(2.10 pm)
MR JAY
Sir, this afternoon we have the Telegraph Media Group Limited. The first witness is Mr Murdoch MacLennan, please. MR MURDOCH MACLENNAN (sworn) Questions by MR JAY
MR JAY
Please make yourself comfortable, Mr MacLennan.
A. Thank you, Mr Jay.
Q. And give us your full name, please.
A. Murdoch MacLennan.
Q. Thank you. I hope in the first of the two bundles in front of you you'll find under tab 2 your witness statement dated 15 September 2011; is that right?
A. That's correct.
Q. You have signed and dated it and appended to it is a statement of truth. Is this your formal evidence to the Inquiry, Mr MacLennan?
A. It is.
Q. You are the chief executive officer of Telegraph Media Group Limited. Since 2010, you've also been chairman of the Press Association, and you have spent a lifetime working in the newspaper industry; is that correct?
A. Yes. Over 40 years.
Q. You tell us in paragraph 5 that between 2005 and 2007 you were chairman of the Newspaper Publishers Association. Can you tell us about that trade body, please? What are its aims and objects?
A. It's a trade body for the national newspapers in this country and there are a number of other bodies that report into it, although the NPA, or Newspaper Publishers Association has no jurisdiction over those other bodies that cover circulation, readership and so on. It's the collective.
Q. Thank you. The Telegraph Media Group Limited, if I can put it in these terms, is the most successful commercially of the traditional broadsheet newspapers. You tell us what your turnover and after profit and taxation was in the year 2010 in paragraph 30. In a nutshell, why is this so, Mr MacLennan? Why is the Telegraph successful?
A. The Telegraph, when we took over the company, was making a profit at that stage. It has the most loyal readership of any of the newspapers I've ever worked on. It's a tight ship. We have a large number of in fact, we have more journalists, full-time journalists, on the team now than we had when we took over, and I'd like to think the most talented journalists in the country.
Q. You mention tight ship. It's clear from your evidence and the evidence of the next witness that if anything, the ship has tightened financially since 2008; is that correct?
A. That would be fair. But it's also one of the most modern newspaper and multimedia operations on the planet and that's been a process that we've undergone during the last seven years.
Q. Of course, one of the initiatives the Telegraph is pursuing, along, of course, with its competitors, is in relation to its digital offering on the Internet, and that presumably is an ongoing priority for your title; is that right?
A. It is, and when we talk about our profitability, we plough our money back into the business to make sure that we stay at the forefront of technological change within our business, because our competitors these days are no longer just other newspapers, but the entire media.
Q. Can I ask you a question about the relationship between the owners of the paper and the board on the one hand and then the editors on the other. Do the owners have any influence over what goes into the newspaper?
A. None at all.
LORD JUSTICE LEVESON
Is that a feature of some surprise? I mean, if one reads historically into the earlier part of the last century, the big proprietors were not merely proprietors; they were much, much more than that.
A. Yes, and they used their power accordingly.
LORD JUSTICE LEVESON
Yes.
A. My recent experiences, sir, have been, with my present employers and going back to my last employer, Lord Rothermere and his late father, absolutely no involvement with their titles. They take a very professional view of church and state between editorial and the business operation.
MR JAY
Do you know the reasons for that?
A. Well, my present chairman is a very private individual, but also, as I said, very professional in the way he deals with the business. He's very interested on a day-to-day basis with the running of the business, how effective or otherwise I am, and leaves the editorial side entirely in the hands of his editors.
Q. Thank you. You say in paragraph 9 of your statement that you hold weekly senior management meetings
A. Yes.
Q. which include both the editors and the senior commercial directors to review the performance of the business and to discuss key strategic issues. You're obviously excluding from that editorial issues but what, in a nutshell, are these key strategic issues?
A. We could be talking about promotions. We could be talking about a major shift in the IT operation, general business issues and major projects, which could also involve the editorial operations, so there's no exclusion to that, but not to discuss content in any shape or form.
Q. No. Then you tell us in paragraph 13 I'm not going to cover all your evidence, Mr MacLennan, we're going to take the rest as read, if you don't mind: "The Telegraph are strong supporters of the code and since March 1998, adherence to the code has been written into all journalists' contracts of employment." Is that so?
A. That's correct. But because of the Inquiry and the seriousness and the reasons the Inquiry was called, we've reiterated the main protocols as a healthy reminder to us all.
Q. A letter went out in your name, and it's under tab 3 of this bundle. It bears the unique reference number 06776.
A. Yes.
Q. Do you have it there?
A. I have indeed.
Q. It went out on 14 September from your office, presumably to all employees of the paper; is that right?
A. Yes.
Q. You point out: "Recent events at the News of the World have placed into very sharp focus the issues of ethics and integrity. The newspaper industry is under unprecedented scrutiny." The purpose of this letter, and then the next page, was to remind journalists of obligations which they had to comply with contractually in any event. It wasn't to set any new standards; is that so, Mr MacLennan?
A. No, that's correct. Because of the black cloud hanging over the industry with the phone hacking and the News of the World I mean, phone hacking is just non-existent, wouldn't even come into discussion at the Telegraph, but it's important from all sorts of other it's been a useful exercise, both on the financial side as well as the editorial side of the business, to go over our procedures again.
Q. Yes.
LORD JUSTICE LEVESON
I've been described in many ways. I've never previously been described as a "black cloud". But I'd be very keen at some stage and I'm sure Mr Jay is going to cover this, to develop with you some of the concerns and some of the responses, but before we get into that, before Mr Jay carries on, your background is in the management side?
A. Yes.
LORD JUSTICE LEVESON
But do I gather from the other offices that you have held and are holding that it would be wrong to say that you weren't equally interested and have a not insignificant role in relation to the editorial side?
A. Yes, I have both editorial and commercial reporting in to me, sir.
LORD JUSTICE LEVESON
But also, as chairman of the Press Association and as the chairman of the Newspaper Publishers Association and the vice president of the World Association of Newspapers, presumably that brings across the range. So you won't mind us asking you questions across the entire range?
A. Delighted.
LORD JUSTICE LEVESON
Yes. You could sound a bit more enthusiastic. All right.
MR JAY
A point arises on the annex to this letter. It starts at 06777 but the specific point is on 06778 under the rubric "Obeying the law". Do you see that, Mr MacLennan?
A. Yes, I do.
Q. You point out clearly that staff must obey the law. That includes not tapping telephones, intercepting email or voicemail messages, et cetera. And then the next paragraph: "As stated in the code, there may be extraordinary circumstances where exceptions to this rule (and others) can be justified in the public interest." It's not your understanding, is it, that there is a public interest defence to tapping telephones, which under the relevant statute is an absolute offence, and there isn't a defence, for example, of acting in the public interest? Do you follow that?
A. I do. It's completely it wouldn't come up for even discussion within the Telegraph operation, so there's we have never been involved or engaged in anything of that type, and it's never been a discussion or debating point.
Q. Yes.
A. Our journalists live by the PCC code.
Q. If it isn't a matter even on the radar of the Telegraph, it might be said: well, why mention it in the context of this advice that you're giving your journalists?
A. I think it comes back to what's happened at the News of the World. To make it very clear to everyone what we stand for. I mean, our readers, our viewers demand honesty and integrity as a given.
Q. That's part of the Telegraph brand; is that what you're telling us?
A. It is indeed, and that's what we seek to protect at all costs.
Q. Maybe you weren't responsible for the precise wording of this advice; it just went out under your name. Do I have that right?
A. Yes. It's a healthy reminder, Mr Jay, across the company, because the company handbook is about three inches thick and is used as a sort of reference document. It's available online to all staff. This was just a comprehensive reminder of the main points.
Q. Okay.
A. I have to say I probably wouldn't have issued it if this whole thing hadn't blown up.
Q. In paragraph 16 of your statement, you say where a PCC complaint is upheld or legal action is lost, senior management would receive a report explaining what has happened and assessing how a repetition could be avoided. Have disciplinary proceedings ever been taken against members of staff under such circumstances?
A. No. We haven't had that many complaints, let alone serious complaints, but when we have had a serious libel action that's gone against us, then a number of lessons are drawn from that and that's taken up by the editorial manager with the staff. And I'm also made aware of the changes.
Q. Right. So is it more a question then of identifying and acquiring lessons learnt than bringing disciplinary proceedings against members of staff responsible? Have I understood that correctly?
A. If members of staff have committed a serious breach, then it's a different matter. It's in their contracts of employment. As I said earlier, Mr Jay, they live by the letter of the Editors' Code.
Q. Can I ask you about paragraph 19. You say: "The senior executive team, in conjunction with the senior editorial team, have also sought to inculcate within the company a culture of accuracy and professionalism." We'll hear from the senior editorial team, or rather the current editor, how that is achieved from his perspective, but how are those objectives achieved from your perspective?
A. Within the Telegraph as a business, we would expect our readers would expect to have any inaccuracy highlighted and to have it as I said here, to put it right in the proper manner as quickly as possible.
Q. You give one specific example where there's a dispute of facts. It's rather a general example: "Where there is a dispute of fact, I would expect us to carry a letter putting a different point of view." Does that happen to your knowledge?
A. It does if we're proven to be wrong.
Q. Do you have a corrections page?
A. No.
Q. Maybe I should ask the editor more about what the policy is in relation to that.
A. The editors, Mr Jay, they are responsible for complaints and they deal with them directly, or their senior executives, and they deal with them quickly, so they the complaints procedure within the Telegraph editorially is handled at the very top.
Q. Thank you. Your statement then goes on to deal with the MPs expenses matter, which I'm going to ask other witnesses about, although you cover the issue of financial authority for the intermediary and the purchase of the disk because the amount was of such a level that your authority was necessary; is that right?
A. That's correct.
Q. So other witnesses will deal with that in more detail. Can I deal with the issue of ethics, which is question 9, paragraph 25 and following. In one sense, you can view this from the standpoint of both commercial expert within the newspaper industry and also having some editorial expertise as well. Paragraph 26: "Ethics means that the newspaper abides by the law and the code. The newspaper should own up when something has gone wrong and seek to put it right. It must respect individual privacy in the news and the photographs it publishes." I mean, to your experience, do individual privacy issues often arise in relation to the sort of stories that the Telegraph publishes?
A. Very seldom.
Q. Why do you think that is?
A. Well, back to our the very basics of the Telegraph, as far as our loyal readership is concerned, they expect and I hope they get, I know they get accuracy on a day in on a daily basis. The paper itself is the mission statement of the business.
Q. That doesn't quite deal with the issue of privacy, why that doesn't feature much in relation to the Telegraph's stories. You've covered the issue of accuracy but not that of privacy, I think.
A. It's probably a question better asked of the editor, but to my knowledge there are very few occasions when privacy is an issue for us.
LORD JUSTICE LEVESON
Well, it was in relation to expenses, but was overridden by the public interest in the story. That's something that we can raise.
A. That's true, sir.
MR JAY
But did you have any input into the public interest decision or issues which arose in the MPs' expenses case or was that entirely a matter for editors?
A. The final decision to publish was entirely the editors', but I was involved in the background to the whole business. Although I was on holiday when the initial ?10,000 was spent on a sample disk, when I came back and I supported that when I came back, I was making sort of continuous enquiries of our legal department and the editor, absolutely satisfied there were major public issues at stake there public money at stake, and serious impropriety and in some cases, a few cases, criminality suggested.
Q. Were you at all concerned whether the publication of this story might have an impact on the Telegraph's brand reputation? And if so, was your input sought in relation to that?
A. I live daily with a concern about the brand reputation of our title and protecting our titles and future-proofing our titles. It's always at the forefront of our minds.
