26/04/2012 Newsnight


26/04/2012

Rupert Murdoch at the Leverson Inquiry. Paul Mason on state capitalism in America. And we go to the Chinese city where Neil Haywood died. With Kirsty Wark.


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There was a cover up - but not by me, or my son. Rupert Murdoch gives

:00:10.:00:18.

his account of hacking at the News of the World. Someone took charge

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of cover-up. Which we were victim to and I regret.

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Now he's been accused of telling a "shameful lie" to Leveson by the

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man he has put in the frame. To discuss contrition and finger

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pointing, Anne Diamond, a victim of phone hacking, the MP who has

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dogged the Murdochs and the writer who thinks Rupert's a visionary.

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And in the land of the free the rise of crony capitalism. How the

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USA embraced a Soviet style rescue. On the worse day for the American

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economy since 1929 the recovery began of its most iconic industry.

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How that happened, tells us a lot about the way America will recover.

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And how the rest of the world might too. Did that We visit Chongqing in

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China, and the scene of the strange death of Neil Haywood. Actually

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happen. How did a communist party official

:01:07.:01:17.
:01:17.:01:20.

turn an entire city into his own Good evening. Rupert Murdoch

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wreaked havoc at the Leveson Inquiry today, affectively accusing

:01:24.:01:27.

senior figures of a cover-up over phone hacking and hiding the truth

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from himself and his son. But, even as he was giving the thumbs up as

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he left the inquiry, one of those he apparently put in the frame hit

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back. Accusing Mr Murdoch of a shameful lie. So, how credible is

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Mr Murdoch's account that he and his son were innocents in the

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affair? For the flesh and blood Keith

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Rupert Murdoch, just for the film creation the basic question is the

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same. Is that really your idea how to run a newspaper. I don't know

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how to run a newspaper, I just try everything I can think of. Will

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Murdoch knows how to run newspapers, he owns 150 of them. But he made

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too little attention to the biggest - the News of the World. It was too

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late when he realised there was hacking going on, and then a cover-

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up. But by who? There were strong characters there. The person I'm

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thinking of is the friend of the journalist, drinking pal, and, is a

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clever lawyer, and forebade them to see their evidence, I mean

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statements reporter, that, this person forebade people to go and

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report to Mrs Brooks or James. Mrs Brooks is Rebecca, his protege

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and James is his son, the ousted heir apparent. The man who

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allegedly ran the cover-up is Tom Crone, the News of the World

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world's lawyer for years. Tonight, Mr Crone described the allegation

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as "a shameful lie", saying "it was perhaps no coin coincidence, Mr

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Murdoch had singleed him out alongside mile mile mile" the

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former editor. The same two people who point out his son's tofdz the

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Parliamentary Select Committee last year was inaccurate. Rupert Murdoch

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was asked whether he in fact wanted the truth buried. Some might say

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all this picture is consistent, with one of a desire to cover-up,

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:03:44.:03:47.

rather than a desire to expose. sorry, I take that back. Excuse me.

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I'm very thick-skinned Mr Murdoch. Do not worry one moment. Leveson

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leaf wanted to know why Mr Murdoch hadn't asked the right questions.

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You would really want to know, what the hell was going on as you put it.

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Because the news media was your printing, was running there through

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your vains, somebody said about you? I have to admit that some

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newspapers are closer to my heart than others, but, I also have to

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say, that I failed. This was the moment last summer, when Rupert

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Murdoch gave his public display of confidence in the beleaguered

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Rebekah Brooks. Struggling to make their way across the street, the

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press mogul had become prey. What did he think now? Part of a game.

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What's the game? Harass people. You know, when I was harassed, I was

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trying to walk, all of ten yards across the street. I had another 20

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or so outside my apartment this morning. But part of the game, is

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harassment, intrusion, these are recurring themes in the behaviour

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of the press for decades. Would you not accept that? Yes. It can take

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many forms, but yes. And then there was the mos mos mos case, where a

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News of the World reporter threatened to publish pictures of

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two women, unless they co-operateed with the newspaper. Mr Leveson

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described that as "disturbing". He quoted the judge who awarded

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damages. I don't think Mr Justice, uses too strong a word as he

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describes it as a form of "blackmail". Apologise, I didn't

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read and I may agree with every word if I read it. But, it's a

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common thing in life, way beyond journalism, to, for people to say

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I'll scratch your back if you scratch my back. So it was a common

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thing in life, you scratch my back if I scratch your back. That's true,

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but it is interesting if you say that's no part of the implied deal

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in your relations with politicians over 30 years, Mr Murdoch, is that

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right? Yes, I don't ask any politician to scratch my back.

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That's a nice twist, but no, I'm nol falling for it.

