1 Thursday 26 April 2012 2 (10.00 am) 3 Statement by LORD JUSTICE LEVESON 4 LORD JUSTICE LEVESON: Forgive me a moment, Mr Murdoch. 5 On three occasions in the recent past, and not for 6 the first time, material has been published by core 7 participants before it has appeared on the Inquiry 8 website and in circumstances that I perceive constitute 9 a breach of the order that I have previously made under 10 Section 19 of the Inquiries Act 2005. 11 Usually, the error has been admitted and apologies 12 offered, but justifications offered have varied. 13 Despite the fact that the majority of the core 14 participants have not had any difficulty understanding 15 and fully complying with the order, it has been 16 suggested that it is ambiguous in relation to witnesses 17 who have given evidence, but whose statements or 18 exhibits have not at that time been placed on the 19 website. 20 For the avoidance of doubt, nobody should be 21 publishing anything using the material from Lextranet, 22 which is intended only to provide core participants with 23 forewarning of statements and exhibits, often before 24 they have been redacted or subject to application to 25 withhold. Sometimes redactions have only been 1 1 communicated at the very last minute, usually at the 2 behest of a core participant. It has also happened that 3 an exhibit has been corrected at an even later stage. 4 Everyone must understand that it is only the 5 redacted statement or exhibit that can ever been 6 published or referred to. That is why they should only 7 be copied from the public website when they have been 8 uploaded. I am very aware that many exhibits have not 9 yet been uploaded for want of time. This will be done 10 in due course, but if any core participant wishes to 11 make application for any document to be uploaded early, 12 the Inquiry team will try to assist. 13 Core participant status is not intended to provide 14 an advantage to core participants and so permit them to 15 publish material before it is available for publication 16 by those who are not core participants. 17 Equally for the avoidance of doubt, I have recast 18 the order that I have made under Section 19 so that from 19 today the order as now re-amended will read: 20 "1. Prior to its publication on the Inquiry 21 website, no witness statement provided to the Inquiry, 22 whether voluntarily or under compulsion, nor any exhibit 23 to any such statement, nor any other document provided 24 to the Inquiry as part of the evidence of the witness, 25 not otherwise previously in the public domain, shall be 2 1 published or disclosed, whether in whole or in part, 2 outside the confidentiality circle comprising of the 3 Chairman, his assessors, the Inquiry team, the core 4 participants and their legal representatives. 5 "2. This order is made under Section 19(2)(b) of 6 the Inquiries Act 2005 and binds all persons including 7 witnesses and core participants to the Inquiry and their 8 legal representatives and companies, whether acting 9 personally or through their servants, agents, directors 10 or officers or in any other way. 11 "3. Any person, including any company affected by 12 this order, may apply for it to be varied pursuant to 13 Section 20 of the Inquiries Act 2005. 14 "4. In the case of any public authority, 15 restrictions specified in this order take effect subject 16 to Section 20(6) of the Inquiries Act 2005." 17 This new form of order will be placed on the website 18 immediately and I will treat any breach as a matter of 19 real significance. Thank you. I'm sorry. 20 Before you start, Mr Rhodri Davies, I'm grateful to 21 Linklaters for correcting one of the exhibits. 22 MR JAY: Sir, I think it's two of the exhibits. 23 LORD JUSTICE LEVESON: Yes. 24 MR JAY: KRM27 and KRM29. 25 3 1 MR KEITH RUPERT MURDOCH (continued) 2 Questions by MR JAY (continued) 3 MR JAY: That's one of the points, Mr Murdoch, we're going 4 to start off with. Do you remember yesterday we were 5 talking about the date of the Sun headline, which was 6 "Labour Lost It", when the Sun switched its support to 7 the Conservative Party. That was 30 September 2009. 8 I understand that you were in New York on that date and 9 therefore there could have been and was no meeting with 10 Mr Cameron on that date. 11 A. That's correct. Thank you. 12 Q. So the exhibits have been revised now to bring those 13 facts into line. 14 May I be clear, Mr Murdoch, on one thing you said 15 yesterday in relation to a conversation you had with 16 Mr Gorham Brown which was either on 30 September 2009 or 17 shortly after it, and you'll remember that conversation 18 and your evidence about it. There has been, as it were, 19 real time commentary by Mr Brown and he strongly denies 20 that there was any such conversation, and he says that 21 the only conversation he had with you took place in 22 relation to a letter he wrote to the mother of a soldier 23 killed in Afghanistan. 24 Can I take it in stages: do you remember 25 a conversation with Mr Brown over that matter? 4 1 A. Over? 2 Q. Over that matter, namely the letter he wrote to the 3 mother of a British soldier killed in Afghanistan? 4 A. I don't remember a conversation with Mr Brown about 5 that, although at the time I think I spoke to the editor 6 and I thought it was too hard on Mr Brown. He had taken 7 the trouble to write to a mother, obviously in a hurry, 8 his handwriting wasn't very good, but it seemed to be 9 very cruel because he had taken the trouble. But 10 I don't think I rang him personally to apologise or talk 11 about it. I may have. 12 But as for the other conversation, which he's 13 denied, I said that very carefully yesterday under oath, 14 and I stand by every word of it, and I would just point 15 out -- you didn't touch on it yesterday, but in the 16 materials you put to me in questions, Mr Mandelson, or 17 Lord Mandelson, who was then the most senior member of 18 the Cabinet, charged News International with having done 19 a deal with Cameron, and I think I pointed out in my 20 answer, which I would like to do now on the record, that 21 Mr -- Lord Mandelson, in his book, said he did this 22 under order from Mr Brown, knowing it to be false. 23 That's in his own autobiography, that he reluctantly 24 went out to do what he was told, and I think that just 25 reflects on Mr Brown's state of mind at the time. 5 1 Q. According to a piece in the Guardian on 12 November 2 2009, the conversation I referred to between you and 3 Mr Brown relating to the story about the letter to the 4 mother of the soldier killed in Afghanistan had been 5 reported in the Financial Times. It's not a huge point, 6 Mr Murdoch, but are you sure that that conversation 7 didn't take place? 8 A. No, I'm not sure. But I certainly didn't defend it. 9 I might have apologised for it, but I didn't defend it. 10 I remember my thoughts at the time about it, but whether 11 I spoke to Mr Brown or anyone else about it, I don't 12 know. 13 Q. Fair enough. Yesterday, Mr Murdoch, I put to you 14 various viewpoints of your editors from time to time: 15 Sir Harold Evans' viewpoint, the charismatic authority, 16 Mrs Brooks' viewpoint reported in the House of Lords 17 communications first report, Mr Neil's viewpoint in full 18 disclosure, the Sun King. 19 There's one further perspective, if I may, and they 20 may or may not all be consistent. This is 21 Mr David Yelland. Did you remember him? He was editor 22 of the Sun I think in the late 1990s. 23 A. Yes. 24 Q. In an interview he gave to the Evening Standard in 2010, 25 there's this very small paragraph: 6 1 "Did Murdoch interfere in his editorship?" 2 The "his" is Mr Yelland. And this quote from 3 Mr Yelland: 4 "All Murdoch editors, what they do is this: they go 5 on a journey where they end up agreeing with everything 6 Rupert says but you don't admit to yourself that you're 7 being influenced. Most Murdoch editors wake up in the 8 morning, switch on the radio, hear that something has 9 happened and think: what would Rupert think about this? 10 It's like a mantra inside your head, it's like a prism. 11 You look at the world through Rupert's eyes." 12 Do you see the point, Mr Murdoch, that all your 13 editors -- 14 A. I understand what you're saying, Mr Jay, but I think 15 it's nonsense and I think you should take it in the 16 context of Mr Yelland's very strange autobiography, when 17 he said he was drunk all the time he was at the Sun, 18 which we didn't notice. 19 Q. When you said yesterday, Mr Murdoch, "If you want to 20 judge my thinking, look at the Sun", the Sun would only 21 know your thinking either because you directly told them 22 about it or because the editors went on the sort of 23 thought process we see coming through Mr Yelland's 24 piece. Would you not agree? 25 A. Well, I think Mr Yelland's nonsense, but certainly 7 1 I don't flinch from my responsibilities and I certainly 2 do take part in the policy decisions of the Sun. 3 I think that is my job. 4 Q. I'm not saying it isn't, Mr Murdoch, but the point I was 5 gently putting to you is that you said, "If you want to 6 judge my thinking, look at the Sun" -- 7 LORD JUSTICE LEVESON: "Look at the editorials in the Sun." 8 MR JAY: There are only two ways the editors could logically 9 know your thinking. Either because you tell them or 10 because they work it out. Do you agree with that? 11 A. I wasn't talking about the editors, I think I was 12 talking about the politicians, but -- 13 Q. No, you were talking about -- the direct quote, it's 14 page 36 of the transcript in the morning, lines 15 to 15 16: 16 "If you want to judge my thinking, look at the Sun." 17 That's what you said. 18 A. Yes. I don't say it's absolutely parallel in every 19 detail, it's not. But generally speaking what the -- 20 the issues that we get interested in, that we fight for, 21 you'll find them in the Sun and you'll find that I would 22 agree with most of them, if not all. 23 Q. Just be -- 24 A. There are details which I don't agree with only 25 recently, but -- 8 1 Q. Just how they work out what your thinking is. There are 2 only two possibilities. Either you tell them -- 3 A. They sit and talk to me or I call them -- I don't call 4 and say, "Do this or do that", you know, there are 5 conversations pretty constantly. Not daily. 6 LORD JUSTICE LEVESON: Therefore, over time, your editors 7 will get to know you very well because you're not shy 8 about expressing your opinions -- 9 A. Well, if we're talking about the Sun, yes. Or, you 10 know, papers like the New York Post, who are in the next 11 room. 12 MR JAY: If you look at the process as to what happens with 13 your advisers and confidantes, the position is exactly 14 the same. They can assess your thinking because they 15 get to know you well and they talk to you about 16 important issues, don't they? 17 A. What do you mean by confidantes, Mr Jay? 18 Q. People like Mr Stelzer or indeed even someone like 19 Mr Gove, but we'll come to him in a moment. 20 A. They might know my thinking, but they don't have to 21 agree with it. They can have very vigorous discussions. 22 I can often have to agree that they're right and I was 23 wrong. 24 LORD JUSTICE LEVESON: I'm sure your discussions were 25 vigorous, Mr Murdoch. 9 1 A. Thank you. 2 MR JAY: Again, can I -- 3 A. Not really, but I accept your approach. 4 Q. As regards your relations with politicians, has it 5 occurred to you that they might know what you want or 6 what you are thinking by exactly the same processes: 7 either because you have discussions with them about your 8 views, or because they get to know you over the fullness 9 of time and work it out? 10 A. Yes, I really see very little of them. I'm only in this 11 country a lot less than 10 per cent of my time, except 12 in this last immediate period. And, yes, I think they 13 know my philosophy, yes. 14 Q. Fair enough. May I ask you about Mr Gove. Is he 15 a politician who is close to you? 16 A. No, I wish he was. He was -- I don't say that any other 17 than to say that he worked with me, had a very 18 distinguished career at the Times for a long time. 19 I might have met him very occasionally then, walking 20 through the Times. I think he and his wife, who is also 21 a distinguished journalist there, they've come to dinner 22 once in the last two or three years, that's with his 23 wife. Then I think there was another occasion when 24 Mr Joel Klein was with me and he came over because he 25 was to do a conference with Mr Gove on education. That 10 1 was -- he was invited when he was -- long before he 2 joined me, when he was chancellor of the New York City 3 school system. And there might have been another one. 4 I like to get a few people around me of interest and 5 different, from different fields, not just politicians. 6 But on education, I want to say very clearly, if 7 I can take this opportunity: I/we are passionate about 8 it. We believe that it's an absolute disgrace, the 9 standard of public education here and in America. In 10 America, nearly 30 per cent of children do not get 11 through high school. They drop out three years early 12 and are committed to the underclass forever. And there 13 are being efforts in different states to try and tackle 14 this, but it's very difficult. Not for lack of money, 15 but for lack of teacher co-operation, and I believe that 16 there are a lot of issues here, the sort of society and 17 the way it's going and our civilisation is going, but 18 from being in the first, I think, two or three or four 19 recognised best education systems in the world, both 20 Britain and America had dropped into the mid-20s, and 21 I believe this is a crime against the younger generation 22 and we want to do something about that. 23 We keep, keep, keep hammering at it. So I'm sorry 24 to divert from the business of the Inquiry, but it's 25 just an example of -- I mean, it's not for profit, it's 11 1 not for us to sell papers off, but to try and get people 2 involved in this issue. 3 Q. Thank you, Mr Murdoch. May I move on now to the BSkyB 4 bid, please? At paragraph 33 of your witness statement 5 it clearly denies that you had any discussion with 6 Mr Cameron or Mr Osborne about the bid; is that right? 7 A. Yes. 8 Q. Did you have any discussions with Mr Jeremy Hunt about 9 the bid? 10 A. I don't believe I've ever met him, but I'm not sure he 11 didn't come to a dinner once a couple of years ago, but 12 I don't know. I certainly didn't discuss it. 13 Q. We know that he was in New York between 30 August and 14 4 September 2009. Did you meet with him on that 15 occasion, Mr Murdoch? 16 A. I don't think so, no. Why? Why would I? 17 Q. Well, according to the register of parliamentary 18 interests, he met representatives of News Corp "to 19 discuss local media ventures", but did he meet with you? 20 A. I don't think so. I have no memory of it. 21 Q. Have you had any telephone discussions with him? 22 A. Never. 23 Q. Has your son spoken to you about Mr Hunt? 24 A. No, he told me when Mr Cameron removed Mr Cable's 25 responsibilities and put the person of Mr Hunt, but 12 1 I don't believe he commented on it. We were shocked by 2 both what Mr Cable said and the unethical means in which 3 that was deleted from the story in the Telegraph, who 4 were clearly running the paper for their own commercial 5 interests. 6 Q. When your son told you about the replacement of 7 Dr Cable, did he tell you words to this effect: "Well, 8 we've got someone better now"? 