>> what's the risk of? this case is already about. the link is already known about. there is no one else involved. >> but if the company, as those described to me there was clear evidence the company would lose the case. there didn't seem any point in

taking it all the way to court. and taking it on if the company was convinced it would lose the case. there was a amount of damages that were possible. rather than go through that it was reasonable to avoid that expense. >> did you discuss reputational risk to the company that might came out of a case like this because i don't recall that specifically it would be recalled as matters of the past and wasn't seen as a matter of, it would have been desirable not to have all these things dragged out. as i testified to in july, i wasn't aware at the time there was any confidentiality or anything out of the ordinary in terms of the confidentiality. but i think i wrote to you in august saying that confidentiality in fact was discussed between the different lawyers and that was something that became clear to me after the fact. >> discussing reputation, a normal part of companies deciding whether to settle or not. you might be a lot more to settle than if you go to court.

laure chapman said many companies, the company spent because you don't want the company to be read. is that something you discussed? >> there was no discussion necessary of other things because no other things were mentioned. but it did seem pointless to take it to court if, in fact, it would be probably high profile company was certain at the time that it would lose the case. it was just a question of assessing what the cost and is there a way to remove that or take that cost or something like it earlier and avoid all of th that. >> the people come to you to say we will pay out the money, and rather than ask why you just say well, okay? >> no. i think reasons were given to me around the evidence, relevant evidence that was in the case, not with relation to why there was phone hacking.

spent but you didn't say -- >> it was strong advice -- advice the company would lose the case. >> you didn't ask what the opinion was in term of the appropriate amount to so. you took their word for it. that was the appropriate amount? >> and they thought leading counsel's opinion and this is what they had come out. >> if you had asked he would've gotten a quite different picture. you would have understood why, it's almost impossible not to look at the documents, and more why he recommended the settlement he does. if you did, you know that. you wouldn't have recommended such a low amount. you didn't ask anyone about it you just agreed with tom crone and let's get on with it. >> i was given a range where this litigation was likely to settle. i was told that in the damage is estimated by the account that they had sought legal counsel subpoenaed. that the evidence of plus cost

would land in the strange. i was given strong advice to settle the case and i went along with that advice. >> it doesn't sound like a textbook example of how you might settle something like this, doesn't? >> again, to put this in context i think while it is a large amount of money, and looking at it in retrospect we can say more transparency around the leading counsel's opinion, other senior execs outside of the newsroom having seen that, and i don't have any knowledge that anyone did. i certainly didn't. more transparency around some of those things would have been certainly desirable, but in the context of the overall european business, news international business and businesses that i was running, this was something that was within the responsibility of the editor, the legal manager of these newspapers. they come to me with strong advice. they did describe sufficient information to get the operation they were seeking.

and it was left to them to manage the issue. >> one final question. you never considered any of the options other than settling the case at the level tom crone recommended? >> i think the only options available were to go forward litigating the case, or to settle the case. and think it through. whether another of the questions, i don't recall. i recall leaving that meeting with a clear sense that they would go into that, and i think that's what they left that meeting with as well as they testify to you. >> okay. >> just to clarify on some of the points i'm still a bit unsure about, the answers you've given to tom watson, katie collins. you're not aware a meeting took place on the 27th of may, and neither was colin myler. i get that. do you recall though at some point thing to colin myler, let's wait and for the view which was in the note to julia

pike. julia pike said colin myler, and you said to him let's wait for the do. do recall saying that to colin myler? >> i don't recall that. there's no record or assertion of them being. there is a reference to potentially a conversation that neither mr. myler nor i recall. it may have happened that i don't have a recollection of the conversation about waiting. >> okay. [inaudible] that would've been what you wanted in? >> i think if they hadn't had a silk city when they came to me in the 10th of june i probably would've asked what leading counsel thought of it, et cetera, but they did. they came to me with communal, a recommendation that leading counsel to provide information about spirit okay. so the bit i'm struggling with how you seem to indicate to

damien you weren't aware of the figure that michael steele believes what the amount could cost but you said, you just that every member rightly that you want actually aware of the exact numbers that michael silverleaf gave in his -- mri? >> i was not provide with the document at all and was described to me a range. and leading counsel's opinion had been sought and this was a reasonable range. >> when you came last time you seem to be very precise what the meeting was. because when adrian asked you about last on your entity was the advice was the damages could be 250,000 pounds, which is absolutely spot on. that's exactly what he said. spare which is exactly what i said in answer to mr. watson's question speed up when you answer damon you weren't entirely sure what the number was. you just knew the number plus the cost, what ever.

usually people come around a second time and they are more sure the second time. using the more big the first time -- this time than the first time. >> that's certainly not my intent. the recollection that i have very specifically as, and the a lot of numbers and throwing around we have 425 that ultimately settle for damages plus the costs and selling it as i testified earlier i am aware that silverleaf said it could be 250,000 pounds, possibly more in damages and in consideration to act on those costs, and i'm trying to be as specific and transparent as again with you. >> the other thing is when you came last in you described re-tweeting on the 10th of june with colin myler and tom crone, 50 minutes, maxima i think is a discredit. today you twice described as a substantial meeting, which against since the eight different emphasis from last

time around the house do you sort of sort of explained the description between a short 15 minute now a substitute meetings to? >> first of all i think i said as 15 or 30 minutes. and the direct records of his record as 30 minute but i don't know how long it took. mr. crone said it took 50 minutes but i can't recall. and i refer to as substitute because is the only meaning where this material, the question of this thing was discussed in any level of detail. as i said to you exactly what was presented at the time which wasn't sufficient to authorize to get them the authority to go and increase the offer but no more spent the sufficient information that you refer to, basically and my writing thingy, we're going to lose the case, and if we lose the case of the costs are going to be 250,000 plus whatever the cost might be of going to court? is that what you're saying,

sufficient information are given? >> and also the existence of evidence that linked the particular voicemail to the "news of the world," and that is something that i think is, and that is important. and leading counsel's opinion was that yes the company would lose the case and also that a certain amount was arranged -- a range that was agreed upon spent what was the basis,. [inaudible] go up to 500,000 pounds? what osha rationale for authorizing a level up to that? >> i think, i don't know what the 5000 limit, but i think the range that was given to me by mr. crone and mr. myler as i have testified would be a be between 5000 a million with damages plus costs. they made a strong recommendation that should be pursued speak to but julian dyke said when i asked him about,

were they prepared to sell this case at any price, or was there a cap which they're prepared to go up to which there's a that's it generous enough, see you in court. and he said to me the 425,000 was getting close to the cap. when i pressed him he said the cap was 500,000 pounds. now, that was beyond tom crone's authorization. so presumably it must have been you who authorize so they could go to 5000 pounds because julia pike was very clear that was the amount he was authorized to go up to to settle the case. >> mr. crone, certified the thousand pounds was be on mr. crone's. i believe mr. crone's authorization was much, much lower with respect to legal settlement which was some 10,000 pounds. i think it's important to try to be fair. mr. crone and mr. lahood had attempted to sell this case at a number of levels before they ever came to me. at a variety of levels. some of which appear to be above

their authority. >> so -- >> 10,000 pounds spin who had given him of authority to try to settle, at higher amounts they are authorized to give? and who had given that authorization? >> certainly in the document that i've seen, recently and that you've seen as well, certainly mr. crone took it upon himself to authorize a settlement of 50,000 in 150,000, and i certainly didn't authorize that nor the increased to 350,000 that came later. that was not at my authorization no delight any records, i've looked quite hard at this define any records of any authorization, other executives who could have done so, chief financial officer for example, and there is no record of any of the spent tom crone had authority to set up to 10,000 completely unilaterally he was instructing your lawyers to settle the case for 150,000,