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He's good reason to be guarded it is just revealed Ofcom is stepping

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up its investigation, into whether BSkyB is a fit and proper company

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to hold a broadcast license. It asked newsgroup to send more

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documents relating to phone hacking. It is the clearest sign yet, that

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misdeeds in the Murdoch press could jeopardise his entire empire Back

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at Leveson a lawyer foor the National Union of journalists said

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some Murdoch employees, too fearful to speech publicly had told of

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bullying. A journalist with six years of experience, "During my

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time at News of the World I experienced constant bullying, my

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editor two find fault" and so on. Clear evidence of clear culture of

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bullying. Why didn't she resign? The problem with that might be she

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needs a job. And that's actually been some of the evidence I

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received. Mr Murdoch said he'd thought the

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News of the World staff had been a happy crew. But then in his 40

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years of ownership, he neglect today keep in touch. In his words

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"are blocked forever on his reputation ygsygs. With me is Anne

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Diamond, a victim of phone hacking by the News of the World, Labour MP,

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Tom Watson, a member of the culture select committee and author, Tom

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Bower, whose recent automatic biography was serialiseed in the

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Sun. Nobody from News International was available.

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Tom Watson, the attack, on the News of the World lawyer, and editor.

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Obvious motivation, they want to deflect. Is there anything more

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going on? They're fighting like rats in a sack. Now the Leveson is

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casting a spotlight on what went on at News International, they're all

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claiming it was somebody else's fault. Murdoch himself is very

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undignified. How credible, when you look at the massive payout, paid to

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Damilola Taylor, what do you think they were paying him for? For his

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silence, in my view. Looking, they deny that of course, about you Tom

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Bower, when you look at Murdoch today, and that attack, he made,

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and it then has been called a shameful lie, do you think it was a

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smart move on his behalf? No I don't, my feeling about him is he

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revolutionised the media here and invented Sky and all terpive, which

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the natives, the local newspaper barons, failed to do. He's gone

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wrong. Things have gone wrong, today was not a great day for him

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or the day for the press. But to just finger him as the guilty man,

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is wrong. There was a wrong, the whole culture was wrong. Just

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because the whole culture was wrong, doesn't mean he who sat at the head

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and set the tone for the organisation, that is who was

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actually in front of Leveson today. I wonder, Anne, how you looked at

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that. Because, at Leveson today, Rupert Murdoch said he had no re-

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election of who you were. You should remind the viewers why he

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should know who you are? It was dismissive, he can't quite remember

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and it really wasn't that important and he's somewhere better than he

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ought to be. That was the whole demeanour at Leveson of Murdoch.

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During the '8 0s, and '90s, I was fodder for the Sun newspaper and

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Today newspaper, two of his titles, and he may not know who I was, but

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I was on his front pages in the worst form, throughout those two

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decades. As one front page we can see now, the Sun front page, the

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sad day of your son's funeral? was a front page I took to Leveson,

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because this was to me, a brutal invasion of privacy, no matter what

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you think of the public's right to know, and right to privacy begins

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and the rest of T no matter what you think of celebrity culture,

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that was a brutal invasion of privacy. I would loved to have him,

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and Robert Jay say how do you justify that? Did you say his

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apology one of sincereity? Good Lord no. I can look at him and

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think he would say those things wouldn't he. He was well rehearseed,

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told to be humble occasionally. He nearly lost his rag. I thought he

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might get questioning where it could show his personality. Do you

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think there should have been some actual contrition of the stories

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like Anne Diamond's for example, there was no display of the

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tkpwraef he caused people, any contrition for that? From, Murdoch,

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I think he showed some contrition, but if Robert Jay actually

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presented that page, that front page to Murdoch, before the hearing,

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he could then have asked him for his reaction. But my feeling is the

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hearing isn't well organised. therefore, when the whole question,

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to go back to the whole question of coverups, do you think it's got

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lost? Or by elevateing it to say, these two men are guilty and then

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respond it is a shameful lie do. You think the focus is back on

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Murdoch or away now? It is a mess, because I don't think you can ask

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for a cover-up, unless you present the evidence. So he is fishing,

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rather than actually, forensically going through, what is effectively

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the allegation of a crime. So that extent it is unsatisfactory. From

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the point of the view of the politicians though, a playing on

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all their houses is what he seems to be saying? What he is saying is

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this, when Murdoch came to London in the '60s, he was fighting to get

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News of the World. Robert Max well was the crook, the Labour man, who

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the Labour Party supported. The Labour Party allowed, the Labour

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Government allowed Richard Desmond to buy the exPress, a man of

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notoriety. So, what Murdoch is now saying, is, why should I be the

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only one, put up, when the Labour Government, successfully, have

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supported these rogues. It is true, you can't call yourself saints, you

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are an ally of Gordon Brown, and no-one more wanted the ifrplmentier

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than Rupert Murdoch. All this stuff was going on when the Government

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was in Through John Major, Tony Blair, Gordon Brown, and David

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Cameron have to take responsibility for this. But the key thing missing

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today, they mention the Burton Copeland report, Murdoch attacked

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them. Let's stick with the politics. We have a situation, where at

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Chequers, there is a sleepover for Elizabeth Murdoch, Sarah Brown,

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should the relationship seen to be toxyilic? Every Prime Minister,

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must shoulder responsibility for making Rupert Murdoch what he is

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today. He got too powerful and the lessons of the scandal should be

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the current Prime Minister and the other party leaders must never let

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it happen again. It looks interesting, you know, you accept

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the idea that Rupert Murdoch is this incredible mogul, he controls

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everything, his finger's on the pulse, so forth. And yet he seems

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to be presiding on argues that was out of control. There was

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criminality and all sorts of money swilling out in bribes, allegations

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of bribery, and he didn't seem to know anything about it?

