On the eve of his second appearance before a British parliamentary committee on Thursday night, Australian time, James Murdoch has two new bits of contention to deal with. Besides questions based on new evidence from lawyers and former News International managers about the extent and knowledge of phone hacking, Murdoch will have two particularly sensitive issues to confront.

The first is the news that Rebekah Brooks, the former News of the World editor who resigned as chief executive of News International, now faces questions about her time as editor of The Sun after the arrest of a senior Sun journalist late last week in connection with claims of the bribing of British police.

Jamie Pyatt, the paper’s so-called district editor, is the first journalist from the paper to be arrested by Scotland Yard’s Operation Elveden into payments to police officers. He has been at The Sun since 1987 and worked under Brooks when she was editor. This means James Murdoch can be questioned about claims made earlier this year, that illegal practices did not take place at The Sun, where Brooks was editor between 2003 and 2009 before being elevated to chief executive of News International.

But in evidence to a parliamentary committee in 2003, Brooks admitted that police had been paid. Here is a posting on YouTube of that evidence eight years ago during which she said “we had paid police for information in the past”.

In April of this year Brooks denied she had any “knowledge of any specific cases”. Pyatt’s arrest places that belated denial under some scrutiny.

It was also revealed over the weekend in London that Brooks has been treated very well by News Corp and the Murdochs. London papers said the former News International boss (who is on bail) received £1.7 million in cash, the use of a London office and a chauffeur-driven limousine as part of her severance package from the newspaper group. Days after she resigned, she was arrested and bailed in connection with allegations of phone hacking and corruption. The Guardian/Observer reported that:

“Records at Companies House show that she has resigned from 23 directorships related to the firm. However, the Observer has learnt that, along with a generous payoff and continued use of her company limousine and driver for two years, Brooks, 43, has been given an office for the same period of time in an affluent central London area which her spokesman asked the Observer not to reveal for security reasons.

“The decision to give Brooks an office will inevitably be raised on Thursday when Murdoch, the 38-year-old son of Rupert and chairman of News International, returns to Westminster to answer questions from the Commons culture, media and sport select committee about his knowledge of illegal activities by his employees.”

Sixteen people have now been arrested, charged and bailed in connection with phone hacking. Brooks is the most senior, with Andy Coulson, the former News of the World editor and official spokesman for Prime Minister David Cameron, the next most senior.

The Guardian reported late last week that the number of people who have their phones hacked by the News of the World now totals 5800, 2000 more than previously stated by police.

A day after that report, News International went for more spin, releasing plans for a voluntary compensation scheme for anyone who has had their phones hacked by the News of the World. The scheme, which will be independently adjudicated by a former high court judge and News International, said it established the scheme as a “speedy, cost-effective alternative to litigation”. (News has so far received at least 60 civil actions relating to the hacking claims.)

The company is promising to pay out 10% more than the amount considered appropriate by the independent adjudicator, Sir Charles Gray, an arbitration expert and former high court judge. It will also cover the applicant’s “reasonable legal costs” and promising confidentiality if any of the victims so wish.

Earlier this year News established a  £20 million fund for victims. The Guardian says that Mark Lewis, one of the solicitors dealing with civil claims, believes News International may end up paying out more than £200 million — perhaps wiping out the profits of the UK company for several years.

Last month News International agreed to a £2 million compensation payment for the family of murder victim Milly Dowler — plus a £1 million personal donation from Rupert Murdoch to six charities of their choice — and it is known to be in talks with other high-profile alleged victims.

It paid actress Sienna Miller £100,000. Using that as a rough guide, the potential bill could be as much as half a billion pounds.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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