British Cabinet Minister Becomes Focus in Murdoch Inquiry
By JOHN F. BURNS and ALAN COWELL
Published: April 24, 2012
A trove of newly released e-mails pointed to hand-in-glove collaboration between a lobbyist for Mr. Murdoch’s News Corporation and the office of Culture Minister Jeremy Hunt, the official designated to pass judgment on the BSkyB bid. That deal, which would have crowned Mr. Murdoch’s 60-year media career, was scuttled last year as the scandal over illicit phone hacking exploded, and now appears out of his reach for years, if not permanently.
Mr. Murdoch’s son James testified at the inquiry for five hours on Tuesday, and Mr. Murdoch himself was to take the stand on Wednesday for what was forecast, given the new uproar, to be an intense grilling. Mr. Murdoch has been in London since Thursday, conferring with a coterie of advisers, lawyers and communications consultants behind closed doors.
In recent months, he was able to pivot his attention to other pieces of his empire, but over the past couple of weeks he has been almost wholeheartedly committed to preparing for his London testimony, according to a person close to his company who spoke on the condition of anonymity.
Prime Minister David Cameron seemed certain to face renewed scrutiny of his relationship to the Murdochs and their business interests on Wednesday, when he was to appear before Parliament for the weekly session of prime minister’s questions.
Over the last year, the ever-growing scandal has exposed unsavory and sometimes illegal interlocking ties among figures in the government, political leadership, law enforcement and News International, the British newspaper arm of Mr. Murdoch’s News Corporation, along with Britain’s other free-wheeling media outlets. The disclosures on Tuesday cemented concerns that the phone hacking scandal had seeped even more deeply into News Corporation operations.
News International underscored that the 161 pages of e-mails had been subpoenaed as part of the inquiry, not volunteered, but some critics saw an ancillary benefit in the day’s events to the Murdoch strategy in the scandal, since the disclosures about apparent cronyism in the BSkyB bid had the effect of shifting some of the focus to the government.
In the e-mails, Frédéric Michel, News Corporation’s chief lobbyist in Britain, was depicted as pushing relentlessly for government approval of a News Corporation takeover of the 61 percent stake that it did not already own in BSkyB, Britain’s leading satellite TV network. The network generates billion-dollar annual profits and is increasingly a serious competitor to the BBC.
With a market capitalization of about $20 billion, BSkyB offered News Corporation a platform to increase its stake in the lucrative pay-TV business while reducing the importance of its legacy, and problematic, newspaper assets. The company now finds itself in a tricky spot: its 39.1 percent stake in BSkyB is enough to make it responsible for any misfires, like the recent disclosures by Sky News that it had engaged twice in illegal e-mail hacking in pursuit of stories, without having real control.
The deal was vehemently opposed by many competing media organizations and by others who argued that Mr. Murdoch, with control of publications that had 40 percent of Britain’s total newspaper circulation, already had a degree of influence and power, particularly over politicians, that was unhealthy for Britain.
Still, Mr. Cameron assigned Mr. Hunt quasi-judicial powers to approve the takeover.
The e-mails tracked an intense back-and-forth during that period between Mr. Michel and Adam Smith, a political aide in Mr. Hunt’s office. Mr. Smith’s e-mails depict Mr. Hunt as an avid supporter of the BSkyB takeover and ready, in effect, to manipulate the approval process in the Murdochs’ favor, in part by giving the lobbyist — and through him, James Murdoch — advance notice of government moves.
In one of the messages, the Hunt aide told the Murdoch lobbyist that he had “managed to get some info” on what Mr. Hunt would say about the bid in Parliament the next day, adding, in brackets, “although absolutely illegal!”
That and other messages were forwarded to James Murdoch, Mr. Murdoch’s 39-year-old son and until recently the head of the family’s media interests in Britain, who has maintained in earlier appearances before the inquiry that he had no knowledge of any wrongdoing on his watch. On Tuesday, he responded to questions about the “absolutely illegal!” comment with what appeared to be a weary impatience. “I thought it was a joke,” he said, adding that the use of an exclamation point confirmed it. “It’s a wink, a joke,” he said.
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