Byline Big Read: Les Hinton, Murdoch's Teflon Executive
FROM a teenage copy boy in a southern Australian newspaper, to the designer-swank of an executive suite in Manhattan, Les Hinton’s rise is marked by a common thread: for almost half a century he was Rupert Murdoch’s right-hand man.
If Murdoch was the driven tycoon that turned a family newspaper business into a global media empire, Hinton was the consigliere navigator, the resolution man, and the trusted organisational calm behind the colossus.
Yet in 2011 when the Metropolitan Police began re-investigating the full extent of criminal conduct linked to phone hacking inside Murdoch’s UK print division, the very idea of corporate liability with Hinton’s name at the pinnacle of the organisational structure, was forcefully dismissed as a legal outrage by the company’s expensive lawyers.
Andy Coulson, once editor of the News of the World and later David Cameron’s communications chief in 10 Downing Street, would go to jail. Other NOTW employees were also convicted. News International paid a fortune in victims’ damages, legal fees and company restructuring that cost it close to an estimated billion dollars.
When Hinton finally cut his formal ties with the Murdoch organisation in 2011, he wrote to staff of the Wall Street Journal saying he felt it was “proper” for him to resign. He added: “That I was ignorant of what apparently happened (inside NI) is irrelevant.”
Hinton’s innocence questioned
He repeatedly told a Commons select committee that the company had carried out both internal and independent investigations into illegal voice message interceptions – and were convinced only one “rogue” journalist, the royal editor, Clive Goodman, was involved.
The committee however were “sceptical” of Hinton’s claimed innocence.
On April 24, 2012, the Commons Culture, Media and Sport Select Committee, published a report on “News International and Phone Hacking”. One of their conclusions was stark: “Les Hinton misled the committee in 2009 in not telling the truth…”
The Commons Committee on Privileges later conducted its own investigation into whether Hinton and other executives were guilty of “contempt of Parliament” for lying to a select committee.
This was damaging enough. But lawyers acting for Murdoch’s companies began to get concerned with the legal fall-out from a far more dangerous matter when MPs and prosecution counsel began using the language of “corporate attribution” and asking whether the criminal actions of News International employees were capable of being assigned to the company itself.
Ahead of the Privileges Committee report in 2016 which re-examined conclusions of the CMS committee from 2012, the distinguished QCs, Lord Pannick and Robert Smith, were instructed by NI’s lawyers, Linklaters. Among their arguments was the claim that the CMS MPs simply failed to understand the legal principles of “corporate attribution”.
Hinton was chairman and chief executive of News International until December 2007. His was a critical role that affected how NI operated as a company. The CMS committee report stated that NI could be held accountable for the actions of three individuals – Hinton, Colin Myler, editor of the News of the World from 2007-11, and Tom Crone, NI’s legal manager till July 2011.
News UK (the rebrand of NI) did not accept that any of them “knowingly” misled parliament. Regardless, Pannick and Smith said that when they gave evidence to MPs ahead of the 2012 report “none of them” were authorised to represent NI.
According to Hinton, when he resigned from Dow Jones in 2011, he was “ignorant” of what was happening around him during the critical years of the hacking scandal. When he left NI in 2007, he said he believed the “rotten element” at the NOTW had been “eliminated”.
New evidence – now published by Byline Investigations – challenges this picture of a detached executive, one only nominally in charge.
It reveals Hinton in a clearly recognised command-role, alleged to have ordered and been informed of key decisions that directly affected the outcome of inquiries he initially pointed to as proving hacking was not widespread.
The New York Times reported in 2010, after speaking to a dozen sources, mostly former reporters of the News of the World: “Everyone knew. The office cat knew.” As one MP who has followed the twists and turns of the hacking scandal, told Byline Investigations: “In control, yet knowing nothing? That makes little sense.”
