James Murdoch and the BSkyB bid
James Cusick is political correspondent of The Independent and The Independent on Sunday. As an experienced member of the lobby, he has previously worked at The Sunday Times and the BBC. His career as a journalist has been split between print and television, including senior positions as producer with Sir David Frost and at BBC Newsnight. He is also an award-winning golf and travel writer, working for over a decade as the UK contributing editor for one of the USA’s leading golf magazines. He broadcasts regularly for the BBC and CNN. He lives in London.
Tuesday 24 April 2012
Two days after Vince Cable was removed as the government minister who would be making the decision about News Corp’s full take-over of BSkyB, James Murdoch attended a meeting with the Prime Minister, David Cameron, at the home of Rebekah Brooks and her husband Charlie Brooks. Around 15 people were at the meeting.
James Murdoch denies the meeting was inappropriate, regardless of the backdrop of his company’s £7 billion bid for BSkyB.
“There was no discussion with Mr Cameron other than he reiterated what he said publicly, that the behaviour [of Cable] had been unacceptable. I imagine I expressed the hope that things would be dealt with in a way that was appropriate and judicial. It was a tiny side conversation, it was not a discussion.”
Jeremy Hunt’s personal website used to claim that he was a “cheer leader” for the Murdochs. James Murdoch denies that he once called on Hunt to “oil the wheels of the take-over”.
Did James Murdoch want a Conservative victory in 2010? The question from the inquiry’s counsel, Robert Jay, sounds simple and straightforward. But behind it lay the idea that News Corp had been, as Mr Murdoch described it, “saving up” for a few years to the buy all of the company it helped found 20 years ago. Which of the main parties would make the deal easier to pull off, would be another way of phrasing the question.
“With respect to enterprise and free market the Conservatives tried to make a case they were the better option for that.”
So a Labour victory wouldn’t have helped – and that’s why support for the Tories was evident across News International’s titles?
“We never made a crass calculation about what the newspapers did, it wouldn’t occur to me.”
Having the Chancellor, George Osborne as a friend was a description James Murdoch didn’t deny. However he denied they were 'close' friends. He confirmed he had visited Mr Osborne at Dorneywood, the chancellor’s official country retreat. Again, given the importance of the BSkyB take-over to News Corp, did Mr Murdoch use it to lobby his friend?
“I had one discussion where it might have come up, which was during the process which was to be grumpy about why [the bid process] was taking a long time. Nothing I said to Mr Osborne would have been inconsistent with our public advocacy on the subject.
James Murdoch’s repeated reply to the inquiry, when he was challenged on having an inside-track into the heart of current and past British governments, was to deny this as having an unfair advantage. He described his company’s influence as “legitimate advocacy”. He simply denied politicians were doing what News Corp wanted them to do.
Through an extraordinary day at the Leveson Inquiry, when News Corp’s influence and access into the heart of David Cameron’s government was exposed in full, James Murdoch could have apologised for the way the top echelon of his company was operating. He chose not to. Instead he said claimed his power was over-rated.
“Big media proprietors being able to dominate the landscape? I just don’t think that’s the case anymore.”
On the BSkyB bid, Robert Jay suggested that James Murdoch wasn’t getting what he needed from Vince Cable. A new route needed to dug. News Corp, said Jay, went elsewhere – to Jeremy Hunt. The route was however a highly political one. So did Mr Murdoch order the Sun to back Cameron in return for BSkyB favours?
“That is absolutely not the case. The question of support for one politician or another is not something I would link to an issue like this. I simply wouldn’t do business that way.”
The slew of emails between News Corp public affairs boss and the special adviser at the Department for Culture, Media and Sport, suggests the route News Corp took to seal the BSkyB bid was a form of political insider intelligence that was about to deliver. However Mr Murdoch offered a more basic explanation. Vince Cable was just not listening to him enough.
“I think it would have been entirely appropriate to have a meeting with Mr Cable and his advisors … but what emerged in the next 12 months that he [Cable] was taking other people’s advice. All we wanted to do was sit down and say here are the issues, please sit us down and let us make our case.”
What was the atmosphere like inside News Corp when their plans for the BSkyB take-over weren’t going to plan? Jeremy Hunt was apparently on their side: government policy was leaking out of the cabinet and directly into James Murdoch’s office. But it all still wasn’t enough. The Culture Secretary was effectively being regarded as a News Corp employee. When he cancelled a meeting, Mr Murdoch dispatched an email which read “You must be fucking joking.” So how angry was he?
“As I said earlier, I was displeased.”
The emails between News Corp and the DCMS are deeply embarrassing and contrary to the repeated public statements by Mr Hunt and the Prime Minister that everything was done by the book. In short, they are political dynamite, that hold the potential to deeply damage David Cameron’s government. However Mr Murdoch simply doesn’t see it this way.
“This is a large-scale process that is in the hands of the DCMS… and it was entirely reasonable to try and communicate with policymakers about the merits of what we were proposing.”
Robert Jay tried to get Mr Murdoch to understand that the way News Corp were operating behind the scenes was unacceptable. He told Mr Murdoch that Mr Hunt held a quasi-judicial role – “and yet he is letting you know what his view is.” The Ness Corp boss couldn’t see there was a conflict. He repeated three times that “There’s a difference between you having that view and the judge behind the scenes [Hunt] telling you he has this view as well. “
Even when Hunt’s DCMS office was re assuring News Corp on the bid’s progress, Mr Murdoch said he remained wary and did not regard what he was being told as positive commercial intelligence.
