Jeremy Hunt congratulated James Murdoch over the BSkyB bid going through Brussels hours before being appointed to replace Vince Cable, the Leveson Inquiry has heard.
The culture secretary sent a text message to James Murdoch on December 21, 2010 – just hours before he was handed responsibility for the bid – to congratulate him after the European commission approved the £8 billion proposed takeover. He told the News Corp chairman: “Great and congrats on Brussels. Just Ofcom to go”.
Before taking over the bid, Hunt took phone calls and exchanged text messages with James Murdoch, after receiving legal advice not to contact parties involved in News Corporation’s bid for the remaining BSkyB shares.
Hunt – who defended his handling of the quasi-judicial role overseeing the bid – said today he was unaware of the volume of contact between his special advisor, Adam Smith, and News Corp lobbyist Frederic Michel.
He also spoke to Murdoch later on December 21, 2010, to discuss comments made by business secretary Vince Cable to undercover journalists from the Telegraph. Cable – originally responsible for the bid – said he had “declared war on Rupert Murdoch” and was removed from overseeing the process. During his evidence, Cable admitted he offloaded pent-up feelings in what he thought was a private conversation with constituents, but remained unbiased.
Last week, the inquiry heard Hunt had spoken to James Murdoch on the phone on November 15, 2010 after being advised by a government legal head not communicate with the company, or write to Cable about the bid.
Hunt – who revealed he only uses his personal email account while his staff monitors his official department account – admitted his messages to Murdoch presented a “positive view”. He sent a private memo to David Cameron on November 19 praising the bid, despite receiving advice not to intervene in Cable’s process. He later said he understood Cable could not have attended the meeting on the bid with him, Cameron and Nick Clegg, which he called for at the time.
Later on December 21, Hunt sent a message to Andy Coulson – Number 10 communications director and former News of the World editor – to say he was “seriously worried” Cable would damage the government with his comments.
He also texted George Osborne, Chancellor of the Exchequer, asking to talk about the bid saying he was “seriously worried we are going to screw this up”.
His text read: “Just been called by James M. His lawyers are meeting now & saying it calls into question legitimacy of whole process from beginning ‘acute bias’ etc.”
Osborne replied: “I hope you like the solution!” – just hours before Hunt was handed the bid.
Hunt – who said he would not have texted Murdoch if in charge of the bid at the time – claimed it was “widely known” that he was sympathetic to a News Corp takeover but said he took steps to make sure he acted impartially in the role. He told the inquiry he set aside his personal views and set up a process “explicitly” to make sure he could not use them to inform the decision.
The inquiry were also shown messages between Murdoch and Hunt from March 2011, when the culture secretary congratulated Murdoch on his promotion to deputy chief operating officer of News Corp.
He wrote: “Many congratulations on the promotion although I am sure you will really miss Ofcom in NY!”
Hunt – who said he would have avoided all text messages in hindsight, said he was pulling Murdoch’s leg over “his much-hated Ofcom”.
Robert Jay QC asked why Hunt had published a comment on his personal website claiming to be a “cheerleader” for Rupert Murdoch. The minister said the quote came from a magazine article and was posted along with other comments for the benefit of his constituents. He then admitted having an unrecorded meeting with James Murdoch on June 20, 2010, where the bid was probably discussed.
Hunt said Smith, who resigned last month over his contact with Michel, was the official point of contact for News Corp but had not been given specific instructions on his role in the process.
He told the inquiry: “I doubt there’s any minister who worked more closely with a special adviser than I worked with Adam Smith”.
He said he was aware Smith was in regular contact with Michel but was surprised by the extent of communication between the two. The News Corp lobbyist sent text messages 542 times to Smith. Hunt called this an “extraordinary amount” and said he had not realised the pressure being put on his adviser by the company, despite being aware of Michel’s “pushiness”.