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newspaper in Britain is a fraction of the empire, the real thing is

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Fox and Universal Films. He loved it, so he can't say he was distant?

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You're right he can't. And he is accepting responsibility, all the

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time. The point is you don't believe his acceptance of

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responsibility. I don't believe t he feigned no knowledge of the

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blackmail allegation today. The judge accused wufpb the reporters

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of blackmail. He was asked at the inquiry in Parliament about this

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last July and asked where the staff didn't bring did to his attention,

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he should have done his homework. He accepted the culture as well.

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You never imagineed, even five years ago that would be the outcome.

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How do you think Rupert Murdoch will be remembered? My newsagent,

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when I was popping on my way here, said, why have they let him get

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away with such an easy ride? They've given him an easy ride,

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that's not the first time I heard that. The public perception is he

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is a ver bad man, responsible for deed tkpwregaigs of our press and

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not been made, no, mam humbled enough, frankly. What do you think

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his legacy will be? He is the man who saved the press. You can say he

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hasn't been humbled, the people who own the rest of the press, Desmond,

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Bailey, deficit of the Guardian, none of the people are really

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giants in the press, our press once Murdoch is forced out, will not be

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a healthier place, but a poorer place. He should have been better

:16:15.:16:20.

regulated perhaps. If he done the job better, it would be a better

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situation generally. He saved a lot of titles and whole press by

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forcing the unions out. At the cost of a lot of people's happyness?

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They're all responsible for that. Richard Des manned and Mandy in can,

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are all there to cause misery. with us, we want to discuss

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something further, because the pressure on the Culture Secretary,

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Jeremy Hunt intense fiedtoday when the permanent secretary refused to

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confirm his version of events. Hunt's assertion the top civil

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servant authorised the liaise. I just repeat what I said before,

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it was a clear statement from the special advisory concern. We're

:17:09.:17:16.

asking about your role, not the Secretary of State's role. If I may,

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I'm just going to explain the nature of the statement yesterday.

:17:21.:17:26.

Now, our political editor, Allegra Stratton is here. What is going on

:17:26.:17:29.

with this? Well, previous guests were talking about how the Leveson

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Inquiry is not organised but it seems to me the Leveson is

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organising the Government. It is slightly there, you had the three

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civil servants, nothing much happened other than the Mandarins

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have been dragged into the story. First of all, this poor chap, who,

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I think it is probably fair to say, he should have been briefed you

:17:49.:17:54.

will be asked about this, and you better have an answer. The same

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line Jeremy Hunt used the day before, instead of the tep

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questions, especially Miss Hostage. He should have been more prepared,

:18:04.:18:08.

but equally, it is now subject to legal process, so that was

:18:08.:18:13.

embarrassing and clearly his master's voice is Leveson. Then

:18:13.:18:19.

Neil Heywood, spoke to Leveson, to establish what could he inquiry

:18:19.:18:23.

into, given Leveson was inquiring into so much. The other Mandarin,

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is the Prime Minister's adviser on the Ministerial Code of conduct.

:18:27.:18:31.

The idea the special adviser, was appropriate, for him to G and

:18:31.:18:35.

Jeremy Hunt to have no oversight or sense what he was doing on his

:18:36.:18:41.

behalf. It is not going to get worse, or is it getting worse?

:18:41.:18:45.

is frozen. Today we had the sense of activity, but, actually, this is

:18:45.:18:52.

all going to be about, a mauling, in front of Leveson, and Robert Jay

:18:52.:18:55.

for the Culture Secretary, one would expect text messages and e-

:18:55.:18:59.

mails to be brought up in front of them. I'm not saying he won't

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survive that, but you can see sometimes, when Robert Jay gets

:19:03.:19:07.

something between his teeth he goes for it. Does it matter? Well, there

:19:07.:19:11.

are some people who are saying on the doorsteps, there's a local

:19:11.:19:14.

election, being fought, and some are saying, this isn't coming up.

:19:14.:19:19.

Remember the test for some of these scandals is it actually

:19:19.:19:22.

particularly clear for people to understand. Some say, this isn't in

:19:22.:19:27.

that order. And some people said today, the posh boys quote about

:19:27.:19:31.

Cameron and Osbourne, is the thing that rolls, than the Leveson

:19:31.:19:37.

Inquiry at the moment. Tom Watson, you are looking for an inquiry,

:19:37.:19:41.

into Ministerial Code of conduct. You haven't got that. Now you're

:19:41.:19:45.

skrieping about, saying we must have the text messages, between

:19:45.:19:49.

Jeremy Hunt and former adviser, Adam Smith. It is getting desperate

:19:50.:19:54.

isn't it? I think Jeremy Hunt will go eventually. And if David Cameron

:19:54.:19:59.

wants to hold out and not have an investigation, he is the one that

:19:59.:20:04.

raised the bar on standards, and code, he made ministers responsible

:20:04.:20:08.

for the conduct of their special advisers, and now he is not let in

:20:08.:20:14.

for the adviser to do his job. They can stagger up to polling day, next

:20:14.:20:18.

