Nick Davies's Blog, page 13

Jeremy Hunt and the Murdochs: how minister oiled wheels of BSkyB bid

A haul of email, text and phone call records appear to show how minister aided News Corp takeover bid

Sometimes half a dozen confidential texts and emails a day would fly back and forth between the culture secretary's Cockspur Street office just off Trafalgar Square and the News Corporation team promoting the takeover bid for BSkyB.

It was a remarkable level of apparent intimacy with Jeremy Hunt, the minister who from January 2011 had the power to decide the bid's fate. On the eve of one key government announcement in March 2011, Frédéric Michel, the chief lobbyist for James Murdoch, who was leading the News Corp bid, emailed his boss excitedly at 3am: "Urgent. JH decision … He is minded to accept … and will release around 7.30am to the market."

In what could be one of the most damning exchanges, Michel wrote of Hunt: "He said we would get there in the end and he shared our objectives."

What made this busy back channel particularly remarkable was that the culture secretary was constantly claiming no such relationship existed. Hunt told the Commons on 30 June: "I am deciding this deal on a quasi-judicial basis, but I have not met Rupert Murdoch or James Murdoch in recent weeks, and all the meetings I have had with them have been minuted and done through official channels."

It appears Hunt was being economical with the truth. Robert Jay, the Leveson inquiry's QC, publicly questioned on Tuesday whether Hunt had upheld his "quasi-judicial" role, during what he suggested was a "surreptitious" pattern of "covert interactions" with James Murdoch.

The details of what appears to be Hunt's collusion with one party would have certainly startled his immediate predecessor, Vince Cable. The Liberal Democrat business secretary was humiliatingly stripped of responsibility for the bid for alleged lack of objectivity, after a Telegraph "sting" found him saying he had "declared war" on Murdoch. David Cameron condemned this attitude as "totally unacceptable and inappropriate".

Cable and his own advisers had nevertheless kept strictly away from contact with the parties warring over the bid.

One of these advisers, Giles Wilkes, told News Corp's lobbyist: "I'm sure we're both interested in staying within the bounds of proper conduct."

It will now be up to Cameron and the cabinet secretary, Sir Jeremy Heywood, to decide whether Hunt failed to stay within such bounds.

The lengthy record of emails, texts and phone calls released on Tuesday appears to reveal a secret communications channel between Hunt and Murdoch devoted to pushing through "Project Rubicon" and giving Murdoch what he wanted.

James Murdoch conceded openly to Leveson: "The company's representatives were speaking to Mr Hunt and/or Mr Hunt's advisers in the course of the proposed offer." He described it as "active public affairs engagement" and said Michel "was a liaison with policymakers".

He maintained he was simply trying to get a decision on a proper legal basis.

The evidence comes largely from Michel's correspondence, which the Murdochs have now made public. Michel sent regular reports to James Murdoch describing his alleged contacts with Hunt.

Michel has told the Leveson inquiry that his messages that habitually referred to conversations with Hunt were, in truth, conversations with Hunt's staff, commonly his special adviser, Adam Smith.

However, in a number of cases, the language used in the emails suggests strongly that Michel was speaking to Hunt himself. For instance, on 24 December 2010, the lobbyist reported to his boss: "Just spoke to JH. Said he was very happy for me to be the point of contact with him/Adam on behalf of JRM [James Murdoch] going forward."

Michel's activities, if the evidence is to be believed, would seem to give the lie to any claims of fairness between News Corp and the opponents of the bid. According to Michel, Hunt agreed a proposal, which he discussed in advance with News Corp, to get their bid successfully past official regulators. Hunt indicated his intention to accept, after a period of negotiation, a News Corp offer to spin off Sky News in an "undertaking in lieu", or UIL.

The growing scandal over phone hacking forced Cameron's press adviser, the former News of the World editor Andy Coulson, to resign on 21 January 2011. But Hunt remained optimistic, according to the emails, that he could deliver a result.

"He [Hunt] still wants to stick to the following plan," Michel wrote on 23 January 2011 "… His view is that once he announces publicly he has a strong UIL, it's almost game over for the opposition … He very specifically said he was keen to get to the same outcome and wanted JRM to understand he needs to build some political cover on the process."

The following day, an email sent at 3.21pm shows Murdoch being supplied with the wording of Hunt's crucial, and market-sensitive, official statement, due to be delivered the next day.

"Confidential: managed to get some infos [sic] on the plans for tomorrow (although absolutely illegal!). Press statement at 7.30am … Lots of legal issues around the statement so he has tried to get a version which helps us … JH will announce … that he wishes to look at any undertakings that have the potential to prevent the potential threats of media plurality."

Hunt had limited room for manoeuvre. He had gained control of the bid only after Cable had already called in the media regulator, Ofcom, to start a rigid legal process. And he was dealing with a man who, as the evidence submitted to the Leveson inquiry shows, was powerfully connected.

