Hack Attack

by Nick Davies

  By Friday, Murdoch’s Fleet Street allies were running for cover. The right-wing Daily Mail attacked Murdoch by name: ‘Never again must one man be allowed to hold such power.’ Stephen Glover at the Independent, who had tied himself in such angry knots in his efforts to support the official line, now attacked the closure of the News of the World as ‘a desperate ploy by a dysfunctional company’ and called for Brooks to resign. Brooks herself addressed the News of the World’s surly staff, telling them that there was still more dirt to be revealed: ‘I think in a year’s time, every single one of you in this room might come up and say “OK, well, I see what you saw now.”’ True to the paper’s form, one of the journalists secretly taped her and leaked her comments.

  By the time she had finished speaking, Andy Coulson had been arrested on suspicion of conspiring to hack phones and pay bribes to police – exactly two years to the day since we had published the Gordon Taylor story. Clive Goodman, who could have been forgiven for thinking he had seen the end of his nightmare, also had been arrested, on suspicion of conspiring to pay bribes to police. It was clear that the arrests had been informed by the Harbottle & Lewis emails which had been suppressed for so long by Murdoch’s executives.

  That Friday afternoon, Amelia Hill and I posted a story on the Guardian website, challenging News International’s claim to be co-operating with police, disclosing that Weeting were investigating evidence that a senior executive had deleted millions of emails from their servers; that the company had infuriated police by leaking the story about the Harbottle & Lewis emails; and that prosecutors were considering charging those who had removed material from Jimmy Weatherup’s desk on the day of his arrest in April and initially refused to hand it over.

  Parliament was in uproar. Those who had always resented Murdoch’s power now spoke out, a sleeping army waking up from years of silent fear. Others who had been happy to support him now raced to abandon him. David Cameron, in particular, shrugged off his cosy friendship with Rebekah Brooks, saying that if it were his choice, he would accept her resignation. He formally announced two public inquiries, one into the press, another into the police. ‘The truth is, we have all been in this together,’ he said. ‘The press, the politicians and the leaders of all the parties – and, yes, that includes me … Throughout all this, all the warnings, all the concern, the government at the time did nothing.’

  But the really bad news for the Murdochs came from Jeremy Hunt. This was the day of the deadline for the final consultation on the BSkyB bid, the day they had planned to celebrate victory. Yet things had changed. Public revulsion had by now produced 156,000 responses, almost all of them hostile. Hunt announced that he had decided to delay his decision. The bid was not dead, but it was in deep trouble.

  At the beginning of the week, BSkyB shares had been trading at 850p. By Friday evening, they had fallen to 748p, wiping an estimated £1.7 billion from the company’s value.

  * * *

  Watching from my study as the masonry collapsed around the Murdochs’ heads, I could only guess at what was going on behind the scenes that week. Much later, sources from News International and News Corp described their panic and confusion, all redoubled by the warring factions within the empire fighting like cats in a sack.

  They say that as soon as they saw the Milly Dowler story on the Guardian website that Monday afternoon, they understood that the hacking scandal was finally a real threat to the BSkyB deal. As one of them put it, it ‘broke the fallacy’ that the two could be kept apart. Their immediate decision was that James Murdoch must take centre stage instead of Rebekah Brooks. But it was not as easy as that.

  By Tuesday evening, some of James’s team were saying that Brooks had to get out of the building: either she knew about the Dowler hacking and had to go; or she didn’t know but was nevertheless responsible because she had been the editor, so she still had to go. They believed that her staff were briefing the press against James. Some of Brooks’s camp believed James’s people were briefing against them. James nevertheless continued to defend Brooks, aware perhaps that an argument with Brooks was effectively an argument with his father. Brooks herself was buoyed by an email from Tony Blair offering his help. ‘I have been through things like this,’ he wrote.

