http://www.independent.co.uk/news/uk/crime/exclusive-met-investigating-rupert-murdoch-firm-news-international-as-corporate-suspect-over-hacking-and-bribing-offences-8771560.html
Scotland Yard is investigating News International as a “corporate suspect” over hacking and bribing offences, it can be revealed.
The Independent has learnt the Metropolitan Police has opened an “active investigation” into the corporate liabilities of the UK newspaper group – recently rebranded News UK – which could have serious implications for the ability of its parent company News Corp to operate in the United States. One of Rupert Murdoch’s most senior lawyers has been interviewed under caution on behalf of the company and two other very senior figures have been officially cautioned for corporate offences. John Turnbull, who works on News Corp’s Management and Standards Committee (MSC) which co-ordinates the company’s interactions with the Metropolitan Police, answered formal questions from detectives earlier this year.
The development has caused pandemonium at the upper echelons of the Murdoch media empire. Shortly afterwards, executives in America ordered that the company dramatically scale back its co-operation with the Metropolitan Police.
A News Corp analysis of the effects of a corporate charge, produced in New York, said the consequences could “kill the corporation and 46,000 jobs would be in jeopardy”.
Lawyers for the media behemoth have pleaded with the Met and the Crown Prosecution Service not to prosecute the company as it would not be in the “public interest” to put thousands of jobs at risk. Gerson Zweifach, the group general counsel of News Corp, flew in to London for emergency talks with the Met last year. According to Scotland Yard, he told police: “Crappy governance is not a crime. The downstream effects of a prosecution would be apocalyptic. The US authorities’ reaction would put the whole business at risk, as licences would be at risk.”
The Independent can reveal that Scotland Yard warned News Corp that its UK subsidiary, which publishes The Sun and used to publish the now-defunct News of the World, was under formal investigation on 18 May last year.
A month later, Rupert Murdoch announced he was splitting the global empire he spent six decades building up into one of the most powerful companies in the world. The 82-year-old hived off the highly profitable television and film assets, including 21st Century Fox and Fox News, into a separate entity from the troubled newspaper group in what was widely perceived as an attempt to isolate any contagion from the phone-hacking scandal.
Tom Watson, the campaigning Labour MP, said: “This comes as no surprise. Parliament has already found Rupert Murdoch unfit to run an international company.
“He is responsible for the corporate culture that allowed this scandal to damage his global empire. I hope that other jurisdictions like Russia will begin to investigate the activities of News Corp around the world.
“The doom-laden internal analysis that the thousands of people who actually add value to the company may lose their jobs is bogus. If News Corp wants to clean up its act, it can easily do so by replacing the Murdochs with people who understand corporate social responsibility.”
Lawyers for the Metropolitan Police identified News International as “suspects” as long ago as October 2011.
But the company did not appear to become aware of its status as a potential “corporate defendant” until April 2012 when Met detectives asked the MSC for “minutes of board meetings”. The request triggered behind-the-scenes negotiations which eventually led to former Deputy Assistant Commissioner Sue Akers writing to the MSC a month later.
In a letter to the chairman Lord Grabiner, she said there was “an active investigation into the corporate liability of News International”. The company immediately changed the terms of its co-operation with the police.
In an unpublished statement submitted to the Leveson Inquiry a month later, seen by The Independent, Lord Grabiner outlined the position of the company. He indicated it would be a “dereliction of duty” to continue co-operating with Scotland Yard if the police were planning a “corporate charge” against News International.
“At no point prior to May 2012 did the Met inform News International or the MSC that any corporate entity was a suspect,” he said.
“It was only in early May 2012, following requests by the Metropolitan Police for information and documents that did not seem relevant to the matters understood to be under investigation in relation to individuals, that it appeared to the MSC the focus of the investigation had shifted to include the companies [News International and News Group Newspapers] without either company having been advised of this fact.
Later he added: “A suspect which is being asked to provide material for use in the investigation into its own liability is entitled to be advised that it is under suspicion in order that it can be advised of its rights and make informed decisions.”
Lord Grabiner said that, following the disclosure, the company was still “co-operating” but felt “obliged to proceed with some care”.
A senior Scotland Yard source said that after Ms Akers’ letter there was a “suspension in co-operation” whilst the UK lawyers “took advice” from the board directors in New York.
He added: “They subsequently resumed co-operation, but on a more challenging, legal-led basis resulting in delays.”
Lawyers for News Corp then continued to plead with the police not to pursue the company, raising the recent case involving Southwark Council, which avoided corporate manslaughter charges by providing full co-operation with an investigation into a fire that ripped through a dilapidated tower block, killing six people.
Since News Corp was informed of the development, a string of senior UK executives have left the company.
According to CPS guidelines, there appears to be no legal provision for dropping a corporate prosecution simply because a company under suspicion also happens to be a major employer.
However, the former Prime Minister Tony Blair ordered the cessation of a three-year Serious Fraud Office investigation into BAE Systems in 2006 as it would affect “thousands of British jobs”. Citing the “public interest”, Mr Blair said the defence giant should not be prosecuted for paying bribes worth hundreds of millions of pounds to the Saudi royal family in order to secure the multibillion-pound al-Yamamah arms contract.
When members of the Saudi government found out that the SFO was probing their personal Swiss bank accounts, they also threatened to cut off all intelligence to Britain.
Last night a spokesman for News UK said: “We have co-operated with all relevant authorities throughout the process and our history of assistance is a matter of record in Lord Justice Leveson’s report.”
A Scotland Yard spokesman said: “We are not prepared to discuss this.”
Explainer: How a company can be prosecuted
The Crown Prosecution Service can treat a company as a “legal person” who is “capable of being prosecuted”.
