Hack Attack (45 page)

That same day, in spite of the repeated legal advice, he drafted a memo to the prime minister, suggesting that the two of them should meet Cable and his party leader, Nick Clegg, to discuss the bid: ‘James Murdoch is pretty furious at Vince’s referral to Ofcom. He does not think he will get a fair hearing from Ofcom. I am privately concerned about this because News Corp are very litigious and we could end up in the wrong place, not just politically but also in terms of media policy.’ In the final version of the memo which he sent to David Cameron that evening, Hunt tactfully deleted the idea that he was concerned ‘politically’ but made his view very clear, adding that he thought it would be ‘totally wrong to cave in’ to opposition to the bid.

All this was done behind the scenes, hidden from the public. When Hunt’s memo to the prime minister was revealed more than a year later at the Leveson Inquiry, Hunt conceded that in retrospect he realised that ‘it would not have been possible for Vince Cable to attend such a meeting’. As it was, the meeting which Hunt suggested never happened, but James Murdoch raised the level of fear, with a speech in Barcelona which carried a clear threat to pull BSkyB’s business out of the UK, taking 30,000 jobs with him: ‘From our perspective – from India to Italy to Germany – countries are becoming more welcoming of investment and more welcoming of what we can bring.’

Regardless of the legal restraint on interfering with the quasi-judicial process, Fred Michel and/or James Murdoch continued to lobby not only Hunt but also coalition MPs, special advisers and at least four Lib Dem members of the House of Lords. They also became more aggressive. On 15 December – the day the
Guardian
broke the story of the hacking of Sienna Miller and her friends and family – the All-Party Parliamentary Group of MPs who had a special interest in the media invited News Corp to send a representative to a breakfast meeting to debate the bid with somebody from the opposing alliance. News Corp refused to send anybody. Later that day, when they heard that the MPs had gone ahead and met with the alliance, News Corp withdrew all their funding from the group.

Meanwhile, Claire Enders, who was still centrally involved with the alliance, was told that News International would no longer co-operate with her, which threatened her ability to produce accurate reports on the media world. News International followed up by indicating that they were considering cancelling their £45,000 annual contract to receive her reports. Enders refused to back down. They cancelled the contract. Clearly, James Murdoch’s team were worried.

Then, suddenly, it all changed.

At 2.30 in the afternoon on 21 December 2010, the BBC business editor, Robert Peston, posted a stunning story on his blog. This disclosed that on 3 December, two women who were working for the
Daily Telegraph
had approached Vince Cable pretending to be mothers from his constituency and secretly recorded their conversation. Over the previous few days, the
Telegraph
had printed several stories about it – but had not published the stick of dynamite which Cable had produced. Peston now reported that Cable had told the two women how he had blocked the BSkyB bid, saying, ‘I have declared war on Murdoch, and I think we’re going to win … I can’t politicise it, but, for the people who know what is happening, this is a big thing. His whole empire is now under attack.’ With one brief outburst, Cable had blown a hole in the neutrality which was essential for his quasi-judicial role.

Peston’s story hit the power elite like a fan dancer at a funeral: some were amazed; some were alarmed; everybody noticed. James Murdoch was so excited that he was physically jumping with joy, according to one News Corp source. Up and down Whitehall, ministers and officials called emergency meetings: this was a threat not just to Cable’s job but, by extension, to the stability of the coalition government itself.

In the Department of Culture, Media and Sport, Jeremy Hunt spoke by phone to James, who complained that Cable was clearly biased and revived his threat to sue the government. Hunt texted the Chancellor of the Exchequer, George Osborne: ‘Cld we chat about Murdoch Sky bid? I am seriously worried we are going to screw this up.’ And then again seconds later: ‘Just been called by James M. His lawyers are meeting now and saying it calls into question legitimacy of whole process from beginning, “acute bias” etc.’

In Downing Street, the prime minister met with Osborne and officials. Rapidly, they agreed that Cable could keep his job, which would stabilise the coalition, but he must hand over responsibility for the BSkyB deal to another minister. And they chose … Jeremy Hunt. Fully aware that Hunt was sympathetic to the bid, Cameron asked the Treasury Solicitor, Sir Paul Jenkins, to advise whether Hunt had said anything public which might cause a problem. Sir Paul checked and reported that he could see no fatal problem.