250,000, without any authority from anybody else even though his authority level is 10,000 pounds? >> presumably he and mr. myler and mr. pika discuss those things but they did not come to me until the 10th of june as i said. >> i still cannot distinguish which is same question which is on what basis did you give the authorities, who gave the 500,000 pounds cap to julia pike? >> certainly after june 10 meeting a range was discussed, and that was, and that would be capped at mr. crone want to give to mr. pike, that was their i had a great certainly with them within a range as we discussed something about 500,000 pounds when you include costs that they had the authority to go out and try to settle it which is their advice they had given me. >> had you given them a cap?

when. >> i think the point here is the damages number plus than the costs of both sides to litigate it. and i don't recall a discussion of cap on damages, although it would have been not, it would've been quite, quite normal to say go and have, you know, go and have a go at this number. but i don't, i don't recall the. >> did you get a cap or not? >> certainly i didn't say they could sell at any number. i would've been absolutely clear about that. they gave me a range within that range i said they could go in, you know, pursue the settlement spent did they come back to see her authorization when they got a figure upon which a been agreed and then say let's go with that? >> they had authority to go and settle the case within a range they have presented to me. whether or not they came back with the sun, there was confirmation of what had

happened or had it ago and in some point in the future, there were no subsequent meetings with two of them on the subject but they may have called me or had a confirmatory discussion that went. >> the problem i have, it's all very cavalier to me. and you know, very cavalier with money. given that your organization has been so successful i can't believe you have been so successful by being so cavalier with whether you pay off somebody, an employee is sent to prison, you give them half a million pounds without a blink of the night. nor the company into disrepute. you agreed to settle cases with no real cap put in place, some sort of a ballpark people that people are left to go along with. you think you have counsel's opinion but you don't have to even see the opinion what comes can be when it's a substantial amount. the problem i have is you seem to characterize your sort of

defense for this sort of cavalier approach. well, this is "news of the world." this is half our business. i don't know how big -- spent wal-mart spirit exactly. i'm pretty safe to say wal-mart is bigger than news corporation. i think wal-mart is passionate absolutely. i know the chief operating officer which may be a small part of wal-mart, but a relatively small part of wal-mart, i guarantee that if somebody had gone to him and said here, we got a problem, a legal case is going to cost us in the region of half a million pounds, in the chief operating officer that i've ever dealt with in my entire life with apricot say, let me have a look at that. i find it incredible, absolutely incredible that you didn't say how much? let me have a look at it.

i can't even begin to believe that that is a cause of action that any chief executive, chief operating officer could possibly take with so much of a companies money and reputation at stake. >> mr. davies, i think it's important to know, and i've testified to this fact and i try to describe this to you in some detail, just the situation that we had here was one where assurances were given, very clearly, rather a description was given very clearly a senior legal counsel that the case would be lost. and a description of why it would be lost with respect to the linkage of these voicemail, it was clear it was a losing case. it was an amount of money that was substantial, you're absolutely right. i was assured that within a range leading catholic convert this is where it would settle at

or could settle at, and within that range i authorize these people, mr. crone and mr. myler to go and negotiate that. i think, you know, the way that the company has always operated is to really rely on executives directly responsible for a unit of the business, paper, et cetera to really be, to go and do the things they need to do under the assumption they would be appropriate, although they would be question from time to time and come to senior management with issues. i was given sufficient information to authorized that settled. i was not given no information. i was given sufficient information and asked the question, is there a legal counsel opinion? what do they say? they say it's within this range, it's reasonable that it was a reasonable decision to take to settle that case, to agree with their advice. and take no further action because no other evidence or none of these other issues we have discussed today came to

light during that conversation or at that meeting spent but what source of level with the settlement would have been or the advice of the council have to been for you to want to say let me have a look at that? we trust our executives to make decisions and go, maybe a few chunky questions here and there. if that's the case why was tom crone only had a 10,000-pound limit. he just might happen to say settle up to half a million pounds, and it doesn't strike me as -- [inaudible] we will get a new authority to settle only to 10,000. doesn't make sense. it's a mismatch. this strict 10,000-pound authorization that tom crone has

spent mister davies, there's a contrast here between controls and financial controls to make sure things are hopefully recorded properly, authorize probably and so on and so forth. and if they're not there dealt with in the right way. following the recommendation of experience council. this is a strong recommendation of very experienced number of years, some 20 plus years as counsel, the editor a new editor who had come in, a fresh look at all these issues i had assumed, and they made a very, very strong recommendation. and i followed it. and i think given, there are two pieces here, if i can try to be helpful. one is the question, decision whether or not to settle or to increase the authority within a range as i recall 500,000 to a million pounds, and all in cost, so and so forth. and then the decision with respect, or the lack of a

decision to say are there other things a we should be looking at. and again, sufficient information was given to authorize reasonably them to negotiate within a range, the increase of the summit offers they had already made, but nothing more and nothing to indicate any other action. there are two sets of things to consider there. >> what parts of that was the confidentiality of? >> as i testify to you in july, at the meeting of june 10 in 2008, confidentiality as a cost item, if you will, was not discussed and it wasn't my absent at the time confidential i was something that was a line item come if you will, that would increase the cost, so and so forth. it was entirely customarily for certain settlement agreements of this nature to be confidential. it's normal practice in many

business passionate many, many businesses, if not all, when faced with certain legal things. as i wrote to you in august, it later became clear to me after my testimony to you in documents that had not been, that i had not been privy to conversations that i was not a part of the indie confidentiality was discussed at cost in that settlement. and i wrote to you in august to clarify at that point. i hope that's helpful. [inaudible] do you come have you as a result of this, do you now look at things differently? do you deal with things differently? do have a more hands-on approach with the way you do with things in your company? can you not see that actually this really is pretty lax for someone in your position? >> it is a huge focus to the business, and has been for the last year, to get to the bottom of this issue definitely, to cooperate with the police with respect to their criminal

investigations and this committee as well as judicial inquiry, and to the press, politicians, police, that is underway. and and i think crucially as well to learn the lessons from these episodes, to say first of all, how can we improve on the ground government of operating companies around the world, including news international? how can we improve transparency with the senior management on a global or regional basis and operating companies in various territories. and we take a number of measures to do that. you ask how. for several at news international, all the operating companies i have a 34 we've instituted a more formal review process. will put an intel board in place. appointed a chief compliance officer full-time round those things. i meet with outside executives of news international order meet with the board. we've had one meeting already

with the substantive agenda around these things. the goal is to go through in great detail both legal matters that are facing the company, ongoing and reputation risks, governance risk, compliance and so on. just in the last week we have instituted, for example, out of one of these in indy we trained over i think 1000 staff, we trained with respect to compliance and risk. these are things i take very strictly. it's something i have throughout my entire career, clearly the transparency that was achieved around this set of issues wasn't good enough, and something i determined to sort out into something we would very, very strongly in. >> just one question i've got regarding mr. davey's line of questioning. your first meeting, they come to

you to ask for authorization to increase what they're offering the doing of what they're offering before they came into the meeting? >> i now know the previous offer they made was 350,000 pounds. but i don't recall the exact amount they discuss with me at the time, that i would imagine they would. >> this is your first substantive meeting with people having alone opposition. did you even ask them who gave you authority to authorize 350 or whatever? >> again i don't recall him mentioning the 350. now i know that was an offer made the week before i was abroad. i didn't have that discussion with him at the time. i was more focused on what the total amount would be that this would seldom given the strong advice that the case would be lost. and that was what was focused on spent.

