Bloomberg News

U.K.’s Top Three Ministers Face Grilling on News Corp. Links

June 11, 2012

Chancellor of the Exchequer George Osborne

The inquiry will hear this afternoon from Chancellor of the Exchequer George Osborne, who has been at the heart of Cameron’s political operations for the last seven years and was behind the decision to employ Coulson from 2007 to 2011. Photographer: Chris Ratcliffe/Bloomberg

The three most powerful men in Britain take turns testifying about their relationship with Rupert Murdoch this week, as the inquiry set up by Prime Minister David Cameron keeps its spotlight on his government.

Cameron is due to spend a full day in front of Judge Brian Leveson’s inquiry in London on June 14, answering questions about his links with Murdoch’s News Corp., with Rebekah Brooks, who used to head its U.K. publishing unit, and with former News of the World editor Andy Coulson, whom Cameron later hired as his communications chief.

The inquiry hears this afternoon from Chancellor of the Exchequer George Osborne, who has been at the heart of Cameron’s political operations for the last seven years and was behind the decision to employ Coulson from 2007 to 2011. Deputy Prime Minister Nick Clegg will appear on June 13. He has made the point that his Liberal Democrat party neither wooed nor was courted by Murdoch, in contrast to Cameron’s Conservatives, or the Labour Party, which formed the previous government.

The probe, set up by Cameron last year amid public anger over the phone-hacking scandal at the News of the World, has been described by one aide as a nightmare for ministers. They face questioning for hours under oath, carried live on television, and their e-mails and text messages have been released to the public. One set showed Culture Secretary Jeremy Hunt and a News Corp. lobbyist calling each other “Daddy” and “Papa” after their children were born the same day.

‘Industrial Scale’

The first witness today was former Prime Minister Gordon Brown. He had a close relationship with Murdoch before falling out with him in 2009 when News Corp. (NWSA:US)’s Sun newspaper, Britain’s biggest-selling daily, decided to switch its support to Cameron ahead of the 2010 general election. Brown accused the company last year of being at the heart of a “criminal media nexus” that engaged in “law-breaking on an industrial scale.”

Brown contradicted Murdoch’s account to the inquiry in April of a phone call after that switch, in which the News Corp. chairman described Brown saying he’d “make war on your company.” The former premier denied the call had taken place.

“I didn’t call him, I had no reason to want to call him, I wouldn’t have called him,” Brown told the inquiry. “I’m shocked and surprised that it should be suggested. There was no such conversation.”

Cystic Fibrosis

Brown accused The Sun of obtaining a 2006 story about his son being diagnosed with cystic fibrosis from medical staff in the Scottish hospital where he was being treated. The newspaper has said it was given the story by another parent at the hospital.

“There was only a few medical people who knew that our son had this condition,” Brown said. He said the hospital had concluded it was “highly likely” the information had come from a member of their staff, comments confirmed by the local health authority in a statement on its website.

Brown disputed Brooks’s testimony to the inquiry last month that he and his wife Sarah had authorized the Sun to run the story. He said he and Sarah were deeply upset when the newspaper contacted them and initially wanted to issue a press release to all media. “This was unacceptable to the Sun newspaper,” he said.

‘Most Forgiving’

Asked why he and his wife had gone on to attend birthday parties for Brooks and her wedding, Brown said Sarah “is one of the most forgiving people I know.” A spokesman for Brooks said she had nothing to add to her testimony.

Brown accused Cameron’s Conservatives of having “supported every one of the recommendations of the Murdoch group” on media regulation, saying that Rupert Murdoch’s son James pursued an “aggressive agenda” that was “highly politicized.”

Another former prime minister, John Major, will testify tomorrow. He was initially supported by Murdoch newspapers, which backed his 1990 bid to become Conservative leader, and his successful 1992 general-election campaign. The newspapers then turned on him, exposing sex scandals in his government and transferring their support to Labour’s Tony Blair in the 1997 election. After Major, the inquiry will hear from current Labour leader Ed Miliband, and his deputy, Harriet Harman.

Scottish Independence

Scottish First Minister Alex Salmond will also testify on June 13. He has already released letters showing how he sought the support of Murdoch and his newspapers for his campaign for Scottish independence from the rest of the U.K.

Labour has repeated accusations that Cameron and Hunt were biased in favor of News Corp.’s 7.8 billion-pound ($12 billion) bid for full control of British Sky Broadcasting Group Plc (BSY), made two years ago and abandoned last July as the hacking scandal widened. “You can serve up dinner, but you don’t have to serve up BSkyB as part of the dinner,” Brown said today.

Hunt spent six hours defending himself at the inquiry on May 31. During his testimony, the culture secretary revealed he had sent a text message to James Murdoch, congratulating him on clearing a European regulatory hurdle on the bid just hours before Cameron gave him responsibility for overseeing it in the U.K., at the end of 2010.

Cameron has defended his dealings with News Corp., rejecting accusations that he sought Murdoch’s backing before coming to power in return for favorable treatment of the company and its BSkyB once he’d taken office.

‘Big Deal’

“Was there some big deal, some big agreement between me and Rupert Murdoch or James Murdoch that, in return for the support for the Conservative Party, I would somehow help their business interests or allow this merger to go through? That is not true,” Cameron said in the House of Commons April 29. “I never had any inappropriate conversations with anyone about this.”

Brooks was charged last month with conspiring with her husband and others to cover up the phone-hacking affair. Coulson was charged May 31 with perjury in a case related to a former Scottish lawmaker who sued the News of the World for defamation in 2006.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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