Special

:00:13. > :00:15.It is 2pm here in Westminster and people across the world are on

:00:15. > :00:25.Rupert Murdoch, his son, James, and Rebekah Brooks as they give

:00:25. > :00:41.

:00:41. > :00:44.evidence to MPs on the great phone Good afternoon. Welcome to the

:00:44. > :00:48.special edition of Daily Politics in an unprecedented day for the

:00:48. > :00:53.British Parliament. In just half an hour, the most powerful media boss

:00:53. > :00:56.on the planet, Rupert Murdoch, and his son, James, who was also at the

:00:56. > :01:01.heart of the Empire, will begin answering questions to a select

:01:01. > :01:05.committee of MPs about the phone hacking scandal which has rocked a

:01:05. > :01:09.British public life and already seen 10 arrests, 6 designations and

:01:10. > :01:14.the end of the News of the World. Also giving evidence this afternoon,

:01:14. > :01:19.Rebekah Brooks, who has had to resign on Friday as chief executive

:01:19. > :01:22.of News International, the British arm of the global operations. She

:01:22. > :01:27.was released without charge on Sunday and will face questions

:01:27. > :01:30.about what she knew of phone hacking when she edited the Sun

:01:30. > :01:36.newspaper and the News of the World and then became boss of all of his

:01:36. > :01:40.UK papers. This is a major unique and historic parliamentary occasion.

:01:40. > :01:44.Members of the public and the press have been queuing for hours for a

:01:44. > :01:48.place at the hearings. They had to be moved from the House of Commons

:01:48. > :01:53.to a bigger committee room in a nearby portcullis House. Even that

:01:53. > :01:55.can't cope with the numbers wanting to be there. We have room for

:01:55. > :01:59.everybody with live and uninterrupted coverage of this

:01:59. > :02:09.afternoon's session and we will be discussing the implications with

:02:09. > :02:10.

:02:10. > :02:19.the press, politicians, and the All that to come over the next

:02:19. > :02:24.couple of hours. Joining me Alastair Campbell, David Davies and

:02:24. > :02:28.a Times columnist David Aaronovitch. Welcome to you all. It is a key day,

:02:28. > :02:33.not just in a phone hacking saga but for Parliament. The leader of

:02:33. > :02:38.the opposition Ed Miliband spelt out what he wanted to hear. What

:02:38. > :02:42.members of the public will want to know is whether Rupert and James

:02:42. > :02:45.Murdoch and Rebekah Brooks have some remorse for what happened and

:02:45. > :02:49.are willing to apologise and say that they have let down the British

:02:50. > :02:54.people and indeed all the victims of the phone hacking, and also to

:02:54. > :02:58.account for what they knew about phone hacking and when they knew it.

:02:58. > :03:02.I'm sure they are the kind of questions they will be asked.

:03:02. > :03:06.Miliband. David Cameron is Bill in Africa. He has had to cut his

:03:06. > :03:10.journey short and will fly back to the UK later today to address the

:03:10. > :03:14.Commons tomorrow. The Deputy Prime Minister was out and about this

:03:14. > :03:18.morning. He said today marked the beginning of a shift in relations

:03:18. > :03:25.between the media and politicians. Why is it, for years and years and

:03:25. > :03:29.years, and I can say this, of the other parties spend their time

:03:29. > :03:32.constantly kowtowing to the press in what I think is an extremely

:03:32. > :03:38.unhealthy way. I think that will change and I think it's a good

:03:38. > :03:43.thing. The meeting today is a start of a process of change. Let's get

:03:43. > :03:50.the latest from Laura Kuenssberg. She is outside the committee room.

:03:50. > :03:54.I think it is called there will some room. -- will some room.

:03:54. > :03:58.have spent a lot of time here in the last few years and I have never

:03:58. > :04:03.seen portcullis House quite like this. You can probably see the

:04:03. > :04:07.queue to get into the room to be there when the Murdochs are giving

:04:07. > :04:11.evidence. A couple of other members of the committee had been preparing

:04:12. > :04:15.furiously and have just passed me and one of them said to me, it is

:04:15. > :04:20.certainly very exciting. A couple of minutes ago I saw James Murdoch

:04:20. > :04:25.just over their asking officials for a glass of water, surrounded by

:04:25. > :04:28.an entourage of five advisers with him. So, not very long to go now

:04:29. > :04:33.and I have to say, this feels like it has been the hottest ticket in

:04:33. > :04:36.town. Portcullis House is buzzing. Quite a lot of exciting things

:04:36. > :04:41.happen here normally but I have to say, I've never seen anything quite

:04:41. > :04:46.like this. Never seen anything like it. Let's start with the basics.

:04:46. > :04:50.Why is there such a frenzy surrounding this? Partly because of

:04:50. > :04:53.the scale of the scandal. It has engulfed the Murdoch empire,

:04:54. > :04:57.getting close to government and has brought about crisis in the

:04:57. > :05:00.Metropolitan Police and also I think the fact that Rupert Murdoch

:05:00. > :05:04.himself appears so infrequently in public, I think a lot of your

:05:04. > :05:09.regular viewers will be tuning in this afternoon and will be

:05:10. > :05:14.intrigued to learn how he speaks. The voice. As you know, he is not a

:05:14. > :05:19.very loud person. He mumbles a bit. I wouldn't be surprised if at some

:05:20. > :05:23.point, John Whittingdale asks him to speak up. This is one of those

:05:23. > :05:30.stories which has been bubbling away for years and years and years,

:05:30. > :05:34.and the Milly Dowler things tip that in one direction. Part of this,

:05:34. > :05:38.and I have been in these select committees when you do get a sense

:05:38. > :05:42.of media frenzy, but I think this one has got through to the public

:05:42. > :05:45.and people out there are talking about this. Rebekah Brooks, a month

:05:45. > :05:49.ago could have walked down any street without anybody knowing who

:05:49. > :05:53.she is, but now everybody is talking about her. People will be

:05:53. > :05:58.interested to see the extent of MPs, who are beginning to reassert their

:05:58. > :06:02.authority, to see whether they can do a frenzied job of examining

:06:02. > :06:08.these guys who are not used to being questioned about this. What

:06:08. > :06:13.are the stakes for Rupert Murdoch? Survival of his empire. Absolutely.

:06:13. > :06:19.First off, you have the cases which will flow from this, criminal and

:06:19. > :06:23.other. You have an inquiry and an outcome which may end up deciding

:06:23. > :06:27.fit and proper or not. The Americans are now starting to take

:06:27. > :06:32.an interest and his liberal opponents in America are gathering

:06:33. > :06:40.impetus, sympathies, like the foreign corrupt practice, to see if

:06:40. > :06:45.they can parlay that back into what is after all, the Crown Jewels.

:06:45. > :06:48.James Murdoch's career on the line, too? There seems to be as are the

:06:48. > :06:56.big questions about it. The question we are talking about today

:06:56. > :06:59.is going to be whether or not there was a culture of ignoring what were

:06:59. > :07:05.effectively corrupted journalistic practices. That is what people want

:07:05. > :07:08.to know. That is what they will concentrate on. It's very dramatic

:07:08. > :07:15.because it's one of the few opportunities the Christians get to

:07:15. > :07:25.throw the Emperor to the lions, isn't it? I thought for a second, I

:07:25. > :07:26.

:07:26. > :07:32.could see television commentators. What will we see today? You have

:07:32. > :07:35.famously appeared in front of they commit that committee, you are the

:07:36. > :07:41.paperclip stabbed into your hand when you're losing your rag, so

:07:42. > :07:48.what will we see? It's a big day for MPs and the Empire. Will we see

:07:48. > :07:52.a rigorous but calm inquiry? Or will it be the modern equivalent of

:07:52. > :07:59.the stocks? I think one or two will probably have thought through their

:07:59. > :08:07.questions. The ones who do it well, like TV presenters...

:08:07. > :08:11.The ones who do it well tend to be forensic. I think David is

:08:11. > :08:16.absolutely right but the question for James Murdoch about why he

:08:16. > :08:21.authorised these massive pay-offs. Reminding David, when I first

:08:21. > :08:24.appeared in the select committee, again, he phoned me on the morning

:08:24. > :08:31.and gave me some very good advice about the committee. He said, show

:08:31. > :08:35.respect, stay calm and don't lose your temper. Hence the club!

:08:35. > :08:42.would be surprised at some point, James Andrew but don't get slightly

:08:42. > :08:47.irritated because -- James and Rupert, because we don't have

:08:47. > :08:51.respect for them but they will have to show it today. Bayern not

:08:51. > :08:57.trained inquisitors, are they? -- this is not a trained inquisitors,

:08:57. > :09:03.are they? No, they don't say, I have spotted a weakness here so I

:09:03. > :09:10.will carry on. However, I have just been watching the other committee

:09:10. > :09:15.talking to the police officers. And actually, that is a fairly

:09:15. > :09:19.impressive performance by the MPs. It can be done. They learned a

:09:19. > :09:24.lesson from last week. Lastly, that same committee was about

:09:24. > :09:29.showboating for the No forensics at all. Everybody jumped on that. I

:09:29. > :09:33.think this committee has we learnt from this. I think we will see a

:09:33. > :09:37.lot of forensics. The we will find out if it is tag wrestling or mud-

:09:37. > :09:41.wrestling in a moment. She is Adam with a reminder of the breathtaking

:09:41. > :09:45.events of the past two weeks. -- here is Adam.

:09:45. > :09:48.This long-running scandal reached a new level a fortnight ago when it

:09:48. > :09:52.emerged the voice mails of the murdered schoolgirl Milly Dowler

:09:52. > :09:58.may have been intercepted. As her family met the party because, it

:09:58. > :10:03.was alleged that other victims may have included those caught up in 77

:10:03. > :10:09.and service personnel killed in action. Rupert Murdoch flew in to

:10:09. > :10:15.quell the crisis engulfing his empire. Asked what his crisis was

:10:15. > :10:19.that proud to was, he said this one. In the coming days, the close to

:10:19. > :10:26.the News of the World. 168 years after it first rolled off the

:10:27. > :10:31.presses. He withdrew his bid for BSkyB. And he lost Rebekah Brooks,

:10:31. > :10:36.who resigned as chief executive of News International. And then at

:10:36. > :10:40.Number Ten became involved. David Cameron announced an inquiry led

:10:40. > :10:46.into the affair and of the state of the media and had to justify why he

:10:46. > :10:50.had hired the ex News of the World editor Andy Coulson as his PR

:10:50. > :10:53.person. He said he didn't know what was happening at the News of the

:10:53. > :10:59.World in terms of packing and resigned as a result of this and I

:10:59. > :11:03.decided to give him a second chance. That's all I can do. A former Prime

:11:03. > :11:09.Minister made a rare appearance in the Commons. Not the misconduct of

:11:09. > :11:13.a few rogues and freelancers, but I have to say, law-breaking on an

:11:13. > :11:20.industrial scale. Ed Miliband piled on the pressure. We need leadership

:11:20. > :11:25.to get to the truth of what happened. But the Prime Minister is

:11:25. > :11:31.hamstrung by the decisions he made and his refusal to face up to them.

:11:31. > :11:34.Meanwhile, the police gathered evidence for two investigations,

:11:34. > :11:38.Operation Weeting and Operation Elveden into allegations officers

:11:38. > :11:41.were paid by the press for information. They have been a

:11:42. > :11:45.number of arrests including Andy Coulson, Rebekah Brooks and the

:11:45. > :11:50.former deputy editor of the News of the World, Neil Wallis. He was

:11:50. > :11:54.hired by Scotland Yard to help to their media work with serious

:11:54. > :11:57.consequences for senior officers. At the weekend, this led to the

:11:57. > :12:03.resignation of the Metropolitan Commissioner, Sir Paul Stephenson,

:12:03. > :12:09.and yesterday John Yates, left as well. Two weeks of revelations that

:12:09. > :12:14.have rocked the media, the police and politics.

:12:14. > :12:19.Adam planning reporting on a truly breathtaking events -- Adam

:12:19. > :12:25.planning. It has dangers to take a sleeper. -- Adam Fleming. Let's

:12:25. > :12:30.look at the politics of this with my guests. David Cameron is out of

:12:30. > :12:37.the country but very much in the frame. Yes, the Labour Party, Ed

:12:37. > :12:44.Miliband, his try and keep him in the frame, but I think, Alastair

:12:44. > :12:49.said this engaging people, but I don't think politics does, frankly.

:12:49. > :12:53.Two polls yesterday, one went in one direction and one went the

:12:53. > :12:57.other. What do you say to that? Mr Miliband is getting good press

:12:57. > :13:01.reviews but they're not moving his way necessarily. No, but the terms

:13:01. > :13:06.of the debate a changing and I think David Cameron is losing a lot

:13:06. > :13:10.of respect for people at the moment because the one thing people want

:13:10. > :13:15.from the Prime Minister is a sense of good judgment. Every time he

:13:15. > :13:18.looks like he doesn't get this whole area of concern about his

:13:18. > :13:23.relationship with Andy Coulson. Then, I think he just erodes his

:13:23. > :13:27.own respect and authority. I think at some point is going have to say,

:13:27. > :13:31.I made a mistake. I shouldn't have done it and I realise that. Here's

:13:31. > :13:38.what I want to learn from it but he appears very reluctant to do it.

:13:38. > :13:47.it time to admit that it was a mistake? That's one aspect of this

:13:47. > :13:51.whole thing, Twenty20 hindsight apply to everybody. Let's take the

:13:51. > :13:54.decision to hire Andy Coulson in the first place. He got

:13:54. > :13:59.undertakings from him and he carried out a check on him. When he

:13:59. > :14:04.came into government, he would have had a positive check. By the time

:14:04. > :14:10.he moved into government, the Prime Minister as he had become, knew a

:14:10. > :14:14.lot more about the accusations then when he appointed him. Yes, but

:14:14. > :14:21.politics is full of accusations and most of them are wrong. He would

:14:21. > :14:23.have had a cheque. This plays back into the police. He would have

:14:23. > :14:27.consulted with the Metropolitan Police and said, is there anything

:14:27. > :14:33.in this and I suspect, what came back was anything not. --

:14:33. > :14:37.absolutely not. Given a choice to listening to Labour comments, on

:14:37. > :14:43.the one hand, and what was a concrete review on the other, who

:14:43. > :14:48.would you believe? I would believe the review. I doubt... So you don't

:14:48. > :14:52.think he should admit it was a mistake? I think there's been a lot

:14:52. > :14:58.of hindsight. He said last week, if it turns out that Andy Coulson lied

:14:58. > :15:03.to him, it will involve prosecution. I think people think it doesn't

:15:03. > :15:07.affect him. This isn't Tyneside because at the time, people were

:15:07. > :15:11.saying this story is not going to go away. There are too many

:15:11. > :15:17.unanswered questions. Why was he so desperate to get this guy and the

:15:17. > :15:22.other guy? He wanted Alastair Campbell. He wanted a lookalike for

:15:22. > :15:27.you, David. Journalistically, you know what this is. Even if somebody

:15:27. > :15:32.like Andy Coulson were not guilty, we don't actually know what he was

:15:32. > :15:36.guilty of, what we do know is he worked in the world of the tabloid

:15:36. > :15:40.press. The tabloid press is famous for this kind of sharp practice,

:15:40. > :15:50.and even if it hadn't done something like this, he would have

:15:50. > :15:56.

:15:56. > :16:00.Worded to work before he joined Tony Blair? The tabloid press.

:16:01. > :16:05.part of the problem as it has turned out, Alastair Campbell is

:16:05. > :16:11.the Tories wanted their Alastair Campbell. I remember hearing it off

:16:11. > :16:14.the record, Lee Mead and Alastair Campbell. Particularly in the

:16:14. > :16:20.summer of 2007 when Mr Brown was doing well when he became leader.

:16:20. > :16:25.That is when Andy Coulson was hired. They wanted someone who had good

:16:25. > :16:29.relations with News International, as you had. It is lucky for Mr

:16:29. > :16:36.Blair and Mr Brown, and for use this has happened on the Andy

:16:36. > :16:40.Coulson, David Cameron watch. It could have happened on yours?

:16:40. > :16:45.could have done. But I don't think we could have been as sucked into

:16:45. > :16:50.it. I did all sorts of things as a journalist, but I am confident I

:16:50. > :16:57.never broke the law. My point is, Mr Cameron is suffering because of

:16:57. > :17:02.his very close relations he developed after 2007... You have

:17:02. > :17:07.the same relations? He is suffering because of the judgment he showed

:17:07. > :17:13.in hiring Andy Coulson. And second to that, he is suffering because he

:17:13. > :17:19.allowed himself to be ensnared by the Murdoch empire, having first

:17:19. > :17:25.decided he wouldn't do. It is true, we try to get a better relationship

:17:25. > :17:29.with Murdoch, the Daily Mail and the Express and we exceeded. But we

:17:29. > :17:36.did not do, and in Government what we should have done is take them on

:17:36. > :17:43.in a way Tony did not want to do. It all happened on your watch.

:17:43. > :17:49.should have taken action when the information report was published.

:17:49. > :17:55.Until the last couple of weeks, it was still going on. On the

:17:55. > :18:00.conservative side we know about. But Saturday, July 2nd just gone.

:18:00. > :18:07.Leading Labour figures, James Purnell, Tessa Jowell, the mind you

:18:07. > :18:14.back as leader of the Labour Party, David Miliband partied in the

:18:14. > :18:21.Cotswold with James Murdoch. the director of the BBC if I

:18:21. > :18:26.remember. It was wrong of you to leave out the director of the BBC

:18:26. > :18:31.from that list all the presenter, Jon Snow from Channel Four News. It

:18:31. > :18:35.is about the fear politicians have had, not so much the fear of the

:18:35. > :18:42.press, but the fact they wanted something from the press. They have

:18:42. > :18:47.wanted endorsements and these relationships. There is an issue to

:18:47. > :18:53.this, it is about the fear of the press in the sense Rebekah Brooks

:18:53. > :18:58.in particular, the paper she edited actually went out to damage people.

:18:58. > :19:03.She told Tom Watson she was going to do that. That is like Tom Watson

:19:03. > :19:09.has been so vigorous about this. What is that about? Today isn't

:19:09. > :19:15.just about the Murdochs and Rebekah Brooks answering questions. The two

:19:15. > :19:19.most important policeman in this country were forced to resign. The

:19:19. > :19:22.Metropolitan Police Commissioner, Paul Stephenson and John Yates gave

:19:22. > :19:27.evidence to another select committee about phone hacking. They

:19:27. > :19:32.both came a cropper because they hired former deputy editor of the

:19:32. > :19:35.News of the World, Neil Wallis to provide them with PR advice. Paul

:19:35. > :19:39.Stephenson was asked if he tried to dissuade the Guardian from its

:19:39. > :19:43.phone hacking campaign when he went to see them.

:19:43. > :19:48.The Guardian carried a report a couple of days ago that you have

:19:48. > :19:53.had a meeting with them to say you had tried to persuade them the

:19:53. > :20:00.coverage of phone hacking was exaggerated and incorrect. And that

:20:00. > :20:04.you had a meeting to that effect in December 2009, is that right?

:20:04. > :20:07.Paul Stephenson was then asked why he should question the Guardian's

:20:07. > :20:13.journalism and pointed the finger firmly at Assistant Commissioner

:20:13. > :20:18.John Yates. Why would you go to a newspaper like the Guardian to

:20:18. > :20:21.persuade them they were getting it wrong. I presume you looked at the

:20:21. > :20:27.evidence and over the case to be in a position to give them that

:20:27. > :20:33.assurance? I am the Commissioner of the Met and I have senior grade

:20:33. > :20:38.Chief Constable's like John Yates. He gave me assurances there was

:20:38. > :20:43.nothing new coming out of the Guardian article. I think I have a

:20:43. > :20:46.right to rely on those assurances and I had no reason to doubt the

:20:46. > :20:50.first operation. I went to the Guardian because they continued to

:20:50. > :20:55.run the campaign and I acknowledged in my speech, we should be grateful

:20:55. > :20:59.for them to do that. I went to them because I did not understand it.

:20:59. > :21:02.The resigning head of the Metropolitan Police, probably his

:21:02. > :21:07.last appearance before a select committee in that role, which is

:21:07. > :21:14.still going on. It is a difference select committee to the one we are

:21:14. > :21:17.going to live at 2:30pm. Excepted from John Yates, who had supposedly

:21:17. > :21:25.looked at the inquiry that the Guardian was barking up the wrong

:21:25. > :21:29.tree. You could not get it more wrong could you Alastair Campbell?

:21:29. > :21:36.A feel a bit sorry for him, because I think the man at the top is

:21:36. > :21:42.entitled to trust people one down. The more you hear about this first

:21:42. > :21:44.inquiry and John Yates, you wonder how that man has been in charge

:21:44. > :21:49.against a campaign against terrorism. It is probably a good

:21:49. > :21:54.thing he has gone. The reason people are concerned, the police

:21:54. > :21:59.have relations with all sorts of media, the BBC and other newspapers

:21:59. > :22:03.as well. The reason why the police have entered the frame in the

:22:03. > :22:06.centre, is there is a feeling centre, is there is a feeling

:22:06. > :22:10.evidence is mounting a combination of News International and senior

:22:10. > :22:16.policemen work together to close down the investigation. Do you

:22:16. > :22:21.agree? What you have got his two things. You have incompetence.

:22:21. > :22:26.Whether it is John Yates for Andy Hayman, neither of them have

:22:26. > :22:31.impressed in terms of their handling of this. And second, you

:22:31. > :22:34.have this great big, too difficult basket into which all of the News

:22:34. > :22:39.International stuff was pushed because they knew it mainly to a

:22:39. > :22:43.political problem, a certain amount of bad press in the News of the

:22:43. > :22:50.World. It is not a conspiracy in the normal sense of the word, it is

:22:50. > :22:55.a combination of competence and not wanting to take on that animal.

:22:55. > :23:00.This isn't the finest aspect of policing. Let's not be crass,

:23:00. > :23:04.terrorism is much more fun. It you want to be a policeman, what do you

:23:04. > :23:08.want to spend your time on question of people wonder why this went to

:23:08. > :23:12.the anti-terrorist squad in the first place. If they said they did

:23:12. > :23:18.not have the time, why didn't they pass it on to a more mundane part

:23:18. > :23:23.of the Met? Why after of the 2006 Information

:23:23. > :23:29.Commissioner's report, why wasn't it taken seriously? When Rebekah

:23:29. > :23:35.Brooks gave evidence in 2003, why didn't we jump up and say, it is a

:23:35. > :23:44.criminal offence! Nobody did. me come back to the point then that

:23:44. > :23:53.people wonder about Rupert Murdoch but they have never accused him of

:23:53. > :23:58.being a terrorist. Why did it end up with the anti- terrorist group?

:23:58. > :24:03.Party -- partly an accident because the Royal protection is part of the

:24:03. > :24:07.anti- terrorist group. There was a Royal hacking and that is why it

:24:07. > :24:12.got dealt with. Second, because they trust the counter-terrorist

:24:12. > :24:16.unit to be more secure than others. That is why when Damian Green was

:24:16. > :24:20.arrested, the MP was arrested by the police it was the counter-

:24:20. > :24:25.terrorism unit, who incidentally could not find his house in the

:24:25. > :24:30.village of Kent. They went to the wrong house? It would have been

:24:30. > :24:34.very scary for the man with the biggest house in the village!

:24:34. > :24:39.are just learning John Yates who is giving testimony to the same

:24:39. > :24:44.committee as Paul Stephenson, he said he spoke to her Llewellyn,

:24:44. > :24:49.David Cameron's chief-of-staff, in 2010 and offered to give him a

:24:49. > :24:55.briefing on the language around the phone hacking, but Eddie Llewellyn

:24:55. > :25:01.decline that offer. This is the biggest crisis for the Metropolitan

:25:01. > :25:06.Police in modern times. Agreed? seems most peculiar. When I look at

:25:07. > :25:11.the resignation of Paul Stephenson, I wasn't sure why he resigned. He

:25:11. > :25:17.went to Champney's for free. It was declared in his proper interest,

:25:17. > :25:22.and as far as I know he did not break the code. So how has he got

:25:22. > :25:25.in this business of Neil Wallis being employed, former deputy

:25:25. > :25:30.editor of the News of the World by somebody who turns out to be his

:25:30. > :25:35.friend. Somebody in the Home Affairs Committee said it was the

:25:35. > :25:38.lack of diligence done on the employment of Neil Wallis. He was a

:25:38. > :25:45.friend of the police he was brought in to do it friend of the police

:25:45. > :25:51.job. It is the interlocking network. We have learned it between News

:25:51. > :25:55.International and the politicians on the left and the right. But also

:25:55. > :25:59.between News International and the police. In the Metropolitan Police

:25:59. > :26:05.press department there are former News International employees, why

:26:05. > :26:09.don't they just merge and form one press office? You will know from

:26:09. > :26:15.the days of being an editor, crime correspondents have kept as close

:26:15. > :26:18.as they can to the police. But this has surprised me. Again, I think

:26:18. > :26:22.Paul Stevenson probably reached a judgment that his own judgment

:26:22. > :26:26.would probably be called into question for the fact that with

:26:26. > :26:30.this investigation still going on, it is just as extraordinary that

:26:30. > :26:37.David Cameron could not see the dangers of Andy Coulson, neither

:26:37. > :26:46.could they see the dangers. called for Ian Blair's resignation

:26:46. > :26:56.after the shooting of Jean Paul Dominguez. But he hung on and his

:26:56. > :26:58.

