News Corp. revelations rock U.K. gov’t

Special advisor to media minister ankles

LONDON — A special advisor to U.K. media minister Jeremy Hunt has ankled following revelations that he maintained close links with Rupert Murdoch’s News Corp. during its bid to take over satcaster BSkyB last year.

Hunt had a legal obligation, a so-called “quasi-judicial role,” to be impartial over the BSkyB bid, but the emails released by News Corp. on Tuesday appear to show the minister and his aides acted in a way that gave the media company privileged access to government thinking on the takeover.

The development came as the News Corp. chairman-CEO, during evidence to the Leveson inquiry into media ethics, repeatedly claimed that he never asks or expects favors from politicians.

The special advisor, Adam Smith, identified in incendiary emails to the Murdoch camp during the appearance at the inquiry of former BSkyB chairman James Murdoch on Tuesday, admitted that he had given the impression that the British government had “too close a relationship” with News Corp.

He added that the “content and extent” of his contact with News Corp. had not been authorised by Hunt.

Hunt, who has been accused of being “a cheerleader” for the Murdoch empire, was facing calls for his resignation in what is the most explosive phase of the phone hacking and police corruption row since the scandal became toxic last July.

Hunt claimed he had behaved “scrupulously” during News Corp.’s bid to buy the 61% of BSkyB it did not already own.

However, political commentators believe Hunt’s position remains precarious.

One U.K. newspaper, the Guardian, the prime mover in the hacking scandal, led its morning edition with the headline “Minister for Murdoch.”

One of its writers, investigative reporter Nick Davies, said that the row now threatened British Prime Minister David Cameron. The Prime Minister’s former communications director, Andy Coulson, was previously editor of the News of the World, and was arrested last year in connection with the phone hacking saga, but is still to be charged.

In a three-hour morning hearing with Rupert Murdoch, Leveson counsel Robert Jay attempted to expose details of the News Corp. topper’s dealings with senior British pols going back to the Thatcher era of the 1980s when Murdoch initiated a meeting with Thatcher to discuss his proposed purchase of loss-making U.K. newspaper The Times.

On occasion the exchanges between Murdoch and Jay grew testy as Murdoch made no attempt to hide the steely side of his character.

This was in stark contrast to the News Corp. chief’s faltering performance at last July’s House of Commons select committee hearing into phone hacking when the 81-year-old Murdoch appeared old and frail.

Last summer Murdoch affected humility, but at Leveson his patience looked tested by his deceptively mild-mannered inquisitor.

On no fewer than four separate occasions the mogul insisted he never uses his papers to further News Corp.’s commercial aims, and that he never promises politicians favors in return for supporting his corporate objectives, points Jay attempted to undermine by reading the memoirs of some of Murdoch’s former employees, such as ex-Sunday Times and Times editor Harold Evans.

Murdoch said: “I, in 10 years he was in power, never asked Mr. Blair (ex-British Prime Minister Tony Blair) for anything, nor did I receive any favors.”

Earlier he had insisted: “I take particular pride in that I have never pushed our commercial interests in our papers,” which he described as “the most independent” in Britain.

In written evidence to the inquiry, Murdoch said he had never discussed the BSkyB bid with Cameron.

He said that he regrets ever agreeing to sell BSkyB stock in the first place and that it was Chase Carey, News Corp.’s prexy and chief operating officer, who suggested that they should launch a bid for full control of the paybox.

Murdoch recalled one of the first things Carey said on his return to the News Corp. fold was ” ‘We should clean up the situation at BSkyB,’ ” said the media mogul.

Murdoch added: “With hindsight, I regret that I ever agreed to an IPO.”

On breaking for lunch, Murdoch was overheard telling advisors, “Let’s get him (Leveson) to get this fucking thing over with today.” However, he has been asked to return to give further evidence on Thursday.

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