News International chair James Murdoch is either a liar or an utterly incompetent executive. Those are the only two conclusions you can take away from his evidence to the House of Commons select committee on culture, etc, today. For two and a half hours, the committee chased young James around a series of questions about News Corp’s handling of the phone-hacking affair, leaving the 37-year-old no choice but to give the impression that he was not merely out of the loop on the phone hacking, but so fundamentally incurious about the widening scandal as to border on the negligent.
Among the startling moments of the testimony:
- claims a third NotW figure was disputing Murdoch’s claims of no knowledge of a hacking culture
- Murdoch’s remark that News would consider closing the Sun in the same way as it closed News of the World
- Murdoch’s outright claim that NotW executives were misleading Parliament in contesting his evidence
- concession that he had authorised more than £2 million payouts without even the most cursory examination of the case
- that News executives were negotiating payments of up to £350,000, when they only had an authorisation of £10,000
- that there was basic confusion about the leadership of News International after the departure of Les Hinton, even though James Murdoch’s official role was as executive chairman.
Murdoch had been recalled to the committee after his initial evidence, given in mid-July, had been contradicted by two senior executives. In July, Murdoch had claimed that he’d signed off on a nearly £1 million settlement with phone-hacking victim Gordon Taylor (head of the Professional Football Players Association), at a meeting with News of the World editor Colin Myler and legal consigliere Tom Crone, acting under the belief that the hacking was part of the “rogue” activities of private detective Glenn Mulcaire, employed by the paper.
There's more to Crikey than you think.
Get more and save 50%.
Crone and Myler immediately contradicted that evidence — both in public statement and to the committee — issuing a statement, and later telling the committee that they had shown Murdoch an email — now entitled “For Neville” — which showed transcripts of phone hacks being transmitted from one NotW reporter to senior reporter Neville Thurlbeck, and thus indicating a general practice of hacking at the paper.
Today, Murdoch reaffirmed his stance, sticking to his story that no matters of detail regarding the case had been discussed in a 15-minute meeting with Myler and Crone, on June 10, 2008. But in doing so, he had to not only categorically state that Myler and Crone were misleading the committee in their testimony, he also had to present himself as an executive so disengaged that the prospect of paying out a £1 million settlement — for a tort attracting maximum damages of £250,000 — did not even prompt him to ask questions about further exposure, or even ask to see the written brief by an outside QC.
Indeed, Murdoch also denied that he had seen a third document — a memo prepared by Crone for Myler, outlining some worst-case scenarios, and raising the possibility of “widespread criminality” at News of the World (Myler was not the editor at the time of hacking; he was brought in after Andy Coulson resigned when the scandal initially broke). Crone stated that Murdoch had been supplied with that memo on May 27, two weeks before the meeting where the settlement was signed off.
Murdoch’s testimony that he saw none of these documents, and did not inquire about their contents, paints a picture either of management so blase about outgoings as to be of great interest to shareholders, or a story that begins as unlikely, and rapidly extends to the absurd. The committee was happy to lead him there.
Had James, on taking over the leadership of NGI, made any inquiries about the hacking affair of Les Hinton, the outgoing CEO in 2007, he was asked by Jim Sheridan, opening the batting. No, it had happened a year before, we relied on assurances that it was a one-off matter. Furthermore though his father had spoken to Hinton of concerns about hacking, he and James had somehow never discussed this.
After a bit of blather from Murdoch about how “humbled” the company was by the experience, he was handed over to the tender mercies of Adrian Sanders from the Lib-Dems, who began what would turn out to be an all-party pincer movement. Was this a case of wilful blindness, or was evidence kept from you? he asked. Murdoch then decisively dropped Colin Myler in it, saying he should have known on taking over that there was a widespread criminal culture in NotW. He should have told me these things. The company should have told me these things. The police should have.
Then Tom Watson took over. Watson has been hammering News on this for years — so much so that it was revealed this week that News had had him followed by private detectives. His first major point, in a series of rolling and relentless short questions, was that one of the external QCs working on the case had made a note of Crone’s feedback after May 27 — that “JM wanted to think thru options”. Nothing untoward there — save for Murdoch’s denials that he had been presented with the options at all, and certainly not a fortnight before signing off. That produced the first of the day’s “I can’t recalls”.
Watson hammered home the question of a discrepancy between testimonies, forcing Murdoch to put it on record his claim that Myler and Crone “misled the committee” — thus putting out a challenge that neither will be able to leave unanswered. As Watson dug further into the details of the June 10 meeting, Murdoch’s position became increasingly bizarre. He related that Crone and Myler had told him of the “For Neville” email, and that it would be crucial to any judgment — yet claims he never asked to see it. Really? It would have been sitting in a manila folder in front of Crone. Wouldn’t basic competence have suggested giving it a gander?
