>> news corporation chairman and ceo rupert mudoch testified what he knew about phone hacking. he was joined by his son, james, who heads news international, his u.k. operation, and rebecca brooks, the former chief executive of news international. this hearing is a little more than four hours. [inaudible conversations] >> our understanding was that we would be afforded the opportunity to make an opening statement. we think, and we prepare it on that basis, and we would like the opportunity to make that statement. would you allow us? >> the committee discussed this earlier. we feel we have a lot of questions, and we wish all you have to say comes out in the course of questioning. if you feel that's not the case, then you can make a statement at the end. excuse me, could owe not have that, please? >> in this case, we would like to submit the statement in writing if that pleases you. >> that would be perfectly accept l. >> thank you, mr. chairman. >> can we please remove those people holding up the signs. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> after that brief interruption, we will begin. good afternoon, everybody. this is a special meeting of the elect committee, a follow-up to the inquiry which the committee held in 2009 into privacy and libel during which we took evidence on the extent of phone hacking which had taken plaices in news of the world. in our reports last year, we stated that we thought it was inconceivable that only one reporter had been involved. in the last ten weeks, it's emerged that not only evidence has come out, which i think has been vindicated the conclusion, but also abuses have been revealed which have angered and shocked the entire country. it's also true the parliament has been misled. we are very conscious upon the committee that there's an ongoing police investigation and possible criminal proceedings to follow, and this committee would not wish to jeopardize that; however, we are encouraged by the statements that have been made by all the witnesses this afternoon that they wish to cooperate with the committee and help us to establish the truth, so as the first witnesses this afternoon, can i welcome the chairman and chief executive officer of news corp., rupert mudoch and the chief executive for news international, james mudoch. thank you for making yourselves available. >> thank you, mr. chairman. we're more than prepared to. >> thank you. perhaps i might start with mr. james murdoch. you made a statement on the 7th of july in which you stated that the paper had made statements to parliament without being in the full possession of the facts, and that was wrong. you essentially admitted the parliament had been misled in what we were told. can you tell us to what extent we were misled and when you became aware of that? >> mr. chairman, thank you very much, and i'd like to say as well how sorry i am and how sorry we are to particularly the victims of illegal voice mail interceptions and their families. it's the matter of great regret of mine, my father's, and everyone at news corporation and these are standards, these actions do not live up to the standards that our company aspires to everywhere around the world, and it's our determination to both put things right, make sure these things don't happen again, and to be the company that i know we've always aspired to be. as for my comments, mr. chairman, in my statement, which i believe was around the closure of the news of the world newspaper -- >> before you get to that, i want to say one sentence. this is the most humble day of my life. >> thank you. >> the statement around the closure of the news of the world newspaper, where i stated that we -- the company had not been in full possession of the facts when certain statements were made to this committee was referring to the e jeer gens of new facts -- emergence of new facts that largely came about in 2010 as the due process as a number of civil trials reached their point where document disclosure and evidence disclosure made it apparent to the company and to myself at that time that, indeed, there was reason to believe that potentially more people had been involved in news of the world illegal voice mail interceptions from before. that was new evidence or new information at the time that post dated the 2009 hearings, and that is what i was referring to. subsequent to our discovery in the information at the end of a civil trial in january 2010, i believe service the sienna miller case, the company immediately alerted individuals involved, alerted the police, and we started on that basis, the investigation that is now underway, and since then, the company has admitted liability to victims of illegal voice mail interceptions, has apologized unreservedly, which i repeat today to those victim, and the company set up a compensation to a higher court judge to deal with legitimate claims coming from victims coming from those terrible incidents of voice mail interception, and that was taken when new evidence o merged -- emerged. it was those facts at that point, still in the future, and it was in the due process of that civil trial, civil litigation process that that evidence really emerged for us, and we acted and the company acted as swiftly and transparently as possible. >> when this committee took evidence in 2009, we heard from the managing editor, legal manager of news international top crime, and news of the world editor, the former editor, andy corson, and the chairman of news international, all of them told us that there had been a thorough investigation, no evidence had been found that anybody else was involved. clearly, that's not correct. were any of them lying to this committee? >> the -- mr. chairman, the company relieded -- relied on three things for a period of time up until the new evidence emerged. the company relied on a police investigation in 2007, and this was before we went back to the area, this is before i was involved. i became back involved in news corporation and news international at the end of 2007. in the 2007 period, there was a police investigation, successful prosecutions were brought against two individuals, and the editor of the news of the world resigned, and the company relied on the police having closed the investigation and repeated assertions there was no new evidence for them to reopen the investigation. the company relied on the pcc, which had had a report that had said there was nothing more to this at the time, and the company relied on the legal opinion of outside council that was brought in related to those matters who with respect to their