Murdoch's team had already been in contact with the chancellor, George Osborne, and his special adviser, Rupert Harrison, to try to get the Treasury to pile pressure on Cable.

Hunt had previously told Murdoch that he backed his bid. But he had also received "very strong legal advice" that it would be improper for him to meet Murdoch during this period. According to the Michel emails, the answer to the problem was simply: "You could have a chat with him [Hunt] on his mobile."

James Murdoch responded in an email, the inquiry heard: "You must be fucking joking. I will text him and find a time."

When Hunt was put in charge of the bid, on 21 December, Murdoch phoned him again immediately, as he now admits.

A couple of days later, Murdoch lobbied Cameron about the bid. The two were together at the then News International chief executive Rebekah Brooks's Christmas lunch in Oxfordshire and although the prime minister has never admitted it before, Murdoch now testifies: "I recall speaking briefly to the prime minister … about the proposal."

Under questioning on Tuesday , Murdoch said he merely told Cameron he hoped the handling of the BSkyB deal would be "appropriate and judicial" in a short, "side" conversation.

The following day back in London, Michel texted Hunt, according to his own witness statement.

He then emailed Murdoch to explain how a back channel was being set up via Hunt's chief of staff, Adam Smith, to enable Hunt and Murdoch to communicate privately.

Reporting the suggestion of "JH" that Michel should be the point of contact between Hunt and Murdoch, he said "JH" had stressed that it was "very important to avoid giving 'the anti' any opportunity to attack the fairness of the process and fine to liaise at that political level".

Extraordinarily, when Ofcom reported that the takeover might be against the public interest, Hunt's team appears to have asked News Corp's team to help him undermine the findings.

Michel wrote: "Spoke to Hunt. He made again a plea to try and find as many legal errors as we can in the Ofcom report and propose some strong and 'impactful' remedies … Would welcomed [sic] other opeds [comment articles] like [Mark] Littlewood or [David] Elstein in coming days."

Littlewood, the director general of the Institute of Economic Affairs, issued a statement supporting BSkyB's bid two weeks later and blogged for the Spectator a month later. Elstein, a former Sky executive, wrote two comment articles for the Open Democracy website supporting the bid.

A coalition of other newspapers, including the Guardian, were campaigning against the bid and made representations to Hunt's department, drafted by lawyers Slaughter & May. What the opposition alliance did not realise, however, was that Hunt's office was feeding information back to News Corp about the activities of their rivals.

Hunt was due to meet the coalition, but shortly before he did so, Michel emailed: "JH confidential please read. JH would welcome our critical views on the Slaughter & May submission to help him forge his arguments."

Following the formal meeting, Michel wrote: "… [JH] debriefed on his meeting with the media coalition. In a nutshell: they looked miserable … and know they have lost the battle."

Hunt and his team insisted to an apparently irritated Murdoch that all Ofcom's objections to the proposed safeguards could be overcome by making a few concessions. Matters came to a head on 9 February when Michel texted to Smith: "Bad news from Ofcom. We need to talk," and Smith texted back: "Will call asap."

That evening, Michel emailed James: "As agreed on the call, I have managed to get JH quickly before he went in to see Swan Lake and have further chat. He really feels this Ofcom letter is the ultimate weapon for them to block the deal. It's the last throw of the dice for Ed [Richards, of Ofcom] …. He… shares our frustration – 'we all know what Ofcom's intentions are and have been from the start on this' … it might be a price worth paying to get a green light in 2 weeks.

"He can't instruct his officials to get back to Ofcom as he is not supposed to be aware we have received the letter and its content … he feels … we should look at the longer-term view – He asked whether we would be prepared to negotiate at all … I told him he had to stand for something ultimately … and show he had some backbone. He said he couldn't ignore Ofcom, he had brought them into this OFT [Office of Fair Trading] process to get some cover and in public debate he would get absolutely killed if he did such a thing."

On 11 February, Michel sent Murdoch a warning originating from Hunt's office: "JH called: – he now knows what Ofcom and OFT will send him tonight: both will recommend he refers to CC [Competition Commission] … JH doesn't want this to go to the CC … JH believes it would kill the deal."

Michel told the inquiry that he sometimes used "JH" as a shorthand term for dealings with Smith and Hunt's other advisers: "It was my understanding that when they told me something, it was always on behalf of the minister and having conferred with him."

This claim is supported to an extent by the email traffic. Smith at one point refers to "what Jeremy and I have told you". At another point Michel explicitly asks him to consult Hunt and get the answer to a question. But much of the language is that of a more direct relationship.

In April last year, as talks with Ofcom about the details of the bid safeguards continued, two News of the World journalists were arrested in the reopened police-hacking inquiry. This led to further anxious discussions on the Hunt back channel.

