UK hacking probe sharpens focus on James Murdoch

LONDON — James Murdoch knew more than three years ago that phone-hacking at News Corp.'s News of the World went beyond one "rogue" reporter, the newspaper's former legal chief said on Tuesday, contradicting repeated denials by Murdoch.

As the two-month crisis that has gripped News Corp. and Britain's political establishment deepened, Tom Crone also said he had seen evidence that the company had recently hired freelance reporters to spy on hacking victims' lawyers.

Crone on Tuesday was one of four former News International executives fielding questions  from Parliament's media committee about what they knew and when. All cast doubt on key aspects of the testimony given by Rupert and James Murdoch earlier this summer.

In a statement, James Murdoch stuck to his denial that he had known at the time that hacking was more widespread but Crone's repeated allegations, and the mention of recent spying, cast doubt on Murdoch's effectiveness in weeding out wrongdoing.

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News Corp. has been engulfed by the scandal since July when it was revealed that the phone hacking extended beyond celebrities and politicians to murder victims including schoolgirl Milly Dowler, and British war dead.

The crisis has already wiped billions of dollars off News Corp.'s market value, cost it two senior executives, forced it to drop a $12 billion bid for BSkyB and to shut down the 168-year-old News of the World tabloid.

James Murdoch, News Corp.'s deputy chief operating officer has seen his chances of succeeding his father and founder of the media empire, Rupert, receding.

Charlotte Harris of law firm Mishcon de Reya, which is representing several hacking victims suing News Corp.'s UK newspaper unit News International, said the contradictory statements from James Murdoch and his former executives were evidence of a deepening split in the company.

"The old guard and the new guard are no longer cooperating," she said, adding that the parliamentary committee would almost certainly have to recall James Murdoch, whom it had subjected to a grilling last month along with his father.

The new allegations of spying on victims' lawyers is bound to give fresh ammunition to the Murdochs' critics.

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Mark Lewis, who is representing hacking victims including supermodel Elle Macpherson's former assistant Mary-Ellen Field and jockey Kieren Fallon, says he was one of the lawyers on whom News International ordered surveillance to be carried out.

"What does surprise me is the failure by News International to inform me or at least to notify the police," he said.

Charlie Beckett, founding director of the Polis journalism think-tank at the London School of Economics, said: "This shows that this idea that James Murdoch has been working post-2007 to clear out the stables has not been true."

"It's not illegal for them to do things like this but it doesn't speak volumes about their real commitment to a thorough transparency," he added.

The crisis has pushed Prime Minister David Cameron, once so close to the Murdoch media empire that he hired ex-News of the World editor Andy Coulson as his spokesman, to join his opponents in condemning Murdoch, and to order a public inquiry.

On Tuesday, Cameron told parliamentarians that the UK should resist the temptation to over-regulate the media in the wake of the scandal. "There is a danger of the pendulum swinging too far the other way," he said.

Key email explained
Crone repeated that he had explained to James Murdoch in 2008 the significance of a key email obtained by a hacking victim, which contained transcripts of intercepted voicemails unrelated to the activities of "rogue" reporter Clive Goodman, who had already been to jail.

"This document meant there was a wider News International involvement," Crone told the committee, when asked to explain what he had told Murdoch in a meeting in which Myler, the tabloid's last editor, was also present.

Myler and Crone said the email, with its suggestion of hacking by other journalists, was the only reason Murdoch had approved a 700,000 pound ($1.1 million) payout to the victim, soccer executive Gordon Taylor.

"I would take it that...for the first time he realized the News of The World was involved, and that involved people beyond Clive Goodman, and on that basis he authorized the settlement," said Crone.

Murdoch, who took charge of News Corp's European operations in late 2007, has repeatedly said he did not know the phone-hacking went beyond ex-royal reporter Goodman and private detective Glenn Mulcaire, who both served jail terms in 2007.

"Neither Mr. Myler nor Mr. Crone told me that wrongdoing extended beyond Mr. Goodman or Mr. Mulcaire," he said in his statement on Tuesday. "There was nothing discussed in the meeting that led me to believe that a further investigation was necessary."