[inaudible] >> their authority level did not come up during the conversation. >> would any of the people involved in that chain of operations, john chapman to your knowledge to? to my knowledge, the authorization process was that there was about, mr. crone was authorized to make a 10,000 pounds legal some of the mr. myler would've been 50,000 pounds, and other members of the executive committee, the chief operating officer, chief financial officer would've been authorized i believe up to 500,000 pounds. >> did they go through any of those? >> i can find no record of those authorizations being sought or given. and we have looked and tried to find out exactly how that escalation occurred during that period. spirit as far as you are what it really was tom crone and mr. myler show? >> i think very much in the documents given to you, you know, we're very much driving the agenda around the litigation

but i think that's also what mr. chapman testified to as well spent i will come to mr. crone and mr. meyerle, but the matter of tom crone, wrote to -- on a saturday which was a very busy day for "news of the world." the following tuesday where he is clearly expecting colin myler to the meaning within, which he said he can't be advocacy group are in for a holiday. when did you first see that name of? >> i didn't see that memo at the time. i first saw that memo recently since i gave evidence to you in july spent so that was a private note from tom crone to colin myler, and was not copied to? >> it was not shared with the. >> would you agree, the fact that you can't recall having a meeting, or discussion, certainly colin myler can't recall having a meeting that tom

crone expect to happen, writing pretty serious memo, the question as to how these two deal with each other and whether they fall in frank with what they're up to? >> i mean, i couldn't possibly spike lee about all the conversation they might have had with each other but i just don't know. [inaudible] people have occasionally refresh their memories, and colin myler has told he has been unable to verify details of the discussion that may or may not have taken place because news of the international have refused them access to the relevant documents, presuming relevant document exist. would you let mr. myler refresh his memory, you would give them access to any guidance he needs surrounding that meeting or otherwise? >> i can tell you that mr., you know, as a matter of, if there's

an occasion to review policy around former employees, access to systems, week in review that and i can get back to you on the. i can say that i had gone and looked for records around my own diary with respect to conversations during that period, and i'm happy to provide my calendar to you. there's no record of a conversation or meeting on the 27th of may with mr. myler or with anyone else on this matter. and i can provide you with that. those calendar events all the way through. [inaudible] wouldn't you agree with that? >> i think the company around all of these issues can the independent committee for that matter, if there's an occasion to revisit those, certainly i will meet with them. >> in the spirit of transparency? >> very much so.

and i'm happy to provide you with my own calendar and notes about the entire period. >> because a peculiar meeting come or not needing? >> i don't think anyone is suggesting it's a meeting. mr. pike recorded know that mr. myler told him of the conversation, so secondhand note of the conversation that neither mr. myler nor i recall, neither of us rule out the possibility of a brief conversation on that day, a telephone call or what have you, but it certainly would have been a transeventy because otherwise one of us would have recalled. >> just the way people argue with each other, you're very clear, you talked to go and settle, where as the notes made by julian pike with his conversation of tom crone, quite clear he said he went to think the options and that's not the case. that again raises the question about what these people are telling each other, whether they are being honest with each other

if you are telling us the truth spent by the mr. crone and mr. myler both testified to this committee, certainly mr. crone did, that he left that meeting with the understanding that they had the authority to go and settle. the authority they were seeking to increase their offer was something they left that meeting with. i don't know what the note from mr. pike is referring to, whether not mr. crone are mr. pike or somebody had to be gone but i just don't know. >> can i just got back a bit about your position, your responsibilities. you took over when -- was. [inaudible] moved over to "the wall street journal." and you were running a international operations for europe and asia at news corp. where you effectively executive chairman of news international? >> i was chairman of his international when he moved to new york to dow jones.

and did spend time on the business. and relied on senior manager put in place for some time. it was always the case that the company would appoint full-time ceo to replace mr. hinton. and it took about 18 months to get to that point. that was rebekah brooks? >> yes spent in september 2009? >> yes, although effectively i think was announced in the summer of 2000 and she started to play a much bigger role. >> so you were -- >> i think formerly the chairm chairman. >> not executive chairman? >> i don't recall. i may been the executive chairman. >> who was the de facto chief executive of news international before running the show before rebecca was appointed? >> we had an executive group, chief financial officer and

then, and i involve the editors more transparency. >> so you were an executive chairman? >> yes. i might have been but effective -- >> can i just come in this meeting on the 10th of june, the e-mail in its wide significance was not mentioned the fact that involve "news of the world." when you had this meeting did you ask colin myler, you know who taylor was? >> pardon me? >> did you? >> did you know who gordon taylor was? >> i don't recall if i knew he'd he was beforehand, but mr. myler would have told me spirit did you ask any meeting who the hell is this gordon taylor? >> i don't recall if i asked. i recall being aware of it at the time.

what it was prior or maybe where any meaning who mr. taylor was i don't recall spent do you know what he did for a living? >> i was told. as i just said to you to be clear, i don't know if i had a lot of knowledge about mr. taylor's role. >> the one thing that really, that really showed us and i think any 10 year old that the "news of the world" line did not stand up with the fact according to was not a member of the royal family or the royal household. so did you not say well he is not royal? >> i think the point here is not so much whether or not i was told gordon taylor was, but really what, you know, when i came to news corporation in 2007, what didn't happen was, i did not receive a briefing on all the matters in 2006, december 2007 i was aware that the editor had resigned over these things, taepodong to jail,

one of them was a reporter. the details involving the royal family, that was the royal reporter, those things were not brought to my attention spent you were authorizing a settlement, substantially above sort of damages what you see as they were talking about. and you are not even curious -- [inaudible] how can he pakistan's own? -- hack this man's phone? >> the original prosecution and that would not in terms of his being the royal reporter and it was a voicemail interception involving the royal family were not of my mind at the time. i was given a set of information that this was a case, it was an old matter, there was a question of, it was the same person

convicted before and so one who'd been working with the "news of the world" with mr. goodman, but mr. goodlatte i don't live was discussed at the meeting. and that there was a piece of evidence that would ensure that the company would lose the case because indeed the interception in question was only half of the company. that was information i was given spirit did not occur to you, did you ask? >> i don't believe so. i think it was known at the time that this was a voicemail interception that had already been prosecuted by the police and that the police had said there isn't anything more here. they shut their investigation and successfully prosecute the individuals concerned. >> i have a growly australian accent rattling around in my head at the moment that would take how much more is this person going to cost me question to you think your dad might've

asked more questions than you asked for? >> i couldn't begin to speculate. >> and you didn't come it didn't occur to you to sort of ask whether glenn mulcaire -- >> no, it was specifically said to me that he was doing this on behalf of the "news of the world" with respect to this. and that was the relevant, the evidence that was described to me. >> it's remarkably curious, are you so curious with all the other businesses you run at news corp.? >> i think it's important to be clear here is that the question, the questions were asked with respect is there evidence, what is the evidence about, is the case going to be lost? i was told the council provide acting within a range that somewhat recommendations were made. it was not as if there wasn't a conversation. it was not certainly a long conversation. in my view it was a settled matter. i was given very, very strong

recommendation by senior and experienced legal counsel, and the editor of the "news of the world." i think, unicom had been with the business for some time. and in industry for something. i had no reason to believe, nor was i provide any reason to believe that anything further was a foot in spent entrance of the opinion, either didn't occur or clearly didn't seem relevant to you even ask for a copy? >> i interested at the time and he was described to me at the time deleting counsel's opinion was with respect to damages. i was given an answer about the range of damages and what it would take to question with respect to what mr. taylor's requirements were, in terms of what you might want to settle for an have to do that. that was the discussion that was had and it was deemed sufficient. >> we do not at all curious whether they said anything else? >> singh as a told the qc had been passed on damages and it was described to me with a range of damages there were, it

didn't, it didn't occur to me to probe further. >> so you didn't even ask how long is this aqc's opinion, if it's a cute -- a few pages long? >> it was described to me that the opinion was made that it was with respect to damages and that there wasn't other things that but it didn't seem necessary for me to ask for a copy of it nor was a forthcoming. >> do you know how widely the qc opinion was to get a to get a? >> i did not know. >> do you know what it was a good are asked by rebekah brooks? >> i do not know. >> the e-mail was published of far, far earlier than our report in february 2010, published to shortly after the 14th of july, 2009, when it was disclosed to us. >> if it was in the newspaper allegation in 2009.