Thursday, but it is not going to go away, until he does something.

:20:18.:20:23.

the troubles of the Government's own makeing Yes I do, it is tragedy

:20:23.:20:30.

for the Tories. I think, that David Cameron, a man of integrity but the

:20:30.:20:37.

question is his judgment. Which I think is poor. We had Peter with

:20:37.:20:41.

one catastrophe after another, he is not a man in control. But the

:20:41.:20:46.

trouble really is, if I don't mind you saying, with the Hunt saga, it

:20:46.:20:51.

is not Murdoch's fault, that he wanted to lobby, to get a perfectly

:20:51.:20:57.

legitimate deal through n Labour's time, John Brown was in Number Ten,

:20:57.:21:02.

it was calling Blair patrol. It is Hunt and he should have been in

:21:02.:21:07.

control of his apartment, he should never have allowed Smith to talk to

:21:07.:21:11.

him the way he did. That's why Hunt will probably go, because in the

:21:11.:21:16.

end, Hunt like Cameron was not in charge of the detail. Thank you all

:21:16.:21:19.

very much. The American Vice-President, Joe

:21:19.:21:25.

Biden had a favourite phrase to sum of Barack Obama's presidency, Osama

:21:25.:21:29.

Bin Laden is daet and general motor is alive. The former is lauded the

:21:29.:21:32.

General Motors is another matter because many Republicans the

:21:32.:21:36.

billions of dollars of taxpayers' money pumped noolt car industry to

:21:36.:21:41.

resuscitate it, was good money, thrown after bad. Our economics

:21:41.:21:51.
:21:51.:22:01.

editor has been to the place they Detroit. Michigan. The American

:22:02.:22:06.

auto industry was born here and when the financial crisis hit, it

:22:06.:22:11.

nearly died here. But general motor, and Chrysler, got a Government bail

:22:11.:22:20.

out of $85 billion. And it worked The industry, is back. On the worst

:22:20.:22:25.

day for the American economy, since 1929 the recovery began of hits

:22:25.:22:28.

most iconic industry. How that happened, tells us a lot

:22:28.:22:34.

about the way America will recover and how the rest of the world might

:22:34.:22:43.

too. In 2009, Brad was laid off with thousands of others, and

:22:44.:22:49.

production stopped at this plant in lake Oran, now, both Brad and

:22:49.:22:53.

completely retooled factory are in full swing. These jobs, are going

:22:53.:22:57.

to be here to stay if we do a good job. So I think the jobs are on the

:22:57.:23:03.

line, and everyone's here to do the best jobs they k It may look like

:23:03.:23:08.

everything's back to normal, but it's not. These workers gave away

:23:08.:23:13.

long-held rights, in return, their union pension fund got a 11% stake

:23:13.:23:18.

in the company. With massive tax relief and handouts, they've

:23:18.:23:22.

engineered a total change of culture. We talked together as a

:23:22.:23:28.

team and nought what is the best way we can build this car, or have

:23:28.:23:33.

an issue, what's the best way we can resolve the issue. So, we're

:23:33.:23:35.

working together, instead of amendment, saying this is the way

:23:35.:23:43.

we're going to do it. With new ways of working it's become economic to

:23:43.:23:50.

make smaller, fuel efficient cars and they're in frostr profit. GM

:23:50.:23:55.

made $7 billion, even though they're the sitting on a loss. It

:23:55.:23:58.

sounds like state capitalism, that's what the amendment are

:23:58.:24:03.

touchy about. Are you gaining an unfair, state advantage here?

:24:03.:24:08.

this point, all the Government owns our stock. In the same way that

:24:08.:24:11.

individuals owners own our stock, but they're not directing our

:24:11.:24:16.

company, or managing our business, and not interfering in the industry.

:24:16.:24:23.

It left America, confused. The auto industry is the symbol of free

:24:23.:24:28.

market values. But now, it does look quite stated,

:24:28.:24:35.

stronger unions, Government ownership and taxpayers' subsidy.

:24:35.:24:41.

To some in the Republican Party, this looks like crony capitalism

:24:41.:24:44.

stootoorks a reward to the unions from the Democrats in a key state

:24:44.:24:50.

ahead of an election. Let me make this point - the reason I remain

:24:50.:24:54.

unfortunately with the way it was done, we lost more jobs, in the

:24:54.:24:59.

recreational vehicle industry, for example in this state, that we're

:24:59.:25:04.

threatened a GM and Chrysler. No- one offered to spend hundreds of

:25:04.:25:09.

thousands of dollars per worker on them. How was I to tell the people

:25:09.:25:14.

your job is not worth as much, because you're not as politically

:25:14.:25:20.

connected. The rebirth is shrieth of hand? I don't know how you could

:25:20.:25:24.

not make money, if someone handed you a comeck for tens of billions,

:25:24.:25:29.