Pannick’s submission to the investigating MPs on behalf of News UK was a five-star legal warning that Hinton needed to be treated differently. He advised that the committee “must be mindful of the controlling law on corporate attribution.” He said that if a “corporate body had been responsible for intentionally misleading Parliament” the CMS committee would have to prove, among other things, that the person they identified was the “directing and controlling mind or willof the company.”
That legal test, he wrote, had to be passed before MPs or the prosecution authority (CPS) could find against NI itself, rather than a handful of senior individuals.
Hinton’s own lawyers, Morrison|Foerster, were on the same legal hymn sheet as Pannick. In January 2015 the Privileges Committee wrote to them and announced that, because proceedings “relating to corporate criminal liability” were still under “active consideration” they had decided not to proceed at that time with their own inquiries which covered the same legal territory. In other words, MPs were delaying their probe to avoid prejudice.
Nevertheless, Hinton’s solicitors still flagged up to the committee that as their client was the executive chairman of NI from 1995 till 2007, and also a director, his position was “indistinguishable from that of the company in terms of corporate criminal liability.”
The message? Find against Hinton and they find against NI itself – and that, potentially, came with very serious legal difficulties.
With the arduous criminal hacking trial over, and civil suits continuing to settle, a smiling Rupert and James Murdoch appeared on the front cover of the New York Times’ Business Day in June 2015 celebrating being “Guided Back to the Top”. But behind the scenes at NI in London and News Corp in New York, it was appreciated that legally treacherous waters lay ahead.
And Hinton – long gone from London, and no longer at Murdoch’s side after resigning from his Dow Jones role – remained a central figure in the fight to avoid corporate prosecution.
Corporate criminal liability
Linklaters, an expensive ‘magic circle’ law firm, will have fully understood that the UK’s law on corporate criminal l iability was out of date, and regarded by many as effectively worthless. Based on principles of civil law from the 1940s and a small 1970s test case (Tesco v Nattrass), it no longer reflected the internal and organisational complexities of a global company like News Corp.
Some senior lawyers believed NI and the phone hacking scandal offered the perfect opportunity to update the law. With the objective of gathering material that could potentially be used in a case that might go all the way to the Supreme Court, Hinton – along with Andy Coulson, and the former NI chief executive, Rebekah Brooks – was interviewed by specialist officers assigned to the wider hacking investigation, Operation Weeting.
It was Hinton’s only police inquisition.
Advised on the limits of the law, Weeting investigators were aware of what one expert believed was the “perverse incentive to decentralise responsibilities so as to make it impossible to identify a senior individual or group in charge of any particular operation.”
In other words, was NI’s spread of responsibility designed to keep blame well away from the shores of those actually in control?
Barrier to blame
Pannick’s analysis read like a roadblock to any consideration of blame. He claimed the CMS select committee had failed to distinguish between evidence given by an individual in his or her personal capacity, and evidence given on behalf of NI. There was also mention of a wider failure by the select committee to appreciate or apply the correct legal principles when it came to James and Rupert Murdoch and the issue of corporate governance.
The bottom line? Hinton had resigned as chief exec of NI and by the time he was interviewed by MPs on the Culture, Media and Sport select committee in 2009, he was not authorised to give evidence on behalf of NI.
And the other key players who gave evidence in 2009 – Myler, who had taken over from Coulson at the NOTW, and Crone – were not “vested with the necessary authority to present evidence on behalf on NI”.
The Privileges Committee reasoned that Crone and Myler had misled the CMS committee by answering questions falsely on the evidence of hacking inside the NOTW, who was involved, and what the scale of the wrongdoing was. A finding of contempt was made against both men.
However there was hesitation when it came to Hinton. The Times, the flagship broadsheet of Murdoch’s UK print division, interpreted the findings of the committee, stating: “Les Hinton … was cleared of allegations of giving misleading evidence to the CMS committee”. The article opened with “News International has been cleared of being in contempt of parliament over phone-hacking evidence given to MPs.”
The road leading to that victorious headline was not, however, straightforward.
