Quote:Fri, 08 Jul 2011

Deputy Leader of the Liberal Democrats Simon Hughes MP, has written to Ofcom calling on the regulator to investigate whether BSkyB is fit and proper' to hold a broadcasting licence.

BSkyB and the fit and proper person' test

I write to ask for you to investigate and rule on whether BSkyB is a fit and proper person' to hold a broadcasting licence and whether this will remain the case if there was to be a takeover of the company by News International.

I am aware that, under the Broadcasting Acts of 1990 and 1996 section 3(3) Ofcom:

(a) "shall not grant a licence to any person unless satisfied that the person is "a fit and proper person to hold it"; and

(b) "shall do all that they can to secure that, if they cease to be so satisfied in the case of any person holding a licence, that person does not remain the holder of the licence".

BSkyB

James Murdoch is the chairman of BSkyB and News International. Rebekah Brooks is currently the chief executive of News International which owns 40% of BSkyB. James Murdoch was, on Wednesday 6 July, accused on the floor of the House of Commons of seeking to pervert the course of justice. Tom Watson MP, speaking in the debate on phone hacking said It is clear now that he personally [James Murdoch], without board approval, authorised money to be paid by his company to silence people who had been hacked, and to cover up criminal behaviour within his organisation. That is nothing short of an attempt to pervert the course of justice'. On Thursday 7 July James Murdoch confirmed in a statement that he had approved out of court settlements with hacking victims which prevented the public disclosure of documents which have now led to the arrest of senior journalists at the News of the World on criminal charges.

News International

As James Murdoch is the chairman of News International, and Rebekah Brooks is the Chief Executive of News International, the activities of News International are also relevant to the fit and proper' test in relation to BSkyB.

It is now clear that in order to cover up the allegations of criminal behaviour News International has been untruthful in its dealings with the Press Complaints Commission (PCC). It was reported in the Financial Times on July 7 2011 that Baroness Buscombe, the chair of the Press Complaints Commission, had said that the PCC had been lied to by News International. She also said that The corporate culture was clearly there to mislead us'.

News of the World

You will be aware of the ongoing allegations of illegal activity at the News of the World' newspaper, currently owned by News International. These accusations were originally made against one reporter and one agent of the newspaper. These two people have been convicted and imprisoned, on evidence which included the evidence I gave relating to the hacking of my phone. Other employees of the 'News of the World' have subsequently been arrested.

It has now become apparent that people working directly or indirectly for the News of the World' were engaged in very extensive criminal activity. There is increasing evidence to suggest that this criminal activity was known about, condoned and encouraged at the highest level of the organisation. I highlight in particular the testimony in 2003 of Rebekah Wade (now Rebekah Brooks), the then editor of the News of the World', to the House of Commons Select Committee on Culture, Media and Sport. Ms Brooks said we have paid the police for information in the past'. With this statement Ms Brooks admitted to knowledge of a serious criminal offence or offences being carried out by the newspaper she was in charge of. In addition, there are now allegations that Andy Coulson, who was editor of the News of the World' from 2003 to 2007 illegally paid the police for information which they had obtained in the course of their duty.

Given the very serious accusations levelled at James Murdoch, the chairman of BSkyB, and the accusations levelled against News International, which he also chairs, I would like you to make a judgement as to whether BSkyB can still be considered to be fit and proper to hold a broadcasting licence as long as James Murdoch continues to act as chairman of the company. The admissions made by and the allegations made against the Chairman of BSkyB must directly reflect on and influence the reputation of BSkyB, and its fitness and propriety to continue to hold a broadcasting licence.

News International is currently seeking to acquire BSkyB. Ahead of any decision that the acquisition were to be approved, and without prejudice to the separate consideration of the merits of this, I ask that you consider the history and reputation of News International in deciding whether it is or would be a fit and proper' person to have a broadcasting licence. Certain elements in the history of the News of the Word' are relevant to this.

Fit and proper

It is my view that the fit and proper test cannot be taken only to mean the absence of criminal convictions or financial impropriety. Broadcast licence holders have a wider public duty to act with decency, honesty and truthfulness. It must be the case that regardless of criminal convictions, if there is evidence and admission of wrongdoing by organisations or individuals which would impact on their conduct or reputation as responsible broadcasters or publishers, this should be acted on.

In the case of James Murdoch I do not believe that it would be acceptable for a person who led an organisation which has a corporate culture of misleading the watchdog for its print media and has admitted to making payments to stop information coming out about his company which will now lead to criminal convictions to be in charge of a company which holds a broadcast licence.