9 A. I don't think he used those words. We couldn't have had 10 anyone worse, but -- 11 Q. I'm sure he didn't use those words precisely. I'm 12 communicating to you the gist of an idea. Surely you 13 were concerned: look, we have Dr Cable, he was dead 14 against News International -- 15 A. We didn't know that. 16 Q. No, but you did on 21 December because it all came out? 17 A. It came out in the BBC, yes. 18 Q. So it must have passed through your mind: Dr Cable is 19 being replaced by Mr Hunt; what is Mr Hunt like? Didn't 20 you ask your son about that? 21 A. I may have. I don't remember that. 22 Q. But you must have done, mustn't you? 23 A. No. I mustn't have done anything. 24 Q. But -- 25 A. I explained to you yesterday: I never saw anything wrong 13 1 in what we were doing. It was a commonplace 2 transaction. A large one, but a commonplace one. 3 Q. That wasn't the question -- 4 A. So why would I be worried about the politics of it? 5 Q. You were worried about the politics because Dr Cable had 6 demonstrated, on your hypothesis, that there was 7 a political dimension, moreover an anti-Murdoch 8 dimension. That had come out, hadn't it? 9 A. Yes. Well, we'd seen all our competitors in the 10 newspaper industry form a consortium, very publicly, and 11 hire Slaughter & May and a lot of public relations 12 people to lobby against it and see if they could stop 13 it. 14 Q. Indeed. 15 A. So it had a -- because I think they felt that if we had 16 the cash flows of BSkyB, I think they said this very 17 clearly, we would be a more formidable competitor for 18 them. 19 Q. But is it -- 20 A. Which, of course, is quite wrong, but -- 21 Q. Is it your evidence, Mr Murdoch, that when Mr Hunt 22 replaced Dr Cable, you were quite oblivious to whether 23 Mr Hunt would be on side or off side? 24 A. No, we just -- no greater on side or off side. We just 25 thought we'd probably get a fairer -- a fairer go from 14 1 anyone other than Dr Cable. 2 Q. Didn't your son explain to you that Mr Hunt was very 3 much onside, for example see what he put up on his 4 website, he's a cheerleader for News International -- 5 A. I did not know of that. 6 Q. You didn't? 7 A. No. 8 Q. As the months wore on, by which I mean the early part of 9 2011, you were presumably concerned by all the delay, 10 weren't you? 11 A. Not intentionally, but I don't remember my exact 12 feelings then, but no, this wasn't -- it was a very big 13 move by our company, but I was a lot more concerned 14 about the -- in 2011 about the unfolding hacking 15 scandal. 16 Q. Well, we'll come to that, Mr Murdoch. 17 A. I'm sure. 18 Q. Here we had a multi-billion pound bid. You were very 19 keen to acquire the remaining publicly owned shares in 20 BSkyB. It wasn't happening, there was delay. You must 21 have been concerned about that as a businessman, weren't 22 you? 23 A. Yes, we didn't have to have it. We were doing other 24 things with the money now. It's fine. 25 Q. Well, it's something you wanted, isn't it? 15 1 A. Well, we did indeed. We thought it was a good 2 investment. 3 Q. Did not your son give you in general terms a progress 4 report as to how the bid was getting on? 5 A. Not on a daily or probably even a weekly basis, but yes, 6 I don't remember it, but I have no doubt. 7 Q. And was it along these lines: here are the likely time 8 scales, it's going well for us, it's not going so well 9 for us? Was it that sort of conversation? 10 A. No. 11 Q. What was it then? 12 A. I don't remember any conversation, to be honest with 13 you, but I'm assuming that he kept me up to date to some 14 extent. You know, I delegated the situation to him, 15 left it to him, and he had a lot on his plate and did 16 not report perhaps as often, but we did talk, of course. 17 Q. You mentioned, Mr Murdoch, there was a coalition ranged 18 against you who had been lobbying Dr Cable. Were you 19 aware that you had your own lobbyists, who were, as it 20 were, on the other side lobbying government? 21 A. I don't know what date you're talking about, but no, 22 it's only much more recently that I've learnt of the 23 extent of Mr Michel's -- I think -- you call it 24 lobbying, certainly his seeking of information and the 25 progress of things. 16 1 Q. That's something you've only discovered recently when 2 the 163 pages of emails were disclosed; is that right, 3 Mr Murdoch? 4 A. Oh, I knew of Mr Michel's existence a few months before 5 that. 6 Q. When you became acquainted then with these 163 pages, 7 were you surprised by the extent of Mr Michel's 8 activities? 9 A. I didn't see anything wrong with his activities. Was 10 I surprised that it had gone on so long and there were 11 so many emails? Yes, sir. 12 Q. Was your surprise only on this footing: well, it should 13 have happened much sooner, namely we should have got the 14 bid much sooner? 15 A. No, I was just surprised at the success of the -- our 16 competitors' lobbying, and of course they would never 17 have succeeded if it hadn't coincided with the hacking 18 scandal. 19 Q. Were you not surprised by the success of Mr Michel's own 20 lobbying with Mr Hunt's department? 21 A. I don't think there was success. We were made to make 22 very, very big concessions for reasons which I can't 23 understand. 24 Q. Were you not surprised by the degree of apparent 25 closeness between Mr Michel and Mr Hunt's office? 17 1 A. No, and I don't want to say anything against Mr Michel, 2 but I think there could have been a little bit of 3 exaggeration there. 4 Q. Maybe you weren't surprised because you would or you 5 might assume that Mr Hunt's office would be onside in 6 support of News International, in which case there would 7 be nothing in KRM18, this is the 163 pages, which would 8 cause you surprise or your eyebrows to be raised? 9 A. I didn't read the 163 pages, I'm sorry, but I certainly 10 tasted them, if you will. 11 Q. What about an answer to my question, Mr Murdoch? 12 A. Did I assume that Mr Hunt was on our side? 13 Q. Yes, that's right. 14 A. No. I assumed that any responsible minister would be 15 responsible and deal with it in a completely unbiased 16 way. I thought that Dr Cable was an exception. 17 Q. We understand Dr Cable anti-Murdoch, but surely turning 18 it the other way around, Mr Hunt pro-Murdoch. That must 19 have been something which you understood? 20 A. No, I don't think it's an anti and a pro. 21 Q. Is it true that the longer this went on, the higher the 22 price might have to be? 23 A. No. Well, the longer it went on, the greedier the hedge 24 funds got and their big -- big talk to assist the start 25 of ... that was their way of negotiating. It always is. 18 1 Q. Is it your feeling, Mr Murdoch, that were it not for 2 the -- really the apogee of the hacking scandal, the 3 Milly Dowler voicemail deletions allegations, you would 4 have got the remaining shares in BSkyB? 5 A. Well, I don't know whether we can put it down to the 6 Milly Dowler misfortune, but the hacking scandal, yes. 7 I mean, the hacking scandal was not a great national 8 thing until the Milly Dowler disclosure, half of 9 which -- look, I'm not making any excuses for it at all, 10 but half of which has been somewhat disowned by the 11 police, but not for many weeks afterwards. We didn't 12 know -- we didn't have any information, because the 13 police had under lock and key the Mulcaire diary, still 14 do, and we still have had no access to it, and we've 15 been limited in our enquiries at all times by that. 16 Q. Can I ask you this direct question, Mr Murdoch: I told 17 you that Mr Hunt was in New York until 4 September 2009. 18 The meeting between your son and Mr Cameron in a private 19 club called The George was on 9 September 2009. Is 20 there any connection between those two events? I should 21 make it absolutely clear that on 9 September, Mr Cameron 22 was told that the Sun -- 23 A. What date was this? 24 Q. 4 September Mr Hunt left New York -- 25 A. What year? 19 1 Q. 2009. 2 A. Oh, Mr Hunt had nothing to do with the matter at that 3 stage. 4 Q. Okay. 5 A. That's my understanding. 6 Q. Well -- 7 A. And Mr Cameron wasn't even Prime Minister, so -- 8 LORD JUSTICE LEVESON: I'm not sure you're talking about the 9 same matter, Mr Jay. I think you're at cross purposes. 10 I think you're turning to a different subject -- I think 11 you are. 12 MR JAY: That's okay. 13 LORD JUSTICE LEVESON: Try again. 14 MR JAY: May I come back to that? 15 LORD JUSTICE LEVESON: Yes. 16 MR JAY: May I move on now Mr Murdoch to the issue of phone 17 hacking? Are you with me? 18 A. Yes. 19 Q. You tell us in your witness statement at paragraphs 169 20 and 170 -- turn those up, our page 03028 -- that you 21 learned of the arrests of Mr Goodman and -- 22 A. No, I'm sorry, excuse me. In my witness statement, 23 paragraph 160? 24 Q. 169. 25 A. Oh. Yes. 20 1 Q. Just getting our bearings here in the chronology. You 2 say that you believe that you learned about the arrests 3 in a telephone call with Les Hinton, which may have 4 been -- or when do you think that was? September 2006? 5 A. I think I have said here I was with my family in August, 6 not in London. Mr Hinton could reach me at any time and 7 it may well have been wherever I was in August. 8 Q. At the top of paragraph 170, page 03029, you say that: 9 "I recall being told, probably by Les Hinton, that 10 News International were co-operating with the police..." 11 Do you see that? 12 A. Yes. 13 Q. The evidence to the Inquiry might be said to demonstrate 14 that News International were not co-operating with the 15 police -- 16 A. Well, I don't agree with that. We -- if I may defer? 17 We appointed a special law firm to look into this and to 18 aid our co-operation with the police, and when the 19 police -- after the charging of -- I think after the 20 charging, not just the arrest, after the charging of 21 Mr Goodman, said that was it, they were closing the 22 file, I can't believe they would have done that if they 23 were unhappy with our co-operation. 24 Q. Well, that's not the evidence we've had at all, 25 Mr Murdoch. The evidence we've had conclusively 21 1 demonstrates that the law firm you mentioned produced, 2 I think, just one document, which we know did not 3 represent the position at all, and one way or another, 4 News International were being obstructive. Does that 5 not shock you? 6 A. That shocks me deeply, and I was unaware of it and I've 7 not heard of it until you've just said that. 8 Q. News International are still claiming privilege in 9 relation to advice given by the law firm you mentioned. 10 This is Burton Copeland. You know that, don't you? 11 A. I'm not aware of that detail, but I'll take your word 12 for it. 13 Q. Well, it's a detail which emerged when you gave evidence 14 before the Select Committee on 19 July of last year. 15 You knew the position then. 16 A. I think I spoke about a second law firm. 17 Q. Harbottle & Lewis, privilege was waived; Burton 18 Copeland, privilege has not been waived. Do you know 19 why that is? 20 A. No, I don't know. You'd have to ask them why they gave 21 us that advice. 22 LORD JUSTICE LEVESON: That's not quite the question Mr Jay 23 is asking. You appreciate that communications between 24 a lawyer and his client are privileged? 25 A. Yes, sir. 22 1 LORD JUSTICE LEVESON: And the only way people can see what 2 is said is if the client, not the lawyer, the client, 3 waives privilege. And in the spirit of openness, your 4 firm or your company, the company, waived privilege in 5 relation to the work that was done by Harbottle & Lewis, 6 so Harbottle & Lewis were able to talk, I think both to 7 the Select Committee and indeed to this Inquiry, about 8 what they did for News International and how they went 9 about what they did. 10 The other firm that were involved, Burton Copeland, 11 a specialist criminal law firm, were apparently very 12 heavily involved, but in respect of that firm, the 13 company has not waived privilege. Now, they don't have 14 to, it's a matter for them, but that's the position. 15 A. Thank you, sir. 16 LORD JUSTICE LEVESON: It's a matter for you. 17 A. I was not aware of that. But it doesn't alter the fact 18 that the police said they were satisfied this was 19 a rogue reporter and were closing their file. 20 MR JAY: Well, that may be one aspect of this, but 21 News International would have the means of knowing to 22 what extent this cancer, to use a term related to your 23 son's evidence, to what extent this cancer was prevalent 24 in the organisation. Did it stop at one individual, the 25 one rogue reporter, or was it more prevalent? It was in 23 1 News International's power to ascertain that, wasn't it? 2 A. I think the senior executives were all informed, and 3 I -- were all misinformed and shielded from anything 4 that was going on there, and I do blame one or two 5 people for that, who perhaps I shouldn't name, because 6 for all I know they may be arrested yet, but there's no 7 question in my mind that maybe even the editor, but 8 certainly beyond that someone took charge of a cover-up, 9 which we were victim to and I regret and, you know, I'm 10 getting ahead of myself now, perhaps, or getting ahead 11 of you when I say that, you know, we did take steps 12 after the conviction and the resignation of Mr Coulson. 13 A new editor was appointed with specific instructions to 14 find out what was going on. He did, I believe, put in 15 two or three new sort of steps of regulation, if you 16 like, but never reported back that there was more 17 hacking than we'd been told. 18 Harbottle & Lewis were appointed, and given a file. 19 Now, it's argued that they were only given a very 20 specific brief, but I've got to say that I have not gone 21 through that whole file that they were given of emails, 22 but I have again tasted them and I cannot understand 23 a law firm reading that and not ringing the chief 24 executive of a company and saying, "Hey, you've got some 25 big problems." 24 1 LORD JUSTICE LEVESON: That goes back to the question about 2 whether News International would contemplate letting us 3 see what Burton Copeland did in fact say, but that's 4 a matter -- 5 A. Well, we were perhaps wrong about Burton Copeland, but 6 we were not about Harbottle & Lewis. 7 MR JAY: You mentioned the term "cover-up" -- 8 A. I mean, I regret this greatly, but we'll just go through 9 the chronology before I tell you. 10 Q. Yes. Mr Murdoch, you used the term "cover-up". May 11 I suggest to you that throughout this story there is 12 a consistent -- 13 LORD JUSTICE LEVESON: Would you please sit down. I would 14 be grateful if you wouldn't do that again. 15 MR JAY: Throughout this story, this narrative, there's 16 a consistent theme until April 2011 of cover-up. 17 Cover-up in relation to the police, cover-up by 18 Burton Copeland, either on News International's 19 instructions or of their own notion, and then cover-up 20 subsequently. Where does this culture -- 21 A. I don't -- 22 Q. From where does this culture of cover-up emanate, 23 Mr Murdoch? 24 A. I think from within the News of the World and -- there 25 were one or two very strong characters there, who 25 1 I think had been there many, many, many years and were 2 friends with the journalists -- or the person I'm 3 thinking of was a friend of the journalists, drinking 4 pal, and was a clever lawyer, and forbade them to go and 5 see the evidence -- or there had been statements 6 reporting that this person forbade people to go and 7 report to Mrs Brooks or to James. That is not to excuse 8 it on our behalf at all. I take it extremely seriously 9 that that situation had arisen. 