In 2009, Murdoch’s consigliere was among a long line up of senior executives from NI who publicly continued to back the single “rogue” reporter explanation. Hinton told the CMS MPs “there was never any evidence delivered to me that the conduct of Clive Goodman spread beyond him”.
He said he had not been “personally involved” in the internal investigations when he was executive chairman.
Morrison|Foerster laboured this point when they wrote to the Privileges Committee in February 2015 offering their interpretation of what Hinton had told MPs in 2009 and 2011.
They said their client “did not (and does not) deny that there were suspicions of wider abuses”. They added that their client had “time and time again” made the point that “News International and the News of the World had been at great pains to investigate those suspicions…”
Just ‘an executive’
In correspondence with the Privileges Committee, Morrison|Foerster often refer to Hinton as “an executive” relying on the advice of others. The term “chief executive” is not always used.
When Hinton was re-questioned by the CMS MPs in 2011 via a video-link from New York, Tom Watson (later Labour’s deputy leader) reminded him that on 32 occasions during his 2009 appearance he had told the committee he “did not remember.”
The phrase “sceptical about Mr Hinton’s memory” is a kind understatement of what the committee thought.
Although new evidence from the lengthy hacking trial and elsewhere was available to the Privileges Committee when they re-examined the conclusions of the 2012 report, Byline Investigations has established that the eight members of the committee were often provided with summary accounts rather than full transcripts of evidence.
So what did the committee see? Byline Investigations asked the committee’s clerks to confirm what summaries or abstracts had been used. The advisers said that the report’s conclusions stood for themselves and there was no obligation for the committee to address in detail now what had or had not been considered
What the committee were reminded of, time and time again in lengthy submissions by Linklaters (for NI) and by Morrison|Foerster, was that whatever Hinton was or was not saying, he was not speaking for News International.
In a letter to the Privileges Committee in December 2014, Linklaters were clearly aware of the danger of charges being brought that would allege corporate liability. By March 2016, that same issue was still troubling them. They wrote to the committee saying: “We simply cannot understand the basis on which the Committee is now proceeding with its inquiry insofar as it concerns any corporate liability.”
CPS backs off News International
The Crown Prosecution Service had eventually backed off from launching corporate charges against NI. But would a damning report from a parliamentary committee resurrect the issue, and force a rethink? Hinton, and what he knew or did not know, was critical to any answer.
Linklaters wrote to the committee wanting to know what lay behind the Privileges committee strategy. What were they looking at? What was their outline case? And in case the committee had forgotten, they were reminded not to place too much weight on Hinton.
He left NI in December 2007, became chief exec of Dow Jones and when he gave evidence in 2009 he “did not hold the necessary authority, or any authority, to present evidence on behalf of NI/News UK nor did he claim to do so.”
So who was “in control” of NI in 2007? It clearly mattered legally – but did it matter inside the company? Previously unpublished evidence seen by Byline Investigations, suggests that at critical periods when “the company” was in a position to halt, prevent, and even identify who, beyond one “rogue” reporter, was actually involved in hacking, there was only one senior individual acknowledged as holding the reins of NI and internally recognised as the controlling executive. That was Les Hinton.
In previously restricted interviews seen by Byline Investigations, including the lengthy questioning of Tom Crone by the Metropolitan Police at Sutton in autumn 2012 and into 2013, Hinton emerges as the individual that senior figures inside NI had to consult, ask or inform before key decisions were taken or strategies advanced.
During interviews conducted by two Met officers, Crone mentions that during a period when the single “rogue” reporter was still the official company line and NI were facing law suits from individuals outside the Royal family who claimed their voicemails had been illegally accessed, the specialist hacker, Glenn Mulcaire (convicted alongside Clive Goodman in 2007), had offered to help NI’s legal team if he was paid “£600,000 or £750K or something like that.”
Crone says the request from Mulcaire was “well into the litigation, I can’t remember which case it was”.