Q. But did this particular story, for you at least, throw up any issues which bore on the Telegraph's brand reputation or was it for you more: "There's an overwhelming public interest in publishing this story, that is sufficient for me"?
A. I was interested in the accuracy of the material, and when both the editor and the legal director were more than satisfied with that, I supported it completely.
Q. I'll ask you some general questions now. First of all, since the announcement of this Inquiry, which, as we know, was in July of last year, has the approach of the Telegraph to risk and/or the publication of types of story changed in any way?
A. On the story, you'd probably better ask that question, I would suggest, Mr Jay, of the editor, but he and his team go through exactly the same procedures. They deal with many stories in the course of the day, but accuracy and honesty are at the forefront of their minds with that. In terms of the rest of the business, yes, it's brought everything into sharp focus. We carried out a that major I've mentioned it major exercise into our financial systems and have checked back to 2005 to make sure that we could come to this Inquiry with the backing of Slaughter May and say that we are clear.
Q. What is the "policy" of the Telegraph from your perspective in relation to the whole issue of risk management and protecting the reputation of the brand?
A. As I said, that's to the forefront of our minds. We have a number of policies in place to protect our brand, to protect our titles and to protect our business, and also it's very important that we make arrangements to in the event of an emergency, to cover that, if we had problems in the place we publish from. But beyond that, it's protecting our brands, future-proofing them going forward.
Q. And presumably as well understanding your readers; is that right?
A. That's certainly to the forefront of our minds. We are probably one of the most customer-focused businesses, and we would not in fact, it's very difficult to even change or modify something in the paper without getting a very strong reader reaction. It's a very intelligent readership.
Q. Yes. I'm sure from what you said it's a very loyal readership, but how do you understand your readers? What processes, if any, do you undertake to lock into their thinking?
A. We have the largest reader subscriber base in the newspaper business in this country. People who buy the Telegraph have often told me they take the Telegraph, they simply hand it down from generation to generation, and they expect the highest standards from us. But I'm very satisfied our editorial team are completely locked into their needs and desires.
Q. Can I ask you a separate question now about non-aggression pacts with other newspaper proprietors? There's certainly a perception that such pacts exist, and if they did, you would know about them. Do they exist, Mr MacLennan?
A. I would know about them and they don't exist. And there's a I have been criticised in the past for trying to ensure that we are more focused on our business as an industry. Some players within the industry are more obsessed with the media space than our readers are.
Q. There was a lunch, I think, which took place when, in fact, you were managing director of Associated so this must have been before 2005 between you and Mr Richard Desmond, who owns the Northern Shell titles. Did you reach informal agreement with him at that lunch, as others have purported, that it was not in the interests of either newspaper to use them for mudslinging?
A. I've never been in favour of mudslinging. There was no agreement with Mr Desmond, but I did receive at that lunch a series of demands from Mr Desmond to stop the articles that were appearing in his publications. I said I'd take those demands back to the editor but Mr Desmond must have known that those demands would have been thrown out and completely ignored, because before I even got back to the office, a statement had been issued to other newspapers that an agreement was in existence. There was no such agreement and taking back the demands, they were laughed out of court.
Q. These were demands which were coming from Mr Desmond, which, as your evidence is, were laughed out of court. But what specifically were the demands that were being made? Can you recall now?
A. No, I can't remember the detail. To stop publishing articles attacking my proprietor.
Q. He was the proprietor, though, wasn't he, Mr Desmond?
A. Yes.
Q. Sorry, I misunderstood.
A. Sorry.
Q. You were supposed to be communicating to the editor demands which he, the editor, then presumably Mr Dacre, would activate, and one of the demands was that he, Mr Dacre, would stop publishing articles which attack Mr Desmond? Is that right?
A. Anyone who knows Mr Dacre would accept that he would have laughed at the suggestion that he stop publishing on the back of or because of a threat.
Q. Thank you. Was the Daily Telegraph censured by the PCC in May 2011 over the Vince Cable sting story?
A. Yes, it was on a technicality, yes.
Q. You haven't been put on notice of this question. If you need more time to consider it, of course you can have it, but can you remember what the nature of the technicality was?
A. Not exactly, but it was on some sort of fishing I think that was the word used. Because subterfuge was used. I didn't agree with the ruling, but because the I didn't agree at all with the ruling, but if you're in the PCC, you accept the adjudication, which we did, and the editor, as I recall, was invited to print a summary and he in fact printed the entire ruling.
Q. I think the issue was this: that two journalists posed as constituents of Dr Cable, went to see him at his surgery, and he said certain things during the course of that meeting which led to consequences we know about, namely that he was taken off considering the bid by News International, News Corporation, for BSkyB. But the issue is whether the use of subterfuge was justified in those circumstances, I think, was it not?
A. Yes.
Q. Okay. But the action which followed is that the full ruling of the PCC was published in the Telegraph; have I understood your evidence correctly?
A. Correct.
Q. Thank you.
A. Also, the use of subterfuge there was a further story recently on the exam boards where you could use the same sort of arguments but there were no complaints. Anyway, we printed the ruling in full.
Q. Yes, in the Dr Cable case; is that right?
A. Yes.
Q. But was that the editor's decision, not yours? Have I understood that right?
A. Entirely.
MR JAY
I don't have any further questions for you, but
LORD JUSTICE LEVESON
Let me have a go. Can I go backing to what you've just said about the discussion you had with Mr Desmond. I accept entirely what you say about the likely reaction of Mr Dacre, but it is a concern or may be a concern that whereas the press will look at every organ of the country, whether it be Parliament, the government, local authorities, health service, the army, the judiciary, about which I have no complaint at all, and if they find something legitimately expose it, there doesn't seem to be as much of that in relation to the press, and therefore the perception, if not the reality and that's really what I'm asking you about is that whether or not there's a formal agreement, there is an understanding that one doesn't really have a go at other titles. The fact is, as we know, that Mulcaire/Goodman was 2005/2006. Whittamore was 2002/2003 and these stories weren't picked up and run with as they might have been if they'd been involved in some other organ of the state. You may say that's not fair, or you may think it is fair. I welcome your experienced view on it.
A. I would disagree, sir, and I think there are far too many stories about the press on the press, almost an obsession, to the point where
LORD JUSTICE LEVESON
Certainly now, I agree.
A. But where readers are not as obsessed as we are about our own business. I often get attacked well, I have in the past but I take responsibility for that because I don't, as a habit, give interviews, but I think we tend to write too much about ourselves. If we're talking about impropriety, if we're talking about wrongdoing, then I have no doubt that would be exposed in a very healthy way by the media, and journalism some people would argue it's a trade or a I'd say it's a real profession. It's become quite onerous in many ways, but in terms of reporting on wrongdoing within our industry, that would be done without fear or favour.
LORD JUSTICE LEVESON
Well, it's interesting, but if one takes the example of phone hacking I've heard a fair amount of evidence, as you may be aware, of people writing in positive terms, in terms of clear fact, that it was well-known to be going on, now rather softened by saying "rumours", but yet it took considerable work on the part of the Guardian before it really became alive again as a story, and even then, as you yourself are aware, the PCC were very, very dismissive of that story, and yet if what I've heard is right, that people were saying, "Well, of course we knew it was all going on", one would have thought that that doesn't really square with a determination to get to the bottom of all wrongdoing in other organs of the press.
A. I think that there has been so much now written about phone hacking and the Guardian provided a very good service to the industry, and it's the worst example, because in spite of what you've said, I we, at the Telegraph, were astonished about the business of phone hacking at the News of the World. I was really surprised by it. And the PCC well, they didn't handle that well because they weren't provided with the facts, and that's why there's going to have to be changes now, because most because phone hacking's the worst example. If you think of most complaints, 90-odd per cent of complaints are handled, I think, successfully by the PCC, but within that there has to be room for handling or there has to be a method of handling more serious complaints. It's not so much a PCC plus, but for the most serious complaints, there have to be powers of investigation.
LORD JUSTICE LEVESON
I think actually the PCC does contain within it a power it may not have been exercised. I've just read the terms of the documentation.
A. Well, that's not been clear to me, that they have the power to go in and demand emails and text messages and correspondence.
LORD JUSTICE LEVESON
Mm.
A. But they should be able to do that, and then there must be some sort of enforcement or yeah, it's taken me a while to come around to this, but bringing all this into sharp focus, there has to be a way of imposing sanctions, fines, on the worst offenders, whether that be a business or whether that be an individual. The other problem that we have is to make sure that everyone is inside the tent. That's when it becomes a bit more expansive, because we still have one national newspaper outside, but there's some interest, I've heard, in coming back into the PCC operation. But we have to take account of the major digital companies that are repurposing news, because although they're not involved in investigations, they're repurposing the investigations that we're involved in.
LORD JUSTICE LEVESON
I understand.
A. And when it comes to individual bloggers, as you've heard, that's much more of a that's a more difficult exercise.
LORD JUSTICE LEVESON
Individual bloggers, speaking entirely for myself and without committing myself to anything, are not my greatest concern. I do understand the issue that you raise about those who are in the business of recycling news on the Internet, which I have described, I think more than once, as the elephant in the room. But as regards membership, I have difficulty with the idea that it can always be entirely voluntary, because if everybody isn't involved, it just becomes very difficult. Don't get me wrong. I am not suggesting a government or a statutory regime. On the other hand, I don't think it's a binary choice between that and self-regulation where it's all entirely voluntary. I don't think you were in the Inquiry when Mr Barber was giving evidence this morning, but we had a discussion about this very topic.
A. Are you talking about sorry, sir, are you talking about statute and
LORD JUSTICE LEVESON
No, Mr Barber and I spoke about the binary about something between he was very much against statutory regulation, which I understand.
A. Yes.
LORD JUSTICE LEVESON
But on the other hand he recognised that if it was entirely consensual self-regulation, then some possible advantages of a new regime might be lost. Let me give you the example that I've discussed with him this morning that he went away to think about. I'm not saying anything that's novel. He expressed concern about the way in which the libel laws operate and the enormous expense which is involved.
A. Yes.
LORD JUSTICE LEVESON
And I postulated to him the possibility of some arbitral system, which is, if you like, an arbitral arm of whatever comes after the PCC, but made the point to him that unless it had some sort of framework that required people to go through it, then the very wealthy would simply say, "I'm not prepared to go down that route, I'm simply going to institute enormously expensive litigation", and so make it very difficult for whoever to defend it. So what I was asking him about, and what I'm very keen to hear your voice about if not now, then at some stage, because I'm very conscious that I'm only expressing ideas, and I'm keen to the get the view of the industry but there has to be a framework onto which you latch independent regulation, which is absolutely independent of government and also not necessarily run by editors but perhaps by some very senior retired journalists on it. I fear there probably would have to be a lawyer somewhere around there. I know that everybody's concerned about them, but other independent people who not only could continue the complaints work that the PCC have done, although perhaps expanding it to allow complaints from people over than those specifically affected there are bits and pieces that one could hook onto but additionally had a regulatory mechanism and an arbitral mechanism.
A. Yes.
LORD JUSTICE LEVESON
A much more complex construction, but one that actually provided all the avenues for those who are concerned about the press to raise them in a comparatively straightforward, quick, comparatively cheap way, and the press to respond in like kind. But I don't see how that could be entirely consensual.
Q. That's really worth considering. You take my point, though, that the vast majority of complaints are handled in the normal way. It's these more serious issues that concern us all, and having them thoroughly investigated I can tell you that Lord Hunt, you're probably aware, the chairman of the PCC, is carrying out a process of consultation within the industry before he appears in front of you.