Watson then produced the first major bombshell. Crone and Myler on the one side, Murdoch on the other, differing over whether the “For Neville” email had been shown. But there was also Neville Thurlbeck, for whom the email was intended, and Watson introduced an interview he’d had with him into the record. Thurlbeck said that he had begged Tom Crone not to show the email to Murdoch, fearing he would lose his job, but Crone said that he had no choice but to do so. After the meeting, Thurlbeck had recounted, he spoke to Crone again, and Crone had said that, yes, he’d shown Murdoch the email. This was the real turning point for me, though most thought that it was Watson’s follow-up, when he remarked that Murdoch was the only mafia leader who didn’t know he was part of a criminal conspiracy.
Now trapped in a defence of “executive blitheness”, Murdoch was repeatedly savaged. Labour’s Philip Davies had Murdoch contradicting himself as to whether he’d dictated a cap on the amount that Crone could settle with Gordon Taylor for — revealing along the way that Crone had negotiated up to £350,000 before referring it to Murdoch, even though Crone’s authorisation for settlements only went up to £10,000, and crucially, that Murdoch had never asked, while authorising a £1 million settlement for a matter — phone hacking — that had ostensibly been “dealt with”, whether there were more disasters such as this on the way.Later, Murdoch would claim that he signed off on a £1 million deal with Max Clifford — the next payout after Taylor — with similar insouciance. On this, another committee member noted that he could hear an elderly Australian voice in his head asking “how much money is this going to cost me” — saying what everyone was thinking, that James’s contention that News is a “hands-off” managerial organisation is so ludicrous as to beggar belief. Murdoch’s defence against this produced the strangest moment of the lot:
Philip Davies: yes or no, does this show you to be competent
Murdoch: No it doesn’t show me to be incompetent.
By now, we were two hours in, and Murdoch was looking desperately unhappy — as you would if your defence was to effectively paint yourself as the “boss’s idiot son” who everyone worked around.
But they weren’t done with him yet. Louise Mensch (nee Bagshawe) asked if any people had been hacked on American soil, including the 9/11 victim relatives, while Tom Watson came in to get a late, last scalp, when he obliged Murdoch to admit that, if it turned out that the Sun had been guilty of widespread hacking, it would not be out of consideration that they close that too. Commenting on recent revelations that opposing lawyers, and committee members, had been followed by private detectives, Murdoch said he had known about this for some weeks, later amending it to “some weeks or days”.
In other words, even News’s cover story admits that it knew of this outrage long before it was revealed by other media outlets.
The general opinion is that Murdoch did not have a terrible day, and that nothing he said would directly implicate him in misleading Parliament this time around. I’m not so sure. For Murdoch didn’t, and couldn’t, play the straight “I can’t recall” game. He had to admit to the June 10 meeting had taken place, and that he had signed off on the £1 million payout — after being informed that the case was unwinnable for News. This was in a 15-minute meeting, called for this matter only. So the question must be — if Murdoch was not briefed on the details of the case, if he was not told about, but not shown, the “For Neville” email, the QC opinion, and the memo from Crone to Myler, then what on earth filled out the meeting?
For the obvious first question after being told that a case is unwinnable is … why is it? And the obvious answer to that is, “because we’ve been doing this en masse for years”. What else would there be to say, as a first step? It’s not that one can simply say that Murdoch is lying — it’s that there is no other way to rationally reconstruct the conversation of that meeting, other than by the account of Crone and Myler.
Labour MP and ex-Observer journalist Paul Farrelly made the obvious further point — that the Gordon Taylor, and then Max Clifford pay-offs indicated that the practice extended well beyond the remit of Clive Goodman’s royal-watching brief, by their very nature. Murdoch didn’t have to know anything about them other than who was being paid off, for it to be evident that the practice of hacking was spread out.
James Murdoch may have escaped any explicit charges of misleading Parliament, but he has left many hostages to fortune. But he will, tonight, be wondering if there are people out there who have a different take on what is, by any stretch, a story that is hard to accept. Someone with a note, an email, a diary entry … who brought in the coffee, or copied a memo. Who knows? But even if there isn’t, he has had to chew off a leg to get out of a trap. Weeks before a crucial BSkyB shareholders vote, he has had to paint himself as a CEO who doesn’t know when to ask the right questions, who can’t spot patterns, and is not across the details.
The News of the World — News UK’s cash cow — is gone because of it, and I suspect that this afternoon, in its own quiet way, marked the end of the Murdoch dynasty, not with a win, but a blagger.