House of Commons Culture, Media and Sport Committee News International and Phone-hacking Eleventh Report of Session 2010-12 Volume I HC 903-I House of Commons Culture, Media and Sport Committee News International and Phone-hacking Eleventh Report Volume I Volume I: Report, together with formal minutes Volume II: Oral and written evidence Ordered by the House of Commons to be printed 30 April 2012 HC 903-I Published on 1 May 2012 by authority of the House of Commons London: The Stationery Office Limited £0.00 The Culture, Media and Sport Committee The Culture, Media and Sport Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Culture, Media and Sport and its associated public bodies. Current membership Mr John Whittingdale MP (Conservative, Maldon) (Chair) Dr Thérèse Coffey MP (Conservative, Suffolk Coastal) Damian Collins MP (Conservative, Folkestone and Hythe) Philip Davies MP (Conservative, Shipley) Paul Farrelly MP (Labour, Newcastle-under-Lyme) Louise Mensch MP (Conservative, Corby) Steve Rotheram MP (Labour, Liverpool, Walton) Mr Adrian Sanders MP (Liberal Democrat, Torbay) Jim Sheridan MP (Labour, Paisley and Renfrewshire North) Mr Gerry Sutcliffe MP (Labour, Bradford South) Mr Tom Watson MP (Labour, West Bromwich East) Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/parliament.uk/cmscom. A list of Reports of the Committee in the present Parliament is at the back of this volume. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some of the written evidence are available in a printed volume. Additional written evidence is published on the internet only. Committee staff The following staff assisted the Committee in the preparation of this report: Emily Commander (Clerk of the Committee till April 2012), Elizabeth Flood (Clerk of the Committee from April 2012), Jackie Recardo and Victoria Butt (Senior Committee Assistants), Keely Bishop and Alison Pratt (Committee Assistants), Elizabeth Bradshaw (Committee Specialist), Jessica Bridges-Palmer (Media Officer), Michael Carpenter (Speaker's Counsel) and Andrew Kennon (Clerk of Committees). Contacts All correspondence should be addressed to the Clerk of the Culture, Media and Sport Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6188; the Committee’s email address is [email protected] News International and Phone-hacking 1 Contents Report Page 1 Introduction 3 Background: the Committee’s work on phone-hacking 3 Parliamentary context 6 The wider context and other investigations into phone-hacking 7 Scope of the Committee’s investigation 7 2 News International: cooperation with the Committee and other investigations 9 3 The Goodman and Mulcaire employment claims 15 Clive Goodman’s dismissal 15 The Harbottle & Lewis investigation 16 The decision to settle Clive Goodman’s claim 23 Amounts and authorisation 24 Legal fees 30 Clive Goodman’s prospects for re-employment 31 Confidentiality 32 The settlement with Glenn Mulcaire 33 4 The Gordon Taylor and subsequent settlements 36 Timeline 36 The settlement amount 38 Confidentiality 40 The ‘for Neville’ email 42 The significance of the ‘for Neville’ email and the Silverleaf opinion 46 What James Murdoch knew in 2008 49 Further evidence received 56 Evidence from the Clifford and subsequent settlements 59 The corporate culture at News International 63 5 The hacking of Milly Dowler’s telephone 71 6 The original investigation by the Metropolitan Police 77 Regulation of Investigatory Powers Act 2000 (RIPA) 77 Contacting victims 79 7 Surveillance 82 8 Conclusions and next steps 84 Annex 1: Who’s who 86 Annex 2: Timeline of events 90 2 News International and Phone-hacking Formal Minutes 100 List of Reports from the Committee during the current Parliament 121 News International and Phone-hacking 3 1 Introduction 1. This Report examines whether or not there is good evidence to suggest that the Committee and its predecessor Committees have been misled by any witnesses during the course of their work on the phone-hacking scandal, which continues to reverberate around News International and to have major repercussions for the British newspaper industry as a whole. Background: the Committee’s work on phone-hacking 2. In the last decade, the Committee’s predecessors have conducted three separate inquiries into press standards, taking a special interest in privacy. In the last Parliament, as part of the most recent of the three Reports—Press standards, privacy and libel—the Committee looked into allegations of widespread phone-hacking at the News of the World.1 It was not convinced by assurances given to it that phone-hacking had been the work of a single ‘rogue reporter’ and was frustrated by what it described as the “collective amnesia” that seemed to afflict witnesses from News International.2 It also criticised the Metropolitan Police for failing to pursue its own investigation into phone-hacking.3 The Committee made it clear that it regarded some of the contentions made by witnesses as straining credulity but, faced with a repeated insistence that wrongdoing was not widespread, and the unwillingness of police and prosecutors to investigate further, it was not possible to conclude definitively that we had knowingly been given evidence which was deliberately misleading or false, either by individuals or by News International itself. 