"I was informed, for the first time, that there was evidence that Mulcaire had carried out this interception on behalf of the News of the World. It was for this reason alone that Mr. Crone and Mr. Myler recommended settlement," he wrote.

James Murdoch was not in charge of News International at the time the hacking that is known about occurred. But he joined shortly afterwards and presided over what may turn out to have been a huge corporate cover-up.

In a letter to parliamentarians, James Murdoch said it was Chapman, along with Daniel Cloke, News International head of personnel that authorized the payment to Goodman.

Not so, the pair said Tuesday. They both testified that it was Les Hinton, one of Murdoch's most trusted aides — and until recently the publisher of the Wall Street Journal — who authorized the award. Hinton is the most senior Murdoch executive to resign in the scandal.

On Tuesday, members of the committee frequently appeared exasperated by the witnesses' repeated claims to have no recollection of key events and documents.

Crone said he had not read the Gordon Taylor file since he last gave evidence to parliament on the matter in 2009, eliciting an incredulous response from lawmaker Tom Watson, the committee's most dogged questioner.

"What on earth were you doing for two years, Mr. Crone? The entire focus of public enquiry has been on the Taylor payment, you were the legal director of News Group Newspapers and you are seriously telling me you have not reviewed that file in over two years?" he asked.

"Not in any detail, no," Crone replied, shrugging.

Who should play the Murdoch clan?

Earlier on Tuesday, other ex-News International executives said the company had done all it could to investigate a 2007 claim by Goodman, made as part of an appeal against unfair dismissal, that hacking was commonplace.

Blame claim called wrong
Also Tuesday, Jonathan Chapman, the former director of legal affairs with News International, said the elder Murdoch made a mistake when he blamed the London law firm Harbottle & Lewis for failing to uncover the scope of the hacking scandal back in 2007. News International is the British arm of Murdoch's News Corp.

"I don't think Mr. Murdoch had his facts right," Chapman told lawmakers. "He was wrong."

Cloke, who ran News International's human resources at the time, said no evidence had been found to support Goodman's claim, which was published by the parliamentary committee last month.

"At that particular moment in time, this was one employee — ex-employee — making allegations about others," Cloke said when asked why the company had not done more to uncover the scale of the phone hacking.

"We interviewed those people, we also then looked at around 2,000-2,500 emails and then took it to a third party," he said. "That gave me comfort as an HR director that we had covered the bases and done the proper thing."

Asked why the company had approved payments of a quarter of a million pounds to Goodman after he lost his unfair dismissal appeal, Cloke and ex-commercial lawyer Jon Chapman presented it as pragmatism, not a measure calculated to buy his silence.

"It was a stark choice — settle at a reasonable figure or end up in tribunal," Chapman said. "At the tribunal proceedings, Mr. Goodman would have been able to make a number of allegations, which we didn't believe... in a public forum."

Reuters and The Associated Press contributed to this story.

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Italian police defend their Knox murder probe

PERUGIA, Italy — The police official who conducted the original investigation in the Amanda Knox case defended her standards Monday, after an independent review harshly criticized the evidence used to convict the American student of murdering her British roommate.

Patrizia Stefanoni took the stand as Knox's appeals trial resumed after the summer recess. A verdict is expected by the end of the month.

Knox and her co-defendant and one-time boyfriend, Raffaele Sollecito, were convicted of sexually assaulting and killing Meredith Kercher in the apartment that Knox and the 21-year-old Briton shared while studying in Perugia. Knox was sentenced to 26 years in prison; Sollecito to 25. Both deny wrongdoing and have appealed the Dec. 29 verdict.

An independent review of DNA traces in the case found that much of the evidence collected in the original investigation fell below international standards and may have led to contamination of the samples. The review especially focused on some traces of DNA linking the defendants to the crime, and concluded that due to the risk of contamination and the low amounts of DNA used for the testing it was impossible to extract a genetic profile with any certainty.

