Leveson Inquiry: MPs' expenses story 'laced with risk'

The editor who broke the MPs' expenses scandal said today the story was "laced with risk" but he felt a duty to make it public.

Former Daily Telegraph editor-in-chief Will Lewis told the Leveson Inquiry into press standards that exposing the abuses of parliamentary allowances was "one of the most important bits of public service and public interest journalism in the post-war period".

Mr Lewis described how his initial worries about the possibility of being hoaxed over the story turned into a feeling that he had a "responsibility" to publish it.

He confirmed that the Telegraph paid about £150,000 for a computer disk containing four years of information about MPs' expenses, but insisted that it was not stolen.

The ex-editor told the inquiry his first concern on being offered the disk in 2009 was to ensure that it was genuine, mindful of how the Sunday Times was tricked into publishing the fake Hitler diaries more than 25 years earlier.

He added: "I was also aware of the fact that this story was laced with risk all around, as the best and most important public interest journalism tends to be - whether it was the time that we had in order to be able to investigate it, whether it was the reaction of the readers."

Mr Lewis consulted lawyers before entering negotiations to buy the data, the hearing at the Royal Courts of Justice in London was told.

"Given that the information had been copied on to a disk, the advice was that it was not capable of theft," he said.

A Telegraph team was given 10 days to make a preliminary examination of the material and soon found evidence of abuses of the parliamentary expenses system, the inquiry heard.

Mr Lewis said: "They uncovered quite quickly things that no one thought probable. Looking through such stuff, I became very aware that it was my responsibility to bring this to the public domain.

"It was no longer a choice for me as editor. I knew this was a duty to bring this into the public domain."

The former editor denied a suggestion that the Telegraph dragged out its reporting of the story for commercial gain.

"Some might say that it represents one of the most important bits of public service and public interest journalism in the post-war period that unveiled and revealed such wrong-doing in Parliament that the Speaker had to resign and many MPs followed after him," he said.

"It was a way to ensure that the readers of the Telegraph and the broader British public were able to find out about the profound wrong-doing in the House of Commons and how MPs had stolen from the taxpayer."

Mr Lewis joined News International in September 2010 and now sits on News Corporation's management and standards committee, which is looking at the phone-hacking scandal that resulted in the closure of the News of the World last July.

Mr Lewis refused to confirm whether he was the source of a December 2010 BBC report based on a leak from a Telegraph investigation in which undercover reporters recorded Business Secretary Vince Cable saying he had "declared war" on Rupert Murdoch.

Mr Lewis said: "I can't assist you on that. As you know, core to any journalist, and I am included, is the protection of journalists' sources."

Current Telegraph editor Tony Gallagher told the inquiry that industry regulator the Press Complaints Commission (PCC) was "clearly not fit for purpose" in its present form.

He called for the PCC's replacement to have powers to launch its own investigations.

"I think one of the difficulties of the PCC is that it stands condemned for things it was never able to do," he said.

"I think the PCC has never had investigative powers, and I'd very much like it to have those, to be able to - when there's been a systemic breakdown in standards - go into newsrooms, interview staff, seek emails, demand an audit trail to see how decisions have been taken."

Mr Gallagher said he was "hugely attracted" to the idea of a system of arbitration to resolve legal disputes before they go to court.

He told the hearing: "I think if that arbitral service was low cost, it might be a great way of embracing the internet news providers, who at the moment remain outside the system, and if they realise that their access to that cheap and quick arbitral system would be contingent upon joining the new body, that would be wholly desirable."

Mr Gallagher also suggested more should be done to "increase the nature of pariah status" for publishers that refuse to sign up to the regulator.

"If it was not enforceable by some kind of civil law, then I think the industry could and should do a great deal more to ensure that rogue publishers are given no access to the benefit enjoyed by everybody else," he said.

Telegraph Media Group chief executive Murdoch MacLennan told the inquiry that he approved the purchase of the MPs' expenses disk.

He said: "I was making continuous inquiries of our legal department and the editor, absolutely satisfied there were major public issues at stake there, public money at stake and serious impropriety, and in a few cases criminality."