LORD JUSTICE LEVESON
I'm delighted to hear it, because at the seminars I made clear that I was very keen that the industry have some ideas, provided the industry accept, as I've said many times, that they've not only got to work for the industry but they have to work for me and by "me", I really mean the public.
A. Yes. It's worth considering I mean, we hosted our own sort of seminar at the start of that consultation process. I don't know how these I don't know the outcome yet. It's a bit too early and it's wrong for me to say. It must come back to you as industry recommendations, but we accept there have to be changes. I agree with the editor of the FT about self-regulation, but it's how that's handled. And could this not be handled under civil law?
LORD JUSTICE LEVESON
It may be that's the way to do it, but then we would have to create the civil law construction to do it.
A. Yes.
LORD JUSTICE LEVESON
Otherwise, you can't force anybody to do it. The example that got Mr Barber thinking was he expressed concern about the extremely wealthy people who will seek to take the Financial Times on and have so much money that they can overwhelm everybody. Now, that's not happy either.
A. No. That was one of my concerns still is a concern, about affordability within the industry defines it's another end of the argument with CFAs.
LORD JUSTICE LEVESON
Of course, as I said I think this morning, there was a time when the industry had the boot because legal aid wasn't available for libel and it was very expensive to bring and the industry, although you might smile at it now, was seen to be very wealthy and able to afford the sort of litigation and therefore that acted as a chilling effect on bringing actions. Now with CFAs, the boot is, I understand, on the other foot.
A. Yes.
LORD JUSTICE LEVESON
The question is to find a median way which allows privacy, libel, all these issues to be resolved quickly, efficiently and comparatively cheaply.
A. Yes.
LORD JUSTICE LEVESON
Now, the civil law might provide a way forward, but once you've used the word that everybody hates, namely "law".
A. I think it's not an attack on the legal profession. It's
LORD JUSTICE LEVESON
No, no, no.
A. It's a concern about government.
LORD JUSTICE LEVESON
No, I understand. I'd be very surprised if government regulation ever even entered my mind. I'm not committing myself to anything I have to hear everybody's views but I have said more than once that freedom of expression and freedom of the press, which are different concepts
A. Yes.
LORD JUSTICE LEVESON
are, to my mind, a fundamental bedrock of our society. But that's not to say that the there can't be some sort of independent mechanism that deals with complaints, regulation and resolution of disputes that doesn't involve the government, doesn't involve the state, but is in some way set up so that it can operate and can require people to go through that route, however independently staffed it is, which I think is essential.
A. Sounds helpful, very helpful. The only one point I'd make on that is that once everyone is in, it's important, however and you're an expert on civil law how that could be how they could be contained so that it's so onerous to leave the system that you're practically disqualified.
LORD JUSTICE LEVESON
Yes. The answer is that that is extremely difficult if it's purely a matter of contract because there can be arguments about that.
A. I think, though, if the punishment the financial punishments are considerable, that would help.
LORD JUSTICE LEVESON
The financial constraints on leaving or not joining? You have to get people to come into the club, and one I'd be surprised if I agreed with this, that everybody says, "We're all now friends together, we can all do this because of the terrible six months we've had." Reading the history of discussions about the press since the last world war, there have been a number of attempts. Something terrible has happened, there's been a report, everybody says, "Oh, it will be much better next time." That's happened more than once; I hope you would agree with that.
A. I do, but could I add that nothing ever like this has happened to the press. Nothing as comprehensive on the media. Nothing as far-reaching as this has hit us thus far, and I think you'll find there's a general consensus across the industry that things have to change.
LORD JUSTICE LEVESON
Right.
A. I think you'd be pleased about that, rather than everything is perfect.
LORD JUSTICE LEVESON
Given the effort that I've put into persuading the industry to think about it themselves, I'm very pleased to hear it. I'm not asking you to commit to solutions. Any views you wish to express I'd be interested to receive, now or at any time. That's not a requirement; it's a genuine wish to make sure that whatever I come up with works for the industry and works for the public and the good of the public as well. What I do not want and I've said this publicly too is to produce a report that everybody reads, either likes or rubbishes, and then it just sits on a shelf, because then I've wasted a lot of time and we've all wasted a lot of money.
A. On that point, sir, could we, before the end of this particular section of your Inquiry, then come back to you?
LORD JUSTICE LEVESON
You can come back to me, but you don't need to have to be worried about precisely when I'm not allowing a free range because what I will be doing is moving from this module, which is to do with the public, onto a module to do with the police, and then the politicians, and there will be an opportunity to discuss emerging findings.
A. Yes.
LORD JUSTICE LEVESON
You may then come back, and you certainly can come back at the time that Lord Hunt is speaking, if not to give evidence, at least in writing. I'm happy to receive views at any time, to try to get the thing as ordered as I can, but ordered in such a way that requires participation without permitting interference, whether it be by the judiciary or the government or the state in any other way
A. Sure.
LORD JUSTICE LEVESON
but achieves a mechanism that ensures that all those who do provide us with our news are bound by certain standards.
A. Yes.
LORD JUSTICE LEVESON
And I'm obviously talking about minimum standards, as to which everybody seems to believe that the code is a good piece of work.
A. It is.
LORD JUSTICE LEVESON
And that's my immediate reaction. The extent to which it is observed and enforced is something else, but the actual language may not require very much. But I've probably pressed you enough on all this.
A. No, but that's very helpful. Thank you.
LORD JUSTICE LEVESON
Thank you very much.
MR JAY
The next witness is Mr Finbarr Ronayne, which is tab 5.
LORD JUSTICE LEVESON
Thank you. MR FINBARR PATRICK RONAYNE (affirmed) Questions by MR JAY
MR JAY
Mr Ronayne, sit down and make yourself comfortable. In file 1, the bundle in front of you, under tab 5, you should see a witness statement that bears your name. For our record, could you give us your full name?
A. Finbarr Patrick Ronayne.
Q. Thank you. The statement you'll see is dated 14 October of last year, is signed by you and has a statement of truth at the end; is that correct?
A. That's correct, yes.
Q. You have an accounting background. You worked at Trinity Mirror between 1991 and 2008, when you left to take up your present position at the Daily Telegraph in October; is that right?
A. That's correct, yes.
Q. And you are the finance director of the group. Can I ask you a general question: what are the differences, if any, in cultural terms, if I can so describe it, between Trinity Mirror and the Daily Telegraph?
A. Okay, the key difference probably is Trinity Mirror is a plc and I worked in one of the operating divisions. I was finance director for the national newspapers, which covered the Daily Mirror, the Sunday Mirror and the People, so I was more involved in implementing strategy, which was basically decided on at board level. At the Telegraph, I'm obviously a main board member and involved in actually setting the strategy.
Q. Yes.
A. But in aspects of the day-to-day job, it's pretty similar actually in terms of the operating day-to-day base.
Q. Trinity Mirror is a public limited company. Daily Telegraph is a limited company.
A. That's correct.
Q. But the requirements of the Companies Act 2006 are the same?
A. Are the same.
Q. Thank you. A lot of your evidence we're going to take as read, Mr Ronayne, given the time available. Can I ask you this: when you arrived in October 2008, the country was in the middle of a recession. Did that lead to the taking of measures of financial stringency at the Daily Telegraph?
A. That's correct. As you mentioned, when I arrived in October 2008, it was shortly after the credit crunch crisis, and in terms of actually budgeting for business performance the following year, we expected a significant reduction in advertising revenue, as indeed the entire industry faced, and that required basically a detailed review of our current cost base, our decline(?).
Q. You explain the systems in place to ensure the correct allocation of funds. The framework is in paragraph 9. The first element is a robust budgeting process, which starts under paragraph 10, and it involves, if I can summarise it in this way, preparing a detailed annual budget and then reviewing that budget on a monthly basis; is that correct?
A. That's correct, yes.
Q. The Inquiry is probably specifically or more interested in two aspects, which are the authority levels and then the policies. You tell us in paragraph 14 that the authority levels were lowered in December of 2008 as part and parcel of the cost reduction programme; is that correct?
A. That's correct.
Q. And you explain how the authority levels are applied. May I cover one issue, which in fact was not addressed in your statement, and this is authority for settling litigation. How does that work?
A. That would be covered basically under the policy of central control of certain aspects of the business, under paragraph 9 for central control of the key functions, would include basically litigation settlements or, I think, the decision whether to defend or settle the case, depending on magnitude of that. The legal director would basically bring that advice to myself and the chief executive.
Q. Right.
A. To decide the best course of action.
Q. Thank you. Then from a financial governance perspective I'm now on paragraph 18 there are two key policies. There's a procurement policy, which is no doubt designed to bring the Telegraph in line with its obligations under the public contracts regulations and the similar secondary legislation. I think we're probably more interested in the expenses and business travel policy, which is subparagraph (b) of paragraph 18, Mr Ronayne.
A. The commissioning of content would actually fall under the procurement policy. The expenses and business travel policy is in respect of editorial employees, and indeed all employees reclaiming expenses incurred on behalf of the business.
Q. Have these policies been tightened during your time as finance director?
A. Yes. When I joined in October 2008, I basically rewrote both policies, mainly due to the economic climate at the time.
Q. Yes. You tell us that the policies were revised in October of 2008 but did you have a feeling therefore that they were too loose beforehand or was this merely a response to the background economic situation in the country as a whole?
A. I think in the main it was a response to the economic climate, but yes, we did actually use the opportunity to tighten certain policies and procedures.
Q. Before October 2008, can you recall what this is when you arrived the position was in relation to cash payments expenses?
A. We undertook basically the business doesn't encourage cash payments but we undertook a very detailed financial review to you know, in support of our witness statements to this Inquiry, and we have not identified any cash payments that were made to purchase editorial content back to January 2005. We have identified, I think, through the expense system, that there were about 12 claims basically between 2005 and 2008, you know, where employees paid cash payments directly to secure stories, I think the amount to ?2,500 in total.
Q. Sorry, what was the sum in total?
A. ?2,500.
Q. And that was for 12 stories?
A. This is where there were 12 expense claims where cash payments were made in respect of stories around sensitive material. It was basically around stories in respect of the sex industry and around army barrack bullying.
Q. Right.
A. But there has been none since the policies were revised in October 2008.
Q. The position therefore is, if I've correctly understood paragraph 19 of your statement, that cash payments by journalists to sources simply have not taken place since October or December 2008; is that right?
A. That's correct, yes.
Q. Different titles have expressed a concern or raised this point: that some sources don't want to be paid in other than cash, through fear of being identified. Is that an issue which you're aware of?
A. I've certainly experienced that when I worked at Mirror Group. There was a very tight procedure over cash payments and where cash payments were actually made. In the case of the Telegraph, all contribution payments are actually processed on the system, where we take addresses, postcodes, bank account details, VAT registration numbers, if appropriate.
Q. Yes, but to your knowledge, has that acted as a disincentive for sources giving stories to Telegraph journalists?
A. Not that I've been made aware of.
Q. Okay. The Telegraph also has a whistle-blowing policy. That's paragraph 20. Then in paragraph 25 you refer to the letter which we have seen as an exhibit to Mr MacLennan's evidence.
A. That's correct.
Q. Are there any specific financial issues which arise this is in the context of paragraph 27 from the challenge which your company faces to transition from traditional print base to multimedia digital business?
A. I think, as Mr MacLennan explained, obviously I think it's a priority for any print business to transition itself into a multimedia business, and I think we've taken the view basically as a board that we would set realistic profit targets for the traditional side of the business and reinvest those profits into technology and digital operations to diversify our revenue streams.
Q. You were involved in organising the payment for the computer disk in relation to the MPs expenses story?
A. That's correct. Mr MacLennan was on holiday at the time and I was the most senior executive in the business.
Q. You explain what the payment was in paragraph 31. A deposit also had to be paid for, as it were, a ten-day review period to satisfy yourself that the material was what it purported to be?