review said there was no opinion of clear conditional legality other than the two individuals involved before, and the company relied on those facts and for the company in 2008 and 2009, it was not -- it was not clear that there was a reason to believe that those matters were anything other than settling those matters in the past. >> is it your testimony to this committee, those who gave up evidence in 2009, none of them knew, at that time, what had been going on? >> i do not have direct knowledge of what they knew and what time, but i can tell you that the critical new facts and the company saw them really emerge in the production of documentary information or evidence in the civil trials at the end of 2010, and the duration from 2008 until -- or 2007 until the end the 2010, and the length of time it took for that to become clear and for the real evidence to be there is a matter of deep frustration. mine, i have to tell you, i know and i sympathize with the frustration of this committee, and it's a matter of real regret that the facts could not emerge and could not be gotten to my understanding faster. >> well, you made clear that it is the case that the information we were given was incorrect. how -- have you established who, as well as clyde goodman, was goffed in phone hack -- involved in phone hacking. >> i'm sorry, mr. chairman, can you repeat that? >> who was involved in the phone hacking at news of the world? >> i think you made it clear, mr. chairman, there's been a number of arrests of former news of the world employees. these are matters for current criminal investigations, and i think it's understandably difficult for me to comment in particular around some of the those individuals. >> have you carried out your own investigation since the discovery of this information to find out the extent of involvement in phone hacking in the news of the world? >> we have established -- we have established 5 group in the company cooperating very closely with the police on their investigation. their investigation is broad with respect to journalistic practices and in particular journalist tick practices at news of the world, and the policy and direction the company has given them is to cooperate fully and transparently with the police, so provide information in evidence that the company believes is relevant to those investigations, sometimes proactively, sometimes in response to those questions, and, again, i think the very fact that the provision of the new information to the police in the first place when there was no police investigation ongoing that then led to, in part, the reopening or this new investigation being established. i hope it can be testament to some proactive action and transparency with respect to getting to the right place in terms of finding out the facts of what happened, understanding all of the allegations that are being -- that are coming in, and moving forward to aid the police in the successful completion of the important and serious work that they are doing. >> okay. the departure from your company in the recent few days of -- [inaudible] it's not because any of them have knowledge of phone hacking. >> there is -- i have no knowledge, and there is no evidence that i'm aware of that mrs. brooks or mr. henson or any of those executives had knowledge of that, and assertions, mrs. brooks and her knowledge of things to me has been clear, and nonetheless, those resignations have been accepted but it's important on the basis there's no evidence today that i have seen or that i have any knowledge of that there was in impropriety by them. >> you repeatedly stated that news corporation has a zero tolerance of wrong doing by employees; is that right? >> yes. >> in october 2010, did you still believe it to be true when you made your speech and you said, "let me be clear. we will vigorously pursue the truth, and we will not tolerate wrong doing." >> yes. >> if you were not lying then, somebody lied to you. who was it? >> i don't know. that is what the police are investigating, and we are helping them with. >> you acknowledge you were misled? >> clearly. >> can i take you back to 2003? are you aware that in march of that year, rebecca brooks gave evidence to this committee admitting paying police? >> i am now aware of that. i was not aware at the time. also aware that she amended that very quickly afterwards. >> i think she amended it seven or eight years afterwards. >> sorry. >> did you or anyone else at your organization investigate this at the time? >> no. >> can you explain why? >> i didn't know of it. i'm sorry, but i'm going to say something, and this is not an excuse, maybe it's an explanation. the news of the world is less than 1% of our company. i employee 53,000 people around the world. we great and ethical and distinguished people, professionals, and perhaps i'm -- i'm sad watching and appointing people whom i trust to run those divisions. >> i do accept you have many distinguished people who work for your company. you ultimately are responsible for the corporate governance of news corporation, so what i'm trying to establish is who knew about wrong doing, and what was involved at the time. if i can take you forward to 2006, when clyde goodman was arrested and suns e-subs -- subsequently convicted of intercepting voice mails, were you aware of that? >> when they were convicted. >> what did news international go prior to to the arrest to get to the facts? >> we worked with the police on further investigation, and e -- we appointed to investigate it further. >> let me finish the line of questioning, and i'll come to you. what did you personally do to investigate that after mr. goodman went to prison? you were obviously concerned about it. >> i spoke to him. he told me about it. >> okay. can i ask you 2008, another two years. why did you not dismiss news of the world chief report following the mosley case. >> i had never heard of it. >> okay. despite the judge making clear that phil set out to -- [inaudible] >> i didn't hear that. >> a church made it clear that they sent out blackmail to two of the women involved in the case. >> that's the first i heard of that. >> none of your u.k. staff through the serious wrong doing even though the case received widespread media attention. >> maybe he can answer that in more detail. >> i'll come to your son in a minute. despite the blackmail resulting 234 a 40 year prison sentence, nobody in your u.k. company brought this fact to your attention? >> the blackmail charge, no. >> do you think that might be because they knew you would think nothing of it? >> no. i