you?

  • Yeah, I think less on the content, more the timing. I think it was very early before the statement was made. I would have expected it to be probably later in the evening. But that's why probably I wrote that.

  • There's evidence of an 18-second call -- yes, it's 18 seconds before this email, and then there are various text messages which you actually collect up in the exhibit to your first statement at 03256. You probably remember those.

  • I have a call -- I don't know if it's -- it might have been a call just 10 minutes before that email was written. Oh no, it's 15, sorry, that's before the other one. On that one I don't know, sorry. I refer to the one above, sorry.

  • The text message relates to the timing. There are some disputes about this which I'll put to you quickly.

  • Do you see, level with the lower hole punch:

    "Lots of legal issues around the statement so he has tried to get a version which helps us by qualifying the threats identified by Ofcom."

    Well, the "helps us" is denied by Mr Smith, probably for obvious reasons, but what is your position on that, Mr Michel? Are you sure that's what he said?

  • Yes, I think the "helps us" means help presenting the UIL in an adequate way. I don't read any more than this. So I would -- yes.

  • And the reference to "very fast" on the next page, level with the upper hole punch.

  • That's denied and that isn't borne out by any of the text messages, to be fair, so where do you feel that might have come from, if anywhere?

  • I think this memo must have been borne out of a call. I don't think -- I mean, I don't believe that kind of detailed conversation would have been given by text. The idea that it's wanted to be done very fast I think is something that I would have been told on an ongoing basis, that of course we want a timing to be done quickly. That's probably a way to appease my -- our sort of fears that this could be a process that could drag on.

  • On any view, you're being given information here which is not in the public domain and which, I suppose, is inside information for News Corp. Would you agree with that?

  • Well, I think it was given to the team that was interacting with DCMS on the transaction, it's probably an assumption which was right, that this wouldn't go anywhere else and stay in the bound of confidentiality as we always did.

  • Mr Michel, you've mentioned the team several times. I wonder if you could help me --

  • -- what they all do. You mentioned Matthew Anderson. What does he do?

  • He was the person I was reporting to until my new role. He was director of corporate affairs and strategy.

  • All right, so he's director of corporate affairs. And who is Andrea Appella?

  • He's our regulatory lawyer. He's deputy general counsel in charge of regulatory competition issues.

  • He's our general counsel for Europe and Asia.

  • She was the director of communication.

  • Did any of these emails or any of the contents get discussed with those lawyers who were advising News Corp on the bid? Who are they?

  • Yes, they were Allen & Overy.

  • And were they discussed with Allen & Overy, these emails?

  • Yes, I'm sure the content of some of those emails would have been, yes.

  • I think right in saying we don't see any evidence of them being forwarded to Allen & Overy, but your evidence is that the gist or content was discussed with them --

  • Do you mean that specific one?

  • Yes, or any of them, actually.

  • No, I wouldn't be liaising with Allen & Overy. That wouldn't be my role.

  • No. I move on to 01704. Your page 63. This relates to Mr Hunt's statement to Parliament, doesn't it?

  • And the remedy is the reference to the UILs, obviously. And what the email says is:

    "He can't say they are too brilliant [that's the UILs] otherwise people will call for them to be published."

  • Yes, I think it's an extract of text with Adam.

  • Yes, the relevant text is at page 02345 in your exhibit. Mr Smith's text to you is:

    "There's plenty potential to mitigate problems. We can't say they're too brilliant otherwise people will call for them to be published. Will check on meeting."

    So you've set it out more or less verbatim there, haven't you?

  • Yeah, except for "will check on meeting."

  • I suppose that was another indication that the wind was blowing hard in your direction, wasn't it?

  • I think it was an indication that the problems attached to plurality were being mitigated by our UIL, which was a very strong structural and financial concession from the company.

  • I think that's just a different way of putting the same thing, isn't it?

  • Yeah, yeah. I mean, this was a discussion around the UIL. As you said, it was around the statement on the UIL, so I would agree that it's a supportive comment on -- on that.

  • If you look at the next page, 01705, your page 64, another chat. The chat, I think, is probably a reference to a text message exchange, isn't it, rather than a conversation?

  • Yes, I think this was from a text from Adam.

  • Yes, our page 03245. The email says:

    "He said he had no legal wriggle room in a statement to Parliament."

    The text says:

    "Other than what Jeremy and I have told you, we have no legal wriggle room in a statement to Parliament."

    So you've set that bit out entirely faithfully. It's the next bit, though, Mr Michel, which I'm sure Mr Smith will say is extraneous gloss:

    "And he only needs some space to prevent any accusation of deal-making at this stage."

    That isn't reflected by an antecedent text and you've elaborated there.

  • That's probably me adding something else as well, yes.