A. Correct.
Q. And you were responsible for signing this off, as it were; is that correct?
A. That's correct, yes.
Q. Can I ask you about paragraph 35? You point out that from time to time, editorial executives will claim expenses in respect of entertaining police or public officials, and then I paraphrase: you aren't involved or have any knowledge of indirect payments made to police, public officials, mobile phone companies or intermediaries. What sort of expenses are we looking at in respect of entertaining? Are these the cost of a dinner
A. I think they generally take the form of lunch, dinner or a drink. Having undertaken this detailed financial review, I mean, I wasn't concerned that there were any extravagant expense claims made by the editorial team.
Q. And the expense claims, is this correct, are always in respect of entertainment and not for the provision of information, for example, from these sources?
A. No, these would all be in respect of expense claims. I mean, they need to support any expense claim with a detailed receipt of the entertaining.
Q. And presumably public officials also includes politicians; is that correct?
A. That would be correct, yes.
MR JAY
Thank you, Mr Ronayne. Those are all the questions I have.
LORD JUSTICE LEVESON
Mr Ronayne, I'm grateful to you for leading the review of the records, which permitted the letter to be written, which I have seen. It's not just important, obviously, that I see all this, but it's important that it's seen publicly to have been done and to achieve the results that it's achieved. Thank you very much.
A. Yes, thank you.
LORD JUSTICE LEVESON
Shall we take six minutes?
MR JAY
The next two witnesses will be much lengthier.
LORD JUSTICE LEVESON
That's all right. (3.25 pm) (A short break) (3.33 pm)
MR JAY
The next witness is Mr William Lewis. MR WILLIAM JOHN LEWIS (sworn) Questions by Mr Jay
MR JAY
Your full name, please, Mr Lewis?
A. William John Lewis.
Q. Thank you. Under tab 4, you will see your witness statement, which doesn't in fact have a statement of truth at the end. Is this your evidence to the Inquiry?
A. Yes, it is.
Q. Can we be clear about your statement: it is very lengthy and detailed. I understand that it took you some time over the summer holiday. Is that so?
A. It did, yes. It represents my sum total of my knowledge and recollection of my time at the Telegraph between 2006 and 2010 in relation to your questions.
LORD JUSTICE LEVESON
I'm very grateful to you for taking the time to do it. It's been very helpful.
A. Thank you.
LORD JUSTICE LEVESON
I'm very conscious that I've imposed a great deal on a large number of people, but I hope you feel that it's worth the effort.
A. Very much so, and it was actually very interesting reliving in my own mind and for this purpose what went on there, particularly with the MPs' expenses story.
MR JAY
Mr Lewis, if I can look first of all at your career. You've been, I think, at four separate papers. Between 1991 and 2002, you were at the Mail no, pardon me, you moved to the Financial Times at some stage between those two dates?
A. Yes. I started at the Mail on Sunday as a financial reporter in 1991. I then moved to the Financial Times in 1994.
Q. Thank you. Then to the Sunday Times in 2002?
A. As business editor, yes.
Q. City editor of the Telegraph in 2005 and you ended up, if I can put it in those terms, as editor in-chief of the Telegraph Media Group, from where you left in May 2010; is that correct?
A. That's correct, yes.
Q. Can I understand your current position: you are permanently seconded to News Corporation, and have been since July 2011, as executive member of the Management and Standards Committee which is looking into all the issues around the phone hacking matter. Is that so?
A. That is correct. The chairman is Lord Grabiner.
Q. Thank you. We've asked you to address your time, as it were, at the Daily Telegraph, and not to cover your recent history at News International and then News Corporation, since a lot of what you're doing overlaps with the concurrent police investigation. Is that so?
A. That is so, yes.
LORD JUSTICE LEVESON
That's not to say that at some time we're not going to ask Lord Grabiner and possibly you to come and assist us further, but I understand it
A. Thank you. As you see fit, but for these purposes I understand my evidence to relate entirely to my time at the Telegraph between 2006 and 2010.
Q. That is so. But I do have a general question for you, and it's one I've asked others, whether, in your perception, there are any cultural differences between the various papers for whom you've worked.
A. Yes, there were differences. Obviously I was at different levels of seniority at each of those different newspapers, but I think it's fair to say there was if you take the Financial Times, for example, there was a much more cerebral approach at the Financial Times. When I moved to the Sunday Times, I became aware of the power and the process involved in putting together such a fantastic newspaper, and the Telegraph, as I detail in my statement, was a process of tremendous change. We went through a very profound change programme there, where the culture shifted quite considerably.
Q. Thank you, and most of your statement is devoted to that cultural shift and the systems and philosophies of corporate governance which you introduced over a four, five-year period; is that right?
A. Yes, with my team.
Q. Yes. Can I just deal with the background. When you arrived, the company, I think, was spread out geographically over a number of locations but that changed?
A. Yes.
Q. The impact of that may have been obvious, but in your own words, what was the impact of that change?
A. The goal that I was set was to try and find a way of publishing both newspapers to the same or higher standard that's the Daily Telegraph and the Sunday Telegraph and at the same time to move confidently into embracing the new digital opportunities: online, mobile and so on, all within broadly the same budget. That was the goal that was the purpose of the change programme. And as I think was referred to earlier, another key part of this was putting the customer, the reader, the user online, at the very heart of the business, which hadn't been the case before, and all the changes that we took together and implemented stemmed from that goal.
Q. The one specific issue you address under the old regime, as it were, in paragraph 6.3.4, is heavy reliance on casual labour.
A. Yes.
Q. As you describe it, what were the problems associated with that?
A. There were various issues related to casual labour. In particular, it was it made it difficult to effect serious cost control. Although department heads professed to have a grip on expenditure in that area, that was not the case, and so that, in addition to the need to professionalise the company was going to be investing a large amount of money in training programmes to help journalists understand how to do new media. It seemed sensible that that money should be spent on staff rather than casual labour.
Q. Once the geography was sorted out, you rolled out what you call here the five governance principles?
A. Yes.
Q. Can we just identify those. The first was one, newsroom, which was really a question both of geographical integration and integrating the print and online operations; is that right?
A. Yes, that's correct.
Q. The second governance principle: effective and transparent cost management and incentive schemes. Can you just tell us a little bit about that matter, please?
A. Well, that was a point of this part of the change programme was to get a firmer grip on costs in order to be able to effect change in the cost base, to be able to have new types of roles and new types of jobs. We faced a real opportunity but also a threat in the digital area. We needed to, within broadly the same money, create new jobs, whether it's early morning working, technology correspondence and so on, and so we needed to get much better about cost management, and that's what that passage refers to.
Q. Thank you, and that had various subelements. First of all, the elimination of casual journalists, which is dealt with under 8.3, and then what you call external content, which starts under paragraph 8.6, and then there are various policies which you outline under 8.7; is that right? Which largely go to financial matters.
A. Yes, that's right, and also but control and visibility. I mean, one of the key issues here was trying to effect better management control through better transparency. If we can know in near real time how money was being spent, then we'd be able to manage the use of that money better.
Q. Thank you. The third governance incidence principle, professionalisation, I suppose means improving the training and quality of the workforce, but governance principle four, which is very much related to that, training continuous professional development, in particular the introduction of training programmes, you explain that under paragraph 10 in particular.
A. Yes, and training was there's two issues here. We've already talked about the need for new media training and every colleague was given that opportunity, but there's also a need for ongoing training and professional development and core journalistic skills. So we were trying to really create a training culture at the Telegraph, and we did successfully, something which hasn't traditionally been the case in newspaper groups.
Q. Part and parcel of that was the relaunching of the Telegraph's graduate trainee scheme.
A. Yes.
Q. Can I just follow that through a little bit. When you are employing people from the bottom, if I can put it in those terms, you explain there's a two-day programme of interviews and tests for the shortlisted candidates. Who carries out the interviews, first of all, and who decides who is going to be selected for employment?
A. I'm not sure I'd agree with the interpretation of "the bottom". I mean, some of our best people very quickly accessed great work, did great work at the Telegraph right from the very beginning. So I mean, one of the key people in the MPs' expenses story was a trainee journalist. If I could just
Q. Junior, then?
A. Uh younger. Even that's not necessarily correct. But graduate trainees, if one can call them that. I was intimately involved in that process with senior colleagues. It was one of the main ways we were going to get replenishment of the gene pool, so we took it incredibly seriously and were very proud we got it relaunched and it still carries on today, I understand it.
Q. In terms, though, of who decides who is going to be employed, who makes the hire decisions?
A. It would be a panel of senior editorial people. In my day, if I can recall correctly but this may not be entirely accurate it was two colleagues, Richard Preston and Simon Heffer, who brought their recommendation to me.
Q. Of course, the Telegraph, aligned with the practice of other newspapers, are bringing in people higher up, lateral hires. Who would decide who was going to be hired pursuant to that sort of process?
A. Well, ultimately it would be the editor or editor in-chief, with heads of department making recommendations. And yes, you're right, there was quite a radical infusion of new blood into the Telegraph during my time there, where we tried to combine the best of the best from around Fleet Street to try and meet this challenge of producing both papers to the same or higher standard and embrace all digital opportunities.
Q. Thank you. The fifth governance principle, clear appropriate reporting lines for editorial, finance, legal and compliance functions, you explain the differences in role between the editor or editor in-chief, the executive director and the legal manager. I don't think it's necessary to go through those specifically, but you helpfully explain that.
A. Could I just highlight one point here, which is that the concept of the independent force in the newsroom. This structure, my belief is, is quite or was quite unusual, where the editor didn't have these functions reporting to him or her. So it's something that was there right from the beginning of my tenure as editor, and I embraced and I came to understand how valuable it was.
Q. Thank you. Your specific role and this you deal with under paragraph 13 was to ensure that the Telegraph's editorial corporate governance policies, which we've just been discussing, were adhered to in practice, and part and parcel of that was responsibility for ensuring that the editorial budget was adhered to.
A. Yes. The key roles of the editor were really fundamentally around what to publish and what not to publish in the papers and online, around people issues that we talked about, and making sure we're getting the best out of our people, and also to ensure that the budget that had been allocated was being spent sensibly and appropriately. That was overlayered, obviously, by the overall responsibility of the editor to ensure that the editorial department is going about its business in compliance with PCC, Reynolds and the law.
Q. Thank you. Can I move on to paragraph 14, if I may. This is PCC issues. You didn't, I think, at the time your statement was prepared, have access to documents which would enable you to quantify the number of complaints which were resolved on the one hand without the need for a ruling and those which then proceeded to an adjudication; is that right?
A. Yes. No, that's correct.
Q. If we want to know the precise figures, doubtless those can be provided in writing in due course. I'm going to pass over matters which we can either take as read or hear from the editor. Can I ask you about section 8, which is paragraph 18, ethics in print media.
A. Mm.
Q. Your analysis is really tripartite, I think. First of all, it entails employing the right people, secondly complying with the relevant standards as laid down by the code. Can I deal with the third one, "Judgment: does this feel right?"
A. Mm.
Q. How does this work in practice?
A. Well, in practice, it's exactly as I state there, that it's something that any editor will ask of him or herself on a regular basis, and they should and will, I'm sure, also ask that of senior colleagues. It speaks to the judgment that's at the heart of good editing.
Q. It might be said this is not very scientific. Does it feel right doesn't involve the invocation of any particular principle or any standard; it's whether it feels right in one's waters, as it were.
