Murdoch's World: The Last of the Old Media Empires

by David Folkenflik

  In turn, top News Corp executives convinced themselves the establishment loathed the corporation. This declaration would be repeated despite the fact that Murdoch père and fils and their top lieutenants were courted by prime ministers, and their top executives were often culled from the establishment’s ranks. In the US, former US assistant attorney general and New York City Schools chancellor Joel Klein became a top aide to Rupert Murdoch; in the UK, Andrew Knight, former editor of the Economist and chairman and CEO of the Telegraph Group became chairman of News International in the 1990s and later a corporate director of News Corp.

  On the parent corporation’s board sat the former prime minister of Spain and a second former assistant US attorney general, Viet Dinh. (In classic corporate mode, both sides were covered: Klein was a Democrat, Dinh a Republican.) When David Cameron took office as prime minister, the very first private citizen to pay a call in person was Rupert Murdoch. Cameron welcomed Murdoch warmly—but the media magnate had been asked to arrive by the back door, unobserved by the press. It is the defining contradiction of Rupert Murdoch’s corporation that it has accumulated more influence than any other media company in the world and yet remains convinced of its status as an outsider.

  Often those characterized as enemies by News Corp would be more fairly classified as competitors or critics or even punching bags rather than pure foes. In the phone hacking saga, two avengers stood out. None of what followed would likely have occurred had either of these two men adopted a conventional concern for maintaining their status in British society—the conventions that Murdoch and his inner circle ascribed to their most threatening critics. They were the iconoclasts.

  One of them operated far from the corridors of power in a historic town that sits a few miles from England’s southern coast. Lewes provides a respite from London’s traffic, grit, and crowds. At a fair on the day I visited, a Punch and Judy show enthralled toddlers, as it has for generations, at a schoolyard. Up a hill, past a battered Ford Fiesta in the driveway, a bit beyond a neatly tended garden with rhubarb and cabbages, a lean man with a thatch of almost-white hair sat in a converted garage, peering at an oversize computer screen.

  “The view opens up, and it’s like a sort of postcard of Old England,” Nick Davies said, pointing to a stone church nearby, once he had looked up. “Beyond that, on a clear day, you can see the green hills rolling away in the distance, to the sea.”

  Davies was the relentless investigative journalist who broke a string of stories tying top executives at News of the World and News International to the hacking mess. But he was a bit of a renegade at the Guardian. The paper, denigrated as impossibly earnest by its competitors, is owned by not-for-profit Scott Trust with an identifiably left editorial page. Its annual losses are covered in large part by the trust’s other, profitable holdings, especially AutoTrader, Europe’s leading automobile classified advertising website and magazine. The Guardian’s journalism is on the whole serious, fearless, and thorough. But the politicians and business executives who dislike the paper’s coverage point to its ideology to dismiss its findings.

  Davies’s scoops in the hacking case took time to build. “A blind man in a dark room could see that the official version of events didn’t make sense,” Davies told me. He had written an earlier book about the flaws of the British press, Flat Earth News. But hacking sounded worse. A source inside News International once told him mobile phone hacking was commonplace at its tabloids. At a dinner party, Davies asked an official from Scotland Yard: How many people were really targeted? Thousands, the policeman replied.

  WORKING IN parallel to Nick Davies was a man who had been practicing law in the professional purgatory of Manchester. Mark Lewis had previously pursued cases involving defamation of character—in one instance, the controlling board of a professional soccer team that had smeared its fans. Lewis had a specialty in “reputation management” (what more typically is called defamation and libel) and had taken on a case involving Gordon Taylor, an official with the professional soccer players association. The News of the World was preparing an article that alleged Taylor had been involved in an extramarital affair. After some interventions by Lewis, the article was held, but he was told by the paper the reporting was “a proper journalistic inquiry.”

  Later, Lewis said, he saw Taylor’s name and face flit by on a television screen during a story on the sentencing of News of the World’s Clive Goodman and his associate, Mulcaire. Taylor was one of a handful of people also named as targets. Others included Liberal Democrat MP Simon Hughes, actress and model Elle MacPherson, and high-end public relations executive Max Clifford. Lewis started inquiries and almost immediately received a very unusual visit from Tom Crone. Crone suggested the matter was a small one—worth only some thousands of pounds.

  Lewis took the fact of the visit as proof the case was worth a lot more. News Corp mismeasured its mark. Lewis is a tall, slender man with a pronounced limp, a flair for dramatic rhetoric, and flashy garb. He was wearing a garish orange overcoat the day I met him. He grandiosely described his role in the case as akin to living inside a John Grisham novel. But then his was an extraordinary story.

  Painstakingly annotated documents sat undisturbed for years deep in storage at Scotland Yard that detailed for any investigator who showed sufficient curiosity how Gordon Taylor’s privacy had been illegally invaded.

  As Crone later wrote in a confidential legal memo, a contract dated February 4, 2005, showed News of the World had agreed to pay Mulcaire £7,000 for information “on an affair being conducted by Gordon Taylor.” Taylor’s lawyer had also obtained a list of illegal privacy violations implicating many journalists at News of the World and its sister Sun. The most damaging blow came in the form of a single email from a junior reporter named Ross Hall (working at the paper under a pseudonym). On June 29, 2005, Hall sent a note to Mulcaire with the transcripts of fifteen messages from Taylor’s mobile phone. Hall also transcribed another seventeen messages left by Taylor on the cell phone of his assistant, JoAnn Armstrong. Hall’s note started: “This is the transcript for Neville.” Neville, it was claimed, had to be Neville Thurlbeck, then the tabloid’s chief reporter. His name would appear hundreds of times in the meticulous records taken from Mulcaire.

  In 2008 Mark Lewis demanded documents explaining what had happened to his client, citing a provision of British law that compelled prosecutors and police to share any evidence they possessed.

  “This evidence particularly the email from the News of the World is fatal to our case,” Crone wrote on May 24, 2008. “Our position is very perilous. The damning email is genuine and proves we actively made use of a large number of extremely private voicemails from Taylor’s telephone . . . pursuant to a February 2005 contract.”

  Crone recommended to Colin Myler, the editor, and the firm’s outside lawyers that the company offer to pay Taylor £150,000, plus legal fees. On May 27, 2008, Myler met with James Murdoch, who was about to embark on a series of trips abroad. James Murdoch told Myler to wait for outside legal opinion. Myler wasn’t happy—it was a mess. Clive Goodman had sprayed around allegations against others. I can’t ignore it, Myler told Julian Pike, the firm’s leading outside lawyer, who jotted down Myler’s misgivings: The new editor couldn’t be seen to be dismissing these allegations. I had given assurances to the staff. Les Hinton had given evidence to a parliamentary committee. But Les is no longer here. James would say, get rid of them. Cut out the cancer. Fire the people responsible.

  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 c
onsequences 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.”