In the first trial, prosecutors maintained that Knox's DNA was found on the knife's handle and Kercher's DNA was found on the blade. They also say Sollecito's DNA was found on the clasp of Kercher's bra, mixed with the victim's.

Carla Vecchiotti, one expert questioned Monday over the extraction of DNA profiles from the bra clasp, said the data was so mixed that a very high number of genetic profiles could be extracted, depending how one combined the data.

"I could find yours, too," Vecchiotti told the presiding judge. "I'm there, too," she said, adding that some data was compatible with her own DNA. She said Kercher's profile was the only certain one.

The findings have boosted the defendants' efforts to be cleared and gain freedom after almost four years in prison.

Curt Knox, the defendant's father, said he was hopeful that the case was turning in his daughter's direction.

"The independent experts have done a very good job evaluating the information," he said. "I don't see it breaking down at this point. I see it's been good for Amanda and Raffaele."

Giulia Bongiorno, a lawyer for Sollecito, said DNA can be "formidable evidence" but not with such a mixed, confusing trace.

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"Poorly collected DNA can lead to an error of justice," she told reporters during a break in the proceedings.

The two independent experts were appointed by the appeals court at the defense's request. Over two sessions of fierce cross-examination, both the prosecutors and a lawyer representing the Kercher family have sought to undermine the experts' testimony and insisted that the evidence could stand.

Stefanoni, the forensic police officer, countered some of the points made in the review, saying that DNA analyses were carried out from behind a glass wall to avoid the risk of contamination. She also said some of the standard protocols cited by the experts were published after she finished her report in May 2008.

Using some of the 119 slides she said she had prepared, she challenged the experts' finding over DNA quantity, analysis and evidence collection techniques. Her testimony will continue Tuesday.

The DNA review has dominated recent hearings in the 10-month appeals trial.

Just before the trial resumed, Kercher's sister issued a letter asking the appeals court to assess "every single (piece) of evidence" so justice can be done. The Kercher family insisted they still had faith in the Perugia police, investigators and the court, but also expressed worry over the evidence review.

"We find it extremely difficult to comprehend how the evidence that was so carefully developed and presented in the first hearing was valid, yet how it now seems to carry a slight chance it will become irrelevant," Stephanie Kercher said in the letter.

"We ask that the Court of Appeal assess every single (piece) of evidence, both scientific and circumstantial, as well as any witnesses who have taken the stand independently of any other information or media," she wrote.

The Kercher family has kept a low profile throughout the headline-grabbing case. The letter, released through the family's lawyer Francesco Maresca, represented a rare break in their silence.

"Meredith has been forgotten because she is no longer with us, yet this should be about her and what really happened on that tragic evening," Stephanie Kercher lamented in the letter.

Knox has been the center of attention since her arrest on Nov. 6, 2007 — four days after Kercher's body was found in a pool of blood at the apartment. Knox has been described both as an angel-faced ruthless killer and as an innocent girl caught in an Italian judicial nightmare.

Both Knox, 24, and Sollecito, 27, attended the session Monday.

A third person, Rudy Hermann Guede of the Ivory Coast, also has been convicted of Kercher's murder in a separate proceeding. Italy's highest criminal court has upheld Guede's conviction and his 16-year-prison sentence. Guede denies wrongdoing.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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UK: Inquiry to probe intelligence ties to Libya

LONDON — A British inquiry into the country's pursuit of terrorism suspects will examine new allegations about cozy ties between U.K. intelligence officials and Moammar Gadhafi's regime, Prime Minister David Cameron said Monday.

Security documents discovered after the fall of Tripoli have offered embarrassing examples of the warm relationships that British and American spies had developed with their Libyan counterparts.

The trove of files document efforts by the CIA and Britain's overseas intelligence agency MI6 in advising Gadhafi's regime on ending its international isolation. In return, the Western agencies won close cooperation as they hunted al-Qaida linked terrorism suspects.

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Files discovered among tens of thousands of papers collected from an External Security building in Tripoli show how Abdel-Hakim Belhaj, now Libya's rebel military commander, was targeted for rendition.