However, Cameron’s request that Sir Paul review Hunt’s ‘public’ comments meant that he did not consider the memo which Hunt had sent to Cameron four weeks earlier, in which he had ignored legal advice by attempting to organise a meeting with Cable and declared that he thought it ‘totally wrong’ to give in to opposition to the bid. Nor did Sir Paul consider any of Hunt’s discreet encouragement for the takeover in his contacts with News Corp, including the fact that earlier that same day, less than two hours before Robert Peston posted his story, Hunt had heard that the European Commission had ruled that they had no objection to the bid and had texted James Murdoch: ‘Congrats on Brussels. Just Ofcom to go!’

At 5.45 that afternoon, a little more than three hours after Peston’s story broke, Downing Street announced that Vince Cable would pass over all responsibility for the bid and for all media mergers to Jeremy Hunt. Within ten days, Hunt would receive the report from Ofcom and decide whether to wave the deal through or to refer it to the Competition Commission. Shares in BSkyB rose sharply.

One intriguing question remained. Since the
Daily Telegraph
had not published Cable’s destructive comments, how had Robert Peston from the BBC managed to get hold of them, including the recording of Cable’s voice? The
Telegraph
, although embarrassed by the clear implication that they had suppressed the story because they opposed the bid, responded by hiring the upmarket security company Kroll to investigate the leak. Six months later, Kroll reported their ‘strong suspicion’ that the whole affair had been orchestrated by a former editor of the
Daily Telegraph
, Will Lewis, who had left the paper under unhappy circumstances seven months earlier … and was now working as right-hand man to Rebekah Brooks at News International.

Kroll found evidence of texts and phone calls between Lewis and a computer specialist at the
Telegraph
during the twelve days before the story broke. They also found that that specialist had since left and gone to work at News International. And it was a matter of record that Lewis and Robert Peston had worked together years earlier at the
Financial Times
and remained close friends. Giving evidence to the Leveson Inquiry, Lewis declined to answer questions about whether he had organised the leak. It really didn’t matter. The breakthrough was clear.

Two days later, on the evening of 23 December 2010, a triumphant James Murdoch and his wife, Kathryn, sat down for an informal private supper with Rebekah and Charlie Brooks. They were joined by the prime minister and his wife, Sam. Caesar was in sight of Rome. What could possibly stop him?

12. 15 December 2010 to 28 June 2011

The Sienna Miller story hit them hard. On 16 December 2010, the day after we had published her devastating submission to the High Court, News International suspended Ian Edmondson. They made sure that they said nothing in public, but it was a very significant moment, the first sign of a new strategy, of selective sacrifice. Edmondson might have worked for them for years, might have thought they would protect him, might have guessed they felt some loyalty, but as soon as his presence became a threat, they were ready to toss him over the wall to the enemy.

Christmas and the New Year holiday intervened, with the press feasting on Vince Cable’s removal from the BSkyB bid. On 5 January 2011, the
Guardian
disclosed Edmondson’s suspension. On 7 January, News International got hold of the fat file of Mulcaire paperwork which Mark Thomson had forced Scotland Yard to disclose. It traced in horrible detail how their full-time private investigator, acting on instructions from their long-standing head of news, had repeatedly and unlawfully eavesdropped on the voicemails of Sienna Miller and her friends and family.

They reacted by adding a little more weight to their new strategy, announcing that they were conducting an internal inquiry to find out what had been happening. This was all too like the scene in
Casablanca
where the corrupt police captain declares that he is ‘shocked – shocked – to discover that gambling has been going on’ in the casino where he has just been placing his bets. The internal inquiry was headed by Rebekah Brooks.

Edmondson tried a little psychological warfare on his former commanders, leaking to the press the fact that he had ‘had a cup of tea’ with Max Clifford, with the clear implication that he might just decide to use the celebrity PR agent to tell all. He also hired himself a tough lawyer, Eddie Parladorio. (It isn’t clear whether Edmondson noticed the oddity that Parladorio was highly likely to have had his own messages eavesdropped by the
News of the World
in July 2002 when he had a relationship with the eternal tabloid target Ulrika Jonsson, whose phone certainly was hacked; and that Max Clifford also certainly had had his phone hacked in 2005/6 – on Ian Edmondson’s instructions.) Edmondson remained suspended.

