July 18 (Bloomberg) -- Police must explain why they arrested and interviewed former News of the World editor Rebekah Brooks for more than nine hours yesterday without confronting her with any allegations, her lawyer said.
The arrest caused Brooks, 43, “enormous reputational damage,’’ her solicitor Stephen Parkinson said today. She will still attend a U.K. parliamentary committee hearing on phone hacking at the News Corp. tabloid, he said.
“In time they will have to give their account of their actions, in particular their decision to arrest her with the enormous reputational damage this has involved,” Parkinson said in a televised statement. “She is not guilty of any criminal offense.’’
The revelations of phone hacking -- including breaking into the voice mail of a murdered schoolgirl -- have already seen News Corp. shutter the 168-year-old News of the World. Brooks will attend the Parliamentary hearing tomorrow after testimony from News Corp. Chairman Rupert Murdoch, and his son James, deputy chief operating officer.
Brooks voluntarily went to a London police station by appointment yesterday. Police said in an e-mail that the arrest was on suspicion of corruption and conspiring to intercept communications. She was released on bail around midnight.
Brooks was the 10th person, including at least eight with links to News of the World, detained by police in the investigation. She resigned July 15 as chief executive officer of News International, which publishes New York-based News Corp.’s U.K. titles. Brooks edited the News of the World and then the Sun before being promoted to CEO of News International in 2009.
The scandal also led to the resignation of Les Hinton, head of the company’s Dow Jones unit and previously chairman of News International.
News Corp. dropped 1.4 percent to the equivalent of $15.02 at 1:25 p.m. in German trading. Its Australian shares fell 4.1 percent to the equivalent of $15.01, closing at a two- year low in Sydney and bringing their losses to 17 percent since July 4, when the scandal erupted.
Niri Shan, a lawyer at Taylor Wessing LLP, said Brooks’s ability to answer questions from lawmakers tomorrow will be limited because of the arrest.
‘Level of Knowledge’
“Her lawyers will advise her not to answer questions that might damage her defense,” Shan said in an e-mail. “All the questions will be directed to her level of knowledge. That’s going to be a key part of any case against her, and a key part of any successful defense.”
Brooks will attend the committee over the initial concerns of her lawyer, Wilson said.
The July 4 revelation by the Guardian that News of the World reporters deleted messages from murdered schoolgirl Milly Dowler’s voice mail in 2002 turned phone hacking into a national scandal that led to the shuttering of the tabloid and the end of News Corp.’s bid for British Sky Broadcasting Group Plc. Since then, about $4.4 billion has been wiped off the market value of News Corp.’s Class A shares, and 2.5 billion pounds ($4 billion) from BSkyB’s.
Brooks “should have been arrested,” Mark Lewis, a lawyer for hacking victims including the parents of Dowler, said yesterday. “In the circumstances of her arrest, I’m not confident that she will offer any meaningful answers” at tomorrow’s hearing.
Under the headline “Putting right what’s gone wrong,” News International said in advertisements published yesterday in U.K. national newspapers that it’s the company’s obligation to cooperate with the police and compensate those affected. The publisher is “committed to change” and said “apologising for our mistakes and fixing them are only the first steps.”
A News Corp. spokeswoman, who declined to be identified, reiterated yesterday the company’s intention to fully cooperate with the police.
In the U.K., people are often arrested at earlier stages in an investigation for questioning under caution and the investigation can continue for months before any charges are filed. The first two arrests in the current probe, of a former News of the World editor and the tabloid’s then chief reporter, occurred in April.
In addition to the police and parliamentary probes, Prime Minister David Cameron appointed Lord Justice Brian Leveson to conduct a judicial inquiry into phone hacking.
Serious Fraud Office
The U.K.’s Serious Fraud Office, which prosecutes white- collar crime and corruption, was asked by a lawmaker to probe allegations of phone hacking by journalists at News Corp.’s now- defunct tabloid News of the World.
A letter from Labour party lawmaker Tom Watson arrived today and was received by the SFO’s director, Richard Alderman, who plans to reply by the end of the week, spokesman David Jones said in an interview today. The SFO isn’t currently investigating, he said.
“The issues raised by Mr. Watson are very serious issues,” Jones said. “Not all the issues may be within our scope, it depends on the public interest.”
Police said in an e-mailed statement that the Brooks arrest was part of their probe into phone hacking and an investigation into whether officers were paid for information.
Brooks told lawmakers at a 2003 committee hearing that “we have paid the police for information in the past.” The committee wrote in its report that Hinton, then chairman of News International, later told them Brooks had since told him she had “not authorized payments to police.”
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--With assistance from Carter Dougherty in Washington, Robert Fenner in Melbourne and Lindsay Fortado, Tariq Panja and Amy Thomson in London. Editors: Anthony Aarons, Kenneth Wong, Andrew Dunn
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