Hack Attack (51 page)

Michel relayed particularly comforting news about the timing of all this, providing a detailed summary of Hunt’s plans. He claimed that: Ofcom would now look at the Newco plan, and two weeks later Hunt would tell Parliament that the Newco plan was a strong one, at which point, in Hunt’s view, it would be ‘almost game over for the opposition’. He assured James Murdoch that Hunt would ask the regulators for ‘speedy feedback. He believes he can do it more quickly and understands the damages [
sic
] a long period can have.’ The whole deal would be sealed by mid-February.

On the day before Hunt’s statement to Parliament, Michel was given yet more inside information, reporting with some hyperbole to Matthew Anderson that his own access to this was ‘absolutely illegal’. He then delivered a series of predictions about the content of Hunt’s statement. On several occasions, Michel claimed that he not only knew the wording of the minister’s statement but was attempting to negotiate particular phrasing to help News Corp.

On the morning of 25 January, Hunt duly made his statement to Parliament. It followed precisely the lines which Michel had predicted. The Ofcom report was published, provoking attacks on News Corp. The statement included three particular sets of wording which Michel had forecast, including those which he had claimed he was negotiating. And Hunt did indeed give Ofcom just two weeks to come up with a verdict on the Newco plan. It would all be over by mid-February.

That morning, Michel was still pushing Smith, complaining that Hunt was failing to say that their plans for Newco were strong. Smith replied by text: ‘We can’t say they’re too brilliant, otherwise people will call for them to be published.’ The appearance of collusion continued all day. That night, Michel texted Smith: ‘I think we’re in a good place tonight, no?’ Smith replied: ‘I agree. Coverage looks okay.’

News Corp had reason to be cheerful.

During the day, Rebekah Brooks had her office, home, phones and car swept for bugs. That evening, she might have shown Rupert Murdoch the incriminating emails which had been found in Ian Edmondson’s computer and tried to persuade him that it was a good idea to hand them over to the police – that they might cause trouble for the
News of the World
but they could help the BSkyB bid by allowing News Corp to claim that it wanted to uphold the law. Two sources who were directly involved say they suspect Brooks never did show him the emails simply because she didn’t want to upset him by giving him bad news.

The following day, 26 January, as Scotland Yard launched Operation Weeting, the bare wires moved closer together.

*   *   *

This was a new experience for those inside News International – a genuinely threatening police inquiry.

Rebekah Brooks seemed bewildered, according to some of those who worked alongside her. They say that, having clearly agreed that the three embarrassing emails be handed to police, she then saw press reports about the launch of Operation Weeting and claimed to know nothing about it. There were some who were now worrying out loud that she was in the wrong job. They complained that habitually she failed to read her emails, missed meetings and then made midnight calls to try to catch up, and that her social life involved too much white wine with the result that she was simply forgetting things. Worse, they feared she was still playing the denial game, keeping Rupert Murdoch sweet; failing to do enough for the police, who wanted a formal protocol to allow them access to evidence in News International’s possession; and failing to stop the company policy to delete millions of emails as they migrated to new servers in the new TMS offices. That last omission had a potentially very destructive result.

As the Weeting detectives started their work on 26 January, the IT department finally followed the official policy to destroy more of the email archive. During the previous September, they had deleted all messages up to the end of 2004. Over the weekend following the launch of Weeting, they deleted everything they could find from 2005 and 2006. By 7 February, after several false starts, they had deleted all they could find from 2007. Will Lewis had already preserved the messages he believed were most important, and they were stored on a laptop. But, in amongst material which was of no importance, the archive had been stripped of a mass of evidence about all the years when Mulcaire was hacking as well as the footprints of the company’s cover-up after he and Goodman were arrested. On 16 February, apparently alarmed, Jon Chapman called a halt to all deletions.

When Weeting finally got to grips with the company servers, they found that a total of some 300 million emails had been deleted over the years. They succeeded in recovering only 90 million. According to multiple sources, the laptop on which Will Lewis preserved the messages of 105 key users was not found by Weeting, although this has not finally been confirmed. The hard drive which had been removed from Rebekah Brooks’s computer for safe keeping also was not found.