:26:58. > :27:02.reputation went down. It is about five minutes to go until we expect

:27:02. > :27:06.the Murdochs to appear in front of the select committee and we will be

:27:06. > :27:11.passing to the Wilson Room in Portcullis House. But let's remind

:27:11. > :27:16.ourselves of the key players in today's performance. First up is

:27:16. > :27:21.the man at the top, Rupert Murdoch. 80 years of age, he is chairman of

:27:21. > :27:26.News Corporation which wanted full control of BSkyB. He has about 40%

:27:26. > :27:30.at the moment. The committee will want to know what he knew about

:27:30. > :27:36.phone hacking at the News of the World. What did he know and when

:27:36. > :27:42.did he know it? Then there will be his son James, chairman of News

:27:42. > :27:47.Corporation in Europe and Asia. The committee will want to know why he

:27:47. > :27:51.authorised payments to victims of hacking. Then at around 3:30pm when

:27:51. > :27:56.they have gone, I assume we will hear from Rebekah Brooks who was

:27:56. > :27:59.until last week, chief executive of News International and was editor

:28:00. > :28:04.of the News of the World when Milly Dowler's telephone was hacked into

:28:04. > :28:10.us. She was arrested and questioned on Sunday but denies any knowledge

:28:10. > :28:14.of what went on at her newspaper. There are two key political figures

:28:14. > :28:19.about to take centre stage. The Conservative MP, John Whittingdale

:28:19. > :28:23.who chairs the culture committee and last week took the step of

:28:23. > :28:27.issuing a Parliamentary summons to compel the Murdochs to attend this

:28:27. > :28:32.committee session. Also sitting on the committee is a Labour MP called

:28:32. > :28:39.Tom Watson. He has been at the forefront of the campaign to expose

:28:39. > :28:45.phone hacking. What are the key points you will be looking out for

:28:45. > :28:49.this afternoon? What do you want to find out? For me it is the James

:28:49. > :28:53.Murdoch authorisation of these huge payments out of court settlements.

:28:53. > :29:00.He said in one of the few statements he has made, he was not

:29:00. > :29:06.in full possession of the fact. Presumably now he is. So what were

:29:06. > :29:11.the full facts? Rupert Murdoch will be questioned whether it it is his

:29:11. > :29:15.culture that has permeated all levels of the organisation. And for

:29:15. > :29:23.Rebekah Brooks, they will be quizzing her about what she said to

:29:23. > :29:31.the committee in the past. During the Watergate scandal a senator

:29:31. > :29:36.became famous for asking "what did Juno And When Did You Know It"?

:29:36. > :29:42.They could take a leaf out of his book? It will be more specific than

:29:42. > :29:47.that. And also at the point when you decide to close the News of the

:29:47. > :29:53.World, a new mood there was a problem. He did not choose to sack

:29:53. > :30:00.Rebekah Brooks, you just shut down been News of the World. Why didn't

:30:00. > :30:08.you get to the bottom of its then and there. And for Rupert Murdoch,

:30:08. > :30:11.this does go back to Les Hinton. has also had to resign. Also the

:30:11. > :30:17.common denominator is Rupert Murdoch. What we your instructions

:30:17. > :30:23.to Les Hinton at that time? David, what would you like to find out

:30:23. > :30:29.this afternoon? I want to know if they decided to close their ears to

:30:29. > :30:33.what is going on. We will shut this down, we won't let it happen. We

:30:33. > :30:37.have some suspicions but we won't run with it. Or whether they

:30:37. > :30:41.genuinely didn't have their eye on the ball until it was too late and

:30:41. > :30:48.then they did not have the capacity to respond. A thing I am the only

:30:48. > :30:58.person in this room who has not met Rupert Murdoch. I shall be very

:30:58. > :30:58.

:30:58. > :31:02.interested to see how that question It's about the advice of not losing

:31:02. > :31:07.your temper and being calm, I think if there is the slightest sign of

:31:07. > :31:10.them getting irritated, it will backfire on them. People will be

:31:10. > :31:14.interest the see whether they have worked better strategy. To get

:31:14. > :31:19.themselves though it. I'm not sure 1 hour will be long enough. It

:31:19. > :31:24.could overrun. And I hope it does because there's a lot of serious

:31:24. > :31:28.questions. The demeanour is incredibly important. They should

:31:28. > :31:34.take the emotion out of the questions and find the facts in the

:31:34. > :31:39.questions put up and deal with the facts. Rupert Murdoch is not used

:31:39. > :31:46.to this kind of public accountability. Hasn't he appeared

:31:46. > :31:51.before the Senate in the USA. was pretty uncontroversial. It

:31:51. > :31:57.wasn't like this. We are just watching pictures of people going

:31:57. > :32:04.into the committee. It has gone at 2:30pm, so they are running late.

:32:04. > :32:08.Would it be sensible if either of the Murdochs intentionally gave us

:32:08. > :32:15.new information today? If I was them, I would. I would start with

:32:15. > :32:19.an apology, up front, and a completely unlimited apology, not

:32:19. > :32:25.try to be reticent about it. I'm sorry my employees let you down

:32:25. > :32:31.kind of thing. I would try and say, what I have managed to find out in

:32:31. > :32:37.the time since the crisis blew up, as it were, and at least Telegraph

:32:37. > :32:41.to the committee that I intend to be straightforward with them.

:32:41. > :32:48.People have said Murdoch will announce his resignation. I will

:32:48. > :32:51.believe that when I see it. resignation in favour of who?

:32:51. > :32:57.it is difficult for two men, particularly the older one, who is

:32:58. > :33:01.used to be so powerful, being interviewed by people they employ,

:33:01. > :33:05.and used to being treated with huge respect and deference by

:33:05. > :33:10.politicians, some of them, I suspect, are now going to give them

:33:10. > :33:13.a tough time. One big problem with people this powerful is they do

:33:13. > :33:18.attract coteries and so on. They have people running around after

:33:18. > :33:28.them. They tell them they are effectively immortal. I think that

:33:28. > :33:30.happens. It happens everywhere. Power attracts it. This is a

:33:31. > :33:35.wonderful experience if the committee do it right because what

:33:35. > :33:38.it shows is that nobody is so powerful they are not answerable to

:33:38. > :33:41.a committee. The committee has got to ask the questions correctly

:33:41. > :33:47.force up my understanding is they had been training over the past

:33:47. > :33:53.couple of days for this. The way the party leaders trained for the

:33:53. > :34:02.debates. They have been having mock sessions and so on. The one thing

:34:02. > :34:11.they have to avoid, I would suggest, is the, "You can't handle the

:34:11. > :34:20.tricky" Moment. Because anger it could rebound on them. -- you can't

:34:20. > :34:24.handle the truth. We can see, with police protection to help him get

:34:24. > :34:30.through the people forming along the corridor, in this relatively

:34:30. > :34:34.new building, portcullis House, James Murdoch and Rupert Murdoch,

:34:34. > :34:40.his father, going into the committee room. You can see the

:34:40. > :34:45.rather lovely atrium there. They will be nervous. I remember that

:34:45. > :34:50.little walk and I was nervous on several occasions. These MPs, some

:34:50. > :34:56.of them will have done their homework. I think most important

:34:56. > :35:00.thing is they have bought through every possible question and answer.

:35:00. > :35:04.They are taking their seats now in front of the committee. Mr Murdoch

:35:04. > :35:12.senior on the left. And James Murdoch on the right. Get your

:35:12. > :35:22.glass of water, I suspect. Mr Murdoch is not used to speaking

:35:22. > :35:27.

:35:27. > :35:33.off-the-cuff. He is more used to We would like the opportunity to

:35:34. > :35:42.make a statement. Would you allow us? The committee discussed that

:35:42. > :35:46.earlier and we do feel be a lot of questions and we hope all you want

:35:46. > :35:50.to say well, to question. If you feel that is not the case, please

:35:50. > :35:54.make the statement at the end. Excuse me, can we not have that,

:35:54. > :36:01.please? The in that case, we would like to submit the statement in

:36:01. > :36:11.writing. That would be acceptable. Could we please remove the people

:36:11. > :36:23.

:36:24. > :36:28.STUDIO: We are keeping the cameras on the chairman of the committee.

:36:28. > :36:33.There was a bit of a protest just as we got out of the way as James

:36:33. > :36:43.Murdoch asked for the committee's permission to make a statement. It

:36:43. > :36:44.

:36:44. > :36:49.wasn't really granted. They have This is a special meeting of the

:36:49. > :36:52.committee. A follow-up to the committee the committee held in the

:36:52. > :36:56.2009 into press standards, privacy and libel during which we took

:36:56. > :37:01.evidence on the extent of the phone hacking which are taking place in

:37:01. > :37:05.the News of the World. In our report last year, we stated that we

:37:05. > :37:10.thought it was inconceivable that only one reporter had been involved.

:37:10. > :37:15.In the last few weeks, it has emerged that, not only evidence has

:37:15. > :37:18.come out which I think has vindicated this conclusion, but

:37:18. > :37:24.also abuses have been revealed which have shocked the entire

:37:24. > :37:27.country. It's also clear parliament has been misled. We are very

:37:27. > :37:30.conscious in the committee that there is an ongoing police

:37:30. > :37:35.investigation. And possible criminal proceedings to follow.

:37:35. > :37:38.This committee would not wish to jeopardise that. However, we are

:37:38. > :37:42.encouraged by the statements which have been made by all the witnesses

:37:42. > :37:46.this afternoon that they wish to co-operate with the committee and

:37:46. > :37:53.help us to establish the truth. So, as our first witnesses this up in,

:37:53. > :37:56.can I welcome Rupert Murdoch and the deputy chief operating officer

:37:56. > :37:59.and chairman and chief executive of News Corp International, James

:37:59. > :38:07.Murdoch. Can I thank you for making yourself available to the committee

:38:07. > :38:12.this afternoon. Thank you, Mr Chairman. We are more than prepared

:38:12. > :38:17.to. If I could start the James Murdoch. You made a statement on

:38:17. > :38:20.7th July in which you stated the paper had made statements to

:38:20. > :38:24.Parliament without being in possession of the facts and that

:38:24. > :38:29.was wrong. You essentially admitted Parliament had been misled in what

:38:29. > :38:33.we had been told. Can you tell us to what extent where we misled when

:38:33. > :38:41.you became aware of it? Thank you very much and first of all I would

:38:41. > :38:45.like to say just how sorry I am and how sorry we are two particularly

:38:45. > :38:52.the victims of a legal voice mail interceptions and to their families.

:38:52. > :38:56.It's a matter of great regret. Mind, my father's, and everyone at News

:38:56. > :39:02.Corporation and these are standards, these actions do not live up to the

:39:02. > :39:07.standards that our company aspires to. It is our determination to both

:39:07. > :39:12.put things right, make sure these things don't happen again, and to

:39:12. > :39:18.be the company that I know we have always aspired to be. As for my

:39:18. > :39:28.statement, which I believe it was around the closure of the News of

:39:28. > :39:30.

:39:30. > :39:34.the World newspaper,... This is the most humble day of my life.

:39:34. > :39:41.statement around the closure of the News of the World newspaper, where

:39:41. > :39:44.I stated that the company had not been in full possession of the fact

:39:44. > :39:51.when certain statements were made to this committee, was referring to

:39:51. > :39:56.the emergence of new facts, largely that came about at the end of 2010,

:39:56. > :40:00.as the due process of a number of civil trials reached their point

:40:00. > :40:07.Word document disclosure and evidence disclosure made it

:40:07. > :40:10.apparent to the company and to myself at that time that, indeed,

:40:10. > :40:14.there was reason to believe that, potentially, more people had been

:40:14. > :40:21.involved in the News of the World illegal voice mail interceptions

:40:21. > :40:25.from before. That was new evidence and information at the time that

:40:25. > :40:29.post-dated the 2009 hearings. That is what I was referring to.

:40:29. > :40:38.Subsequent to our discovery of that information, in one of the civil

:40:38. > :40:42.trials at the end of 2010, which I believe was the CNN Mellor trial,

:40:42. > :40:48.the company immediately went to look at additional record around

:40:48. > :40:53.the individual involved -- CNN a laugh. We alerted the police who

:40:53. > :40:59.restarted on that basis, the investigation that is now under way.

:40:59. > :41:03.And, since then, the company has admitted liability to victims of a

:41:03. > :41:08.legal voice mail interception, apologised unreservedly, which I

:41:08. > :41:11.repeat today, to those victims, and the company has also set up a

:41:11. > :41:17.compensation scheme independently managed by a former High Court

:41:17. > :41:21.judge to be able to deal with legitimate claims coming from

:41:22. > :41:27.victims of those terrible incidents. Voice mail interception. Those are

:41:27. > :41:31.the actions which were taken as soon as new evidence emerged, so

:41:31. > :41:36.when I made a statement about not being in possession of the fact, it

:41:36. > :41:43.was those facts at that point, were in the future, and it was the due

:41:43. > :41:50.process of the civil trial that that evidence really emerged for us.

:41:50. > :41:55.And we acted as swiftly and transparently as possible. When

:41:55. > :42:00.this committee took evidence in at 2009, we heard from the managing

:42:00. > :42:06.editor of the News of the World, the legal manager of News

:42:06. > :42:11.International and News of the World editor, the former editor Andy

:42:11. > :42:14.Coulson and Les Hinton, the former chairman. All of them told us that

:42:14. > :42:18.there had been a thorough investigation, no evidence had ever

:42:19. > :42:26.been found that anybody else was involved for that clearly was not

:42:26. > :42:35.correct. Were any of them lying to his committee? Mr Thurnham, the

:42:35. > :42:45.company relied on three things -- Mr Chairman. Until the new evidence

:42:45. > :42:46.

:42:46. > :42:51.emerged, the company relied on a police investigation in 2007,

:42:51. > :42:58.before I was involved. I became involved in at News Corporation at

:42:58. > :43:03.the end of 2007. In the 2007 period, there was a police investigation,

:43:03. > :43:08.successful prosecutions against two individuals, and the editor of the

:43:08. > :43:13.News of the World resigned. The company relied on both the police

:43:13. > :43:16.having closed the investigation and repeated assertions that there was

:43:16. > :43:24.no new evidence for them to reopen their investigation, the company

:43:25. > :43:29.relied on be PCC, but said there was no more to this at the time.

:43:29. > :43:34.The company relied on the legal opinion, outside counsel, that was

:43:34. > :43:37.brought in a related to those matters with respect to their

:43:37. > :43:44.review, and had issued a clear opinion that there was no

:43:44. > :43:51.additional illegality than the two individuals involved before. The

:43:51. > :43:55.company relied on those facts and for the company in at 2008-nine, it

:43:55. > :44:00.was not clear that there was a reason to believe that those

:44:00. > :44:03.matters were anything other than settled matters and in the past.

:44:03. > :44:07.visit your test the need to this committee the individuals who gave

:44:07. > :44:12.us evidence in 2009, none of them knew at that time what's been going

:44:12. > :44:16.on? -- Is it your testimony? I do not have direct knowledge of what

:44:16. > :44:22.they knew and what time, but I can tell you that the critical new

:44:22. > :44:28.facts, as I saw them, and as the company saw them, really emerged in

:44:28. > :44:38.the production of documents and evidence in the civil trial at the

:44:38. > :44:43.end of 2010. And the duration from 2008 until the end of 2010, the

:44:43. > :44:49.length of time it took for that to come Clear and for that real

:44:49. > :44:53.evidence to be there, is a matter of deep frustration, because I know

:44:53. > :44:58.and sympathise with the frustration of this committee. It is a matter

:44:58. > :45:07.of real regret that the facts could not emerge and could not be got

:45:07. > :45:11.into, to my understanding, Foster. -- faster. You are made it clear

:45:11. > :45:21.the information we were giving was incorrect. Have you established, as

:45:21. > :45:23.

:45:23. > :45:27.well as Clive Goodman, was involved I am sorry, can you repeat that?

:45:27. > :45:31.Who as well as Clive Goodman was involved in phone hacking at the

:45:32. > :45:35.News of the World? As I think you made it clear earlier Mr Chairman,

:45:35. > :45:41.there have been a number of arrests of former News of the World

:45:41. > :45:46.employees. These are matters for current criminal investigations,

:45:46. > :45:51.and I think it is difficult for me to comment in particular around

:45:51. > :45:56.some of those individuals. Have you carried out your own investigation

:45:56. > :46:05.since the discovery of this information, to find out the extent

:46:05. > :46:09.of involvement in phone hacking at the News of the World? We have

:46:09. > :46:14.established a group in the company co-operating very closely with the

:46:14. > :46:18.police on their investigations. Their investigation is brought with

:46:18. > :46:22.respect to journalistic practices and in particular journalistic

:46:22. > :46:27.practices at the News of the World. And the policy and direction the

:46:27. > :46:31.company has given them is to co- operate with the police and provide

:46:31. > :46:37.information and evidence that the company believes and they believe

:46:37. > :46:42.is relevant to those investigations. Sometimes prayer -- pro actively

:46:42. > :46:45.and sometimes in response to those requests. I think the provision of

:46:45. > :46:52.the new information to the police in the first place when there was

:46:52. > :46:59.no ongoing police investigation, led to, in part, the reopening of

:46:59. > :47:04.this new investigation being established. I hope that can be

:47:04. > :47:08.established as being proactive to getting to the right place in

:47:08. > :47:14.finding out the facts, understanding all of the

:47:14. > :47:18.allegations that are coming in and moving forward to help the police

:47:18. > :47:24.in the successful completion of the important, serious work they are

:47:24. > :47:29.doing. And a departure from your company in the recent few days of

:47:29. > :47:39.Tom Crone, of Rebekah Brooks and of Les Hinton, is it because any of

:47:39. > :47:46.them acknowledged phone hacking? have no knowledge, and there is no

:47:46. > :47:51.evidence that I am aware of, that Rebekah Brooks, or Les Hinton or

:47:51. > :47:55.any of those executives had knowledge of that. And their

:47:55. > :48:01.assertions, certainly Rebekah Brooks and her assertions to meet

:48:01. > :48:05.that her knowledge of those things has been clear. Nonetheless, those

:48:06. > :48:11.resignations have been accepted but it is important on the basis there

:48:11. > :48:15.is no evidence today that I have seen or I have any knowledge of,

:48:15. > :48:19.but there was any impropriety by them. I am going to turn to Tom

:48:19. > :48:25.Watson. Mr Murdoch's senior, Good

:48:25. > :48:29.afternoon.. You have stated News Corp has a

:48:29. > :48:35.zero tolerance to wrongdoing by employees, is that right? It is,

:48:35. > :48:45.yes. In 20th October 10 Did you still it believed to be true when

:48:45. > :48:53.you made your speech, when you said "let me be clear we will go in

:48:53. > :48:57.search of the truth". Yes. That is what the police are investigating

:48:57. > :49:05.and we are helping them with. acknowledge you were misled?

:49:05. > :49:07.Clearly. Can I take you back to 2003? Are you aware in March of

:49:07. > :49:14.that year Rebekah Brooks gave evidence to this committee

:49:14. > :49:20.admitting paying the police? I am now aware of that. I was not aware

:49:20. > :49:26.of it at the time. I'm also aware she amended that considerably very

:49:26. > :49:31.quickly afterwards. I think she amended its seven or eight years

:49:31. > :49:38.after it. Sorry! Did you or anyone else at your in this --

:49:38. > :49:47.organisation investigate this at the time? No. Can you explain why?

:49:47. > :49:55.I did not know of it. I am sorry, if I can just say something? This

:49:55. > :50:01.is not an excuse. Maybe it is an explanation, the News of the World

:50:01. > :50:07.is less than 1% of the company, I employ 53,000 people around the

:50:07. > :50:14.world hoo-ha great and ethical and distinguished people. They are

:50:14. > :50:22.professionals in their own right. And I am spread watching and

:50:22. > :50:27.appointing people with whom I trust to run those divisions. I do accept

:50:27. > :50:31.you have many distinguished people who work for your company. You what

:50:31. > :50:38.ultimately responsible for the Government source of News Corp. So

:50:38. > :50:44.I want to establish who knew about wrong doing at the time. If I can

:50:44. > :50:51.take you to 2006, and when Clive Goodman was arrested and convicted

:50:51. > :50:56.of intercepting voice mails, where you made aware of that? I was

:50:56. > :50:59.certainly made aware of it when he was convicted. What did News

:50:59. > :51:05.International do subsequent to the rest of Clive Goodman and Glenn

:51:05. > :51:09.Mulcaire to get to the facts? worked with the police with a

:51:09. > :51:19.further investigation and eventually we quickly appointed a

:51:19. > :51:21.

:51:21. > :51:25.Bury leading firm of lawyers in the city to investigated further.

:51:25. > :51:30.would like to finish my line of questioning. What did you

:51:30. > :51:38.personally do to investigate that after Clive Goodman went to prison?

:51:39. > :51:48.You were obviously concerned about it. I spoke to Les Hinton, who told

:51:49. > :51:49.

:51:49. > :51:53.me about it. Can I ask in 2008, why did you not dismiss News of the

:51:53. > :52:03.World chief reporter, Neville far back following the Moseley case?

:52:03. > :52:04.

:52:04. > :52:08.had never heard of him. Despite a judge at making clear that he set

:52:08. > :52:14.out he went out to set out to blackmail two of the women involved

:52:14. > :52:17.in the case? That is the first I have heard of that. So none of your

:52:17. > :52:27.UK staff draw your attention to this serious wrongdoing even though

:52:27. > :52:33.the case received extensive media attention? Maybe my son can answer

:52:33. > :52:36.that. I will come to your son in a minute. And despite blackmail

:52:37. > :52:42.resulted in a 14 year sentence, nobody in your UK company brought

:52:42. > :52:49.this to your attention? blackmail charges, no. Do you think

:52:49. > :52:56.that is because they thought you might think nothing of it? No. I

:52:56. > :53:00.cannot answer, I do not know. you agree with Mr Justice e d when

:53:00. > :53:08.he said the lack of action discloses a remarkable state of

:53:08. > :53:16.affairs at News International? Mr Murdoch, a judge found a chief

:53:16. > :53:23.reporter guilty of blackmail. It was widely reported, he said it was

:53:23. > :53:31.a remarkable state of affairs. didn't he put him in jail? It was a

:53:31. > :53:33.civil case. Were you aware that News

:53:33. > :53:36.International commissioned an investigation into News

:53:36. > :53:46.International e-mails by the solicitors' firm, Harbottle &

:53:46. > :53:49.Lewis? Yes, I did not appoint them but I was told of it happening.

:53:49. > :53:59.claimed in the Wall Street Journal Harbottle & Lewis are made a major

:53:59. > :54:03.

:54:03. > :54:13.mistake. What a mistake way you referring to? -- what mistake way

:54:13. > :54:15.

:54:15. > :54:18.you referring to? I think again that is a question for James. But a

:54:18. > :54:25.we re-examined that. We found things we admittedly went to

:54:25. > :54:29.council with to get advice on how to present it to the police.

:54:29. > :54:33.their written response to these questions, are you aware News

:54:33. > :54:37.International stated that both John Chapman and Daniel cloak reviewed

:54:37. > :54:43.these e-mails before RIF -- affording them to Harbottle &

:54:43. > :54:48.Lewis? Know. So nobody in the company told you that two of your

:54:48. > :54:54.executives had reviewed the e- mails? I thought then, everything

:54:54. > :55:02.had been sent to them. You are a word Lord MacDonald QC has refute

:55:02. > :55:10.the e-mails on behalf of News International are you not? Yes.

:55:11. > :55:16.you aware he stated evidence... reported them to News International.

:55:16. > :55:20.He found evidence of indirect hacking, breaches of national

:55:20. > :55:26.security and evidence of serious crime in the Harbottle & Lewis

:55:26. > :55:30.file? I did indeed. I can address these in some detail

:55:30. > :55:34.if you will allow me. It is your father who is responsible for

:55:34. > :55:40.corporate governance and I want to know what he knew but I will come

:55:40. > :55:50.back to you. He was aware of how awful and there was findings at a

:55:50. > :55:51.

:55:51. > :55:57.News International? It went to the senior officials of News Corp.

:55:57. > :56:05.Certainly the top legal officer. Tom crone or Les Hinton? No, they

:56:05. > :56:09.were not the top legal officers. Who are the top legal officers?

:56:09. > :56:15.John Chapman was the top legal officer at news International and

:56:15. > :56:20.Mr John crone was head of legal affairs at News Group Newspapers.

