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News Int's cover-up is unravelling: Watson -

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British Labour MP Tom Watson says the investigating committee will be examining the evidence of two
law firms which have accused News International of lying about their actions.

Transcript

TONY JONES, PRESENTER: Joining me to discuss that is the man who has pursued the News of the World
hacking affair most vigorously as a member of the Commons Culture, Media and Sport Committee,
British Labor MP Tom Watson.

Thanks for being there.

TOM WATSON, BRITISH LABOUR MP: Hi.

TONY JONES: Cracks are opening up all over the place in the dam wall which has protected the
Murdochs. Do you expect it to hold up or burst over them?

TOM WATSON: Well I think it already bursting over. What we're seeing is the unravelling of a
cover-up.

It took two years to expose phone hacking and now the focus of parliament is on where the cover-up
is. You know, my committee, we've got a very narrow remit; we're just seeking to find out where
parliament was misled and it's already - we're already in a Byzantine game trying to find that out.

The reason we invited James and Rupert Murdoch the first time to our committee was because James
admitted the company had misled Parliament in our previous inquiry, and there are now allegations
that Mr Murdoch himself misled it when he came to give us evidence, so we're going to get to the
bottom of it.

TONY JONES: OK. Well, we'll go through this systematically.

There are two prominent law firms which News executives claimed in parliamentary hearings had done
serious investigations into whether or not there'd been phone hacking at the paper and these law
firms were used to defend the paper in the suggestion that these private companies had basically
given them a clean bill of health.

How serious is it for the Murdochs' claims that both of these major law firms are now redacting or
changing their statements?

TOM WATSON: Oh, it's pretty serious. Harbottle & Lewis came in for much public criticism over the
last few weeks. Their submission to us was very detailed. They gave a good, comprehensive account
of themselves.

Indeed they described Rupert Murdoch's testimony to the committee as at various points
self-serving, inaccurate and misleading. And they make the claim that you couldn't possibly draw
the conclusion that they were investigating hacking and giving them a clean bill of health.

Their remit was very narrow.

And then perhaps more significant is the firm Burton Copeland that the company used to justify
their position in the 2009 inquiry. They parted company with News International yesterday or the
day before. I think that's quite significant.

I don't know why yet, but we'll get to the bottom of it, and I would imagine that my committee will
be asking them for the terms of reference of the reports that they did back in 2007 when the
hacking - when they were trying to deal with the hacking inquiry the first time.

So, very, very serious for News International.

TONY JONES: Put simply in both cases, the law firms did not do the investigation which the News
executives had claimed they'd done. Is it as simple as that?

TOM WATSON: Pretty much, yeah. They say they had a narrow remit and that the company shouldn't be
hiding behind the work they did. And, you know, we are now going to find out exactly what they did
on behalf of the company and see whether the original defence is accurate or not.

TONY JONES: Now you just pointed it out yourself, but Rupert Murdoch's line in Parliament was that
Harbottle & Lewis were taken on, "To find out what the hell was going on." Is that clearly now not
a true statement?

TOM WATSON: Oh, I think so.

I mean, Harbottle & Lewis say they think Rupert Murdoch was confused and strongly suggested that
they thought he was referring to the other company, Burton Copeland. I'm sorry to your viewers who
are having to listen to lots of solicitors' names here, but they - so we will be talking to Burton
Copeland pretty shortly to find out what their view is, but given that they parted company with
News International in what seemed quite unusual circumstances this week, I would imagine that
they've got quite a lot to say as well.

TONY JONES: But if he was talking about either of them, it now appears that both of them, let's
say, are saying they didn't do what the Murdochs and what their executives have claimed they did.
So, do you now see that as part of a cover-up? Do you think that you were misled ...

TOM WATSON: Oh, yes.

TONY JONES: ... over this by - going right up the top to Rupert Murdoch?

TOM WATSON: Yes, I think we were misled and I think in the original inquiry the company went to
extraordinary lengths to prohibit the committee from finding out what was going on.

In our original inquiry we found them guilty of collective amnesia and said that we thought it was
inconceivable that others were not involved in phone hacking. That now certainly appears to be the
case. And there's an old maxim in politics that it's not the - it's always the cover-up that sinks
you, and I think this company is in very serious trouble now.

TONY JONES: Now it goes right to the top. I mean, before it was - you were able to show that
various executives had effectively lied to the parliamentary inquiry. What are you concluding or
what can you conclude about Rupert and James Murdoch? I mean, could they now claim to have simply
been misled, as Rupert Murdoch said, by the people he should never have trusted in the first place?

TOM WATSON: Well Rupert Murdoch was not in possession of the details when he gave evidence to us.
He was quite a poor witness. I think James Murdoch is potentially in more serious trouble because
we've received written submissions from the former editor of News of the World and the former
lawyer for the paper contradicting his oral evidence.

And he also conceded in his submission to us that in the negotiations around payment to a hacking
victim, a guy called Gordon Taylor who runs a professional footballers' association, when he gave
his oral evidence, he said a confidentiality clause was not part of the negotiations over payments
and he had to concede that that was the case in his written submission.

So when we talked to the former editor and lawyer in early September, we're going to be questioning
them in some detail about what they told James Murdoch, and then I think it's highly likely we'll
be inviting him back to give evidence himself, probably in October.