>> it was given to this committee by nick davis, the journalist. >> do you recall when the guarding produce that story and then a week later they came, the documents were published following our session, do you remember where you are? >> when a newspaper allegation was made i was in the united states. i was in idaho at a business conference. >> where you've been at the time based in london? >> yes, and i return to the u.k. the following week. >> did you ask for anything? >> my reaction was to understand whether or not it was true, that there were further allegations. and i asked, i received a telephone call from the u.k. i received a copy of the article and the allegations made, was asked is this true. went back to the news of the will to say, because they been,

mr. koh and mr. myler had answered the settlement that the answer came back very strongly that investigations have been made, inquiries have been made, previous investigations have been made and are, had uncovered no new evidence at all. the same assurances that you received in 2090 and, indeed, it was only well before i return to london, was only 24 hours after the allegations in december 2002009 emerged that the metropolitan police issued a statement saying that there was no new evidence and this was a matter of very serious investigation by a series of detectives and is nothing new to investigate. >> so when the story was published, but, you know, was published, you didn't even think about saying well, i'd better have a look at this, these transcripts that were mentioned to me previously? i'd like to have a look at the qc's opinion?

>> the transcripts themselves a? >> the e-mail. >> as you said, there wasn't much in the. i think there was, a facsimile of our something like that. sort of a redacted one piece. >> even in the middle of 2009, the executive chairman of news international, you are possibly the only person in london who still thinks that there's one rogue reporter and one private detective? >> as you are aware, mr. fairley, within 24 hours, the police issued a statement, and recall that the e-mail came from the police in the civil trial disclosure process, so the issued a statement saying there was no new evidence. >> bodmin spent but they said that the police had for longer than that because it had come from them. that there was no new evidence, that there was nothing new to investigate. secondly, the executives

responsible were very, very clear that thorough investigation had been done, and the company as i said earlier on in state testimony, the company relied for too long on assurances about thoroughness and scope and completeness of those investigations, as was the assurances of the police. >> let's move back to news international and reaction to some of these events. and july 2009 you said too quick and too aggressive in defense and when they talk about a thorough investigation, didn't happen because their investigation didn't even, honor the qc's opinion, which is pretty damned. cleanup you take responsibility as executive chairman for that failing. spent i think as i said, the company come and they do share

responsibility as an executive, senior executive in the company, relied for too long on very strong assurances from both internally inside the company around the quality, scope and authority of investigate have been made on an ongoing basis as was the 2006 in 2007, and also on the assurances from outside the company from the police who presume that more information and for the last word if you will on the investigations that they carried out and successfully lead to successful prosecution in 2006. and i have said that the company relied on those things to like and i have said i'm sorry for the. it's something that we're determined in how we operate a business going forward that we make sure these things don't happen again. >> -- [inaudible] pretty much repeated news international statements and said there was no evidence that

"news of the world" instructed third parties or others to access voicemails of individuals. you except now that colin myler, the editor, produced that editorial and the lead manager, tom crone believed that statement in the paper to be false? >> what i do know now is that in 2008 they had access to the leading counsel's opinion and other things. what conclusions they drew from that, and there are other things, is a matter that would be speculation if i got into that. and i think you have spent a lot of time with mr. myler and mr. crone, and i think also a matter for this committee. >> similar statements were made about our committee report in 2010. could i just very, very quickly deal with mr. crone and mr. myler who have taken issue with you, clearly mr. pike has

already told us he knew that people from news were not telling principally mr. myler and mr. crone as soon as they open their mouth. can't i just add something else into the mix here? as far as what mr. crone and mr. myler told us. originally, mr. crone told us as far as neville thurlbeck. i questioned neville thurlbeck then and i questioned the same subject at his position is he is never seen the e-mail nor had any knowledge of it. ..

>> i think that's -- with respect, i think that's a question for this committee to judge the evidence given to it. i have been very clear that i believe this committee was given evidence with executives either without full possession of until facts or that was not as complete as it should have been, and i'm sorry for that, and the company is. this is -- it's not good, and it's something that i'm determined to make sure doesn't happen again. um, it is something, you know, the only thing i can speak to with respect to the evidence, and i made a statement to this effect, is, that, you know, assertions made about my knowledge were wrong. >> mr. krone also said when he came back for the first time, that's you, realized that news of the world was involved, and

on that basis he authorized a settlement. he couldn't have been more cat goeric. again, how does that reflect on -- >> could you repeat that piece -- >> yes, came back to the committee to say of the settlement organization for the first time he -- that's you -- realized "news of the world "was involved, and that involvement involved people beyond clive good match. on that basis, he authorized set m settlement. >> there's a lot of might have known and should have known and this and that. what never happened is mr. crone and mr. myler showing me the relevant evidence, explaining the relevance or talking about wider spread criminality, the queen's council opinions, all of these things. that simply did not happen. and people can suppose that i might have understood, but at the end of the day, those things were not provided to me, and as i said earlier, i was given

sufficient information and only sufficient information to authorize the increase of a settlement offer that mr. crone and mr. myler had already been eagerly increasing before it came across my desk, and that's what i received. i received nothing more. >> i'm just drawing a conclusion, so just to be absolutely clear, if mr. myler's telling the truth, you're not telling the truth. if you're telling the truth, they're not telling the truth. >> mr. farrelly, it's quite interesting. there is a lot of supposition in it. i would have known, they understood me to know, all of those sorts of things. what they never did was clearly tell you that they showed me those e-mails. they never clearly told you that they discussed with me the real significance of the queen's council opinion. they never went that far. it was very cob fusing and

muddled -- confusing and muddled, to be honest with you. but i think it's for this committee to decide the quality of the evidence and the testimony that it's receiving, not for me to prejudge that. >> right. my final question is given all the evidence that was clearly there within news of the world, given the close your and given the loss, do you think you handled this competently? >> um, i spent a bit of time, quite a bit of time refleblghting on my own decisions, my own behavior and the company's behavior more generally in this, in this matter. for the time where i had direct responsibility, um, as you put it executive chairman, i think it might have been executive chairman in title, we don't focus that much on titles, but

for that time in 2008 and leading up to the middle of 2009, i think with respect to the settlement, for example, i think i behaved reasonably given the information that i had. i do think the company -- and i share in the responsibility for this, and i'm sorry for it, the company took too long to come to grips with these issues with understanding what had been done and what had not been done in 2006 and '7 with respect to its own investigations. and understanding how to dispassionately look at what were perceived as attacks as opposed to legitimate criticism from the outside. and i think part of showing that responsibility and part of taking responsibility is also making sure that those things don't happen again and making sure that the quality of the business that i see with my colleagues everywhere around the world from my colleagues in hong kong to milan to munich and new york and california just to name a few, a huge and great