10 Q. May I move forward to January 2007, Mr Murdoch, and 11 paragraph 172 of your statement, where you say: 12 "... after Mr Goodman pleaded guilty, I recall 13 learning that Mr Coulson resigned and that Mr Hinton 14 replaced him with Mr Myler." 15 Do you see that? 16 A. Yes. 17 Q. Were you not directly involved in the decision to 18 appoint Mr Myler as editor of the News of the World? 19 A. Mr Hinton sent me -- I suppose he spoke to me, I forget, 20 but he certainly sent me an email saying he proposed 21 this and did I agree and I said yes. 22 Q. Did you know Mr Myler? 23 A. Yes, and, you know, he would not have been my choice, 24 but Mr Hinton felt that he was someone who had never had 25 any contact with the News of the World, that there 26 1 wouldn't be personal allegiances there, and that he 2 could look at it and he could rely on him to report back 3 to Mr Hinton. 4 Q. Why would Mr Myler not have been your choice? 5 A. Well, I could think of some stronger people who were on 6 the Sun. 7 Q. Is it your assessment then that Mr Myler was a weak 8 individual and therefore the wrong man for this job? 9 A. I would say that's a slight exaggeration. 10 Q. How would you put it then, Mr Murdoch, in your own 11 words? 12 A. Well, I'd hoped that Mr Myler would do what he was 13 commissioned to do, and certainly during the remaining 14 seven or eight months of Mr Hinton's regime, he did not 15 report back to him. 16 Q. May I ask you -- 17 A. Maybe he didn't find anything out, but he certainly 18 didn't report that. 19 Q. Did you make it clear to Mr Hinton that Mr Coulson 20 needed to resign when Mulcaire and Goodman were sent to 21 prison? 22 A. No. I have to say for Mr Coulson that he came forward 23 and said, "I knew nothing of this, but it happened on my 24 watch and I think I've got to go, I should go." 25 Q. Did you have a conversation with Mr Coulson about this 27 1 issue? 2 A. No. 3 Q. Did you have a conversation with Mr Hinton about 4 Mr Coulson leaving the company? 5 A. I think he'd called me and told me this, and I thought 6 that Mr Coulson was doing the honourable thing. And we 7 all agreed the fact that somebody, we thought one 8 person, the police thought one person, had engaged in 9 hacking was a very, very serious matter. 10 Q. Were you aware of any aspects of Mr Coulson's settlement 11 package? 12 A. No. 13 Q. You told the Select Committee that Mr Myler was 14 appointed to find out "what the hell was going on"; 15 that's right, isn't it? 16 A. Yes. 17 Q. Well, given that was his brief, what steps did you take 18 to see whether Mr Myler was discharging his brief? 19 A. Nothing. I relied on Mr Hinton, who had been with me 20 for 50 years. 21 Q. You've told us that this was a very serious matter. It 22 was capable of affecting the whole reputation of 23 News International in the United Kingdom, and its poison 24 was capable of seeping -- 25 A. You used the word -- 28 1 Q. Just wait, Mr Murdoch. Its poison was capable of 2 seeping far further. Was this not an issue which 3 required your personal attention? 4 A. Look, in hindsight, as I said later -- which I thought 5 we'd come to it -- 6 Q. We will. 7 A. I said that the buck stops with me, so I have to agree 8 with you. 9 Q. Well, we have to be clear, Mr Murdoch. In one sense, 10 the buck always stops with the chairman of the holding 11 company. That's axiomatic, but it might not tell us 12 a huge amount, but I was talking more directly about why 13 you, given it was such an important issue, did not find 14 out whether Mr Myler was discharging his brief. Do you 15 see that point? 16 A. I don't know what else I was doing at the time, but 17 I trusted Mr Hinton. I delegated that responsibility to 18 Mr Hinton. 19 Q. Did you have discussions at least with Mr Hinton about 20 this? 21 A. No. Not at the time. 22 Q. Some might say that all this picture is consistent with 23 one of a desire to cover up rather than a desire to 24 expose. Would you agree with that? 25 A. Well, people with minds like yours, yes, perhaps. 29 1 LORD JUSTICE LEVESON: Oh, oh. 2 A. I'm sorry, I take that back. Excuse me. 3 MR JAY: I'm very thick skinned, Mr Murdoch. 4 A. You seem to be. 5 Q. Do not worry one moment. 6 A. May I -- 7 LORD JUSTICE LEVESON: You could point the point slightly 8 differently. It is very, very clear, Mr Murdoch, that 9 among the vast commercial interests that you have 10 developed over your life, you have a particular interest 11 in the print media. 12 A. Yes. 13 LORD JUSTICE LEVESON: And, if I may say so, you have shown 14 that interest is more than just a commercial interest, 15 it's more than just an intellectual interest, it is an 16 interest that is within your being, if I could put it 17 like that. 18 A. Thank you, sir. 19 LORD JUSTICE LEVESON: Well, I'm only trying to summarise 20 what I think you've said to us. 21 A. Yes. 22 LORD JUSTICE LEVESON: Therefore, the question might be 23 asked in this way: here was a newspaper that was in your 24 family, that you had built up to be the largest-selling 25 newspaper in the UK, as I think the News of the World 30 1 was. 2 A. I think when we bought it, it was. 3 LORD JUSTICE LEVESON: Yes. 4 A. And it had lost more than half its circulation by the 5 time we got to this stage, but yes. As had everybody 6 else. 7 LORD JUSTICE LEVESON: But quite apart from the commercial 8 side of it, you would really want to know, as you 9 yourself put it, what the hell was going on, because the 10 news media was your -- printing was running through your 11 veins, I think somebody has said about you. 12 A. Yes, sir. 13 LORD JUSTICE LEVESON: Then that's the way that I might ask 14 the question that Mr Jay was trying to ask and indeed 15 did ask. This wasn't just a matter of commercial 16 interest for you. This was at the very core of your 17 being. So that's why I think you're being asked: well, 18 were you not really intensely concerned to know what was 19 going on, quite apart from everything else, because this 20 was you? 21 A. I have to admit that some newspapers are closer to my 22 heart than others, but I also have to say that I failed. 23 LORD JUSTICE LEVESON: Well, that may be, and I -- 24 A. And I am very sorry about that. 25 LORD JUSTICE LEVESON: No, no, I recognise that and 31 1 I understand that you've made that clear, not just to 2 the Inquiry, not just in your statement, but on a number 3 of your public appearances discussing this matter. But 4 it doesn't actually quite answer the question whether 5 you really did try to understand what was going on or 6 whether you felt: well, I don't need to understand 7 what's going on, it's over and let's just move on. 8 That's the question. 9 A. Well, I think when the police said, "We're satisfied 10 this was a rogue reporter, we're closing our file", 11 I think Mr Hinton did that, probably, if I'd been in his 12 place, I have to admit that I would have said I'd close 13 it too, but with hindsight -- 14 LORD JUSTICE LEVESON: Hindsight's always very good, 15 Mr Murdoch. 16 A. Very, very easy. I can only say what I should have 17 done. 18 LORD JUSTICE LEVESON: The question that I wanted to come to 19 was this: this wasn't just a question of a reporter 20 doing what the reporter did with the private detective. 21 I wonder whether you wouldn't want to know what was the 22 atmosphere or the climate within your newspaper that had 23 encouraged the reporter to think that this was a correct 24 way to proceed. That this was justifiable. Quite apart 25 from how he got away with it, that's a separate 32 1 question, but that actually the paper would be prepared 2 to let this happen, would be prepared to go that extra 3 illegal mile to get a story. So that's quite apart from 4 whether it is one rogue reporter. It goes to: what's 5 going on in the paper, not just with the people? Do you 6 see what mean? 7 A. I think in newspapers reporters do act very much on 8 their own, they do protect their sources, they don't 9 disclose to their colleagues what they're doing. 10 I think you had an instance of this, a really rogue 11 reporter but harmless, when you came across the Times 12 and the NightJack case. That didn't reflect the 13 newsroom of the Times, and this might have reflected the 14 newsroom of the News of the World, and I think I said 15 yesterday that I am guilty of not having paid enough 16 attention to the News of the World, probably throughout 17 all the time that we've owned it. I was more interested 18 in the excitement of building a new newspaper and doing 19 other things, and that's -- and the challenges of the 20 Times and the Sunday Times, and it was an omission by 21 me, and all I can do is apologise to a lot of people, 22 including all the innocent people in the News of the 23 World who lost their jobs, but -- as a result of that. 24 MR JAY: The article in the Guardian in July 2009, 25 Mr Murdoch, can you recall -- 33 1 A. Yes. 2 Q. -- whether that one was brought to your attention at the 3 time? 4 A. It was indeed, but I think at the same moment, probably, 5 as the police totally disowned it and said it was wrong. 6 Q. Your son told us that he had discussions with you after 7 the Guardian article was published and about the 8 Gordon Taylor settlement. Do you remember anything 9 about that? 10 A. Yes, he probably did explain that, but that was a year 11 after the Gordon Taylor settlement and I didn't know 12 anything in 2008 about the Gordon Taylor settlement. 13 Q. No. So in 2009 you get to learn of the Gordon Taylor 14 settlement. Did that not surprise you? 15 A. It did indeed surprise me. 16 Q. Why? 17 A. The size of it. 18 Q. The size of it? 19 A. Oh, yes. I mean ... I didn't know who had hacked him or 20 if he had really been hacked or what it was, but it -- 21 just the size seemed incredible. Still does seem 22 incredible. 23 Q. Did you ask your son words to this effect, "Why the hell 24 have we paid him so much money"? 25 A. Yes. 34 1 Q. And what was his answer? 2 A. He said, "I was given a short time and was given like 3 two boxes. Which one do you tick? One for a relatively 4 low sum of money, relatively low, or one infinitely 5 bigger?" and his advice was to tick the lower one and 6 that's what happened. He was pretty inexperienced at 7 the time, he'd just been there a few months, and 8 Mr Crone and Mr Myler came to him and put it to him in 9 a relatively short conversation. 10 Q. Yes, can I just understand that, Mr Murdoch? 11 LORD JUSTICE LEVESON: I think Mr Murdoch meant tick the 12 higher one. 13 MR JAY: Your two boxes, the lower box and the infinitely 14 higher one, is it your evidence that your son was told 15 to tick the lower box or the infinitely higher one? 16 A. I've forgotten what all they were, but tick the one that 17 didn't involve the risk of an appeal and triple damages 18 and God knows what else. 19 Q. I see. Weren't you told that the much higher box was 20 the one which said, "If we don't settle this case, 21 there's a risk that there will be many more cases"? 22 A. No, I was never told that. 23 Q. You sure? 24 A. Yes. I mean, anyone who puts faith in confidentiality 25 agreements with contingency lawyers is too naive to be 35 1 true. 2 Q. So you knew that there was a confidentiality agreement 3 associated with the Taylor settlement, didn't you? 4 A. I was told that, yes. 5 Q. So you might have assumed that that wasn't worth the 6 paper it was written on -- 7 A. If I'd thought about it, yes. 8 Q. Didn't you think about it? 9 A. No. I have a lot of things to think about. I'm sorry, 10 I didn't give it enough attention. But, you know, that 11 wouldn't have changed anything. But the real change 12 came -- 13 Q. Can we just wait for that, Mr Murdoch? We will come to 14 the real change with the MSC in July of 2011, but -- 15 A. Oh, that? I was going to come before that. Okay. 16 Q. If you just bear with me. These conversations with your 17 son, was there any discussion about the need to avoid 18 reputational risk to the company? 19 A. Not in those terms, no. I mean -- anything that 20 involves ethical behaviour or unethical behaviour 21 involves reputational behaviour. You don't have to 22 state it in those words. 23 Q. Is not the conversation with your son perhaps along 24 these lines, "Look Dad", or whatever he calls you, "this 25 guy was in effect blackmailing us, we had to pay him 36 1 a lot of money in the hope of keeping him quiet because 2 if we didn't, there was a real risk of reputational harm 3 to our company"? 4 A. No, he did not say that. 5 Q. Or anything like that? 6 A. No. 7 Q. Did you suspect, certainly by July 2009, that the one 8 rogue reporter defence was wearing a bit thin? 9 A. No, because that article in the Guardian, very hostile, 10 the Guardian, and personalised, but put that aside, was 11 instantly disowned, or within 24 hours, by the police 12 and we chose to take the word of the police over the 13 word of the Guardian, and, you know, I'd just go 14 a little further forward. We rested on that until 15 I think the beginning of 2011, the Sienna Miller thing 16 came forward, we immediately realised there was a great 17 danger, and we gave the police the name of [redacted]. 18 Q. Mr Murdoch, can we -- 19 A. I'm getting ahead of you, am I? 20 MR JAY: Yes. 21 LORD JUSTICE LEVESON: Shall we just take five minutes. 22 (11.00 am) 23 (A short break) 24 (11.10 am) 25 MR JAY: Mr Murdoch, I've been asked to make it clear by the 37 1 Metropolitan Police that they've never said, "We are 2 satisfied there's only one rogue reporter". That was 3 News International's assertion, not theirs. Do you 4 understand? 5 A. I understand what you're saying. That was not my 6 understanding until then. 7 Q. It was Mr Myler's evidence to this Inquiry, Day 18, 8 page 7, line 18, Day 18, page 26, line 22. According to 9 the News Corp's website, the entry for 10 July 2009, it 10 says this: 11 "News International has delayed making this detailed 12 statement until all relevant facts have been analysed 13 and checked internally and externally. 14 News International has completed a thorough 15 investigation into the various allegations made since 16 the Guardian broke the story on Wednesday." 17 So News International were claiming, following the 18 Guardian article, that they weren't relying merely on 19 what the police said, but had carried out their own 20 investigation. Were you aware of that? 21 A. Yes, it's very true. I meant to mention it before: 22 there was a committee set up, consisting of Mr Myler, 23 the corporate council and the corporate human relations 24 executive, to make their enquiries. There was 25 Harbottle & Lewis, and they all seemed to confirm what 38 1 the police had said. 2 Q. Was this communicated to you at the time? 3 A. And we relied on that too much. As it turned out. 4 Q. I think it was your son who used the term "aggressive 5 defence" in relation to the Guardian article, 6 a knee-jerk reaction, perhaps, based on the visceral 7 hatred, if I can put it as high as that, that 8 News International feel for the Guardian. 9 A. A little too high. 10 Q. Is it a little too high or -- 11 A. I've often expressed admiration for them. I think they 12 look after their audience pretty well. 13 Q. Were it not for the Guardian, do you accept, the phone 14 hacking story would never have entered the public 15 domain? 16 A. I don't know. The Independent seemed to be pretty 17 active. 18 Q. Well, who else would have brought this out? You 19 certainly weren't investigating it -- 20 A. We were investigating it. Indeed we were investigating 21 it. I've just explained we had an investigation 22 committee and we had Harbottle & Lewis. 