Murdoch's World (19 page)

In an August 2006 raid on Mulcaire's home,
police turned up more than 11,000 pages of documents with several thousand names of potential targets. The documents showed the tabloid's reporting relied heavily on Mulcaire's investigations, as well as other private investigators, and that many reporters commissioned his work, not just Goodman.

In January 2007 Mulcaire pleaded guilty to hacking the phones of aides to the princes, as well as five other prominent people, and was sent to jail. Goodman was headed to jail too. Andrew Coulson,
News of the World
editor, resigned, saying he had no knowledge of their activity but accepted responsibility for what occurred on his watch. The case seemed to write a new but brief chapter in the eternal chase of the royals by the tabloid press. News International brought in Colin Myler, a British editor who was Col Allan's deputy at the
New York Post
, to run
News of the World
and to set new newsroom policies to assure such things would not happen again.

Goodman pleaded guilty to conspiracy to intercept the private mobile phone messages of three members of the princes' inner circle. A month later, in February 2007, Goodman was fired for gross misconduct by Les Hinton, then the executive chairman of News International. But privately Goodman wrote a letter to Hinton; Stuart Kuttner, the managing editor of the paper; and the company's chief human resources executive saying
he had done nothing wrong.

“The decision is perverse in that the actions leading to this criminal charge were carried out with the full knowledge and support” of several executives at the paper, Goodman wrote. He added that others had approved his payments to the private investigator, Mulcaire, for
the precise purpose of hacking into the phones of the princes' aides. The firing was “inconsistent,” Goodman contended, because “other members of the staff were carrying out the same illegal procedures.”

His next sentence gathered up the combustible material at hand and lit it: “This practice was widely discussed in the daily editorial conference, until explicit reference to it was banned by the Editor. As far as I am aware, no other member of staff has faced disciplinary action, much less dismissal.” Throughout the trial, he had been suspended but remained employed, though the paper's top lawyer, Tom Crone, had attended his defense preparations and knew he would plead guilty. Crone and editor Coulson “promised on many occasions that I could come back to a job if I did not implicate the paper or any of its staff in my mitigation plea.”

Within a month, Hinton had authorized
the first in a pair of payments to Goodman that totaled more than £253,000 ($382,000). Only £13,000 of the payment went toward legal fees. Hinton wrote in a letter that the money was only being paid out of respect for his past service to the company.

In May 2007, News International announced that respected
outside lawyers had done an extensive review and found no executives who had any knowledge or involvement in the conspiracy to break the law. The company would stick with that formulation for more than four years. Andy Coulson found new life as the chief communications director of the head of the Tory Party, David Cameron.

NEWS CORP'S executives have always defined themselves by its enemies—unions, liberal elites, the
New York Times
, the BBC, the
Guardian
, and the Australian Broadcasting Corp; self-satisfied politicians, red tape–happy government regulators, the leftist university professoriate.

Leaders throughout the corporate empire embrace the conflict.
“We like being pirates,” said
New York Post
editor in chief Col Allan.
“We're like a pirate ship,” a senior news executive at the
Wall Street Journal
told me, oblivious to the echo of Allan—or how remarkable it sounded coming from the mouth of someone leading one of the most prestigious newspapers in the world.

Murdoch's men (and women) insisted they didn't get the invites to high society parties, which is hard to credit, given their social calendars in New York, Hollywood, London, and Sydney. In the UK, Rupert Murdoch had not been knighted by the Queen—as had his father and many of his rivals. Once Murdoch took American citizenship in order to consummate a major television deal in 1985, of course, he could not actually accept a knightship anyhow. But Conrad Black, the former owner of the
Telegraph
, gave up his Canadian citizenship to accept a peerage. Murdoch still could have been offered it. (Then again, he may console himself with his papal knighthood.)

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.