In the case of Rebekah Brooks we have a Chief Executive of a company who has admitted to her newspaper committing criminal acts under her leadership in making payments to police to acquire information. She was also editor of the newspaper over the period when some of the worst cases of phone hacking took place, incidents which have shocked and disgusted the nation. As CEO of News International she presided over a company which repeatedly failed to uncover the truth, and which misled the PCC and others to stop them from discovering the truth. This company is now seeking to take over one of the largest broadcasters in the UK.

I hope that you will be able to consider my request and that you will able to come to a view on these matters quickly. This is a matter of great public interest, and as you may know the investigation against the News of the World' and News International is currently one of the largest criminal investigations in the country. The accusations which have been made against News International executives are a scandal which is being followed in the media around the world.

Rt Hon Simon Hughes MP

Quote:Phone hacking: Police probe suspected deletion of emails by NI executive

'Massive quantities' of archive allegedly deleted
Emails believed to be between News of the World editors

Nick Davies and Amelia Hill guardian.co.uk, Friday 8 July 2011 14.18 BST

Police are investigating evidence that a News International executive may have deleted millions of emails from an internal archive, in an apparent attempt to obstruct Scotland Yard's inquiry into the phone-hacking scandal.

The archive is believed to have reached back to January 2005 revealing daily contact between News of the World editors, reporters and outsiders, including private investigators. The messages are potentially highly valuable both for the police and for the numerous public figures who are suing News International.

According to legal sources close to the police inquiry, a senior executive is believed to have deleted 'massive quantities' of the archive on two separate occasions, leaving only a small fraction to be disclosed. One of the alleged deletions is said to have been made at the end of January this year, just as Scotland Yard was launching Operation Weeting, its new inquiry into the affair.

The allegation directly contradicts repeated claims from News International that it is co-operating fully with police in order to expose its history of illegal news-gathering. It is likely to be seen as evidence that the company could not pass a 'fit and proper person' test for its proposed purchase of BSkyB.

A Guardian investigation has found that, in addition to deleting emails, the company has also:

infuriated police by leaking sensitive information in spite of an undertaking to police that it would keep it confidential; and

risked prosecution for perverting the course of justice by trying to hide the contents of a senior reporter's desk after he was arrested by Weeting detectives in earlier this year.

News International originally claimed that the archive of emails did not exist. Last December, its Scottish editor, Bob Bird, told the trial of Tommy Sheridan in Glasgow that the emails had been lost en route to Mumbai. Also in December, the company's solicitor Julian Pike from Farrer and Co provided the high court with a statement claiming that it was unable to retrieve emails which were more than six months old.

The first hint that this was not true came in late January when News International handed Scotland Yard evidence which led to the immediate sacking of its news editor Ian Edmondson and to the launch of Operation Weeting. It was reported at the time that this evidence consisted of three old emails.

Three months later, on 23 March this year, Pike formally apologised to the high court and acknowledged that News International could locate emails as far back as 2005 and that no emails had ever been lost en route to Mumbai or anywhere else in India. In a signed statement seen by the Guardian, Pike said he had been misinformed by the News of the World's in-house lawyer, Tom Crone, who had told him that he, too, had been misled. He offered no explanation for the misleading evidence given by Bob Bird.

The original archive was said to contain half a terabyte of data - equivalent to 500 editions of Encyclopaedia Britannica. But police now believe that there was an effort to substantially destroy the archive before News International handed over their new evidence in January. They believe they have identified the executive responsible by following an electronic audit trail. They have attempted to retrieve the data which they fear was lost. The Crown Prosecution Service is believed to have been asked whether the executive can be charged with perverting the course of justice.

At the heart of the affair is a specialist data company, Essential Computing, based in Clevedon, near Bristol. Staff there have been interviewed by Operation Weeting. One source speculated that it was this company which had compelled News International to admit that the archive existed.

The Guardian understands that Essential Computing has co-operated with police and has provided evidence about an alleged attempt by the News International executive to destroy part of the archive while they were working with it. This is said to have happened after the executive discovered that the company retained material of which News International was unaware.

The alleged deletion has caused tension between News International and Scotland Yard, who are also angry over recent leaks. When the Murdoch company handed over evidence of their journalists' involvement in bribing police officers in late June, they wanted to make a public announcement, claiming credit for their assistance to police. They were warned that this would interfere with inquiries and finally agreed that they would keep the entire matter confidential until early August, to allow police to make arrests. In the event, this week, a series of leaks has led Scotland Yard to conclude that News International breached the agreement.