23 Q. Whatever investigation -- 24 A. And when you're talking two years later, the Guardian 25 and the police disowning the thing, I agree with my son, 39 1 the statement we made then was far too defensive. 2 Q. We know almost by definition that your own internal 3 investigations yielded nothing. You have to accept, 4 Mr Murdoch, if it wasn't for the good work of the 5 Guardian, if I can be forgiven for putting it in those 6 terms, all of this would have remained concealed, 7 wouldn't it? 8 A. I don't think so. But perhaps. 9 Q. Can you tell me, just help me. How would it have come 10 out? 11 A. I don't know. I mean, there's plenty of investigative 12 journalists around. I mean, maybe the police would 13 have -- the police were sitting on Mr Mulcaire's diaries 14 all this time. They still are. And that seems to be 15 the major source of information on hacking. 16 Q. Well, the major source on hacking was never anything 17 that News International did, do you accept? 18 A. Oh, we looked, but we didn't find anything. 19 Q. In Mr Watson's latest book, "Dial M for Murdoch", you 20 probably haven't read it yet as it only came out last -- 21 A. I'm not planning on reading it. 22 Q. Well, it has been read in our team. Page 94, this 23 allegation is made that Mr Brown called Mr Watson to 24 tell him that Mr Murdoch had spoken to Mr Blair and had 25 asked him to tell the MPs to back off. Did you 40 1 telephone Mr Blair with that request? 2 A. No. 3 Q. What -- 4 A. I believe Mr Brown says -- if you continue that quote as 5 it has been read to me, Mr Brown says he doesn't 6 remember it either. 7 Q. That's right. But you don't remember it? 8 A. I'm certain it never happened. I would never do that. 9 Q. When you were interviewed by your own company, Fox News, 10 in 2009, which was after the Guardian article, you 11 apparently refused to talk about the issue of phone 12 hacking. Why was that? 13 A. When are you referring to? 14 Q. 2009, after the publication of the Guardian article. 15 A. Yes. I was in Sun Valley, I believe, I think that's 16 what you're referring to, and Fox Business News, which 17 was a start-up, had a booth there, they begged me to go 18 for ten minutes and they asked me that. I said I can't 19 talk about that. I just didn't know. I wasn't up to 20 date. I wasn't -- thousands of miles away and I get 21 into a discussion about phone hacking. 22 Q. Although you had had discussions with your son about it, 23 hadn't you? 24 A. I don't think he called me in Sun Valley. He may have. 25 I don't remember that. 41 1 Q. Why did you say, Mr Murdoch, when you were here in July 2 of last year, when asked what your priority was, "This 3 one", pointing to Rebekah Brooks? 4 A. I don't know whether you've seen the video of that. 5 Q. Yes. 6 A. I was walking across the street from my apartment to 7 a hotel. We were mobbed by journalists and paparazzi, 8 I had a microphone stuck in my mouth, said, "What's your 9 main consideration?" and I said, "Her, here". 10 Q. Yes, and? 11 A. That's all I said. 12 Q. Are you suggesting you were acting under duress in any 13 way? 14 A. No. Oh, if you've got 30 journalists and paparazzi and 15 microphones in your mouth, yes, you are under duress. 16 Q. Are you suggesting -- 17 LORD JUSTICE LEVESON: I think we might come back to discuss 18 that later. 19 A. Right. 20 MR JAY: My question was: are you suggesting, Mr Murdoch, 21 that this pack of journalists and paparazzi were acting 22 in any way inappropriately? 23 A. I think it's part of the game. 24 Q. And what's the game? 25 A. Harass people. I mean, I was being harassed. I was 42 1 trying to walk all of ten yards across the street. 2 I had another 20 or so outside my apartment this 3 morning. 4 Q. But part of the game is harassment, intrusion, these are 5 recurring themes in the behaviour of the press for 6 decades. Would you not accept that? 7 A. Yes, it can take many forms, but yes. 8 Q. Why is this the case? 9 A. Well, I think they're very competitive. You know, a lot 10 of these paparazzi don't work for anybody. They're 11 trying to get photographs they can sell to agencies like 12 Getty Images and so on and make a living that way, and 13 that would be true every corner of the world. 14 Q. I may come back to that. 15 Why wasn't your instinctive response, when the 16 microphone was thrust under your nose, as it were, 17 instead of saying, "This one", pointing to 18 Rebekah Brooks, "We need to clean up my company"? 19 A. Because I was concerned for Rebekah Brooks, who was 20 seeking to resign under great pressure and I was seeking 21 to keep her confidence. I mean, her self-confidence. 22 Q. Can I ask you, please, about the -- 23 A. I think before we get into Ms Brooks, it's only fair to 24 leave that subject until we've heard from her. 25 Q. Well, Mr Murdoch, we're not getting into -- 43 1 A. Thank you. 2 Q. -- Mrs Brooks. We're getting into another topic. The 3 brand. It's, I think, a term you use in relation to the 4 Sun and the News of the World. Can I ask you to look at 5 paragraph 73 of your statement. Page 03006. 6 A. I see paragraph 73. 7 Q. Fourth line, there's a reference to the "brand 8 definition" of the News of the World, which you say was 9 fairly consistent over the last 30 years. Do you see 10 that? 11 A. Yes. 12 Q. How would you define the brand definition of the News of 13 the World? 14 A. It's a campaigning newspaper. I think I -- when I first 15 went there, it was more interested in covering the 16 courts all over the country, which were not covered by 17 other newspapers then, except very quickly at the Daily 18 Telegraph, which covered them in much greater and 19 grimier detail but in infinitely smaller type. But yes, 20 we did -- it went from being more of a court coverage to 21 being more of a campaigner. 22 Q. You're careful not to include within the parameters of 23 that an interest in celebrity gossip, kiss-and-tell 24 stories, intrusion into the sex lives of celebrities, 25 sports persons and the like, and salacious 44 1 tittle-tattle. Should that not be included -- 2 A. I was not careful to exclude that. I would say that's 3 a vast exaggeration. It's very easy for you to stand 4 there and say that but that is not the case. Certainly 5 it was interested in celebrities, just as the public is, 6 and a much greater investment went into coveraging -- 7 covering the weekend soccer. 8 Q. These aspects of the brand -- I'm not saying that they 9 are definitive of the brand, they're just aspects of 10 it -- contribute to the commercial success of the paper, 11 don't they? 12 A. Well, the aspects I've just mentioned, yes. 13 Q. What about the aspects I've just mentioned? 14 A. No, I don't agree with you, because I don't agree they 15 were there. Coverage of celebrities, yes. Salacious 16 gossip? Meaning -- I take gossip as meaning unfounded 17 stories about celebrities: no. I certainly hope not. 18 Q. Something Sir John Major said in his autobiography, 19 page 359, I was just reading it overnight, I'll read it 20 out to you to see whether you agree with it: 21 "One route of the press hostility was a circulation 22 war at a time when overall newspaper sales were falling 23 by a million a year. Across Fleet Street, sensational 24 and exclusive stories sold extra copies. Straight 25 reporting did not. Accuracy suffered, squandered for 45 1 something, anything new. Quotes were reconstructed, 2 leaks and splashes abounded, confidentiality was not 3 respected, and reputations sacrificed for a few days' 4 hysterical speculation." 5 A. He must have been talking about other newspapers. 6 Q. Is that a serious answer, Mr Murdoch? 7 A. Yes. 8 Q. The Sun and the News of the World are not being embraced 9 by that statement, I would suggest -- 10 A. He didn't say News of the World. He said Fleet Street. 11 Q. Yes -- 12 A. But I would agree with you that circulations were 13 falling then, they're still falling for various reasons, 14 which I can discuss later, and I just -- and there was 15 great competition between -- but there was great 16 competition when they were selling many millions more. 17 It has always been -- look, we have a great, vibrant 18 press here, 10, 11 newspapers. I don't know why, 19 because only three or four of them could be possibly 20 making money, but it is -- 21 Q. Mr Murdoch, we're slightly off the point -- 22 A. -- a fact of life that there is great competition and -- 23 but I don't think it leads to lying -- 24 Q. I get all that, Mr Murdoch. I just want to understand 25 whether you're saying that Sir John Major's comments 46 1 only applied to non-News International newspapers. Is 2 that your evidence? 3 A. No, that may be a little too broad, but they don't 4 certainly apply -- do that exclusively. 5 Q. Is it -- 6 A. There has been great competition between us. I mean, 7 you want to see some of the front pages of the 8 Daily Mirror when Mr Piers Morgan was there. He had me 9 there, full-page picture, with horns out of my head. 10 Q. This is fully understood, Mr Murdoch. I just want to 11 understand whether you think that the Sun and the News 12 of the World over the years performed better or worse 13 than other newspapers in terms of the sort of matters 14 Sir John Major is referring to? 15 A. I think -- in the sort of matters he's referring to? 16 Q. Yes. 17 A. Well, what is he referring to? He's referring to the 18 falling circulation, their being very competitive, them 19 telling lies. 20 Q. Mm. 21 A. No. And I really want to distinguish, I've tried to 22 distinguish, throughout this, the difference between the 23 Sun and the News of the World. You lump them together 24 all the time and I think it's grossly unfair to the Sun. 25 Q. Well, this Inquiry is into the culture, practice and 47 1 ethics of the press. Sir John Major's comment relates 2 to Fleet Street. 3 A. All the press, yes. 4 Q. Yes. Which, I suppose, is a reference to everyone, 5 isn't it? 6 A. Well he probably has reasons to be bitter about the 7 press and his treatment. He became an unpopular 8 Prime Minister and lost an election. It's very natural 9 that he would make sweeping allegations against the 10 press, in which there may be an element of truth. 11 Q. Can I ask you, please, about the letter Max Mosley wrote 12 you, 10 March 2011? It's MOD1 this time, 00031562. 13 I think you remember this letter, don't you, Mr Murdoch? 14 It's going to come up on the screen in a few moments, 15 I hope. We can find it for you. 16 A. No. I have looked into the question of correspondence 17 with Mr Mosley, and I did not read -- I was out of town 18 or something and my assistant sent them to whoever was 19 the chief executive of News International to handle and 20 I received an email, a coded email only yesterday about 21 it from him, passed again to Mr Mockridge, the chief 22 executive, to handle. 23 Q. The point Mr Mosley was making accurately was that 24 Mr Justice Eady, in a judgment given out of this 25 building, referred to blackmail being committed by 48 1 journalists employed by the News of the World. You were 2 aware of Mr Justice Eady's comments, weren't you? 3 A. I am aware now, and with great respect to 4 Mr Justice Eady I think he suggested that one of the 5 ladies in the picture of this Nazi orgy had been offered 6 to have her face pixelated out if they would co-operate 7 with the story. Again, with great respect to 8 Mr Justice Eady, I'm not as shocked as he is by that. 9 I'm much more shocked by the behaviour of Mr Brett in 10 not telling him the truth of a lot of things. 11 Q. Don't worry about Mr Brett, Mr Murdoch. Have you read 12 Mr Justice Eady's judgment? 13 A. No. 14 Q. Because he, in a very careful and considered judgment, 15 having analysed all the evidence, oral and written, came 16 to the clear conclusion, some may say it was the only 17 conclusion he could possibly have reached, that your 18 journalists, or at least one of them, had perpetrated 19 blackmail of these two women. Is it really your -- 20 A. Two women or one? 21 Q. Yes. Is it really your position: we don't have to worry 22 about what he says? 23 A. No, it's not my position at all. I respect him and 24 I accept what he says, I'm just simply saying that 25 a journalist doing a favour for someone in returning for 49 1 a favour back is pretty much everyday practice. 2 Q. Well -- 3 LORD JUSTICE LEVESON: I'd just like to go into that for 4 just a moment, please, Mr Murdoch. First of all, 5 I think it ought to be made very, very clear that 6 Mr Justice Eady rejected the allegation there were Nazi 7 overtones to this incident, but I merely identify that 8 fact. It's not what I want to ask you about. 9 Do you say, from all your experience of journalists 10 and journalism, that it's appropriate to say to a member 11 of the public, "We have this photograph of you, we can 12 do this two ways: we can embarrass you by unpixelating 13 your photograph, even though there may not be a public 14 interest in identifying who you are, and that's what we 15 will do, or alternatively, we'll give you some money and 16 you tell us the inside story"? Is that an appropriate 17 way for a journalist to behave? 18 A. I don't know that she was offered money, but it happens. 19 LORD JUSTICE LEVESON: She certainly was offered money. 20 A. Well, I accept that sir, if you say so, and 21 I apologise -- 22 LORD JUSTICE LEVESON: Look, Mr Murdoch, I wasn't there, 23 I've only read the judgment. 24 A. Yes. 25 LORD JUSTICE LEVESON: And I've heard the evidence about it. 50 1 But I ought to make it very clear to you, and I would be 2 very grateful for your help on the topic, that I find 3 that approach somewhat disturbing, because I don't think 4 Mr Justice Eady is using too strong a word if he 5 describes it as a form of "blackmail". And therefore, 6 if it is the culture and the practice of the press that 7 this is acceptable or justifiable, then I would like to 8 know that, I really would. 9 A. Look, I apologise, sir. I have not read 10 Mr Justice Eady's thing. 11 LORD JUSTICE LEVESON: Yes. 12 A. And I may well agree with every word if I read it. But 13 it's a common thing in life, way beyond journalism, for 14 people to say, "I'll scratch your back if you scratch my 15 back." 16 LORD JUSTICE LEVESON: Yes -- 17 A. To seek to go beyond that, I disagree. 18 LORD JUSTICE LEVESON: That's the point. 19 A. And I accept your words. Or Mr Justice Eady's words, 20 but I have not read it, I'm sorry. 21 LORD JUSTICE LEVESON: No, but you can see why this is at 22 the very core of part of what I am doing? 23 A. Yes. 24 LORD JUSTICE LEVESON: And therefore, without asking you to 25 return, I think I would ask you, if you don't mind, to 51 1 look at that judgment and let me know whether you think 2 what Mr Eady there describes, if it be right -- and 3 I don't ask you to reach a judgment on right or wrong, 4 the newspaper could have appealed the judgment, they 5 didn't -- reveals a culture and practice that you think 6 is (a) accurate in the sense that it's more widespread 7 and therefore everything everybody does, or (b) 8 inappropriate. Do you understand the question? 9 A. I understand it, sir, and I will be very happy to read 10 it and to write to you and submit a document. 11 LORD JUSTICE LEVESON: That's perfect, that's fine. But 12 I would like your considered view on that question. 