  By Wednesday, Rupert Murdoch had joined the shouting match, according to one source, who says he was furious when The Times ran their leader condemning the Dowler hacking and, from the US, phoned the editor James Harding to complain, loudly and bitterly. Harding is said to have made it clear within the company that he thought Rebekah Brooks must go immediately and even to have threatened to write another leader, calling for her resignation. In the confusion, Brooks told friends that she had offered her resignation to James Murdoch, who had refused to take it; and this was soon leaked to the press by her camp. Against that, James’s team say that she never offered to resign but simply had an inconclusive discussion with him about whether she should consider it. On the Wednesday afternoon, she met Ken Macdonald, the former DPP, for legal advice.

  At the beginning of the week, as the Dowler story broke, the signals which Fred Michel was reporting from government were still encouraging. On the Tuesday night, the prime minister’s press secretary, Gabby Bertin, sent supportive messages to Brooks. Jeremy Hunt was still saying that the hacking had nothing to do with the bid. On Wednesday morning, Craig Oliver, who had replaced Coulson as the prime minister’s director of communications, texted Fred Michel to say he was looking forward to dining that evening with him and Will Lewis, and hoped the location would be discreet.

  But the Labour opposition smelled blood in the water. After Ed Miliband stood up in the House of Commons on Wednesday and urged that the bid must be stopped, Will Lewis called Miliband’s office and insisted that the hacking had nothing to do with the BSkyB deal. ‘That gave away their fear,’ according to one of Miliband’s senior advisers. ‘We decided to keep pushing on it.’

  It was against this background that Rupert Murdoch not only approved the death of the News of the World but made a second bid for respectability by setting up a Management and Standards Committee, which, he said, would gather evidence about the hacking and liaise with police and report to Joel Klein in New York. However, still blinded by his enduring affection for Rebekah Brooks, he not only refused to sack her but appointed her to run the MSC’s investigation.

  At around this time, according to two sources, any hope of Murdoch family unity was broken by a heated conference call between the chairman and his four eldest children, during which Elisabeth said boldly that not only should Brooks resign but that James too should ‘step back’. She was overruled. After this call, according to Vanity Fair, Elisabeth spoke privately to her father and persuaded him that James should take some leave. Rupert Murdoch told James that he should take a break from his job and possibly resign but then, after a sleepless night, changed his mind. Later, Elisabeth was quoted as having told James that he had ‘fucked the company’ – a line which, according to one source close to her, was inaccurate in its language but correct in its gist.

  By Thursday morning, with the death of the News of the World to be announced that afternoon, the sources say that Brooks was effectively absent without leave. One says she had ‘some sort of breakdown’, hiding in her office, refusing to take meetings or phone calls and allowing contact from others in the building only via her husband, Charlie. She was due that evening to go to the Sun’s annual Police Bravery Awards where, two years earlier, she had huddled comfortably with John Yates and Sir Paul Stephenson from Scotland Yard. But not tonight. She cancelled – at the suggestion of the police, according to one senior officer.

  Fred Michel was anxiously working on Adam Smith in Jeremy Hunt’s office, and on Thursday evening he was able to send James Murdoch an accurate account of Hunt’s meeting with the prime minister at which they had agreed to hold public inquiries into the police and the press. But the government was clearly shifting. Hunt’s department posted a new note on their website, sa
ying that he would ‘consider all factors’ in making his decision about the bid, and then he announced the delay.

  On Friday morning, Rebekah Brooks came up with a masterplan, emailing James Murdoch soon after seven to suggest they set up a full internal inquiry ‘as an internal announcement from you that gets leaked’, which would ‘slam Les, Colin etc and it will vindicate my position (or not)’. The plan got lost in the chaos with Lewis and Greenberg now openly saying that she had to resign.

  That afternoon, after bitter wrangling among the factions, it was agreed that James Murdoch should give an interview to ITN News to position News Corp as a law-abiding company which wanted to help the police. His advisers instructed him at all costs to avoid endorsing Rebekah Brooks; but he lost the script. Although he did claim (disingenuously) that ‘the process of information-discovery that we went through, proactively and voluntarily’ had led to the creation of Operation Weeting, he then proceeded to say that he was convinced that Brooks’s leadership was right, she was doing the right thing and, in relation to the hacking, that ‘I’m satisfied that she neither had knowledge of, nor directed those activities.’