Belhaj, who was seized in Bangkok in 2004 and delivered to Tripoli, alleges that U.S. and British intelligence planned his capture and were later involved in his interrogation.

Cameron said a government-commissioned study — known as the Detainee Inquiry — being led by retired appeals court judge Peter Gibson must consider the allegations in its examination of Britain's conduct in the years after the Sept. 11, 2001, attacks on the United States.

The British leader said there were significant accusations "that under the last government relations between the British and Libyan security services became too close, particularly in 2003."

Lawmaker Jack Straw, who was Britain's foreign secretary in 2003, said that his previous Labour Party government opposed torture or mistreatment, but acknowledged that it was "entirely right" that the inquiry examine claims Britain offered inappropriate support to Tripoli.

In one letter uncovered in Tripoli, dated Dec. 24, 2003, a British official thanks Gadhafi's then-spy chief Moussa Koussa for a gift of a "very large quantity of dates and oranges."

Koussa defected from Gadhafi's regime and flew to Britain in March, where he was questioned for several weeks by intelligence officials.

In a public statement in April, Koussa — who also served as Libya's foreign minister — acknowledged he had strong ties with a number of British officials.

"I personally have relations, and good relations, with so many Britons. We worked together against terrorism and we succeeded," said Koussa, who later left Britain for Doha, Qatar.

Cameron said that Gibson's inquiry panel would examine issues around relations with Libya. The inquiry's primary focus is to consider allegations put forward by former Guantanamo Bay detainees who accuse Britain of being complicit in their mistreatment.

"The inquiry has already said it will look at these latest accusations very carefully," Cameron told the House of Commons.

In a statement, the inquiry said it would look "at the extent of the U.K. government's involvement in, or awareness of, improper treatment of detainees — including rendition."

Andrew Tyrie, a British lawmaker who heads a group of legislators investigating so-called extraordinary rendition, said he hoped the British inquiry would get to "the truth about alleged British complicity in the kidnap and torture of detainees."

Cameron confirmed that Mahmoud Jibril, the head of the Libyan rebels' acting Cabinet, has assured Britain that the country's post-Gadhafi regime would assist British police hunting the killer of a policewoman shot dead outside the Libyan embassy in London in 1984.

Since the NATO-led air campaign began in Libya on March 19 British fighter jets have flown 2,400 sorties — about one fifth of the total, Cameron told the House of Commons. He said that the mission would not end until the threat from Gadhafi loyalists had been fully suppressed.

"Those thinking NATO will somehow pull out or pull back must think again. We are ready to extend the NATO mandate for as long as is necessary," he said.

Britain re-established a diplomatic mission in Tripoli Monday, and the U.K. along with its NATO partners will assist Libya's interim government is bringing Gadhafi to justice, Cameron said.

"There must be no bolthole, no pampered hiding place from justice. He must face the consequences of his actions, under international and Libyan law," he told legislators.

Cameron said Britain's top diplomat in Libya and other officials would move from a current base in Benghazi to Tripoli to prepare to reopen the U.K. embassy.

He also repeated calls for Syrian President Bashar Assad to stand down, and to halt violence which the United Nations estimates has seen 2,200 people killed since a crackdown on protests began mid-March.

"The achievement of the Libyan people gives hope to those across the wider region who want a job, a voice and a stake in how their society is run," Cameron said. "The message to President Assad must be clear: he has lost all legitimacy and can no longer claim to lead Syria. The violence must end."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Mexico opens corruption probe in deadly fire

MONTERREY, Mexico — Nuevo Leon state launched a new offensive Wednesday against the proliferation of gambling halls as a top politician's brother was videotaped taking wads of cash inside a casino days before a casino fire killed 52 people.

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Nuevo Leon Gov. Rodrigo Medina announced initiatives to ban new betting operations and to better regulate existing ones, as well as a corruption probe into Jonas Larrazabal, brother of Monterrey Mayor Fernando Larrazabal who was caught on videotape visiting several unidentified casinos and being handed large amounts of money.