There was friction too earlier this year when Weeting detectives arrested a senior journalist. When they went to the News of the World's office to search his desk, they found that all of its contents had been removed and lodged with a firm of solicitors, who initially refused to hand it over. The solicitors eventually complied. A file is believed to have been sent to the Crown Prosecution service seeking advice on whether anybody connected with the incident should be charged.

Quote:James Murdoch could face criminal charges on both sides of the Atlantic

As phone hacking scandal leaves News Corp open to prosecution, James Murdoch looks less likely to inherit empire

Dominic Rushe and Jill Treanor guardian.co.uk, Friday 8 July 2011 20.18 BST

James Murdoch and News Corp could face corporate legal battles on both sides of the Atlantic that involve criminal charges, fines and forfeiture of assets as the escalating phone-hacking scandal risks damaging his chances of taking control of Rupert Murdoch's US-based media empire.

As deputy chief operating officer of News Corp the US-listed company that is the ultimate owner of News International (NI), which in turn owns the News of the World, the Times, the Sunday Times and the Sun the younger Murdoch has admitted he misled parliament over phone hacking, although he has stated he did not have the complete picture at the time. There have also been reports that employees routinely made payments to police officers, believed to total more than £100,000, in return for information.

The payments could leave News Corp and possibly James Murdoch himself facing the possibility of prosecution in the US under the Foreign Corrupt Practices Act (FCPA) legislation designed to stamp out bad corporate behaviour that carries severe penalties for anyone found guilty of breaching it and in the UK under the Regulation of Investigatory Powers Act 2000 which outlaws the interception of communications.

Tony Woodcock, a partner at the City law firm Stephenson Harwood, said section 79 of the 2000 Act enabled criminal proceedings to be brought against not only a company, but also a director or similar officer where the offence was committed with their "consent or connivance" or was "attributable to any neglect on their part". Woodcock said: "This could embrace a wide number of people at the highest level within an organisation, such as a chief executive not just the individual who 'pushed the button' allowing the intercept to take place or someone (perhaps less senior) who encouraged or was otherwise an accessory to the offence, such as an editor."

While the UK phone-hacking scandal has been met with outrage in the US, the hacking itself is unlikely to prompt Washington officials into action. But because NI is a subsidiary of the US company, any payments to UK police officers could trigger a justice department inquiry under the FCPA.

The 1977 Act generally prohibits American companies and citizens from corruptly paying or offering to pay foreign officials to obtain or retain business.

The Butler University law professor Mike Koehler, an FCPA expert, said: "I would be very surprised if the US authorities don't become involved in this [NI] conduct."

He said the scandal appeared to qualify as an FCPA case on two counts. First, News Corp is a US-listed company, giving the US authorities jurisdiction to investigate allegations. "Second, perhaps more importantly, the act requires that payments to government officials need to be in the furtherance of 'obtaining or retaining' business. If money is being paid to officials, in this case the police, in order to get information to write sensational stories to sell newspapers, that would qualify," he said.

Koehler said the US justice department was increasingly keen to bring cases against individuals as well as companies, because prosecuting people brought "maximum deterrence". He added: "Companies just pay out shareholders' money. There's not much deterrence there." Tom Fox, a Houston-based lawyer who specialises in FCPA cases and anti-corruption law, said most corporate cases were settled before going to court. But for individuals who are successfully prosecuted the penalties are severe.

In 2009 the former Hollywood movie producer Gerald Green and his wife, Patricia, were jailed for six months in the first criminal case under the FCPA. The Greens, whose credits included Werner Herzog's Rescue Dawn, were convicted of paying $1.8m in bribes to a government official in Thailand in exchange for contracts to manage the Bangkok international film festival.

FCPA charges can carry up to five years in jail for each charge but the Greens' short prison sentence was not the harshest element of their sentencing. The "biggest hammer" prosecutors hold is forfeiture of assets, said Fox. "The Greens lost everything. Their house, savings, retirement plan. They are destitute now."

Bringing an FCPA case against the company would be far easier than bringing an action against James Murdoch. As yet there appears to be no evidence that he was directly linked to authorising the police payments. "If you don't know about it, that is a valid defence for an individual," said Koehler. In New York, media executives believe that with or without an FCPA case James Murdoch has already fatally damaged his chances of taking his father's crown.