wiped out your debt, and excused you from making taxes in the future,

:25:29.:25:34.

they ought to be a going concern. I cannot bring myself to say, that's

:25:34.:25:39.

a trifle of brilliant public policy. We might have gotten to a same

:25:39.:25:45.

outcome for quickly if a bankruptcy court had wiped out the creditors

:25:46.:25:55.

and so foreth. The city of Toledo is in the key election battleground

:25:55.:26:00.

state of Ohio. It's seen years of industrial decline but the bail out

:26:00.:26:05.

of a nearby jeep plant, has, they hope, marked a new beginning. At

:26:05.:26:08.

the Toledo Blade, one of the historic local newspapers, that

:26:08.:26:14.

still matter in America, they know the bail out is about politics as

:26:14.:26:20.

much as economics. What are readers thinking about the bail out?

:26:20.:26:24.

think locally the voter would say the bail out worked, it saved jobs

:26:25.:26:30.

in an industry that dominates our Marshall ket. In the political

:26:30.:26:37.

battle, Toledo is on the front line. Vice-President here, several times,

:26:37.:26:42.

President Obama a couple of times, their message is to defend the bail

:26:42.:26:47.

out. Joe Biden is pitching what I talked about in terms of the bail

:26:47.:26:51.

out, saved America, saved jobs. There are people who call this

:26:51.:26:56.

though, crony capitalism, because it is the unions, the Democrats, it

:26:56.:27:01.

is industrys that some people think ought not to exist any more? Yeah.

:27:01.:27:06.

That's true. There is an argument out there. I say you know what, you

:27:06.:27:13.

talk to a guy who a family of four to feed, used to work on a jeep

:27:13.:27:17.

assembly line. Without the union co-operation here, Toledo would

:27:17.:27:24.

have quickly become a waistline. What the Republicans have to do, is

:27:24.:27:29.

persuade the American working class, that the bail out was a big mistake.

:27:29.:27:34.

To do the job, they've chosen a man who has become iconic of working

:27:34.:27:41.

class distain for the big state full stop. A regular blue colour

:27:41.:27:46.

worker, not someone who graduated from harvord, a regular Jo. A man

:27:46.:27:51.

who, in one short confrontation, defined the terms of the last

:27:51.:27:54.

election? Your new tax plan is going to tax me more. I don't want

:27:54.:27:59.

to punish your success, I want to make sure everybody behind you they

:27:59.:28:05.

have a chance of success too. When you spread the wolt around. As Joe

:28:05.:28:09.

the Plumber, Jo shot to national fame. Now he is running for

:28:09.:28:15.

Congress in Toledo, his message the Government should get out of the

:28:15.:28:20.

economy. A very federal Government that bailed him out, is the same

:28:20.:28:26.

that brought the automobile toity knees, through over-regulation,so

:28:26.:28:31.

they're thanking the same person that beat them. Let's get away, and

:28:31.:28:35.

not let the Government pick the winners and losers, and decide who

:28:35.:28:38.

will keep or lose their business. But they will argue they delivered

:28:38.:28:43.

to the working man and woman on the production line? They can argue all

:28:43.:28:49.

they want, it is still wrong. the Toledo Blade the presss are

:28:49.:28:54.

getting busy, advertising revenue is up and America is recovering.

:28:54.:28:58.

But it's taken a trillion dollar stimulus and rethink of the economy

:28:58.:29:04.

that most Americans just can't get their heads around. The bail out

:29:04.:29:08.

has revived the car industry here, spectacularly, but to make it

:29:08.:29:13.

happen, they had to do things that seemed alien, subsidy, state

:29:13.:29:17.

ownership and partnership with the unions. Americans like to tell

:29:17.:29:20.

themselves these things are temporary, but it is in moment of

:29:20.:29:30.
:29:30.:29:31.

crisis new models are born. Across the wider economy, the US recovery

:29:31.:29:37.

has a long way to go. The private sector on its own is still

:29:37.:29:41.

struggling to generate growth, so what happens here could define the

:29:41.:29:50.

landscape, not just in the economy, but in the election too. Steven

:29:50.:29:59.

Rattner, man known as the car Czar, who was asked to push the bail out,

:29:59.:30:04.

and here, we have Dr Pippa Malmgren, adviser to George Bush, who runs,

:30:04.:30:09.

Principalis Asset Management. It is hard to deny the auto bail out

:30:09.:30:14.

worked. GM biggest profit since 1999? It is easy to deny, because

:30:14.:30:18.

the question is what would have happened if we hadn't had it, and

:30:18.:30:25.

gone through the normal bankruptcy process, and would the process

:30:25.:30:28.

happen moreicly. We declare a company bankrupt T goes to sale for

:30:28.:30:33.

a dollar, and new investors come in rapidly n addition, there are

:30:33.:30:39.

factors that led to foreign direct investment in the US motor industry,

:30:39.:30:42.

like the China stake in again moteers, which was not dependent on

:30:42.:30:49.

the bail out, but the China moving up the value added ladder. In the

:30:49.:30:54.

film, the criticism was hundreds of dollars per worker were poured into

:30:54.:30:58.

the GM, you were the architect of the bail out. But was it for a

:30:58.:31:03.

political reason, in as much as the car workers, the Democratic

:31:03.:31:08.

constituency, you needed to get them on side? Remember, the first

:31:08.:31:12.

architect of the bail out was George Bush, he was the first

:31:12.:31:15.

