Damning New Evidence in the News Corp. Hacking Scandal

Payments to a convict began one month after a letter reminded execs he'd kept his mouth shut

You know, it’s a serious problem when you can’t trust a word said by one of the very biggest owner of news organizations in the world—indeed, when evidence shows that you have to assume that it’s misleading you, as MP Tom Watson now says.

The latest bombshells in the Murdoch hacking scandal landed today, lobbed by defectors from the company’s own side, and they’re very bad for News Corporation, its executives, and for its crisis-PR managers.

We learned today Clive Goodman, the original scapegoat for the News of the World’s crimes, wrote a letter to News International in 2007 claiming he was wrongfully fired. Here’s what he wrote:

This practice (hacking) was widely discussed in the daily editorial conference, until explicit reference to it was banned by the Editor.

My conviction and imprisonment cannot be the real reason for my dismissal. The legal manager, Tom Crone, attended virtually every meeting of my legal team and was given full access to the Crown Prosecution Service’s evidence files. He, and other senior staff of the paper, had long advance knowledge that I would plead guilty. Despite this, the paper continued to employ me. Throughout my suspension, I was given book serialisations to write and was consulted on several occasions about royal stories they needed to check. The paper continued to employ me for a substantial part of my custodial sentence.

That’s bad enough, but it gets much worse here:

Tom Crone and the Editor promised on many occasions that I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation plea. I did not, and I expect the paper to honour its promise to me.

Les Hinton, future and now-former CEO of Dow Jones and The Wall Street Journal, was copied in on the 2007 letter, which hadn’t been turned over to the parliamentary committee until now.

News Corp. submitted it, redacting all the key information in the three paragraphs I just quoted. Unfortunately for News Corp., the law firm Harbottle & Lewis, whom it tried to enlist in its cover-up (and half-succeeded), had the same document and submitted it to the committee with all that information unredacted. The redactions suggest that the cover-up is hardly over at the company, which has made a big show lately of coming clean. (ProPublica’s sweet interactive shows how the letters from News and Harbottle differ).

Harbottle also says that both James and Rupert Murdoch misled Parliament when they testified last month. That was clear at the time, but it’s quite another thing to have your own attorneys say it in writing. The Guardian’s Nick Davies:

In a lengthy criticism of the Murdochs’ evidence to the select committee last month, Harbottle & Lewis says it finds it “hard to credit” James Murdoch’s repeated claim that News International “rested on” its letter as part of their grounds for believing that Goodman was a “rogue reporter”. It says News International’s view of the law firm’s role is “self-serving” and that Rupert Murdoch’s claim that it was hired “to find out what the hell was going on” was “inaccurate and misleading”, although it adds that he may have been confused or misinformed about its role…

Harbottle & Lewis writes: “There was absolutely no question of the firm being asked to provide News International with a clean bill of health which it could deploy years later in wholly different contexts for wholly different purposes … The firm was not being asked to provide some sort of ‘good conduct certificate’ which News International could show to parliament … Nor was it being given a general retainer, as Mr Rupert Murdoch asserted it was, ‘to find out what the hell was going on’.”

But that’s not all of the News Corp. falsehoods exposed today. The company has said that it paid Goodman £60,000. The real number, it turns out, is more than four times as much: £244,000. All of this hush money was paid to a convicted criminal after he pleaded guilty.

It’s worth emphasizing that all of these funds were paid to Goodman between April 2007 and December 2007. Goodman’s damning letter to Les Hinton et al was sent on March 2, 2007—one month before the payments began. Here’s a quote from that letter: “Tom Crone and the Editor promised on many occasions that I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation plea.”

Hinton testified to Parliament on March 6, 2007, just four days after receiving the letter from Goodman, which presumably would make it difficult to use the “I don’t recall” defense. The Guardian:

Four days after Goodman sent his letter, Hinton gave evidence to the select committee in which he made no reference to any of the allegations contained in the letter, but told MPs: “I believe absolutely that Andy [Coulson] did not have knowledge of what was going on”. He added that he had carried out a full, rigorous internal inquiry and that he believed Goodman was the only person involved.

Hinton is now likely to have be called before Parliament again, as is James Murdoch.

I’ll leave the kicker to Brian Cathcart in The Guardian:

Tom Watson MP said the new material was devastating and he was not exaggerating. Difficult though it may be to believe, documents released by the Commons culture, media and sport select committee are at least as damaging to News International management as the revelation last month that Milly Dowler’s voicemail had been hacked. That news prompted disgrace and resignations: now we are looking at possible criminal charges at senior levels.
Assuming that these documents hold up to scrutiny, a whole raft of executives - not journalists or editors, but well above that level - are surely likely to be questioned by police investigating the possibility of a conspiracy to pervert the course of justice. Arrests in some cases must be likely…
James has been asked back to the media committee to clarify his evidence. That will be a humiliation so dreadful that he will be looking for any way he can to avoid it. Meanwhile a number of people accustomed to executive limos and seven-figure salaries are beginning to wonder what it might be like in jail.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum. Tags: , , , ,