According to John Massey, the detective questioning Crone, Goodman had already by this point told NI that he was not the only one hacking phones at the NOTW. Yet senior NI executives were still saying “it was all Goodman.”
So who did Crone tell about Mulcaire offering information for a staggeringly large sum of money? Crone says he would “certainly” have passed it on to Colin Myler, then editing the NOTW, and “probably to Les at that stage”.
Throughout the interviews, Crone is clear who he reported information to: Andy Coulson (then editing the NOTW) and “the chief, probably the chief executive, Les Hinton”.
The “chief” word was becoming familiar to the Met officers. According to Crone, there was also “constant dialogue, possibly everyday” between “the chief executive and the editor”. Whatever the editor was doing, either this week, or from last week, “the chief executive should know because of that dialogue…”.
If Crone is correct and “constant dialogue” was in place and working, why – in the words of the MP Paul Farrelly – did Hinton paint a picture of himself as an ill-informed “mushroom”; an executive kept in the dark?
In email exchanges between Coulson and Crone in 2006/7 there is little doubt who needs to be told about emerging events.
On December 30, 2006, after Goodman had pleaded guilty to hacking the phones of members of the royal family, and with his sentencing hearing imminent, Crone writes to Coulson saying “I enclose briefing note on the current Clive (Goodman) situation. It ought to go to Les…”
Four days on, just after new year, Coulson writes to Crone saying: “Tom –you are OK to send that memo to Les whenever you’re ready.”
Just less than a week later, on January 9, 2007, Crone wrote to Coulson, mentioning “the ‘options’” briefing that “Les asked for”.
A day later Crone writes directly to Hinton reminding him they had spoken about the “Clive/Mulcaire situation last week” and that Hinton had asked for a “not’ on the Mulcaire ‘options’” [it’s assumed he means ‘note’]. Crone adds: “Here it is. I am due to meet his lawyers again tomorrow afternoon. If we haven’t communicated by then, I’ll pull it off.”
If Hinton doesn’t know what’s going on, it might be logical to expect a follow-up email to Crone asking “What the hell are you talking about? What options, what situation?” There isn’t one.
News Group Newspapers and Hinton himself continue to deny that he was, during his tenure as chief executive, well aware that illegal activities inside NI extended beyond “one rogue reporter”.
But Byline Investigations has now revealed that Coulson, during the criminal hacking trial at the Old Bailey, had informed Hinton in 2004 about a NOTW reporter, Neville Thurlbeck, unlawfully accessing the voicemails of the then Home Secretary, David Blunkett.
Not true says Hinton, who told Byline Investigations: “I did not know about phone hacking at the height of its use in 2004. I was never told Thurlbeck was listening to voicemails in 2004 and I never allowed a story I knew to be derived from phone hacking to be published on the front page of the News of the World.”
So why did Coulson, under oath, say he did – and say it six times? Hinton said Coulson’s assertions were “based entirely on the testimony of a man defending himself at a criminal trial, at which a jury found him guilty”.
Would Coulson telling the court he told Hinton have been a fact that changed the jury’s opinion of him? No.
And neither Coulson nor his legal team ever claimed that the act of telling Hinton about Thurlbeck hacking the Home Secretary should lead to his acquittal.
Loyalty inside NI evidently comes with a high price. But in 2007, Hinton saw that Coulson, and the NOTW, required a veneer of honour. When it was deemed necessary for Coulson to resign as the Sunday tabloid’s editor following the jailing of Goodman and Mulcaire, a draft statement was drawn up by NI.
Hinton, in control of the public image of Murdoch’s UK company, added an additional paragraph to make it clear that “rules were in place prohibiting such conduct (namely, illegal voicemail interception)”.
He added that NI now had “additional measures to ensure they will not be repeated by any member of my staff.”
For a chief executive unaware of what was really going inside his organisation, Hinton instead appears to be in control of emerging events around him. He simply tells Coulson to add the extra paragraph and promised “I can explain my thinking”.