However, the real problem for the Murdoch commanders was that while they were busy reinforcing their defences against the evidence uncovered by Sienna Miller, another big gun was finally rolling into position. Sky Andrew’s case was ready to blow another hole in News International.

On 12 January, the police belatedly obeyed a court order to hand over evidence which they had been holding for more than four years on the hacking of Andrew’s phone. However, repeating the pattern from Max Clifford’s case a year earlier, the police took it upon themselves to redact all of the material so heavily that Andrew’s lawyer, Charlotte Harris, had to submit a new application to the High Court for an order to compel the police to disclose the evidence so that it could be read properly.

This had bought News International some time, but clearly the Murdoch team were nervous and they repeated that they were holding a ‘comprehensive internal inquiry’. The
Guardian
discovered that all they were doing was searching Edmondson’s computer and emails, apparently checking to see what would happen if the court accepted Charlotte Harris’s request for internal email to be handed over. More important, Sky Andrew had another shot to fire.

Weeks earlier, a judge had ordered Glenn Mulcaire to name the person who had told him to hack Andrew’s phone. In the case of Nicola Phillips, he had been able to block a similar order by appealing on the grounds that he could not be ordered to disclose information which might incriminate him. We strongly suspected that News International were funding him to do so. But with Sky Andrew, they couldn’t do that: Mulcaire had already been convicted of hacking Andrew, back at his original trial in January 2007. He had no way out. He had to name the name.

On the afternoon of 17 January 2011, after more than four years of silence, the
News of the World
’s former private investigator lodged an affidavit with the High Court. The following morning, the
Guardian
reported that this was understood to have named the person who had commissioned the interception of Sky Andrew’s voicemail – Ian Edmondson. Nicola Phillips’s case had hinted at him, Sienna Miller had named him and now Sky Andrew had nailed him. A rogue reporter was an embarrassment. A rogue news editor was devastating – not only for News International, but also for the police and the prosecutors who had done nothing about this evidence for years, and, beyond them, for the prime minister’s right-hand man, whose credibility was draining away like old bath suds.

Within twenty-four hours, the crisis for Coulson got worse. A hearing in the case of Andy Gray disclosed that the name which Mulcaire had written in the top left-hand corner of his notebook as he hacked the football commentator’s phone was Greg Miskiw. Miskiw had already been named in the case of Tommy Sheridan, and here was confirmation. Miskiw had been one of Edmondson’s predecessors as news editor. A rogue reporter perhaps could have slipped under the newspaper’s radar. But this was two rogue news editors – spending the lion’s share of the editorial budget, providing the paper’s most important stories and reporting directly to their editor (Coulson in the case of Ian Edmondson) and their deputy editor (Coulson in the case of Greg Miskiw). How could he not have known that the budget and the stories were tied up with hacking? Forty-eight hours later, on Friday 21 January, Andy Coulson quit.

He announced his resignation as the prime minister’s spokesman without admitting a thing. He came out with a nice sound bite, that when a spokesman needs a spokesman, it’s time to go; and he left the stage in the role of an innocent man who had become a distraction for government. This may or may not have been a move which was urged on him by Rebekah Brooks, trying to relieve the political tension. (It emerged later that on 14 January, she had asked her secretary to find ‘somewhere discreet’ for her to meet him and had done so at 7.45 the following morning, at the Halkin hotel in Belgravia.) As it was, the political reaction followed a familiar path – loud, brave protest from a small number of MPs such as Tom Watson, Paul Farrelly and Chris Bryant; the traditional safe silence from most of them, including the front bench of the Labour Party.

The new Labour leader, Ed Miliband, complained that Cameron had made a serious error of judgement in appointing Coulson in the first place, but noticeably did not complain that Cameron’s real problem was that he had felt it necessary to appoint a Murdoch journalist as his media adviser. Miliband had just done exactly the same thing, hiring the former
Times
reporter, Tom Baldwin, straight from the Murdoch stable. A few days later, on 27 January, Baldwin emailed every member of Miliband’s shadow Cabinet, urging them not to use the phone-hacking scandal as a means of attacking News International: ‘We must guard against anything which appears to be attacking a particular newspaper group out of spite.’