James Murdoch: how did he miss the phone hacking smoking guns?

The UK parliament's investigation into phone hacking at Rupert Murdoch's News of the World is three months past its due date, with the the Culture Committee's members said to be deeply divided over how hard James should be whacked. This week, Paul Barry has been exploring what James Murdoch knew – or didn't know – about phone hacking during his time at News of the World. Today he presents the final installment in a three-part series.

Even if James Murdoch knew nothing about the extent of phone hacking at the News of the World when he arrived in December 2007, he soon discovered it was not just royal correspondent Clive Goodman who was responsible, as he and News International kept claiming until 2011.

In May and June 2008 James authorised a £700,000 payout to Gordon Taylor of the Professional Footballers' Association, who had been suing the News of the World since late 2006.

In talks about this settlement, Murdoch was allegedly shown or briefed on the contents of three key documents, which indicated that phone hacking at the paper went way beyond what he and News had admitted to.

You can think of these documents as three smoking guns. Yet James claims he never picked them up.

Smoking gun No. 1: the 'For Neville' email 

The first was the notorious "For Neville" email, which revealed that two NoTW reporters—Ross Hindley and Neville Thurbeck—had received transcripts of 32 of Taylor's phone messages, hacked by the NoTW's pet private investigator Glenn Mulcaire.

It need hardly be said that these journalists did not work for Goodman. Nor was Taylor a member of the Royal Family. So it was clearly not just one "rogue reporter" doing the hacking.

Murdoch says in his latest letter to MPs: "I was not shown a copy of the email at the time". He has previously told MPs on oath he was not even "aware" of the email's existence in 2008.

Smoking gun No. 2: journalists were 'intimately involved' 

The second smoking gun offered even more explicit warning that hacking was widespread. It came in the form of a legal opinion provided to News of the World lawyer Tom Crone by Michael Silverleaf QC on 3 June 2008, which concluded that at least three NoTW journalists were "intimately involved in Mr Mulcaire's illegal researching", that a "culture of illegal information access" existed at the paper, and that it could be "extremely damaging" if Taylor's case went to trial.

Murdoch says in his letter to MPs: "I never saw the opinion and nor, most importantly, was I aware of Mr Silverleaf QC's comments about widespread wrongdoing".

If this is true it is mind-boggling. As Tory MP Philip Davies told James when he appeared before the committee last November, "I find it incredible, absolutely incredible, that you didn't say, 'How much? Half-a-million pounds? Let me have a look at that.' I cannot even begin to believe that course of action is one that any self-respecting chief executive, any self-respecting chief operating officer could possibly take with so much of the company's money and reputation at stake."

The MPs' disbelief that day in the face of much of Murdoch said was almost palpable.

Crone told the Leveson inquiry on oath in November that he took "a copy and probably spare copies" of Silverleaf's legal opinion and the "For Neville" email into a meeting with James Murdoch on 10 June, at which it was decided to pay Taylor £700,000 to avoid the case going to court. He added: "I can't remember whether they were passed across the table to him but I'm pretty sure I held up the front page of the email. I am also pretty sure he already knew about it ... in that it had been described to him already."

Colin Myler, News of the World editor at the time, who was also in the meeting, backed Crone's account, telling Leveson he had no reason to doubt Crone's evidence, and adding, "I'm pretty sure that he would have had ... any relevant document that he felt that James may have asked to see or to be referred to."

Neville Thurbeck, the NoTW's former chief reporter, also corroborated Crone, telling Labour committee member Tom Watson MP that the lawyer had told him before the June 10 meeting that he intended to show James the "For Neville" email, and reported having done so afterwards.

Even if one disbelieves the testimony of these three men and takes James's word against them, it is hard to believe Murdoch could be so incurious and so dim as to fail to discover what warnings the email and legal opinion contained.

Moreover, if he really knew nothing of Silverleaf's judgements and the damning implications of the "For Neville" email, why did he agree to pay Taylor £700,000, when the lawyers were telling him damages would almost certainly be less than £250,000?

But the June 10 meeting was not James's only opportunity to find out that his single "rogue reporter" defence was a lie.