Michel emailed Murdoch on 13 April: "Catch up with JH … debriefed him on the NOW [News of the World] issues … There is no question that NOW will not play any part in his decision … He managed to avoid a massive backlash against the deal despite attempts by [John] Prescott and other Labour figures. Given the current onslaught in the media … there will be a strategic decision to make for the government as to the day it will choose to clear the deal. We know it will clear it. We just need to push them strongly now to announce it as early as possible."

Six days later, Hunt's chief of staff texted Michel: "I've got JH meeting officials on it this afternoon to push ahead quicker. Will let you know how we get on."

By May, the Murdoch camp clearly feared their former ally in the cabinet was getting cold feet. Michel wrote: "We might want to use a call from JRM to JH to put further pressure on or raise some alarm bells."

On 29 May, Michel complained to Smith: "It does seem the timetable you outlined to me is slipping away massively and we might want to consider our options … seems that Ed Richards has been given very much a free ride on this and is doing his best to delay."

The Hunt camp tried to reassure Murdoch on 3 June. Michel reported: "JH confidential. Had conversations with him today. Blame game going on regarding the delay. He … is politically very keen to get this done as quickly as possible … also asked whether there were any other news which could conflict with the process in the coming weeks, and asked me to keep him informed privately [ie NI] … I have painted to him what could happen … and what it would mean for him and his department to be openly accused of not providing us process etc. He believes there will be overall green light given by everyone by end of next week."

Michel texted Smith: "James is not making any more commercial concessions … might even exit the process if consultation doesn't take place next week. Very serious."

He then told Murdoch: "As discussed, I just had very strong conversation with JH and explained we had now no intention of engaging further in any more commercial negotiations with OFT or Ofcom … I insisted he needed to get a grip … I also floated the threat that … we could decide at any moment to withdraw … JH repeated he was definitely keen to see this through as quickly as possible."

The mood only improved when Hunt announced a green light to the proposals on 30 June, subject to one final short period of formal consultation due to end on 8 July. The Rubicon seemed on the verge of being crossed at last.

Michel emailed Hunt's adviser early that morning: "Just showed to Rupert! Great statement ... !"

Hunt spent the day batting off parliamentary attacks from Labour politicians, and Michel texted: "Think we are in a good place, no?" Smith texted back: "Very, yes. Jeremy happy."

Just four days later, however, the Guardian revealed that the News of the World had hacked Milly Dowler's mobile phone. In a tumultuous week, Rupert Murdoch shut down the paper, and Cameron set up the wide-ranging Leveson inquiry.

By 11 July last year, the Sky bid had collapsed. The Murdochs, father and son, have been ordered into the Leveson witness box and forced this week to explain the backstairs lobbying.

As a result, both James Murdoch, who tried to ram through the Sky project for his father, and Hunt, the cabinet minister who tried to help him, seem to have ended up in what is very far from a good place.

Jeremy Hunt BSkyB BSkyB News Corporation Leveson inquiry Media business James Murdoch David Leigh Nick Davies
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

View more on Nick Davies's website »

Like • 0 comments • flag

Published on April 24, 2012 09:20

James Murdoch: questions to answer

BSkyB, Brown and the BBC: phone-hacking scandal has thrown a web of allegations around the Murdochs and News Corp

• Allegation: That the Sun's decision to support the Conservatives at the 2010 election was traded for Tory support for the Murdochs on key media policies

Did you ever discuss News Corp's bid to take over all of BSkyB with anybody from the Conservative party before it was announced in June 2010? Were you given any kind of indication about a future Tory government's attitude to it? Did you make any attempt directly or indirectly to influence Vince Cable or Jeremy Hunt, the two cabinet ministers responsible for deciding whether the bid should go before regulators?

Cuts to BBC income Did you ever in private meetings with anybody from the Tory party urge them to cut the BBC's licence fee and/or to limit its commercial income? After the election, did any government figure discuss with you any aspect of the October 2010 licence fee settlement, which in effect cut the BBC's income by 16%?

Cuts to Ofcom Did you ever urge anybody from the Conservative party to cut Ofcom's income or powers and/or to abolish Ofcom? Did you have any contact with ministers or officials in relation to the changes announced in October 2010 that reduced Ofcom's role and cut its budget by 28%?

• Allegation: That the Sun adopted a politically motivated strategy to destabilise the Brown government

Was the Sun's decision to support the Conservatives in the 2010 election made exclusively by editorial staff, or did you or your father become involved? Were the Conservatives told of the decision before Sun readers were?

Were they aware of the plan to announce the decision on the day of Gordon Brown's keynote speech to the Labour conference in September 2009? Do you accept that the timing of the announcement had no journalistic justification and was calculated to inflict political damage on Labour?

Do you accept that the decision led to unusually hostile and distorted news coverage of Brown and his government? Was it fair of the Sun to attack Brown for mis-spelling the name of a soldier who had died in Afghanistan and then to record and publish a transcript of his personal call apologising to the soldier's mother?