  That caused more shouting in the office.

  * * *

  I was still picking up warnings that there might be some kind of surveillance on me and the Guardian editor. On my advice, Rusbridger commissioned an upmarket security consultancy to make sure there was no listening device in his home. Stupidly, the consultancy subcontracted the job to a specialist who was close friends with the group of corrupt investigators around Jonathan Rees, thus creating the risk which they were supposed to eliminate. The specialist, we heard, searched through paperwork in Rusbridger’s study and possibly photographed pages from his private diary.

  Sunday saw the News of the World pushed into its grave, with a final remorseful leader column which admitted ‘appalling wrongdoing’. The Church of England’s commissioners were threatening to sell £3.7 million of shares in News Corp. John Yates had given an interview describing his refusal to reopen the hacking investigation after our Gordon Taylor story as ‘pretty crap’ and privately had written to Rusbridger and me to apologise for his mistakes. And we saw the first signs of News International turning to attack as a form of defence.

  The Sunday Times described the Guardian as a ‘lefty newspaper’ with a long history of fear and loathing of Rupert Murdoch and ‘a visceral dislike for multinational business’. In the Sun, Trevor Kavanagh mourned the closure of the News of the World and suggested darkly that ‘we should examine closely the motives of those who brought it to its knees’. The Sun tried to do a story accusing me of having held a meeting with a private detective in the Obsidian bar in Manchester, in order to hire him to spy on the News of the World. I’d never met the detective or been to the Obsidian bar, so that fell by the way, but the will to smear was easy to see.

  None of this aggression amounted to any real problem – until I accidentally opened a chink in our defences. Glenn Campbell from the BBC and I had succeeded in collecting a pile of evidence about News International targeting Gordon Brown’s confidential information: the News of the World had used Glenn Mulcaire to try to listen to his voicemail; the Sunday Times had used a blagger who on six occasions had obtained details from Brown’s bank account; they had also, as I already knew, used another blagger, Barry Beardall, to trick a London law firm into providing details of a property he had bought; and the Sun had obtained confidential medical details about the cystic fibrosis which had been diagnosed in Brown’s infant son, Fraser.

  On Monday afternoon, 11 July, a week after the Dowler story, we posted on the Guardian website a strong account of the targeting of Brown, including the fact that the Sun had obtained confidential information about Fraser, which was accurate. But in the opening paragraph, I had tried to squeeze everything into a single sentence which accused News International of ‘obtaining information from his bank account, his legal file and his family’s medical records’. That was the chink in our defences: we knew they had obtained confidential information, but we didn’t know that they had got this direct from his family’s medical records.

  Two days later, the Sun splashed its front page with the headline ‘Brown wrong’, telling its readers: ‘The Sun today exposes the allegation that we hacked into Gordon Brown’s family medical records as FALSE and a smear.’ They had a point, but they had wildly overstated it: nobody had accused them of hacking the medical records. We didn’t know how they had got the confidential information – by blagging, hacking or through a leak from the hospital. The Sun story claimed that they had been given the information by ‘a shattered dad whose own son also has the crippling disease’. But how had he got it?

  The Sun’s managing editor, Richard Caseby, insisted that we publish not only a correction, which was fair enough, but also an apology. In emails and phone calls, Caseby pressed his point by explaining that, if the Guardian didn’t do as he said, the Sunday Times would ‘work you over’ at the end of the week and expose Rusbridger as ‘the biggest fucking hypocrite on earth’. Digging deeper, I heard that the Sun had not quite told the truth about their source; that their ‘shattered dad’ was, in fact, married to a health worker, whose name I was given. One source claimed that the Sun had paid her £2,000, potentially a criminal offence if true. I relayed the information to the office of Gordon Brown, who passed it to his local health authority in Fife and persuaded them to investigate.