In the meantime, Weeting were struggling on a second front. Senior officers spent two months bogged down in negotiations with News International about privacy and journalistic privilege, trying to agree a protocol which would allow them access to the potentially revealing emails and paperwork which were being held by the company. When finally the two sides signed an agreement, on 25 March, Weeting detectives ran into new obstacles. It was then that they discovered that multiple millions of email messages were missing from the servers. And when they asked for the Harbottle & Lewis emails, they found that some unseen hand had deleted most of them from the servers – two of the seven folders which had originally been prepared for the law firm were completely empty; hundreds of messages were missing from the other five. But Jon Chapman contacted Harbottle & Lewis and asked if they had any records of their own. The law firm said they had no electronic copies at all – but, on 1 April, they disclosed that they had kept printouts of some of them. Chapman asked them to hand them over.

By the first half of April, alarm was changing to panic inside the Murdoch camp. Neville Thurlbeck reported that when he and Ian Edmondson were arrested on 5 April, detectives had asked him whether he had worked on stories about Milly Dowler. In London, James Murdoch was suggesting that they might close down the
News of the World
completely if that was the only way to stop the damage. Brooks was resisting. In New York, Lon Jacobs was arguing for a full internal inquiry, and James Murdoch, according to one source, was telling him he was ridiculous and had no business being involved. News Corp had announced, as apparently agreed in the Azores, that James was leaving London to work under his father’s eye in New York.

And now there was yet another internal conflict in New York: Jacobs, the established in-house counsel, was finding his advice challenged by Rupert Murdoch’s new vice president, Joel Klein, a controversial lawyer who had joined the company four months earlier and rapidly earned himself the unkind nickname of Gollum, partly because he looked a little like the character in
Lord of the Rings
and partly because some thought that, like Gollum, he wanted to get his hands on precious treasure – Lon Jacobs’ job.

In London, Will Lewis and Simon Greenberg were pushing along parallel lines to Lon Jacobs, calling for a full inquiry. Lewis had contacted Clifford Chance, who had drawn up terms of reference and costed their work to act as an independent investigator. Brooks, however, still refused to give them a green light. Since January, in New York and London, they had been discussing the plan for News International to issue a ‘mea culpa’, admitting widespread crime and offering to settle with hacking victims. Amidst the internal conflict, this was still stuck in the pipeline at the end of March. As one of those involved put it: ‘We were becoming increasingly embarrassed. We knew the rogue reporter line was not true, but we didn’t know what was true. We had no internal inquiry, we never examined our emails, we hadn’t got Mulcaire’s notes.’

In their office on the tenth floor, Lewis and Greenberg sketched out on a whiteboard on the wall ‘an escape map’. Down the left-hand side, they listed the things which needed to be done if the company were to have any chance of surviving: bring in Clifford Chance, hand over the Harbottle & Lewis emails, give clear evidence to select committees. In the middle, they recorded some worst-case outcomes: other News International titles being investigated by police, the whole company being investigated by police, the
News of the World
closing down. And on the right-hand side, at the top, they wrote two words and underlined them: Main Street. Underneath that, they wrote three more words: McCann, Soham and Dowler. Rebekah Brooks came into their office one day and asked what it meant. So Lewis explained – that just possibly they could contain the scandal if they followed their escape map. But if it turned out that it was not just celebrities who had been hacked, if it turned out that the
News of the World
had hacked really vulnerable victims – like the parents of three-year-old Madeleine McCann, who had been abducted in Portugal in 2007, or the two young schoolgirls who had been murdered in Soham in 2002, or Milly Dowler who had been abducted and murdered a few months later – then it would ‘go Main Street’. That would change everything. ‘It’s manageable as long as it doesn’t go Main Street.’

*   *   *

Meanwhile, James Murdoch found his foot still snared in Ofcom’s regulations. The plan to complete the BSkyB deal by mid-February rapidly fell apart when Ofcom reported on 11 February that they were not convinced by the scheme to spin off Sky News into Newco. The new company might be independent, they argued, but they wanted more guarantees for its editorial independence and they objected, in particular, to James Murdoch’s plan to chair it.