13 A. Yes. I'm sorry that I haven't got one. 14 LORD JUSTICE LEVESON: No, no, that's quite -- you've had 15 more than enough to cope with, although one might ask 16 whether the fact that a High Court judge in England had 17 reached this conclusion about one of your papers would 18 itself be brought to your attention, but I rather gather 19 it wasn't. 20 A. No. 21 LORD JUSTICE LEVESON: Yes, Mr Jay. 22 MR JAY: Well, you said it was a common thing in life, "I'll 23 scratch your back if you scratch my back", and that's 24 true, that's human nature, but it's interesting that you 25 say that's no part of the implied deal in your relations 52 1 with politicians over 30 years, Mr Murdoch. Is that 2 right? 3 A. Uh ... yes. I don't ask any politician to scratch my 4 back. 5 Q. Okay. 6 A. That's a nice twist, but no, I'm not falling for it. 7 Q. You probably don't, but I should put this to you. Do 8 you remember being interviewed by a British TV presenter 9 called Anne Diamond, probably in the 1980s, who asked 10 you about Princess Diana and Elton John? 11 A. No. I saw that allegation a few days ago and I have no 12 memory of either the interview or even who Anne Diamond 13 is. I'm sorry. 14 Q. I think the general point -- 15 A. I'm too remote from this country, perhaps. 16 Q. Well, the point she made was simply this: that your 17 newspapers, she said, were ruining some people's lives 18 and how did you feel about that and how could you sleep 19 at night, knowing what was going on? And she said that 20 you brushed that aside. Might you have done that? 21 A. No, I try to answer every question that's put to me. 22 I may have, but I don't think so. 23 Q. The claim is also made that you then decided in 24 collusion with your editors to target her. Is that 25 right or not? 53 1 A. No, that's absolutely wrong. I know who made that 2 claim, and it was my housekeeper, a very strange bird 3 indeed. Though we did keep it clean. 4 Q. Another quote from Lord Wyatt: 5 "The trouble is newspapers will bring anybody down 6 just for the hell of it these days. They find it shows 7 their power, titillates their readers and helps sell 8 their newspapers." 9 Is he wide of the mark? 10 A. Yes, I think that's a very unkind thing. Of course 11 Mr Wyatt felt that when he wrote a column for the News 12 of the World he was the most powerful man in the country 13 and greatly resented when the editor wanted to stop it, 14 but this is many years later when he wrote that, but no, 15 let's be serious about this. 16 Only yesterday, maybe the day before, the Daily Mail 17 had all of its page 1, had a double page inside 18 attacking Google for not deleting porn from its servers. 19 Maybe I'm old-fashioned, but I happen to agree with 20 every word of it, but that was a very, very strong 21 attack and I think that's fair. I think the newspaper, 22 if it wants to, if it feels that someone's doing wrong 23 or a company is doing wrong, I think it's fair to debate 24 it and debate it in strong terms. 25 LORD JUSTICE LEVESON: And equally if another newspaper is 54 1 doing wrong, it's right to expose it and debate it in 2 strong terms? 3 A. Yes. 4 LORD JUSTICE LEVESON: Because one of the problems is that 5 whereas the press hold all of us to account, 6 politicians, even judges, there's nobody actually often 7 holding the press up to account. 8 A. I must say, I don't feel that. I feel that I'm held to 9 account every day. 10 LORD JUSTICE LEVESON: I think that might be so at the 11 moment -- 12 A. I'm held to account by the British people every day. 13 They can stop buying the paper. I stand for election 14 every day, as I said yesterday, but I'm constantly 15 attacked. They love attacking me. Whether it's the 16 Daily Mirror, whether it's the Guardian or whatever. 17 And I've developed a pretty thick skin over the years. 18 And I'm under strict instructions by my lawyers not to 19 say this, but I'm going to. I feel -- 20 LORD JUSTICE LEVESON: I think you've just caused three 21 coronaries. 22 A. But I was really shocked by the statement of Mr Dacre 23 the other day, that his editorial policy is driven by 24 commercial interests. I think that is about the most 25 unethical thing I've read for a long time and, what's 55 1 more, from the most surprising source, as I have great 2 respect for his abilities. Indeed, many years ago when 3 he was editor of the Evening Standard, he agreed to 4 leave then and come and edit the Times and I was 5 extremely pleased and Associated quickly made him editor 6 of the Daily Mail, I have no doubt at a vastly increased 7 salary, where -- some friends of mine may disagree with 8 this strongly, but I think he's been a great success. 9 But I was shocked when he said that his policies now, 10 the editorial policy of the Mail is driven by commercial 11 interests. That's on a record here somewhere. 12 MR JAY: I think to be fair to him, Mr Murdoch, that was 13 said in the context of the alliance which was forming 14 against the BSkyB bid, and he made it clear, quite 15 frankly, that the philosophy underpinning that alliance 16 was commercial considerations rather than legal 17 considerations. He wasn't making a broader statement as 18 regards the Daily Mail more widely -- 19 A. No, he said that they were going to do just the sort of 20 thing he'd been attacking -- alleging that I do. That 21 he was going to be driven by commercial interests in his 22 editorial policy. The words are very clear. And 23 I might expect it of other newspapers. I didn't expect 24 it of the Mail. 25 Q. Well, I'll stand to be corrected, or probably affirmed 56 1 by those behind me, but I'm pretty sure I'm right on 2 this, but let's not debate Mr Dacre today, Mr Murdoch. 3 Would you agree that the -- 4 A. I'll look at the transcript. I can -- but go ahead. 5 Q. Would you agree that maintaining high ethical standards 6 in newspapers costs money? 7 A. No. I don't. I agree that failure to maintain ethical 8 standards can be immensely expensive, as I'm here 9 witness of today. 10 Q. Yes. That's certainly true. We'll come to that. But 11 in order to have proper systems in place internally, to 12 ensure that ethical standards are installed in the first 13 place and then maintained and preserved, there is 14 a commercial cost, isn't there? 15 A. No. We have compliance officers, we have more now as 16 a result of this, but the cost is -- even though they're 17 highly paid people and distinguished lawyers, it's 18 peanuts compared to what this whole scandal and Inquiry 19 has cost us. I mean, I'm talking now hundreds of 20 millions. 21 Q. Mm. 22 A. I think -- well, you may want to go through a couple of 23 other instances first before I -- I would like to just 24 expand on that at some stage. 25 Q. May I put to you a point Mr Andrew Neil said in an 57 1 interview he gave to CNN and just see your reaction, 2 please, Mr Murdoch. He said this: 3 "Of course Rupert Murdoch can't be held responsible 4 for every individual act, just as when I was editor of 5 the Sunday Times I couldn't be held responsible for 6 every individual act that my tens of, scores of 7 journalists would take, but you create a climate in 8 which people think it's all right to do certain things, 9 and I would argue that Rupert Murdoch, with his take no 10 prisoners attitude to tabloid journalism, the end will 11 justify the means, do whatever it takes, that created 12 the kind of newsroom climate in which hacking and other 13 things were done with impunity on an industrial scale." 14 Is he right or wrong? 15 A. I don't think he knows the first thing he's talking 16 about. I would say, at the beginning of that quote, 17 that I may not be able to know what every journalist is 18 writing, but it is certainly the duty of the editor to 19 take responsibility for every word in his newspaper. 20 It's harder for someone, the chairman of a company of 21 a lot of newspapers. That's by way of explanation, not 22 excuse. 23 Q. So the second part of the quote about the -- 24 A. Mr Neil seems to have found it very profitable to get up 25 and spread lies about me, but that's his business. 58 1 I mean, several people that goes for, now. It's 2 something of an industry, which I hope this Inquiry has 3 done a lot yesterday to dispel a lot of those myths. We 4 have given you hard written third-party evidence to show 5 that a lot of these are just myths. I hope that -- 6 I take it that they will go up on your website in time. 7 Is that fair to assume? 8 Q. Mr Murdoch, if I can proceed -- 9 A. No, can I have an answer? 10 Q. I don't give answers to questions, Mr Murdoch. I just 11 ask them. 12 LORD JUSTICE LEVESON: The evidence that you have presented 13 and the exhibits to your statements will be placed on 14 the website. 15 A. Thank you very much, sir. 16 MR JAY: If one takes out some of the loaded language in 17 Mr Neil's interview and puts it in this way: is not the 18 ethical tone of a newspaper or group of newspapers set 19 by the chairman, particularly if the chairman has been 20 there for decades? 21 A. Well, I hope I've had that effect for the most part. We 22 employ 6,000 journalists around the world. As a result 23 of this hacking, we have not only spent hundreds of 24 millions here, we've been through every email, every 25 check possible, the New York Post, all our Australian 59 1 newspapers in Australia under the supervision of two 2 retired Supreme Court justices. We want to be 3 absolutely certainly that this was only in here in 4 the -- in London. And I think we've satisfied ourselves 5 we have great journalists, great, great journalists, who 6 have done some amazing work, if you go back a week, 7 a month or three months or three years, all over the 8 world in different countries. I mean, we exposed the 9 whole Chinese scandal days ahead of it in public in 10 China. 11 Q. Mr Murdoch, may I ask you about your attitude to 12 self-regulation, although this was some years ago now? 13 We had some evidence from Mr Piers Morgan at the time 14 when he was editing the News of the World, which was, 15 I think, in 1994 and 1995, and what happened was that 16 the Press Complaints Commission upheld a complaint by 17 Earl Spencer over private photographs of his wife. 18 Publicly you supported the Press Complaints Commission 19 and upbraided Mr Morgan, yet Mr Morgan's diaries say, 20 22 May 1995, that you called him into your office and 21 said this: 22 "I'm sorry about all that press complaining 23 thingamajig." 24 Did you say that? 25 A. No. 60 1 Q. Did you say anything like that? 2 A. I might have said, "Look", I said, "I have confidence in 3 you as editor, let's put that behind us, let's remember 4 it, but get on with it." 5 Q. He also has you saying: 6 "We had to deal with it the way we did or they'd 7 have all been banging on about a privacy law again and 8 we don't need that right now." 9 Might you have said that? 10 A. I don't think so. Generally I don't believe in 11 a privacy law, but we discussed privacy yesterday. 12 I think it's their -- privacy laws are always proposed 13 for the protection of the great and the good and not for 14 the mass of people who make up our democracy. 15 Q. I've been asked to put these questions to you by another 16 core participant, Mr Murdoch: have you ever instructed 17 or encouraged your editors to pursue stories which 18 promote your own newspapers, TV channels or other 19 business interests? 20 A. I don't have any other business interests. I certainly 21 would ask -- or suggest, I don't think it needs 22 suggesting -- the editor of the Sun that it could be 23 good to mention what's coming in our new paper on 24 Sunday. There is self-promotion of newspapers. I mean, 25 it goes back -- I remember my first training days, 55 61 1 years ago or more, on the Daily Express, we had 2 something every day promoting the glories of the next 3 day's Express. 4 Q. Mm. I am not sure that's what the question is being 5 addressed to at all. 6 A. No, you suggested that I was telling journalists to 7 promote other business interests. I'm saying I have no 8 other business interests. 9 Q. Well, your other business interests are within other 10 newspapers and TV channels, aren't they? 11 A. Yes, but I certainly do not tell journalists to promote 12 our TV channels or our TV shows or our films. You ought 13 to read the critics in the New York Post of all our Fox 14 films. They kill them. 15 Q. Have you ever instructed or encouraged your editors to 16 pursue negative stories about competitor businesses or 17 rival individuals? 18 A. No. I can't think of it. Any. Who, for instance? 19 Q. I'm just asking these general questions which have been 20 put. 21 Have you ever asked your newspapers to make life 22 uncomfortable for regulators such as Ofcom or the 23 Competition Commission when they're considering action 24 that might be to the detriment of News Corp's 25 businesses? 62 1 A. No. 2 Q. Why did you close the News of the World rather than 3 tough it out, Mr Murdoch? 4 A. Well, I think that's explained in my statement, but 5 I could put it a little more succinctly in that when the 6 Milly Dowler situation was first given huge publicity, 7 I think all the newspapers took this as the chance to 8 really make a really national scandal. It -- it made 9 people all over the country aware of this, who hadn't 10 been following. You could feel the blast coming in the 11 window almost. And, as I say, I would say it 12 succinctly: I panicked. But I'm glad I did. 13 Q. It's obvious that closing it was a disaster both -- 14 A. Only I'm sorry I didn't close it years before and put 15 a Sunday Sun in. Though I tell you what held us back: 16 the News of the World readers. Only half of them ever 17 read the Sun, all surveys showed that. In fact, only 18 a quarter of them read it regularly. So that probably 19 was brought into consideration at the time. 20 Q. Closing the News of the World was a disaster, both 21 financial and reputational, wasn't it? 22 A. You love this word "reputation". It certainly hasn't 23 stopped the record -- excellent sales every day of the 24 Sun and our other newspapers. 25 Q. But would you agree that -- 63 1 A. I think -- let me agree with you. I think that 2 historically this whole business of the News of the 3 World is a serious blot on my reputation. 4 Q. Would you agree, Mr Murdoch, that reputation is a vital 5 commercial asset, which needs actively to be managed in 6 any business? 7 A. Yes. I think it's what keeps the public relations 8 business going. 9 Q. Mm. Did your business register the risk of a compound 10 commercial disaster of these proportions? 11 A. Could you ask that again? Did our? 12 Q. Did your business register the risk of a compound 13 commercial disaster of these proportions? 14 A. No. It was a decision taken very quickly by my son -- 15 Q. Sorry, you've missed -- 16 A. -- I think Mrs Brooks was still there and myself. It 17 was done like that. 18 Q. I think you misunderstood the question, Mr Murdoch. I'm 19 not looking now at the decision you took, I think on 20 7 July -- 21 A. Did we sit down and write out the costs and how many 22 millions? No. 23 Q. No, I'm looking at a much earlier stage, whether your 24 business, as a matter of business practice, registered 25 the risk of compound commercial disaster of these 64 1 proportions. So going back to 2005 or 2000 or even 2 1995. Did you think about these risks? 3 A. 1995? 4 Q. Yes. 5 A. What for? 6 Q. We're talking about the risk of this sort of 7 reputational catastrophe. Did it enter onto your radar 8 at all? 9 A. No, we were always interested in people thinking well of 10 our company and thinking well of our newspapers. 