organization that clearly in this instance has failed to come to grips with something important. and part of taking responsibility is making sure to sort that out. >> yes or no, do you think the whole, this whole saga and your evident lack of curiosity in asking questions that were screaming to be asked show you to be competent or incompetent? yes or no? >> no, i don't think it shows me to be incompetent. and i don't think, for the record, that i would characterize it the same way you just did. >> can i turn to -- [inaudible] >> i apologize, but i'm going to have to leave the committee meeting after my last question. we have two from the same age, i think, and i have to go back home and pick them up. >> oh, good. good luck. >> when your father appeared before us in july, he promised to take under review news corporation's properties all around the world. to your knowledge, how is that

review coming? >> there are a number of activities underway. they are, some of them, discreet to different regions, so the newspaper businesses in the n if australia, for example, have undergone a review of editorial practices and so on and so forth. as you know, i think, and as we've informed this committee, in the u.k. the company has set up an independent management and standards committee reporting to the independent directors of the board, and that review of editorial practices proactively and to all of the titles, not just the "news of the world," is well upside way and a lot of detail. and i hope that's concluded early in the new year, although it's being managed separately to the business. as i mentioned earlier from a corporate perspective and from a governance and compliance perspective, we're making the changes we think that will, hopefully, insure greater

transparency around things if they do go wrong, but also insure the disciplines and really the prioritization of some of the matters around transparency up and down the chain of the business. so i feel they're coming along well. i don't have perfect knowledge of the management and standards committee independent review, nor should i as an executive involved in this business. i think one of the real lessons learned here as well is to avoid allowing, for lack of -- [inaudible] allowing the newsroom to investigate itself, and i think having ip dependent eyes and having a stronger and more proactive, um, to the corporate presence when things are raised or when an alarm goes off, i think it's something that is one of the key lessons that we've learned. >> thank you. in advance of the australian government's inquire ri into media standards over there, is the resignation of john hartigan

yesterday, to your knowledge, related either to phone hacking or to any unethical practices -- >> no, i'm not involved in the australian part of the business, but i would think certainly not glflt okay. to your knowledge, how many other international newspapers have been hacking e-mails or phones other than "news of the world"? >> the management standards committee, the investigation is underway, and i really don't want to prejudge the outcome of that investigation. it's an important investigation, and if there is evidence that's found, there will be matters of criminal informations as well -- investigations as well. as you know, a journalist at "the sun" was arrested recently which is a matter of great concern, but i also think it shows how seriously we're taking these issues, and the company is working, you know, determinedly to provide whatever information

there is to the police in those instances. but in that matter, that is the matter of a criminal investigation, and i shouldn't talk too much more about it. >> i wonder if you could, i might ask if it'd be in order for you not to say which journalist, but which paper if news international, to your knowledge, has been involved this -- because that wouldn't prejudice -- >> at this point, i have no knowledge of any of the other papers being involved in the hacking of phones, but i don't want to prejudge the management and standards committee's work, nor have i seen all the work their doing. >> okay. i asked you if you were aware of the allegations that phone hacking had been hacked on american soil, and you said you were not aware of any such allegations. since that time mr. martin lewis, the hour for the victims, has told us he is representing victims who were hacked by news international journalists on american soil.

what do you know of that matter today? >> um, i know that it's a matter of activity for the management and standards committee, they are looking into that and cooperating with the police here and the investigations that are ongoing as well as with any matters in any other jurisdiction with respect to activities at the u.k. newspapers, but i have no knowledge of the veracity or substantiveness of those allegations. >> so you still have no knowledge, you stand by your earlier testimony also that you have no knowledge that 9/11 victims or their families were hacked by news corporation? >> that's correct, and i think a loot of investigation and work has been done on that summit, and so far there's nothing to say that confirms it, as i understand it. >> so far you were coming up empty. it would seem that, at best, mr. tom crohn misled this committee in his most recent evidence. in answering questions from my

colleague, tom watson, the exchange went as followed: mr. watson, did you arrange for the phone hacking victims to be monitored by -- >> mr. crone, no. mr. watson, have you ever received a commissioned report from civil case lawyers that involved private information? mr. crone, let me just think about that last question. i may have litigation, certainly not in the last few years, but a long time ago maybe i might well have used, i probably did, in fact, use private investigators. is it not, in fact, the case, though, that many crone instructed news international's solicitors as recently as may 2010 to look into the personal relationship that may or may not have existed between mr. lewis and the lawyer, charlotte harris, also representing victims of phone hacking? >> i can say that, um, mr.crone

and another news of the world employee at the time did engage certain private investigators. the details around it i'm not sure as you describe it, but to surveil plaintiffs' lawyers, and i want to say for the record it is appalling, it is something i would never condone, and the company should never condone, and it's just unacceptable. >> when did you discover the lawyers of plaintiffs had been put under surveillance? >> very recently. the last few weeks. and i think it's important to say that was absolutely not a corporate activity that was condoned, and it's absolutely not appropriate, and mr. crone and the other person did not do that with any authority or knowledge by me, and i would never con tone that behavior. >> does your internal review of the record suggest that mr. crone authorized that

surveillance on victims' lawyers? >> there was surveillance that was done by mr. crone and another executive at "news of the world," and which private investigator and what bits between them i don't know, but they were involved in that. >> are you aware that mr. lewis' family was trailed by private investigators including his 14-year-old daughter, and would you agree with me that that is completely dispick bl and has absolutely no place in the practices of -- >> i totally agree with you. if it's the case, as i just said, the whole affair is just not acceptable. >> are you aware that private investigators investigated my colleague, tom watson, and other members of this standing committee and the predeaccesser standing committee during the time they were making their investigations into your company? >> i am aware of the case of

surveilling mr. wattton, and under the circumstances i apologize unreservedly for that. it's not something i had knowledge of, and it's not something i think that has a place in the way we operate. i think it's important to note that certain surveillance of prominent figures in investigative journalism is acceptable, but in this case it's absolutely not acceptable, you have my apology on behalf of the company even though it is something i didn't condone, wouldn't condone and don't agree with. >> i'm sure mr. watson will have some follow-up questions on that later. but can i put it to you, mr. murdoch, that it seems every month if one is following the hacking scandal here in the united kingdom, there's revelations about unethical behavior from news international executives, the latest being the scandalous revelation of surveillance on the lawyers of victims, on the families of lawyers of victims and on

members of the select committee investigating the company. you've spoken repeatedly here today and made reference to the review of practices in news international about the need to clean up your act, how proactive the company is trying to be. would you agree that it would be better for news corporation to get out in the open every unethical practice that is yet to come to light and, therefore, avoid the drip, drip, drip of incredibly damaging revelations which seem to come out week after week, month after month in relation to this scandal? >> i think, um, i hi it's important to note that much of the disclosure around, um, these activities around police payments, around phone hacking, um, really started to come out as we came to grips with this, and much of the disclosure has actually been disclosure by news corporation and news international first of all with respect to the initial disclosure around a journalist who's since been arrested in