:56:20. > :56:30.Away you informed about the findings by your son, Mr Murdoch or

:56:30. > :56:33.

:56:33. > :56:37.by Rebekah Brooks? I forget, but I suspect it was my son. I was in

:56:37. > :56:47.daily contact with them both. we were informed about the payments

:56:47. > :56:55.are made to Gordon Taylor and Max Clifford? Know. You were not

:56:55. > :57:04.informed? Know. At no point you knew that Gordon Taylor and Max

:57:04. > :57:09.Clifford were made payments? You never informed the chief executives

:57:09. > :57:14.at News Corp that you made payments and authorise payments to Gordon

:57:14. > :57:18.Taylor as a result of him being a victim of a crime? The settlement

:57:18. > :57:25.with Mr Taylor, and I am happy to address the matter of Mr Taylor in

:57:25. > :57:30.some detail if you would like. My father became a were after the

:57:30. > :57:35.settlement was made in 2009, I believe after the confidential

:57:35. > :57:41.settlement had become public. As a newspaper reported on the out of

:57:41. > :57:45.court settlement afterwards. Please understand the settlement of an

:57:45. > :57:49.out-of-court settlement of a civil claim of that nature and with that

:57:49. > :57:54.quantum is something that normally in a company car size, the

:57:54. > :57:59.responsible executives in the territory of the country would be

:57:59. > :58:09.authorised to make. And that is the way the company is functioning and

:58:09. > :58:11.

:58:11. > :58:15.it is below the approval threshold, if you will. There are other

:58:15. > :58:19.questions I could ask, but there are other colleagues who have

:58:19. > :58:23.specific questions on this Mr Murdoch. I will move back to your

:58:23. > :58:33.father. Mr Murdoch when did you find out criminality was endemic at

:58:33. > :58:38.

:58:38. > :58:46.the News of the World? Endemic is a very wide-ranging what. I also have

:58:46. > :58:56.to be careful not to prejudice the course of justice taking place now.

:58:56. > :58:57.

:58:57. > :59:01.That has been disclosed. I became aware as it became apparent. I was

:59:01. > :59:10.absolutely shocked, appalled and ashamed when I heard about the

:59:10. > :59:14.Milly Dowler case. That was only two weeks ago. I was graciously

:59:14. > :59:18.received by the family. Did you read our last report into the

:59:18. > :59:25.matter when we referred to the collective amnesia of your

:59:25. > :59:30.executives who gave evidence to a committee? I have not heard that.

:59:30. > :59:33.Nobody brought it to your attention? So a Parliamentary

:59:34. > :59:40.inquiry found your senior executives in the UK guilty of

:59:40. > :59:45.collective amnesia and nobody brought it to your attention? I

:59:46. > :59:50.don't see why you think it is not very serious? You are not saying

:59:50. > :59:54.Anisha, you would be saying they were lying? We found your

:59:54. > :59:58.executives guilty of collective amnesia. I would have thought

:59:58. > :00:07.somebody would have brought back to your attention and that it would

:00:07. > :00:12.concern you? Did they forget? I don't think so. What has been

:00:12. > :00:16.obvious to most of the observers from the summer of 2009 phone

:00:16. > :00:26.hacking was widespread. You knew in January of this year the one road

:00:26. > :00:31.

:00:31. > :00:39.report a line was false. Is that right? -- Road reporter. I forget

:00:39. > :00:46.the days. Why was he the only person to leave the News of the

:00:46. > :00:52.World last January? We have given all of our files and all of our

:00:52. > :00:58.knowledge and everything to the police. They have not asked for

:00:58. > :01:06.Glenn Mulcaire's diaries, so we do not know what was in that. There

:01:06. > :01:11.was eight-page which appeared to be addressed... Again my son can

:01:11. > :01:13.answer that. Perhaps it would be helpful to the committee if you

:01:13. > :01:17.would like to go through that particular detail around why

:01:17. > :01:20.decisions were made by the management team at News

:01:20. > :01:25.International and the precise chronology, would be more helpful

:01:25. > :01:35.if I could answer those questions as the chief executive of the

:01:35. > :01:38.

:01:38. > :01:41.regional businesses across Europe. Your father is responsible. He is

:01:41. > :01:45.revealing what he doesn't know and what executives chose not to tell

:01:45. > :01:51.him so, with respect to you, I will pursue my line of questioning and

:01:51. > :01:55.come back to you later. Why was no one fired in April when the News

:01:55. > :02:02.International finally admitted that the News of the World have been

:02:02. > :02:06.engaged in criminal interception of voice mails? It was not our job to

:02:06. > :02:11.get in the course of justice. It was up to the police to bring those

:02:11. > :02:15.charges and carry out their investigation which we were 100%

:02:15. > :02:23.co-operating with. In April, the company admitted liability for

:02:24. > :02:28.phone hacking and nobody took responsibility for it then. No one

:02:28. > :02:33.was fired. The company admitted they had been involved in criminal

:02:33. > :02:38.wrongdoing and nobody was fired. Why was that? There were people in

:02:38. > :02:44.the company which apparently were guilty. And we have to find them

:02:44. > :02:48.and deal with them appropriately. If I can clarify, is to the

:02:48. > :02:53.individuals implicated in the allegations there, had long since

:02:53. > :03:01.left the company. Some of that were still there, you mention one,

:03:01. > :03:07.Exeter the business as soon as To he co-operate with the police to

:03:07. > :03:13.aid them with the things they wanted to do. But many of the

:03:13. > :03:16.individuals that were potentially implicated in those civil

:03:16. > :03:23.litigation and a criminal matters had already left the building and

:03:23. > :03:28.were not in the News of the World at this time. The executives and

:03:28. > :03:35.journalists at the time, many of whom were not there, in a 2006-

:03:35. > :03:40.seven, so some of them had already left. Thank you. Mr Murdoch, why

:03:40. > :03:44.did you decide to risk the jobs of 200 people before pointing the

:03:44. > :03:49.finger at those responsible for running the company at the time of

:03:49. > :03:54.the illegality? Your son and Rebekah books? When a company

:03:54. > :03:58.closes down, it's natural for people to lose their jobs. In this

:03:58. > :04:03.case, we are continuing to make effort to see those people are

:04:03. > :04:11.employed in other divisions of the company. If they are not part of

:04:11. > :04:21.the small group of, whatever group was involved. Did you close it

:04:21. > :04:26.

:04:26. > :04:33.because of the criminality? Yes, we felt ashamed of what had happened.

:04:33. > :04:41.People lied to you and to their readers. We had broken our trust

:04:41. > :04:45.with our readers. The important point was we had broken our trust

:04:45. > :04:48.with our readers. Were you aware there was other forms of illicit

:04:48. > :04:58.surveillance being used by private investigators used by News

:04:58. > :05:00.

:05:00. > :05:04.International? Other forms of? Computer hacking, tracking cars?

:05:04. > :05:09.All news organisations have used private detectives and do so in

:05:09. > :05:15.their investigations from time to time. I don't think illegally.

:05:15. > :05:18.it could be shown to you that private investigators working for

:05:18. > :05:22.newspapers and News International used other forms of illicit so they

:05:22. > :05:27.don't like computer hacking, would to immediately introduce another

:05:27. > :05:32.investigation? That would be up to the police, but we would certainly

:05:32. > :05:42.work with the police. If they wanted to do it, they would do it.

:05:42. > :05:44.

:05:44. > :05:51.Can I ask you, when did you first meet Mr Alex Marincek? I don't know.

:05:51. > :05:55.He worked for the company for 25 years. I may have shaken his hand

:05:55. > :06:05.at one day in the office, but I have no memory. The bank you. Jim

:06:05. > :06:07.

:06:07. > :06:11.Could I ask you a number of short questions? Why did you enter the

:06:11. > :06:20.back door at Number Ten when you visit to the Prime Minister

:06:20. > :06:24.following the last general election? Because I was asked to.

:06:24. > :06:31.You were asked to come in the back door of Number Ten? Yes, to avoid

:06:31. > :06:34.photographers in the front, I would imagine. I just did what I was told.

:06:34. > :06:44.It's strange but heads of state managed to go in the front door.

:06:44. > :06:45.

:06:45. > :06:51.Yes. But you had to go in the back door? Yes. That's up to the Prime

:06:51. > :06:54.Minister or their staff. So it was under the Prime Minister's direct

:06:54. > :06:59.instructions you come through the back door? I was asked to come

:06:59. > :07:05.through the back door. I don't think my father had any direct

:07:06. > :07:13.knowledge of arrangements to go into any building, respectively.

:07:13. > :07:19.Have you ever imposed any preconditions... Which a visit to

:07:19. > :07:23.Downing Street are you talking about? Following the general

:07:23. > :07:29.election. I was invited for a cup of tea to be thanked for support by

:07:29. > :07:35.Mr Cameron. No other conversation took place. And that's the one when

:07:35. > :07:40.you came into the back door? Yes. I have also been asked by Mr Brown

:07:40. > :07:48.many times. Through the back door? Yes.

:07:48. > :07:51.My family went there many times. Have you ever imposed any

:07:51. > :07:56.preconditions on a party leader in the UK before giving them the

:07:56. > :08:03.support of your newspapers? I have never guaranteed any one support of

:08:03. > :08:12.the newspapers. We had been supporting the Thatcher government,

:08:12. > :08:17.the Conservative government, and we felt it was a good time and we

:08:17. > :08:23.changed and are supported the Labour Party whenever it was, 13

:08:23. > :08:29.years ago, with the direct loss of 200,000 circulation. Did you ever

:08:29. > :08:34.impose any preconditions on the Labour Party? No. None whatsoever?

:08:34. > :08:44.The only conversation I had with him, Tony Blair, we were arguing

:08:44. > :08:47.

:08:47. > :08:53.about Europe. Mr Blair visited you are halfway around the world before

:08:53. > :09:03.the 1997 election. It doesn't matter. It was something Mr

:09:03. > :09:04.Campbell arranged. Yes. It is understood that the FBI are

:09:04. > :09:09.investigating the 9/11 victims. Have you commissioned an

:09:09. > :09:14.investigation into these allegations? We have seen no

:09:14. > :09:19.evidence of that at all and as far as we know, the F B I haven't

:09:19. > :09:24.either. If they do, we will treated exactly the same way as we treat it

:09:24. > :09:31.here, and I cannot believe it happened. Anyone in America. The

:09:31. > :09:36.News of the World, where the Glenn Mulcaire took it upon themselves to

:09:36. > :09:41.do it, I don't know. I will come back to you in a moment for so I

:09:41. > :09:43.just want to clarify, if these allegations are true whatsoever,

:09:43. > :09:50.will you commission an investigation into them?

:09:50. > :09:56.absolute it. -- absolutely. must be horrified by the scandal

:09:56. > :10:01.and the fact it has cost to the BSkyB transaction and led to the

:10:01. > :10:10.closure of the News of the World. Who do you blame for that? A lot of

:10:10. > :10:14.people had different agendas, I think. Tried to build this hysteria.

:10:14. > :10:23.All our competitors in this country formally announced a consortium to

:10:23. > :10:28.try and stop us and they caught us with dirty hands and booked us.

:10:28. > :10:37.was your competitors that stop you getting at? No, and mood developed

:10:37. > :10:41.which made it impractical to go ahead. We have been very clear that

:10:41. > :10:48.serious allegations of wrongdoing have been levelled to the News of

:10:48. > :10:52.the World. We believed that the News of the World, the actions of

:10:52. > :10:56.some reporters and people some years ago, have a fundamentally

:10:56. > :11:01.tarnished the trust the News of the World had with its reserves --

:11:01. > :11:08.readers, and this is a matter of huge and sincere regret, mind, my

:11:08. > :11:14.father's, the companies. The company's priority very much so is

:11:14. > :11:20.to restore that trust, to operate in the right way, to make sure that

:11:20. > :11:28.the company can be the company it is always aspired to be. And the

:11:28. > :11:33.removal of the offer to make, the proposal to make an offer to BSkyB

:11:33. > :11:38.shareholders, is simply a reflection of that priority moving

:11:38. > :11:42.forward. I have every sympathy with what you're saying, but do you

:11:42. > :11:48.understand that people who have been the victims of the News of the

:11:48. > :11:58.World, based on allegations, will find that a bit strange? It is our

:11:58. > :12:00.

:12:00. > :12:04.absolute priority,... What happened at the News of the World was wrong.

:12:04. > :12:10.I have apologised profusely and unreservedly for that. And my

:12:10. > :12:14.father has, as well. These are very, very serious matters and we are

:12:14. > :12:20.trying to establish the facts of any new allegations as they come up.

:12:20. > :12:24.We are working closely with the police to find out where the wrong

:12:24. > :12:29.doing was and hold people accountable. I think, importantly,

:12:29. > :12:33.as well, to the victims of illegal voice mail interceptions, not just

:12:33. > :12:37.if we apologise, but we have admitted liability, the company has

:12:37. > :12:42.admitted liability, and we have set up the appropriate third party

:12:42. > :12:46.compensation scheme to deal with that. These are all matters that we

:12:46. > :12:53.are fully engaged in. Just turning to your father, I know it's a very

:12:53. > :12:59.stressful time for yourself, but, Mr Murdoch, do you accept

:12:59. > :13:06.responsibility for this whole fiasco? No. Who is responsible?

:13:06. > :13:12.people that I trusted and then maybe the people they trusted. I

:13:12. > :13:16.worked with Les Hinton for 22 years and I would trust him with my life.

:13:16. > :13:22.Are you satisfied that the cash payments made by the News

:13:22. > :13:31.Corporation companies to informants for stories were registered with

:13:31. > :13:41.appropriate tax authorities? don't know anything about that, no.

:13:41. > :13:43.

:13:43. > :13:52.If people were given money... In order to accomplish stories, was

:13:52. > :13:59.that notified? All of our financial affairs and, as a public company, a

:13:59. > :14:04.transparent, audited, the tax jurisdictions all around the world,

:14:04. > :14:12.our work transparently and thoroughly. Tax compliance is an

:14:12. > :14:17.important priority for any business and we comply with the laws. Does

:14:17. > :14:24.that include people in a regular monthly retainers, registering

:14:24. > :14:28.their affairs? I have no knowledge of separate people on a retainers

:14:28. > :14:33.in the company, their own tax arrangements, but I can't speak for

:14:33. > :14:41.the company's tax arrangements and, to the best of my knowledge, we are

:14:41. > :14:50.a company which takes tax compliant, transparency, hugely seriously. It

:14:50. > :14:56.is something we are very proud of. Can I just turn to James, you will

:14:56. > :15:06.be aware of the situation with Tommy Sheridan, who is currently in

:15:06. > :15:07.

:15:07. > :15:14.prison. The jury was misled in the Tommy Sheridan's perjury trial.

:15:14. > :15:18.Your company has not disclosed the internal e-mails for that before

:15:18. > :15:22.the wires that? I have no knowledge of that and I apologise for that. I

:15:22. > :15:26.have additional questions on that and in future I will supply a

:15:26. > :15:36.written answers but I don't have direct knowledge. I can't answer

:15:36. > :15:39.

:15:39. > :15:42.James, could you please confirm or deny whether any News Corporation

:15:42. > :15:48.company is the subject of an investigation by the Serious Fraud

:15:48. > :15:53.Office? I have no knowledge of that at this point. Could you also

:15:53. > :15:56.confirm or deny whether any News Corporation company is the subject

:15:56. > :16:01.of an investigation by the financial services authority?

:16:01. > :16:05.don't believe so, but not to my knowledge. Please confirm or deny

:16:05. > :16:10.whether any News Corporation company is the subject of an

:16:10. > :16:15.investigation by HMRC? Not to my knowledge, we have ongoing dialogue

:16:16. > :16:19.with the HMRC and the various subsidiaries here. As far as

:16:19. > :16:23.investigations are concerned, I have no knowledge of one.

:16:23. > :16:32.Mr Murdoch, who made the recommendation to close down the

:16:32. > :16:42.News of the World to the board of News Corp? I assume it was a board

:16:42. > :16:47.decision made by News Corp? It was a discussion between my son, myself

:16:47. > :16:51.and senior executives and Rebekah Brooks one morning. We called the

:16:51. > :16:56.board of News Corporation, the whole board to seek their agreement.

:16:56. > :17:03.You have already suggested he felt ashamed. It is not suggested it was

:17:03. > :17:08.a commercial decision? Far from it. Moving on to the financial

:17:08. > :17:13.governance arrangements within News Corp. James Murdoch, you suggested

:17:13. > :17:19.the payments to Gordon Taylor were not notified at News Corp level

:17:19. > :17:24.because of the finance thresholds? Could you tell us more about that?

:17:24. > :17:30.I understand you had to agree for the payment to Mr Taylor, could you

:17:30. > :17:37.tell us, was it financial or a managerial decision? It is a good

:17:37. > :17:42.question, I am happy to discuss the matter of Mr Taylor. The out of

:17:42. > :17:48.court settlement with Mr Taylor was related to a voice mail

:17:48. > :17:55.interception that had occurred previously and was one of the

:17:55. > :17:59.counts, as I understand of the 2007 trial of Glenn Mulcaire. It is

:17:59. > :18:05.important to think back to 2008 to understand what we knew them and

:18:05. > :18:11.what the Ince -- information was in the context. It was not a disputed

:18:11. > :18:15.fact. It was the advice, and further to that it was the advice

:18:15. > :18:20.and the clear view of the company that if litigated, the company

:18:20. > :18:26.would lose that case, it was almost certain to lose the case because

:18:27. > :18:31.the underlying fact was not in dispute. Third, the company sought

:18:31. > :18:36.distinguish outside counsel to understand that if the case was

:18:36. > :18:41.litigated and to be lost, which was the great likelihood, what it would

:18:41. > :18:48.cost the company. It was advised that with expenses, legal expenses

:18:48. > :18:57.and damages, it could be between �500,001 million, or they're about,

:18:57. > :19:02.I don't recall the exact number of the advice, I think it was 250,000,

:19:02. > :19:06.plus expenses. This was in a context in the first half of 2008

:19:06. > :19:10.and this was my first real involvement with any of these

:19:10. > :19:15.issues, where there was no reason at the time to believe the issue of

:19:15. > :19:20.the voice mail interceptions was anything but a settled matter. And

:19:20. > :19:26.that it was in the past after the successful prosecution of the two

:19:26. > :19:31.individuals we discussed, as well as the resignation of the editor.

:19:31. > :19:36.So the out-of-court settlement was made in that context. And it was

:19:36. > :19:39.within the authorities, as I understood it, of News

:19:39. > :19:46.International to be able to make those out of court settlements in

:19:46. > :19:52.due course without going to the global level company. At the time,

:19:52. > :19:56.I was the regional head for Europe and Asia of News Corporation. And I

:19:56. > :20:03.directed it was all right to settle that, but did not get involved in

:20:03. > :20:08.any of the Nicosia Asians directly about that settlements but I do

:20:08. > :20:13.recall in 2008, those were the things that were done. Can I just

:20:13. > :20:18.add, my son had only been with the company for a matter of a very few

:20:19. > :20:25.weeks in this instance. It was a few months, but I had come back to

:20:25. > :20:32.the company at the end of 2007 in the middle of December. This was

:20:32. > :20:39.some time in the first half of 2008. Giving you renewed to the company,

:20:39. > :20:44.what level of financial payments could news International executives

:20:44. > :20:52.sanctioned, people like Rebekah Brooks without recourse to you as

:20:52. > :20:57.the chairman? Generally speaking, the way the company will operate,

:20:57. > :21:02.as any company will operate, is within certain financial parameters

:21:02. > :21:07.and financial planning perspective. Much like a house will manage its

:21:07. > :21:14.budget, and say how much money do we have to spend? As long as they

:21:14. > :21:20.stay within those guidelines the belief is, they should be empowered

:21:20. > :21:28.to make those judgments to spend the money and achieve the end as

:21:28. > :21:34.they can. I don't have at the tip of my fingers, the precise

:21:34. > :21:37.financial authorities in that. I can discuss after the committee

:21:37. > :21:43.hearing with you, what exactly you would like to know and discuss

:21:43. > :21:48.whether or not it is right to come back to you with that. What level

:21:48. > :21:53.of financial payout would it have taken an authorisation from the

:21:53. > :21:57.board of News Corp? A thing for the full board it is in the millions.

:21:57. > :22:05.But her don't know the exact answer. Do you know how much has been paid

:22:05. > :22:10.out to people, authorised by your executives? Paid out in what way?

:22:10. > :22:16.Pay out in settlements? Illegal settlements? I do not know of the

:22:16. > :22:20.total number. Around the world it is customary to reach out of court

:22:20. > :22:24.settlements in civil litigation is an civil matters. It is something

:22:24. > :22:28.that rather than go through the lengthy and expensive litigation

:22:28. > :22:34.process and what the risk that often entails, sometimes at his

:22:34. > :22:37.best to reach out of court settlements in many cases. We have

:22:38. > :22:43.a very strong board committee at News Corporation which would know

:22:43. > :22:48.about this. Neither of us are members of that, they are outside

:22:48. > :22:52.directors and they will review all of these things. Building on that,

:22:52. > :22:58.how is it possible to make payments to people if they do not invoice

:22:58. > :23:02.you or they are not an employee of News Corp subsidiaries? How is it

:23:02. > :23:08.possible to transfer cash or some other form of remuneration to

:23:08. > :23:13.people who do not invoice you, or who are not employees of News Corp

:23:13. > :23:20.subsidiaries? I don't know the exact arrangements of that. I don't

:23:20. > :23:26.do that myself. Sometimes in certain instances, it is

:23:26. > :23:31.appropriate for journalists or managers in a certain environment

:23:31. > :23:38.to have the ability to use cash and in some instances, it is customary

:23:38. > :23:44.for those to be recorded and all of the cash expenses, as well as

:23:44. > :23:48.invoice expenses should be looked at and recorded. So things like the

:23:48. > :23:55.use of petty cash could be big sums of money or small? At the moment

:23:55. > :23:58.you just record the journalist gave it to somebody? I don't have direct

:23:58. > :24:04.knowledge of all of those arrangements. I was going to ask if

:24:04. > :24:08.payments could have been made to family members of those alleged to

:24:08. > :24:13.have been hacked? But can other forms of renumeration be used in

:24:13. > :24:16.your company other than cash, things like travellers' cheques,

:24:16. > :24:24.things that can be redeemed for cash? And don't have any knowledge

:24:24. > :24:27.of that. Looking at some of your own code, page two and page four

:24:27. > :24:33.talking about directors and employees and if officers acting

:24:33. > :24:38.for News Corporation including consultants, agents and suppliers

:24:38. > :24:43.and business partners must adhere to the standards. We would never

:24:43. > :24:48.ask any third party to perform any act to violate the standards. How

:24:48. > :24:58.do you try and make that happen as an organisation? How we work is,

:24:58. > :25:03.

:25:03. > :25:10.each newspaper has its own editor or manager. But, they have to

:25:10. > :25:19.approve the expense claims up every reporter. The reporter has no

:25:19. > :25:24.authority to pay money out. So the managing editor often manages a lot

:25:24. > :25:29.of expenses and budgets. And should do so, and is directed to do so

:25:29. > :25:34.with propriety. Do you require your executives to make annual

:25:34. > :25:38.statements that they have abided by your code of conduct and ethics?

:25:38. > :25:47.Every employee, every colleague around the world of News

:25:47. > :25:51.Corporation receives the code of conduct, a set... It is a pamphlet

:25:51. > :25:59.that has some detail in it. It is not too much so people read it,

:25:59. > :26:06.with respect to what ethical conduct is required. It is about

:26:06. > :26:11.ethical conduct, the law, breaking the rules and so on. Everyone he

:26:11. > :26:20.becomes an employee is required to do that. Our legal internal council

:26:20. > :26:25.conducts workshops around the world with staff, in Mumbai to Manchester

:26:25. > :26:29.around those rules and that code of conduct and it is something we

:26:29. > :26:34.tried to communicate as crisply as we can to everyone in the business.

