Murdoch's World (20 page)

This moment forced the
first true corporate reckoning. Michael Silverleaf, a lawyer and a leading figure in British media circles, was asked to assess News International's prospects in court. He rendered his verdict on June 3, 2008: the disclosure could not “possibly justify the use of unlawful means to obtain information on it,” Silverleaf wrote.

In the UK, judges and prosecutors tend to give much leeway to legal infractions by reporters who convincingly argue they broke the law in pursuit of the public interest. And even the bad consequences of a civil suit
under British law are typically far less severe than in the US. But Silverleaf fretted it would be “almost inevitable that the court will wish to mark its disapproval of their activities by awarding an enhanced level of damages. The accessing of Mr Taylor's and [a woman's] voicemails was not only illegal but will be seen as immoral and repugnant by any judge who is likely to hear the action.”

No precedents existed to guide estimates for the size of the judgment Taylor might win. Silverleaf advised Crone and News International
to up the ante. Other implications came into play as well: disclosures of evidence in open court would show that prosecutors were wrong to accept
News of the World
's continued assertion of the hacking as isolated. Damage to the company's reputation could far exceed any savings it would achieve in this single case.

Under British law, the loser in civil litigation pays all legal fees. That provided some leverage. A loss could cost Taylor hundreds of thousands of pounds out of his own pocket. Silverleaf suggested offering £250,000 plus legal fees.

Later that day, News International's chief outside attorney, Julian Pike, decided instead to offer £350,000 “on the basis that [it]
drew a line in the sand and that the deal was confidential.” Both elements were crucial to the defense: stop the damage and do so silently. Pike was in for a nasty surprise. Three days later, Mark Lewis informed Pike that Gordon Taylor
“wanted to be vindicated or be rich.” It would cost
News of the World
, “seven figures not to open his mouth.” The price was £1 million plus £200,000 in legal fees, plus taxes owed to Her Majesty's Revenue and Customs.

On Saturday, June 7, Myler asked James Murdoch for five minutes of his time on the following Tuesday for a meeting with Crone. In the email, the editor warned Murdoch, “Unfortunately,
it is as bad as we feared.” Below his email, Myler had forwarded gloomy summaries from both Crone and Pike. James Murdoch sent off a chipper reply—
“no worries”—just two-and-a-half minutes later, and offered to talk that night or the next day. Did James read the whole email trail? That remains a matter of dispute.

On the afternoon of June 10,
James Murdoch waved Crone and Myler into his office at News International's Wapping headquarters for a meeting that lasted about fifteen minutes. The two men briefed Murdoch, who said he wanted to think through his options.
I'm
sick of the drip, drip, drip
, Myler told one of the lawyers later.
Let's tell Taylor to fuck off
. Frustration reached a peak. The men feared that if
Taylor's suit against Mulcaire succeeded, the paper could face liability there as well.

One month later, on July 10, 2008,
Murdoch approved payments hitting £425,000 (about $635,000) plus legal fees for both sides. The total cost exceeded £1 million. The settlement specified that the terms would remain secret—as would the very existence of the deal.

IT TOOK Nick Davies until July 2009 to document the scope of the tabloid's hacking for public consumption. It focuses on the same private investigator as the story about the princes does, a man whom the
Guardian
sought to link to Coulson and Rebekah Brooks Coulson and Rebekah Brooks, by this time editor of the sister
Sun
tabloid. James Murdoch, then the executive chairman over the British wing of News Corp, had personally approved the secret settlement.

The story Davies wrote in July 2009 revealing that payment, he said, “provoked a kind of blizzard of dishonesty.”

Assistant police commissioner John Yates
announced he had conducted a review of the previous investigation—in less than a day—and that the
Guardian
had no new evidence to contradict the earlier conclusion of police that hacking had been limited at
News of the World
. Within forty-eight hours,
News International put out a slashing statement, accusing the
Guardian
of lying, and still the public seemed indifferent.

Davies said he heard it all. “People kept on saying that I was obsessive, and maybe that's true.” He kept reporting, but nothing seemed to come of it. Davies had stayed largely in Lewes, away from the newsroom, calling sources, badgering people—periodically popping out to meet them in person.

Guardian
editor Alan Rusbridger was one of a few at the newspaper who dealt with him directly. Under British law, the press cannot
report on criminal trials beyond the proceedings while they are under way. In 2005, it was later reported, Coulson had hired
Jonathan Rees, a private investigator who had done seven years in jail for planting cocaine on a woman to frame her for a crime she did not commit. In 2008 Rees was charged with murder. His business partner had been found in a parking lot outside a pub, an ax lodged securely in his head. But Rees could not yet be identified in print.