He said people at the Telegraph were "astonished" to learn about the News of the World's use of phone hacking and assured inquiry chairman Lord Justice Leveson that newspaper executives wanted to reform the way they are regulated.

"Nothing ever like this has happened to the press. Nothing as comprehensive in the media, nothing as far-reaching as this, has hit us thus far," he said.

"I think you will find there is a general consensus across the industry that things have to change."

Independent editor Chris Blackhurst told the inquiry that editors recognised the PCC needed "substantial reform".

Referring to the PCC guidelines, he said: "I think the code is pretty robust, but it needs to be enforced and it needs to be credible."

He was asked about an interview he gave the BBC in September in which he supported the idea of "striking off" journalists who were found to have committed serious abuses.

Mr Blackhurst replied: "I am not in favour of state licensing. As much as I regret saying it, I think the PCC has become tarnished in the eyes of the public."

He added: "Certainly when the editors meet and we talk among ourselves, we now recognise that there is need for substantial reform. What I am personally against is state intervention, state control of the media."

Chris Blackhurst also said that The Independent was plunged into "profound" shock after journalist Johann Hari was exposed for plagiarism.

He told how a "whole storm" broke when the scandal was brought to light, bringing with it revelations that Mr Hari had adopted a pseudonym to attack his critics online.

But he defended the reporter, telling the Leveson Inquiry Mr Hari would return to The Independent in four to five weeks, following four months' unpaid leave.

And he dismissed suggestions the paper "protected" its own when Mr Hari's case was compared to that of journalist Neville Thurlbeck who "did not face the sack from News of the World despite having been heavily criticised for his actions".

Recalling the effect of Mr Hari's actions on his colleagues, Mr Blackhurst told the inquiry: "I think what I would want to stress was the shock this caused.

"Enormous shock to myself, as somebody who prior to then had mainly been an observer and an admirer of Johann's journalism, and a much deeper shock, I think, to his colleagues at The Independent.

"It was really profound and totally unexpected."

Responding to claims the paper may have known about Mr Hari's actions prior to this point, he told the hearing: "I'm surprised you say that there was a cover-up in the sense that we'd had inklings before because that is genuinely news to me.

"We had no inklings of the plagiarism at all. Indeed, one of the problems with the Johann affair was nobody had ever complained, no journalist that he had plagiarised, no person he had interviewed, no reader, no colleague ... had alerted us to the fact that he had drawn his information from somewhere else.

"If they had, it might have been nipped in the bud at a much earlier stage. The fact was, it continued."

Mr Blackhurst, who took the helm at The Independent shortly after Mr Hari's plagiarism was exposed, told the hearing staff had "absolutely no knowledge" the reporter had doctored Wikipedia entries.

"Again we had absolutely no knowledge," he said. "I certainly didn't. I don't believe any of my colleagues did. They had absolutely no knowledge that Johann Hari was messing about on the internet under a false name amending people's Wikipedia entries."

But standing by the journalist, he said Mr Hari "genuinely believed he was doing nothing wrong" when he incorporated comments given by interviewees to other reporters in his own articles.

Financial Times editor Lionel Barber said the phone-hacking scandal was a "wake-up call" that made British newspaper executives realise they must change how the industry is regulated.

He called for the formation of a new independent press regulator with powers to impose fines, require corrections to be published prominently and launch investigations.

Mr Barber told the hearing: "This was a shocking episode. All of us, I speak for myself, believe that as a result we need to change the way we do business. If this isn't a wake-up call, I'm not sure what is."

Prime Minister David Cameron set up the Leveson Inquiry last July in response to allegations that the News of the World commissioned a private detective to hack murdered schoolgirl Milly Dowler's phone after she disappeared in 2002.

The first part of the inquiry is looking at the culture, practices and ethics of the press in general and is due to produce a report by September.

The second part, examining the extent of unlawful activities by journalists, will not begin until detectives have completed their investigation into alleged phone hacking and corrupt payments to police, and any prosecutions have been concluded.

PA