:26:34. > :26:39.And finally, I appreciate Mr murder's statements at the

:26:39. > :26:43.beginning. Giving you have been in the media spotlight and not

:26:43. > :26:48.appreciated the attention you have had, will this make you think again

:26:48. > :26:53.on how you approach your headlines, your targets in future? That could

:26:53. > :27:03.the people from the Hillsborough 96, celebrities or others. We you think

:27:03. > :27:09.again about what your headlines will say in future? I think all of

:27:09. > :27:14.our editors certainly will. I am not aware of any transgressions as

:27:14. > :27:19.a matter of taste. It is a difficult issue we have in this

:27:19. > :27:28.country. We have a wonderful variety of voices and naturally

:27:28. > :27:34.very competitive. I am sure headlines, can occasionally give

:27:35. > :27:43.offence. But it is not intentional. Mr James Murdoch? It is important

:27:43. > :27:48.to say one of the lessons from all of this for us is we do need to

:27:48. > :27:52.think, as a business as well as an industry, in this country more

:27:52. > :27:59.forcefully and more thoughtfully about journalistic ethics. About

:27:59. > :28:04.what exactly the codes of conduct should be, not just for News

:28:04. > :28:08.International, are UK publishing subsidiary, but for the industry as

:28:08. > :28:15.a whole. And what sort of Government should be around this

:28:15. > :28:18.whole sort of area and we welcomed last week the Prime Minister's

:28:18. > :28:23.announcements for a judicial inquiry into journalistic ethics,

:28:23. > :28:27.and relationships between the police and politicians. It is a

:28:27. > :28:32.good thing for the country and for all of the interested parties to

:28:32. > :28:39.engage with. One of the specific actions we have taken to try to be

:28:39. > :28:42.as proactive as we can around us, is we have set up what we call a

:28:42. > :28:46.management and Standards Committee, that is outside the actual

:28:46. > :28:50.management of our publishing company and reports to the

:28:50. > :28:54.independent directors through the independent directors of our global

:28:55. > :28:59.public board. They will be looking at this issue around, first the

:28:59. > :29:04.specific issues, how we co-operate with the investigations, how we

:29:04. > :29:10.deal with allegations of wrongdoing and get to the bottom of it. Also,

:29:10. > :29:14.it is important how we co-ordinate and productively engaged with the

:29:14. > :29:17.judicial enquiries and how we set a code of conduct and a code of

:29:17. > :29:23.ethics that we think, and that it thinks is something that can both

:29:23. > :29:28.be apparent on top of all of our newspapers, and all of the industry

:29:28. > :29:33.and also something that has teeth and can hold the company to account.

:29:33. > :29:38.It is independently chaired, this management and Standards Committee

:29:38. > :29:44.and we think it is going to be a much better way to go in the future.

:29:44. > :29:49.We would like, over the next six months and years to be judged on

:29:49. > :29:56.the actions the company takes to put that right and to put it in

:29:56. > :30:06.place. I would like to say it does not take the weight off what we

:30:06. > :30:10.have been saying, our apologies. But this country does greatly

:30:10. > :30:14.benefit from having a competitive press and therefore have a very

:30:14. > :30:24.transparent society. That is sometimes very inconvenient to

:30:24. > :30:27.

:30:27. > :30:33.people. But I think we are better Is it your intention to launch a

:30:33. > :30:38.new Sunday tabloid newspaper? have made no decision on that.

:30:38. > :30:42.There is no decision on that. the moment there's no plans to

:30:42. > :30:50.other News International title coming out on Sunday? No immediate

:30:50. > :30:57.plans for that. We had talked in the past two moving to seven-day

:30:57. > :31:01.news rooms, speculation about the sun on Sunday. I think we will

:31:01. > :31:10.leave those options open. It's not the company's priority now. In the

:31:10. > :31:14.last week, it has come up. But, you know, our direction is that this is

:31:14. > :31:18.not the time to be worrying about that. The company has to move

:31:18. > :31:23.forward on all of these other actions and really get to grips

:31:23. > :31:28.with the facts of these allegations and understand them as fully as we

:31:28. > :31:35.can. Can I appeal both to the witnesses and indeed to members to

:31:35. > :31:45.try to keep brief because we have a lot to get through?

:31:45. > :31:49.In your statement on 7th July 2011, to James Murdoch, you said the

:31:49. > :31:53.company paid out court settlement approved by me, and I did not have

:31:53. > :32:03.a complete picture when I did so. What do you know now that you did

:32:03. > :32:08.not know then? I think, essentially, the new information that image to

:32:08. > :32:13.that is critical here, is the information that came out of the

:32:14. > :32:18.ongoing process of civil litigation in 2010 -- emerged. At the end of

:32:18. > :32:23.2010, the presentation of the evidence would not be in opposition

:32:23. > :32:29.previously from this civil litigation, that widen the circle

:32:29. > :32:39.definitively, at least made it very apparent, the circle was wider than

:32:39. > :32:48.the two individuals, Glenn McKerr. But information was critical. --

:32:48. > :32:55.Glenn Mulcaire. If I go back to my earlier comment, the commercial and

:32:55. > :33:01.legal rationality around that was very clear. The underlying fact was

:33:01. > :33:05.not in dispute for the it was known from previous trials. The a device

:33:05. > :33:10.was very, very clear as to what sort of damages could be expected

:33:10. > :33:15.to be paid and it was quite clear and likely that if litigated, the

:33:15. > :33:19.company would lose that case. In the context of none of this other

:33:19. > :33:25.information, and full before some of the new allegations in the press

:33:25. > :33:31.a rose, from afar, and there was no reason to believe at the time it

:33:31. > :33:38.was anything other than in the past. Knowing them what I know now, would

:33:38. > :33:42.I still have directed to negotiate to settle that case? I would,

:33:42. > :33:46.actually, but I would have coupled it with the other actions we have

:33:46. > :33:54.taken since the new evidence emerged at the end of September

:33:54. > :33:59.2010, and that is to immediately go and look at whatever we could find

:33:59. > :34:07.internally around the individuals involved, to immediately contact

:34:07. > :34:12.the police about information which may be of information -- interest

:34:12. > :34:17.to them. To put in place the process, which I think we did in

:34:17. > :34:20.the early part of 2011, editing liability to the civil litigants,

:34:21. > :34:28.putting a process in place to get to the bottom of what legitimate

:34:28. > :34:33.allegations their work, apologising unreservedly to the victims of the

:34:33. > :34:39.voice mail intercepts which were inexcusable, and having a system of

:34:39. > :34:43.compensation there. If I knew then what I know now, with the benefit

:34:43. > :34:47.of hindsight, we can look at all these things. But if I knew then

:34:47. > :34:52.what I know now, we would have taken more action around that and

:34:52. > :34:55.moved faster to get to the bottom of these allegations. Were the

:34:56. > :35:04.settlement paid by News International, News Corp or News

:35:04. > :35:07.Group Newspapers? I don't recall. I would imagine it's News Corp or

:35:07. > :35:13.News International. I'm sure we can provide you with that information

:35:13. > :35:23.of this up what advice did Colin Myler give you in relation to

:35:23. > :35:26.

:35:27. > :35:33.That the underlying factor in the case was a previous fact which came

:35:33. > :35:39.up in the trial of Glenn Mulcaire. Were you aware the case included a

:35:39. > :35:42.criminal act of phone hacking? Pardon me? Were you aware the case

:35:42. > :35:46.involved the criminal act of a phone hacking? That was my

:35:46. > :35:49.understanding that that was what the litigation was four, damages

:35:49. > :35:59.for the illegal voice mail interception. When did you get this

:35:59. > :36:02.

:36:02. > :36:09.advice? In the first half of 2008. In 2009, and they said they would

:36:09. > :36:15.settle this claim based on external legal advisers. Was this received

:36:15. > :36:18.from Farrer and Co solicitors? have done work for us. I don't know

:36:18. > :36:28.precisely which external council they engaged on that, but I can

:36:28. > :36:35.clarify it. Did you see the advice? No, the advice I had was oral from

:36:36. > :36:40.Tom Crone and Colin Myler. What was that advice? As I described it.

:36:40. > :36:46.Outside legal advice have been taken with respect to quantum of

:36:46. > :36:50.damages and the advice was the cases would be lost and the advice

:36:51. > :36:57.was in the absence of any new evidence, certainly no new evidence

:36:57. > :37:03.was made aware to me, this was simply a matter to do with events

:37:03. > :37:07.which had come to light in 2007 and the criminal trials before I was

:37:07. > :37:10.there, and that this was in the past. And the police, as well, and

:37:10. > :37:14.closed their case and said there was no new evidence there, so the

:37:14. > :37:24.context was that it was about events which were a year or more

:37:24. > :37:24.

:37:24. > :37:28.world, underlying staff previous to that. Was part of the advice given

:37:28. > :37:30.that the High pavement was that the matter would be kept confidential?

:37:30. > :37:35.Not at fault. The confidential nature of an out-of-court

:37:35. > :37:39.settlement is a normal thing. -- not at all. I don't know many which

:37:39. > :37:43.are not kept confidential files I'm sure there are some, but there was

:37:43. > :37:50.nothing about confidentiality. I think I understand were you are

:37:50. > :37:54.going with this, but no, the amount paid and the advice there was on

:37:54. > :37:59.advice from outside counsel, with respect to the amount we would be

:37:59. > :38:05.expected to pay in damages plus expenses in litigation costs.

:38:05. > :38:13.you question why such high payments were made to Mr Taylor and Mr

:38:13. > :38:17.Clifford? It's so just have to be �700,000 and �1 million

:38:17. > :38:22.respectively for privacy when the record amount opera was the damages

:38:22. > :38:27.awarded by a court remains �60,000, ironically against the News of the

:38:27. > :38:32.World. I did question the amount but not in relation to the 60,000.

:38:32. > :38:36.If you recall, as I'm sure you do, the chronology here, the settlement

:38:36. > :38:42.made with respect to �60,000 against the News of the World what

:38:42. > :38:46.I believe was the Moseley case, was after the authorisation the advice

:38:46. > :38:50.that we sought from senior distinguished outside counsel with

:38:50. > :38:55.respect to the quantum of damages expected to pay which, in damages

:38:55. > :39:01.terms, was a quarter of a million pounds plus expenses and litigation

:39:01. > :39:05.costs expected to be between �500,000 and �1 million. I think

:39:05. > :39:11.that chronology is important and afterwards you would obviously have

:39:11. > :39:14.different information but it wasn't afterwards, it was before. You have

:39:14. > :39:21.since said when you approved the settlement you did not actually

:39:21. > :39:31.have all the facts. What do you know now that you didn't then?

:39:31. > :39:34.have testified, the key facts and evidence, that came to light as the

:39:34. > :39:38.lengthy due process of the civil litigation involving these matters

:39:38. > :39:45.to their cause, it was of that process which unearthed the key

:39:46. > :39:48.evidence there, and it was really only after that, that any one said

:39:48. > :39:53.they should start the investigation is in as we had that new

:39:53. > :40:02.information. It indicated to us that there was a wider involvement.

:40:02. > :40:06.We acted on it immediately. Crone said he did not know why he

:40:06. > :40:12.left News Group Newspapers. Why was he asked to leave after 26 years of

:40:12. > :40:22.service? Well, last week, the News of the World, two weeks ago, I

:40:22. > :40:23.

:40:23. > :40:27.guess, Tom Crone was very involved over the years, but the company

:40:27. > :40:32.believed and the management of the company believed that it was time

:40:32. > :40:35.to part ways. I was not involved in those direct discussions with Tom

:40:35. > :40:42.Crone and I can't comment on their nature and content. I don't have

:40:42. > :40:45.information. The New Statesman it carries a story last week that News

:40:46. > :40:51.International subsidised Andy Coulson's wages after he left your

:40:51. > :40:56.employee. Can you shed any light on that? I have no knowledge of Andy

:40:56. > :41:06.Coulson's wages after he left the company. Finally, are you familiar

:41:06. > :41:14.

:41:14. > :41:20.with the term will fall blindness? -- wilful. It came up in the ENRON

:41:20. > :41:24.scandal, a legal term which states that if there is information you

:41:24. > :41:31.choose not to have, you are still responsible. Do you have a

:41:31. > :41:41.question? The question was, are you aware of that? I'm not aware of

:41:41. > :41:42.

:41:42. > :41:52.that phrase. I have heard of that phrase before and we were not ever

:41:52. > :41:54.

:41:54. > :41:59.guilty of that. When we had our inquiry in a 2009,

:41:59. > :42:04.the evidence given by News International executives was at

:42:04. > :42:07.rather hopeless, really. They came with a game-plan, to tell us that

:42:07. > :42:13.they didn't know anything, they couldn't remember anything, and

:42:13. > :42:17.they didn't know anybody who would know anything. I just wonder, so we

:42:17. > :42:21.can get off on a reasonable footing, what coaching you have had to date

:42:21. > :42:31.and who has advised you on how to handle this session and what their

:42:31. > :42:33.

:42:34. > :42:37.advice was? With respect to today, after scheduling this appearance,

:42:37. > :42:43.we took some advice around what the context of this sort of setting

:42:43. > :42:48.would be. This is our first time in a committee meeting like this.

:42:48. > :42:51.Mostly logistics and so on, what sort of questions we would be asked,

:42:51. > :42:58.and we were advised fundamentally to tell the truth. And then come

:42:58. > :43:04.and be as open and transparent as possible. And that is hour intent,

:43:04. > :43:09.intention, and I hope we can show you that is what is happening.

:43:09. > :43:13.answering questions from at Mr Watson, you seemed to indicate you

:43:13. > :43:18.had a rather hands-off approach to your company, and the point you

:43:18. > :43:21.made was that the News of the World was less than 1% of your entire

:43:21. > :43:25.worldwide business and so you wouldn't really be expected to know

:43:25. > :43:30.the ins and outs of what was going on. Could you just give us an

:43:30. > :43:34.illustration of how many times, how often you would speak to the editor

:43:34. > :43:44.of your newspapers? How often you speak to the editor of the Sun, for

:43:44. > :43:47.

:43:47. > :43:54.Very seldom. Sometimes I would ring the editor on a Saturday night and

:43:54. > :44:01.say, have we got any news tonight? Keeping in touch. I ring the editor

:44:01. > :44:08.of the Sunday Times nearly every Saturday. Not to influence what he

:44:08. > :44:18.has got to say, at all. I'm always careful not to promise any remark I

:44:18. > :44:25.

:44:25. > :44:33.I'm not really in touch. I have got to tell you, the editor I have

:44:33. > :44:41.spent most time with, it's the Wall Street Journal. To say that we are

:44:41. > :44:48.hands-off is wrong. I work a 12 hour day and I cannot tell the

:44:48. > :44:56.multitude of issues which come my way. The News of the World, I lost

:44:56. > :45:06.sight of it, maybe because it was so small in the general frame of

:45:06. > :45:09.

:45:09. > :45:14.our company. But we're doing a lot If I can help you out. It some of

:45:14. > :45:17.the had told me you would speak to somebody like the editor of the Sun

:45:17. > :45:23.newspaper daily and twice a day, wouldn't you recognise that

:45:23. > :45:28.description? No. You wouldn't historically, traditionally spoke

:45:28. > :45:34.to the editor of the Sun newspaper that a number of times? No. I would

:45:34. > :45:38.like to, but no. When you said you speak to the editor of the News of

:45:38. > :45:43.the World may be on a Saturday night before the publication, not

:45:43. > :45:48.to influence what they say, I understand that. I am intrigued as

:45:48. > :45:51.to how these conversations go? I would imagine it would go something

:45:51. > :45:57.along the lines of to the editor of the News of the World, anything to

:45:57. > :46:03.report? Anything interesting going on? And the editor of the News of

:46:03. > :46:10.the World says, no, it's been a standard way, we have paid Gordon

:46:10. > :46:13.Taylor �600,000! He never said that last sentence. In your weekly

:46:14. > :46:19.conversations with the editor of the News of the World, something as

:46:19. > :46:23.big as that, paying somebody �700,000, you would have expected

:46:23. > :46:32.the editor of the News of the World to drop it into the conversation at

:46:32. > :46:42.some point? No. I would have called him at least once a month I guess.

:46:42. > :46:47.What we do discuss with him? What was on the agenda? I would say,

:46:47. > :46:53.what is doing? What sort of response which are expect? He might

:46:53. > :47:03.say we have a great story exposing this or that. Or he would say,

:47:03. > :47:05.

:47:05. > :47:10.actually nothing special. James,... He might refer to the fact extra

:47:10. > :47:18.pages have been added to the football that week. But he wouldn't

:47:18. > :47:26.refer to a �1 million pay-off? James, we do acknowledge in your

:47:26. > :47:29.view, you overpaid Max Clifford and Gordon Taylor? I cannot speak about

:47:29. > :47:36.the arrangements of Max Clifford because I don't have direct

:47:36. > :47:42.knowledge in terms I wasn't involved in those pieces. With

:47:42. > :47:47.respect to Gordon Taylor, I made a judgment given the advice of

:47:47. > :47:51.counsel, given the advice of the executives involved and going back

:47:51. > :48:01.and looking at what we knew in 2000 inmates and looking at that advice

:48:01. > :48:02.

:48:02. > :48:12.and remembering that advice. -- 2008. It we look back from now, it

:48:12. > :48:15.

:48:15. > :48:22.was a decision, given that context, I would still stand by, I think.

:48:22. > :48:27.Apparently there was a contract with Max Clifford. It was cancelled

:48:27. > :48:36.by Andy Coulson. I don't know about that. I don't have knowledge about

:48:36. > :48:43.that. It just seems strange to me... I don't know what was in the

:48:43. > :48:50.contract. We might ask you to come back with details about that. But

:48:50. > :49:00.it seems odd to me as a layman, 600,000, a million pounds, Andy

:49:00. > :49:00.

:49:00. > :49:05.Gray had his phone hacked but he did not get 600,000, 500,000 or

:49:05. > :49:11.even 50,000. He got 20,000. Somebody else gets their phone Act

:49:11. > :49:14.and they get 600,000 or one million. And surely you can see the

:49:15. > :49:19.difference most people draw is one was when it was all out in the open

:49:19. > :49:25.and everybody knew about these things, Andy Gray. And the other

:49:25. > :49:31.one was paid when it was all trying to be kept quiet, 600,000. Do you

:49:31. > :49:36.not see, to most people looking at that it smells a bit? I understand

:49:36. > :49:44.why you are coming from. These are big sums of money we are talking

:49:44. > :49:49.about, 100,000, 200,000, 600,000. It is a lot of money. He would ask,

:49:49. > :49:53.why would a company do that? I would go back to my answer to Mr

:49:53. > :50:03.Sanders's question, be precise about the chronology. I'm not a

:50:03. > :50:04.

:50:04. > :50:12.lawyer, but at my understanding is that the 60,000 settlements in the

:50:12. > :50:20.Moseley judgment case, which was after the advice given around the

:50:20. > :50:25.Gordon Taylor settlements, is an important chronology. And courts

:50:25. > :50:29.and judges have set a different standard here. What we knew and

:50:29. > :50:34.what I knew at the time was we had seen your distinguished outside

:50:34. > :50:38.counsel who had said if this case is as -- if this case is litigated

:50:38. > :50:43.and the company will lose the case, what sort of damages would we

:50:43. > :50:50.expect to pay? And the company received an answer that was

:50:50. > :50:59.substantial. The answer was 250,000, so you settle for 600? It is

:50:59. > :51:04.important to be clear. The 600,000, 700,000, included damages, legal

:51:04. > :51:11.fees and an estimation of what it would have cost otherwise. Because

:51:11. > :51:16.the other side is negotiating. So it is damages plus costs that get

:51:16. > :51:20.you to that number. It is important to be clear about that. I want to

:51:20. > :51:26.concentrate on payments you make to your staff. Going back to the trial

:51:26. > :51:35.of Glenn Mulcaire and Clive Goodman. Clive Goodman was pleading guilty

:51:35. > :51:41.to phone hacking, criminal offence. Did News International pay Clive

:51:41. > :51:47.Goodman's legal fees for his trial? I do want to be clear about the

:51:47. > :51:54.chronology, I don't have first-hand knowledge of those times. Remember,

:51:54. > :51:58.my involvement in these matters started in 2008. In 2007 in

:51:59. > :52:03.December I was focused in my role of a public company and I was not

:52:03. > :52:13.involved. Who would know? contrite to answer the first

:52:13. > :52:16.

:52:16. > :52:21.question first. It is customary, certainly with employees and with

:52:21. > :52:26.litigation to pay some set of legal expenses on behalf of those, to try

:52:26. > :52:30.to bring all of the evidence to a court and so on. That has all been

:52:30. > :52:34.done in accordance with, since any involvement I have had any

:52:34. > :52:42.knowledge, in accordance with legal advice about the proper way to do

:52:42. > :52:47.things. I can speed -- I cannot speak about the 2007 arrangements.

:52:47. > :52:53.Clive Goodman employed the services of a QC called John Kelsey-Fry. I

:52:53. > :52:57.don't know whether you ever came across him? We don't know him.

:52:57. > :53:03.is probably one of the most expensive and eminent more is in

:53:03. > :53:07.the country. He is the go to a lawyer celebrities. Steven Gerrard

:53:07. > :53:12.used him recently. It seems odd to me a journalist on the News of the

:53:12. > :53:17.World who is pleading guilty to a crime, uses in mitigation, probably

:53:18. > :53:23.the most expensive lawyer in the country which obviously leads some

:53:23. > :53:26.people to suspect his legal fees were not being paid for by himself.

:53:26. > :53:32.But were being paid for by News International. Given he was

:53:32. > :53:37.pleading guilty to a criminal act, phone hacking, which presumably

:53:37. > :53:43.needs to summary dismissal, gross misconduct? Why would News

:53:43. > :53:47.International even think about, even dream about playing -- paying

:53:47. > :53:53.the legal fees of somebody engaged in criminal activity and committed

:53:53. > :53:56.something which was clearly gross misconduct? I don't have any direct

:53:56. > :54:05.knowledge of the specific legal arrangements of Clive Goodman in

:54:05. > :54:10.2007. I cannot answer the specifics of that question. I have asked the

:54:10. > :54:14.question as well more recently than that. With respect to who the

:54:14. > :54:21.company pays legal fees, what contribution to legal fees do we

:54:21. > :54:25.make, or does the company make? I think I can tell you that in asking

:54:25. > :54:32.the question I have been surprised, and this is legal counsel telling

:54:32. > :54:37.me this, it is customary in here it is sometimes made contributions to

:54:37. > :54:41.the legal costs of either co- defendants or defendants in related

:54:41. > :54:45.matters. But I have no direct knowledge of that particular

:54:45. > :54:50.instance you mentioned. If you have any additional specific questions

:54:50. > :54:56.about that, perhaps Mr chairman, we can follow up with you on that and

:54:56. > :55:00.I am happy to do so. These are issues that go back some time, I am

:55:00. > :55:05.surprised you have not followed upon them already. Where any

:55:05. > :55:11.payments paid subsequently to Glenn Mulcaire and Clyde and following

:55:11. > :55:18.their convictions? -- Clive Goodman. It is a good question and it is a

:55:18. > :55:25.specific question. To my knowledge, and upon asking because allegations

:55:25. > :55:29.had been made that legal fees had been paid after that time in 2007.

:55:29. > :55:32.I asked the question myself and I was very surprised to find the

:55:33. > :55:38.company had made certain contributions to legal settlements.

:55:38. > :55:43.I don't have all are the details around each of those. Not legal

:55:43. > :55:50.settlements sorry I mean legal fees. I was surprised, very surprised.

:55:50. > :55:56.Who authorised them? They were done, as I understand it, in accordance

:55:56. > :56:00.with legal counsel and strong advice. I'm not asking who advised,

:56:00. > :56:09.who signed it off? Q-side the Czechs at News International and

:56:09. > :56:13.agreed to make those of payments? have no idea. The talk about the

:56:13. > :56:19.managing editor, would the managing editor have made them? It would

:56:19. > :56:24.have been the management of the legal cases I would think. I am

:56:24. > :56:32.happy to go back and look at that, but it was not something that came

:56:32. > :56:37.to my attention. It wouldn't have anything to do with the managing

:56:37. > :56:43.editors. Would it have been above the managing editor or below?

:56:43. > :56:47.would have been above. It would have been on legal advice, had to

:56:47. > :56:52.handle payments in legal litigation has. I don't have direct knowledge

:56:52. > :56:58.of the current status of those. But I was surprised as you are to find

:56:58. > :57:03.some of those arrangements had been made. Mr Murdoch senior, I seem to

:57:03. > :57:07.be getting further with you. Would it have been Les Hinton? Would he

:57:07. > :57:13.have agreed and signed those cheques? It could have been. Would

:57:13. > :57:19.have been or could have been? have been. The who else could it

:57:19. > :57:26.have been? The chief legal officer. They both had authority to sign

:57:26. > :57:32.cheques. It would have been on the instructions of the chief legal

:57:32. > :57:37.officer. James, you said you were not involved in the decision to get

:57:37. > :57:43.rid of Tom Crone, whose decision was that? The management of the

:57:43. > :57:49.company at the time, recently the chief executive, Rebekah Brooks.

:57:49. > :57:54.it was her decision? She is the chief executive of the company and

:57:54. > :57:59.senior personnel decisions are made by her. When Stuart left the

:57:59. > :58:05.company, he left the day after all on the day allegations were made in

:58:05. > :58:11.the Guardian, allegedly about her own -- phone hacking. What happened

:58:11. > :58:15.to Stuart cut no, how did he leave the company? That I do not know.

:58:15. > :58:23.And that would have been at the time, a News of the World matter

:58:23. > :58:33.for them. It would be for you to ask him. Why did Les Hinton resign?

:58:33. > :58:37.