President to put money in general moteers and Chrysler, because he

:31:15.:31:20.

saw, as President Obama saw, this was not a case of buying political

:31:20.:31:25.

favours or pouring money into a charity, it was a case of market

:31:25.:31:32.

failure, and the fact was had the Government not stepped in the

:31:32.:31:36.

alternative with into the have somebody buying it for a dollar,

:31:36.:31:44.

but shutting down, liquidateing and losing jobs. Early 2008, and 2009,

:31:44.:31:47.

there simply was no capital interested in investing in the

:31:47.:31:49.

industry, I know that because I was there.

:31:49.:31:54.

Steven Rattner was hawking around the industries, looking for

:31:54.:31:58.

purchasers, there was no-one will, the President of the Toledo Blade,

:31:58.:32:02.

saying it would be a wasteland and thousands of workers out of work?

:32:02.:32:06.

agree, it was the Bush administration, that made the

:32:06.:32:10.

initial decisions. My view is part of the team was that was not

:32:10.:32:13.

necessarily the correct decision at that time. Was there no industry

:32:13.:32:17.

you would have saved in that way? have to say, I would have leaned

:32:17.:32:23.

against bail out, even for Wall Street. I do think, we would have

:32:23.:32:25.

seen the collapse more than institutions than Lehman Brothers,

:32:25.:32:29.

and the economy, would have been able to manage that process. But

:32:29.:32:34.

that view will never be tested, we won't know. I was saying, at that

:32:34.:32:37.

time, that was the argument I made and I stand by that. The problem

:32:37.:32:41.

now is we've created an environment, under both Democrats and

:32:42.:32:44.

Republicans, where private businesses, believe, that if they

:32:44.:32:49.

really get did wrong, they're going to be bailed out. Even after Lehman,

:32:49.:32:56.

you stand by that view? Absolutely. What you've got now, is Steven

:32:56.:33:01.

Rattner, a situation, where the market is distorted, is what you're

:33:01.:33:07.

saying, pipa, and you're in a kind of permanent new deal Roosevelt

:33:07.:33:11.

situation that will go on and change the nature of the US

:33:11.:33:14.

economy? I actually respect flee disagree with that. First of all, I

:33:14.:33:20.

think, while it can't be proveen, absent the bailouts, or rescues of

:33:20.:33:25.

both the banks and auto sector, there would be no functioning USA

:33:25.:33:27.

Today, the entire financial and economic system would have

:33:27.:33:37.

collapsed in a panic. I can't proof it but I believe it. Secondly, what

:33:37.:33:40.

President Bush and President Obama was to exception to reinforce the

:33:40.:33:44.

rule N US, and parts of Europe, the Government does stay out of the

:33:44.:33:48.

industrial sector. And I don't think anybody, who was involved

:33:48.:33:54.

with the rescues, in 2008 and 2009, believes they were setting a

:33:54.:33:58.

precedent, wanted to, or had a desire for the Government to be in

:33:58.:34:01.

this business, for one second longer than necessary. But you say

:34:02.:34:05.

that, but do you think there's a possibility if it has been judged

:34:05.:34:08.

as a success, this situation will not be a temporary situation, and

:34:08.:34:15.

there will be a fundamental shift, where the US economy becomes, it is

:34:15.:34:22.

status, and interventionist? could go back further in history,

:34:22.:34:29.

and we've had a significant sectors, continuously, since the 1970s, when

:34:29.:34:36.

we have had major banks, go bust, when we had LTCM hit the wall.

:34:36.:34:39.

Other incidents where the Government has stepped in. The

:34:39.:34:43.

tradition, is we tend to prefer, going into bankruptcy procedures,

:34:43.:34:49.

but Steveen is right, when an entire sector is subject to a loss

:34:49.:34:54.

function, that's when politics steps in. Do you think then, Steven

:34:54.:35:00.

Rattner, that state spending can actually be the highlighted as

:35:00.:35:06.

being the key to America's recovery? Well, first of all, we

:35:06.:35:10.

actually let many, many companies go bankrupt, after general moteers,

:35:10.:35:16.

and Chrysler were he is queuesed, suppliers. Sorry to interrupt, that

:35:16.:35:19.

led to resentment, because you were selective in what you were saving?

:35:19.:35:23.

We saved the two companies, for which there was no private capital

:35:23.:35:28.

available. The rest of the supply base, we allowed to go through

:35:28.:35:33.

bankruptcy, and they emerged as Pippa, described. There was no

:35:33.:35:37.

possibility for that to happen to general moteers, and Chrysler. You

:35:37.:35:43.

said about Government spending, yes, the Government spending and all the

:35:43.:35:51.

actions taken by President Bush and President Obama were instrumental

:35:51.:35:54.

in preventing economic collapse. What is interesting, is there was

:35:54.:35:57.

no tradition, as in Europe, of state intervention. But now the

:35:57.:36:02.

