CHAPTER 27

Meltdown

The News of the World phone-hacking affair was about much more than the reckless behaviour of journalists who betrayed their trade and helped kill a newspaper. They wrecked their own lives, and those of many others, but their actions also set off a chain of events that eventually dwarfed their deceit, even their criminality, and boiled up into a monumental legal, political, and media hyper-drama. Unwittingly, they created a monster of unstoppable anger, grief, paranoia, and hysteria that gave old enemies, and new, an unexpected and unprecedented opportunity to attack Rupert Murdoch, his politics, and his newspapers.

The affair had been ebbing and rising since August 2006 when reporter Clive Goodman and Glenn Mulcaire, a football player turned private investigator, were arrested for phone-hacking. When the case went to court in November of that year, both pleaded guilty. Sentencing was deferred until January, when the judge, Mr Justice Gross, described their conduct as ‘reprehensible in the extreme’.

He gave each a short prison sentence. Goodman and Mulcaire had apparently hacked more than 600 times into the voicemails of senior employees in the household of Prince Charles and his sons, William and Harry. In addition, Mulcaire admitted to hacking into the phones of others, including the model Elle Macpherson and the publicist Max Clifford.

Mulcaire was a hacking aficionado. In their early years, mobile phones were sold with a common four-digit passcode. Unless new owners created their own unique passcode, listening into other people’s voice messages was easy — anyone could dial the number and enter the default code. Even when someone had created their own passcode, Mulcaire could usually discover it. He would call telephone companies masquerading as a forgetful customer; or he would use software, available on the internet, that made it possible to bypass some passcodes completely.

As the court case later showed, Mulcaire and Goodman’s scheme began to fall apart in November 2005. The paper had run two gossip items by Goodman — one revealed that Prince William had seen a doctor about a knee injury; the other that a television reporter covering the Royal Family had loaned the prince broadcasting equipment. While William was wondering how the News of the World could have obtained this information, a couple of his courtiers noticed their voicemails were displaying as old messages before they had listened to them.

The police were called in, and due to the importance of the complainants, Scotland Yard assigned its counterterrorism squad to the case. It’s possible these elite officers thought the task an unhelpful distraction from their main job. London was on high alert after four jihadist terrorists had murdered 52 people in July that year, followed two weeks later with a further attempted attack.

Nine months later, Goodman and Mulcaire were arrested. Many people — myself included — assumed that, after so long, these two arrests were the culmination of a painstaking investigation. Goodman’s desk had been searched; papers had been removed, and Goodman and Mulcaire interviewed at length. No one else had been arrested, or charged. It appeared that they had acted alone.

When Goodman and Mulcaire went to prison, the police closed the case and returned all their resources to the main task of tackling terrorism. I thought the curtain had been drawn on an embarrassing and painful episode for the News of the World.

I fired Goodman, and gave him a year’s salary, telling him in my letter of dismissal that the payment was for his ‘many unblemished, and frequently distinguished, years of service … and in recognition of the pressures on your family.’ This was true, but I was also over-generous. I soon wished I hadn’t done it.

At the same time, Andy Coulson resigned. He was close to tears as we sat in my office. I hadn’t asked him to go — in fact, I thought there was no need. He had told me he knew nothing about phone-hacking, and I believed him. I believed him for years.

By 2007, Coulson had been editor of the News of the World for four years. He was a demanding boss, but mostly popular. I considered him a gifted newspaperman, and still do. I was proud to have recognised his talent and advanced his career. Colin Myler, a former Daily Mirror editor-in-chief who was then based in America as deputy editor at the New York Post, agreed to come home and take Coulson’s place.

In an effort to repair the damage, I called Prince Charles’ principal private secretary, Sir Michael Peat, a silky Old Etonian. Coulson had already publicly apologised on behalf of the paper, as reported in The Guardian the day after the guilty pleas of Goodman and Mulcaire. I apologised to Peat on behalf of the company, and offered £100,000 to any charities nominated by Princes William and Harry. It was a token gesture given the scale of intrusion, but Peat was gracious in accepting both the offer and the spirit in which it was made. Unfortunately, by 2011, with Peat no longer at the palace, both the apology and donation appeared to have been forgotten at News International and Clarence House. The Times gave great display to a story about Prince William complaining to James Murdoch and Rebekah Brooks that he had never received an apology. Murdoch, the newspaper said, was ‘shocked’ at the news. I wished someone had checked with me.

In the summer of 2007, Prince Charles was guest of honour at the annual Police Bravery Awards, an event The Sun sponsored in support of the Police Federation. Rebekah Brooks and I greeted him in the lobby of the Dorchester Hotel in Park Lane, seating him at our table. He was impressed with the evening and suggested that The Sun stage a similar event for the military. We did, and The Sun’s Military Awards became an annual event. I thought we had made peace with the palace, and steadied the ship at the News of the World. But the real trouble hadn’t even started.