:58:37. > :58:44.Les Hinton resigned sadly last Friday following Rebekah Brooks's

:58:44. > :58:54.resignation saying I was in charge of the company during this period

:58:54. > :58:55.

:58:55. > :59:01.we are getting criticism for. He said he felt he Muster down.

:59:01. > :59:07.Rebekah Brooks, Les Hinton, were they asked to leave? They both

:59:07. > :59:13.asked to leave. Why did you not accept Rebekah Brooks resignation

:59:13. > :59:20.when she first offered to do it? Because I trust her. Why did you

:59:20. > :59:26.accepted the second time round? was insistent. She was at a point

:59:26. > :59:31.of extreme anguish. How much have all of these characters been paid

:59:31. > :59:36.off? How much financial settlement have they been given on their

:59:36. > :59:41.departure from News International? I cannot tell you, but in the case

:59:41. > :59:49.of Les Hinton, it will be considerable because there will be

:59:49. > :59:56.pensions for 52 years' service. Would it be 10 million, 5 million?

:59:56. > :00:01.It is confidential. Is there any confidentiality in the pay-off they

:00:01. > :00:11.are not supposed to speak about what happened, with their time at

:00:11. > :00:16.

:00:16. > :00:21.When somebody leaves the business in circumstances like this, there

:00:21. > :00:25.are commercial confidentiality agreements but nothing that would

:00:25. > :00:29.stop or inhibit the executives from co-operating fully with

:00:29. > :00:32.investigations or being transparent about any wrong doing or anything

:00:32. > :00:37.like that. It's important to know in these agreements, they are made

:00:37. > :00:43.on the basis of no evidence of impropriety, and if evidence of

:00:43. > :00:48.impropriety images, or was their prior to that the party, then you

:00:48. > :00:54.would have a different piece, but that's an important pointer to be

:00:54. > :00:58.clear about. My final question is, it seems to me on the face of it,

:00:58. > :01:02.the News of the World was sacrificed in order to try and

:01:02. > :01:10.protect Rebekah Brooks's position at News International, in effect,

:01:10. > :01:14.rather than her being, having her departure announced, the News of

:01:14. > :01:19.the World was offered up to deal with the whole thing. Do you regret

:01:19. > :01:23.making a decision, closing the News of the World to try to save a

:01:23. > :01:29.Rebekah Brooks and, in hindsight, do you wish you had accepted her

:01:29. > :01:32.resignation to start with, in order that that paper could probably

:01:32. > :01:37.continue and all of the people now out of work, struggling to find a

:01:37. > :01:44.job, could still be in work? regret the fact people won't be

:01:44. > :01:50.able to find work. The two decisions are totally unrelated.

:01:50. > :01:56.Absolutely and totally unrelated. When you came into the UK, your

:01:57. > :02:00.priorities was Rebekah Brooks. not sure I said that. I went aside

:02:00. > :02:07.my flat and I had about 20 microphones stuck in my mouth, so

:02:07. > :02:14.I'm not sure what I said. You were misquoted. I'm not saying that.

:02:14. > :02:22.It's important that the closure of a newspaper with a history 160

:02:22. > :02:28.years, is something which the great thing, something which is a serious

:02:29. > :02:34.matter of regret for as, for the company, but much more serious than

:02:34. > :02:39.that is the seriousness of the violation of privacy, the her to

:02:39. > :02:46.that certain individuals the News of the World caused to the victims

:02:46. > :02:51.of voice mail interceptions and their families -- hurt. I advocated

:02:51. > :02:55.that this was a step that we should take. This was a newspaper and

:02:55. > :03:01.title which had fundamentally violated the trust of its readers.

:03:01. > :03:11.It is something which was a matter of great regret, real gravity but,

:03:11. > :03:13.

:03:13. > :03:16.under the circumstances, and with respect to the bad things that

:03:16. > :03:20.certain things happened at the News of the World a couple of years ago,

:03:20. > :03:26.it was the right choice for the paper to cease publication. Now, it

:03:26. > :03:31.is important to note, and they want to be clear on this, the company is

:03:31. > :03:34.doing everything it can to make sure that journalists and staff at

:03:34. > :03:38.the News of the World to add nothing to do with any of these

:03:38. > :03:42.issues, who are completely blameless, in any of these things,

:03:42. > :03:46.and many have done a tremendous work journalistically,

:03:46. > :03:50.professionally, commercially, and for the business, that we find re-

:03:50. > :03:57.employment for them whenever we can and I think the company is being as

:03:57. > :04:00.generous as we can be under the circumstances. The company is being

:04:00. > :04:04.as thoughtful and compassionate for them and their families to get

:04:04. > :04:14.through this, but it is a very regrettable situation and one that

:04:14. > :04:20.we did not take lightly in any way. I'm going to ask for numbers. We do

:04:20. > :04:27.still have some way to go. Thank you, John. I want to return

:04:27. > :04:30.to how John opened the session and the evidence given previously. In

:04:30. > :04:36.connection with Mr Davies's question, there was one key

:04:36. > :04:43.question he omitted to ask. James, through all the civil actions, have

:04:43. > :04:53.you been paying Glenn Mulcaire lack of legal fees, not personally?

:04:53. > :04:53.

:04:53. > :04:59.said earlier,... Let's keep it short. Yes or no. I don't know the

:05:00. > :05:03.current status. Have you been paying legal fees for Glenn

:05:03. > :05:10.Mulcaire during the civil actions? I don't know the details of the

:05:10. > :05:15.civil actions but I do know that certainly, legal fees were paid for

:05:15. > :05:20.Glenn Mulcaire by the company. I was as shocked to learn that as you

:05:20. > :05:24.off. Can you understand that people might ask why a company might wish

:05:24. > :05:31.to pay the legal fees of a convicted felon who has been

:05:31. > :05:35.involved in the destruction of a reputation? Was it to buy his

:05:35. > :05:42.silence? I can understand that. That's exactly why I ask the

:05:42. > :05:48.question. When the allegations came out I said, are we doing this? Is

:05:48. > :05:51.this what the company is doing? On a legal advice, and again, I don't

:05:52. > :05:54.want to be legalistic, I'm not a lawyer, but these are serious

:05:54. > :05:57.litigation has. It's important for all the evidence from the

:05:58. > :06:04.defendants to get to court of the right time and the strong advice

:06:04. > :06:10.was, from time to time, it was customary to pay co-defendants's

:06:10. > :06:13.legal fees. I have to rest on counsel's advice on some of these

:06:13. > :06:20.litigation matters. If the organisation still contributing to

:06:20. > :06:29.his legal fees? I don't know the precise status of that now but I do

:06:29. > :06:39.know that I asked for those things to cease. Will you let us know?

:06:39. > :06:40.

:06:40. > :06:44.happy to follow up on that. Murdoch senior, is it not time for

:06:44. > :06:50.the organisation to say enough is enough? This man allegedly hacked

:06:50. > :06:55.the phone of the murdered schoolgirl Milly Dowler. Is it not

:06:55. > :07:00.time for the organisation to say, do your worst? You have behaved

:07:00. > :07:06.disgracefully. We're not going to pay any more of your costs. I would

:07:06. > :07:10.like to do that. I don't have the status of what we're doing a or

:07:10. > :07:14.indeed what his contract was and whether it still has any course.

:07:14. > :07:18.The if the organisation is still paying his fees, will you give the

:07:18. > :07:26.instruction now that that will stop? Provided it's not in breach

:07:26. > :07:30.of contract, a legal contract, yes. I just want to return now to the

:07:30. > :07:35.question of making statements to Parliament without being in full

:07:35. > :07:42.possession of the facts. During our inquiry into 1009, all the

:07:42. > :07:47.witnesses who came to us testified to been intimately involved, in

:07:47. > :07:51.particular a huge lot but e-mails after the arrival of Colin Myler.

:07:51. > :08:01.It seems over the past few days, they have been quick to distance

:08:01. > :08:03.

:08:03. > :08:07.themselves from that investigation according to the newspapers. It has

:08:07. > :08:13.made clear that that investigation uncovered no new evidence. James

:08:13. > :08:23.Murdoch, can you tell us about the e-mails, the internal reports,

:08:23. > :08:24.

:08:24. > :08:28.discovered allegedly in the offices of Harbottle & Lewis? Can you tell

:08:28. > :08:34.us when you first came to know about it? What is in it? I first

:08:34. > :08:44.came to know about but earlier this year, in a 2011. Can you be more

:08:44. > :08:52.precise? It would have been around springtime of I don't remember the

:08:52. > :09:01.exact date. Before April? April or May. I can try to find the media

:09:01. > :09:05.schedules and come back for so a few months ago. I can speak a

:09:05. > :09:14.little bit about it, but as to the activity that was carried out in at

:09:14. > :09:20.2007, again, I pieces back together from the past, be formed any of my

:09:20. > :09:26.involvement, but the company at the time, I think you're referring to a

:09:26. > :09:34.dismissal case that was brought by a Mr Goodman, and that was the

:09:34. > :09:42.basis for conducting the period of the convictions. That is what we

:09:42. > :09:45.inferred in our report last year. It was right at the time Colin

:09:45. > :09:55.Myler had come in and the code of standards have been talked about,

:09:55. > :10:02.this was before my time, and an investigation was done around this

:10:02. > :10:05.and there was an outside council brought in, Harbottle & Lewis, by

:10:05. > :10:10.the company at the time, and I understand that the Legal

:10:10. > :10:17.executives, Mr Chapman at the time, along with Colin Myler who

:10:17. > :10:25.testified, took a report and from that, the opinion was clear that,

:10:25. > :10:30.as to their review, there was no additional illegality with respect

:10:30. > :10:34.to phone hacking at in that file. As to their review, that was the

:10:34. > :10:39.opinion. The company really rested on a number of things from then on

:10:39. > :10:44.and they certainly know in at 2009, when additional allegations came in

:10:44. > :10:51.the summer, the company rested on a handful of those things for I want

:10:51. > :10:57.to move right up to date to what was discovered in the offices of

:10:57. > :11:07.Harbottle & Lewis. So, in at 2010, after the civil

:11:07. > :11:07.

:11:07. > :11:11.litigation has had put a spotlight on the company, new information had

:11:11. > :11:16.not been there before and the police investigation started off.

:11:16. > :11:20.One of the things which was locked up, I suppose, in the spring, by

:11:20. > :11:25.senior people at a News International, was that file. It

:11:25. > :11:32.was looked at again, and it was rapidly brought to our attention

:11:32. > :11:41.that this was something. When was this look that? Between May, April

:11:41. > :11:44.May-June. Who looked at it first? William Lewis? The people managing

:11:44. > :11:54.the work on behalf of News International from earlier this

:11:54. > :11:54.

:11:54. > :12:02.year, led by Mr Lewis, that's correct. What is in that file? A

:12:02. > :12:05.collection of 300 e-mails, loosely bandied? As you know, there's an

:12:05. > :12:13.ongoing criminal investigation and I think it would be wrong of me to

:12:13. > :12:17.talk about specific information and evidence subject to, which could

:12:17. > :12:27.make problems to the police. don't thing it could cause problems

:12:27. > :12:29.

:12:29. > :12:39.if you tell us whether it was in a It is pay but also of his e-mails,

:12:39. > :12:40.

:12:40. > :12:45.documents. -- It is paper. But also e-mails. Have you read it all?

:12:45. > :12:51.things have been shown to me. I have not read it. Did you use an

:12:51. > :12:56.expletive when you first read some of these e-mails? I try not to.

:12:56. > :12:59.Occasionally when you do? reaction immediately was to agree

:12:59. > :13:03.with the recommendation of the executives involved but this was

:13:03. > :13:07.something we should bring to the police with respect to the ongoing

:13:07. > :13:14.investigations and perhaps a new ones. When was it given to the

:13:14. > :13:24.police? June 20th? Up to inform the board. That date is accurate?

:13:24. > :13:26.

:13:26. > :13:31.yes. The Sunday Times, great newspaper, portrayed a picture on

:13:31. > :13:38.10th July from this file that showed a six gatekeepers of the

:13:38. > :13:43.news desk who dealt with Glenn Mulcaire. And they were named for

:13:43. > :13:49.that Clive Goodman. James Weatherall. Ian Edmondson. Do you

:13:49. > :13:54.recognise that summary from the file? Mr Farrelly, respectfully, I

:13:54. > :14:00.would ask you to please understand it but detailed questions about any

:14:00. > :14:06.of the evidence, information we are passed to the police in relation to

:14:06. > :14:10.the ongoing criminal inquiries are difficult for me to answer. I would

:14:10. > :14:14.appreciate it if we would allow the police to undergo the important

:14:14. > :14:18.work that they are undergoing. There is a process which is

:14:18. > :14:23.important. We are co-operating with it and provide the information on a

:14:23. > :14:28.regular basis. On a regular basis as needed by the police. I really

:14:28. > :14:33.believe we have to allow the police to conduct their investigation and

:14:33. > :14:43.told the people who did wrong to account in this area. OK, I will

:14:43. > :14:44.

:14:44. > :14:53.On anything now. It could result in guilty people... I fully understand

:14:53. > :14:57.that and I respect that clearly. The descriptions and the press said

:14:57. > :15:00.they mentioned the e-mails implicate Andy Coulson in knowledge

:15:00. > :15:05.of payments to the police but they were not expected to comment on

:15:05. > :15:15.that so I will just turn to the Harbottle & Lewis letter provided

:15:15. > :15:15.

:15:15. > :15:25.to ask by Rebekah Brooks as evidence during her inquiry, the e-

:15:25. > :15:31.mails have produced nothing more. That letter from Lawrence Abraham,

:15:31. > :15:35.senior partner of Harbottle & Lewis, I mention that e-mails have been

:15:35. > :15:42.reviewed of Andy Coulson, Stuart coupler, Ian Edmondson, Clive

:15:42. > :15:48.Goodman, and Jules Stenson, and that nothing had come to light in

:15:48. > :15:52.that review which contradicted the report -- a lone reporter working

:15:52. > :15:59.with Glenn Mulcaire. Knowing what you know now, from the other

:15:59. > :16:09.evidence you discovered, have you looked back in detail at the basis

:16:09. > :16:20.

:16:20. > :16:26.And why they gave such a clean bill of health? Having looked at some of

:16:26. > :16:30.the things in that and the advice of the senior people inside the

:16:30. > :16:34.company more recently that went and looked at that, it was the view of

:16:34. > :16:38.the company's self- evidently, it was right to bring this to the

:16:39. > :16:43.attention of the police and go forward. And that opinion from the

:16:43. > :16:49.council was something the company rested on and it was a clear

:16:49. > :16:52.opinion about a review that was done around those records. And in

:16:52. > :16:57.addition in conjunction with the police continuing to say there was

:16:57. > :17:02.no new evidence and there was no reason to open a new investigation,

:17:02. > :17:06.and in conjunction with the PCC saying they had done their review

:17:06. > :17:11.an inquiry and there was nothing new. It was viewed it was a settled

:17:11. > :17:16.the matter. It was only when you evidence emerged those three things

:17:16. > :17:19.began to be undermined. In the follow up to the session, can you

:17:19. > :17:24.provide us with the instruction that was given to Harbottle & Lewis,

:17:24. > :17:28.the information, the extent of the information given to them out of

:17:28. > :17:34.the totality of the information available? That detail would help

:17:34. > :17:41.us conclude... If there is additional detail required around

:17:41. > :17:46.some of those legal instructions we will consult and come back to the

:17:46. > :17:54.chairman in a way to satisfy you with the information you have.

:17:54. > :18:00.review coincided not so much with Mr miler's a rival but in timing

:18:00. > :18:06.with the industrial tribunal action that Clive Goodman and Glenn Moore

:18:06. > :18:13.clerk were planning. Do you know it was limited to the six individuals?

:18:13. > :18:16.I don't know, I think... I was not there at the time and they cannot

:18:16. > :18:24.tell you the conversations people had with Harbottle & Lewis and the

:18:24. > :18:30.terms of reference of that. Be it had been viewed after the fact it

:18:30. > :18:35.had been a thorough look at information based on that reviewed

:18:35. > :18:41.that opinion was issued. Neville further back is one of mission that

:18:41. > :18:45.is immediately jumping out. Again, in hindsight we can all say that

:18:45. > :18:50.somebody had looked at this, and if somebody had known some think that

:18:50. > :18:58.it was unknown at the time, I cannot comment on why the terms and

:18:58. > :19:05.wider scope was what it was. proceedings by a Clive Goodman and

:19:05. > :19:08.Glenn Mulcaire for unfair dismissal, not withstanding their criminal

:19:08. > :19:13.conditions never saw the light of day because they were settled

:19:13. > :19:19.because then we do not know what they were planning to serve on you.

:19:19. > :19:23.The you-know-what allegations they were making? Have you satisfied

:19:23. > :19:28.yourself with what types of allegations they were making?

:19:28. > :19:32.think some of these individuals are subject to criminal investigation.

:19:32. > :19:37.Some of them have been arrested recently and they are important

:19:37. > :19:41.matters for the police now. It is important I am not lead into

:19:41. > :19:47.commenting specifically about individuals for allegations made in

:19:47. > :19:51.the past. Have you satisfied yourself as to what Clive Goodman

:19:51. > :19:55.and Glenn Mulcaire were alleging in discussions that led up to the

:19:55. > :20:00.settlements, if they brought industrial tribunal proceedings

:20:00. > :20:04.against you? That was the question. Not what they were alleging, but

:20:04. > :20:08.have you satisfied yourself about what they were alleging? As for

:20:08. > :20:14.Glenn Mulcaire I am not aware of allegations at the time and other

:20:14. > :20:18.things. And in 2007, with Clive Goodman again, before I was there,

:20:18. > :20:23.it is my understanding that is what Harbottle & Lewis were helping to

:20:23. > :20:28.do with and they did satisfy the company at the time and the company

:20:28. > :20:33.rested on that opinion for a period of time. Would you like to take the

:20:33. > :20:38.opportunity to withdraw this letter as an accurate portrayal as to what

:20:38. > :20:44.went on at the News of the World? This is the Harbottle & Lewis

:20:44. > :20:50.letter? It is something I am glad you have asked about. It is a bit

:20:50. > :20:55.of the legal advice from senior council that was provided to the

:20:55. > :21:00.company and the company rested on. It goes some distance in providing

:21:00. > :21:05.information as to why it took so long to provide that information.

:21:05. > :21:09.It was one of the basis for a push back the company made against new

:21:09. > :21:14.allegations. It is one of the pillars are the environment around

:21:14. > :21:19.the place that led the company to believe that these matters were

:21:19. > :21:23.from the past and new allegations... The question was different Mr

:21:23. > :21:28.Murdoch. I astute whether this letter, which is still lying on the

:21:28. > :21:36.record as evidence to Miss -- this committee, would you like to

:21:36. > :21:42.withdraw it? Respectfully, I'm not a were of the legal technicalities

:21:42. > :21:47.of withdrawing that or submitting it on the record. It is a relevant

:21:47. > :21:53.document in trying to understand how News International was thinking

:21:53. > :22:00.at the time. I can say no, but I come back after taking Council.

:22:00. > :22:05.want to wind up, given the time but I have a few more questions. As you

:22:05. > :22:12.have described it, and as Colin Myler described it, the

:22:12. > :22:15.investigation was carried about by the IT department and was overseen

:22:15. > :22:21.by the Director of Legal Affairs, John Chapman and the page are

:22:21. > :22:28.director, Daniel cloak. Is that your understanding? Pardon me, what

:22:28. > :22:32.is the question? The investigation yourself, you describe it to us and

:22:32. > :22:37.Colin Myler describe it to us, it was carried out by the IT

:22:37. > :22:41.department and overseen by the Director of Legal Affairs, John

:22:41. > :22:47.Chapman and the page are personnel director, Daniel cloaks. Is that an

:22:47. > :22:53.accurate description? That is my understanding. Why has John Chapman

:22:53. > :22:58.left the organisation? John Chapman and the organisation decided it was

:22:58. > :23:04.in mutual interest to part ways. I think one of the pieces here it is

:23:04. > :23:08.for the company to move forward, and it is for, and I think this is

:23:08. > :23:16.important, many of the individuals, even if there is no evidence of

:23:16. > :23:21.wrongdoing, or anything like that and no evidence of impropriety,

:23:21. > :23:26.many individuals have chosen it is time to part ways. I was not

:23:26. > :23:30.involved with the discussions with Mr Chapman. You have no information

:23:30. > :23:35.of complicity by Mr Chapman to cover up the file? I have no

:23:35. > :23:41.knowledge. Can you tell us their employment status of Daniel cloak?

:23:41. > :23:46.He left some time ago, I don't know what he is doing. He is not in the

:23:46. > :23:53.business. He was director of human resources for a number of years,

:23:53. > :24:03.not that many, I am not sure. quickly, the witnesses who came to

:24:03. > :24:04.

:24:04. > :24:09.us. In respect of the file you have discovered this year, regarding Les

:24:09. > :24:19.Hinton, when did he first become aware of this collection of the e-

:24:19. > :24:19.

:24:19. > :24:26.mails and paper, you disk covered - - discovered, when did he hear

:24:26. > :24:32.about it? I cannot speak to his knowledge of that. Are you

:24:32. > :24:39.referring in 2011 or 2007? This document that was left... In 2007?

:24:39. > :24:43.I cannot speak to his knowledge, but I know Les Hinton was aware of

:24:43. > :24:49.the work that had been carried out and I think he has testified to

:24:49. > :24:56.this committee as to that effect. Mr Murdoch's senior, had you asked

:24:56. > :25:04.lessons at last -- Les Hinton if he knew about this document? No.

:25:04. > :25:14.not? About? The document that was discovered in April, May in the

:25:14. > :25:15.

:25:15. > :25:20.offices of Harbottle & Lewis? have not asked him. And I think he

:25:20. > :25:26.has testified to this, as the chief executive of News International at

:25:26. > :25:31.the time wouldn't have been expected to read hundreds and

:25:31. > :25:39.thousands of e-mails, but it would rely on the opinion of council.

:25:39. > :25:47.Colin Myler aware of this evidence lying with Harbottle & Lewis?

:25:47. > :25:54.cannot speak to other individuals knowledge in the past. I simply

:25:54. > :26:02.cannot speak for them. And Stuart cut and a? The same goes, I cannot

:26:02. > :26:06.speak for them. And Rebekah Brooks? I simply cannot speak. I cannot

:26:06. > :26:10.speak about the knowledge of Rebekah Brooks when she was chief

:26:10. > :26:19.executive of this, but she brought it to my attention as a new thing.

:26:19. > :26:23.To finish off this questioning, we are left now in a situation, you

:26:23. > :26:30.having looked into this affair, having co-operated with the police,

:26:30. > :26:36.cannot tell us who lodged the file with Harbottle & Lewis. He was

:26:36. > :26:42.aware of its contents and who kept you from being in the full

:26:42. > :26:47.possession of the facts, evidence that is clearly now being submitted

:26:47. > :26:53.to the police which contradicts all of the assurances we were given,

:26:53. > :26:58.not in one but in two select committee inquiries? Frankly, I

:26:58. > :27:04.hope he would agree it is unsatisfactory? I can say the

:27:04. > :27:09.company at the time engaged in -- engaged an outside law firm to

:27:09. > :27:14.review a number of these e-mails. They reviewed an opinion based on

:27:14. > :27:20.the review issued to the company of a respected law firm and the

:27:20. > :27:25.opinion was clear. The company rested on that. I cannot speak to

:27:25. > :27:31.individuals knowledge at different times because I simply don't know.

:27:31. > :27:34.The company rested on that, rested on the fact the police told us

:27:34. > :27:39.there was no new evidence and no reason for a new investigation and

:27:39. > :27:42.rested on the opinion of the PCC there was no reason to carry it

:27:43. > :27:49.further. It wasn't until new evidence emerged from the civil

:27:49. > :27:54.litigation is that it would go in on that the company immediately

:27:54. > :27:59.went to the police, restarted this. And the company has done the right

:27:59. > :28:09.thing. This was evidence that was lying with your lawyer's at the

:28:09. > :28:12.

:28:12. > :28:16.same time, it did not emerge simply out of litigation. It was looked at

:28:16. > :28:21.in conjunction with the new and restarted criminal investigation.

:28:21. > :28:25.These are serious matters and we take them seriously. When it was

:28:25. > :28:31.looked at, it was deemed these things would be of interest to the

:28:31. > :28:35.police, we brought in additional council, Lord MacDonald, who you

:28:35. > :28:39.mentioned earlier, to help advise the company on the appropriate way

:28:39. > :28:43.forward in terms of full transparency and co-operation with

:28:43. > :28:50.the police investigations were. They are serious matters and the

:28:50. > :28:58.company took them at very seriously. Mr Rupert Murdoch, two questions.