january of this year that led to the restarting of the police investigation into the news of the world and into the phone hacking pieces with the disclosure of sufficient evidence that we thought the police should open an investigation into police payments as well. that was something that was there that we didn't know about previously, and when it came to light, we acted very, very quickly. and i think since the end of 2010 the company as it has found things out and discovered the extent of what has been isn'ted of happening -- is suspected of happening, we've sought to be as transparent as a company can be. and, certainly, that is the posture of the business, of the executives of the business, of the management and standards committee and at the board level of news corporation that to the extent that we can be as transparent in as timely a way as possible as to any behavior that is unacceptable, um, or illegal, that, um, we are

seeking to deal with it. and we're dealing with that with full cooperation with the police investigations that are ongoing and with being as transparent as we can given that there are criminal investigations ongoing and judicial inquiry with any other inquiries that come through. >> so just to be completely clear, obviously, you will need to clear all this with the police so that you don't prejudice ongoing criminal investigations, but with those matters which the police allow you to release, as the leader of the company, mr. murdoch, will you guarantee to this committee that you will publicize every nefarious practice that has happened in your company and allow it to be exposed in other media outlets? will you not come forward and admit wrongdoing where you have evidence of it and where such a mission would not prejudice the police investigation? >> i think, first of all, i just want to be very, very clear about the corporate governance

structure we've set up recently around these matters, that the disclosure of information both alongside with the police, to the police is something that is a matter of utmost importance to the management and standards committee, and the independent management and standards committee is responsible for the information and disclosure around, um, judicial inquire ris, new press practices, so on and so forth. it's my responsibility to be as transparent as possible which is why we asked in april of this year when the company admitted responsibility to wider spread phone hacking set up compensation funds, apologized unreservedly to victims of those voicemail interceptions. we've asked repeatedly for information to come forward that can help us get to the bottom of this to underscore the issue and move forward in a way that is as transparticipant and appropriate as possible. >> when mr. myler appeared before our committee last, i put

it to mr. crone then that his credibility had been dadged. it's also going to be further damaged by the revelation he said he did not authorize surveillance on the victims' families and lawyers when clearly he did as recently as may of 2010. since your answer to me shows that news international did know that tom crone had authorized this surveillance, why did you not write to the committee to alert us the evidence given by mr. crone in september was not true? >> my understanding that this information came to news international's attention very, very recently, in the last few days or weeks, and it was something that was not known to us and confirmed, is my understand. >> so you would have done if you knew we had been misled, you would have supplied that to the committee? >> i'd have to -- i don't know exactly when ohs in the company

became aware of it or our legal counsel and so on, but again, you know, those are the matters to december close before this committee i've tried to be as complete as i can in sending you documents and things that we've understood and found out since my last system. >> i'm sure you would agree that only news corporation can clear up this matter. i wish you luck in pursuing your ethical review of the company. thank you. >> i think given the line of questioning, louise has allowed tom to come in. >> be aware that the convicted private investigator -- [inaudible] prince william original inquiry, and this week we found out that the private investigator derek webb taunted prince william. you will probably note that the private investigator jonathan rees targeted these one friend of prince william in 2006, is that right? >> i wasn't aware of that particular piece, but i may have been, i don't recall. >> i know that because i've got

an invoice from news international's fly company limited from jonathan rees regarding that. could i ask that you check out your company e-mails and let us know when jonathan rees was contracted to work for the company when he came out of prison in 2005, how long he worked for the company, what he did and who appointed him? >> i don't want see that there's any reason why we couldn't share that. i think it's been shown that he worked for a number of news organizations including news international. >> he worked for a number of news organizations in the late '90s, and then he went to prison for a serious crime. he got a seven-year sentence. when he left prison, he was then contracted to work for what we now know is news international supply company limited and did a number of work for the company. and if you could check the -- >> absolutely. if you provide us with that, we can check that and come back to

you. >> are you aware of any other private investigators that taunted prince william? >> i'm not aware of any other private investigators. >> [inaudible] >> it's the first time i've heard that, so -- [inaudible conversations] >> and alex layton. >> if you'd like, mr. watson, perhaps you could write to us and we could go through all of that -- >> i'd like, given that we're talking about private investigators, i would like to ask you now. could you, also, examine the activities of the private investigator barry -- [inaudible] >> i'm not aware of the individual identities of private investigators were used. perhaps, mr. watson, it'd be helpful to just clarify one of the things the company is doing around this. the use of private investigators clearly has been, i think, in the industry and by "news of the world" too widespread, and i just apologize to you and to the other members of the previous committee as it was described to me for what was inappropriate.

it seems to me. one of the key changes we put in place over the last year is that the use of private investigators in particular is severely restricted by the journalists at news international and, in fact, no private investigator, um, under our new guidelines and new rules around this can be, um, hired. or contracted by a newspaper without the editor going to the chief executive of the company for approval such that the use of these private investigators doesn't get out of happened and is only finish out of hand and is only in the extremist for appropriate public interest purposes. >> well, under the circumstances, mr. murdoch, i'd like to say that's a great relief to me. >> well, i'm glad. [laughter] [inaudible conversations] >> are you aware of the serious organized crime agency investigation code named operation millipede? >> operation -- no, i'm not aware of that. >> did you -- i won't go there, don't worry, i'm just asking if he was aware.

can you let me know whether the company admitted liability to e-mail hacks during any of for settled civil cases? i'm thinking of taylor or clifford. >> i don't believe so. i'm not aware of any of that. >> if you subsequently find, could you go back and let us know if that's the case if you did accept liability? >> i'll consult with counsel about that to, hopefully -- but i'm not aware of any computer hacking that you've talked about in the past. >> whether that's a yes or a no. >> would you like me to talk to them now, or can i write to you at some point in the future? >> we've got a bit of time, yes or no. >> where is -- they'd like to get back to you. if they did, they're not aware. >> a few weeks ago --

[inaudible] told me he would investigate allegations of computer hacking. has he started with you? >> no. he has oversight for the work of the management standards committee is doing, and i understand it's being pursued with vigor. >> are you aware that ian hearst has now had it confirmed that he's a victim of computer hacking? >> no, i'm not aware of that. >> and that 16 associated with him have had their e-mails read? >> i'll advise you, you are straying into areas -- >> okay, okay. this is about me. >> [inaudible] >> you may be aware or may not be aware given the line of questioning that operation -- [inaudible] contacted me last week to say that my name appeared on seized electronic advances, and they need more information to rule out me as a victim myself. are you aware of that? >> i have no knowledge of that. >> okay. um, i thank you for your apology

on behalf of the company for the surveillance undertaken by derek webb. key bring to your attention a conversation i had with another senior member, former employee of news international on this matter? asked me to allow him to remain anonymous about the consequences. he said to me in registration to the original -- relation to the original inquiry of members of this committee, dig up, you know, as much information as you can on the members of the committee. do you know who might have sent out that dictate? >> no, i have no knowledge of that. >> he said to me about rebecca brooks, you might find this amusing, you might not. he said, she didn't like you at all -- that's me -- she took an absolute pathological dislike to you. she saw you as a person that was -- she saw you as the person that was threatening.

did rebecca brooks discuss my line of inquiry on investigation with you? >> not that i recall, no. >> he went on to say to me, she tried to smear you as being mad. she was saying to blair, you've got to call this man off. he's mad. don't you realize he's mad? did you discuss the inquiry or do you know whether rebecca brooks discussed the inquiry with tony blair? >> i certainly had very little to do with the former prime minister, and i had no knowledge of discussions with him about this or other matters. >> okay. >> [inaudible] [inaudible conversations] >> well, okay let steve sinclair in, if we can just wrap up. >> did the lack of appropriate corporate golfer nance give a false sense of security that are news international was -- [inaudible]