Shortly after receiving my note firing him, Clive Goodman had sent an angry letter dated 2 March 2007 to Daniel Cloke, the human resources director, accusing the company of unfair dismissal. He also claimed that News of the World editors knew about phone-hacking, and alleged ‘other members of staff were carrying out the same illegal procedures’. Goodman said his case would be supported by copies of his email exchanges with several executives over a 16-month period.

I asked Cloke and Jon Chapman, the company’s legal director, to join with Colin Myler, the new editor, to investigate Goodman’s claims. None of these three men had any conceivable reason to hide wrongdoing. Chapman and Cloke had nothing to do with editorial operations, and Myler was new at the paper.

They interviewed everyone Goodman had named, and reviewed around 2500 emails, but came up with nothing to support the allegations. To reinforce the independence and thoroughness of the investigation, I asked Chapman to hire an outside law firm to conduct a further review.

Chapman appointed Harbottle & Lewis, a well-established media law firm, and forwarded them the emails, including a batch that went beyond the dates specified by Goodman and had not been previously examined. The email review was led by the firm’s managing partner, Lawrence Abramson, who subsequently wrote to Chapman confirming he had found no evidence of criminal activity.

It would be eight years before it became clear that Abramson had made a terrible mistake: he had missed crucial emails, not seen by the News International team, that contained evidence of wrongdoing. These were the so-called, and now infamous, ‘toxic emails’ mentioned in court cases, criminal trials, and countless news stories. They referred to ‘lifting quotes from tele’ and ‘turning mobiles.’ In another, Goodman wrote about actions that could land ‘me, you, and the editor in jail’. In one exchange, Coulson gave Goodman permission to pay £1000 for a palace phone book containing the phone numbers of the Royal Family and their staff.

It was a disastrous mistake by Harbottle & Lewis, and one with serious and irreparable repercussions for their client, News International.

A paralegal helping Abramson had flagged the emails for his attention, warning him against sending his proposed letter to News International. ‘I cannot say that I agree there is no evidence,’ she wrote. But Abramson didn’t read her note, or the email attachments she had sent him — a failure that led him, in 2015, to appear before the Solicitors Disciplinary Tribunal charged with unprofessional behaviour.

He offered a litany of excuses: it had been ‘probably the busiest week’ of his life; he needed to complete outstanding work before taking his children on holiday; he was ‘juggling, trying to keep everything in the air’; he flew to Athens to see his club, Liverpool, play in the Champions League Final, and in the chaos outside the ground, his ticket was snatched from his hand, requiring him to watch the game in a bar; his return flight that night was delayed; he didn’t get home until 10 o’clock the following morning; his secretary was away and the temporary one unfamiliar with his work; she mislabelled the paralegal’s vital message and so he overlooked it. Everything that could go wrong for him apparently had. Even Liverpool lost 2-1 to A. C. Milan — I witnessed the defeat myself, in the stadium with my two youngest children, James and Jane.

Despite his excuses, the tribunal ruled that Abramson’s errors were ‘major in nature and caused consequences which were there for all to see’. For his ‘genuine, major but inadvertent oversight’, the tribunal ordered him to pay a fine of £20,000 and £15,000 in costs. The tribunal was forgiving: ‘his misconduct was a single episode in a previously unblemished career’.

I found it difficult to feel charitable, thinking of the consequences of his ‘busiest week’ and how different life might be, for me and many others, if he had read the emails instead of sending his lack-of-evidence note.

In 2007, it would be another four years before the truth was known. The Guardian, the BBC, and others would write extensively about the ‘smoking gun emails’. Tom Watson MP, a member of the House of Commons Culture, Media and Sport select committee, claimed it was a ‘fantastical notion’ that executives hadn’t known about the emails, and said the company had misled Parliament. Chris Bryant, a Labour frontbencher, accused News International of ‘a massive cover-up’, claiming it was ‘inconceivable that the senior management of News International did not know about this. It is quite clear that Parliament has been lied to.’

When the truth was finally uncovered during the Abramson tribunal, it went almost entirely unreported. Labour’s fiery critics — MPs such as Tom Watson and Chris Bryant — had nothing to say. The truth must have been too inconvenient.

With the evidence to the contrary lost in Harbottle & Lewis’ files, we told Goodman in 2007 that his claims were without merit. He immediately pressed forward with a claim of wrongful dismissal.