Why did the Sun repeatedly attack the Brown government for failing to hold a referendum over Europe but failed to attack the Cameron government on the same point? Ditto in relation to the alleged lack of support for British troops in Afghanistan.

• Allegation: That the former editor of the News of the World (NoW), Andy Coulson, acted as a link between News Corp and the Conservative leadership

Were you aware that News International continued to provide Coulson with private healthcare, a car and staggered payments from his severance package after July 2007 when he started work in David Cameron's office? For how long did these payments continue?

Is it possible that Coulson received any other form of income or benefit from any source with any connection to News Corp after he left the News of the World?

Did Coulson facilitate or engage in any form of contact between News Corp and the Tory leadership before or after the 2010 election, apart from normal contact with journalists working on stories?

• Allegation: That James Murdoch was aware of illegal activity at the News of the World but failed to warn his shareholders or to ensure that the truth was told to parliament and the public

You told the select committee that you settled Gordon Taylor's case because you knew there was of evidence that the hacking of his phone was "connected to the News of the World" but you did not know that this evidence implicated any NoW journalist. How could the evidence possibly have implicated the paper without implicating at least one person who had worked for it?

You settled the Taylor case for more than £1m in damages and costs, and yet your father, to whom you spoke regularly, says you never mentioned it to him. Was that because you were afraid of his reaction, because you knew there was evidence of wrongdoing at the NoW?

Was no suspicion raised in your mind by the public disclosure in July 2009 by the director of public prosecutions that he was aware of far larger number of more offences at the NoW; in February 2010 by the media select committee that it was inconceivable that Clive Goodman had acted alone; in February 2010 by the Guardian that the NoW had employed four investigators who broke the law; in March 2010 that Rebekah Brooks had authorised the payment of more than £1m to stop a court case by Max Clifford that threatened to implicate NoW staff in hacking; in April 2010 by the Guardian that police in 2006 had found evidence of "a vast number" of offences at NoW?

Was your failure to act on this public information in any way connected with a desire not to fall out with the Tory leadership of the Conservative party , which had hired the former editor of the NoW as its media adviser?

James Murdoch Rupert Murdoch Phone hacking Newspapers & magazines National newspapers Newspapers Rebekah Brooks BBC Conservatives Gordon Brown The Sun News of the World Clive Goodman Andy Coulson Ofcom Nick Davies
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

View more on Nick Davies's website »

Like • 0 comments • flag

Published on April 23, 2012 13:37

Sky News admits hacking emails of 'canoe man'

Broadcaster says accessing of emails of John Darwin, who faked own death, was authorised by executives and in public interest

Sky News has admitted that one of its senior executives authorised a journalist to conduct email hacking on two separate occasions that it said were "in the public interest" – even though intercepting emails is a prima facie breach of the Computer Misuse Act, to which there is no such defence written in law.

Gerard Tubb, the broadcaster's northern England correspondent, accessed emails belonging to John Darwin, the "canoe man" accused of faking his own death, when his wife, Anne, was due to stand trial for deception in July 2008. The reporter built up a database of emails that he believed would help defeat Anne Darwin's defence; her husband had pleaded guilty to seven charges of deception before her trial.

The same reporter accessed the email accounts of a suspected paedeophile and his wife in an investigation that did not lead to any material being published or broadcast, according to a statement sent to the Guardian by Sky, which is part-owned by Rupert Murdoch's News Corporation.

Both instances of hacking were approved by Simon Cole, the managing editor of Sky News.

John Ryley, the head of Sky News, said the broadcaster had "authorised a journalist to access the emails of individuals suspected of criminal activity" and the hacking in both cases was "justified and in the public interest". Ryley said the broadcaster's decisions required "finely balanced judgment" and they were "subjected to the proper editorial controls".

The broadcaster said it stood by Tubb and that there were instances when the broadcaster believed breaking the law was justified to produce a news story of public interest. It cited the example of a Sky News journalist buying an Uzi machine gun in the UK.

John Darwin faked his own death in 2002, "going missing" after he was last seen paddling out to sea in a canoe. He secretly flew to Panama, where he was later joined by his wife, only to return to Britain in 2007.

Walking into a London police station in December 2007 he declared: "I think I may be a missing person", but later that month both he and his wife were charged with fraud after it emerged that they had been photographed in Panama with an estate agent and that Anne Darwin had cashed in her husband's life insurance policy.

He pleaded guilty to seven charges of deception and a passport offence in March 2008, leaving his wife to face six charges of deception and nine of money laundering at a trial due to begin four months later.

At around this point, Sky News said, Tubb discovered that John Darwin used the identity of a friend, John Jones. According to the broadcaster, Tubb conducted an internet search to reveal a Yahoo email account in the name John Jones and, in the belief that Yahoo accounts were "notoriously weak at the time", the journalist was confident he could gain access with his existing background knowledge. He then sought permission to access the emails, an investigation that led him on to further email accounts.