The newspaper Reforma, which published the images Wednesday, estimated that one wad of cash passed in a cell phone box was 400,000 pesos ($32,000). Mayor Fernando Larrazabal said that he supports the probe.

"First of all, the people voted for Fernando Larrazabal, and I'm not responsible for my brother's actions," he said. "I will ask the prosecutor to investigate and bring whoever is responsible to justice."

Gunmen entered the Casino Royale in Monterrey last Thursday, spread gasoline and set the building on fire, trapping and asphyxiating dozens of gamblers and employees in what's believed to be a case of extortion. Most of the victims were women playing bingo and slots or lunching that afternoon.

The five suspects arrested so far confessed to being part of the Zetas drug cartel. Authorities says they are searching for seven others, as well as the owner of the casino, who is believed to be in the United States.

It was the worst attack related to drug violence on civilians since President Felipe Calderon launched his crackdown on organized crime in 2006. At least 35,000 people have died in drug violence since then, according to government figures, though other sources put the number at 40,000.

Calderon declared three days of national mourning after the casino attack.

Medina also said he will push for changes in federal law so that no concession is granted for a casino without the approval of state and local authorities.

Larrazabal said the Casino Royale and 12 more of Monterrey's 29 casinos violated municipal laws but were allowed to remain open after obtaining federal court injunctions.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Police probe Australian political sex scandal (AP)

CANBERRA, Australia – Australian police were investigating allegations Tuesday that a lawmaker misused a credit card to pay prostitutes, a political scandal that could bring down the country's fragile government.

New South Wales state police said they are looking into new evidence that government lawmaker Craig Thomson misused a trade union credit card when he was a senior union official in 2005 and 2007.

A conviction for theft or fraud would force Thomson to quit Parliament and cost Prime Minister Julia Gillard's year-old government its single-seat majority.

With opinion polls showing the government has become deeply unpopular, observers agree that the ruling Labor Party would have little hope of retaining Thomson's seat in an ensuing by-election.

Thomson has denied any wrongdoing and Gillard has publicly supported the lawmaker, who was first elected when Labor swept to power in 2007.

The allegation, first raised by a Sydney newspaper in 2009, dates back to when Thomson was national secretary of the Health Services Union. He allegedly used his union credit card to pay a Sydney brothel thousands of dollars of union money in two transactions.

Thomson has denied the allegation and claimed that an unnamed man had taken his credit card and forged his signature. Thomson also said that that man had repaid the money.

Thomson sued the newspaper's owner, Fairfax Media Publications, but dropped that court action in May.

Police have never investigated the allegations because the Health Services Union, which is aligned with Labor, has never made a complaint.

But an opposition senator, George Brandis, wrote to Police Commissioner Andrew Scipione on Monday with new evidence he said showed Thomson had committed a range of crimes, including fraud, which is punishable by 10 years in prison.

The new evidence included a statement from a forensic handwriting expert who said Thomson had probably signed one of the brothel credit card dockets in question. It also included a bundle of recently released court documents that Fairfax would have used in the defamation trial as proof of many more instances in which Thomson allegedly paid prostitutes with the same credit card.

Gillard told Parliament on Tuesday "it would be inappropriate for me to comment further" on the scandal because of the police investigation.

She denied any involvement in a decision by a Labor state branch to pay more than 90,000 Australian dollars ($94,000) toward Thomson's legal bills for settling his defamation case.

"Decisions about finances related to the New South Wales Labor Party are for the New South Wales Labor Party to make," she told Parliament.

The party won't explain the generous gift, but the opposition is convinced it was to prevent Thomson being bankrupted by his legal bills.

Under Australia's Constitution, a lawmaker must quit Parliament if he or she is bankrupt or convicted of a crime that carries a potential prison sentence of at least 12 months.

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Police expand hacking probe team

21 July 2011 Last updated at 08:18 GMT

Police said they had experienced a surge of inquiries over the past fortnight The police team investigating phone hacking has been boosted from 45 to 60 officers, Scotland Yard has said.

