Murdoch-owned British Paper Embroiled in Phone Scandal

Media Mogul Denies Paying to Settle Suits

The British tabloid News of the World, published by a subsidiary of media mogul Rupert Murdoch’s News Corporation, paid about $1.6 million to settle various lawsuits involving allegations of phone hacking by its reporters, The Guardian of London reported on July 8, 2009. Critics and other media outlets, however, have suggested that the Guardian report amounts to little more than media mud-slinging.

The July 8 Guardian story reported that News of the World’s publisher, News Group Newspapers, attempted to settle the lawsuits to avoid revealing evidence that News of the World journalists were repeatedly hiring private investigators to illegally hack into the mobile phone messages of numerous public figures. The story also alleged that the investigators illegally gained access to the public figures’ confidential personal data, including tax records, social security files, bank statements, and itemized phone bills.

News Group Newspapers is a subsidiary of News International, which is owned by Murdoch’s News Corporation.

According to The Guardian, cabinet ministers, members of Parliament, actors, and sports stars were all targets of the private investigators.

The Guardian claimed to have discovered the information by researching the 2006 criminal investigations of Clive Goodman and Glenn Mulcaire. Goodman is a former News of the World reporter who was convicted of hacking into the mobile phones of three royal staff members. Mulcaire is a private investigator who once worked for News of the World’s publisher and admitted to hacking into the phones of Gordon Taylor, the chief executive of the Professional Footballers’ Association; member of Parliament (MP) Simon Hughes; celebrity publicist Max Clifford; model Elle MacPherson; and soccer agent Sky Andrew.

The Guardian reported that both Goodman and Mulcaire were convicted of violating the British Regulation of Investigatory Powers Act of 2000.

The Guardian cited a “senior source” at the Metropolitan police as saying that, during the Goodman investigation, officers found evidence of News Group staff hiring private investigators to hack into “thousands” of mobile phones, and “another source with direct knowledge of the police findings” put the figure at “two or three thousand” different phones.

The Guardian story also reported that law enforcement’s investigation of Mulcaire had uncovered evidence that Mulcaire had provided voicemail recordings to a News of the World journalist who had transcribed and e-mailed them to a senior reporter, and that a News of the World executive had offered Mulcaire a substantial bonus for a story specifically related to the stolen messages.

The story alleged that, when faced with a lawsuit from Taylor, News of the World offered a cash payment to settle the case out of court, and eventually paid out 700,000 pounds, or approximately $1.1 million, in legal costs and damages to Taylor on the condition that he sign a confidentiality agreement to prevent him from speaking about the case. News Group then persuaded the court to seal the file on Taylor’s case to prevent all public access, “even though it contained evidence of criminal activity,” The Guardian story said.

The Guardian also alleged that News of the World and Mulcaire had been involved in hacking into the mobile phones of at least two other soccer figures who, after filing complaints, settled when News International paid them more than 300,000 pounds, or approximately $500,000, in damages and costs on the condition that they sign confidentiality agreements.

John Whittingdale, a Conservative Party MP who chairs the Culture, Media and Sport select committee, said in the July 8 Guardian article that the revelation “raises a number of questions that we would want to put to News International.”

“The fact that other people beyond the royal family had their calls intercepted was well known,” Whittingdale said. “But we were absolutely assured by News International that none of their journalists were aware of that, that Goodman was acting alone and that Mulcaire was a rogue agent.”

Whittingdale said that the “committee will want to discuss [the issue] very urgently,” and that the committee “would summon back witnesses and ask those questions.”

Bloomberg News reported on July 9 that, in addition to Parliament, the Metropolitan Police would look into the allegations of phone hacking, according to a statement from Commissioner Paul Stephenson. But a later story in the July 9 New York Times said that the Metropolitan Police would not conduct another investigation. “No additional evidence has come to light since [the 2006 Goodman-Mulcaire investigation] has concluded,” Assistant Commissioner John Yates said. Yates said that his research into the case indicated that many of the phone hacking cases cited by The Guardian never actually resulted in the tapping of the phones that were targeted.

Andrew Neil, former editor of the Murdoch-owned Sunday Times, said in the July 8 Guardian story that the phone hacking scandal was “one of the most significant media stories of modern times.”

“It suggests that rather than being a one-off journalist or rogue private investigator, it was systemic throughout the News of the World, and to a lesser extent The Sun,” Neil said, referring to another News Group publication. “Particularly in the News of the World, this was a newsroom out of control.”