A. Yes.
Q. Is it more precise than that?
A. One can take as many steps as one can to make scientific what is a creative process. Editors start each day with a blank bit of paper that they have to fill with vibrant, dynamic journalism by the end of the day, compliant with the law, code, spirit of the code, Reynolds, all carried out within Reynolds' journalistic practices. It's extremely challenging, creative work and at the end of the day you really have to ask yourself this nonscientific but really crucially important question of: does it feel right? And several times in my time at the Telegraph, it didn't feel right, so we didn't do it.
LORD JUSTICE LEVESON
When you say "feel right", do you mean this doesn't sound right factually, it doesn't appear right ethically, it doesn't seem right emotionally, or is it all of those things?
A. I'm not sure about the third one. The emotional one wasn't necessarily
LORD JUSTICE LEVESON
Commercially?
A. No, I'd probably say it's the first two primarily. But I think the mistakes that I've made in my career, and there have been several, and they are numerous, have come about when I haven't followed my instinct, and that instinct can only be described as "does it feel right". The best advice I ever got was: if in doubt, don't do it that day. Wait a day, do it the next day, come at it again. And that's all that this paragraph is meant it's not meant to be a catch-all. I'm not suggesting it as a new regulatory framework.
LORD JUSTICE LEVESON
I'm pleased to hear that.
A. Although it may rule out the need for lawyers, which may be troubling, or not, but I just think it would be wrong not to make it clear how important the feel is in the trade in which I've worked for the last 20 years.
LORD JUSTICE LEVESON
It's really a default question of a slightly different level, isn't it? You may have done everything right. You may have got sensible people working on it. You may have sourced the story in a way that you are satisfied with. You may feel it will satisfies the PCC code
A. Yeah.
LORD JUSTICE LEVESON
but even then, although you've ticked all those boxes, if you're broadly unhappy, then you're not going to publish is that day? That's what you're saying?
A. I'm saying that. I'm saying that and it always annoys the reporter as well. They always go storming out of your office, and at the end of the day, that has to be an editor's right, to say, "It just doesn't feel right. I can't put my finger on it, but it doesn't feel right." Editing really, to give sort of gobbledygook management speak, is about risk mitigation. Editors have to wrestle each day with really difficult issues. We have a saying in my industry, which is: we don't make chocolates. Mars bars or the like don't come churning off a conveyor belt and simply accumulate in a box and it's a very complicated business, as I know you're aware. The best stories are never black and white. You don't get a receipt for a whistle-blower providing information to you. It's just not how it works, and so you will perhaps, on that basis, understand how the instincts of you and the people around you one is very reliant I was very reliant on my deputy during my time as editor, who's now the editor. I was reliant on my colleague, who is now the editor of the Sunday Telegraph, and a range of other important colleagues who would also hold you to account and would often ask the question: "Are you really sure? Does this not feel right? If which case, let's not do it."
MR JAY
Thank you.
LORD JUSTICE LEVESON
I'm going to have problems articulating that, but there it is. I understand the point you're making.
MR JAY
May I move on, Mr Lewis, to the issue of private investigators and other external providers of information. This is paragraph 22.
A. Right.
Q. You make it clear that the general practice at the Telegraph Media Group was not to pay private investigators. To the best of your knowledge, this never happened during your tenure between 2006 and 2010. But then you say in paragraph 22.18 you're fairly certain that a number of reporters would, from time to time, have some sort of contact with private investigators during the course of their reporting duties. Can you be more specific there about the sort of contact you're referring to there?
A. Yes. I mean, when a fraud hits a big company, they will often engage the services of a reputable investigations unit in order to help the company find out who did what when, and I would have expected my reporters involved in covering those types of stories to have engaged with those investigators to see if they could become sources who could provide timely information so that the readers of the Telegraph could be better informed about the fraud that had been ongoing at that company.
Q. Thank you. Separately from that, a significant sum, you think in the order of ?150,000, was paid to the intermediary, if I can so describe him, in connection with the MPs' expenses story; is that right?
A. That's right, yeah.
Q. Some specific questions, please, about the expenses story, which is picked up in paragraph 31.
A. Yes.
Q. The first issue, I suppose, which you had to satisfy yourself of was that the material was genuine and not a hoax?
A. Yes. I was concerned from the very beginning that it was a hoax. I used to work, as you referred to earlier, at the Sunday Times, when many years previously the Hitler diaries hoax took place, and the ghost of that particular situation still rose around the Sunday Times newsroom, so I was particularly aware of the possibility of someone trying to stitch me up by providing hoax material. Quite quickly I was able to satisfy myself although I will concede that worry about a hoax dogged me all the way through until the MPs finally confirmed it themselves. So my first concern was it being a hoax. I was also aware of the fact that this story was laced with risk all round, as the best and most important public interest journalism tends to be, whether it was the time that we had in order to be able to investigate it, whether it was the reaction of the readers, that one couldn't be certain of and all the people we were dealing with. It was a story that was laced with risk, so I felt the best way was to engage in an iterative process, a five-step process, if you like, in order to run this investigation and to conclude finally about publication, which I'm happy to share with you, if you wish.
Q. Just to go through some of the stages, one of the early issues, I think, was whether a breach of the criminal law might be perpetrated. Have I understood that correctly?
A. Stage one was I was told by colleagues that they had been approached by an intermediary on behalf of a source to say they had got four years' worth of MPs' data copied onto a disk. Obviously, the first question was: could we go ahead and negotiate with that source and have that kind of conversation? So we took legal advice, and given that the information had been copied onto a disk, the advice was that was not capable of theft, and in addition it was also seen as being important that no Telegraph person had been involved in the copying process. It would be also wrong not to state now that already at the very beginning I was pretty aware of the likely public interest in the material seeing the light of day, so that was phase one.
LORD JUSTICE LEVESON
I understand that, but let me just change the facts a little bit and ask whether it would have made a difference.
A. Yes.
LORD JUSTICE LEVESON
Assume that it hadn't been a disk that whoever it was copied it had bought in a shop and taken in and then copied the data on because I'm aware of the law in relation to intellectual property but they'd actually stolen a disk. In other words, they'd used a disk that wasn't theirs and stolen it. Do you think that would have made an entirely different analysis of the position?
A. I would obviously have got legal advice, as I got throughout this process, and I would like to think that we would have been able to find a way to bring this very important information to the readers' attention without breaking the law.
LORD JUSTICE LEVESON
Handling stolen property. That's the law.
A. I don't know what the legal advice would be, but my first port of call would have been to get legal advice and
LORD JUSTICE LEVESON
You were having a go at lawyers a few minutes ago.
A. Yes. A fair point.
LORD JUSTICE LEVESON
All right, all right, keep going. Cheap, cheap.
A. Apologies, yes. But the second phase I think is really quite important. So I felt comfortable with my negotiating team going to meet the source, and the source was really quite interesting because he wanted some money, which was not unexpected, he wanted some legal protection, but what was really interesting was that he wanted the reason he had come to the Telegraph was he wanted to ensure fair and balanced coverage. He wanted to be certain that the Labour MPs and the Conservative MPs all had their chance to have their day in the sun, as it were. Of course, I was delighted to provide that, because that's what we would have done anyway. We then, on that basis, concluded this agreement and then moved to phase three, which was the most important phase and the most difficult phase, which was we had ten days given to us to investigate the data on this disk, and the data ran to more than a million documents. So we had to put together the best of the best in a secret room and get them to see what was on this disk, and they uncovered quite quickly things that no one thought probable, looking through such stuff. So I became very aware that it was my responsibility to bring this to the public domain. It was no longer going to be a choice for me as editor; I now this a duty to bring this into the public domain. Which takes me onto stage four, which was about engaging with colleagues on how we were going to publish. This was a matter of enormous importance because I wanted it to be seen to be fair and balanced in our approach, and we concluded that we should rightly start with the government and then move into the opposition as it was then, the Conservative party. Stage 5 was then about writing to each MP to say, "Here are allegations we need to put to you", giving them due notice, and waiting for their replies. I can remember it as if it was yesterday when I was told that Jack Straw had replied, confirming information and explaining his expenses, and only then did I feel able to give the green light to publication that evening.
MR JAY
Thank you. This yielded a number of complaints, some of which were successful, others not, and you list those in paragraph 31.10, I think, Mr Lewis.
A. Yeah, mistakes are always an issue, and I hated it when we made errors, and I hated it even more in relation to this story, but I will say in defence of what we did that the mistake ratio here is reasonably low and I remain hugely proud of given the intensity with which the MPs' expenses team had to work, the incredible pressure they worked under, continual threat of trying to be stopped what they were doing, I think this record is one we should be proud of.
Q. Some might say the expenses story went on for too long and the Telegraph, as it were, eked it out for what it was worth. You say that the strategy was to start with the government, work down and move on to the opposition, but really, you took every possible commercial advantage that was open to you to, as it were, make as much money out of this as possible. Would you accept that?
A. No, I wouldn't, and I suppose some might say that it represents one of the most important bits of public service and public interest journalism in the post-war period that unveiled and revealed such wrongdoing in Parliament that the speaker had to resign and many MPs followed after him, and I'd probably prefer that version of events rather than the one you put to me.
Q. Okay. So it wasn't a question then of achieving a return on a no doubt substantial investment for the material in the first place? You wouldn't agree with that proposition?
A. I wouldn't agree with that. I'd say that the reason that we did it was because ultimately I was obliged I saw it as my ethical obligation to bring this profound wrongdoing at the heart of the House of Commons into the public domain, and remain passionately of that view now.
Q. No one would seriously suggest that the Telegraph was not entitled to make money, but looking at the circulation figures over this period of time, as I'm sure you did, is it possible to say whether or not there was a return on the Telegraph's investment?
A. I don't know, but I wouldn't agree with the premise of the question that the money paid was an investment. It was a way to ensure that the readers of the Telegraph and the broader British public were able to find out about the profound wrongdoing in the House of Commons and how MPs had stolen from the taxpayer.
Q. Of course it's accepted that without payment you weren't going to get the data, and one can characterise the payment in whatever terms one wishes, either in your terms or in mine, but however it's characterised, is it capable of being demonstrated with reference to the circulation figures whether the increase in circulation and therefore the resultant increase in revenue overtopped the amount of money that had to be paid for the retention of the data?
A. I don't know the answer to that question. In line with other big stories that I've been involved with, one would expect circulation to go up, but at the heart of the MPs' expenses story was a desire to ensure that loyal Telegraph readers and you've already heard about the unusual loyalty of Telegraph readers were informed about how their MPs were fleecing the taxpayer.
Q. I've been asked to put to you a question on a completely unrelated matter, and I gave you some notice of this. It concerns the sting, if I can so describe it, of Dr Vince Cable, which I think was in December of 2010, when two female journalists from the Telegraph impersonated his constituents. You obviously know about that matter, although by that stage it's right to point out that you had left the Telegraph; is that correct?
A. That is correct.
Q. Indeed, we know from the chronology that you left that summer, didn't you?
A. Yes. May, actually, I think.
Q. The original story in the Telegraph, published on 20 December 2010, did not include Dr Cable saying that he'd declared war on Rupert Murdoch by referring the BSkyB bid to Ofcom. Do you recall that?
A. I do.
Q. Subsequently Mr Peston of the BBC got hold of the full story, including those remarks, and the question then arose where Mr Peston had got that information from. Am I right in saying that the Telegraph carried out an internal investigation through private investigators to see who had leaked or might have leaked the story to Mr Peston? Is that correct?
A. I have no idea. As you said earlier in your question, I left the Telegraph in May 2010, so I've no idea if the Telegraph conducted such an investigation.