Metropolitan Police Deputy Assistant Commissioner Sue Akers said the move came after a "significant increase in the workload" over the past fortnight.

Meanwhile, the investigation into alleged misconduct by newspapers may be spreading beyond News International.

Police have asked for files of an earlier inquiry into the use of private investigators, the BBC has learned.

According to BBC Radio 4's The Report, the files from Operation Motorman, which was run by the Information Commissioner's Office in 2003, were requested three months ago.

They contain 4,000 requests from 300 journalists and 31 publications for confidential information from a private investigator, which in many cases had been obtained illegally.

The investigation found the Daily Mail had made the most requests, followed by the Sunday People and the Daily Mirror.

The Daily Mail said the information obtained may have been for reasons of public interest, and Trinity Mirror Group said its journalists worked within the law and the Press Complaints Commission code of conduct.

'12,000 victims'

On the hacking probe known as Operation Weeting, Ms Akers said there had been a "surge of enquiries and requests for assistance from the public and solicitors.

Continue reading the main story

This is excellent news. The extra resources will assist to help move things along much more quickly”

End Quote Keith Vaz MP Home affairs committee chairman "I have said all along that I would keep the resources under review and this has led to the increase. Similarly, if the demand decreases, I will release officers back to other duties."

The expansion in officer numbers comes after a Commons home affairs committee report praised Ms Akers' decision that all potential victims of phone hacking by the News of the World should be contacted.

But the MPs said they were "alarmed" only 170 people had so far been informed and noted that "up to 12,800 people may have been affected".

They warned that if the process dragged on it would "seriously delay" the start of Lord Justice Leveson's public inquiry announced by Prime Minister David Cameron.

After Ms Akers' announcement, home affairs committee chairman Keith Vaz said: "This is excellent news. The extra resources will assist to help move things along much more quickly."

'Serious offences'

In other developments, it emerged that former News of the World editor Andy Coulson was only given mid-level security clearance when he went to work as the prime minister's communications director in May last year.

Mr Cameron told the Commons he was subject to "basic level" vetting and was not able to see the government's most secret documents.

Elsewhere, the legal firm that represented News of the World owners News International (NI) has been given permission by the newspaper group to answer questions from the police and MPs.

Harbottle & Lewis is said to have received e-mails from the company four years ago which the legal firm concluded did not reveal reasonable grounds for believing the hacking went beyond the News of the World's royal editor Clive Goodman.

Glenn Mulcaire, the private investigator jailed for phone hacking, speaks to the BBC

But on Tuesday, former director of public prosecutions Lord Macdonald, who reviewed for NI's owner News Corporation the e-mails in a file relating to bribes allegedly paid to police, said they contained "evidence of serious criminal offences".

The law firm had said it was being prevented from responding to "inaccurate" comments made by News International chairman James Murdoch because it was not allowed to breach its duty of client confidentiality.

Also, Labour have seized on remarks by the culture secretary as an "admission" that Mr Cameron had discussed the BSkyB takeover bid with News International.

Mr Cameron faced repeated questions on the issue in the Commons on Wednesday and told MPs he had had no "inappropriate conversations".

Position reversed

But Jeremy Hunt said afterwards that "the discussions the prime minister had on the BSkyB deal were irrelevant" because he, as culture secretary, was responsible for making the decision, prompting the Labour attack.

Mr Hunt's aides later said he had been talking about discussions in general, rather than specific discussions with NI executives.

Conservative deputy chairman Michael Fallon dismissed what he called petty point-scoring by saying former NI executive Rebekah Brooks and Mr Cameron were both clear no inappropriate discussions had taken place.

During his Commons statement, Mr Cameron told MPs that "with hindsight" he would not have hired Mr Coulson.

Labour MP Nick Raynsford said that when Mr Coulson was still working at Downing Street, the cabinet secretary had been alerted to evidence of illegal phone hacking, covert surveillance and hostile media briefing against a senior government official - a claim the cabinet secretary denied.

But the Cabinet Office later completely reversed its position, conceding that a meeting on the matter did take place last summer.

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