11 Q. Do you accept that the evidence demonstrates that your 12 company managed the legal risk by covering it up? 13 A. No. 14 Q. Even though, as you've said, the Sun -- 15 A. There was no attempt, either at my level or several 16 levels below me, to cover it up. We set up inquiry 17 after inquiry. We employed legal firm after legal firm. 18 And perhaps we relied too much on the conclusions of the 19 police. 20 You know, I think that -- well, you may want to take 21 me forward, but just in dates, you saw our response to 22 Sienna Miller. We realised we had a major problem then. 23 The Select Committee at Parliament met and heard from 24 some of our executives and accused them of collective 25 amnesia, and I think that our response to that was far 65 1 too defensive, and, what's more, worse, disrespectful of 2 Parliament. And then, of course, there was a further 3 thing, I think there was something in July last year, 4 when I appeared, and one of the members challenged me 5 and said, "Are you the person to clean this up?" and 6 I said, "Yes, the buck stops with me and I pledge I will 7 clean it up", and I did. I have spent hundreds of 8 millions of dollars -- Ms Akers I think said that we had 9 electronically examined 300 million emails, of which we 10 chose 2 million, which Linklaters, ourselves examined, 11 and anything that was frankly suspicious was passed to 12 the police. 13 That led to, I think, a dozen midnight arrests 14 because of my pledge, not because of the police, they 15 did not ask us to go into that extent, we went way 16 beyond what they'd asked us to do, and I remain greatly 17 distressed that people who have been with me for 20 or 18 30 years, great journalists, some friends of mine -- 19 but, of course, my distress, it would have been 20 presumptuous to compare it with the immense disturbance, 21 if you like, and hurt to the people who were arrested. 22 And I feel responsible for that but I am glad we did 23 it. We are now a new company, we have new rules, we 24 have new compliance officers, and I think we're showing 25 in the Sun that you can still produce the best newspaper 66 1 without the bad practices that were disclosed. 2 Q. Okay, Mr Murdoch. Might it be said that what that 3 answer demonstrates is that when the decision was taken 4 in the summer of last year to clean out the Augean 5 stables, as it were, that was almost, arguably at least, 6 an overreaction because you realised that the history 7 before, between 2006 and last year, demonstrated 8 cover-up, therefore it was necessary to go to arguably 9 excessive lengths to put your vote -- 10 A. I think you use emotional words like "cover-up". 11 Certainly it disclosed -- not the Select Committee but 12 what was coming out on hacking, and we were only at 13 hacking at that stage, although we then went in and we 14 went way beyond it, and way beyond anything that the 15 police asked us to do, but I had made my personal pledge 16 to Parliament, and although it's caused great pain, huge 17 pain, in fact, for families and, as I say, distress to 18 myself, but we did it, I'm glad we did it. We are now 19 a new company altogether, and Mr Justice Leveson rather 20 reprimanded me for talking about hindsight, but if I may 21 just for a minute. 22 If I again had really got into it when Mr Goodman 23 wrote that letter in 2007 saying he shouldn't have 24 been -- making accusations that other people were 25 involved, we appointed Harbottle & Lewis, we went 67 1 through a lot of things, I should have been -- I should 2 have gone there and thrown all the damn lawyers out of 3 the place and seen Mr Goodman one-on-one -- he'd been an 4 employee for a long time -- and cross-examined him 5 myself and made up my mind, maybe rightly, maybe 6 wrongly: was he telling the truth? And if I had come to 7 the conclusion that he was telling the truth, I would 8 have torn the place apart and we wouldn't be here today. 9 I'm talking 2007. 10 But that's hindsight, which, of course, is a lot 11 easier than foresight, but ... 12 Q. Looking back on this, Mr Murdoch, presumably you see the 13 link between ethical misbehaviour and legal 14 misbehaviour, don't you? 15 A. Oh yes. But I -- legal rules are certainly devised to 16 try to encourage ethical behaviour, I think that's 17 a fair generalisation. 18 Q. Mm. 19 A. Although what I would call unethical behaviour, if, for 20 instance, I'd asked prime ministers for favours in 21 return for -- I would have said that would be very 22 unethical, but I doubt if it would have been criminal. 23 But it would have been bad, and that's why I didn't do 24 it. And I invite you to ask them. 25 LORD JUSTICE LEVESON: I think it may be right to take 68 1 another five minutes. 2 (12.06 pm) 3 (A short break) 4 (12.19 pm) 5 LORD JUSTICE LEVESON: Yes. 6 MR JAY: Mr Murdoch, we've discussed the nexus between 7 ethics and the law in your last answer. Would you agree 8 that the magnitude of legal risk to a company is merely 9 a function of the magnitude of ethical misbehaviour 10 within a company? 11 A. No. Clearly it may be. Serious breaches of the law are 12 certainly unethical, but I think I can think of other 13 unethical things which I would call unethical and 14 extremely serious, but -- which are not criminal. And 15 I hope I'm not guilty of either. I try in my life, 16 private and public, to be without that. 17 LORD JUSTICE LEVESON: By "not criminal", also do you mean 18 not giving rise to civil action? 19 A. Yes. I'm sorry. 20 LORD JUSTICE LEVESON: No, no, no, that's fine, because it 21 does raise the question, which is what Mr Jay might be 22 coming on to, about the whole question of regulation. 23 We'll see how Mr Jay develops it. 24 A. Thank you. 25 MR JAY: I'm trying to get you, Mr Murdoch, to see this as 69 1 all on a spectrum. Ethical misbehaviour perhaps at the 2 lowest end of gravity, overlapping into civil wrong, 3 which is in the middle, and then criminal wrong at the 4 most serious end, but it's all part of a continuum or 5 spectrum. Do you see that? 6 A. Yes. But -- I suppose so, yes. 7 Q. Can I put this -- 8 A. I mean there are a lot of personal unethical things that 9 one could do which don't come very close to civil, but 10 yes, okay. 11 Q. If you were serious about managing the business risk of 12 wrongdoing in itself, you would have to do so not at the 13 most serious end, which is criminal behaviour, but 14 holistically by instilling a strongly ethical culture, 15 wouldn't you? 16 A. Would you put that again? 17 Q. Yes. If you were serious about managing the business 18 risk of wrongdoing in itself, you would have to do that 19 not at the most serious end only, namely criminal 20 behaviour, but holistically by instilling a strongly 21 ethical culture, would you agree? 22 A. Yes. Yes. 23 Q. There are, however, business costs in doing that, aren't 24 there? 25 A. I think I explained: minor, compared to serious 70 1 unethical or criminal things. 2 Q. You're right about that, Mr Murdoch, but could it not be 3 said that your failure to ensure that there were proper 4 systems of internal governance in place in your -- 5 A. In the News of the World. 6 Q. -- in the News of the World demonstrates a cavalier 7 attitude to the business risk I have referred to? 8 A. No, I think it's unfair to put that to me. If you -- 9 I think I've explained that I'm guilty of not paying 10 enough attention to the News of the World at any time 11 that I was in charge of it, certainly, but to say that 12 it's me around the world, no. 13 Q. I'm asking you to separate out in your mind, Mr Murdoch, 14 that which may be purely personal, which I'm not 15 actually talking about now -- 16 A. No. 17 Q. -- and that which may relate to systems failures, but 18 insofar as there's a personal responsibility in you, at 19 least in relation to what I'm talking about now, it is 20 the failure to insist on proper internal systems of 21 corporate governance being in place at all material 22 times, particularly in relation to a newspaper such as 23 the News of the World, whose very being was to take 24 risk. Would you agree with that? 25 A. No. Its being was not to take risks. It had 71 1 a full-time law -- legal officer there who was meant to 2 check every story. 3 Q. But if one -- 4 A. And yes, we had systems, they proved inadequate and I'm 5 sorry about that. 6 Q. The only -- 7 A. But we have put in new systems and it's more -- almost 8 new people, and a few additional people, but of the 9 highest calibre. I think we learned a lot about how to 10 control compliance and so on, which takes place pretty 11 naturally in all our newspapers, but certainly did not 12 in the News of the World. 13 Q. The only system in place at the News of the World at the 14 time on which we're focusing was the human personality 15 of Mr Crone, who is the legal manager, and that of the 16 editor. There was nothing else, was there, Mr Murdoch? 17 A. No. And not -- well, there were above him. 18 Q. Yes. 19 A. There were corporate lawyers. There were HR people. 20 Q. The whole system -- 21 A. With major responsibilities in this area. 22 Q. The whole system -- 23 A. They were at the cutting edge, those two. 24 Q. So the whole system, in inverted commas, stood or fell 25 by the personalities, abilities and qualities of Messrs 72 1 Myler and Crone, and before Mr Myler, of course, the 2 editors who were responsible. Are we agreed? 3 A. Yes, I think editors are all responsible for their 4 papers. I certainly hold them that -- for that. 5 Q. If you say that the cost of installing proper systems, 6 I would suggest to you, of internal governance was not 7 that great, could it not be said that there's even 8 greater force in the proposition that you showed 9 a swashbuckling or cavalier attitude to these matters? 10 A. No, I don't think it can be said. I think we made 11 mistakes. I think we should not have allowed -- not 12 have had one legal officer at the News of the World for 13 20 years. I think those sort of people should be 14 changed every five or, at the worst, every ten years. 15 Q. May I suggest this to you, that any claim that a paper 16 such as the News of the World was an agent of the public 17 interest is in danger of seriously overstating the 18 position. What the News of the World provided is either 19 what the public wanted or what you believed commercially 20 the public wanted. Is that not right? 21 A. I think that's true of any newspaper. I certainly tried 22 to provide newspapers which I think will find a strong 23 market and loyalty. We have the greatest newspaper in 24 America, double the circulation of its major competitor, 25 and I receive nothing but praise for it, and we have 73 1 a great staff of 2,000 journalists there. 2 The News of the World, I'll be quite honest, was an 3 aberration and it's my fault. 4 Q. Mr Murdoch, I believe you want to share with this 5 Inquiry some ideas about the future of press regulation, 6 but quite narrowly, I think, in the context of your 7 concerns about the Internet; is that right? 8 A. I think it goes beyond that, but yes. I would say that 9 the laws that you've seen in force in the last few 10 months, still being -- the consequences are still being 11 felt -- are perfectly adequate. It's been a failure of 12 enforcement of the laws. By us. It may be going on in 13 other papers, I don't know. I certainly haven't 14 heard -- I've heard admissions, but not heard inquiries. 15 But pass, let that pass. 16 You said that I had at the very beginning a great -- 17 and I should have corrected you -- understanding of 18 technology. I don't. I am not a technologist. I can't 19 run -- I can't write computer code or anything like 20 that. But the fact is that the Internet came along, 21 slowly developed as a source of news, and now is 22 absolutely in our space, and I think it's been 23 responsible for a lot of loss of circulation. 24 I don't know, I should ask the judge: this Inquiry, 25 I presume, is for the press in this country, not just 74 1 the press in Fleet Street? 2 MR JAY: (Nods head). 3 A. We're seeing everybody under extreme pressure. We've 4 seen only this week an announcement of three newspapers 5 ceasing publication as dailies and becoming weeklies, at 6 a high price. Now, there's a reason for that, because 7 of disruptive technology. Certain things can be done, 8 I think, to control the major players, but in the long 9 run it is just too wide. You know, people can send 10 their blogs from Beijing or from the Cayman Islands and 11 whatever you do, you can't regulate that. 12 I think you have a danger of regulating -- putting 13 regulations in place which will mean there will be no 14 press in ten years to regulate, and I honestly believe 15 that newspapers and all they mean, mistakes and 16 qualities, are a huge benefit to society. What we have 17 here, and I take some -- I don't want to sound 18 boastful -- some credit for it, the industry was on its 19 knees before the craft unions and 20 years behind the 20 rest of the world and I took a very unpleasant and 21 painful strike for a year, and as a result every 22 newspaper has had a very good run. It's coming to an 23 end as a result of these disruptive technologies. 24 I could go on a great deal about it. We're spending 25 a lot of money trying to -- and succeeding in presenting 75 1 every word of our newspapers on modern tablets. There 2 will be -- I would be very confident in saying that in 3 very a short time, less than five years, there will be 4 billions of tablets in the world. Furthermore, I think 5 there would be more billions, maybe twice as many what 6 we call smart telephones. Already some buy newspapers, 7 but other people present the news on a smart telephone. 8 There's very little cost of entry in that, there's 9 great costs of entry in newspapers. I'm old enough, 10 old-fashioned enough, I don't know about you, 11 I understand that you're one of the few people that like 12 Le Monde, but that's another matter. You also paid 13 a very nice compliment about the Times. I'm repeating 14 a private conversation, I'm sorry. 15 But I like, and probably a lot of the people in this 16 room, prefer the tactile experience of reading 17 a newspaper. Or a book. And so I think we will have 18 both for quite a while, certainly ten years, some people 19 say five, I'd be more inclined to say 20, but 20 means 20 very small circulations. And the day will come when 21 we'll just have to say, "It's not working, we can't 22 afford all the trucks, we can't afford all the huge 23 presses and so on", and we'll be purely electronic. 24 As I say, privacy, if you have a telephone, if you 25 have my telephone number of my iPhone, you could find 76 1 out, if you're here in London, or wherever you may be 2 you could find out wherever I was anywhere in the world 3 any time of the day within 10 feet, because it has in 4 it -- and I think the tablets do, I'm not sure -- 5 a little chip worth $3 or $4 called a GPS. 6 Now, as far as the press goes, it's only a part of 7 it. It's used for industrial espionage, it's used for 8 law enforcement and it's not going to go away. 9 Particularly industrial espionage which is conducted 10 internationally, and I think that what can be done, 11 certainly with the big players, it is perfectly possible 12 and practical to say: no pornography, no provision of 13 links to confidential intellectual property. This is 14 not a Hollywood Silicon Valley fight. It's been 15 presented, of course, by Silicon Valley. It's an 16 argument with drug companies, with people who do 17 research or whatever. It doesn't take much to click on 18 to Google and find the link. Or other people, I'm sure. 19 Now, that can be stopped. It would take 20 legislation, but -- and I would encourage it. I'm not 21 saying that there are other people beyond the 22 jurisdiction of the law who wouldn't try to do it, but 23 it is a very, very serious thing. 