One said: "There has been a sense of unravelling at News Corp for a while. The Daily, MySpace, Project Alesia they look like News is chasing rainbows. [Rupert] Murdoch is looking old. It affects his ability to appoint an heir and I don't think James even has the backing of his family any more." Speculation is that Chase Carey, the chief operating officer, is most likely to take the top slot when and if the media mogul steps aside. "He is the ultimate Murdoch operative. He is not interested in the trappings of the media business. What would he do? Close the New York Post, sell the Times. Why not? It's a rational thing to do."

Quote:Guardian statement on information it gave the government regarding Andy Coulson

Before the general election the Guardian contacted all three party leaders to tell them of certain facts about Andy Coulson which the Guardian could not at that stage report

guardian.co.uk, Saturday 9 July 2011 14.27 BST

In a telephone call around February 25th, Guardian deputy editor Ian Katz told the prime minister's director of strategy Steve Hilton a number of details about the case of Jonathan Rees, a private detective who had worked for the News of the World, which the paper had been unable to publish due to ongoing legal proceedings. These included:

Rees's name he had been described in a Guardian report published online on February 24th and in the paper edition of February 25th only as "Mr A"

The fact that he was awaiting trial for a murder in which the victim was found in a pub car park with an axe in his head

The fact that Rees had been jailed for seven years for conspiring to frame a woman by placing cocaine in her car, after which he had been rehired by Coulson's News of the World.

The fact that Rees's illegal activities on behalf of the News of the World had been prominently reported in the Guardian before he was rehired under Coulson.

None of these details was included in any report for several months until after the collapse of Rees's trial in March 2011. The thrust of the conversation was that Rees was a murder suspect who had been involved in massive corruption on behalf of the News of the World of which Coulson could not have been unaware. The Guardian understands No 10 chief of staff Edward Llewelyn was informed of this conversation.

Downing Street's reference to the private detective working for Panorama is baffling and irrelevant to how the Rees information was handled. There was no suggestion that Rees ever had any connection with Panorama until March 2011, many months after No 10 was told the details of the Rees case

Quote:Phone hacking: I warned No 10 over Coulson appointment, says Ashdown

Lib Dem peer advised that decision would cause 'terrible damage' after being briefed about NoW former editor's past

Toby Helm and Daniel Boffey guardian.co.uk, Saturday 9 July 2011 19.22 BST

The crisis engulfing David Cameron over phone hacking deepened on Saturday as Paddy Ashdown revealed that he had warned No 10 only days after the general election of "terrible damage" to the coalition if he employed Andy Coulson in Downing Street.

The former Liberal Democrat leader, who had been extensively briefed on details that had not been made public for legal reasons, was so convinced that the truth would eventually emerge that he contacted the prime minister's office.

Ashdown, a key player as the Liberal Democrats agonised over whether to join in a coalition with the Tories, told the Observer that, based on what he had been told, it was obvious Coulson's appointment as Cameron's director of communications would be a disaster.

"I warned No 10 within days of the election that they would suffer terrible damage if they did not get rid of Coulson, when these things came out, as it was inevitable they would," he said.

Cameron, who will meet Milly Dowler's parents to discuss the government's response to phone hacking, refused to heed the advice and recruited the former News of the World editor to be his right-hand man in charge of the media at No 10.

It has also emerged that Nick Clegg, the deputy prime minister, received similar briefings to those given to Ashdown before the election, which he raised with Cameron only to be rebuffed by the prime minister, who insisted that it was right to give Coulson a "second chance".

Senior Whitehall sources say that Clegg was stunned by what he was told but concluded, after the coalition deal was struck, that he was powerless to change Cameron's mind. "Clegg said: 'It is not up to me to tell the prime minister who to appoint as his director of communications'," said a source.

Downing Street also faces fresh questions about why it failed to act on information passed by the Guardian to Cameron's director of strategy, Steve Hilton, about Coulson's professional relationship with the private detective Jonathan Rees.

Downing Street appeared to alter its story from claiming that the information passed to it was merely that which appeared in the newspaper to claiming that "much" of it was. The Guardian insists that Hilton was given information it had been unable to publish owing to legal proceedings, including the fact that Rees was awaiting trial for murder and that he had been jailed for seven years for conspiring to frame a woman by placing cocaine in her car.

Coulson, arrested by police on Friday over his role in the scandal, went on to be cleared by the security vetting team at Downing Street after three in-depth interviews about his professional and personal life. He was given "strap one" status, which allowed him the highest access to top-secret material.