On May 12, 2011, Michel sent an email to Smith urging the Department for Culture, Media and Sport to complete the bid by June otherwise it would be “catastrophic for many important reasons” – two months before the Guardian revealed the extent of phone hacking at the News of the World.
Hunt said News Corp were worried the scandal would derail the bid and were aware “there were more and more explosive revelations down the track”. After a conversation with Number 10 lawyers, Hunt wrote to regulator Ofcom and the Office of Fair Trading for advice but News Corp pulled the bid on June 13.
Hunt took legal advice on whether phone hacking would affect the bid on April 18 but said he did not believe an issue of trust extended to News Corp from subsidiary company News International.
Hunt said this changed after the News of the World was closed down, when he questioned a corporate governance issue at the newspaper.
He added: “I asked myself: ‘If they found it necessary to close down the whole paper, is there a corporate governance issue here?’”
During his evidence, the Culture Secretary referred several times to the contact between Smith and Michel, saying his advisor had been lapsed into inappropriate language because of the pressure he was under from the company.
He told the inquiry: “What I didn’t deduce from this was the effect of this contact multiplied many, many times over to Adam Smith. That was the crucial thing – that right at the beginning of the process that we didn’t foresee – the fact that there was going to be such a volume of correspondence, and I think it’s something that we have to reflect on in terms of the way that we handle bids in the future.
“My feeling is that Adam Smith is the most decent, straight, honourable person that one could imagine, and even he was not able to maintain the impartiality that he needed to because of the volume of communication [with Michel], and I think that was where things wrong as far as his communication was concerned.”
Smith told the inquiry last week it would not have surprised anyone in the DCMS that he was in regular contact with Michel and he acted as a “buffer” between News Corp and the minister.
Of his own contact with Michel, Hunt said the lobbyist used flattery as a weapon and had been “cheeky” to contact him on December 20, 2010 following a tense meeting with Murdoch.
He added: “”He was just looking for any opportunity he could to establish contact of one sort or another.”
Last week, Michel claimed he tried to boost morale at News Corp when relaying conversations with Smith over the bid. Hunt agreed, saying he may have exaggerated contact with the adviser to please Murdoch and other executives.
He said an email from Michel to Murdoch saying the closure of the News of the World would not affect the bid was “just wrong”. He told the inquiry it was difficult to comment on the contact between Smith and Michel because it was unclear which parts were true.
He added: “I’m not sure that [Smith] did ever misrepresent my private view. We don’t know from Mr Michel’s emails how much is fact and how much is fiction.”
Hunt said he had considered whether to resign himself but decided it would not be appropriate, as he had conducted the bid “scrupulously”.
He come under pressure after the contact between Smith and Michel was revealed at the inquiry during James Murdoch’s appearance, on May 24.
Hunt said: “There was no other choice but to accept with a heavy heart Adam’s resignation”.
He added: “It may have been that one of the factors that made it easier for Mr Michel to suck Mr Smith into a situation where he was using some inappropriate language was partly because there was some pre-existing relationship, which would have been less likely with a civil servant – and that might be something that we want to reflect on in terms of doing things for the future.”
In his written witness statement he said: “The contact between my former special advisor Adam Smith and Mr Michel was not a secret back channel through which News Corporation was able to influence my decisions.
“I did not see or hear of any of the texts, emails or conversations between my Special Advisor and Mr Michel whilst I was responsible for the merger until April 24, 2012.”
Towards the end of his evidence, Hunt advocated a press regulator independent of politicians and serving newspaper editors.
He said: “If there was a way that the successor to the PCC could be a champion of press freedom and a champion of press standards as well as a complaints body – when things have gone wrong – that would be a positive thing for the entire press industry.
“If the press are willing to support a structure of independent self-regulation which commands the confidence of the public and therefore does have the distance from serving editors, as well as proper distance from politicians, if such a body could be set up then I think that the government could consider whether that the regulatory structure and the rules could be made similar for products that go out online and on video on demand, and the other types of things the press will be doing.”