24 I would say one more thing, if I may, about the 25 Internet. Not only is it a major source of information, 77 1 but in this country, we have the BBC, which we haven't 2 mentioned, but is really far the greatest force in media 3 in this country. It does some great broadcasting. It's 4 a very important organisation. But it also has gone 5 online with a news service, which 12 million people in 6 this country watch it, I don't know about every day, but 7 at least every week, probably several days, and feel 8 they've had enough news. That must be affecting -- one 9 of the reasons why newspaper circulations are in 10 decline. 11 I think more seriously my criticism is it's 12 a taxpayer funded thing we have to put up with, but it 13 has started over the years very good websites with local 14 news in all the major cities of Britain. Those 15 newspapers depended almost entirely or very largely on 16 their classified advertising. That went to the 17 Internet, you can't do anything about that. Specialist 18 employment sites, real estate sites, car sales, 19 et cetera. 20 But to have the one thing they had, the newspaper -- 21 and some of them have been great newspapers, great 22 histories -- there have been only this week three 23 newspapers, I believe, were announced they were giving 24 up daily publication. There'll be more. And there's 25 nothing more certain. 78 1 I don't think it's really added to the diversity of 2 information of the press, and because the -- I was never 3 in it, or very, very slightly, but the local media in 4 this country, the local press, local newspapers, have 5 a great history of contribution to our democracy, and 6 I think it will be a very sad day if the major ones, if 7 all of them, disappear. 8 So I don't know that they can be saved. They could 9 be saved from the BBC, but that wouldn't be enough, 10 possibly. 11 We really have enormous disruptive technologies, 12 which is the history of the world, and it's fine, but we 13 have to meet that challenge and try and turn it into an 14 opportunity. For instance, the Times. The problem is 15 we ask people to pay for it, but if it's good enough, 16 they will. There's a lot of -- they're really 17 aggregated to a large extent -- run full news services 18 for free. I don't know how long they can do it. 19 They -- their advertising is rising, they expect it, but 20 so are their costs, and in fact there's more -- there's 21 more advertising opportunities occurring every year, 22 even than there are websites, so the rates stay very 23 low. 24 But it's a fact of life, and we have to treat it as 25 an opportunity. For instance, the Times of London, 79 1 seven days a week. We put it on the iPad. We charge 2 for it. Unfortunately, Apple takes 30 per cent, but 3 that's another argument. That can be seen any corner of 4 the world. So maybe there's an opportunity there. Just 5 as your friends at Le Monde can be seen any corner of 6 the world. 7 There's just -- as I say, I think there are some 8 opportunities. They're not easy. We have a lot of 9 people working at them to make attractive versions of 10 our newspapers. You know, for instance, the Wall Street 11 Journal. Every single word of the Wall Street Journal 12 is a challenge to get through. It's there every day. 13 But we add more photographs, which are of extraordinary 14 quality on the iPad and will get better. 15 But we're dealing in a very complex world with 16 disruptive technologies, and we're suffering at the hand 17 of those, so when it comes to regulation, I just beg for 18 some care, because it is really a very complex 19 situation. The press today guarantees -- a varied press 20 guarantees democracy and we want democracy rather than 21 autocracy. I think we would all agree with that in this 22 room. 23 LORD JUSTICE LEVESON: I equally agree with you that the 24 whole question of regulation requires very great care 25 and one has to try to ensure that one isn't merely 80 1 regulating what Mr Lebedev talked about, "Work produced 2 on dead trees", and one does encompass what's going out 3 digitally, but therein lies a number of problems, which 4 I'm sure I don't need to mention to you, but I want to 5 take you back to your recognition that the whole 6 framework runs from that which is unethical, 7 inappropriate, it doesn't really matter what words you 8 use, but not necessarily a civil or criminal wrong, 9 through the civil to the criminal. 10 Now, you may say that the problems of the News of 11 the World are an issue of enforcement as much as 12 anything else, although I might say that external 13 enforcement by the police must be the very, very last 14 rung, because the police have got lots of other things 15 to do, and therefore some enforcement must come 16 internally, and I don't think you'd disagree with 17 that -- 18 A. Not at all. 19 LORD JUSTICE LEVESON: -- because of what you've said. But 20 there also must be some mechanism for speedy resolution 21 of complaints, and you don't need me to tell you that 22 there are complaints about what is published, which are 23 short of claims in libel or claims in breach of a civil 24 wrong or criminal wrong. There has to be some mechanism 25 to resolve them, and one would want to encompass as many 81 1 as possible, including those who decide only to publish 2 but for profit online, within the scheme. Have you 3 considered how that could be organised? It may be you 4 haven't, and if not -- but given that I have the 5 opportunity of speaking to you -- 6 A. Yes, I'm not aware -- I should be more aware of the -- 7 all the details of the PCC. I know the number of 8 complaints that we've received, the number that have 9 been either dismissed by the PCC, the number that have 10 then been mediated or resolved, and the final complaints 11 that we've had to address and apologise, which are, over 12 a number of years, very minor. 13 Now, did this take a very long time? I don't know. 14 LORD JUSTICE LEVESON: Okay. 15 A. We should perhaps have a bigger staff or something. But 16 I don't think it's enough to say profit. If you only 17 make profitable organisations, you can leave out most of 18 my newspapers here, and -- 19 LORD JUSTICE LEVESON: Yes, maybe instead of using the word 20 "profit", I should have said, "They're doing it for 21 money". In other words, they're in the course of 22 a business. 23 A. Oh ... I think everybody's doing it for money, including 24 the bloggers. They're trying to sell advertising, 25 they're trying to get a bigger audience. You get 82 1 a thing like the Huffington Post, which started as 2 pretty much a political pamphlet with advertising and 3 broadened itself quite cleverly, but mainly just 4 stealing stories from existing newspapers. They now 5 have a few reporters, and blogs from individual people, 6 but it's a very big thing here, they have a British 7 edition as well as an American edition. And I don't 8 believe that they're making a profit yet, but they're 9 read by many millions of people. 10 The Mail Online, which is unrecognisable as part of 11 the Daily Mail, I think Mr Dacre doesn't have a computer 12 and said to someone else, "You do this", that just 13 steals. But they have their own gossip, they steal 14 gossip from everybody. It's a great sort of gossip 15 site. Or bad, whichever way you look at it. And comes 16 right up to the barrier of what is fair use of other 17 people's material. They change it a little. But it has 18 tens and tens of millions of followers around the world, 19 but there's no profit in it, according to their public 20 statements. Yet. Their hope is for profit. Profit 21 motive, perhaps, but I think that would include 22 everybody. 23 LORD JUSTICE LEVESON: All right. 24 A. I'm sorry. 25 LORD JUSTICE LEVESON: No -- 83 1 A. It is a very difficult subject. 2 LORD JUSTICE LEVESON: Yes. 3 A. You have my sympathy, sir. 4 LORD JUSTICE LEVESON: Yes, your son actually said that it 5 was above his pay grade. 6 A. It's well above mine. 7 LORD JUSTICE LEVESON: I'll challenge that in the same way 8 that I challenged the statement by your son. You did 9 say, when Mr Jay asked you about ethical standards and 10 its expense, that "failure to maintain ethical standards 11 can be immensely expensive" and I would like to expand 12 on this. Maybe you've since said all you wanted to say 13 on it, but I did want to give you the opportunity of 14 saying anything else that you wanted to say on the 15 subject -- 16 A. No, I think I only wanted to say that through the 17 ethical lapses of the News of the World that we 18 discovered, I have been through the whole of News 19 Corporation, I have spent hundreds of millions of 20 dollars in London alone, way beyond anything the police 21 asked. We have examined 300 million emails; I didn't 22 believe that many existed, but 300 million, of which 23 2 million were given closer -- were chosen for closer 24 examination, and it led -- and I don't think I have 25 anything to say other than that it led to the arrest and 84 1 terrible distress of a number of families of journalists 2 who had been with me many, many years, who were friends 3 of mine, and it caused me a lot of pain, but -- 4 LORD JUSTICE LEVESON: Yes. 5 A. -- we did it. 6 LORD JUSTICE LEVESON: And I'm sure you would want to say, 7 because you have said and I wouldn't want it to be 8 thought that you didn't get the opportunity to say it 9 here, that recognising, of course, the distress and 10 upset you've caused to your own staff, or former members 11 of your staff, you also recognise the -- 12 A. No, they are my staff until proven guilty. 13 LORD JUSTICE LEVESON: Yes, but some of them are no longer, 14 because they were News of the World. 15 A. Yes. 16 LORD JUSTICE LEVESON: I wasn't seeking to make any 17 judgments. 18 A. Thank you. 19 LORD JUSTICE LEVESON: But also you would recognise the 20 position in relation to those who have legitimate claims 21 that their privacy has been intercepted, but -- 22 A. As regards the News of the World, I think that is true. 23 I drew a line yesterday, a very vague line, about 24 privacy. 25 LORD JUSTICE LEVESON: Yes -- 85 1 A. Who deserves it and who doesn't. 2 LORD JUSTICE LEVESON: Yes, I wasn't talking about that -- 3 A. We want to live in a transparent, open society, but -- 4 and therefore people who pay public relations agents to 5 make themselves popular, or politicians or people who 6 have great responsibility, I don't think deserve the 7 same privacy. 8 LORD JUSTICE LEVESON: I wasn't actually talking about them, 9 I was talking about those who have in fact legitimate 10 complaints that their voicemails or whatever were 11 intercepted by somebody -- 12 A. Oh yes. That was against the law, quite apart from the 13 ethical side. It was totally wrong, and I regret it and 14 I've said it's going to be a blot on my reputation for 15 the rest of my life. 16 LORD JUSTICE LEVESON: I know, but I wanted to give you the 17 opportunity just to add that on to as you spoke about 18 your staff. 19 Right. There may be some questions and in the light 20 of some of the things you say, there may very well be 21 some questions. Is there anything else that you want to 22 say that you've not had the opportunity to say? 23 A. No, I think I've spoken about the state of the printed 24 word at the moment. I made some remarks about the BBC 25 pursuing local newspapers and the danger it was to the 86 1 press generally, and to the profession. Our best 2 journalists have been trained in the provinces and have 3 always been. I don't think I have anything to add to 4 the privacy. 5 LORD JUSTICE LEVESON: Thank you very much indeed. 6 A. Thank you. 7 LORD JUSTICE LEVESON: Right. Yes? Well, let's start with 8 Mr Caplan. 9 MR CAPLAN: Thank you. Sir, may I just ask one question in 10 relation to what was said this morning concerning 11 Mr Dacre? I can do it quite shortly. 12 LORD JUSTICE LEVESON: Yes. 13 Questions by MR CAPLAN 14 MR CAPLAN: Mr Murdoch, I'm representing 15 Associated Newspapers. There's a number of matters 16 I could ask you, but I'm going to restrict myself to one 17 matter, please, which is what you said this morning 18 concerning Mr Dacre, and I think you told the Inquiry 19 that you were very surprised to read recently that 20 Mr Dacre had said that his editorial policy was driven 21 by commercial interests. Do you remember that this 22 morning? 23 A. Yes. 24 Q. I'm going to suggest you've made a mistake in reading 25 something, and I'm going to ask, please, for a document 87 1 to be put on screen, which is 001748. Mr Murdoch, this 2 in fact is one of the emails passing between 3 Frederic Michel and your son, which you produced as part 4 of your statement. It's exhibit 18 to your statement, 5 and it's about 160-odd emails. Do you remember that 6 bundle of documents which you told us you had tasted but 7 not read in detail? 8 I want to direct you, please, to this email -- 9 A. Yes, the second sentence -- third sentence? 10 Q. Yes. This is Mr Michel, in his words, summarising to 11 your son James what he says had happened very recently 12 when Mr Hunt had spoken to a number of the editors, and 13 he is reporting in his words that: 14 "Paul Dacre was clear that their campaign was purely 15 motivated for commercial reasons and fears around 16 bundling." 17 And that's a reference to a campaign by the 18 Daily Mail and other sections of the media against News 19 Corporation's full takeover of BSkyB. It's not any 20 reference, I suggest, clearly, to Mr Dacre's editorial 21 policy. It's the motives for the campaign against the 22 BSkyB full takeover. 23 A. I don't see the difference. I'm sorry. I think there's 24 no doubt the Daily Mail and maybe other newspapers were 25 campaigning against it and against us as a means of 88 1 stopping. 2 Q. Yes, but -- sorry. 3 A. And that is a commercial reason. They said at the time 4 in their public statement that they felt they were in 5 some commercial danger, if you like, if we had succeeded 6 in having 100 per cent of BSkyB. 7 Q. Yes. 8 A. Something which -- I might say something else I would 9 say that -- I'm sorry, judge -- I'm very, very proud of. 10 I nearly went broke, and I'm not talking about the 11 company, I'm talking about myself. One night in the 12 hands of the bankers I actually mortgaged my own 13 apartment in New York. But we got through it and we 14 gave great plurality to the British public. They now 15 have 600 channels of television, some very good, some 16 were never there before, some better than the BBC, a lot 17 worse, but there we are. There is now great plurality 18 and competition. 19 Q. Yes. 20 A. And I feel -- you've given me the opportunity, and I'm 21 sorry -- 22 Q. No, no, Mr -- 23 A. -- I'm not answering your question, but I did want to 24 say that whatever might have happened to the News of the 25 World, I have contributed to plurality of the press. 89 1 You wouldn't be here with ten papers today. I don't 2 know about how some papers are being financed, like the 3 Independent, but the -- or the purpose, but I -- if 4 I hadn't beaten the old craft unions, who I'm sure 5 Mr Dacre remembers and would agree with me, we went 6 through agonies. We didn't know how many papers were we 7 were going to get every night, or what would happen -- 8 there wouldn't be such a good democratic press, with all 9 its faults, we have today. 