American model is one that could help Europe, which is having a

:36:02.:36:07.

harder time, getting out of the doldrums? Yeah, that's a much

:36:07.:36:12.

bigger subject. And it is hard to draw an immediate parallel between

:36:12.:36:16.

what you see in Europe today and the US. But what I will say is this

:36:16.:36:20.

- the political today, in the United States, when it comes to the

:36:20.:36:24.

question of bail out, the issue is not general moteers or the

:36:24.:36:28.

automotive industry, the issue is bail out for Wall Street. And the

:36:28.:36:32.

perception remains in the middle of the country, that Wall Street got a

:36:32.:36:37.

whole lot of money than the automotive industry or economy

:36:37.:36:40.

sector, that's the politicalcal issue that both Democrats and

:36:40.:36:45.

Republicans have to fight over. Thank you both very much indeed.

:36:45.:36:49.

Today, the Foreign Secretary, William Hague denied that British

:36:49.:36:53.

businessman, Neil Heywood thought to be murdered in the Chinese city

:36:53.:36:56.

of Hong Kong was in the employ of British Government. He was

:36:56.:37:00.

responding to allegations that Mr Heywood was a MI6 agent. But his

:37:00.:37:05.

death is a huge ramificationness Chinese politics, in particular on

:37:06.:37:15.

the career of rising career of Bo Xilai. But, Mr Bo may have fallen

:37:15.:37:19.

from Parliament for other reasons. We've just returned, where we found

:37:19.:37:29.
:37:29.:37:30.

a city state under the grip of Bo Xilai, a grip threadened not seen

:37:30.:37:40.
:37:40.:37:47.

A death on theantscy and the man who would be King. Chongqing and

:37:47.:37:50.

notorious underworld is the setting for an extraordinary drama. The

:37:50.:37:55.

city's leader in a power struggle, against the mighty party machine.

:37:55.:38:00.

He was bold and am a birks and he used his time in charge here to

:38:00.:38:06.

ruthlessly manoeuvre for a seat at China's top thaibl. Conning qing,

:38:06.:38:14.

with over 30 million people, became Bo Xilai's personal city state.

:38:14.:38:18.

Until Neil Heywood's death. Heywood came to China to seek his fortune.

:38:18.:38:24.

He became the trusted adviser to a highly visible power couple. Bo's

:38:24.:38:30.

aspiration to lead the country, an open secret. By his side, his wife,

:38:30.:38:35.

the lawyer, dubbed China's Jackie Kennedy.

:38:35.:38:41.

The King of police, was in the charmed circle, until he turned up

:38:41.:38:44.

at the US Consulate begging for protection.

:38:44.:38:49.

TRANSLATION: It's been a one-man dictatorship, one man ruling, one

:38:49.:38:53.

voice, one message. The party and the media were completely

:38:53.:39:00.

controlled. Heywood's body was found we believe in this hotel. The

:39:00.:39:09.

chief of police had information that linked his death to Bo's wife.

:39:09.:39:12.

Heywood's death was murder A business deal gone wrong. The

:39:12.:39:18.

police chief wanted out, the case too toxic to handle. Party chief he

:39:18.:39:22.

is in this suburb is said to be part of the loyal security network.

:39:23.:39:28.

We understand this hotel was closely monitored by Bo's security

:39:28.:39:31.

apparatus. Reports today suggest a wire taping

:39:31.:39:37.

regime extended across the city even the premier was buged. Inside

:39:38.:39:45.

the hotel, no-one is talking. REPORTER: I want to ask, did a

:39:45.:39:55.
:39:55.:39:59.

British man die here last year? don't know. They don't take

:39:59.:40:09.
:40:09.:40:17.

interviews. REPORTER: Did that At Chongqing's Great Hall of the

:40:17.:40:21.

People, the carefully choreographed message is party rule careies on

:40:21.:40:26.

ace normal but Beijing acted quickly.

:40:26.:40:30.

GU was arrested and her husband perged. But Bo did not fall just

:40:30.:40:35.

because of at murder case. There is a second explanation. China is

:40:35.:40:40.

about to appoint a new generation of leaders. And Bo wanted in. He

:40:40.:40:47.

was using his position, to challenge party orm doxy, in a way

:40:47.:40:56.

not seen since 1989. TRANSLATION: Bo Xilai was openly

:40:56.:41:00.

advocating a different line from Beijing on China's fewture. He had

:41:00.:41:05.

an attitude on his own, and many of his people rallied to his cause,

:41:05.:41:15.
:41:15.:41:15.

they think he was a victim of a political struggle. The party's

:41:15.:41:22.

battle lines are clear. Some want ever more market reforms. Others, a

:41:22.:41:25.

return to Communist values. Bo Xilai was different, because he

:41:25.:41:31.

took his struggle to the streets. Becoming the champion of the new

:41:31.:41:41.
:41:41.:41:42.