:28:58. > :29:06.The situation I painted, we are now here, not knowing who at News

:29:06. > :29:11.International, News of the World was complicit in keeping that file

:29:11. > :29:15.containing however many bits of paper, we are no where near a

:29:16. > :29:20.knowing who knew what and when about that file. Evidence that

:29:20. > :29:27.clearly contradicts, not only statements given to the select

:29:27. > :29:31.committee, but evidence as it would appear that it leads your closest

:29:31. > :29:37.and trusted aide over many years, Les Hinton to give misleading

:29:37. > :29:41.evidence. Defined it a satisfactory state of affairs? No, I do not.

:29:41. > :29:47.What do you think the company should do in the follow-up to this

:29:47. > :29:57.select committee inquiry? Chapman, who was in charge of this

:29:57. > :30:02.has left us. And, he had that report for a number of years. It

:30:02. > :30:08.wasn't until Mr Lewis looked at it carefully we immediately said we

:30:08. > :30:17.need legal advice, go to the police with this and how we should present

:30:17. > :30:22.it. The file was what the law firm and there wouldn't have been any

:30:22. > :30:28.reason to look at it. The opinion was clear based on the review that

:30:28. > :30:38.was stunned. As soon as it was in a new criminal investigation, it was

:30:38. > :30:39.

:30:39. > :30:43.deemed appropriate to look at and Given the picture painted of

:30:43. > :30:48.individuals on the newsdesk, asking it -- acting as a great cure for a

:30:48. > :30:52.private investigator, do you think it's possible at all what editors

:30:52. > :30:58.of your newspaper would not have known about these activities? Do

:30:58. > :31:08.you think it's remotely possible? can't say that because of the

:31:08. > :31:09.

:31:09. > :31:18.police inquiry. And the coming judicial proceedings. That's all I

:31:18. > :31:25.can tell you except it was my understanding... I better not say

:31:25. > :31:35.it... That Colin Myler was appointed by a Mr Hinton to find a

:31:35. > :31:41.what the hell was going on and he commissioned that inquiry. Now,

:31:41. > :31:48.that is my understanding of it. I cannot see where to the accuracy of

:31:48. > :31:58.it. Thank you. I am going to appeal for brevity because we have been

:31:58. > :31:59.

:31:59. > :32:03.going for two hours now. James Murdoch, it's a mystery to us

:32:03. > :32:10.how Sunday newspapers are run. I'm familiar with the engineering

:32:10. > :32:17.industry. Can you paint a picture of a week's operation at the News

:32:17. > :32:24.of the World? What period were you controlling the News of the World?

:32:24. > :32:29.My involvement overseeing Europe and Asia, in at 2008, the middle of

:32:29. > :32:36.December, I was chief executive for Europe and Asia, the television

:32:36. > :32:40.business, and the UK publishing business. One title of which is the

:32:40. > :32:46.News of the World. I can't say that I was ever intimately involved with

:32:46. > :32:52.the workings of the News of the World. What results would come to

:32:52. > :32:58.you seven days after publication? Presumably the advertising, sales,

:32:58. > :33:08.income, and to run the paper on the profitability, week by week,

:33:08. > :33:09.

:33:09. > :33:14.presumably? I know Rupert Murdoch is far removed from that. Yes,

:33:14. > :33:18.these are enterprises. Sales and advertising figures. Personnel

:33:18. > :33:27.numbers and all those things, they are relevant. Managers look at

:33:27. > :33:32.these things. We understand that when it comes to legal issues,

:33:32. > :33:41.settlements of claims, that is taking out side from the day-to-day

:33:41. > :33:44.management of the newspaper. Each group of companies will have their

:33:44. > :33:47.own legal executives who will deal with things like libel and other

:33:47. > :33:51.things and we'll try to check that something does not going to the

:33:51. > :33:57.paper which will be wrong etc. Sometimes it's right, sometimes

:33:57. > :34:07.it's wrong, but each has its own resources. Each manager is involved

:34:07. > :34:09.

:34:09. > :34:19.in that. The editor of the News of the World... My son's typical week

:34:19. > :34:21.

:34:21. > :34:30.could well have been a day in a Munich, or in a Italian Sky TV. We

:34:30. > :34:37.had a difficult situation with a tricky competitor. He had a lot on

:34:37. > :34:42.his plate. I will leave a more of the mundane issues, then. It became

:34:42. > :34:49.clear from the first couple of questions to you, Rupert Murdoch,

:34:49. > :34:54.you were kept in the dark quite a bit. On serious issues. Not in the

:34:54. > :35:00.dark. I may have been lax in not asking but it was such a tiny part

:35:00. > :35:07.of our business. But you wouldn't be here if it was an extremely

:35:07. > :35:12.serious. It has become extremely service. -- serious. Is there no

:35:12. > :35:21.written rules that certain things have to go straight to the very

:35:21. > :35:28.top? It sounds as if there are no such things. Anything seen as a

:35:28. > :35:31.crisis comes to me. I think it's important to know the difference

:35:31. > :35:35.between being kept in a dark and a large company, the management of

:35:35. > :35:41.which is delegated, two managers of different companies within the

:35:41. > :35:45.group and so on and so forth. I think to suggest that my father and

:35:45. > :35:50.myself were kept in the dark is a different thing from suggesting the

:35:50. > :35:56.management and the running of these businesses are often delegated to

:35:56. > :36:00.chief executives, and editor, and managing editor, and decision-

:36:00. > :36:06.making has to be there. There are threshold of materiality, if you

:36:06. > :36:10.will, whereby things have to move upstream so something has to be

:36:10. > :36:14.brought to the attention. From a financial point of view, we address

:36:14. > :36:20.that earlier would respect of settlement out-of-court settlement

:36:20. > :36:25.with Mr Taylor. But also from the standpoint of things like alleged

:36:25. > :36:30.criminality, violations of our code of conduct, things like that, those

:36:30. > :36:33.are things which the company's internal audit function, as well as

:36:33. > :36:39.the audit committee and senior executives of the committee are

:36:39. > :36:47.expected to be made aware of. As they were in the case of the

:36:47. > :36:52.criminal prosecutions in 2007. Whatever efforts were made and

:36:52. > :36:57.whatever rules their work, we have reached News International Mac was

:36:57. > :37:00.crisis point, otherwise you wouldn't be here today and the News

:37:00. > :37:06.of the World wouldn't have been closed. Who do you hold responsible

:37:06. > :37:10.for that failure? You say people should have told you. You're really

:37:10. > :37:16.saying to us now, not that they should have told you, but you will

:37:16. > :37:20.let them get on and manage it. What has gone wrong? It's a good

:37:20. > :37:25.question but I'm not saying somebody should have told me. To my

:37:26. > :37:30.knowledge, certain things were not known. When a new information came

:37:30. > :37:35.to light in respect to my knowledge of these events and the

:37:35. > :37:42.understanding of new information coming to light, the company acted

:37:42. > :37:45.on it in a right and proper way as best it could. But it is difficult

:37:45. > :37:50.saying the company should have been told something if it's not known

:37:50. > :37:55.but a thing was a known fact to be told. Now, I have been asked today

:37:55. > :38:02.about what other new people knew then, and I can only tell you what

:38:02. > :38:05.they told me or what they have told you in previous hearings, and I

:38:05. > :38:10.understand completely your frustration about this. You can

:38:10. > :38:17.imagine my own frustration in the 2010 When this civil litigation

:38:17. > :38:24.came to a point where these things were coming out and I suddenly

:38:25. > :38:29.realised, actually, the denial of allegations made earlier,

:38:29. > :38:34.particularly in a 2009, had been too strong. And that is a matter of

:38:34. > :38:39.real regret because all the facts were not known when that was done

:38:39. > :38:44.and that is a matter of deep regret. That is why we are here today with

:38:44. > :38:49.you trying to be as transparent as you possibly can. I suppose this is

:38:50. > :38:54.a rhetorical question. I'm sure your answer will be what I expect,

:38:54. > :39:04.but it is admirable that fact you have had such long-term employees

:39:04. > :39:06.

:39:06. > :39:10.who have become very close friends. Rupert explained that with his

:39:10. > :39:15.determination to look after Rebekah Brooks, so it is admirable, but

:39:15. > :39:25.there was a lot of criticism at the time. This is not a criticism,

:39:25. > :39:26.

:39:26. > :39:36.James, of your ability, but that it was nepotism to a point you. --

:39:36. > :39:46.appointee. -- a point you. Do you regret it has become a family

:39:46. > :39:49.

:39:49. > :39:59.organisation? When the job became available as head of BSkyB, several

:39:59. > :40:07.people applied, including my son. They passed all sorts of board

:40:07. > :40:17.committees, outside experts, etc, who came to the conclusion that he

:40:17. > :40:22.

:40:22. > :40:31.a field day. When he left to go to, I promoted him to take charge of

:40:31. > :40:34.much wider responsibilities, we had calls from all the big shareholders

:40:34. > :40:43.saying it was a terrible thing to take him away because he had done

:40:43. > :40:47.such a great job. I wasn't disputing his ability. The fact

:40:47. > :40:52.that you didn't know about so many of these criminal activities which

:40:52. > :40:57.went on, do you not think that was made more likely because of the

:40:57. > :41:06.family history? I'm talking about people are not direct members of a

:41:06. > :41:11.family but became friends? No. I don't think that. It has been

:41:11. > :41:16.mismanaged. I don't think Les Hinton this led me for me but you

:41:16. > :41:19.must find out that and make your own conclusions. Other people who

:41:19. > :41:23.gave evidence may have been misleading you, but he certainly

:41:23. > :41:30.did not know of anything. Thank you very much. I have a two more

:41:30. > :41:33.members. I would like to make a short

:41:33. > :41:38.declaration of my own which was something previously declared to

:41:38. > :41:44.the committee to say my wife is employed by News Corporation has

:41:44. > :41:49.never worked on his account and has no access to information on this.

:41:49. > :41:52.Mr Rupert Murdoch, you said earlier on that we live in a transparent

:41:52. > :42:02.society. Do you think it's right people in public life can expect

:42:02. > :42:03.

:42:03. > :42:07.total privacy? No. I noticed in the Watergate investigation for example,

:42:07. > :42:12.personal banking and phone records were used belonging to one of the

:42:12. > :42:16.witnesses, relevant that investigation. To what extent you

:42:16. > :42:21.think the use of confidential private information, phone records,

:42:21. > :42:25.phone hacking, is permissible? Phone hacking is something quite

:42:25. > :42:31.different but I do believe that investigative journalism,

:42:31. > :42:41.particularly competitive, does lead to a more transparent and open

:42:41. > :42:46.

:42:46. > :42:50.society. I think we're a better society because of it. We are

:42:50. > :42:54.probably more an open society than the USA. Where do you draw a line

:42:55. > :43:04.on that? Where are the boundaries of legitimate investigation? What

:43:05. > :43:12.

:43:12. > :43:19.is out of bounds? I'm sorry to say this, when the Daily Telegraph

:43:19. > :43:24.bought a series of stolen documents of all the expenses of MPs, it

:43:24. > :43:32.caused a huge outcry. One of which I feel has not been properly

:43:32. > :43:38.addressed. There is an answer to it. We ought to look at the most open

:43:38. > :43:42.and clear society in the world, Singapore, where every minister

:43:42. > :43:46.gets at least a million dollars a year and the Prime Minister a lot

:43:46. > :43:50.more and there is no temptation, and it is the cleanest society you

:43:50. > :43:59.will find anywhere. Good luck in selling that idea!

:43:59. > :44:05.I mean that seriously. It is ridiculous. People were reduced to

:44:05. > :44:09.doing what they did. I think it's a very good question and an important

:44:09. > :44:12.question and I understand it's going to be one of the subjects of

:44:12. > :44:18.the judicial inquiry which the Prime Minister announced last week,

:44:18. > :44:22.which, as a company, we immediately welcome and look forward to. This

:44:22. > :44:25.question of public interest, the question of what is acceptable and

:44:25. > :44:29.what isn't in terms investigative techniques is an important one but

:44:29. > :44:32.let me be clear, the codes of conduct of News Corporation

:44:32. > :44:37.globally for our employees, journalist and otherwise, are very

:44:37. > :44:41.clear, that breaking the law is a very, very serious matter and

:44:41. > :44:45.people who are law-breakers should be held to account. In the matter

:44:45. > :44:48.of something like phone hacking and payments to police, and things like

:44:48. > :44:53.that, we just don't think they should have any place in our

:44:53. > :44:55.business. You would be very clear within your company, your

:44:56. > :45:04.organisation, senior people should have been aware phone hacking was

:45:04. > :45:08.not only illegal but totally unacceptable? I think after the

:45:08. > :45:13.successful prosecutions and convictions of the individuals

:45:13. > :45:17.involved in 2007, it could not be taken more seriously and if new

:45:17. > :45:25.evidence emerges, as it has in cases, the company acts on it very

:45:25. > :45:28.very quickly. The what extent do think of a cultural problem? Duping

:45:28. > :45:32.people only tell you things you want to hear and even people who

:45:32. > :45:42.have been your trusted advisers simply withhold information because

:45:42. > :45:48.

:45:48. > :45:56.No, not my trusted advisers. should hear the conversations in my

:45:56. > :46:01.office. A lot of you trusted advisers... A lot of people say I

:46:01. > :46:07.have crazy ideas. A lot of your trusted advisers have left your

:46:07. > :46:12.company? We are a very big company. I'm sure I get people who try to

:46:12. > :46:21.please me. That could be human nature and it is up to me to see

:46:21. > :46:26.through that. What is the pressure on senior managers and editors to

:46:26. > :46:32.get scoops that leads them to take risks and clearly in the case of

:46:32. > :46:37.the News of the World, push boundaries that broke the law?

:46:37. > :46:41.you ask that again, I am sorry. you think there is a pressure on

:46:41. > :46:46.editors of Your News papers which leads them to take risks and break

:46:46. > :46:51.boundaries? In the legal -- in the News of the World, there was

:46:51. > :47:01.illegal action and people but the law to get scoops? The to totally

:47:01. > :47:05.wrong. There is no excuse for breaking the law at any time. It is

:47:06. > :47:10.right for all newspapers, when they wish to to campaign for a change in

:47:10. > :47:20.the law. But never to break it. Just two further questions if I

:47:20. > :47:26.

:47:26. > :47:36.make? -- if I may. I was brought up by a father who was not rich, but

:47:36. > :47:42.

:47:42. > :47:47.made a great journalist. And he, just before he died left a piece of

:47:47. > :47:57.paper in his will, specifically giving me the chance to do some

:47:57. > :48:01.

:48:01. > :48:05.good. He gave me the chance to expose the scandal at Gallipoli.

:48:05. > :48:13.Which I am very, very proud of. Which goes to the suggestion it is

:48:13. > :48:17.a family business. Rupert Murdoch, you said earlier on you have had

:48:17. > :48:24.frequent meetings with prime ministers during your career. In

:48:24. > :48:27.the period after the arrest... wish they would leave me alone.

:48:27. > :48:32.arrest of Clive Goodman, which you said earlier on you were aware of

:48:32. > :48:36.the situation when Clive Goodman was sent to prison. In the years

:48:36. > :48:41.after that, when there were numerous reports and investigations,

:48:41. > :48:45.he rings at this Committee, did any senior politicians are you were in

:48:45. > :48:50.contact with during that period of time raise this as an issue with

:48:50. > :48:56.you, about phone hacking? Absolutely never. The prime

:48:56. > :49:06.ministers I met in those days was Mr Brown when he was Chancellor of

:49:06. > :49:06.

:49:06. > :49:12.the X Cheshire. -- Chancellor of the Exchequer. His wife and my wife

:49:12. > :49:17.struck up a great friendship. We had great values that we shared, I

:49:17. > :49:22.am sorry we have come apart and I hope we can put it together again.

:49:22. > :49:26.You said in the interview you gave to the Wall Street Journal, your

:49:26. > :49:31.fellow executives at News Corporation had handled this crisis

:49:31. > :49:34.very well with just a few minor mistakes. Do you stand by that

:49:34. > :49:43.statement or do you believe the level of mistakes was far greater

:49:43. > :49:50.than that? They seem much bigger now. What we did was terrible. The

:49:50. > :50:00.handling of the crisis. I am sorry, I had just been told not to

:50:00. > :50:01.

:50:01. > :50:07.gesticulate. They don't believe that either he or Les Hinton made

:50:08. > :50:15.any great mistakes. But were mistakes made within the

:50:15. > :50:21.organisation? Absolutely. People I trust it, people they trusted, we

:50:22. > :50:26.were betrayed, yes. Finally, James Murdoch, it was reported while

:50:26. > :50:30.Rebekah Brooks wrote to staff or when the News of the World closure

:50:30. > :50:40.was made, she said in a year's time they might understand why the paper

:50:40. > :50:41.

:50:41. > :50:45.had to close. Are you expecting there to be more revelations to

:50:45. > :50:50.come out that made the closure of the News of the World with

:50:50. > :50:57.hindsight, inevitable? I cannot speak to what she was specifically

:50:57. > :51:04.referring to, she made those comments herself. And when she was

:51:04. > :51:11.saying goodbye, sadly to the staff. But I can say, what happened at the

:51:11. > :51:16.News of the World and the events leading up to the 2007 affairs and

:51:16. > :51:21.prosecutions and at what we know about those things now, were bad.

:51:21. > :51:27.And there are things that shouldn't have any place in our organisation.

:51:27. > :51:31.There were things we unreservedly, and since Sealey are sorry for. We

:51:31. > :51:35.haven't seen the end of this in terms of the ongoing police

:51:35. > :51:40.investigations that of her. As you know, there are a number of people

:51:40. > :51:47.who have been arrested. We don't know what is going to happen in the

:51:47. > :51:53.future around those things. Given the breach of trust, given the

:51:53. > :51:57.allegations that were emerging at a rapid pace, you know it was clear,

:51:57. > :52:01.to me anyway and I think the future will bear this out with any

:52:01. > :52:07.specific knowledge of the future obviously, it was the right thing

:52:07. > :52:13.for the paper to cease publication. Your father said in his Wall Street

:52:14. > :52:18.Journal interview, he acted as fast as he could, the moment he could.

:52:18. > :52:24.Does that suggest you have been held back at any point, had he been

:52:24. > :52:31.frustrated during this process in the past few weeks? This has been a

:52:31. > :52:38.frustrating process and my frustration, my real anger to learn

:52:38. > :52:45.there was new evidence emerging as late as the end of 2010, was real

:52:45. > :52:49.and is real. What I have done and what the company has tried to do is

:52:49. > :52:55.take new information, at just the course, behaved with propriety, the

:52:55. > :53:00.Hague quickly and behave in a humble way with respect to what has

:53:00. > :53:05.happened and with respect to trying to put it right. That is what we

:53:05. > :53:10.are trying to do. It does not mean I have any knowledge of anyone

:53:10. > :53:15.intentionally misleading me in the company, I don't. Which makes it

:53:15. > :53:19.even more frustrating. We are where we are, new information emerge

:53:19. > :53:26.through a legitimate due process of the civil trial. The company acted

:53:26. > :53:32.on it as fast as could possibly be expected. Add new allegations are

:53:32. > :53:42.emerging that the company, we are trying to deal with him as best way

:53:42. > :53:42.

:53:43. > :53:46.as possible. And finally, the good news is I am your last questioner

:53:46. > :53:52.and I will try to have a few specific questions that I would

:53:52. > :53:59.like to ask you. Starting with you, Mr James Murdoch. I know we have

:53:59. > :54:05.been over at length, the differences in the settlements, the

:54:05. > :54:15.Taylor sufferance -- settlement, did that include a confidentiality

:54:15. > :54:21.

:54:21. > :54:28.clause and maybe the other This hearing is suspended for 10

:54:28. > :54:33.minutes. We are leaving the committee

:54:33. > :54:37.hearing there has been some sort of altercation. We could not help but

:54:37. > :54:43.we will let you know, somebody had moved to attack Rupert Murdoch, or

:54:43. > :54:46.it was happening at his side of the table. We have had to cut away from

:54:46. > :54:51.the committee hearing and it has been postponed for at least 10

:54:51. > :54:55.minutes to get back to some order. We have heard a lot already, my

:54:55. > :55:01.three guests are still with me. I will get their overall reactions.

:55:01. > :55:06.Alastair Campbell? I think people will have been surprised how

:55:06. > :55:09.distant Rupert Murdoch seemed from everything. I thought he be came a

:55:09. > :55:14.bit more cogent in the second half. But in the first half, it was

:55:14. > :55:18.almost like, I don't really know what has gone on anyway. James

:55:18. > :55:22.Murdoch as well, there were a lot of questions where I thought, in

:55:22. > :55:26.the time he has had to research and prepare for this, he would have

:55:26. > :55:33.known the answers. He looked most uncomfortable in relation to the

:55:33. > :55:38.specific questions to Glenn Mulcaire's legal bills, and he

:55:38. > :55:42.should have known the answer. And Gordon Taylor, Louise Mensch was

:55:42. > :55:48.going when that incident occurred, and Gordon Taylor situation looks

:55:48. > :55:52.where they feel a bit vulnerable. Over all, you had a feeling of two

:55:52. > :55:57.people in charge of a company that was saying, we were not in charge

:55:57. > :56:00.of this. The theme that seemed to be coming through, sometimes from

:56:00. > :56:07.questioning that was less than penetrating, but did reveal things

:56:07. > :56:13.in the end, was the implication of a lot of the questions was, a new

:56:13. > :56:17.revelation, he continued to pay Glenn Mulcaire and Clive Goodman,

:56:17. > :56:23.the two who went down. The Guardian you that, and now we know it is

:56:23. > :56:30.definitely true. We are just giving you live pictures as I speak. We

:56:30. > :56:34.are not sure what has happened. The police moved in very quickly, or on

:56:34. > :56:39.attendance, security attend and moved very quickly when the

:56:39. > :56:42.incident happened. We saw it, just as he was seeing it, with a look of

:56:42. > :56:48.shock on the face of John Whittingdale, the chairman of the

:56:48. > :56:50.committee. It was then we knew something was happening at

:56:51. > :56:55.Portcullis House. There is very strong security in the sense you

:56:55. > :56:58.have to go through the detectors you have to go through at airports

:56:58. > :57:04.and bags are checked and so on. That does not mean somebody could

:57:04. > :57:09.at least getting he wanted to be up to no good. We will stay on these

:57:09. > :57:13.pictures for a second. I will continue with David. The

:57:13. > :57:17.implication, is that we have shut them down by paying money. The

:57:17. > :57:21.other implication of the questioning was to Mr Taylor and Mr

:57:21. > :57:28.Max Clifford, we paid them a shed load of money and that shut them

:57:28. > :57:31.down, too? That goes right to the question, which have two outcomes

:57:31. > :57:39.is this? Is it gross negligence in terms of the management not going

:57:39. > :57:45.on, or is it to cover up? wilful blindness argument. James

:57:45. > :57:50.Murdoch answered, after Mosley, the �60,000 settlement, it dropped away.

:57:50. > :57:55.He had been given advice, it will be more than this, but then it

:57:55. > :58:01.dropped away. What was interesting as well for me, I said to you at

:58:01. > :58:05.the beginning this might mean the end... I am being told, my

:58:05. > :58:10.understanding is it looks as if somebody, a woman tried to grab

:58:10. > :58:16.Rupert Murdoch from behind. And that was kind of the indication we

:58:16. > :58:22.were getting. It did look like that. Another report, Kevin Maguire of

:58:22. > :58:29.the Daily Mirror, a long-standing friend of this programme, also

:58:29. > :58:33.trying to attack Rupert Murdoch and Wendy Murdoch, Rupert Murdoch's

:58:33. > :58:38.wife who was sitting right behind him moved in to intervene when she

:58:38. > :58:45.saw that happening. These are early reports, they are not confirmed yet,

:58:45. > :58:50.so as soon as we get confirmation, we will bring it to you. I said

:58:50. > :58:56.this may be the end of the Empire, but what was interesting in

:58:56. > :59:00.watching the Emperor in action. Tom Watson's initial long series of

:59:00. > :59:04.questions serve to show essentially, Rupert Murdoch did not know what

:59:04. > :59:10.was going on in his organisation, in this part of his organisation,

:59:10. > :59:14.at all. I don't know how that will play in America, how will the

:59:14. > :59:20.shareholders look at that? How can you be at the centre of this storm,

:59:20. > :59:24.come before a select committee and appeared to be ignorant of what

:59:24. > :59:30.previous select committee inquiries had stated. He honestly look like

:59:30. > :59:34.the collective amnesia point. It was the first time anybody had ever

:59:34. > :59:41.suggested that to him! So all of the briefings, rehearsals and

:59:41. > :59:46.preparation... Which they admitted to. As if nobody had given him a

:59:46. > :59:51.chronology. My feeling is anybody could have given him any chronology

:59:51. > :59:56.than they wanted to. You did not get the impression of somebody he

:59:56. > :00:02.was going to be big on the detail of this and was even going to

:00:02. > :00:06.necessarily recall the details. We saw the real human drama about the

:00:06. > :00:16.succession of one generation by another. James Murdoch's narrative

:00:16. > :00:17.