  But that didn’t stop Richard Caseby. In a high-volume expletive-scattered call to an executive at the Guardian, he continued to demand an apology before interrupting himself to say: ‘Right, I have just heard that Fife has cleared our source.’ He didn’t seem to understand that he had just knocked the legs out from under the Sun’s version of events. It turned out that Fife had merely run a cursory check of their records and found no evidence at all. Months later, they conceded that it was ‘highly likely’ that one of their staff had been the original source.

  I was hundreds of miles away, at my daughter’s graduation ceremony, when, to my surprise, I heard that the Guardian had agreed to publish an apology. That was irritating. The Guardian had been unmoved by Caseby’s aggression but had decided to apologise on the grounds that the sentence in the story had been inaccurate. I thought a simple correction would have been enough. I heard that Gordon Brown was furious about the Guardian’s decision.

  The Sunday Times then followed up by attempting to run stories claiming that in the past, the Guardian had hired Jonathan Rees and another private investigator to gather information by illegal means. Rusbridger told them this was news to him and invited them to take their evidence to the police. It was clear that they had been talking to Rees: they also asked whether it was true that in the previous week, Rusbridger had had his home swept for bugs. Rusbridger told them that no organisation would comment on its security measures.

  All this looked very much like a diversionary tactic from a company which still had its eyes on the big prize, BSkyB.

  On Sunday 10 July, two days after Hunt had announced he would delay his decision, Rupert Murdoch once more had flown into London. He had suggested a PR move to improve his appearance: that he might travel on a commercial flight, like an ordinary man. In the event, he had used a private jet and soon delivered a PR gaffe when replying to a TV reporter who asked about his main priority, by pointing to Rebekah Brooks and saying: ‘This one.’

  His real priority was to deal with the tsunami of political disrespect which was flooding his company, much of it now channelled into a single event – a vote in the House of Commons on Wednesday, called by Ed Miliband, urging Murdoch to kill his bid for BSkyB. Fred Michel reported a call from an adviser in the prime minister’s office: ‘No. 10 are very worried about the vote on Wednesday. They think that it’s highly possible that Miliband will win.’

  Still acting as though the special relationship were undamaged, Fred Michel contacted one of the senior advisers in the office of the chancellor, George Osborne: ‘Quick
question for your advice. Do you think it would be possible/helpful to get a senior government person to come out condemning strongly phone-hacking, ask for a thorough police investigation but insisting on the need for the legal process to be followed with the bid? Incredible that a business decision on a massive takeover could be left to Parliament to oppose/influence, no?’ It didn’t work. The Murdochs had lost their influence in Westminster. The point was made bluntly at an internal meeting when James Murdoch and his team defended the bid, arguing as ever that there was no legal basis for blocking it, only to be told by one of Will Lewis’s team: ‘You don’t get it: everybody hates you.’

  Internal records from Jeremy Hunt’s department reveal that he now recognised that the hacking scandal and the BSkyB bid were linked in the public mind. On Monday morning, stepping back fast from his previous sympathy for the bid, Hunt decided to write to Ofcom to ask them for advice on whether his decision should be affected by the closure of the News of the World or by the recent revelations. Of potentially even greater significance, he asked the regulator to consider whether News Corp was a ‘fit and proper person’ to hold a broadcasting licence in the UK. This was a line that had been pushed over the previous week by Tom Watson and other MPs. If Ofcom were to rule that News Corp were not fit and proper, they would not only lose the chance to buy the 61% of BSkyB which they wanted, they would also have to sell the 39% which they already owned. They would be turfed out of British broadcasting.

  An hour later, with nowhere to go but backwards, the prime minister himself spoke out against the bid: ‘If I was running that company right now, with all the problems and the difficulties and the mess frankly that there is, I think they should be focused on clearing those up rather than on the next corporate move.’