Worse, Jeremy Hunt refused to ignore Ofcom and, on 15 February, gave News Corp a twenty-four-hour deadline within which to concede all of the regulator’s points, or else he would send the whole thing to the Competition Commission. An irritable and reluctant James Murdoch agreed and was then reduced once more to fury when, on 17 February, Hunt went back to Ofcom yet again to ask if they were now happy. Another two-week delay.

In the background, Fred Michel wheeled in the Scottish First Minister, Alex Salmond, who agreed to talk to Hunt about the importance of the bid for the Scottish economy and wondered if Sky News would like to organise a pre-election TV debate featuring himself. Michel and Adam Smith continued to swap information through their backchannel, co-operating on PR moves, occasionally sneering at Ofcom and the media coalition and MPs who opposed the bid. Michel urged Smith to tell his boss ‘to show some backbone’ by dismissing Ofcom’s worries. He did, a little.

On 1 March, Ofcom – backed by a second regulator, the Office of Fair Trading – told Hunt that they feared Newco would not be financially independent: it would be entirely reliant for its income on BSkyB. This time, Hunt compromised: he told News Corp they would have to find some way to satisfy Ofcom but, in the meantime, agreed to announce on 3 March that he was ‘minded to accept’ the Newco plan yet wanted to run a short public consultation, which would end on 21 March. A week later, he would announce his final decision and, if all went well for News Corp, the deal would be waved through on 28 March.

But it didn’t go well. With Mr Justice Vos in the background ordering more and more disclosure in the High Court while the
Guardian
and
Panorama
were breaking news stories, Hunt’s public consultation produced multiple thousands of responses, almost all of them opposing the deal. The majority of them had been generated by two online campaigning organisations, Avaaz and 38 Degrees. Hunt was advised that the law would not allow his department to consider the responses in blocks. Each one must be dealt with individually. And Ofcom and News Corp were still at odds about the detail of Newco. The 28 March target slipped away. Rupert Murdoch’s eightieth birthday had passed without victory. Michel agitated urgently for a quick conclusion. One of Hunt’s officials emailed a colleague: ‘Are we sure the process is going as fast as it can?’ All through April, there was still no end in sight.

*   *   *

On 8 April, News International finally issued their ‘mea culpa’ admitting liability for hacking claims – a clear admission that they (and News Corp) now knew that there had been widespread crime at the
News of the World
, and yet they took no disciplinary action against anybody, continued to make no serious effort to uncover the truth and continued to give minimum co-operation to the police. Two different sources say that, when Harbottle & Lewis in early April gave the company the hard copies of the emails which had survived in their office with their explicit references to paying royal police, Rebekah Brooks chose not to pass them immediately to Weeting but to delay, telling an increasingly impatient Scotland Yard that she did not want to hand over evidence piecemeal. Colleagues believed she wanted to stall for long enough to let the BSkyB bid be completed and for News Corp to hold its annual summer party in London. They say it was obvious that the emails ‘went to the guts of the company’. Others argue that the delay was inevitable, that they had to check the emails for themselves, which involved interviewing a senior lawyer at Harbottle & Lewis, and that then they had to get the blessing of the News Corp board. They concede that both these moves were arguably unnecessary and that, whatever the intent, they had the effect of slowing down police progress.

Ian Burton called an internal meeting to discuss them and, according to one of those there, began by showing no great concern about the emails. When others at the meeting flicked through them and found emails apparently implicating Coulson and Goodman in bribery, Simon Greenberg is said to have exploded: ‘What part of the
News of the World
paying police to steal the Queen’s phone directory don’t you think is serious?’ He and Lewis insisted they be handed to police. But they were not. Following this meeting, James Murdoch heard about the embarrassing contents of the emails and, apparently recognising the potential damage to his precious Rubicon project, according to one source, he asked if they really had to hand them over now. To which the answer from Greenberg was ‘fucking yes’.