In the first week of July 2008, Sky News said executives met Cleveland police officials and handed over "pertinent" emails. Anne Darwin was found guilty in the trial that followed shortly afterwards, and was sentenced to six and half years in prison; John Darwin was sentenced to six years, three months.

Shortly after, Tubb produced a story for Sky's news channel and website in which he quoted from emails which had been written by John Darwin to his wife and to a lawyer. A web story, still on Sky News's site at the time of writing, said the channel "has uncovered documentary evidence" which demonstrates "conclusively why John Darwin came back to Britain".

Making only a minimal effort to hide the basis of the story, Tubb's report said Sky News had "discovered an email" from John to Anne dated 31 May 2007, in which he says changes to visa regulations meant he could no longer stay in Panama, where he was hiding on a tourist visa. The report cited evidence from several emails between the two, including a "final email" from Anne that was not, "as suggested in court", evidence of a "massive row" between them, an email that Tubb said had been "handed to the police by Sky News".

The story displayed a picture of "John and Anne Darwin's masterplan", showing a detailed diagram which had apparently been produced by Darwin, and claimed to have obtained detailed financial accounts prepared by Darwin. In another story, published in November 2009, Tubb quoted directly from an email written by John Darwin to his wife in 2007, explaining that their property in Panama had been valued at $1m and adding: "You're a filthy rich gringo". But a link to copies of the couple's emails is now dead.

Intercepting emails is an offence under the Computer Misuse Act, and there is no public interest defence written in law. Theoretically, however, any email hacking charges would have to be brought at the discretion of the police and the Crown Prosecution Service, which could weigh up whether any intrusions could be justified. The role of the CPS in this area is untested, and Keir Starmer, the director of public prosecutions, told the Leveson inquiry in February that he intended to issue guidance to clarify the issue.

Danvers Baillieu, a specialist internet lawyer with Pinsent Masons, said that while there was no public interest defence "it doesn't mean that a jury would convict a person, or a judge would punish them, because there is usually a discretion in such cases". However, he added that "the difficulty for news organisations is the question of where do you draw the line: would it be legitimate to break into somebody's house who is suspected of committing a crime? The issue with computer offences is that people can do it from their offices, and believe it is a lesser offence than any other type of intrusion."

Sensitivities at Sky News are running high because the broadcaster's parent, BSkyB, is subject to a "fit and proper" investigation being conducted by the communications regulator, Ofcom, in the wake of the News of the World phone-hacking scandal. However, that investigation is focused on News Corporation's shareholding, and the continuining directorship of James Murdoch, who stepped down as chairman on Wednesday and who was executive chairman of News International.

Cleveland police said the force did inquire about the provenance of the emails at the time, and said it continued to do so. A statement said: "Cleveland police has conducted an initial review into these matters and can confirm that enquiries are ongoing into how the emails were obtained."

Tubb declined to speak to the Guardian. Cole is on leave, and forwarded inquiries to the Sky News press office.

Ryley said Sky News had asked the law firm Herbert Smith to conduct a separate review of staff email records and payment records in the light of "heightened interest in editorial practices". However, the broadcaster said that because Tubb's email hacking had been sanctioned, his work had not come up as part of that exercise.

Ryley said that there were "no grounds for concern" regarding any of its other journalists, and that Sky News believed there were rare occasions when tensions could arise between the law and responsible investigative journalism.

Tubb's authorised email hacking contrasts with another example of a potentially illegal email access, conducted by Patrick Foster while he was employed by the Times. Foster accessed emails belonging to the anonymous police blogger Nightjack to out him as the serving Lancashire police officer, Richard Horton, but his actions were not authorised by any executive.

A story naming Horton was later published by the Times, but the editor, James Harding, said he was not made aware of the unauthorised email access until after the newspaper had begun a court battle to allow the police officer to be named, which it won. Harding said if he had been aware of the hacking previously he would have disciplined the journalist and told him to drop the story. "I squarely do not approve of what happened," the editor told the Leveson inquiry in February.

Sky News Hacking Email TV news BSkyB Television industry Computing Dan Sabbagh Nick Davies Robert Booth
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

View more on Nick Davies's website »

Like • 0 comments • flag

Published on April 05, 2012 04:38

The Guardian's Nick Davies gives evidence at the Leveson inquiry - video

Guardian journalist Nick Davies says there are some instances where paying a source may be acceptable, citing the Daily Telegraph's exposé on MPs' expenses

Nick Davies

View more on Nick Davies's website »

Like • 0 comments • flag

Published on March 01, 2012 05:50

Leveson witnesses halt the tabloid power grab

Akers provided a riposte to the Sun's recent fist-waving, while questions about the police response to phone hacking mount

The phone-hacking scandal never was simply a story about journalists behaving badly: it was and is about power.