Any organisation at the centre of a criminal investigation “should not be treated differently from an individual because of its artificial personality”, according to the CPS.
The latest guidelines state: “A thorough enforcement of the criminal law against corporate offenders, where appropriate, will have a deterrent effect, protect the public and support ethical business practices.
“Prosecuting corporations, where appropriate, will capture the full range of criminality involved and thus lead to increased public confidence in the criminal justice system.”
A company can be found guilty if any potential offender can be established as the “directing mind and will” of the organisation.
The Independent asked the CPS to explain what the possible penalties were for a corporate charge, including fines and custodial sentences, but the press office refused to discuss “hypotheticals”.
Lawyers for News Corp believe the law on corporate prosecutions is a “mess” and have told the Met and CPS that any charge against the company will be vigorously challenged in court.
It appears the company is most concerned about the effect of corporate charges on the ability of News Corp to obtain unspecified “licences” in the United States.
A senior News Corp source said the “licences” are now under the domain of 21st Century Fox, the TV and film arm that was split from the newspaper group in June this year.
Timeline: Hacking saga
January 2007 Original phone-hacking prosecutions result in two convictions.
January 2011 Scotland Yard launches new investigation into phone hacking after embarrassing disclosures. Material seized years earlier is re-examined.
July 2011 Milly Dowler hacking scandal breaks. News Corp establishes Management and Standards Committee (MSC) to co-operate with police.
Rupert Murdoch: police investigate secretly recorded Sun meeting
Met investigates media mogul over alleged conspiracy to commit misconduct in public office following meeting with Sun staff
Email
Rupert Murdoch criticised the 'incompetent' police investigation which has led to the arrest of so many of his staff. Photograph: Noah Berger/AP
Detectives are investigating Rupert Murdoch over comments he made in an internal meeting with journalists from the Sun that were secretly recorded.
The Metropolitan police want access to the recording as part of the Operation Elveden inquiry into corrupt payments to public officials, assistant commissioner Cressida Dick said on Tuesday.
It is understood that one of the offences being investigated by the force is conspiracy to commit misconduct in public office.
Dick told MPs on the home affairs select committee: "We are seeking to obtain the tape of the meeting during which Rupert Murdoch appears to have been recorded. We will then assess the full contents of that tape."
She refused to be drawn on whether police had already obtained the full tape or whether they were seeking a court order for the media organisation to hand it over. "I am not prepared to go further," she told MPs.
The revelation comes as Murdoch was summoned to appear before the culture, media and sport select committee again over what he said in the March meeting recorded by News International journalists.
Exaro News, the website that published parts of the recording, said on Tuesday it was arranging to supply the evidence to Operation Elveden. Mark Watts, editor of Exaro News, said he was giving the police what had already been published on the website – three audio clips from the meeting.
Murdoch told the journalists that the culture of paying police officers for stories "existed at every newspaper in Fleet Street. Long since forgotten. But absolutely", and had existed long before Sun journalists had been arrested.
Murdoch also criticised the "incompetent" police investigation that has led to the arrest of so many of his staff.
In one clip broadcast by Channel 4 News, a journalist asks Murdoch: "I'm pretty confident that the working practices that I've seen here are ones that I've inherited, rather than instigated. Would you recognise that all this predates many of our involvement here?"
Murdoch replies: "We're talking about payments for news tips from cops. That's been going on a hundred years, absolutely. You didn't instigate it."
Dick told the committee relationships with News International and its management and standards committee had always been challenging. A memorandum of understanding for the "voluntary provision of documents" had been signed by the police and the standards committee – which eventually handed over more than 300,000 staff emails. But in recent months all requests by the police for new information were going through the courts, where police have to seek a production order for information from a media organisation.
"Since May of this year, voluntary co-operation has been significantly reduced," said Dick. "And all requests for new material are now supervised by the courts."
Asked about Murdoch's comments that the police investigation – which is likely to cost almost £40m by 2015 – was a disgrace and that the "cops are totally incompetent", Commander Neil Basu, who is running the linked Operations Elveden, Weeting and Tuleta, said he was not surprised by the media tycoon's comments as they were made in a meeting that was about providing "empathy for his staff".
Keith Vaz, chair of the home affairs select committee, challenged Dick on whether the inquiries – which have so far resulted in 126 arrests but led to only six convictions – could be described as incompetent.
Dick said: "I don't think it's a valid way of assessing success or otherwise, particularly at this stage – the number of people convicted." She said she was extremely satisfied the investigations had been very competent.
Basu told the committee that more arrests – probably numbering fewer than 10 – were likely in the coming weeks and months but the police were coming to the end of the arrest phase.
To date, 42 people have been charged, 56 are still on bail and 24 have been told no further action is being taken against them.
In a statement a spokesperson for News Corp said: "Mr Murdoch welcomes the opportunity to return to the select committee and answer their questions. He looks forward to clearing up any misconceptions as soon as possible."
October 2011 The Metropolitan Police internally identifies News International as corporate “suspect”.
November 2011 Leveson Inquiry starts.
April 2012 Met asks MSC for “minutes of board meetings”.
May 2012 Deputy Assistant Commissioner Sue Akers tells MSC that company is under “active investigation”. News Corp’s co-operation with police dramatically scaled back.
June 2012 Rupert Murdoch announces plan to split News Corp in two. MSC tells Leveson Inquiry it would be a “dereliction of duty” to continue co-operating with Scotland Yard if police were planning a “corporate charge”.
December 2012 Leveson Inquiry concludes.
March 2013 Rupert Murdoch is secretly recorded telling staff that “payments for news tips from cops” have been “going on a hundred years”.
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