10 Q. Thank you for that, Mr Murdoch, but -- 11 A. And in television the same. 12 Q. -- can I just, to be fair -- 13 A. I know your point. 14 Q. -- to Mr Dacre, just come back please to -- 15 A. I thought I was very complimentary to him. 16 Q. You were, and I'm very grateful for what you said, but 17 when you said that his editorial policy was driven by 18 commercial interests -- 19 A. I was only reading -- 20 Q. -- what you had in mind was this email which is solely 21 concerned -- it's not even his words, it's Mr Michel's 22 words -- with the campaign of some sections of the media 23 about the BSkyB takeover, isn't it? That's what this is 24 about? 25 A. Yes. He just simply -- I think he was referring to 90 1 Mr Hunt, I don't know, or his adviser, that all the 2 editors have been called about his decision and that 3 Mr Dacre said that his -- made it clear that their 4 campaign was purely motivated by commercial reasons and 5 fears about bundling. 6 Q. Yes, and it's in that context that you said what you had 7 to say this morning? 8 A. Yes. 9 MR CAPLAN: Thank you very much. 10 LORD JUSTICE LEVESON: Yes, Mr Hendy? 11 MR HENDY: Sir, John Hendy representing the National Union 12 of Journalists. 13 We'd like to put some questions about the culture, 14 practice and ethics of News International in relation to 15 its own staff in the light of some of the evidence that 16 you've heard in the Inquiry. I gave notice of the areas 17 that I wanted to raise to Mr Jay. He took one of them 18 up with Mr Murdoch, but not the others. I also gave 19 notice to Mr Davies on behalf of News International. 20 Mr Jay indicated that he wasn't going to pursue various 21 aspects. Since then, I've refined my questions. May 22 I just indicate what the five areas are? 23 LORD JUSTICE LEVESON: Please. 24 MR HENDY: Sir, the first is what might be thought to be the 25 unethical treatment of journalists and photographers, 91 1 a factor which we say contributed to the unethical news 2 gathering which you've been investigating. Secondly, 3 whether allowing the National Union of Journalists to 4 represent members wouldn't be a good protection against 5 unethical behaviour in the future. Thirdly, whether 6 News International was involved in the insertion of 7 a particular provision in the industrial relations 8 legislation, which would appear to be protective of 9 News International. Fourth, whether a conscience 10 clause, as the NUJ has campaigned for, would not be 11 a sensible protection for journalists for the future. 12 And finally, the role of the Management Standards 13 Committee and what we say is the absence of protection 14 of journalists in relation to its activities. 15 LORD JUSTICE LEVESON: I don't mind you asking about the 16 first topics that you've identified quite briefly. 17 MR HENDY: Of course. 18 LORD JUSTICE LEVESON: The last, however, does not in my 19 judgment fall within the remit. That's part of what 20 Mr Murdoch has described as, if you like, the clean-up 21 operation, and I am looking at the custom, practice and 22 ethics of the press up to that moment, as it were, 23 rather than putting in situ what he's now established to 24 revisit what's gone on with the News of the World. 25 MR HENDY: I understand. 92 1 LORD JUSTICE LEVESON: But you'll have to do it quite 2 quickly, Mr -- 3 A. I would have welcomed the chance to answer that last 4 one. 5 LORD JUSTICE LEVESON: You want to answer the last one as 6 well? 7 A. I just want to say that the MSC did not disclose any 8 sources of any journalists at all. 9 LORD JUSTICE LEVESON: All right. 10 A. As they feared. 11 LORD JUSTICE LEVESON: All right. Right, Mr Rhodri Davies, 12 you wanted to -- 13 MR DAVIES: I was going to say that Mr Hendy was kind enough 14 to give me a copy of the questions he wants to ask. 15 I don't think they quite cover the first category which 16 he mentioned just now, and I think this is the same list 17 of questions which was given to Mr Jay and they failed 18 to pass his editorial filter. They run to seven or 19 eight pages, and in my submission they're not actually 20 questions at all. What they are really is a statement, 21 because they're rather in the form of statements with 22 question marks appended -- 23 LORD JUSTICE LEVESON: No, Mr Hendy won't be making 24 statements with question marks appended, he'll be asking 25 questions, because if he doesn't ask questions, I'll 93 1 stop him. Thank you very much. Right, questions, 2 Mr Hendy, briefly on the topics that you've mentioned. 3 Questions by MR HENDY 4 MR HENDY: Mr Murdoch, we know that News International set 5 up the Management Standards Committee and indeed you 6 said this morning you set up inquiry after inquiry in 7 response to the unethical practices in gathering 8 material for publication. Are you aware that the 9 Inquiry has heard significant evidence of unethical 10 practices in the treatment of journalists and 11 photographers by News International? 12 A. No. Let me answer this. I don't believe there is any 13 or has been any. We have a very large staff of very, 14 very well-paid journalists, and they are perfectly free 15 to join the NUJ whenever they wish. 16 Q. Yes, that's not quite the point -- 17 A. Well, it is the point. If they were unhappy or being 18 treated unethically, they can join the NUJ. 19 Q. Sorry, Mr Murdoch. The evidence I'm referring to is 20 described by Ms Stanistreet as endemic bullying, huge 21 pressure to deliver stories, whatever the means, 22 overwhelming commercial pressures which are allowed to 23 dictate what is published, and the overweening power and 24 control of editors over their journalists and of 25 employers over their editors. It's that sort of thing. 94 1 And she gave evidence to this Inquiry of bullying, in 2 the words of journalists who had spoken to her, who she 3 said were too scared even to come here and tell 4 Lord Justice Leveson about that. 5 A. Who said this? 6 Q. Ms Stanistreet gave the evidence as General Secretary of 7 the NUJ. 8 A. Oh, naturally. 9 Q. Have those matters not been drawn to your attention? 10 A. Certainly not. Our journalists are perfectly free to 11 make complaints and perfectly free to join the NUJ. 12 LORD JUSTICE LEVESON: I think one has to be a bit careful, 13 Mr Hendy. I think Ms Stanistreet was very careful that 14 she wasn't simply limiting this to any one news 15 operator. 16 MR HENDY: Absolutely. 17 LORD JUSTICE LEVESON: So it is general because it's 18 anonymous and the titles are therefore unknown. It's 19 a general point. But, Mr Murdoch, you may not be aware 20 of it, but I did hear evidence from a gentleman by the 21 name of Driscoll who most certainly gave evidence of 22 bullying and won a very large settlement from one of 23 your titles in relation to the way that he was treated. 24 Is that right, Mr Jay? 25 Maybe you don't know anything about it, in which 95 1 case we'll move on. 2 A. I don't know. 3 MR HENDY: Mr Murdoch, let me give you two sentences from 4 evidence which she recorded from a journalist. 5 LORD JUSTICE LEVESON: No, no -- 6 MR HENDY: This is MS1, paragraph 1.1: 7 "I worked ..." 8 This is a journalist of 30 years' experience: 9 "I worked for the News of the World for over three 10 years. There was tremendous pressure. Everyone talked 11 about the byline count. Reporters had to do what they 12 needed to get the story." 13 And another journalist with six years' experience, 14 paragraph 1.14: 15 "During my time at the News of the World, 16 I experienced pretty much constant bullying. My section 17 editor would find fault with ..." and so on. 18 Clear evidence that at the News of the World at 19 least there was a culture of bullying. 20 A. Why didn't she resign? 21 LORD JUSTICE LEVESON: I think the problem with that might 22 be that she needs a job. That's actually been some of 23 the evidence I've received, but if you've not seen this 24 evidence, I don't think it's necessarily sensible that 25 you be asked to comment on it, but it may be that in the 96 1 light of what Mr Hendy has pointed to, if you wanted to, 2 you could look at it, and if you wanted to say something 3 about it, you can. If you don't, you don't need to. 4 A. I will certainly look at it. 5 MR HENDY: Can I just ask you this: as far as you're aware, 6 there's been no investigation within News International 7 of allegations of bullying of staff? 8 A. I've never heard of it. They always strike me as a very 9 happy crowd. 10 LORD JUSTICE LEVESON: Struck you as a happy crowd, yes. 11 MR HENDY: Can I turn to the second topic in relation to the 12 NUJ itself. Everybody knows that News International 13 derecognised all its unions in 1986 and the reasons for 14 that are well-known. It is the case that the National 15 Union of Journalists, indeed no independent union, is 16 permitted to represent journalists or any other staff to 17 this day on any United Kingdom News International title. 18 That's right, isn't it? 19 A. If they could find a majority of our journalists who 20 want to join the NUJ, we would have no choice, I think, 21 but to -- 22 Q. You say you would have no choice. Do you mean as 23 a matter of law -- 24 A. I don't know the law. 25 Q. -- or would you accept their democratic decision? 97 1 A. I'd accept their democratic decision, but let me be 2 quite clear. We didn't throw out the NUJ. There was 3 a particularly militant head of the NUJ who worked at 4 the Sun, and when the Sun's staff overwhelmingly decided 5 to walk through the printer's picket line, he resigned. 6 And that sort of thing happened in each of the papers. 7 It was not overwhelming at the Sunday Times, it was 8 a narrow majority, but elsewhere it was. And they had 9 no interest in the NUJ. 10 Q. Do you accept that the absence of the NUJ having any 11 form of recognition whatever at News International means 12 journalists have got no independent place to go to be 13 represented should they wish to make complaints about 14 bullying or indeed any other matter at work? 15 A. No, I believe there's an internal -- a staff 16 association, which I'm sure they're represented on. 17 They're certainly very welcome to raise whatever issue 18 they want to. 19 Q. That staff association was set up by News International 20 itself, and indeed funded by News International, wasn't 21 it? 22 A. Probably. We thought it was good to have a staff 23 association, somewhere where the staff could talk to us 24 if they wanted to as a whole, and which could report to 25 them on the progress of the company. 98 1 Q. That staff association, News International's staff 2 association, made an application to the public official 3 who deals with these matters for a declaration or 4 a certificate of independence, which failed, because the 5 certification officer found that the organisation was 6 under the influence of the employer. Is that right? 7 A. I don't know. 8 Q. Do you accept that were the NUJ permitted to represent 9 members in News International titles, that would be at 10 least one step towards the eradication or prevention of 11 the unethical story-gathering practices which 12 Lord Justice Leveson has heard about? 13 A. No. 14 Q. Why not? 15 A. I'm sure the people who have been arrested were once 16 members of the NUJ. 17 Q. And? 18 A. Well? Didn't stop them doing what they did. 19 Q. But if the NUJ had a presence, it would be somewhere for 20 a journalist to turn, should they feel that they were 21 under pressure to do something unethical. 22 A. It didn't work out that way when the NUJ was there. 23 Q. And indeed, one of the journalists who gave evidence 24 through Ms Stanistreet said that the absence of the NUJ 25 meant that there was nowhere to turn. 99 1 A. No, there's the staff association. 2 Q. You don't accept that? 3 LORD JUSTICE LEVESON: Right. 4 A. And there's the editor. Everyone has access to 5 everybody. 6 MR HENDY: Are you aware that the NUJ has for a long time 7 been seeking the insertion in contracts of employment, 8 not just at News International but other titles, of 9 a conscience clause, that's to say a provision by which 10 it is forbidden to discipline a journalist who refuses 11 to do something which is unethical or against the code 12 of practice? 13 A. I have never heard of it. 14 LORD JUSTICE LEVESON: Do you think it's a good idea? 15 A. Yes. I think -- I wouldn't do it through the NUJ, but 16 I think for -- 17 LORD JUSTICE LEVESON: No, but the clause. 18 A. For us to say as a condition of employment in a contract 19 for a journalist they have the right to do that, I think 20 that's a good idea. 21 LORD JUSTICE LEVESON: That's a good idea. Right? 22 MR HENDY: Thank you. The final matter then is in relation 23 to the industrial relations legislation. Mr Jay showed 24 you an article yesterday by Mr Blair about what Labour 25 was proposing. I think you're aware that Labour 100 1 introduced a statutory mechanism whereby a trade union 2 could apply to a state body, the central arbitration 3 committee, for recognition, compulsory recognition, by 4 an employer, provided it had the support of the relevant 5 workers. That procedure contains within it a provision 6 by which, if the employer already recognises a trade 7 union for collective bargaining, no further union can 8 make an application, and that's very understandable, but 9 there's an embellishment on that principle in that the 10 legislation says that if an employer has a voluntary 11 agreement with a non-independent trade union, like 12 News International's staff association, that too will 13 prevent any independent union making an application. 14 You're aware of these things, Mr Murdoch? 15 A. No, I'm afraid I'm not. 16 Q. You see, that -- 17 A. I'm not up on these issues. 18 Q. That embellishment is referred to in Trade Union circles 19 as the NISA clause, the News International Staff 20 Association clause, and what I want to suggest to you is 21 that you had some discussion or people in 22 News International had some discussion with Mr Blair or 23 officials on his side to ensure that that provision was 24 in the legislation so that the NUJ or indeed any other 25 union could not make an application for recognition for 101 1 collective bargaining at News International. 2 A. No. 3 Q. Sure about that? 4 LORD JUSTICE LEVESON: That can either be "no" or "I don't 5 know anything about this". Which is it? 6 A. Well, I know that I never approached Mr Blair or spoke 7 to Mr Blair about it. Otherwise I have no knowledge. 8 MR HENDY: Thank you, sir. 9 LORD JUSTICE LEVESON: Thank you. 10 Mr Murdoch, thank you very much indeed for the time 11 that you've devoted again to the preparation of the 12 evidence. The statement, I think, will go on the 13 website almost immediately. The exhibits, although one 14 already is on the website, the exhibits will in due time 15 go on the website. It's simply a question of time, but 16 I do assure you, it will happen. 17 A. Thank you. We were just concerned, particularly about 18 the Thomson letter -- 19 LORD JUSTICE LEVESON: Thank you very much indeed. 20 A. -- on the Times. Thank you, sir. 21 (1.16 pm) 22 (The hearing adjourned until further notice) 23 Statement by LORD JUSTICE LEVESON ....................1 24 MR KEITH RUPERT MURDOCH (continued) ..................4 25 Questions by MR JAY (continued) ..................4 102 1 Questions by MR CAPLAN ..........................87 2 Questions by MR HENDY ...........................94 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 103