Companies regularly settle wrongful dismissal claims to avoid bad publicity and the time they take up. Our initial intention was to fight it — I thought we had a strong case — but after looking at the details, our lawyers said we should agree a settlement. The company had apparently failed to follow statutory disciplinary and dismissal procedure — this made Goodman’s firing automatically unfair, and gave him the right to appeal at a public hearing. Mulcaire, in turn, claimed the amount of work he had done for the News of the World gave him the rights of a member of staff. Legal advice was we could lose both cases.

Common sense said they both deserved instant dismissal for gross misconduct and — legal technicalities aside — that we were entitled to kick out the pair of them. But I agreed we should avoid the risk of defeat and the probability of painful, if unfounded, public allegations, and we settled both cases.

By the end of 2007, I wasn’t thinking about phone-hacking at all. It had been a difficult interlude for everyone involved, but I had put it out of my mind. I was in New York buried in the complicated makeover of Dow Jones and The Wall Street Journal. My memory wouldn’t be jolted until the morning of 9 July 2009.

Kath and I had planned it as a happy day. We had married quietly two months before, but this was the day of our wedding party. We had hired Hertford House, a grand building five minutes from our London flat that had become a gallery, the Wallace Collection. We loved wandering its rooms. It was left to the nation by the family of Sir Richard Wallace, the illegitimate son of the fourth Marquess of Hertford, and contains a beautifully eclectic collection of Old Masters, antiques, furniture, and porcelain.

We invited 100 family and friends. Kath’s mother Angela and a merry troop of her Liverpool relatives were there. All five of my grown children came from New York, with spouses and partners, and my two grandchildren, Samantha and Dylan. Dylan, aged three, looked uncomfortably splendid in a blue suit and bright yellow tie.

But that morning’s edition of The Guardian had taken the shine off things. ‘Revealed: Murdoch’s £1m Bill For Hiding Dirty Tricks’ said its front, across two page-wide decks. The lead paragraph was chilling: ‘Rupert Murdoch’s News Group Newspapers has paid out more than £1m to settle legal cases that threatened to reveal evidence of his journalists’ repeated involvement in criminal methods to get stories.’

The biggest payout, it said, had been a settlement in 2008 of £700,000 to Gordon Taylor, chief executive of the Professional Footballers’ Association, who had received the money after signing a ‘gagging’ clause preventing him from talking about the case.

A photograph of Rupert, Rebekah Brooks, Andy Coulson, and myself dominated two pages of further coverage inside. We were sitting solemnly in the pews for a memorial service at St Bride’s, Fleet Street’s parish church. I would grow sick of that image; it became the default photo used to illustrate scores of stories.

The Guardian quoted an unnamed police source saying that officers had found evidence that reporters hacked into thousands of mobile phones, including those of cabinet ministers, MPs, celebrities, and sports stars. It ran photos of the actor Gwyneth Paltrow, the cabinet minister Tessa Jowell, the TV chef Nigella Lawson, the mayor of London Boris Johnson, and the comedian Lenny Henry.

The first person to greet Kath and me at the Wallace Collection was not an invited guest. Jon Craig of Sky News was there with a camera crew, looking for an interview. Craig was the first of many, and the media cluster that grew through the evening discouraged some guests from attending. Andy Coulson sent his regrets by text, and Tessa Jowell phoned Kath with her apologies.

Our guests included politicians and party operatives from Labour and the Conservatives, and friends from most Fleet Street newspapers. They were enjoying themselves — politicians and journalists take delight in a crisis when they are merely witnesses. Senior politicians in particular live in a minefield of catastrophes waiting to happen; their glee at the troubles of others must be a relief reflex that comes with surviving another explosion.

It was a worrying article, but The Guardian had stalked News Corp for years and had overplayed other stories against the company. This latest was a dramatic read, but looked thin and depended heavily on unnamed sources. I was also sure that someone would have told me about such a massive payoff. Rebekah Brooks, there that evening, agreed. No one had told her, she said, and she doubted it was true.

But Kath was not so ready to dismiss it. ‘Even if The Guardian has jazzed it up, they can’t have invented the whole story. They would have to be sure about the details of a payment as huge as that,’ she said.

As I prepared to make my speech, she took my arm, kissed my cheek, and whispered: ‘No jokes about this — it isn’t funny.’

The Guardian story ran for three days and the hacking saga came back to life in the news. Parliamentary hearings were convened, and politicians and critics accused News International of a cover-up. But Scotland Yard decided not to reopen its investigation. The assistant commissioner John Yates said: ‘This case has been the subject of the most careful investigation by experienced detectives … No additional evidence has come to light. I therefore consider no further investigation is required.’ The Director of Public Prosecutions, Sir Keir Starmer QC — later a Labour MP — agreed with Yates.