On Monday, in an outbreak of peculiarly destructive evidence, Lord Justice Leveson's courtroom became a battlefield for two parts of a defining power struggle.

The first was short term. In the past few weeks, those who lost some of their power last summer, when the facts of the scandal finally erupted, have been trying to reclaim it. In 20 minutes of deftly understated evidence, Deputy Assistant Commissioner Sue Akers sent them packing.

Rupert Murdoch's Sun had led the attempted coup with an outburst of the kind of tabloid fist-waving which has itself been part of the distortion of power. The paper's associate editor, Trevor Kavanagh, reacted to the arrest of 10 of his colleagues by launching a ferocious attack on Scotland Yard. It was full of the rhetorical flourish of great reporting but almost devoid of facts.

Crucially, Kavanagh's claim that the Yard was engaged in a witch-hunt against legitimate journalism was based on a bold assumption that, in the Sun's history of paying sources for stories, "there is nothing disreputable and, as far as we know at this point, nothing illegal". Never pausing to question that assumption, the Daily Mail joined in, reporting the arrests under the headline "Operation Overkill" and running a column by Richard Littlejohn which compared the police to the Stasi engaging in "a sinister assault on a free press".

Lawyers, bloggers and tweeters joined in the attack. Many claimed to know that the police were investigating nothing more than reporters who had paid for a pint for a police officer. Murdoch's Times highlighted claims that the arrested journalists had been acting in the public interest. The Telegraph suggested that police had "overstepped the mark".

Akers took to the Leveson stage and challenged the assumption on which this attack was founded. She was careful to emphasise that she was still dealing in allegation, not proof. She was equally clear that this is not about paying for pints but about the alleged illegal payment by Sun journalists of "regular, frequent and sometimes significant sums of money" to officials in every area of the public life of this country, including the police, military, prisons and health service. "The current assessment of the evidence is that it reveals a network of corrupted officials," she said. And this was not about stories in the public interest, she added, but about "salacious gossip".

The truth about all this remains to be seen. Police inquiries continue – and that, in itself is what is significant. At another time, in another context, the tabloid fist, with the political muscle that lies behind it, might have succeeded in diverting the investigation. But yesterday saw a rare moment, when the power of a cynical press to distort public debate was openly challenged and stopped in its tracks.

Beyond this short-term skirmish, there is a larger and longer-term struggle of power. This is not about the conduct of reporters but about the power of the press in relation to the state, specifically about whether the Murdoch papers had reached a point where the police and the political apparatus had become compliant. Here again, Monday's evidence was peculiarly destructive.

The immediate question is whether to accept Scotland Yard's claim that police failed to expose the truth about crime at the News of the World simply because they had to focus their limited resources on counter-terrorist work where human life was at stake. The evidence disclosed by the former deputy assistant commissioner Brian Paddick and by the former deputy prime minister Lord Prescott keeps alive the alternative theory, that this was an act of favouritism.

If the priority was to protect human life, it is not clear why – as was suggested on Monday – Scotland Yard failed to take any action at all in November 2006 when it found evidence that the News of the World's investigator Glenn Mulcaire had penetrated some of the secrets of the witness protection programme, exposing the new identities of people who were being protected precisely because they were vulnerable to attack.

Equally, it is not clear how Scotland Yard saved resources by writing multiple letters to both Paddick and Prescott, denying that it held any evidence to suggest they had been victims of the hacking, when it could have sent a single letter to each man admitting that both of them were clearly named in Mulcaire's notes – something which, we now know, police had first discovered, in Prescott's case, right back on 8 August 2006, the day they arrested Mulcaire and seized his paperwork.

It is not clear how police saved resources by failing to show prosecutors the now famous "email for Neville", containing the transcripts of 35 voicemail messages, which was the clearest available evidence of Mulcaire's guilt in one of the very few cases which they chose to take to trial, concerning Gordon Taylor of the Professional Footballers Association.

Nor is it clear how they saved resources by telling Mulcaire's trial in January 2007 that he had earned only £12,300 from crime when, according to Monday's evidence, they believed he had earned more than £1m from the News of the World and hacked hundreds of victims.

Nor is there any clear explanation of why the former assistant commissioner John Yates spent two years insisting to press, public and parliament that the scandal had only a small number of victims, all of whom had been contacted by police. Monday's evidence suggested that the original inquiry compiled a "blue book", listing hundreds of victims over 24 pages, almost none of whom was approached by police.

On the question of alleged favouritism, the Leveson inquiry will surely be interested in the evidence disclosed by Paddick that when police in August 2006 went to search the News of the World, they were physically stopped from entering the accounts department and denied access to the computer and safe of the royal reporter Clive Goodman; and that the police responded by drafting a production order and then failing to use it. Paddick said: "It is not usual that a suspect would be permitted to fob the police off in this way."