  • So it was the inference you drew rather than anything --

  • Yes. I think so. If it's not backed up by text, sorry, I can't remember every text, and I have the schedule here which doesn't show any of the -- it's probably something I drew myself.

  • If you were attributing rather this phrase, this clause, to Mr Smith, it would be quite damaging because it wouldn't be quite an allegation of bad faith, but it would be suggesting that they were acting in a less than wholly open and transparent manner, but I think your evidence is that you're not attributing that to him?

  • No, there is a text at 9.40 from Adam to me saying:

    "It's all exactly as we said, we just need space."

  • Can you just tell me where that one is, Mr Michel?

  • On 25 January at 9.40. So an hour and a half after the first text.

  • It's not in your list. If there's a further text which I haven't spotted, you've got your evidence for that part of the email. It's in that schedule, is it?

  • Okay. So you are basing that on something Mr Smith said?

  • Yes, I think 85 per cent of the memo is verbatim. My only, let's say, colourful addition is "to prevent any accusation of deal-making at this stage".

  • Okay, thank you.

    The next one is 01707. Your page 66. There are some relevant texts which precede it.

    "We've had an update on today's events ... weaken most of the opponent's arguments", I'm paraphrasing.

    "JL believes we are in a good place tonight. Let's see what the morning's coverage brings."

    And the texts say -- your text:

    "Today went well. Look at the Coalition's campaign statement, so weak."

    Do you see that one?

    Four hours later:

    "I think we're in a good place tonight, no?"

    Mr Smith says:

    "I agree, coverage looks okay. Let's look again in the morning though!"

  • So he agrees that "we're in a good place", but I suppose the argument might surround who the "we" in that sentence is a reference to and what "good place" might mean, but how did you interpret that?

  • That the process of presenting the UIL had gone well and that we were in a good place compared to where we were a few days before, when everyone was stressing about the presentation of it. I don't know if it related to the media specifically, but ...

  • The argument was moving your way, wasn't it?

  • Well, the presentation of the UIL had gone well, and most commentators were agreeing that plurality concerns had been met.

  • There isn't going to be time to go through each and every one of these, otherwise we really will be here for a very long time. I need to identify those which are more important than others.

    If you look at 01708, page 67, that one is borne out by some antecedent texts. The next one we're going to look at is 01711, page 70. That one again is borne out by an antecedent text.

    Page 71, I think this one is more controversial, 01712. It's on Friday, 4 February in the afternoon. The call data shows a 23-minute, 15-second call at 09.24 in the morning, and there was a text at our page 03247, two texts. One from you to Mr Smith and one from he to you, not long before the email was sent. Your text to him:

    "Are you able to send me the Enders and Slaughter documents. Would help me prepare for the public debate. Enjoy golf."

    Were those confidential documents at that stage?

  • "Enders and Slaughter documents"?

  • I think they were the submission made to the department from the other side, as it were. I think they had been leaked quite extensively.

  • Apart from the fact that they had been leaked quite extensively, they were confidential documents, weren't they?

  • I can't assess whether or not they were confidential. I actually didn't see them at this stage.

  • What Mr Smith replies to you at 17.30 hours:

    "I haven't actually got them at the moment. Officials just told me about them. Don't mention them to anyone like oft, et cetera. If we need them I'll show you."

    So he's indicating that he shouldn't really be providing them to you, isn't he?

  • I think he had a discussion with officials about it and that -- yes, he's not willing to give them to me, probably. I will agree.

  • But it's the line "Don't mention them to anyone like oft, et cetera." It's what obvious inference you might deduce from that, Mr Michel.

  • That anything the DCMS would receive as documents shouldn't be shared with the OFT.

  • Because you shouldn't have got them?

  • Probably why I didn't get them.

  • Well, the email says:

    "I'm trying to get the documents, but it might be difficult."

  • I think at the end of the day you didn't get the documents; is that right?

  • No. I know other people had managed to, but although we were party to the transaction, we didn't have access to them.

  • Although Mr Smith was apparently -- indeed he was, it wasn't just apparently, the text speaks for itself -- indicating that if you need them he will provide them to you, so it's clear you didn't ask him for them, did you?

  • No. It doesn't seem that way.

  • Apart from the texts we've seen and the earlier telephone conversation, do you know where the other information we see in this email is derived from? In particular, the reference to the "very quick public consultation process" and the heat being "absolutely massive from the Coalition", that's on the next page.

  • I might have had a discussion that day.

  • As you pass from that email, there's a new name that we haven't identified, Anil Jhingan.

  • He's another deputy general counsel.

  • If you take this email as a whole, including the reference to he completely agreeing with our fears, given the toxic relationship and mistrust of Ofcom, the clear impression we get is that Mr Smith, either speaking for himself or for someone else, was on your side. Would you agree with that?