Andy Hayman, who was assistant commissioner in charge of counterterrorism when the palace made its complaint, wrote in The Times about the original 2006 investigation: ‘This was not the time for a half-hearted investigation — we put our best detectives on the case and left no stone unturned as officials breathed down our neck.’

It seemed conclusive. But there was something I didn’t know, and that Yates and Hayman did not at that time reveal. When the police had searched Mulcaire’s home, they had taken away and stored 11,000 pages of notebooks and papers in bin bags. They had never properly examined them. This turned out to be a big mistake. It might have been incompetent, but I don’t believe it was sinister. The anti-terrorist police assigned to the job believed they had more important things to do, and it’s likely they made a time-and-cost decision based on the logic that the jailing of Goodman and Mulcaire would have brought phone-hacking to a dead halt; the job of police forces is to prevent crime and that doesn’t necessarily mean catching every criminal. However, in 2012 when events required them to take another look, Mulcaire’s papers provided abundant evidence of hacking, and led to dozens of civil cases and several criminal prosecutions.

But in July 2009, in the face of an emphatic police response, and without solid evidence against others at the newspaper, the story receded. But the number of civil court actions mounted, with more and more people suspecting their phones might have been hacked.

The Guardian, meanwhile, had stalled in its effort to find a smoking gun inside News International. With no new leads, editor Alan Rusbridger phoned Bill Keller, executive editor of The New York Times, hoping to excite his interest.

Rusbridger’s call was well timed. The long-running war between News Corp and The New York Times was at its hottest. Days before, we had announced that The Wall Street Journal would go into direct competition with The New York Times by launching a daily section called ‘Greater New York’.

Rupert enjoyed battling The New York Times and having fun at the expense of its chairman, Arthur Sulzberger. His admired father and predecessor had been nicknamed ‘Punch’ by his staff; Arthur was known as ‘Pinch’.

Psychological warfare between News Corp and The New York Times had gone on for decades. The New York Post took constant personal shots at ‘Pinch’. Even The Wall Street Journal joined in by illustrating, with part of Sulzberger’s face, a story about ‘men with feminine features’.

The new ‘Greater New York’ section in The Wall Street Journal was a direct assault on The New York Times when it was at its weakest. The 2008 recession had cost the newspaper millions in advertising.

Keller seized the opportunity that Rusbridger’s call gave him. Within three days, three staffers from The New York Times arrived at The Guardian’s London office. The New York Times was cutting costs elsewhere, but these reporters were given all the time they needed to get their story. It was almost six months before it appeared. It wasn’t in the main paper, but in its Sunday magazine — giving it more room for detail and speculation. The cover, dated 1 September 2010, was presented in tabloid style with a vivid red slash of a headline across a photograph of Princes William and Harry: ‘Tabloid Hack Attack!’

The paper had spoken to a dozen News of the World reporters who claimed that the hacking of mobile phones was pervasive — and that Coulson knew about it. It also named three journalists, giving the report greater strength than the nameless quotes that had appeared in The Guardian. The hacking story had legs again — and this time it was running on both sides of the Atlantic.

The Metropolitan police held their ground, despite calls from politicians for a judicial inquiry into the mishandling of the investigation. ‘We remain of the view that no new evidence has emerged to justify re-opening this inquiry,’ a police statement said. ‘Independently, the Crown Prosecution Service, leading counsel, and the director of public prosecutions reached the same conclusion.’

But this time the inaction did not last long. By the end of 2010, as News International found itself fighting further civil actions, the company began its own internal inquiries. This was when William Lewis, News International’s managing director, found the ‘toxic emails’ that had been lost at Harbottle & Lewis.

Lewis’ discovery flipped a switch within the company. Some at News International appear to have jumped too eagerly to the conclusion that these emails had been covered up in 2007 by the then-management. I realised later that the emails must be the ‘internal report’ someone from News International had inventively told The Guardian I had seen. I was baffled that no one among News International’s team of diligent investigators appears to have questioned Harbottle & Lewis about them. No one asked me if I were aware of them; I would have said flatly that I was not. Without discussing them with me, News International’s investigators handed these explosive emails to the police. The Met, meanwhile, had remembered the bin sacks of papers it had removed from Mulcaire’s home, and reopened its inquiry in the face of ‘significant new evidence’. In the following months, Ian Edmondson, the News of the World head of news, was suspended; Andy Coulson quit his job in David Cameron’s office; and three News of the World journalists were arrested on suspicion of hacking.

By now, the crimes of phone-hackers — and the misery of their victims — were becoming lost in a drama that encompassed political parties, police, media companies, and a band of baying crusaders demanding new laws to keep the press in check.

But the most ferocious attacks on Rupert and News Corp came not from the victims of hacking, or from the police, but from the Brownite faction of the Labour Party.