>> i don't quite understand your question. i don't think there's a -- i wouldn't say that there's a lack of appropriate corporate golfer nance. i think we had an instance here -- in. [inaudible] >> we've tried to strengthen a number of procedures, but, you know, from the governance perspective, there is, you know, we -- i wouldn't call it failure of governance. i think there's a failure in transparency. we had individuals who were not making transparent information that was relevant and could have been more consequential to a higher level and what i tried to do is strengthen some procedures around that to make sure there's more traction participant si there. >> i didn't want mention failure or -- >> my apologies. >> you said earlier you want today strengthen it so, obviously, there must have been some flaws in the corporate governance. is it not the case that you failed the show the agency or the will to deal with unethical practices because, quite frankly, successive chief

executives since 1989 have believed they could do whatever they wanted and get away with it? >> i can't possibly speak to what chief executives in the past had believed what they could do and what they couldn't. i can say that as soon as evidence came to light to me, unequivocal evidence around wrong doing, this company has moved with determination and with vigor, um, to sort this out. and i think it's very, very important that the company takes responsibility for what happened with respect to liability with victims of illegal voicemail intercepts which the company did and i fully support as well as move to make whatever changes are necessary and pursue with vigor whatever allegations arise to make sure that people who are involved in wrongdoing are held to account and we aid the misto do that and, b, that we make sure to the extent at all possible that these things don't

occur again. and i don't want think that there's been -- i don't think that there's been a, certainly not in my experience in the company that anyone can untouchable actually. what we want is a business and we want to be a business that is a business we aspire to be where we are doing the good work of serious journalism, of serious creative endeavor outside of the other businesses and that these things don't happen in the future. >> do you understand the significance that the data of 1989? is. >> pardon me? >> [inaudible] >> no -- >> do you understand the significance of the date i gave, which is 1989? >> i think i know where you're going. >> okay. do you want me to -- >> yes. well, are you referring to the hillsborough -- >> of course i am, absolutely. it's the case that the -- [inaudible] 1989 because that was when "the

sun" newspaper published lies about the -- [inaudible] disaster under the banner headline and what the question i'd like to ask -- answer is the fact that "the sun" got away with telling outrageous lies in 1989 lead news international to believe they could do whatever they wanted without reproach? >> all i can say about that, and i'd like to say it clearly, is that, you know, i'd like to add my full apology to the wrong coverage of that affair. i'd lake to add that voice -- like to add that voice the chief executives of "the sun," i'd like to add my voice to that as well. it was wrong to do so. it was 22 years ago, and i was far away and a much younger person and, obviously, no involvement or really proximity to it, but i've since looked at

it. i'm aware of the concerns and the hurt that it caused, and it's something that is something we're very sorry for, and i am as well. >> in the public interest -- [inaudible] >> certainly not. >> okay, then. you mentioned that a journalist at "the sun "had been arrested earlier. did employees commission phone hacks? >> it would be inappropriate for me to comment on any of the circumstances around what was provided by -- >> no individuals, just -- >> i shouldn't probably comment on the charges or anything like that either. i hope you understand. >> are you aware that the sun appeared in the evidence file of convicted -- [inaudible] glenn walker? >> i was not aware of that. >> okay. this particular publication is indicated in phone hacking, and if it's revealed that the sun does appear nor the file, will

you close this paper like you did with "the news of the world"? >> i think it's important to not prejudge the outcome of any investigations, nor is it, i think, appropriate to prejudge what actions the company might take -- [inaudible conversations] >> pardon me? >> can you rule it out? is. >> i don't think i can rule any corporate reaction to behavior of wrongdoing out. that'll be a decision made at the time given whatever is out there. it's certainly -- i don't think it'd be right, but i think it's important not to prejudge any outcomes from these investigations that are important police investigations, and they're important internal investigations that we're proactively pursuing so make sure that our papers can be as good as they can be and that they continue to perform the important role that i believe they have in their commitments.

>> thank you. [inaudible] >> mr. murdoch, you've now seen the opinion of -- [inaudible] if any employee had seen it according to your code of conduct within news corporation, should that have been reported, and to whom? >> i think, um, i'm not, i'm not aware of the requirement in the code of conduct with respect to legal counsel being received and who it must be shown to and not shown to. i would say that given the allegations or given the findings and the content of that opinion, it certainly would have been appropriate for it to be shown to more senior legal come in the company -- legal counsel in the company as well as away from "news of the world" as well as in full to me, for example, and others. >> okay. um, so far you've observed that you did not see the opinion and, certainly, not briefed on the

full contents of that. >> that's correct. >> i cannot find any evidence that says mr. myler saw the opinion or was briefed on the full extent of it. but something's happened between 2008 when it's clear, certainly -- [inaudible] because he was amending it. and also a strong suggestion that mr. crone certainly saw it. nobody else seems to be made aware specifically of certain allegations. however, 18 months later there is so much evidence that it is brought to the attention. so who brought it to your attention at the end of 2010, this whole business of si yen that miller and all the other -- [inaudible] was it tom crone that came forward? >> it was a matter -- no, first of all, there were a number of civil actions that were, um, that were following their process as it went through. and it was certainly in the second half of 2010 that the

company -- and i was not at this point involved in the day-to-day management of the company. the company started to grapple with this. the company went and proactively requested both the police and the newspapers that were reporting this, i think it was refer today as a "drip, drip" of allegations of the evidence that they had. up until the end of 2010, the police still asserted that there was nothing new that they saw worthy of opening up a new information. but, certainly, the company and the management company decided that if evidence emerge inside the civil cases that was sufficient to warrant further investigations, that it would react on that. and the company did. i don't recall who came to me precisely to discuss that, but it was a matter of discussion amongst a number of senior executives at the end of 2010. >> could it have been -- so you said no to tom crone, could it

been mr. myler or rebecca brooks? >> mrs. brooks was certainly involved in the, in those activities. she was running the company until the summer of 2011. >> just going back to the transcript of julian -- [inaudible] on the 27th of may, it's already been read out largely by mr. watson. talks here about didn't believe culture in the newsroom, we've already had that discussion. how the investigation, were you made aware of the outcome of that investigation into those three individuals? >> i received throughout the period in 2009 onwards after the allegations came out in the newspaper, i received repeated assurances that internal investigations had been conducted, um, that they were thorough, that they concluded there was no evidence whatsoever of wider spread phone hacking, and this was something that was

repeated, i know, to you, to this committee in 2009, and those are the same assurances that i was being given as well, also by the public statements, um, of the police at the time. >> um, further in that notice there's e-mail from members' staff, nothing is written about it. is it possible for you to give us some assurance or at least go away and make sure this happens that such evidence has been present today the police? is. >> certainly so. my understanding is that the police, first of all, cooperation with the police and providing them with everything that the company can as they require is paramount, and that's very, very important point to make. >> [inaudible] >> with respect to what the particular document he's referring to, i can't speculate what it is. >> no, i -- >> i isn't it is the evidence we've been discuss anything the this committee. >> yeah. although, unfortunately, julian did not make that specifically clear. however, just turning to financial governance, i think i

discussed this with you in july. with the evidence you sent back to us, you talked about how the editor hat a 50,000-pound limit, but any cash payments required the editor. is that still the case, or are there alternative arrangements? >> actually, one of the changes we've made is significantly tightening up cash payment requirements to the extent that for a period of time they were banned in the company, and as the new chief executive and the management and standards committee work, work through that with the editors in terms of what sort of petty cash arrangements should be made, um, those things have been adjusted a little bit. but the cash payment terms are dramatically tightened up, and i think, um, are, you know, rare at this point if at all. and be i'd be very happy to send you the policies and guidelines that have changed as well as when the management and standards committee's recommendations are finalized after their investigations are

complete, we intend to, you know, be very transparent with respect to both practices and a code of conduct with respect to journalistic practice, but also things like cash payments. >> well, building on that, sounds like you have made some changes, so it could be fair to now suggest that there is control perhaps on maximum amounts that be paid out by a certain person to a certain person -- >> very much so. >> -- provided the evidence back in july, i think, you suggested limits. >> i think right now there are very strict limits. i don't have them at my finger tips the exact number of those limits, but not only are there limits, but actually the number of people who can make cash payments and authorize them has been restricted dramatically. >> okay. thank you, mr. chairman. >> [inaudible] >> thank you very much. i've got, i want just to ask a final question on mr.-- [inaudible] and his legal costs of damages which i raised when we last met.

