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07.21.11

James Murdoch’s Facts Trap

Despite a strategy of bluster and vagueness before Parliament, new facts about payments to an investigator and a soccer exec emerged in questioning—and tended to damn the younger Murdoch, says Brian Cathcart.

As the days tick by after the Murdochs’ remarkable appearance before British parliamentarians, the position of James Murdoch looks steadily worse. The joint strategy of father and son, contrived with the best advice money and loyalty could buy, was to apologize, blame others in as vague a manner as possible, and bluster. Unfortunately it was impossible not to yield some new information under questioning, and every little fact tended to damn young James.

Nothing puts James under pressure so much as the payment made by News Corp.’s London arm, News International, to Gordon Taylor, the chief executive of the Professional Footballers’ Association. Taylor is a powerful figure in the British soccer world, though hardly a household name. His voice mails, and those of two of his associates, were hacked in 2006 by Glenn Mulcaire, the private investigator employed by the Murdoch paper News of the World.

Two years later Taylor sued, and his lawyers were able to produce documents to show that at least one and possibly three News of the World reporters knew about the hacking. At that point the legal manager of the paper, Tom Crone, and its editor, Colin Myler, marched into James Murdoch’s London office and told him he had to settle the case, so within days James authorized a payment of £700,000 (about $1.1. million).

The problem for James today is that £700,000 was an order of magnitude too much. A month or so after he made the payment, a London court awarded what is still the record damages for invasion of privacy awarded in Britain: £60,000 (about $97,000). Even allowing for costs, James had signed off for a sum way above the odds, and the suspicion in London is that he did it to buy Taylor’s silence—to ensure he did not reveal to anyone else the existence of evidence of knowledge of hacking among News of the World journalists.

Questioned by members of Parliament this week, James’s tactic was plainly to talk—a lot. This was a time-limited session in a way that a court cross-examination is not, so the more he apologized and generalized the less he would have to address difficult issues. But it was simply impossible to sustain without a break; he had to provide some substantive answers or else look like a crook, and on the Taylor matter his answers were worse than feeble. They may well have been reckless.

He did not appear to have a complete grasp of the chronology or the detail, so he implied, for example, that the “smoking gun” documents were already in the public domain before he made his decision, which is incorrect. They were in fact secret and, as the British response to their revelation by The Guardian newspaper in 2009 demonstrated, explosive. Worse, from his perspective, James insisted that the scale of the payment he authorized had nothing to do with silencing Taylor but was entirely the result of advice from News International’s external legal counsel. By implication, he had no choice because his lawyers told him this was the price he had to pay.

The problem for James now is that he has pointed the finger of blame at someone else, and that is a prominent legal firm or lawyer (we do not know which one yet). Does he have documentary evidence that a top London lawyer (the Murdochs do not employ street-corner firms) advised him to pay in damages and costs a sum that was an order of magnitude above the going rate for the offense? If he does, why did he not produce it? He was, after all, making an assertion that is on the face of it outlandish—far more outlandish than the proposition (which he denied) that this huge sum was paid to shut Taylor up.

And when he was asked whether he would release Taylor from his confidentiality commitments, so that he (Taylor) would be free to confirm or deny this version of events, James blustered again and effectively said no. 

This was the worst of his problems, but by no means the only one. Indeed his testimony, for all the longueurs of his repetitive, management-speak interventions (some of them, it has to be said, spluttered out in the effort to cover for his father’s shortcomings under questioning), offered up a host of hostages to fortune. Notably lost, or nearly lost, in the verbiage and the excitement over the foam “pie” attack and Wendi Murdoch’s furious response, was James’s sideways confession that his company had paid and was still paying Glenn Mulcaire’s legal expenses.

The problem for James now is that he has pointed the finger of blame at someone else.

Mulcaire is the hacker, the private investigator working for News of the World who knew and taught others the trick of accessing voice mails. He was jailed for his activities in 2007 but it has since emerged that News International paid him a five-figure sum (in pounds) on his release, which James says he found shocking. When the true scale of the hacking scandal began to emerge, and victims began to sue, they sued not only News International but also Mulcaire, the man they believed had actually done the deed. Both defendants, the company and the individual, resisted the charges and also resisted efforts by claimants to gain access to relevant documentation.

It has been a long and expensive legal tussle—no one could say how much it has cost, but it is safe to say that Mulcaire’s costs are by now at a level that would worry a very wealthy man, and he is not rich at all. So the London press has been wondering aloud for many months, without having much doubt about the answer, who was paying the bills.

Put on the spot by his questioners this week, James blustered again and tried his best to make his answer obscure, but in the end he had no choice but to admit that News International had been paying. In other words, Rupert Murdoch’s company was paying for the defense of a convicted criminal who allegedly had hacked into the voice mail of, to take one sensational example, Milly Dowler, a schoolgirl who was abducted and murdered in 2002. James Murdoch, discomfort personified, appeared at least to promise to halt these payments, but this are the kind of thing that would normally provoke days of front-page outrage in the British tabloids. There is longterm damage in this for Murdoch junior, though he is fortunate at least that the tabloids will not punish him—they are far too aware of the beams in their own eyes.

Britain has set up a public inquiry into these matters. It will be a slow-motion affair, probably running over several years, with witnesses testifying under oath and questioned at length by senior counsel. When the day comes that James Murdoch has to give evidence to the inquiry he will not be allowed to bluster and his questioners will take no prisoners. He will need a much better defense than this.