Q. Okay. But the conclusion, insofar as there was one, which the investigators reached was that there was a strong suspicion that you and someone else were involved in orchestrating the leaking of that information to Mr Peston. The question I have for you
A. Right?
Q. is simply this: is that strong suspicion correct or incorrect? Or, rather, did you leak this information to Mr Peston?
A. I can't assist you with that. As you know, core to any journalist and I'm included is the protection of journalistic sources, whether they're my sources or someone else's sources, and any way that I answer that question, helpful as I would like to be, would endanger that principle. If I was to give you an example, if I was to confirm that I was not involved at all, and that is those reports the reports you've just read out to me are inaccurate, I'm sure that would cause the Telegraph and/or this agency that you say that they took on but I don't know that for a fact to reinvestigate and to try and hunt down what might be entirely legitimate journalistic sources. So I can't assist you on that.
Q. Can I just press that a little bit further, Mr Lewis? There are two possibilities here, logically. Either it was you who leaked the information to Mr Peston, in which case there's no question of a source involved because you were the person who leaked the information, or it wasn't you, in which case it's not your source that's involved, but Mr Peston and his relationship with another source. I'm not quite sure why you're unwilling to tell us "yes" or "no" whether you provided this information to Mr Peston, since there's no question of [Alarm sounded]
LORD JUSTICE LEVESON
One might have thought you were responsible for this, but this is the not the Queen's building, so we are not I'm afraid it will happen twice.
A. I'm in danger of repeating myself, but I will repeat myself, which is that I think it's clause 14 of the PCC code, for me, as I've lived with all my professional drear, is as much about protecting my own sources as it is for protecting other journalistic sources. I just won't do it. So I don't mean to frustrate, and I hope you'll agree I've been as helpful as I can be in areas that are of importance, I thought, to this Inquiry, but in this instance I've probably gone as far as I can and should.
Q. Okay, Mr Lewis, I fully accept that you have been a great assistance to the Inquiry. I'm not going to press the matter further unless it's suggested that I should.
LORD JUSTICE LEVESON
You heard the debate or discussion that I had, I have no doubt, with Mr MacLennan.
A. Yes.
LORD JUSTICE LEVESON
I appreciate that your present role may involve you thinking about some of these issues, but if you do have anything to say having regard to your experience as an editor in relation to these matters, I wanted to give you the opportunity to say it.
A. That's very kind. I do, and in my statement I make some references to some ideas, but that was in August, and my thinking has built on that since then. I know you asked people to go away and think about
LORD JUSTICE LEVESON
That's true.
A. I hope this is of some use, but I would say four things, I think. They may or may not be of use. Firstly, I completely agree with your judgment not to rush to judgment, I mean, in terms of how to change, since it's incredibly complicated, and we must not throw the baby out with the bathwater. There is tremendous work good work that, for example, the PCC has done over the years that we mustn't lose. But my key point is this: that there's been a lot of talk, rightly so, about what the son of PCC who look like, whether it should be legislated for wrong, no, it should be self-legislated, but if I understand the key question to be that there is legitimate public concern about newsroom behaviours, and that we need to find ways to assure the public that newsroom behaviour is going to improve and can be controlled, if I understand that to be the central question, then we must therefore focus our attention on what's the best way to influence those newsroom behaviours. You can then turn the question around, can't you, and say: what is best practice newsroom behaviour? And it strikes me that that's a question we need to focus on now as a matter of urgency, so that issues like an independent force within the newsroom being a key best practice principle would be, I think, something that I would suggest. Assurances of the independence of the editor it is another key principle, and alongside the Editors' Code, you would see the son of the PCC, this new regulator, hold newsrooms to account on those principles as well as the Editors' Code, and that's the best way in my mind for influencing newsroom behaviour. At the same time, you would ensure that newsrooms had to be transparent and therefore accountable for how their newsrooms operated. Sunlight is a fantastic disinfectant, and the very act of causing newsrooms to have to disclose how they work and how far away they are from best practice would be an incredibly empowering act to help assure the public that newsroom behaviours were under control. I know you will probably be thinking: what about the issue of how do you get everywhere in the tent? I don't think you've call it the Richard Desmond issue, but it is the Richard Desmond issue as things stand.
LORD JUSTICE LEVESON
It's much more than Richard Desmond. There are magazines, all other sorts of journals that aren't members of the PCC, aren't there?
A. Correct, correct, and I think there my thinking is focused really on following the money. Businesses tend to make decisions where the money increases rather than decreases, and logic would dictate that if this son of PCC was able to control the currency, the advertising currency that is so vital to the newspaper industry, which is currently owned by organisations such as ABC and NRS if those were to come under the control of the son of PCC, then any newspaper group outside of the son of PCC would be unable to sell its advertising wares based on these crucial currencies that are so important to how newspapers sell advertising. In addition, in the increasingly important online advertising market, ABCE would also and should also fall under the control of this new regulator, so you wouldn't be able to force anyone to join it but if you wanted, as a media house, to continue to use this advertising currency, you would have to be part of son of PCC.
LORD JUSTICE LEVESON
How would you require that to happen?
A. How would you require the son of PCC to get that control?
LORD JUSTICE LEVESON
I'm not going to call it the son of PCC because that suggests that a little tinkering will do, and I'm not sure it would.
A. I don't mean to imply that at all. I understand the PCC up until this point to have been a mediator with regulatory reputation, and I think there is now I don't disagree with the emerging consensus of the need for the industry to have a regulator, a self-regulator, an industry that the industry should set it up for itself, albeit with non-industry people. I don't disagree with that emerging consensus at all. You wouldn't be able to force people to join it, but if you create an environment where the money, the advertising money, was more able to be accessed if you were a member of it, that would be one step that would cause this to happen.
LORD JUSTICE LEVESON
I'm not sure how you would be able to require advertisers to commit into such an organisation. Why would a company wishing to advertise, say, "Well, of course I'll only go to those who are approved by the regulator" unless you required it? And once you're requiring it, then you're going to run yourself into other difficulties. I'm happy to talk about it. I'm also happy to talk about independent regulation, however that comes about, and I'm also concerned to know how you would fit in the general requirement that people have expressed concern about in relation to libel and the cost of litigation and to have some speedier mediation solution.
A. Yes, I heard that debate and discussion you had earlier. Just to clarify my advertising point, the way that newspaper advertising broadly works at the moment is that newspaper groups use this currency, whether it's through ABC or NRS or some other currencies, which is almost a stamp of approval that these bodies give to say you have this many readers or this many eyeballs on your website, and you use that, as a newspaper group, to then go to the advertising agencies that by and large control corporate advertising and you get off the back of that, you win advertising. So my argument is that the son of PCC, as I'm calling it, would should get control of that currency, to give an extra motivation to media houses to become part of that regulatory framework.
LORD JUSTICE LEVESON
We'll obviously have to look at how that works. Is there anything else that you
A. No, sir.
LORD JUSTICE LEVESON
Thank you very much indeed. Thank you.
MR JAY
Sir, the final witness is Mr Tony Gallagher. MR ANTHONY CONNELL GALLAGHER (sworn) Questions by MR JAY
MR JAY
Your full name?
A. My name is Anthony Connell Gallagher.
Q. Thank you. Under tab 6 of the bundle in front of you, you should find a copy of your witness statement, dated 14 October of last year, and underneath a statement of truth and signed by you; is that correct?
A. Yes.
Q. You are currently the editor of the Daily Telegraph?
A. Correct.
Q. In terms of your journalistic career, after working in the regional press, you joined the Daily Mail in 1990. You ended up, if I may so describe it, as assistant editor. You left the Daily Mail in October 2006 and you became editor of the Daily Telegraph after a number of other positions there in November 2009; is that correct?
A. Yes.
Q. I've asked this general question, this cultural question about the differences, if any, between the various newspapers for which you worked. In your case, it would be a comparison between the Daily Mail on the one hand and the Daily Telegraph on the other. Are there any cultural differences between the two?
A. Bear in mind that I was operating at a lower level when I was at the Daily Mail, but notwithstanding that, I don't see huge cultural differences between the newsroom of the Daily Mail and that of the Daily Telegraph, in that there's a desire for accuracy, there's a desire for professionalism, there's a desire to compete with and beat your rivals in what's a hugely competitive newspaper market, and I think it's right to say that the journalists that can thrive in one newsroom can usually thrive in another, and their skills are very transferable. So no, I don't see a huge cultural difference.
Q. Thank you. Under paragraph 5, you explain and we know this from other evidence we've heard editorial decision making is your responsibility?
A. That's right.
Q. Although of course day-to-day decisions may be delegated to others; is that right?
A. Correct.
Q. In terms of what you decide to do yourself and what you decide to delegate, what principles, if any, do you apply to guide you?
A. I have a team that works underneath me that I trust implicitly that carries out a lot of the instructions that I would make in the course of the day, but I think it's fair to say that I'm very hands-on and I'm involved in most of the key decisions of the day, from everything that goes on the front page to the promotional blurbs, to the page leads, to the choice of commentary, to the leaders, to the choice of features. Pretty much everything apart from the TV listings.
Q. Thank you. In the next few paragraphs of your statement you deal with the structure within, as it were, the editorial division of the Daily Telegraph and the various departments. I can move on to paragraph 10 and deal with the issue of the Telegraph website, which we've heard from other evidence is becoming increasingly important to the Telegraph's business model. Can you explain what you meanwhile by the phrase "reporters who self-publish their own stories"?
A. In classic newsrooms, stories tend to be written and then routed through the news editor, who will then route them to the editor and discuss the importance of them. With the Internet and the need for speed of delivery, as we compete against Internet news providers, we took a decision a couple of years ago to ensure that experienced reporters were effectively able to bypass the news deck, which would allow them to self-publish their stories and have them peer-reviewed pretty much instantly. But that was mainly for what I would describe as noncontentious news stories rather than anything that would be particularly controversial.
Q. So anything that might attract controversy, that would go up through the traditional pathway; is that right?
A. Yes. Or it would or the reporter himself or herself would quickly get involved with the legal department that works on the same floor and is on tap the entire day in terms of advice or guidance they might be able to provide.
LORD JUSTICE LEVESON
Not to do so would create a reputational risk.
A. Absolutely, and the lawyer is two doors away from my office and is on the floor most of the day, and has his door open to reporters the entire time, so can be consulted at any stage, not just by me but by junior reporters too.
MR JAY
Can you explain a little bit more how the process of peer review works, both generally and particularly in relation to the online product?
A. It's senior colleagues of the reporter in question checking the accuracy of the story, making sure there are no howling spelling errors and so forth before the other reporter launches it onto the interpret.
Q. Thank you. You explain how legal risk is addressed under paragraph 14. Some stories require legal sign-off, as you put it. There isn't a hard and fast algorithm for deciding which stories require sign-off and which don't. You explain it's a question of judgment, but you're on the side of caution. We understand fully about the concept of risk in the context of defamation, but to what extent do privacy issues feature in the Telegraph's product, the stories they print?
A. That's not a very live issue for us, in that we don't really go down that path in terms of the story choice, so privacy doesn't normally arise. I think there's a very tiny amount of stories for the Telegraph.
Q. But we know there's a showbusiness correspondent.
A. That is correct.
Q. What sort of stories does he or she write?
A. There's been a showbusiness correspondent dating back two decades, but classically the showbusiness correspondent will cover showbusiness stories that are of interest to Telegraph readers, as we judge them. They'll cover the radio, TV shows, theatrical first nights, cinema premieres. To give you two immediate examples, we've been very interested at the Telegraph in the premiere of War Horse, and we've carried a great deal about that of late, and we have a great interest in Downton Abbey, which appears on the news pages periodically.