:00:17. > :00:23.is interesting. He says, I come in in 2007, and it is not until 2010,

:00:23. > :00:28.it was all shut down. We had no reason to believe it was bigger.

:00:28. > :00:38.But Les Hinton has asked Clive miler to look at the details which

:00:38. > :00:39.

:00:39. > :00:44.So, the underlying question is, are you trying to find out what is

:00:44. > :00:50.going on? Or trying to close it down after this case and say,

:00:50. > :00:56.whatever has happened, we don't want to talk about it any more?

:00:56. > :01:04.When they were preparing for this, they must have realised they would

:01:04. > :01:10.be asked about Glenn Mulcaire's legal bills although James Murdoch

:01:10. > :01:14.was like, I don't know about that. Andy Coulson's salary. That is be a

:01:14. > :01:23.long-running theme. Surely that is it, find me the facts, just in case

:01:23. > :01:29.it comes up? I'm surprised at the extent to which James was not on

:01:29. > :01:39.top of this. I thought you did the Glenn Mulcaire staff on the Aegean.

:01:39. > :01:47.

:01:47. > :01:57.-- Staff of stuff on the chin. Now! You can see there, it looked

:01:57. > :01:58.

:01:58. > :02:03.like someone did move to attack or at least do something to Rupert

:02:03. > :02:06.Murdoch and it was spotted by a Wendy Murdoch, the lady in the pink,

:02:06. > :02:11.though you may have seen is sitting immediately behind Rupert Murdoch

:02:11. > :02:18.during the testimony, sometimes touching him on the shoulder. I

:02:18. > :02:22.think that slap you here is Mrs Murdoch attacking the attacker.

:02:22. > :02:30.will get a very good response. don't beat anybody would blame her.

:02:30. > :02:36.No. That sort of demonstration will get a huge amount of attention.

:02:36. > :02:46.Alas, in my view, because it takes away from the serious questions.

:02:46. > :02:46.

:02:46. > :02:51.One of the constant themes alluded to his, let's accept Rupert Murdoch

:02:51. > :02:55.is remote from this, James Murdoch is in there and have to get across

:02:55. > :03:00.the past as well as organise the future. When he is asked, did you

:03:00. > :03:04.see the legal counsel that advised you to do something? He said no, I

:03:04. > :03:11.just took advice from the in-house lawyers. They had seen the legal

:03:11. > :03:16.counsel. Did he really know what is in the e-mails? No, I don't think

:03:16. > :03:23.Les Hinton did either. He is an American-trained manager. Americans

:03:23. > :03:27.are prone to take senior counsel. They take legal counsel as their

:03:27. > :03:33.line of protection because so much of American life is very intrusive

:03:33. > :03:43.on companies. You can go to jail for anti-trust breeches and so on.

:03:43. > :03:49.I suspect he looked at the lawyer's For I understand that, but if

:03:49. > :03:56.you're going to take over a company from the Cheviots -- previous chief

:03:56. > :04:00.executive, and the e-mails are pretty dynamite, wouldn't you say

:04:00. > :04:09.to the previous executive, did you see these e-mails? Do you know what

:04:09. > :04:13.is in them? Probably. From a British perspective, you would. It

:04:13. > :04:18.is said of James, and I don't know James Murdoch, but he does not love

:04:18. > :04:22.newspapers. He likes electronic media and so on. His focus was on

:04:22. > :04:27.BSkyB. He would have assumed the team in place would have run it for

:04:27. > :04:32.the one of the interesting thing is here it is Les Hinton's resignation.

:04:32. > :04:35.He was there when all of the structure was set up. One doesn't

:04:35. > :04:42.want to prejudice what happens to them but it looks like it was set

:04:42. > :04:46.up, not to expose, but to shut down. Any question you would ask at that

:04:46. > :04:49.stage is, is there any more of this to come? That is the first thing

:04:49. > :04:56.you would say. You would love to know what the answer was for that

:04:56. > :05:04.when a dossier had been compiled? Looking at some of the various news

:05:04. > :05:12.wires, it looks like a young man is being held in handcuffs and it

:05:12. > :05:22.looks like he either had shaving foam or one of these Pisces, a

:05:22. > :05:23.

:05:23. > :05:29.cream pie, -- pies. Peter Mandelson garden like this. The public figure

:05:29. > :05:35.doesn't know what this person has got in their hand. Many years ago,

:05:35. > :05:40.it happened to me. Wendy and James were clearly on to it. Laura

:05:40. > :05:45.Kuenssberg is on top of the stories and said it looks like the young

:05:45. > :05:55.man is being held in handcuffs and it looks like shaving foam all over

:05:55. > :05:55.

:05:55. > :06:03.his face. Having thrown up high at Rupert Murdoch. Right. -- having

:06:03. > :06:12.thrown a Paris. Who is to know it is not an acid spray? -- having

:06:12. > :06:18.thrown a pie. Living in America, you have incidents like this.

:06:18. > :06:26.Blair, in his book, talks about doing a massive speech and it just

:06:26. > :06:33.takes one person to come along and they can move the agenda on. Like

:06:33. > :06:40.water Wolfgang. How would they get the shaving foam into the building?

:06:40. > :06:48.It is not metallic. It may not show up as a there's a lot of able and

:06:48. > :06:54.Parliament wandering around. Let's go to Nick Robinson. Can you update

:06:54. > :06:59.us? I am just being ushered back into the hearing because they are

:06:59. > :07:03.about to resume it. I will have to be brief, but you saw for yourself

:07:03. > :07:07.the pictures there. No one in the room had any sense of what was

:07:07. > :07:12.happening until this plate of what appears to be shaving foam was an

:07:12. > :07:17.inch away from Rupert Murdoch's face. The horror on his son's face

:07:17. > :07:23.was palpable. The anger of his wife, Wendy, was clear. She picked up the

:07:23. > :07:32.plate and are backed her husband's assailant with it and said, "I got

:07:32. > :07:40.him, I got him". It's not clear what the guy who attacked Rupert

:07:40. > :07:46.Murdoch said. There was fury from a James Murdoch and the Murdoch party

:07:46. > :07:51.that his father was attacked in this way in the full view of and

:07:52. > :07:57.protection of the police. Do we know if this attack actually struck

:07:57. > :08:06.Rupert Murdoch? Yes, no doubt at all, it went straight into his face.

:08:06. > :08:13.He was covered. It's a paper plate full of of Bowmer. The sort of in a

:08:13. > :08:17.climate would do at a circus. -- full of foam. Rupert Murdoch barely

:08:17. > :08:22.reacted to what had happened. Perhaps out of shock, perhaps out

:08:22. > :08:27.of anger, perhaps not knowing what to do. The reaction came from his

:08:27. > :08:32.wife, Wendy, who jumped up on her feet, she was sitting behind her

:08:32. > :08:37.husband, and proceeded to attack the assailant. He made no effort to

:08:37. > :08:41.get away, no effort to shout and scream, he had made his point. And

:08:41. > :08:49.that was the end of it. I briefly saw him outside being held by

:08:49. > :08:53.police. I don't know who he was and what he said. He refused to say,

:08:53. > :08:58.saying it was now subject to a police investigation.

:08:58. > :09:02.That finance so we have heard quite a few times today, Nick Robinson. -

:09:02. > :09:06.- that is an answer we have had quite a few times today. They are

:09:06. > :09:16.about to reconvene. There will serious plea be some questions to

:09:16. > :09:18.

:09:18. > :09:22.I thank you for this. My questions will be just as tough

:09:22. > :09:26.as ever they would have been had that unfortunate incident not have

:09:26. > :09:30.occurred. Mr James Murdoch, if I can take you back briefly off

:09:30. > :09:34.before you were so rudely interrupted to the question of the

:09:34. > :09:40.disparity between the settlements, could you tell me whether the

:09:40. > :09:44.Taylor settlement involved a confidential leak caused -- clause

:09:44. > :09:51.which has not involved previously? I cannot tell you that it was a

:09:52. > :09:56.confidential settlement. As to other settlements, post that, some

:09:56. > :10:00.have been confidential, and some not. I don't believe any have been

:10:00. > :10:10.confidential, but I can certainly follow up as to whether they have

:10:10. > :10:10.

:10:10. > :10:14.been any. It is customary to have both parties agreeing

:10:14. > :10:20.confidentiality. There is nothing unusual about an out-of-court

:10:20. > :10:23.settlement agreed to be confidential, but, with respect to

:10:23. > :10:29.to the bases of the question, but the disparity and amount of money

:10:29. > :10:33.involved, there was nothing in the Taylor settlement in respect

:10:33. > :10:39.confidentiality that spoke to the amount of money. The amount of

:10:39. > :10:42.money was derived, as I testified earlier, from a judgment made about

:10:42. > :10:47.what the likely damages would be and are likely expenses and

:10:47. > :10:53.litigation costs. Had the company taken the litigation to its end tos.

:10:53. > :10:57.Yes, you have been very clear about it. I merely put it to you that in

:10:57. > :11:01.front could be drawn if Bollada supplements containing

:11:01. > :11:06.confidentiality clauses did not, that, despite what to say about it

:11:06. > :11:09.being a pragmatic decisions, based on the cost to the company, and in

:11:09. > :11:17.front could be drawn up silence was being bought by the confidentiality

:11:17. > :11:24.clause. But in France would be false. OK, fair enough. -- that

:11:24. > :11:29.inference would be false. People would find it hard to believe that

:11:29. > :11:37.two executives had such little knowledge of widespread criminality

:11:37. > :11:40.at your flagship papers. Mr James Murdoch, when did you become aware

:11:40. > :11:45.that the phones are not only of the royal family and celebrities but

:11:45. > :11:54.victims of crime that had been hacked? When did you become aware

:11:54. > :12:00.that the phone at Milly Dowler had been hacked? The terrible incidents

:12:00. > :12:04.of boys will deception around -- Voicemail deception around the

:12:04. > :12:10.Milly Dowler case only came to my attention when it was reported in

:12:10. > :12:14.the press a few weeks ago. Only when the Guardian reported it?

:12:14. > :12:20.can tell you it was a total shock. It was the first I had become aware

:12:20. > :12:24.of it. Is that the same for hacking of other victims of crime? Have you

:12:24. > :12:29.been made aware prior to the Milly Dowler story breaking that your

:12:29. > :12:36.reporters hacked into the phones of any other crime victims? No, I was

:12:36. > :12:44.not aware of that. Just for the record, you want this earlier but

:12:44. > :12:48.it's very much interest to the USA, the actor Jude Law has said his

:12:49. > :12:54.phone was tapped on US soil, but given that allegation, you are

:12:54. > :13:01.confident no employee or contract up of News Corp or its contractors,

:13:01. > :13:11.packed the phones at 9/11 victims? Or their families? We have no

:13:11. > :13:15.

:13:15. > :13:20.incredibly serious allegations. Are they have come to light fairly

:13:20. > :13:25.recently. We do not know the veracity of his allegations and are

:13:25. > :13:32.trying to understand precisely what they are and an investigation is

:13:32. > :13:38.under way. I remember well, September 11th attacks, I was in

:13:38. > :13:44.the Far East. It is just appalling to think that anyone associated

:13:44. > :13:50.with one of our papers would have done something like that. I am

:13:50. > :13:55.aware of no evidence about that. I am well aware of the allegations

:13:55. > :13:59.and will eagerly co-operate with any investigations or tried to find

:13:59. > :14:05.out what went on at that time was up these are new allegations, just

:14:05. > :14:09.a few days old, I think. But they are very serious and that sort of

:14:09. > :14:14.activity would have absolutely no place. It would be appalling.

:14:14. > :14:19.the information provided to you so far, Rupert Murdoch back was answer

:14:19. > :14:23.was emphatic. Your answer, James Murdoch, was more nuanced. Have you

:14:23. > :14:30.had any information which give you cause for concern that employees of

:14:30. > :14:36.News Corp may have indulged in a kind of thing? No, we have only

:14:36. > :14:42.seen the allegations made in the press. I think it is in the mirror.

:14:42. > :14:47.And we are actively trying to know what the allegations are and how to

:14:47. > :14:52.understand them. You have seen no internal documents or recede any

:14:52. > :14:59.verbal reports that any employee hacked the phone? Definitely not.

:14:59. > :15:02.Have you, as a result of a wider view, heard from any of your

:15:02. > :15:12.employees of papers in other countries that phone hacking and

:15:12. > :15:18.

:15:18. > :15:22.illegal practices may have been Are you doing a global review and

:15:22. > :15:27.have you heard of any allegations of home hacking in any of your

:15:27. > :15:33.other terror Tories? I have never heard of those allegations, but I

:15:33. > :15:35.would go back to the code of ethics and code of conduct all of our

:15:35. > :15:41.colleagues at News Corporation globally, whether they are

:15:42. > :15:46.journalists, or management's are required to have when they joined a

:15:46. > :15:51.company and are briefed on those things. It is a matter of real

:15:51. > :15:57.seriousness. The journalistic ethics of any of the newspapers or

:15:57. > :16:02.television talons -- channels within the group, certainly on a

:16:02. > :16:06.global basis, we want to be consistent. We want to be doing the

:16:06. > :16:13.right thing and when I say illegal behaviour has no place in this

:16:13. > :16:16.company, that goes for the whole company. Mr Rupert Murdoch you are

:16:16. > :16:21.ahead of the global company, everything stops with you. Given

:16:21. > :16:27.these allegations you have said, when you opened the session you

:16:27. > :16:33.said it was the most humiliating day of your life. Sorry, I beg your

:16:33. > :16:39.pardon "the most humble day of your life". You feel humbled by these

:16:39. > :16:42.events and you are in charge of the company. Given your shock these

:16:42. > :16:48.things are laid out before you and you did not know anything about

:16:48. > :16:53.them. Have you instructed your editors around the world to make

:16:53. > :17:02.sure this is not been replicated in other News Corp papers around the

:17:02. > :17:09.globe? If not, we you do so? I am more than prepared to do so.

:17:09. > :17:16.final question, he touched earlier, Mr James Murdoch briefly, you

:17:16. > :17:19.touched on the general culture of phone hacking, blagging and illegal

:17:19. > :17:24.practices that in the past has happened in this country. If I can

:17:24. > :17:30.put a couple of things to you? Piers Morgan, who is a celebrity

:17:30. > :17:36.anchor at CNN, you don't seem to have asked him about phone hacking,

:17:36. > :17:42.a former editor of the Daily Mirror. A little trick of entering a

:17:42. > :17:48.standard four digit code allowing people to hear that message in that

:17:48. > :17:53.book. He said using that a little tricky was able to get the scoop on

:17:53. > :18:00.the former England manager, Sven- Goran Eriksson. He was very open

:18:00. > :18:04.about his use of phone hacking. And indeed he was a former News of the

:18:04. > :18:10.World executive. He was boasting about a story when he was editor of

:18:10. > :18:15.the Daily Mirror. Paul Baker of Associated Newspapers said to a

:18:15. > :18:20.committee, in my view the Daily Mail has never in its history run a

:18:20. > :18:27.story based on phone hacking or blagging in any way. Yet Operation

:18:27. > :18:31.motorman, which Mr James Murdoch, your advisers will have made you

:18:31. > :18:35.aware, had 50 journalists paying for 902 pieces of information

:18:35. > :18:40.obtained by the private investigator, Steve Whitmoor who

:18:40. > :18:44.had been found to have used some of the docks methods. You said your

:18:44. > :18:49.advisers in prepping you to come before this committee had told you

:18:49. > :18:55.to simply tell the truth, which I think is excellent advice. Isn't it

:18:55. > :18:59.the truth of the matter, journalists at the News of the

:18:59. > :19:04.World felt entitled to go out there and use blagging, deception and

:19:04. > :19:08.phone hacking because that was part of the general culture of

:19:08. > :19:14.corruption in the British tabloid press and they did not kick it up

:19:14. > :19:19.the chain to you because they felt they were entitled to use the same

:19:19. > :19:25.methods as everybody else? Isn't that a matter? I am aware of the

:19:25. > :19:30.reports, the questions around other newspapers and they use of private

:19:30. > :19:35.investigators. All I can really speak to in this matter is the

:19:35. > :19:41.behaviours and the culture at the News of the World, as we understand

:19:41. > :19:49.it. How we are trying to find out what really happens in the period

:19:49. > :19:54.in question. Also, it is not for me today to impugn other newspapers,

:19:54. > :19:59.of the journalists and things like that. I am asking if the News of

:19:59. > :20:05.the World felt in your to engaging in these practices, particularly

:20:05. > :20:11.phone hacking because it was so wide in British tabloid journalism.

:20:11. > :20:18.They did not see it as evil as it was because it was so widespread?

:20:18. > :20:24.don't accept that if the journalist on one of our papers, television

:20:24. > :20:30.channel or internet news operation feels they don't have to haul

:20:30. > :20:35.themselves to a higher standard, I think it is important we don't say,

:20:35. > :20:39.listen everybody was doing it and that is why people are doing this.

:20:39. > :20:44.At the end of the day we have to have a set of standards we believe

:20:44. > :20:48.in, titles and journalists who operate to the highest standard.

:20:48. > :20:53.And we have to make sure if they don't live up to that, they are

:20:53. > :21:03.held to account and that is the focus to us. Mr Rupert Murdoch,

:21:03. > :21:09.have you considered suing Harbottle & Lewis? Hughes said in your first

:21:09. > :21:13.answers is that you relied on the investigation by the police, the

:21:13. > :21:17.investigation by the PCC and the investigation undertaken by your

:21:17. > :21:23.solicitors, Harbottle & Lewis. Under whose care this enormous pile

:21:23. > :21:30.of documents was found. There is an old saying, if you want something

:21:30. > :21:35.doing, you should do it yourself. In this investigation you relied on

:21:35. > :21:41.three people whose actions were seriously lacking. Have you

:21:41. > :21:45.considered suing Harbottle & Lewis? Any action, is an action for the

:21:45. > :21:50.future. This today is about how we actually make sure these things

:21:50. > :21:56.don't happen again. So I won't comment or speculate on any future

:21:56. > :22:02.legal matters. The file of evidence, you were asked by my colleague if

:22:02. > :22:07.you have read it. You said no. Under the circumstances, you relied

:22:07. > :22:11.on other people and they let you down. Do you not think you should

:22:11. > :22:16.take the time and read through everything in that file your cells,

:22:16. > :22:22.personally? For clarity, I did say I did read some of the contents of

:22:22. > :22:28.that, they were shown to me. What I saw was sufficient to know that the

:22:28. > :22:33.right thing to do was to Handy's over to the authorities. You were

:22:33. > :22:37.shown a representative sample which can be tricky. But under the

:22:37. > :22:40.circumstances and reputation will damage has been done to News Corp,

:22:40. > :22:45.do-nothing a senior executives you should take the time to read

:22:45. > :22:51.through the entire file so you are not relying on anybody else? I am

:22:51. > :22:57.happy to do so. I have seen a bit of it. My last question is for Mr

:22:58. > :23:01.Rupert Murdoch. You said that your friend of 52 years I think, Les

:23:01. > :23:05.Hinton had stepped down and resigned because he was in charge

:23:05. > :23:10.of the company at the time. In other words he said he was the

:23:10. > :23:15.captain of the ship and he resigned. Is it not the case you are the

:23:15. > :23:20.captain of the ship? You are the chief executive officer of News

:23:20. > :23:26.Corp, the global corporation question marks that is a much

:23:26. > :23:30.bigger ship. If is a bigger ship, but you are in charge of it. He

:23:31. > :23:34.said yourself you're not a hands- off chief executive. You work 10 to

:23:34. > :23:41.12 hours a day, this happened on your watch, Mr Murdoch, have you

:23:41. > :23:47.considered resigning? No. Why not? Because I feel people I have

:23:47. > :23:54.trusted, I don't know who, or at what level, have let me down. They

:23:54. > :24:00.have behaved disgracefully, betrayed the company and more, me.

:24:00. > :24:04.It is for them to pay. I am the best person to clean this up.

:24:04. > :24:14.say, I appreciate your immense courage in having seen this session

:24:14. > :24:19.through despite the common assault that just happen to you. I will

:24:19. > :24:27.allow Mr Watson a very brief question.

:24:27. > :24:35.James, when you signed off the Gordon Taylor payment, did you see

:24:35. > :24:41.or were you made aware of the full transcript? I was not aware of the

:24:41. > :24:46.time. But you paid an astronomical sum of money and there was no

:24:46. > :24:54.reason to? There was every reason to settle the case, given the

:24:54. > :25:03.likelihood of losing a case and given the damages the council said

:25:03. > :25:07.would be levied. If Gordon Taylor and Max Clifford are prepared to

:25:07. > :25:10.release their confidentiality, we you release them from their

:25:10. > :25:20.confidentiality clause so we can get to the full facts of this

:25:20. > :25:25.matter? As to the Taylor matter, it is a confidential matter. The facts

:25:25. > :25:32.of this case might help us get to the truth. If he allows his papers

:25:32. > :25:34.to be released,... Is is a hypothetical scenario and I am

:25:34. > :25:44.happy to correspond with the chairman about what specifically

:25:44. > :25:45.

:25:45. > :25:50.more you would like to know. Can I carry on with a few more questions

:25:50. > :25:56.so I can get to the end of this? I think we have covered this at

:25:56. > :26:01.some considerable length. Actually Mr Chairman, we haven't.

:26:01. > :26:05.Your wife has a very good left hook Mr Murdoch.

:26:05. > :26:12.Mr Murdoch, I know you did ask if you could make a closing statement

:26:12. > :26:17.and we are entirely content for you to do so.

:26:17. > :26:21.Members of the committee, I would like to read a short statement. My

:26:21. > :26:25.son and I came here with great respect for all of you, for

:26:25. > :26:30.Parliament and the people of Britain for whom you represent.

:26:30. > :26:38.This is the most humble day of my career. And all that has happened,

:26:38. > :26:44.I know we needed to be here today. James and I would like to say how

:26:44. > :26:50.sorry we are for what has happened. Especially with regard to listening

:26:50. > :26:56.to the voicemail of victims of crime. My company has 52,000

:26:56. > :27:02.employees, I have led it for 57 years and I have made my share of

:27:02. > :27:09.mistakes. I have lived in many countries, employed thousands of

:27:09. > :27:12.honest and hard-working journalists. I have owned in nearly 200

:27:13. > :27:17.newspapers of various different sizes, and followed countless

:27:17. > :27:23.stories about people and families around the world. At no time do I

:27:23. > :27:29.remember feeling as seconds as to when I heard about what Milly

:27:29. > :27:33.Dowler's family had to endure. Nor do I recall being as angry as when

:27:33. > :27:41.I was told the News of the World could have compounded their

:27:41. > :27:44.distress. I want to thank the family for graciously giving me the

:27:45. > :27:49.opportunity the of -- the opportunity to apologise in person.

:27:49. > :27:55.I would like all the victims of phone hacking to know how

:27:55. > :28:00.completely deeply, sorry I am. Apologising cannot take back what

:28:00. > :28:07.has happened. I want them to know the depth of my regret for the

:28:07. > :28:13.horrible invasions into their lives. I fully understand their anger, and

:28:13. > :28:16.I intend to work tirelessly to merit their forgiveness. I

:28:16. > :28:23.understand our responsibility to co-operate with this session, as

:28:23. > :28:31.well as with future enquiries. We now know things went badly wrong at

:28:31. > :28:38.the News of the World. For a newspaper failed when it came to

:28:38. > :28:47.itself. The behaviour that occurred went against everything I stand for

:28:47. > :28:52.and for my son, too. It not only betrayed my readers and made, but

:28:52. > :28:56.the many thousands of magnificent professionals in other divisions

:28:56. > :29:03.around the world. So let me be clear in saying, invading people's

:29:03. > :29:08.privacy by listening to their voicemail is wrong. Paying police

:29:08. > :29:13.officers for information is wrong. They are inconsistent with our

:29:14. > :29:19.codes of conduct and doesn't have any place in any part of the

:29:19. > :29:26.company that I run. But saying sorry is not enough. Things must be

:29:26. > :29:32.put right. No excuses. This is why News International is co-operating

:29:32. > :29:38.with the police, whose job it is to see that justice is done. It is our

:29:38. > :29:43.duty not to prejudice the outcome of the legal process. I am sure the

:29:43. > :29:50.committee will understand this. I wish we had managed to see and

:29:50. > :29:55.solve these problems much earlier. When two men were sent to prison in

:29:55. > :29:58.2007, I thought this matter had been settled. The police and bend

:29:58. > :30:04.it the -- ended their investigations and I was told News

:30:04. > :30:08.International conducted an internal review. I am confident when James

:30:08. > :30:14.later rejoined News Corporation, he thought the case had closed, too.