Smoking gun No. 3: 'it is worse than we feared' 

Three days earlier, Myler had sent Murdoch another smoking gun in the form of an email, asking for a meeting and briefing him on the Taylor case. This began, "Unfortunately it is worse than we feared".

Attached to his message was an email chain involving Tom Crone, Julian Pike (a second lawyer acting for News), and Taylor's solicitor, Mark Lewis, who has represented scores of victims. Lewis was warning that Taylor intended to prove that hacking was "rife" at the NoTW and the company had misled parliament. Crone warned of a "nightmare scenario" in which Taylor's legal adviser Joanne Armstrong would sue, because her phone had also been hacked.

So how did Murdoch fail to pick up any signals from this barrage?

He tells MPs in his latest letter that he received the email on his Blackberry on Saturday afternoon, replied in just over two minutes and never read beyond the request for a meeting.

So James is his own version of the Three Wise Monkeys: See no evil, hear no evil, read no evil.

One year later, in July 2009, The Guardian revealed that News had secretly paid £1 million to Taylor and two other victims to keep the cases out of court, and cited two police sources who claimed that Mulcaire had hacked into thousands of victims' phones for the NoTW.

James and News International scoffed at the story. But soon more hacking victims began suing for damages, whereupon the denials and hush money turned into a full-blown cover-up. In November 2009, the group ordered its security staff to "eliminate" any emails "that could be unhelpful in the context of future litigation".

A year later, according to court documents filed by hacking victims, News also destroyed "all computers used by its journalists", including eight used by journalists involved in hacking.

In January 2011, it deleted all emails on News International's archive system up to 31 September 2007.

Some of these actions were reviewed by Justice Vos in London's High Court this January, after News agreed to settle 37 of the hacking cases "on the basis that senior employees and directors of News Group Newspapers knew about the wrongdoing and sought to conceal it by deliberately deceiving investigators and destroying evidence".

Commenting on the settlement, Justice Vos told News he had seen evidence, which raised "compelling questions about whether you concealed, told lies, actively tried to get off scot free".

Vos then read out several court documents claiming News had "put out public statements that it knew to be false", that it had "deliberately deceived the police" and that it had destroyed evidence of wrongdoing, including "a very substantial number of emails" and computers.

News did not admit these allegations but agreed to pay damages to the 37 victims "on the basis of the facts alleged".

So where was James in all of this? And was it all still going on without his knowledge?

The answer is he was CEO of News International with direct responsibility for the newspapers until June 2009, when Rebekah Brooks took over, and he was executive chairman thereafter. It is hard to believe he was ignorant of what was being done in the group that he ran. But so far, there has been no direct evidence of his involvement in the cover-up. One London newspaper suggested in November that police wanted to interview Murdoch, but they have not yet done so.

If emails and computers have been destroyed, it would perhaps be surprising if there were any documents left that might implicate executives.

Nevertheless, police clearly believe they have direct evidence of Brooks's role. Last week, she and five others, including News International's Director of Security were arrested on suspicion of conspiracy to pervert the course of justice. Her husband, Charlie Brooks, an Old-Etonian racehorse trainer and friend of the British Prime Minister, David Cameron, was also arrested, following the discovery last July of a laptop, phone and documents dumped in a rubbish bag near the Brooks's home.

James makes no mention of the cover-up in his letter to MPs.

Nor does Murdoch's letter address the surveillance of hacking victims' lawyers and members of the House of Commons committee by a private investigator hired by the News of the World, which also took place on his watch, in 2010 and 2011.

Nor does Murdoch's letter address the surveillance of hacking victims' lawyers by a private investigator hired by the News of the World, which also took place on his watch, in 2010 and 2011.

So what will the House of Commons committee say about James when they sift through all this evidence? Will they conclude that he misled parliament?

Whatever they finally write, it is hard to see it being anything but damning and damaging to James's future career prospects.

But will they conclude that he has lied? And will they say, as others like Chris Bryant MP (himself a hacking victim) have said, that the cover-up went right to the very top? Watch this space. It's going to be fascinating.

You can read part one and two of Paul Barry's series on James Murdoch here and here.