Q. It's a question of the Telegraph knowing its readers?
A. Absolutely. We're more likely to be interested in Downton Abbey than we are in the X Factor, for example.
Q. I think I'm beginning to get the point, thank you. Can I deal with paragraph 16. When the PCC asked you not to publish a particular story or photograph, what is the Telegraph's typical reaction to such a request? Could you help us with that?
A. We tend to abide by it. The relationship with the PCC is very healthy. They can pick up the phone or they can send an email to me or to the head of the legal team, and they're very quick to point out where there's an issue with a particular person that is requiring or demanding privacy. I have to say, when they send these emails or they ring us, I'm guessing that it's quite a small minority of requests are relevant from the point of view of the Daily Telegraph in terms of the personalities they're talking about.
Q. Thank you. We heard, and I put it to a previous witness, Mr MacLennan, that the Telegraph was censured by the PCC in May 2011 over the Dr Vince Cable sting story?
A. Yes, that's correcting.
Q. Mr MacLennan told us that the full adjudication was published; is that right?
A. That's right. The PCC ruling, which we accepted but were unhappy with they required us to publish an abridged version of that ruling. I felt that it was a matter of such public interest that we should publish the entire ruling, which was, from memory, about a third longer than the abridged ruling. We published it in its entirety.
Q. You mentioned the public interest. What was the public interest in publishing the entire ruling?
A. I felt that it was the story itself generated a huge controversy. It was probably the most important PCC ruling of 2011 and I felt in the interests of justice, we should carry the entire ruling, given that we'd devoted a fair amount of space to the embarrassment of the Liberal Democrats in December 2010.
Q. Thank you. May I deal with the issue of corrections. You don't have a corrections page?
A. No.
Q. What is your policy, if any, in relation to the publication of corrections?
A. All corrections come through me. Very often, complaints are addressed to me directly by lawyers or by individuals, if not me then the legal department, and we try and deal with corrections very quickly. I don't like them building up. I don't like the process being drawn out. Wherever possible, I like them to be done quickly. We don't have a corrections page, but my thinking is emerging that it's something we may need to consider in due course.
Q. Thank you. It's been put to one or two editors already the desirability or otherwise of having a readers' editor, which I don't think the Telegraph has. What is your view on that, if any?
A. I'm not sure that a readers' editor is a wholly helpful idea in that I think the person that should be dealing with the readers is me. Complaints often come to my desk, and I take on board the fact that where there are complaints I will ring people and find out what the nature of their complaint is. So I think it might be an unnecessary layer of bureaucracy and I prefer to deal with the issue myself in a quick and timely fashion. But I must say, I don't have a hard and fast view on the matter and if there was an industry consensus that everybody had to have a readers' editor then I'd be happy to go along with that.
Q. Paragraph 23, our page 21162.
A. Yes.
Q. "The culture of the Daily Telegraph is one of excellence and professionalism." First of all, how is that culture inculcated? And secondly, how is it executed, as it were, across the whole of your product, by which I mean your employees?
A. We have a highly professional staff who can be relied upon themselves to work to the highest standards. I think accuracy is at the forefront of everybody's mind every day, and they pride themselves on getting stories right. So first and foremost, it comes down to the reporter. From my point of view, I lead from the front and I'm highly visible. I'm there the entire day, notwithstanding today, and I'm usually there when the edition goes at night source. So I like to think that they can approach me if there's a problem and that I'm a keen stickler for accuracy and getting stories 100 per cent layered on right.
Q. Can I move on to a different matter now. That's responsibility for checking sources, starting at paragraph 29. You explain the day-to-day operation of the paper and the various conferences which take place under paragraph 30. That's part of the background. The primary responsibility lies with the reporter, but the can you just deal with the last sentence of paragraph 29, the extent to which reporters are questioned about their sources. Is this a question of intuition or is there more developed science to it?
A. It's a mix of both, I think. It depends upon the nature of the story in the first instance, how explosive is the story, to what extent is it a knocking story, what sort of waves is it going to cause in political circles? Secondly, what's the veracity of the source? Is the source on the record? If the source is off the record, is there documentation to back um what we're about to allege? I think it's only right to say that we have to trust in the judgment of the reporters, too. If a very senior reporter comes to me with an explosive story and says, "We can't name the source", we're more likely to take that on board than if it happens to be a junior member of staff who joined us five minutes ago.
Q. This question was asked of others, and I suspect I know the answer when I put the question to you, but is there any written audit trail of these decisions in relation to sources so that if there were to be litigation you would be able to demonstrate the thought process?
A. The PCC has issued, I believe, new rules in the past two weeks on the nature to write down how public interest decisions are taken and who is accountable for them. That doesn't necessarily include identification of sources, you won't be surprised to learn.
Q. No.
A. But certainly we're going to have to provide, going forward, more documentary evidence of how we reached a particular decision to publish a story, and I have to say I'm comfortable with that.
Q. Thank you. Then paragraph 32, Mr Gallagher. If you read a story and it makes you think: "When did that come from?" you will almost certainly ask the question. That's a question of the matter of experience. If you smell a rat or there's doubt in your mind, you'll want to probe further; is that correct?
A. Correct. Beyond the legal process, it's a matter of some instinct, I think.
Q. Yes. I can move on. Paragraph 39.
LORD JUSTICE LEVESON
Before you do move on, Mr Gallagher, is it going to be extremely inconvenient for you to return first thing tomorrow morning?
A. I'd really much rather continue after 5 o'clock if that's at all possible. I've had to take the entire day today, so if it's not too inconvenient for everybody.
LORD JUSTICE LEVESON
We'll carry on but we will just give the shorthand writer a couple of minutes. (4.38 pm) (A short break) (4.42 pm)
MR JAY
Mr Gallagher, paragraph 39, if I may say so, though very well written, we'll pass over, but we will note your description of how ethics applied to what you do. Can I deal though with paragraph 41 and the question of any influence on you from above, namely the proprietors. You tell us that there is no such influence. Is that correct?
A. Correct.
Q. What is the nature of the communication, if any, between the proprietors and yourself?
A. Next to nothing. I talk to the chairman of the Telegraph Media Group, Aidan Barclay, ones or twice a month. I think I spoke to him the week before Christmas and I haven't spoken to him since.
Q. Thank you. May I ask you briefly at this stage about your dealings, if any, with politicians? Do you have dealings with politicians, particularly those in high office?
A. Yes, I do.
Q. First of all, how frequently?
A. I think I've seen the Prime Minister three times in 2011, twice for dinner. George Osbourne, a similar number of times. Ed Miliband, a similar number of times. And with my team, we've had lunch or dinner probably with three-quarters of the cabinet, and perhaps 50 per cent of the shadow cabinet over the previous 18 months.
Q. It's clear from that answer that you don't just see those in government; you see those in opposition.
A. Indeed.
Q. Is there any difference in the reason for your meeting politicians on the one hand in government and those outside government?
A. Absolutely not. We're interested you won't be surprised to learn as a newspaper, we're terribly interested in politics, so it shouldn't be a great surprise to discover that we have pretty regular meetings with the most senior politicians in the land, who are keen to get exposure for their policies, convince us of their ideas and that their ideas are of merit and so forth, but I think it's important that we see all sides. I would add the following: I never have these dinners on my own, I've never been in their private homes, and nor would I ever have them in my home. It's usually me and senior members of the editorial team. So it's purely work for us.
Q. Thank you. And presumably these dinners are an expense on your paper; is that right?
A. Usually, yes. Equally I think it's only right to say that politicians now senior politicians now document these on their own websites in the interests of full disclosure.
Q. Maybe in relation to the Daily Telegraph it's an entirely stupid question but I ask it nonetheless so I can get the answer. Presumably the reason behind these meetings is not to persuade the Telegraph to support or not to support a particular political party?
A. You'd have to ask David Cameron or Ed Miliband, but I think we've given them pretty rough treatment, both of them, for various issues over the past 12 months, so if that was the measure they had in mind, they've failed.
Q. Thank you. Paragraph 50, please.
LORD JUSTICE LEVESON
Do you think it gives you influence?
A. Absolutely not. I don't kid myself. The only reason they're having dinner with me is because I run the Daily Telegraph but if I fell under a bus this evening, they'd want dinner with the next editor of the Daily Telegraph.
LORD JUSTICE LEVESON
Yes, I understand that. I'll change the question slightly. Do you think it gives the editor of the Daily Telegraph influence?
A. No, is the short answer to that. I think they become aware of where we stand on given issues, but given the extent to which we find ourselves in opposition with the current government, and indeed found ourselves in opposition with the last government, I think it would be fair to say we're not having a great influence if there are so many of their policies that we don't agree with.
MR JAY
Paragraph 50, please, Mr Gallagher. These are factors you take into account on perhaps fairly rare occasions when a publishing decision has privacy implications.
A. Mm-hm.
Q. You list three of them. The first is the position of the person who is the subject of the story. In your view, is the mere fact of celebrity a reason for publishing a story which would otherwise be an intrusion into that person's privacy?
A. No.
Q. Why do you say that?
A. I would qualify that by saying that if the celebrity was of interest to Daily Telegraph readers, then we might be interested in it, but I think it's very hard to pin down precisely when and how we become interested in that person. It would far more relate to politicians, I think, and we'd be much more interested in their private lives, but again, there probably comes a point when we get interested in it and it's hard to know when it becomes an overwhelming public interest in the disclosure of that information. It shifts, the ground, if you see what I'm saying.
Q. Is it the Telegraph's position, if one were to take the example of a politician, who, for example, has not publicly spoken out in favour of family values, that the publication of adultery would be in the public interest in relation to that individual?
A. It's a difficult question, to which I don't think there's a short and simple answer. Was the publication of the break-up of Chris Huhne's marriage in the public interest? Perhaps not, but then it emerges that there's a wrangle over who was behind the wheel of a car and whether or not he order her to take points on his licence. Then it definitely becomes a matter of public interest. So I come back to what I said earlier: the ground can shift.
LORD JUSTICE LEVESON
But it's not that their relationship has broken up that's a matter of public interest, but whether somebody has done something that contravenes criminal law.
A. In the case of Chris Huhne, yes. In the case of David Blunkett, to give you another prominent political example, when it emerged that he was involved in a love tangle, to use a phrase, there might not have been an overwhelming public interest in that to begin with, but when it become apparent that there had been an issue over whether or not he had fast-tracked a visa for the lover's nanny, then it was suddenly a massive kind of public interest and he subsequently lost his job.
MR JAY
May I ask a series of general questions. The issue of prior notification, whether it's the Telegraph's policy to notify the subjects of stories that stories are about to be published, is it or is it not the Telegraph's policy to do that?
A. It tends to be our policy, the reason for that being that the Reynolds defence is well-known, I think hard wired to most members of staff, and giving them prior notice of stories seems to me to be good practice, even to the point where, on occasion, we've held the story out of the paper for 24 hours to ensure that the subject of the story is given full chance to respond in suitable detail.
Q. Any policy may be subject to exceptions. Could you assist us, please, on a principle basis of the sort of situations which might justify a departure from that policy?
A. I can't think of what we've done in reality, but in terms of hypotheses, I suppose if the subject of the story was going to destroy the information or it was no longer going to be material if you waited another day and they were going to change their mind, then there might be examples where you would not go for prior notification, but they would be extremely rare, and in fact I haven't come across them in my time there.
Q. Thank you. May I ask you now about conditional fee agreements. I have no doubt you have views about the balance of power which is created by claimants having access to such agreements, but I understand it to be the position that sometimes the Telegraph uses conditional fee agreements. Is that so?
A. That's correct.
Q. Is this usually the case or always the case?
A. It's occasionally the case, is how I would put it. They have become a weapon in our armoury as we face claimants who have fantastic funding and seemingly inexhaustible limits of patience to pursue us, even when they're flat wrong.