3. A series of events in 2011 changed the situation: • On 5 January 2011, the News of the World suspended its Assistant Editor Ian Edmondson over alleged involvement in phone-hacking. • On 15 January 2011, following continued civil cases by phone-hacking victims, the Crown Prosecution Service announced a review of the evidence collected in the Metropolitan Police’s original investigation of phone-hacking at the News of the World. The announcement was made after News International had tasked Group General Manager Will Lewis with re-examining all the documents held by Harbottle & Lewis, a firm of solicitors that—in 2007—had conducted an independent review of those papers in the context of an unfair dismissal claim being brought by Clive Goodman, the News of the World’s former Royal Editor, against the company. Mr Lewis had passed the material to a different firm of solicitors, Hickman Rose, who in turn had referred the material to Lord Macdonald of River Glaven, a former Director of Public Prosecutions, for an opinion. On the basis of his opinion, it was decided to refer the matter immediately to the police. 1 Culture, Media and Sport Select Committee, Second Report of Session 2009-10, Press standards, privacy and libel, HC 362 (hereafter referred to as Press standards, privacy and libel) 2 Press standards, privacy and libel, paras 441 and 442 3 Press standards, privacy and libel, para 467 4 News International and Phone-hacking • On 26 January 2011, the Metropolitan Police announced that it was re-opening its investigation into phone-hacking. The new investigation, Operation Weeting, is being led by Deputy Assistant Commissioner Sue Akers, who replaced Acting Deputy Commissioner John Yates, one of the Metropolitan Police witnesses who appeared before the Committee in 2009. It is conducting a fresh examination of all evidence, including that held by the police since the prosecution of the newspaper’s former Royal Editor, Clive Goodman, and the private investigator, Glenn Mulcaire, and is contacting, with distinctly more vigour and purpose, victims of the newspaper’s phone- hacking activities. Since then, two further, parallel investigations have been launched, also headed by DAC Akers: Operation Elveden into alleged payments to police officers; and Operation Tuleta into other activities beyond phone-hacking, including e-mail and computer hacking. • On 10 March 2011, Chris Bryant MP held an adjournment debate on the floor of the House of Commons, during the course of which he accused Acting Deputy Commissioner John Yates of having misled both the Culture, Media and Sport and Home Affairs Select Committees when giving evidence on phone-hacking. Mr Yates had asserted that, under the Regulation of Investigatory Powers Act 2000 (RIPA), it was only possible to prosecute illegal voicemail intercepts if it could be proved that the hacker had accessed the voicemail before the intended recipient had listened to it.4 Written evidence to the Home Affairs Committee from the Director of Public Prosecutions stated, however, that “the prosecution [in the cases of Clive Goodman and Glenn Mulcaire] did not in its charges or presentation of the facts attach any legal significance to the distinction between messages which had been listened to and messages that had not”.5 In fact, because both Clive Goodman and Glenn Mulcaire had pleaded guilty, this issue was never tested.6 On 14 March 2011, Acting Deputy Commissioner John Yates wrote to the Committee offering to give evidence in response to the comments made by Mr Bryant in his debate four days earlier and did so on 24 March. • On 5 April 2011, Ian Edmondson and Neville Thurlbeck, the News of the World’s Chief Reporter, were arrested on suspicion of unlawfully intercepting voicemail messages, the first arrests in the course of the new police investigations.7 • On 7 July 2011, James Murdoch, Deputy Chief Operating Officer and Chairman and Chief Executive Officer (International), News Corporation, made a public statement announcing the closure of the News of the World, in which he stated that wrongdoing was not confined to one reporter and that both the newspaper and News International had failed to get to the bottom of this affair.