Chinese left. Even though Chongqing was hungryly Capitalist, Bo talked

:41:42.:41:47.

like amowist. TRANSLATION: Bo helped the poor, he

:41:47.:41:54.

built cheap housing. The charges against him are lies. Another tells

:41:54.:42:01.

me Bo made Chongqing better for the common man and he was loved for it.

:42:01.:42:06.

While this man says ordinary people are poor, whilst a few earn

:42:06.:42:15.

millions. He likened Bo to chairman Mao and wants to bring his values

:42:15.:42:21.

back. Bo Xilai relies on Mao scares many people. Four decades ago, many

:42:21.:42:24.

were purgesed in his cultural revolution, the country was

:42:24.:42:34.
:42:34.:42:37.

consumed in violence and chaos. Jiang Wenyang was targeted as a

:42:37.:42:41.

rightist, under Bo Xilai he suffered again, placed under

:42:41.:42:47.

constant surveillance. TRANSLATION: The clock has been

:42:47.:42:52.

turned back, it has been just like the cultural revolution. The talk

:42:52.:42:58.

is of class struggle and percentages, Red Guards, red songs

:42:58.:43:07.

and of a red country. Red is good, black is bad. Sing red, fight black.

:43:07.:43:11.

Was Bo Xilai's great campaign slogan. The red referred to pride

:43:12.:43:16.

in the country's leftist task. The black refd to one of the greatest

:43:16.:43:23.

threats to its future - corruption. The mafia are locked up in this

:43:23.:43:29.

prison outside the city. But I was told, Bo's Ennis are locked up here,

:43:29.:43:36.

in large numbers. This lawyer represent one of the city's biggest

:43:36.:43:40.

businessmen, he says shortly of taking on the case, he himself was

:43:40.:43:48.

visited by police in Beijing. TRANSLATION: They drove me 2 hours

:43:48.:43:53.

to conning qing, there I was put in a tiger chair, and my body and

:43:53.:43:58.

hands were tied tightly with chains. They kept me like that for three

:43:58.:44:04.

days and nights. They interrogateed me constantly. When I tried to fall

:44:04.:44:09.

asleep, they shone bright light in my eyes. In the end I was imprise

:44:09.:44:14.

beened for a year-and-a-half. Because he opposed Bo Xilai he was

:44:14.:44:20.

personally targeted. TRANSLATION: TransBo Xilai's

:44:20.:44:23.

campaigns from about winning support across China. As a lawyer,

:44:23.:44:30.

I came across the dark side. I got in the way of his ideas and his

:44:30.:44:40.
:44:40.:44:41.

political career. Bo looked for enemies, so he waved the red banner

:44:41.:44:47.

and accused his opponents of gangsters and part of the mafa. Bo

:44:47.:44:50.

Xilai's campaigns against gangsterism, poll lateriseed this

:44:50.:44:54.

city, but no-one expected the story to end with his own downfall. His

:44:54.:44:59.

hopes of ascending to the highest office, in tatters.

:44:59.:45:04.

Lower level corruption is an open secret in China. And Chongqing had

:45:04.:45:08.

a pen negotation reputation, but Bo Xilai was from an elite class, far

:45:08.:45:12.

above this world. In China, what's so shocking is not the crime, but

:45:12.:45:20.

the accused were so close to the heart of power. China's Communist

:45:20.:45:24.

rulers pride themselves on greyness and continuity. On the surface at

:45:24.:45:30.

least, things are made to seem calm. But the seats on Beijing's pot luet

:45:30.:45:36.

bureau are decided this Autumn. Many in China, think beyond the

:45:36.:45:41.

alleged crime of political clash, Bo Xilai threatened a system that

:45:41.:45:51.
:45:51.:46:21.

valueed stability above all. Well that's all from Newsnight

:46:21.:46:25.

tonight n a few days the Empire State Building will no longer be

:46:25.:46:28.

the tallest building in New York City, as number one World Trade

:46:28.:46:38.

Center, overtakes it just as the predecessor did in the 1970s, here

:46:38.:46:48.
:46:48.:47:09.

Hello there. Wet weather continues through the night, across northern

:47:09.:47:13.

England and Midlands and much of Friday. To the south, we start off

:47:13.:47:17.

with sunny spells but showers will develop. Brighter further north.

:47:17.:47:21.

Southern Scotland, Northern Ireland and far north of northern England,

:47:21.:47:25.

we should have sunny spells. Down across the Midlands, it is a drab

:47:25.:47:30.

day, with outbreaks of rain and temperatures reaching double

:47:30.:47:37.

figures. There will be hit and miss, with you all southern counties of

:47:37.:47:40.

England, expect intense showers once more. Across much of Wales, it

:47:40.:47:46.

will be cloudy, not much in the way of brightness and dull and damp in

:47:46.:47:50.

eastern areas. There will be a chill in the air across Northern

:47:50.:47:56.

Ireland but should be sunshine. The showers pushing south, it will

:47:56.:48:02.

again contain snow in the hills and mountains. Dry day through the

:48:02.:48:12.
:48:12.:48:14.

central part of Scotland. Here is Later on in the day, we are

:48:14.:48:19.

expecting more wet weather to push into the south-east, but overall a

:48:19.:48:25.

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