Q. Can I take that answer in two parts? Why does the Telegraph's use of a conditional fee agreement improve its bargaining or litigation position vis a vis a claimant?
A. It makes it cheaper. Bear in mind we're a company that makes money, as you've seen, and we're reasonably successful, and therefore we have deep enough pockets to fight a number of these cases, but I have to tell you that very often we fail to fight cases simply because the expense of so doing is so onerous that it's easier to pay our own expenses, carry a brief clarification and then move on. Only last week I signed off an amendment to a story, and it was concerning a policeman who had been guilty of some misconduct and we'd run up legal bills of ?35,000, which for us, while being a substantial sum of money, is not ruinous, but if you're a local paper and you're suffering that kind of difficulty, you'll automatically throw in the towel. I'll give you a second example, if that would be helpful, which concerns the case of a man who was described as the world's worst professional tennis player, and we carried a small story about him on the sports pages, in common with a good number of other national newspapers, but armed with a conditional fee agreement, he came after pretty much every national newspaper and then showed up the cheques that he won from all of them on his website. Reuters, who I think I'm right in saying supplied the original story, eventually bailed out when their legal bills came to ?130,000, and we kept going and the case against us was eventually struck out, but everybody else fell by the wayside, to give you just one example.
Q. I ask you to deal with a point which has been forcefully made by those acting for claimants, that if a newspaper such as yours has a good defence, why doesn't the newspaper take that defence to legal adjudication, since the effective after-the-event insurance will mean you get all your costs or most of them back?
A. You can. Do you mean proceeding to trial?
Q. Yes.
A. Proceeding to trial gets even more expensive than that. We've had one or two cases where seven-figure sums have been burned without successful revolution. I must say, we try wherever possible to avoid going to trial and try and resolve things at an earlier stage, but occasionally you will get a litigant who is extremely determined to have their day in court.
Q. Okay.
LORD JUSTICE LEVESON
So that raises the question that you've heard me ask before today I don't know whether you were here earlier about some sort of arbitral system.
A. I'm hugely attracted by that. Hugely attracted by that. A quick and easy way, a cheap way of resolving legal complaints I think would be one of the best policy outcomes of this Inquiry, sir, because the chilling effect of libel on small media organisations has to be seen to be believed.
LORD JUSTICE LEVESON
But there's a downside to that, Mr Gallagher, which I'm sure you appreciate, namely that the only way that can become compulsory is if it's part of the law.
A. Mm-hm.
LORD JUSTICE LEVESON
In other words, it requires those who wish to complain about privacy or libel and there can be limits or whatever to go down this route. If you make it consensual, built on contract, entirely self-organised, then those with the deepest pockets will simply say, "I'm not prepared to play that game"; in other words, you'll suffer exactly the same problems which you are presently complaining about.
A. Quite so. I think I'm right in saying there is a defamation bill going through the houses of Parliament at the moment, and it's not for me to say, but people have worked out more fully thoughts on this matter than me, I would venture to suggest, but it seems to me that if we could find add way of amending that bill to make mediation a route into an earlier stopping stage than libel, I think it would be highly desirable. Indeed, I know you perhaps want to talk in more detail in a moment about the future of the PCC, and it would be a wholly advantageous outcome for the media, I think, if some kind of arbitral system could be embroidered into whatever replaces the PCC going forward.
LORD JUSTICE LEVESON
Well, that's part of an overall package that I've not decided. I make it abundantly clear to everybody and I repeat it so that nobody thinks that I'm becoming blinkered to everything. I'm not. I am just raising questions and raising issues for you to consider, because I'm sure you are already involved at least I hope you're involved with other editors in looking for ways forward which will work for you and work for me. It's part of the overall issue that I believe should be considered.
A. There has to be a better way, a cheaper way and a quicker way than the current system we have, and I think if all of us are thinking hard about it, it can't be beyond the wit of man to come up with such a system.
LORD JUSTICE LEVESON
But you see I mean, this goes into the PCC material. I entirely agree that any regulation has to be independent. It can't involve the government. It can't involve politicians. It must involve people from the business, whether it's serving editors or former editors and former journalists. It must involve independent people. It probably has to involve some legal input. But I could visualise a system that has three limbs: the complaint and mediation services, presently what everybody says the PCC does so well; a regulatory mechanism, which I don't think the PCC now claims to have done; and an arbitral mechanism, not statutory in the sense that it is defined by statute, but statutory in the sense that that provides the compulsory background to appointment of independent people to do all these things.
A. Mm-hm.
LORD JUSTICE LEVESON
I don't ask you to comment upon that. You're very welcome to if you want to, to express definitive views now, and I'm not clear about it in my own mind. I'm merely thinking about all the possibilities.
A. I must say I find the prospect very attractive, and if you could find mediators who could take notes as the process is ongoing, work out how willing or otherwise the complainants or the litigants are to come to a resolution, and if no resolution can be found, that could be counted against them when it comes to an ultimate libel action, but one would hope that most cases would be resolved at a much earlier stage.
LORD JUSTICE LEVESON
Or up to a certain level you could use this and permit appeals on points of law, whatever. There are all sorts of models that one could choose, but one has to be prepared to think about the framework broadly along the lines that I've said, because if one says: well, it all has to be outwith some sort of framework, then, as I say, people needn't co-operate.
A. In principle, I find the prospect highly attractive.
LORD JUSTICE LEVESON
Thank you.
MR JAY
Mr Gallagher, before I ask some final general questions, can I ask you about your paper's diary column, which I think is called Mandrake; is that right?
A. Yes.
Q. I put this to you before lunch when we met. Are you aware of a blogger called Mr Montgomerie writing in his Conservative Home blog on 19 October last year that he was leaving his Sunday Telegraph column because he was repeatedly attacked in Mandrake on your orders because he had tweeted a criticism of the Telegraph's coverage of the resignation of Dr Liam Fox?
A. I've never met Mr Montgomerie, but I think he has quite an unhealthy obsession with all matters to do with the Telegraph and for many years has been an opponent of ours and doesn't like us.
Q. I think he was saying that not merely he doesn't like you but you don't like him, because you were repeatedly attacking him. Is that true or not?
A. I don't think that's true, no.
Q. If I ask you some general questions to conclude. What is your vision for the paper and in what way will you realise that vision in the manner in which you lead your organisation?
A. My vision for the paper is for it to be a continued and increasing success. It's important, I think, as a force for good in civil society. I want it to lead the news agenda, to have the brightest and most provocative comment, the most engaging features, the best business section, the most compelling sport, the entire package, and I would look to achieve that, I hope, by the work rate that I put into the paper and my visibility on the floor and my determination to lead from the front, without wishing to sound vainglorious.
Q. Okay. Finally, what is your biggest priority going forward, Mr Gallagher?
A. I think it's converting our vast digital audience into money, because while we have a huge presence on the web, the way in which that's converted into money hasn't replaced the loss of display advertising in the downturn since 2008.
MR JAY
Thank you very much. There will probably be some more questions.
LORD JUSTICE LEVESON
Really, they're to carry on with the dialogue we were having just a few minutes ago, if you wish to. I'm obviously anxious to explore with editors, as I have with others, ways forward which work, and you've probably heard me say that earlier today.
A. Mm-hm.
LORD JUSTICE LEVESON
So ideas that you have would be welcome.
A. I have four thoughts which I will share with you, if that's okay. I think the PCC as its constituted is clearly not fit for purpose. That's been decreed by the Prime Minister. So for whatever it is that replaces it bearing in mind the good work that I think it does on the complaints and mediation point, I think whatever it is that replaces it must have an investigative arm. I think one of the difficulties of the PCC is that it stands condemned for things it was never able to do. I think it was the Lord Chief Justice who said in his speech in October to criticise the PCC for powers it doesn't have is like criticising a judge for passing a lenient sentence when he doesn't have those powers. I think the PCC has never had investigative powers, and I'd very much like it to have those, to be able to when there's been a systemic breakdown in standards, to go into newsrooms, interview staff, seek emails, demand an audit trail to see how decisions have been taken. I'm, as I say, greatly attracted by the idea of an arbitral service which could be provided by the new body. I think if that arbitral service was low cost, it might be a great way of embracing the Internet news providers, who at the moment remain outwith the system, and if they realise that their access to that cheap and quick arbitral system would be contingent upon joining the new body, that would be wholly desirable. Lastly I would say that I think we need to do much more to increase the nature of pariah status for those organisations that are not members of the body, and if it was not enforceable by some kind of civil law, then I think the industry could and should do a great deal more to ensure that rogue publishers are given no access to the benefits enjoyed by everybody else. I'll give you some examples. Why should a rogue publisher be allowed to have its reporters attend lobby briefings? Why should they get access to briefings carried out by any ministers? Indeed, why should they get access to events organised by football writers or copy from the Press Association or copy from freelance agencies? I think we could do a great deal more to increase pariah status for those that decided they didn't want to be part of the system, and hopefully that could encourage them to come into line.
LORD JUSTICE LEVESON
But if there was a system whereby they had to be in the system, and that's what also got them into the arbitral service and all the rest of it, while ensuring that the regulator was entirely independent in other words, staffed, as I said before, by editors or probably ex-editors, because of the problem about judging your competitors, and independent people then doesn't that equally achieve not merely the goal of bringing in not merely newspapers but the magazine sector, who really should be part of the same system?
A. Mm-hm.
LORD JUSTICE LEVESON
And who probably wouldn't care if they weren't invited to lobby briefings, because they don't come to them anyway.
A. Mm-hm.
LORD JUSTICE LEVESON
And also all those who could take advantage of an arbitral service. Why would that be inimical to the rights of free speech and freedom of the press?
A. I'm not sure that it would. I think we need to do a great deal more to heighten the sense of being a pariah for those that remain outside the organisation. The only other point I would make is that while and I'm not sure I'm in the majority on this, but while I would like them to have investigative powers, I'm not sure I'm attracted to the idea of fines for the recalcitrant media companies. I'd prefer to see suspension of people to fines for the company. Bear in mind we're operating in a very beleaguered landscape, where a great number of media companies, far from making money, are losing tense of millions of pounds per annum.
LORD JUSTICE LEVESON
Yes, I understand that point. I am much more concerned to ensure that everybody is judged on a level playing field, so that there is a commonality of approach which is as wide as possible to all those who are in the trade or business of supplying news.
A. I understand.
LORD JUSTICE LEVESON
I gather from what you say that you don't really disagree with that?
A. I don't.
LORD JUSTICE LEVESON
Is there anything else that you'd like?
A. No, I think that's it for now. Thank you.
LORD JUSTICE LEVESON
Thank you very much indeed.
A. Thank you.
LORD JUSTICE LEVESON
Right.
MR JAY
That concludes the witnesses for today.
LORD JUSTICE LEVESON
Thank you very much. We'll start again at 10 o'clock.
MR JAY
We do need to list the witnesses who are going to be taken as read.
LORD JUSTICE LEVESON
Oh, please do.
MR JAY
In relation to this afternoon's witnesses, Mr Adam Cannon, Mr Wynn-Davies, Mr Benedict Brogan, Mr Peter Oborne and Mr Ian McGregor.
LORD JUSTICE LEVESON
I'm not so sure about Mr Oborne, because I think there may be reasons why I would be keen for him to give evidence.
MR JAY
Yes.
LORD JUSTICE LEVESON
But the others, certainly.
MR JAY
Yes.
LORD JUSTICE LEVESON
Thank you very much. 10 o'clock. (5.12 pm) (The hearing adjourned until 10 o'clock the following day)