:30:14. > :30:20.These are subjects you will no doubt wish to explore. And you have

:30:20. > :30:27.explored them today. This country has given me, our companies and

:30:27. > :30:31.employees are many opportunities. I'm grateful for them, I hope our

:30:31. > :30:35.contributions to Britain will one day also be recognised. A but all,

:30:35. > :30:41.I hope we will come to understand the wrongs of the past and prevent

:30:41. > :30:47.them from happening again and in the years ahead, restore the

:30:47. > :30:57.nation's trust in our company and in all British journalism. I am

:30:57. > :31:02.committed to doing everything in my Thank you for giving up your time

:31:02. > :31:05.for coming here and about to apologise for the Holy

:31:05. > :31:12.irresponsible treatment you receive from a member of the public. Thank

:31:12. > :31:18.you, all members. The committee will now have a break for 5 minutes

:31:18. > :31:24.before we move to the next part. STUDIO: And that brings to an end

:31:24. > :31:29.the testimony of Rupert and James Murdoch. It lasted for a little bit

:31:29. > :31:35.shy of two hours. Interrupted by this amazing event which could have

:31:35. > :31:40.been so dangerous but, in the end, seemed to be a prank when someone

:31:40. > :31:46.tried to smash a custard pie, shaving foam, in to Rupert

:31:46. > :31:51.Murdoch's face. The assailant was attacked by Wendy Murdoch, who was

:31:51. > :31:57.from China. She gave him quite a slap, giving a new meaning to the

:31:57. > :32:04.term a tiger mum up, and she will be regarded as the hero of the ire.

:32:04. > :32:11.-- our. Just shy of three hours, I should stay -- say. It's now just

:32:11. > :32:14.coming up to 5:30pm. If you're just joining us on BBC Two, you are

:32:14. > :32:19.watching a live and uninterrupted coverage of the testimony of the

:32:19. > :32:23.Rupert and James Murdoch to the Culture Select Committee on the

:32:23. > :32:27.hacking scandal. The committee, having had three hours, is taking a

:32:27. > :32:33.short five-minute break, and will be followed by the testimony of

:32:33. > :32:37.Rebekah Wade, now known as Rebekah Brooks. She was chief executive of

:32:37. > :32:40.News International at the weekend. She was the editor of the News of

:32:41. > :32:43.the World and the sun. The News Of the World at the centre of the

:32:43. > :32:47.hacking scandal for that we will bring you that coverage live when

:32:48. > :32:55.they reconvene and we will stick with it until 6pm put up then you

:32:56. > :33:01.can follow it on the BBC News Channel. We will go straight to

:33:01. > :33:05.Rebekah Brooks as soon as the committee reconvenes but let's just

:33:05. > :33:13.get an overall reaction from Alastair Campbell. I think Wendy

:33:13. > :33:17.will be, if Tom Watson can be moved to congratulate her on her left

:33:17. > :33:22.turn, she will be a big part of the coverage. American cable television,

:33:23. > :33:29.it's now going to be a big story. Who has got the pictures? Why don't

:33:29. > :33:39.we show it again. We know how to behave, like American cable TV.

:33:39. > :33:53.

:33:53. > :33:59.You can see a police man at running their two-try and intervene but not

:33:59. > :34:06.before Wendy Murdoch got in herself. We believe that was the sound of

:34:06. > :34:10.Mrs Murdoch attacking the assailant who tried to put this custard pie

:34:10. > :34:16.in to Mr Murdoch. We are not exactly sure who it is a but there

:34:16. > :34:20.are some reports that it was some body from UK and cut, but the

:34:20. > :34:24.person has been bundled off and no doubt will be charged, leaving

:34:24. > :34:28.serious questions because although it ended up just being shaving foam,

:34:28. > :34:35.a frightening thing, particularly if you are 80 years old, but it

:34:35. > :34:40.could have been much more than shaving foam. That will be asked

:34:40. > :34:45.about later. Where are we now? What do we know now that we didn't know

:34:45. > :34:50.three hours ago? We know for sure that News International paid some

:34:50. > :34:55.of the legal bills for Glenn Mulcaire, the private detective

:34:55. > :35:00.doing the hacking. I think people will be, even though we thought

:35:00. > :35:05.that, I think there was a sense of that being a new revelation. I

:35:05. > :35:08.think we know a lot about what they didn't know. And I think, with

:35:08. > :35:14.regard to Rupert Murdoch, there seems to be an understanding from

:35:14. > :35:19.the committee, this is a small part of his overall global enterprise,

:35:19. > :35:23.but I felt from James, in particular, there were things I

:35:23. > :35:29.thought he would have been able to explain more clearly than he did.

:35:29. > :35:33.And I think, actually, I suspect John Whittingdale will have a

:35:33. > :35:38.pretty long follow-up letter to write to James Murdoch about some

:35:38. > :35:42.of the areas we seemed to know some but not all the background. There

:35:42. > :35:48.may be speculation that they both came along, particularly James

:35:48. > :35:52.Murdoch, will fully, intentionally, under briefed. That was the point

:35:52. > :35:57.somebody made. It's nobody's defence to be wilfully blind. It's

:35:57. > :36:04.hard to know. Rupert Murdoch didn't know what was happening in his

:36:04. > :36:11.empire at all. That will be an issue for the shareholders. And, as

:36:11. > :36:16.you say, James rest of everything on the fact he arrived after the

:36:16. > :36:23.events happened. I have a slightly different impression of this. When

:36:23. > :36:26.one talks but the Murdoch empire, and it's a throwaway thing, one

:36:26. > :36:30.thing about emperors, they are quite personal. What you're

:36:31. > :36:35.beginning to get the image of is a series of interpersonal

:36:35. > :36:40.relationships which complicate the business of who would you trust,

:36:40. > :36:45.who you don't, who you follow upon, will you?. Who would defend and who

:36:45. > :36:50.don't. I have a growing suspicion that in this area, the

:36:50. > :36:55.interpersonal relationships, senior international news figures, who

:36:55. > :36:59.could have followed this up after 2007, may be part of the answer as

:36:59. > :37:03.to how this happened. impression Rupert Murdoch gave,

:37:03. > :37:05.that he was under hands on any more as far as the News of the World was

:37:05. > :37:12.concerned, which is a huge difference from the 1980s when he

:37:12. > :37:15.was certainly calling the News of the World usually on a Thursday

:37:15. > :37:21.night to get a taste of what was being prepared and then on Saturday

:37:21. > :37:26.to find out what the front page was. Now seemingly, he has stepped back

:37:26. > :37:30.but only three years ago, to the Lords committee on media matters,

:37:30. > :37:35.he testified, as far as the tabloids were concerned, not the

:37:35. > :37:41.Times and the Sun, he was in effective editorial control. That

:37:41. > :37:45.was 2008. I heard your spluttering when he was talking about that

:37:45. > :37:55.because you, being one of his editors, you know how hands-on he

:37:55. > :37:57.

:37:57. > :38:02.The point is, this is the second generation of the dynasty. The

:38:02. > :38:07.first generation was created by the boss. The second generation, was

:38:07. > :38:13.very different. They may not tell him anything uncomfortable. That

:38:13. > :38:17.question, who, within the culture, people only told you what you

:38:17. > :38:21.wanted to hear, he sort of went along with that a bit. I wonder if

:38:21. > :38:29.that wasn't getting a little bit to the heart of the matter. And how

:38:29. > :38:34.would he know, actually? How would you mark the card of the committee?

:38:34. > :38:41.I thought they were pretty good, actually. A lot of good questions.

:38:41. > :38:46.Remarkably little grandstanding. Tom Watson's questioning, other

:38:46. > :38:51.people will call it cruelty, will remain in my mind for a long time.

:38:51. > :38:55.James Murdoch saying, I can answer your questions and Tom Watson

:38:55. > :39:00.saying, I am going to go for Rupert Murdoch. It brought home to be just

:39:00. > :39:04.what situation this man is in. That's unusual. You don't usually

:39:04. > :39:07.determine who answers the question. You're there to gather information,

:39:07. > :39:11.whoever volunteers of up not to declare some of the innocent and

:39:11. > :39:15.guilty. I was quite surprised that John Whittingdale didn't allow them

:39:15. > :39:21.to do the opening statement because what Rupert Murdoch was reading at

:39:21. > :39:25.the end of the opening statement. He was editing it as he went along.

:39:25. > :39:30.Normally that is prefixed. surprised it was not sorted out

:39:31. > :39:35.beforehand. His people should have talked to their people. It happens

:39:35. > :39:40.and nearly all of these committees. I thought the select committee was

:39:40. > :39:46.pretty good. The substance of what was going on, paying sums of money

:39:46. > :39:51.to Glenn Mulcaire and Mr Goodman long after the trial itself, and

:39:51. > :39:56.then Mr Taylor adding large sums of money and Max Clifford, all that

:39:56. > :40:03.will play in the subsequent inquiries into the fit and proper

:40:03. > :40:07.issues. It will also play in to cover up. If you cover up

:40:08. > :40:13.wrongdoing by definition, you're not fit and proper. I thought Tom

:40:13. > :40:18.Watson was getting somewhere at the end in relation to... James didn't

:40:18. > :40:24.like being asked about whether he would waive the confidentiality if

:40:24. > :40:28.Taylor-Wood. He's not a politician so he doesn't know what to say. He

:40:28. > :40:32.didn't understand what the guy meant by were to withdraw the

:40:32. > :40:36.letter? I think that's an area where, I'm not criticising them,

:40:36. > :40:44.but I don't think they got to the bottom of the tailor cover

:40:44. > :40:50.settlement. If you look the Times both the Murdochs let down by the

:40:50. > :40:53.News of the World newsroom, let down by the private detective, and

:40:54. > :40:58.then let down by the lawyers, let down by Les Hinton, who didn't seem

:40:58. > :41:02.to know what's going on, in his own company, let down by subsequent

:41:02. > :41:06.inquiries, too, let down by the Taylor deal, in the end, would do

:41:06. > :41:11.not had just said, I had bad a day control of theirs and read all of

:41:11. > :41:15.this myself. Exactly for the put least for the inquiry. Let alone

:41:15. > :41:21.before for that I was surprised by that. When he said I saw some of

:41:21. > :41:25.the file. Wouldn't you want to read all of it? Even for curiosity? As a

:41:25. > :41:30.journalist, we are paid to be curious. What we know about the

:41:30. > :41:36.story, since it broke break, News International have been behind it,

:41:36. > :41:44.at every stage, trying to catch up with it, working out where it was

:41:44. > :41:49.failing to grasp it, not realising it was going to be so big. And I

:41:49. > :41:56.think the pattern is absolutely clear. You insulate James Murdoch

:41:56. > :42:02.from the Prix 2007 decisions. He said they didn't know until 2010. I

:42:02. > :42:05.think he actually has a pretty decent answer on the question of

:42:05. > :42:10.the payments for instance to the PFA. But the question is, whether

:42:10. > :42:15.or not they would waive the confidentiality agreements. My own

:42:15. > :42:21.suspicion, and it's worth very little, there isn't much there.

:42:21. > :42:26.Where does this leave David Cameron, now flying back from Africa as we

:42:26. > :42:30.speak? Being fully briefed in what is being said, he appears before a

:42:30. > :42:37.Commons tomorrow to make a statement. I'm told it is 11:30am,

:42:37. > :42:41.and we will possibly be live with another Daily Politics special.

:42:41. > :42:44.don't think a changes things fundamentally because it didn't get

:42:44. > :42:47.into the Cameron relationship. Rupert Murdoch was fairly clear.

:42:47. > :42:57.Let me interrupt you and that's go straight back now to the Commons

:42:57. > :43:08.

:43:08. > :43:14.Select Committee. Rebekah Brooks I would like to thank you for your

:43:14. > :43:17.willingness to come forward. We are very much aware there's an ongoing

:43:17. > :43:20.police investigation which could lead to criminal proceedings. We

:43:21. > :43:25.will bear that in mind but he also appreciate your statement when he

:43:25. > :43:33.resigned from the company that you want to be as helpful as possible

:43:33. > :43:37.to various inquiries under way. Can I just start, News International

:43:38. > :43:42.issued a statement when you're chief executive in July 2009 saying

:43:42. > :43:46.there never has been evidence to support allegations that News of

:43:46. > :43:51.the World journalist have access the boy spells of any individual,

:43:51. > :43:55.instructed private investigators or third parties to do it, all that

:43:55. > :44:01.there was systemic corporate illegality by News International.

:44:01. > :44:08.Would you accept now that that is not correct? Thank you, Mr Chairman.

:44:08. > :44:12.Firstly, just before I answer that question, I would like to add my

:44:12. > :44:18.own personal apologies to the apologies James and Rupert Murdoch

:44:18. > :44:24.made today. Clearly, what happened at the News of the World and

:44:24. > :44:27.certainly when the allegations of voice interception was limited to

:44:27. > :44:32.victims of crime, it was pretty abhorrent, so I just want to

:44:32. > :44:38.reiterate that. I also was very keen to come here and answer

:44:38. > :44:43.questions today. As you know, I was arrested and interviewed by the

:44:44. > :44:49.police a couple of days ago. So, I have legal representation here just

:44:49. > :44:54.so I don't impede those criminal proceedings, which you would expect,

:44:54. > :44:59.but I intend to answer everything as openly as I can and do not use

:44:59. > :45:06.that if at all possible. I know you add a brief thing around the same

:45:06. > :45:11.thing. We are grateful for that. Perhaps I can invite you to comment

:45:11. > :45:17.on whether or not you now accept that the statement issued a saying

:45:17. > :45:27.that news there will journalist had access to voice mails work

:45:27. > :45:27.

:45:27. > :45:34.instructing investigators to do so As you have heard in the last few

:45:34. > :45:42.hours, the fact is that since since the Sienna Miller civil documents

:45:42. > :45:45.came into our possession at the end of December 2010, that was the

:45:45. > :45:52.first time we, the senior management of the company at the

:45:52. > :45:58.time had actually seen some documentary evidence actually

:45:58. > :46:03.relating to a current employee. I think we acted quickly and

:46:03. > :46:09.decisively then, when we had that information. As you know it was our

:46:09. > :46:14.evidence that it opened up the police inquiry in 20th January 11.

:46:14. > :46:19.And since then we have admitted liability on the civil cases,

:46:19. > :46:23.endeavour to settle as many as possible. We have appointed Sir

:46:23. > :46:28.Charles Gray, so victims of phone hacking, if they feel they want to

:46:29. > :46:33.come directly to us and not incur expensive legal costs, they can

:46:33. > :46:39.come and be dealt with very swiftly. The court process is taking its

:46:39. > :46:43.time and those cases won't be heard until I think 20th January 12, so

:46:43. > :46:48.the compensation scheme is there in order for people to come forward.

:46:48. > :46:53.Of course there were estates made in the past, but I think and I hope

:46:53. > :46:57.you will agree, since we saw the evidence at the end of December we

:46:57. > :47:01.have acted properly and quickly. until you saw the evidence which

:47:01. > :47:04.was produced in the Sienna Miller case, you continue to believe the

:47:05. > :47:12.only person at the News of the World who had been implicated in

:47:12. > :47:19.phone hacking was Clive Goodman? Just the sequence of events, in

:47:19. > :47:24.2009, I think was the first time that all of us, and I know some

:47:24. > :47:28.members of the committee have spent a long time on the story and

:47:28. > :47:34.looking at the whole sequence of events, so I know you know it's

:47:34. > :47:39.pretty well. But just to reiterate, in 2009 when we heard about the

:47:39. > :47:48.Gaydon -- Gordon Taylor story appeared in the Guardian, I think

:47:48. > :47:51.that is when information unravelled. But the very, very slowly. We had

:47:51. > :47:56.conducted many internal investigations. I know you spends a

:47:56. > :48:01.lot of time talking to James and Rupert Murdoch about them. But, we

:48:01. > :48:07.had been told by people at the News of the World at the time, they

:48:07. > :48:13.consistently denied any of these allegations in various internal

:48:13. > :48:19.investigations. It was only when we saw the Sienna Miller documentation

:48:19. > :48:26.we Europe -- realised the severity of the situation. Just to point out

:48:26. > :48:33.one of the problems in this case is our lack of visibility and what we

:48:33. > :48:37.have seemed in Glenn Mulcaire's home. We have had zero visibility

:48:37. > :48:46.and we can only see it during the Civil Procedure and then we act on

:48:46. > :48:50.it accordingly. It is now your view, based on that evidence, you were

:48:50. > :48:57.lied to by senior employees? Because of the Criminal Procedure,

:48:57. > :49:02.am not sure it is possible for me to infer guilt until those criminal

:49:02. > :49:06.proceedings have taken place. understand. Tom Watson.

:49:06. > :49:11.There are many questions I would like to ask, but I won't be able to

:49:11. > :49:16.do it today because you are facing criminal proceedings. So I will be

:49:16. > :49:21.narrow in my questioning. Why did you sack Tom crone? We did not sack

:49:21. > :49:27.him. What happened was, when we made the very regrettable decision

:49:27. > :49:36.to close the News of the World at the 168 years, Tom crone has

:49:36. > :49:41.predominantly been the News of the World lawyer. His status as legal

:49:41. > :49:46.manager was spent most of the time, 99% of his time was spent on the

:49:46. > :49:51.News of the World. The rest of the company and rest of the titles, we

:49:51. > :49:58.have appointed new lawyers. There wasn't a job for him once we close

:49:58. > :50:03.the News of the World and he left. Someone is still dealing with the

:50:03. > :50:12.News of the World legal cases presumably? The civil cases are

:50:12. > :50:17.being dealt with, the standards and management committee we have set up.

:50:17. > :50:23.You have seen the announcements on that it recently and I won't go

:50:23. > :50:27.over it. But also Farrer and Co, have sunk test cases are coming up

:50:27. > :50:32.before the judge in January and there are people dealing with it.

:50:32. > :50:38.But Tom's role was as a hands-on legal manager of the News of the

:50:38. > :50:42.World. And when we close the paper there wasn't a job. I must have

:50:42. > :50:50.misunderstood what James Murdoch said. He implied you had sacked him.

:50:50. > :50:54.It has been a busy day, but as an editor and journalist in the News

:50:54. > :51:00.of the World and the Sun newspaper, how extensively did you work with

:51:00. > :51:05.private detectives? On the Sun newspaper, not at all. When I was

:51:05. > :51:13.editor of News of the World, as you know I'd be came editor of the Sun

:51:13. > :51:17.newspaper and came and spoke at the committee. I think back then, we

:51:17. > :51:23.answered extensively, questions about the use of private detectives

:51:23. > :51:27.across Fleet Street. He chart was published of which, I cannot

:51:27. > :51:33.remember whether News of the World was on it, I think it was four. I

:51:33. > :51:38.think the Sun newspaper, on the table was below take a break

:51:38. > :51:48.magazine. The top five or was the Observer, the Guardian, the News of

:51:48. > :51:56.the World... Can I declare, I worked for the Observer, but left

:51:56. > :52:01.in 2001. It is not in the top four. The top-six event. If to was on the

:52:01. > :52:08.table. You extensively work with private investigators, is that if

:52:08. > :52:18.your answer? No, the use of private detectives in the later 1990s and

:52:18. > :52:22.2000, was a Phoebe Street practice. -- Fleet Street. In the main, the

:52:22. > :52:28.use of private detectives was stopped. It was all about the Data

:52:28. > :52:35.Protection Act and changes to VAT, which were made. That is why we had

:52:35. > :52:40.the committee in 2003. Just for the third time, how extensively did you

:52:40. > :52:45.work with private detectives? News of the World employed private

:52:45. > :52:51.detectives like most newspapers in Fleet Street. So you were aware of

:52:51. > :52:55.and approve payments to private detectives? I was aware of the use

:52:55. > :53:01.of private detectives. He would have approved payments to them?

:53:01. > :53:05.That is not how it works, but I was aware we use them. He would have

:53:05. > :53:11.approved payments? The payments system in a newspaper, which has

:53:11. > :53:16.been discussed, the editor's job is to acquire the over all budgets

:53:16. > :53:19.from the senior management for the paper. It is then given to the

:53:19. > :53:25.managing editor to allocate to different departments. Each person

:53:25. > :53:28.in that department has a different level of authorisation. But the

:53:28. > :53:36.final payments are authorised by the managing editor, unless there

:53:36. > :53:40.is a particularly big item, a set of photographs or something that

:53:40. > :53:44.needs to be discussed on a wider level and the editor will be

:53:44. > :53:49.brought in. So Stuart Cook will have discussed...

:53:49. > :53:53.We have been on air since 2pm, with this Daily Politics special,

:53:53. > :53:58.bringing you live coverage of the culture committee hearings. First

:53:58. > :54:04.of Rupert and James Murdoch, now of Rebekah Wade, now known as Rebekah

:54:04. > :54:08.Brooks. It is a session now that the public is not allowed in

:54:08. > :54:13.because of that attack on Rupert Murdoch. Fortunately nobody was

:54:13. > :54:17.harmed. If you want to continue to see her testimony you can do so on

:54:17. > :54:21.the BBC News Channel. Let's have some final thoughts from my guests

:54:21. > :54:28.who have been with me all day on this marathon. Alastair Campbell,

:54:28. > :54:32.where do we go from here? I said before these hearings I think the

:54:32. > :54:35.inquiry led by a judge will be important and of long-term

:54:36. > :54:39.significance. There was a bit of theatre there today, there were

:54:39. > :54:43.some things we learnt. The committee acquitted themselves

:54:43. > :54:47.perfectly well. People will be shocked to the extent Rupert

:54:47. > :54:51.Murdoch appeared to be very divorced from it all. And people

:54:51. > :54:58.will be surprised that James Murdoch appeared not to be on top

:54:58. > :55:03.of the detail. As it but tomorrow with David Cameron, I don't think

:55:03. > :55:07.it is taking any closer to him but the question in his judgments

:55:07. > :55:14.relating to Andy Coulson are still there. I suspect that will be

:55:14. > :55:20.centre stage in the Commons tomorrow. Given we suspect James

:55:20. > :55:26.and Rupert Murdoch will appear before the judicial inquiry, with

:55:26. > :55:30.firms saying I don't know, I didn't bother to find out for stumpy

:55:30. > :55:33.cannot get away with that? I think that will take place after the

:55:34. > :55:40.court cases and we will have a couple of years of prosecutions in

:55:40. > :55:44.front of us. When full disclosure? Everybody will know precisely what

:55:44. > :55:50.the score is. I think this is a four year soap opera we are looking

:55:50. > :55:55.at. It is sad we have List -- missed the last part, because I

:55:55. > :56:01.suspect something will come out with Rebekah Brooks. Where does

:56:01. > :56:06.this leave News International? People would look at James

:56:06. > :56:11.Murdoch's performance. I have never met either of them. I was struck, I

:56:11. > :56:15.think James Murdoch is a very impressive character. He had a

:56:15. > :56:20.narrative to give and he gave that narrative. And all of their body

:56:20. > :56:24.language, they got all of it right. Whether people looking at that, and

:56:24. > :56:30.investors look at Rupert and say, maybe it is time for somebody else,

:56:30. > :56:35.is a big and open. After the early part of that performance. Later on

:56:35. > :56:41.he got it together but early on it was striking. Where do you think it

:56:41. > :56:45.leaves News International? Is still has a 40% share in BSkyB and three

:56:45. > :56:49.national newspapers? They are fundamentally damaged. I am not

:56:49. > :56:53.convinced what they did today repairs the damage. People still

:56:53. > :56:57.feel shocked and angry about what went on. I am not saying James

:56:57. > :57:01.Murdoch did not perform perfectly well, but there were some questions

:57:01. > :57:08.that were so obvious that would be asked, and I was surprised he did

:57:08. > :57:11.not have the answers. I think his house -- case held together, but

:57:11. > :57:16.with weak edges. I would be surprised in five years' time it

:57:16. > :57:21.the papers at least are still in their control. Is that the feeling,

:57:21. > :57:25.David? I certainly hope that is not the case because the they are very

:57:25. > :57:29.good owners of the Times and very good runners of journalism and

:57:29. > :57:34.organisations like the Times. IC other potential owners and to be

:57:34. > :57:39.honest, I don't prefer any of them. It is not an improvement, I don't

:57:39. > :57:45.fancy the idea of a Russian oligarch owning the Times. We are

:57:45. > :57:49.going to have to leave that there. I can reveal this is the story that

:57:50. > :57:54.keeps on giving. Laura Kuenssberg from the BBC reporting Neil Wallis,

:57:54. > :57:58.the executive editor just arrested recently and also had been

:57:58. > :58:04.appointed to Scotland Yard to advise them on PR had been advising

:58:04. > :58:09.Andy Coulson while Andy Coulson was working as David Cameron's chief

:58:09. > :58:14.spin-doctor. We don't know any more of that, it was in the run-up to

:58:14. > :58:19.the election, but it is another twist and turn which will cause

:58:19. > :58:24.David Cameron some problems when he appears before the Commons tomorrow.

:58:24. > :58:28.We will be back. We are meant to be on our summer holidays, but we are

:58:28. > :58:35.so hard working, we will be back with another Daily Politics special

:58:35. > :58:38.tomorrow. We will start on BBC Two at 11:00am. We will have the lead-

:58:38. > :58:42.up to the statement by the Prime Minister in the Commons. We suspect