Cache of emails
The cache of Hinton-Coulson-Crone exchanges are collected in a lengthy legal bundle with the title “Exhibits relating the Harbottle & Lewis email review”.
Harbottle & Lewis was the external law firm NI’s then legal director, Jon Chapman, brought in after the jailing of Goodman in 2007 to deliver an “independent” evaluation of emails connected to Goodman.
After Goodman had been formally sacked, he launched an appeal saying Coulson and others knew hacking went beyond him, and had approved of what he was doing. Chapman and the then head of human resources, Daniel Cloke, initially looked at the emails and found “no evidence to support Goodman’s allegations”.
Throughout these email exchanges Hinton appears in charge, in control, far removed from the detached, ill-informed executive who appeared before MPs. In one email, sent in January 2007, Crone tells Coulson he has been in contact with Mulcaire’s lawyer. And he informs Coulson he can’t give the lawyer a decision because he has “not yet received instructions” adding “Les hasn’t come back to me yet”.
Morrison|Foerster opposed any idea that Hinton knew what was going on. In a letter to the committee in April 2016, they cited the summing up of the judge at the hacking trial, where Mr Justice Saunders, referring to the December 2006 memo told the jury: “Mr Crone reports to Les Hinton on what is going on…”
That comment, Morrison|Foerster say, relates to evidence which came from Andy Coulson’s defence, which they claimed could not be relied upon. Hinton’s lawyers also told the committee of MPs “We cannot understand why the Judge has speculated that Mr Crone reported to Mr Hinton ‘on what was going on’ whatever that means.”
“Whatever that means” sounds like a throwaway line. It isn’t. It falls into the legal divide between Hinton fully exonerated or being identified as the key individual in control of NI – and NI itself at risk of being held liable.
Hinton moving to New York in 2007, in retrospect, looks a sensible decision given NI’s future woes. Three years after Goodman and Mulcaire were jailed, the heat over phone hacking began rising again. Adding to the revelations by Nick Davies at The Guardian, a Channel 4 Dispatches programme presented new evidence asserting that Coulson had asked for transcripts of email intercepts to be forwarded to him. This was during a period when the then NOTW editor was supposed to have known nothing.
A panic ignited inside the corporate affairs office of NI, where strategy on the handling of anything related to hacking was worked out.
On October 3, 2010, NI’s group director of corporate affairs, Matthew Anderson, wrote to Chapman, wanting to know if they could knock down what Channel 4 were saying. Anderson suggested they stick to the line that NI had found “no evidence of this” in the previous email investigations that had been carried out (by Chapman/Cloke and by Harbottle & Lewis).
Rebekah Brooks kicked into the Anderson-Chapman email chain asking: “Can we still say there is no evidence?” She also agreed with Anderson on maintaining the line that no evidence had been found.
Chapman seemed less than convinced about the merits of the two investigations. The Harbottle & Lewis probe was eventually exposed as defective, where important emails that should have been flagged up were ignored. One of the law firm’s partners was disciplined by the Solicitors Regulatory Authority
“On instructions from Les”
Having initially backed the conclusions of Harbottle & Lewis, Chapman was now, three years on, admitting the investigation was flawed. He wrote in reply to Brooks’ intervention: “I do not think our email investigation is of any use here. We limited it – on instructions from Les – to emails between Goodman and a number of senior NOTW people including Andy (Coulson).“
Chapman said that all the exercise would show was that there was no evidence Coulson asked Goodman (by email) for transcripts over a particular period, and it would shed no light on emails Coulson “may have sent to other journalists”.
The key words here are “on instructions from Les”.
The executive who told MPs and the police he knew nothing, was, according to Chapman, directing how a critical exercise – later used to give NI a clean bill of health – needed to be limited.
Had Hinton ordered a deeper and thorough email trawl what would it have found? Did MPs on the Privileges Committee examine this critical email when they considered the role of Hinton and what he had told them? There is nothing in the Report to suggest they did.