Now the balance of power has changed. Leveson and Akers have their own power. The FBI may take the inquiry to News Corp headquarters in New York. Murdoch and his allies still control tens of thousands of words of news coverage every day, but they have lost control of events – for now, at least.

Leveson inquiry Rupert Murdoch Phone hacking The Sun Newspapers & magazines National newspapers Newspapers Press intrusion Sue Akers John Prescott Trevor Kavanagh Brian Paddick Nick Davies
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

View more on Nick Davies's website »

Like • 0 comments • flag

Published on February 27, 2012 11:25

Man convicted in conspiracy case also accused of hacking computer for NoW

Philip Campbell Smith, who allegedly hacked former army spy's computer for News of the World, convicted of conspiring to illegally access private information for profit

A man at the centre of allegations that computers were hacked for the News of the World has been convicted of conspiring to illegally access private information for profit.

Until Monday legal restrictions meant that what is known about Philip Campbell Smith's alleged involvement in computer hacking could not be reported.

Smith is alleged to have hacked the computer of a former British army intelligence officer in 2006 as part of a commission from the News of the World. In a tape recording, Smith says he was in contact with Andy Coulson, the former News of the World editor who went on to become David Cameron's director of communications. Smith also claimed Coulson was in his mobile phone directory.

Smith is understood to be under investigation by a Scotland Yard inquiry, Operation Kalmyk, which is examining allegations that email hacking may have been used against several dozen targets.

The allegations against Smith highlight growing concern over computer hacking. Met officers are known to have approached leading members of the Labour party as possible victims, including Gordon Brown, the former No 10 communications chief Alastair Campbell, the former Northern Ireland secretary Peter Hain, and Tom Watson, the backbench Labour MP who has been particularly vocal in the phone-hacking scandal. If any of the Labour figures were targets, it is not known who carried out the hacking and for whom.

The computer that Smith is suspected of hacking belonged to the former British intelligence officer Ian Hurst.

The computer hacking involving Smith is alleged to have been carried out in July 2006 by sending Hurst an email containing a trojan virus that copied Hurst's emails and relayed them back to the hacker. It is claimed this was commissioned by Alex Marunchak, who was a senior editor on the News of the World when it was edited by Coulson.

The material accessed by the hacker included messages concerning at least two agents who had informed on the Provisional IRA: Freddie Scappaticci, codenamed Stakeknife, and a second informant known as Kevin Fulton. Both men were regarded as high-risk targets for assassination. Hurst was one of the few people who knew their whereabouts and the emails contained information capable of disclosing this.

Hurst found out that Smith had hacked his computer and went on to tape him confessing to it. Sections of that confession were broadcast last year as part of a BBC Panorama programme. Hurst told the Leveson inquiry into press standards that he had been shown a seven-page fax by the BBC containing material from his computer.

Hurst said the hacker worked for a private investigator, Jonathan Rees, who was in turn working for the News of the World. Rees ran a firm called Southern Investigations and last year was acquitted of murdering a former business partner, Daniel Morgan.

Rees has worked as a private investigator for the Daily Mirror, the Sunday Mirror and the News of the World. He was jailed for trying to frame a woman, and on his release from prison in 2004 he resumed his work for the News of the World, then being edited by Coulson. The defunct Sunday tabloid paid Rees up to £150,000 for his services and a bug placed by police in his south London office recorded corrupt officers taking cash for information.

An internal police report said Rees and his network were involved in the long-term penetration of police intelligence and that "their thirst for knowledge is driven by profit to be accrued from the media".

Hurst told the Leveson inquiry of admissions that Smith (referred to as "X" due to the legal reporting restrictions) had made to him, which were covertly recorded: "He states for a three-month period, and all documents he could access via the back door trojan: our emails, the hard drive, social media, the whole range of – I mean, he didn't say this, but the trojan that we've identified would have allowed the cam, your web cam, so he could have actually seen me or my kids at the desk."

Smith was arrested in 2009 and his computers seized, but Hurst was not told his computer had been hacked until October 2011.

Panorama claimed that Marunchak had decided to target Hurst during the summer of 2006. It claimed he hired Rees to do the job, and Rees subcontracted it to Smith. Marunchak denies the allegations.

MI5 became aware that Smith had targeted Hurst's email in an attempt to find the location of Scappaticci. They made no approach to Hurst, apparently on the grounds that he was preparing to write an unauthorised book about his experience in Northern Ireland and could not be trusted. They may have taken steps to alert Scappaticci. They then asked the Serious Organised Crime Agency (Soca) to investigate.

Hurst told the Guardian that police "missed a number of opportunities to investigate".

"In 2007 they chose not to do anything about it," he said. "In 2009, after the arrest of Philip Campbell Smith, they came again into information that my computer had been hacked and chose again to do nothing. Even in 2011 they didn't seem that interested."