However, a July 8 New York Times story cautioned that the Guardian report could not be independently verified, noting that it had cited unnamed sources. The story also observed that The Guardian cited no sources for its claim that News International had paid $1.6 million in damages and legal costs, including the $1.1 million allegedly paid to Taylor.

Murdoch told Bloomberg News on July 9 that he knew nothing about any alleged settlement payments. “If that had happened I would know about it,” Murdoch said.

But on July 21, Bloomberg reported that News of the World editor Colin Myler testified before a parliamentary committee that James Murdoch, Rupert’s son, had authorized the payment of $1.1 million to Taylor to settle allegations against the paper. “It was an agreed collective decision,” Myler told the committee, according to Bloomberg. “It’s how newspapers work.”

The July 8 Times story reported that The Guardian investigation and story had caused an immediate uproar in Great Britain, with demands from politicians that Prime Minister Gordon Brown order a police investigation to explain why earlier inquiries had not resulted in any action against the newspapers.

Hughes, a Liberal Democrat among those who allegedly had their mobile phone messages tapped, said that if The Guardian’s story was accurate, those responsible should be “severely punished.” Hughes told the BBC that The Guardian’s revelations amounted to “a very big warning bell” of the damage that could be done by exploiting the possibilities of “the new data-centered age,” The Times reported on July 9.

According to The New York Times, the controversy stirred by The Guardian could reach into the highest ranks of Murdoch’s news empire, as several senior executives at News International or the News of the World were named by The Guardian as having denied knowledge of the phone hacking during the Goodman-Mulcaire trials.

According to Lorna Tilbian, a media analyst at Numis Securities in London, the story by thepro-Labour Guardian is an attempt to go after the opposition Conservative Party, the July 9 Bloomberg story reported. Tilbian also said that the allegations were not particularly surprising, given the “dog-eat-dog world” of British tabloids. “We always knew that journalists tried every trick in the book to get a scoop,” said Tilbian. “This is just the electronic version.”

A July 21 New York Times story reported that since the Goodman case, News of the World said it has enforced a code of conduct that prohibits reporters from hiring private investigators.

In a July 10 story in The Guardian, Rebekah Wade, editor of The Sun and chief executive elect of News International, said that the company would refute the allegations that phone hacking was a widespread practice at News of the World, and said that The Guardian “has substantially and likely deliberately misled the British public.” Wade also said various British news outlets broadcast the story based on “specific and very limited evidence” from the investigations of Mulcaire and Goodman.

In a July 12 Guardian op-ed, columnist John Kampfner said he worried that the scandal would harm chances to revamp what he called England’s “horrific” libel laws. “Britain has become the libel capital of the world,” Kampfner wrote. “The Commons select committee on culture, media and sport is due in a few weeks to publish its report on ‘press standards, privacy and libel’ … They will be tempted to use the latest scandal to do the opposite of what they should. Instead of loosening libel, they are likely to harden rules on privacy.”

Great Britain’s civil libel laws, which require a defendant to prove the truth of an alleged defamatory statement, have made British courts an increasingly common destination for libel lawsuits. Some American states have passed laws shielding their citizens from so-called “libel tourism” judgments, and bills have been introduced in both houses of the U.S. Congress that would protect American defendants sued in foreign jurisdictions – including England – that provide less protection for speech than the First Amendment. (See “Libel Tourism Bills Introduced in U.S. House and Senate” in the Winter 2009 Silha Bulletin.)

A July 15 story in The Times of London reported that Great Britain is repealing its laws against criminal libel and criminal sedition. Justice Minister Lord William Bach said that criminal sedition and libel were “arcane offences [sic] from a bygone era when freedom of expression wasn’t seen as the right it is today,” and would be abolished.

The Times reported that, although the laws are not used often in modern Britain, lawmakers were concerned about the legitimacy the statutes provided to other countries seeking to suppress public criticism. “It may be decades late in coming, but the acceptance by the Government that our retention of these repressive laws causes much more harm than good is welcome,” said MP Evan Harris, who first proposed the changes in the House of Commons. “The UK must set an example to the world in getting rid of anti-speech offences [sic].”

– Jacob Parsley

Silha Research Assistant

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This page contains a single entry by cla published on October 2, 2009 10:54 AM.

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