Did the Privileges Committee consider evidence presented at a pre-trial hearing on September 17, 2013, six weeks before the phone hacking trial officially opened at the Old Bailey? At that hearing, where reporting restrictions were in place, the head of IT Managed Services at NI, Simon Lowndes, was questioned.
Lowndes said he was asked to set up a system that would allow Harbottle & Lewis’ lawyers to externally access “a specified set of copies of NI emails”. Lowndes said he would have needed a “consent form” to be signed by “the chairman”.
The court asked Lowndes who that was. He replied: “Les Hinton.” And asked if that hadn’t happened? “Then I would have declined,” he told the court.
Hinton, according to Chapman, instructed the limiting of the email search, and, according to Lowndes, was the only one with the necessary authority capable of giving Harbottle & Lewis the access they needed. This was a chief executive in charge, not one oblivious to what was happening on his watch.
In January 2015 the Privileges Committee wrote to Hinton’s solicitors saying they were now looking at testimony from his oral evidence in 2009. They were focused on comments given to the CMS where Hinton said no evidence was ever delivered to him that there had been anyone else involved but Goodman, that no emails had raised further suspicions, and that though there was a “lot of gossip, there was a lot of speculation, there were a lot of accusations that we could never find any firm foundation for”.
Later, in 2011, Hinton would also tell MPs that he was “never provided with any evidence of suspicion against people…”
So if there was just gossip, and nothing beyond mere suspicion, why did Hinton order a limited legal exercise rather than a full no-holds-barred probe?
Reporting to Les
A formal witness statement from Chapman, given to the Met. in September 2012, says it was Hinton who initially asked Cloke to carry out the review of emails between Goodman and five named employees. Goodman in his internal disciplinary appeal had said five others had knowledge or were complicit in hacking. Emails from 2005-6 were gathered by the IT department. Chapman said Cloke asked him to help. There were about 2,500 emails.
But it was not a dedicated, urgent task. Chapman and Cloke were expected to do their normal jobs, and fit in the search alongside other work. “We reviewed them and reported to Les Hinton”, said Chapman. “No reasonable evidence”, he said, that went beyond Goodman was found.
Chapman says it was Hinton who also asked for the opinion of external lawyers – which led to Harbottle & Lewis being instructed by NI. Once again Hinton is not a distant-know-nothing executive, but at the very organisational core of critical decisions being taken.
Trying to stay in control of the emerging scandal, was an important task inside NI in 2010. The chair of the CMS committee from 2005, and still in place when the Channel 4 Dispatches investigation was aired, was John Whittingdale, who later became culture secretary in David Cameron’s administration.
Whittingdale would later deny he had warned members in his committee not to compel Brooks to testify before them, saying that if they did, their personal lives would be investigated in revenge.
News Corp’s senior lobbyist, Fred Michel, however had no doubt where Whittingdale’s loyalties lay. In the same email chain in October 2010 involving Anderson, Brooks and Chapman which centred on the Dispatches issue, Michel said NI should “stay out of it”.
And he appeared to know in advance what Whittingdale would be saying. The chair of committee, he predicted, “Will be on the record refuting allegations… for us.”
Hinton’s memoirs, according to a once-close colleague at Wapping will have to be: “a wire-walk, where Les brags about the empire he helped co-create with Rupert when Wapping sold more than 27 million newspapers a week, but limiting any notion that everything good and worked was down to him, everything bad he knew nothing about.”
Hinton will also have to temper any anger that directs blame at others, when many still see him as Murdoch’s “representative on earth”.
And far from being “sacrificed” to save his long-term friend Rupert’s organisation, he was the personification of the organisation itself, the one that left behind, in Nick Davies’ apt words, “a roadkill” of victims and journalists whi ch ensured blame stayed well away from the executive floor – when evidence suggests otherwise.]]>