  • I think he was probably agreeing with the fears I was expressing, which is something he would do very often, and he probably would refer to the toxic relationship and mistrust of Ofcom, between Ofcom and News Corp, which was -- the ongoing feature I had to deal with. I think that's why -- so he would probably agree with that sort of climate. If that appears.

  • By this stage in your relationship with Mr Smith, you were getting on well with him, weren't you?

  • At every stage until even after the bid.

  • And maybe you felt that you'd drawn him into your confidence; is that right?

  • No, I think he was my interlocutor in that process and we were both representing him the department and me News Corporation. I don't think I had drawn him in -- in -- no. If anything, actually, some of his response to my requests are pretty firm and pretty strong.

  • Okay. There's a dispute about 01714, your page 73. You refer to "insightful feedback from JH on OFT/Ofcom views."

    Mr Smith's statement makes it clear he didn't know OFT/Ofcom views at that point and the only evidence is a telephone call which lasted 10 seconds at 10.10 in the morning. The question is: where did you get that information from?

  • Those call records are from my mobile and I also call often from my office, so -- we don't have those. So it might have been from a call in -- I know there's a text saying "Let's speak" the evening before, so -- I wouldn't have triggered myself to write something like this if I hadn't had a feedback or a reason to write it.

  • If you look at the next email at 01715 at page 74, it's clear that Mr Smith doesn't know the OFT view at that stage, which is consistent with what I put to you in relation to the previous email, that he didn't know the view, therefore you can't have had any insightful feedback from him about it. Do you see that issue?

  • I do, and I would love to understand the reason why it's as it is, but this is nearly a year and a half ago. I can't remember every --

  • One possible explanation, I gently suggest to you, that there may be elements of exaggeration in what we're seeing here.

  • I wouldn't think that's the case, given that that email says I would feed back to my colleague. If there was exaggeration, I wouldn't be able to feed back anything to my colleague.

  • Okay. We're moving forward now to 9 February, page 01717, page 76. This is an email sent at 7.24 in the evening, do you see that?

  • Before that email, there were four telephone calls which lasted, in all, about half an hour, and they ran from 17.30 in the evening to 18.42. There was then the email and there was another call at 20.01 hours, which lasted six minutes and 14 seconds.

  • I think -- sorry. I have three calls before that email.

  • You have three, I have four. I don't think it's going to matter too much. There was also a call out by Mr Smith to Mr Hunt at one stage, and there were some earlier text messages, which aren't particularly revealing. So whatever we see in this email is really derived from the content of the telephone calls you had.

  • I was not aware of the -- of course, of the Adam Smith/Jeremy Hunt conversation.

  • Yes, I've noted that down here actually. He called Mr Hunt at 19.03 hours and the call lasted three minutes and 23 seconds. Actually, having said that there aren't relevant texts, there are relevant texts somewhere else. I'll dig them out. It's pages 12780 and 12781. There's a lot of material here one has to cross-reference, Mr Michel. You're just going to have to bear with me.

  • 12780 says:

    "Let me know if you get feedback from JH tonight. We are working throughout."

    And that was sent at 19.30 hours. And then there's a later one just before 9 o'clock:

    "Agree it is ridiculous and duplicative. As for ability to implement, unfortunately it would be possible as you could just include in the Articles of Association ... [I'm missing the relevant words out]. Let's discuss in the morning. It will be a very personal decision for James. Let's see how we get through this final hurdle."

    That's all the material we got. Can I ask you this, the reference to Swan Lake there, where did you get that from?

  • From my conversation with Adam.

  • And who is the "he" in that sentence who is going in to see Swan Lake?

  • Jeremy Hunt. I think Adam said, "I've just managed to get him before he went in".

  • So that is the call at 19.03 hours, which I suppose fits in with when Swan Lake might have started, although our researches reveal that Covent Garden wasn't showing Swan Lake that evening, it was on 10 and 14 February. It was Die Zauberflote at Covent Garden, but maybe it was something else altogether. But anyway you can't assist on that?

  • But the content, though, we can look six lines down:

    "He understands this is a deal stopper for us and shares our frustration."

    And then what you put in quotes, "We all know what Ofcom's intentions are and have been from the start on this", where does that quote come from?

  • Probably from my conversation with Adam.

  • Do you think you're quoting him verbatim there or not?

  • I can't say. I can't remember the ...

  • If you look a bit later on, or indeed following:

    "He said that in truth this is a very bureaucratic layer to be added, that even though on principles we were not at all on board with it, it might be a price worth paying for the deal to get a green light in 2 weeks."

    This is part of the same point: we have to play the long game because it's the sure way of landing the desired outcome. Do you agree?

  • I think it's part of News Corp being told that although we have worries, and that evening we had very big worries as to the concessions we were asked to make, and although we had those worries, we were asked to take a long-term view and again accept those concessions despite the strong remedy we had put forward.