can't answer. i don't know. >> do you agree with mr. justice eddy saying the lack of action discloses a remarkable state of affairs at news international? >> no. >> mr. murdoch, a judge found a chief reporter guilty of blackmail. it was widely reported. he said it was a remarkable -- >> [inaudible] >> it was a civil case. were you aware that news international commissioned an investigation and national e-mails? were you aware that news international commissioned an investigation into news international e-mails by the solicitors firm? >> yes. i didn't apply them, but i was told of it happening. >> you claimed in a "wall street journal" that they made a major mistake. can i ask what mistake you were referring to? >> i think maybe that's a question, again, for james, but there was certainly -- well, we examined it, re-examined that, we found things which we immediately went to counsel with to get advice on how to present it to the police. >> in their written response to this committee's questions, are you aware that news international stated that both john chapman and daniel cloke reviewed these before forwarding them? >> no. >> so nobody in the company told you that some of your executives had reviewed the e-mails -- >> i thought -- i was under the understanding that everything had been sent to them. >> okay. you are aware that lewd mcdonald qc reviewed the e-mails again on behalf of the international, are you not? >> yes. >> you're aware that he stated he found out -- >> an aid reported the whole bullet. >> he did? >> to news corporation. >> you're aware he stated to the board that he found evidence of indirect hacking breaches national security and then evidence of serious crimes in the firm? >> he did, indeed. >> i can address these in details if you would allow me. >> i'll come to you, but it's your father who is responsible. i'd like to ask what he knew, but i will come back to you. who was aware of the findings at news international? >> went to the senior officials of news corporation. certainly, the top legal officer. >> tom crown or -- >> no. >> were you -- >> they were not the top legal officers. >> who were the top legal officers? >> chapman was the leader at international, and mr. crone was the head of legal affairs at news group newspapers. >> and were you informed about the findings by your son or by rebecca brooks? >> i forget. i suspect it was my son. i was in contact with them both. >> okay. when were you informed about the payments made to gordon taylor and max clifford? >> no. >> you were not nmpled? -- informed? >> no. >> at no point you were told they were made payments? >> not that i heard, sir. >> okay. you never informed the chief executive at news corporation -- >> can i answer the questions now? >> i want you to tell me if you informed your father that you authorized payments to gordon taylor as a result of him being a victim of a crime? >> the settlement with mr. taylor and happy to address that matter in some detail if you'd like. my father became aware after the settlement was made in 2009, i believe after the confidential settlement had become public and the newspaper reported on the out of court settlement afterwards, but please understand that the settlement they out of court, and out of court settlement of the civil claim of that nature and with that -- of that quantum is something that normally in a company our size, the responsible executives in the territory of the country would be authorized to make, and that's the way the company function # and below approval thresholds to go to my father. >> there are other questions asking specific questions about the issue. i'll go back to your father, if i can. mr. murdoch, at what point do you find out criminality was endeemic at -- endemic at news of the world? >> "endemic" is a very wide ranging word, and i also had to be careful not to prejudice the cause of justice that is taking place now. that has been disclosed. i became aware as it became apparent. there were those two, and then i was absolutely appalled when i heard of the case, early two weeks ago, eight days before i saw him, who -- [inaudible] >> did you read the last report into the matter referring to the collective amnesia of those who gave evidence to our committee? >> i have not heard that, but -- >> nobody -- >> i don't know the particular charges. >> parliamentary inquiry found your senior execkives in the -- executives in the u.k. guilty of amnesia, and it was never brought to your attention. i don't know why you think that's not very serious. >> you're not saying amnesia. you're really saying lies. >> well, we find your a bit guilty of collective am amnesia. i would have thought someone would have liked to bring that to your attention, that it would concern you. did they forget? >> no, no. >> okay. what has been obvious to most of the observers from the summer of 2009 that phone hacking was widespread. you knew for sure in january of this year that the one rogue reporter line was false; is that right? >> i forget the date. >> why was edmondson the only one to leave news of the world last january? >> mr. watson, we have given all our files and all our knowledge and everything to the police. they have not given us the diaries, so we do not know what was in there, and that there was a page which appeared to be addressed to him. again, that's my son's -- >> mr. chairman, perhaps it would be helpful of the committee if you'd like to go through any of the particular detail around why the decisions were made by the management team at news international and the precise chronology. it would be more helpful, perhaps, if i can answer those questions as the chief executive of the regional businesses across europe. i have somewhat more proximity to it. >> i understand the detail points. >> just to clarify. > your father is responsible for the serious wrong doing, and it's revealing in itself what he doesn't know and what executive chose not to tell him, so with respect to you, i will pursue my line of questioning and come back to you later. mr. murdoch, why was no one fired in april when news international finally admitted that news of the world had been engaged in criminal inception of voice mails? >> it was not our job to get in the course of justice. it was up to the police to bring those charges and carry out their investigation, which we were 100% cooperating with. >> but do you, in april, the company admitted liability for phone hacking and nobody took responsibility for it then. >> no one was fired. the company admitted they were involved in criminal wrong doing, and no one was fi