Hurst said he had taped meetings and conversations with Smith, during which the private investigator had said he was in contact with Coulson. Hurst says he is prepared to provide his tape recordings of Smith making admissions about computer hacking and the alleged relationship with Coulson to Leveson.

In one recording made by Hurst, Smith said: "I got introduction in [sic] Andy Coulson … on my phone, he's the first name that appears before yours. I ended up deleting it." Smith is also alleged to have hacked the email of a former police officer who was acting as a police informer known as Joe Poulton. This happened between September 2005 and January 2006. This informer had been providing information about Rees and his private detective company called Southern Investigations. The hacking exposed the informer and is alleged to have been ordered by Rees.

At Leveson, Sue Akers, who is leading the Met investigations into hacking, confirmed details about Operation Kalmyk, a sub-inquiry of Tuleta.

Kalmyk is investigating the allegations in the BBC Panorama programme.

"This relates to illegal accessing of computers belonging to others for financial gain and this is the one of them that has been a full investigation as a result of the scoping exercise that Tuleta has undertaken," Akers said.

The NoW has admitted liability for hacking into the actor Sienna Miller's email in September 2008. At the high court in January counsel for News International, Michael Silverleaf QC, said the NoW had unlawfully accessed the emails of the son of the serial killer Harold Shipman and the freelance journalist Tom Rowland.

Christopher Shipman has said he had been shown and provided with copies of emails dating from 2004 that had been intercepted by the private investigator Glenn Mulcaire, who was regularly commissioned by the newspaper. The News International chief executive, Tom Mockridge, has denied his company's newspapers were involved in any hacking of Hain's computers.

In a separate case, Smith and three others – Adam Spears, Daniel Summers, and Graham Freeman – pleaded guilty to conspiracy to commit fraud by illegally obtaining confidential information. The trials were held at Kingston crown court but their outcome could not be reported until Monday.

That was to avoid prejudicing another case against Campbell Smith, which ended on Monday with him pleading guilty to possessing three rounds of ammunition.

The trials did not involve allegations of hacking being carried out for media clients.

The case about the obtaining of confidential information involved the tactic of blagging. The case was investigated by Soca and the activities took place between 16 January 2007 and 19 May 2009. Soca officially says the operation did not involve computer hacking. But a source with knowledge of the case said: "There could have been hacking. There is some suggestion they got mobile phone passwords and pins to hack voicemails and text messages." The source said computer hacking was also possible: "They might have trojaned."

The men convicted are believed to have been able to get information from banks, Interpol, the Criminal Records Bureau and the Driver and Vehicle Licensing Agency (DVLA).

Summers was the blagger, with work being subcontracted to him. Smith and Freeman were business partners in a private investigation firm, Brookmans International. Freeman, who lives in Spain, would email or phone Smith about the work and investigators believe Smith would then pass the work on to Summers.

In an email to a client in March 2007 about why their charges of up to £5,000 may seem high, Freeman wrote that police and Interpol databases that may be accessed were "not open to the general public and are tightly regulated", meaning that "should we be apprehended a custodial sentence" may be handed out.

In an email from Smith which was copied to Freeman, he discussed trying to get information from the DVLA: "My contact is trying to get this information without causing too many waves".

Smith wrote that if his contacts suspected he may be uncovered he would "drop it like a hot potato" adding: "It is getting tougher to get this information … and ensure there are no footprints left behind".

Spears is a former detective inspector with the Metropolitan police.

Hacking News of the World Leveson inquiry Phone hacking National newspapers Newspapers & magazines Newspapers Press intrusion News International News Corporation Media business Crime Vikram Dodd Nick Davies
guardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

View more on Nick Davies's website »

Like • 0 comments • flag

Published on February 20, 2012 12:35

News of the World hacking suspect pleads guilty to conspiracy

Private investigator, who allegedly hacked former army spy's computer for newspaper, admits illegally obtaining confidential information in separate case

A man at the centre of allegations that computers were hacked for the News of the World has been convicted of conspiring to illegally access private information for profit.

Until Monday legal restrictions meant that what is known about Philip Campbell Smith's alleged involvement in computer hacking could not be reported.

Smith is alleged to have hacked the computer of a former British army intelligence officer in 2006 as part of a commission from the News of the World. In a tape recording, Smith says he was in contact with Andy Coulson, the former News of the World editor who went on to become David Cameron's director of communications. Smith says Coulson is in his mobile phone directory.

Smith is understood to be under investigation by a Scotland Yard inquiry, Operation Kalmyk, which is examining allegations that email hacking may have been used against several dozen targets.

The allegations against Smith highlight growing concern over computer hacking. Met officers are known to have approached leading members of the Labour party as possible victims, including Gordon Brown, the former No 10 communications chief Alastair Campbell, the former Northern Ireland secretary Peter Hain, and Tom Watson, the backbench Labour MP who has been particularly vocal in the phone-hacking scandal. If any of the Labour figures were targets, , it is not known who carried out the hacking and for whom.