In the run-up to the 2010 elections,
Rusbridger sent warnings about Coulson to future prime minister David Cameron through a deputy editor, Ian Katz. In early February 2010, Katz called Cameron's director of strategy, with the message:
Do not allow Coulson to follow you from party headquarters into 10 Downing Street
. Rusbridger had also reached out to Liberal Democratic Party leader Nick Clegg by email on April 5 with the same message. Clegg had been stunned, according to Rusbridger, and said he had also cautioned Cameron. The actor and frequent tabloid subject Hugh Grant, an Oxford classmate of Cameron's chief political ally George Osborne, also privately warned against Coulson.

The
Guardian
had endorsed Tony Blair's New Labour on its way to power but in 2010 switched to Clegg and the Liberal Democrats. Though Gordon Brown had lost the support of News International papers, the Labourites were too compromised, Rusbridger and his colleagues concluded, by their extensive entanglement with the Murdochs. Cameron took office in a coalition with Clegg and the Lib Dems and brought Coulson with him.

Seeing in the actions of
News of the World
signs of a greater corruption,
Rusbridger urged Bill Keller, executive editor of the
New York Times
, to send his own reporters to investigate. The two newspapers had collaborated on a WikiLeaks project, divvying up thousands of diplomatic documents hacked and leaked by the outfit for further reporting.

In this instance, Rusbridger and the
Guardian
needed external validation. Most other British papers shied away from making too much of the Murdoch titles' misdeeds. Rusbridger shared tips and sources with the
New York Times
,
whose reporters developed their own reporting. The resulting cover story in the
New York Times Sunday Magazine
in September 2010 offered former
News of the World
reporters talking on the record, for the first time, about criminal activities. News International editors were particularly incensed by what they saw as a pincer movement—the
Guardian
had called in the
New York Times
to deliver a blow from the west. The week the
Times
published its magazine piece, the
News of the World
's managing editor
filed a complaint against the New York paper under its ethics code, saying its reporting was clearly driven by the need to damage a rival company.

We know things we haven't been able to publish
, the deputy
Guardian
editor Katz told Cameron's chief of staff on October 4, 2010.
There's a big murder trial coming involving one of
News of the World
's investigators. He had been linked by investigators to corrupt police years ago. There's no way an editor wouldn't have known
. Katz laid out the details.

Nothing ever came back from the prime minister.

LEWIS HAD lost his job in 2009. His law firm in Manchester didn't want the attention as adversaries of the Murdochs. But Lewis thought he had a case and a cause. “He is a dogged, lone figure,” Rusbridger said. News International's efforts to scare him off “whetted his appetite.” Lewis moved to London and a small firm called Taylor Hampton, across the street from the High Court.

The highly regarded British media lawyer David Hooper told me that he initially thought that
Lewis and his clients had overstated their case. “I don't think one would think that now.”

Lewis had testified to Parliament that he had been told by Detective Sergeant Mark Maberly of the Metropolitan Police that up to 6,000 people had been targets of phone hacking. However, Scotland Yard told the Press Complaints Commission that the detective had been “wrongly quoted” by Lewis. The police were sticking firm to the idea that hacking was limited to “a handful” of instances.

The chairwoman of the Press Complaints Commission, Baroness Buscombe, told an association of editors that
she had warned the head of the parliamentary panel to which Lewis had testified that his sworn remarks had been refuted: “Any suggestion that a Parliamentary Inquiry has been misled is an extremely serious matter.” Later disclosures vindicated Lewis. He sued her, the Metropolitan Police, and the complaints commission.
Buscombe apologized the next year, and she and the complaints commission later paid Lewis £20,000 in damages.

Officials at News International clearly perceived a threat. According to documents later found in the files of Tom Crone,
reporters and private eyes were assigned to follow Lewis and another lawyer, Charlotte Harris, representing different clients with hacking claims against the paper. News Corp's British lawyers argued in court that Lewis should be blocked from the case: he was romantically involved with Harris and must have engaged in professional misconduct. But no evidence of such misconduct existed, nor did any proof surface of the supposedly illicit liaison. Defense motions failed to find favor with judges. Investigators also spied on Lewis's teenage daughter while she shopped and watched Lewis's estranged wife through the window of her home.

Lewis's health was investigated too. He said he was told that Crone and other lawyers concluded he had embarked on a kamikaze mission against News Corp because he was dying. He does have multiple sclerosis, a degenerative disease that causes his limp. The disease prevents him from taking notes in real time, a point that News International's lawyers highlighted in seeking to undercut his
recollection. His riposte: “I have a condition. It's called life. We're all dying—someday.”

In fact, Lewis had decided to use the media against its owners. If he did not care about his reputation or what reporters printed or broadcast about his personal life, their proprietors could not intimidate him from pursuing his cases or giving interviews that raised embarrassing questions. So he spent several years shuttling from TV studios to courthouses to parliamentary hearings—piping up whenever he could get the chance.

“News International was so arrogant about everything,” Lewis told me one day, as we lurched in a taxicab from a BBC studio on the banks of the Thames past Parliament to a meeting he had scheduled with the newest crop of press regulators. News International should have apologized instead of concluding he was “part of the left-wing plot to damage Rupert Murdoch and News International.”