TONY JONES: Will you invite both James and Rupert Murdoch back, or is it the detail that James gave
in the hearings the key to this?

TOM WATSON: Well we're in the detail at the moment, so I think the committee were minded to
probably just invite James Murdoch, but, you know, this is a very fast-moving story in the UK as
more revelations come out. It might well be that we have to invite Rupert Murdoch back, but that's
some way off at the moment I would say.

TONY JONES: Let's go to other - one of the other extraordinary things was the release of this
newly-discovered Clive Goodman letter that absolutely proves that a whole range of News executives
lied to parliament, does it not?

TOM WATSON: Well if Goodman is accurate - and we should remember that he was a convicted criminal
and he wrote the letter a month after coming out of jail, so the company have got some
justification to push back a bit on that, but if it's accurate, it shows that the entire foundation
for their defence over the next four years is blown apart.

They said that the phone hacking was the work of a rogue reporter and they also said they took a
zero tolerance to wrongdoing, and if Goodman's letter is accurate it shows both those statements to
be inaccurate and therefore the hours of testimony that their executives gave us don't amount to a
hill of beans.

TONY JONES: I think it's true to say that the CEO - the then CEO of News International, Les Hinton,
for example, stuck with the rogue reporter line two days after receiving that letter.

TOM WATSON: Yeah, absolutely remarkable. And here's the sequence of events: they pay Goodman, a man
who'd been to jail for hacking whilst employed at the paper, a year's salary as a pay-off and sack
him. He appeals it. Hinton comes to the committee and says, "We think he's a rogue reporter," and
then six months later they pay him a further payment of 153,000 pounds.

I don't know an employment tribunal in the United Kingdom that's ever awarded that kind of money
for someone who's been sacked for gross negligence for conducting crimes whilst at work, and so I
suspect that Les Hinton will have some very important questions to answer to us as well.

TONY JONES: And there's plenty of other material in the Clive Goodman letter which I imagine will
turn into questions for all these executives, and especially the notion in the letter that the
whole business of phone hacking was widely discussed in Andy Coulson's editorial meetings when he
was the editor of the paper.

TOM WATSON: If that's actually the case then clearly there'll be some very nervous executives at
the company this week.

It's a very, very serious allegation and frankly the committee found it remarkable that they didn't
know about that earlier, given that we'd been asking for documents for four years.

So I would imagine that the police would be - they've already interviewed Goodman again and they
probably want to found to out his version of events when it comes to the criminal inquiries.

TONY JONES: How significant was it from your point of view that News, even at the late stage of
handing over this letter, tried to censor key elements of it, including that particular line about
the editorial meetings? As it turns out, you had an uncensored version to compare it against.

TOM WATSON: Yes, well luckily Harbottle & Lewis, the solicitors firm, were less discreet than News
International.

But, you know, it wasn't a surprise to me that they'd try to conceal those words from the committee
because they'd been trying to conceal the whole story for four years.

But it is revealing for them and I'm sure they've got very red faces. Remember, they're now saying
they've crossed a line, they've turned over a new leaf, they're fully co-operating with the police
inquiry and they're trying to get to the facts and the truth, and lo and behold, even when
Parliament is looking at - conducting the inquiry on how they misled parliament, they try and
conceal some key pieces of information. And I'm sure that whoever thought about doing that will be
a little bit more nervous today than they were last week.

TONY JONES: Now, it is in a way the classic form of investigation, the pyramid investigation, where
you start at the bottom and you work up towards the apex of the pyramid.

Now, close to the apex of the pyramid you've got the former very senior executives - you mentioned
them earlier - Les Hinton and Tom Crone, who was the chief legal officer. They're both publicly now
stating that James Murdoch misled the parliament. Is that going to be really crucial evidence when
they come back and give it, presumably as they will stick to that story in the parliament?

TOM WATSON: Well, it's Myler and Crone who've contradicted James Murdoch. And, yes, I do think that
was significant.

TONY JONES: Myler, I beg your pardon - yes, Myler, not Hinton.

TOM WATSON: Yeah, the former editor, yeah. Yes, it is significant because they're essentially
saying that either deliberately or inadvertently, James Murdoch misled parliament himself. And it
might also be important in future criminal inquiries, which is why I've got to be very careful with
what I say.

You know, paying such a huge amount of money to buy the silence of a victim of crime is frowned
upon in UK courts and I'm sure that the police will be reading those words with interest as well.

TONY JONES: We should add, I suppose, that James Murdoch took up his post at News International
after the Goodman letter had been received. Is it conceivable that he didn't - simply didn't know
about it?

TOM WATSON: Yes, it is conceivable. He says he didn't, but, I mean, the significance of this is the
decision to make payment to Taylor was decided when police disclosure of voicemail transcripts was
given. And so, you know, you would imagine that James Murdoch, given that he's chief executive,
would want to understand why all this money is going out the door and dig around a little more.

And if anyone had given him the files into the history of the case, I'm pretty certain the Goodman
letter would be near the top.

TONY JONES: Tom Watson, it's fascinating to hear someone so close to this unfolding investigation
spell it out for us. We thank you very much for being there. Hopefully we'll get a chance to do it
again as it unfolds further. Thank you.

TOM WATSON: Thank you.