Quote:Blair 'tried' to hush up hacking scandal as whistleblower MP told: 'Rebekah Brooks will pursue you for the rest of your life'

By Simon Walters
Last updated at 11:58 PM on 9th July 2011

Tom Watson claims Rebekah Brooks was not only responsible for wrongdoing, but knew about it

MP said in Commons that James Murdoch personally authorised money to be paid to silence hacking victims an attempt to pervert the course of justice

Fellow MP Chris Bryant, a phone-hack victim, brands newspaper company gangsters'

Tony Blair urged Gordon Brown to persuade the Labour MP who led the campaign to expose News of the World phone-hacking to back off, friends of Mr Brown said last night.

Well-placed sources said Mr Blair, who has close links with the paper's owner Rupert Murdoch, wanted Mr Brown to get his ally Tom Watson to lay off the News International (NI) title, but Mr Brown refused.

Mr Watson's two-year crusade played a major part in Mr Murdoch's shock decision to close the paper after today's edition.

The MP used Commons legal protection to make damning allegations against NI chief executive Rebekah Brooks and chairman James Murdoch.

The assertion that Mr Blair tried to help Mr Murdoch came amid claims that:

Mr Watson was told Mrs Brooks will pursue you for the rest of your life' over his stance.

Mrs Brooks begged Blairite ex-Cabinet Minister Tessa Jowell to help stop this madman Tom Watson' and also sought help from her friend, Mr Blair.

A NI executive threatened to take revenge on Ed Miliband for saying Mrs Brooks should quit.

Meanwhile, David Cameron came under fire from his own party for attacking Press regulators. In today's Mail on Sunday, MP David Davis writes: The primary failure has not been of newspaper regulation, but of the criminal law.'

Mr Blair's attempt to persuade Mr Brown to put pressure on Mr Watson is likely to bring his links with Mr Murdoch under fresh scrutiny.

On becoming Labour leader in 1994, Mr Blair flew to a conference hosted by Mr Murdoch to end Labour's feud with him. The alliance continued throughout Mr Blair's ten years in office as Mr Murdoch's papers The Times, The Sun and the News of the World supported him.

In contrast, Mr Brown was accused of orchestrating the campaign against NI after The Sun pulled its support for him at the last Election.

Mr Brown's office declined to comment on whether Mr Blair had intervened, saying: We never comment on private conversations.'

But a friend of Mr Brown said: There is no doubt about it, Tony wanted Gordon to intervene.'

A spokesman for Mr Blair said: The allegation is categorically untrue.' He declined to elaborate on which aspect was untrue.

Mr Watson was reportedly threatened by NI in the early stages of the phone-hacking dispute. He was said to have been told by someone from the company: Rebekah Brooks will pursue you for the rest of your life. She will never forgive you for this.'

As the MP homed in on his prey, the pressure from NI who believed he was being egged on by Mr Brown became increasingly menacing.

One source said the MP was given an extraordinary message as he called for ex-News of the World editor Andy Coulson to resign as Mr Cameron's communications director: The word from Wapping [NI's HQ] was that Watson can have Coulson but not Rebekah.'

The allegations Mr Watson made under Commons protection from libel action include that:

Rebekah Brooks was not only responsible for wrongdoing, but knew about it.'
NI paid people to interfere with police officers on behalf of known criminals.'
James Murdoch personally authorised money to be paid to silence hacking victims an attempt to pervert the course of justice.'

Labour MP Chris Bryant also says he was warned off' about highlighting phone hacking.

He said: A friend said someone very close to the highest level of NI had told him that my actions would never be forgotten by the company.

'NI behave like gangsters. They operate by a combination of fear and favour.'

Sources close to Labour leader Ed Miliband said he was also threatened after attacking NI.

A Labour official said: An NI executive told one of Ed's aides, "If you are making it personal, so will we." '

An ally said: That these people make threats shows they still don't get it.'

Mr Miliband is to force a Commons vote on Wednesday calling for Mr Murdoch's bid for total control of BSkyB to be postponed until police inquiries into hacking are complete. Labour thinks Lib Dems, and some rebel Tories, will back them, forcing Mr Cameron to order MPs to support Mr Murdoch.

Meanwhile, the 63-year-old man arrested on Friday over alleged corrupt payments to police officers has been released on police bail.

Last night, NI said: We are co-operating fully with the police. When provided with concrete evidence, people will be held to account.'