“I took all of it with a grain of salt. It may just have been his office saying all of it will be fine. He only took the advice of Ofcom and the OFT at every turn.”
Jeremy Hunt is portrayed in the email exchanges as almost a loyal subject of News Corp. For many in the inquiry’s courtroom, this was one of the most controversial days the Leveson Inquiry has had. James Murdoch however couldn’t see the controversy, or if he did he maintained his position as a chairman who had simply done his job to get the best deal for his company.
“He [Hunt] consulted widely. He took advice from all sides. And it was an incredibly rigorous process in an environment that was uncharted territory. At every step he followed the independent advice that he said he was going to."
James Murdoch on News Corp’s illegal news gathering techniques and his company’s relations with politicians:
Meetings with politicians:
James Murdoch disclosed that he was on good terms with senior Conservative politicians. He met David Cameron 12 times while he was leader of the opposition and was also “friendly” with Cameron’s close ally, George Osborne, the Chancellor, whom he had met also met in opposition and whose grace and favour government house, Dorneywood in Buckinghamshire, Murdoch had visited with his family. Asked it he lobbied Cameron about policy affecting News Corp, Murdoch replied: “Not really. I wouldn’t really have raised specific things with him.” General subjects such as the Conservatives’ approach towards business and general economic policy would have been discussed, he added.
In September 2009 Murdoch had drinks with the Tory leader to discuss The Sun’s plans to endorse the Conservative Party at the following year’s general election – but he insisted that he did not trade The Sun’s eventual endorsement for commercial favours. Had he discussed the timing of The Sun’s dramatic conversion to the Conservatives in September 2010? “I don’t remember the specificity of that,” Murdoch replied.
However, he admitted he had discussed his company’s bid for BSkyB with David Cameron (six months after he had become prime minister) at a meeting at the home of Rebekah Brooks, News International’s chief executive, in Oxfordshire on 23 December 2010 - but only to raise his concerns that the government would follow the correct legal process. Robert Jay QC asked whether the discussion lasted only a “few moments”. “That’s my recollection,” James Murdoch replied.
In 2005, he confirmed had lobbied the then Prime Minister, Tony Blair, against European Commission proposals that could have affected BSkyB’s grip on Premier League TV rights. Murdoch said his intervention was proper, describing it as appropriate “business advocacy.” “Yes the purpose would be for the Prime Minister to understand that some of these policies might have had adverse consequences for English football.”
The ‘For Neville’ email
James Murdoch insisted again that he was not told of evidence suggesting phone hacking was rife at the News of the World, despite the company’s assurances to the contrary. Murdoch repeatedly blamed his subordinates, maintaining that at a meeting with the NOTW’s editor, Colin Myler, and lawyer, Tom Crone, on 10 June 2008 he had not been shown the "For Neville" email which suggested wrongdoing went wider than just the paper’s jailed royal editor, Clive Goodman. Crone has stated that he had held up the ‘For Neville’ email at the meeting. “No, I don’t have any recollection of that,” Murdoch said. He explained that he did not understand that the email indicated the existence of more widespread wrongdoing, saying: “That part of its importance was not imparted to me on that day.”
The Gordon Taylor settlement
Murdoch denied that he had authorised the £425,000 settlement to Gordon Taylor in 2008 in order to cover up the a culture of lawbreaking at Wapping. The inquiry’s counsel, Robert Jay, QC, pointed out that the settlement was at least 10 times the going rate for a privacy case.“I wasn’t a lawyer. I hadn’t been involved in these sorts of cases,” Murdoch replied. He had been advised that “it would be in the best interests of the business not to have this matter from the past, from a few years ago, dug up and dragged through the court. But it was more in the spirit of that here was an issue that happened a few years ago, it’s all in the past now, it’s all finished..."
Jay suggested: "The point was that this was that the Gordon Taylor litigation would create the possibility, indeed the probability, of fresh reputational damage to the company because it involved others at News International." "I follow your question, but that is not what I was told at the time,” Murdoch replied.
Again, Murdoch blamed his executives for failing to give him straight answers: "I was assured that from a standpoint of journalistic ethics and things like the Editors’ Code and the PCC Code that extensive training had gone on and was continually going on and I was given strong assurances that this had happened." Ethical and legal risks at the News of the World were "very much in the hands of the editor", and he was "not in the business of deciding what to put in newspapers". The blame lay with his staff, he suggested.
News of the World
Murdoch repeatedly distanced himself from News International, saying it was only one of six major businesses he was running. He admitted the company – which he was chairing – had failed to control the News of the World. He said it should not have run its story falsely alleging that former Formula 1 boss Max Mosley had a "sick Nazi orgy".
Murdoch, 39, who became executive chairman of News International when he took over his father’s media empire in Europe and Asia in December 2007, said: “… it’s self-evident that in hindsight, knowing what we know now, whatever controls were in place failed to create the sufficient transparency around those issues and the risks around it ... At the time I didn’t have a view that those were insufficient or not."
Mosley was awarded a record £60,000 in privacy damages at the High Court over the March 2008 News of the World story about his sex life.
Mr Murdoch agreed that News International also had to pay "substantial" costs, which he said was a "cause for concern". "The story shouldn’t have been run," he told the inquiry.
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