just before that, chair, this whole inquiry is really about this committee being misled for, essentially, what news international knew, who knew it and when did they know it. as part of what you call an aggressive defend on the 28th of february in reaction to our record in "news of the world "editorials, tom watson was not called mad, he was called a top -- [inaudible] and i was a former journalist on the observer mainly pursuing an agenda for my powers of the left-wing rag. sadly, the victims here are you, the public. well, how true is that? um, but very quickly after that appeared, um, the next big settlement was with max clifford in march 2010. chair, this is a about what news international knew, who knew it and when they did. you were the executive chairman then, but rebecca brooks was the

chief executive. were you involved in the, in the million pound settlement with max clifford in any way? >> i was not involved be the making of, with the arrangements with mr. clifford. i was informed of them, but in very general terms. but i was not involved in that, and at that point i was not running the business day-to-day. >> but you were the chairman. >> yes, i remained the chairman. >> did anyone come to you for the went fit of your experience in -- benefit of your experience in having settled the previous case? >> mrs. brooks did discuss the settlements or the arrangement with mr. clifford which was a commercial arrangement, i think, for services in the future, but not in any great detail. >> she didn't seek your authorization, did she seek your views? >> no. it was discussed with me in general terms but not with full day-to-day responsibility. she could make those judgments.

>> and did you know who max clifford was? >> yes, i was aware who max clifford was. >> did you ask -- [inaudible] >> the question with mr. clifford, there had been a previous commercial areapgment some years earlier with mr. clifford, i was told, which was around publicity for the client or the like, and it was desirable to enter into an agreement like that for the future. that would be a good thing to do with mr. clifford, and with respect to any specifics about the litigation, it was just seen as rather you take a commercial arrangement with mr. clifford going forward which was in both parties' interest, and rather than have an acrimonious litigation, i wasn't -- >> i've got this australian voice rattling around in the back asking how, how much is this going to cost me now? and in the future? were those, those questions weren't asked by you at that

sustaining? >> i think it's important to remember, and i believe this is the case that mr. clifford was, again, one of the original counts of voicemail interceptions that mr. moll care had been convicted of. so it wasn't at that point a new piece of wrongdoing or anything like that. and, in fact, i'm not aware of the details and ins and outs of that case one way or another. i simply wasn't involved in the legal strategy -- >> do you remember whether these four particulars of claim on the "news of the world "-- >> i wasn't involved -- >> i know it's confidential, but could you just confirm whether you did serve a claim or whether it was just a threat? >> i can discuss with counsel and come back to the committee whether or not that's appropriate or confidential. >> and do you know whether you went through the same process as with the, with the gordon taylor settlement of seeking outside opinion?

>> i'm not aware. i wasn't involved directly -- [inaudible] >> could the company confirm whether that was a process and whether there is a qc's opinion? >> we can certainly write to the committee about what details are appropriate around mr. clifford. i'm happy to do that. >> just on the basis of what the company knew, who knew be it and when they knew it. um, would you consider a request from the committee that if there is a work -- qc's opinion no doubt checking with mr. clifford to preserve any personal detail, whether that might be released to us as the silverleaf opinions has already been released to us? is. >> i think in general, mr. farrelly, it's probably wise, um, not to go down the path of routinely waiving privilege on legal advice around matters of litigation, matters involving individuals, matters involving the company. um, that said, i'm happy to provide you -- i'll go back to

come and to the company and say, you know, what can we, what can we provide with respect to details around the mr. clifford arrangements, and i'm happy to write to you on that basis, but i don't want to make any particular commitment -- >> we'll follow up in a let or. now finally, following our last session you -- mr. murdoch sr. said that, effectively, it was wrong to pay legal costs, particularly issuing an apology to the family whose phone he'd so cruelly hacked in the circumstances. you then came out and said that those legal costs were being stopped, but subsequently confirmed to us in a letter that any damages that are awarded against glenn mull care, the company will stand in good for. >> i think, and i'm not a lawyer, forgive me, mr.

farrelly, but i think there are questions where with respect to him being a co-for the and were to be a case or a damage award against him that he was conducting work on the company behalf, then really the company's liable for those things, is my understanding. and, again, i can provide more detail on that if you like, but i think there's a legal point there. and i'm not a lawyer, but there's a legal point there that is -- >> i'm sorry -- >> -- worth noting. an agent on behalf of the business. >> if he's -- [inaudible conversations] >> thank you. >> if he is where he can't pay his costs and, therefore, he can't man his defense, if he is sued and the court just makes an award against him, that is an award the court make against him and not you because you will also be in the dark with the claim, and a separate award may

be made against -- well, certainly, will no doubt be made against you. if you're backing him on any awards against him, we're back to where we were before the july committee. you effectively are making good an indemnity. is that right or wrong? >> i think, um, i don't want -- with respect, mr. farrelly, i don't think that's the right characterization. i think the word that i didn't, that i didn't want know but dr. coffee is right, this notion of vicarious liability is right. the matter of law and the courts and the question of paying for the defense is one thing. there's a question of the court awarding damages and the company being vicariously liable for those things is another. again, it seems like we're engaging in legal speculation -- >> i don't want, i'm sure you are engaged in legal speculation because i see your lawyer nodding in unison with you. but we're back in the position where you will be effectively supporting the man who hacked

millie dowd's phone s. that right or wrong? >> i think your characterization, and i'm happy to come back -- i don't think your characterization of our supporting mr. mullcare is right. the management this committee has taken into review legal expenses of various people armed these matters, has taken a view to cease paying legal expenses as my father, when he testified to you in july, indicated. the question of what legal issues there are, in the event of future litigation, they are ones that i couldn't possibly comment on. >> okay, my final, final question on this, um, there are over 5,000 names that are now being looked at in the notebooks. any amount of whom might sue news international and glenn mullcare. what will be the test for news

international as to whether they pay any awards? will it be just his word that somebody authorized, or will he have to satisfy a test, leap a hurdle to prove that, actually, there was authorization for the company for that particular hacking he did or whether it was just off his own back? will you discriminate between different cases in terms of standing behind mr. mullcare? is. >> the company has set up an independent process, i think as you're aware, mr. farrelly, to deal with civil cases coming through, and sir charles grey has an independent person, a former high court judge, as i you said it, is setting up a process to deal with claimants coming through. >> i'm talking about the courts, not charles grey's -- >> yes. so there's a number of test cases coming through over the next number of months, i believe, which will give, i think, the judge dealing with

this a sense of what the damages number will be in these cases, what the ranges are. and then if company has admitted liability where legitimate claims are made, and this is a question of the independent management of these cases and the company to judge what claims are legitimate and what are not, um, with respect to voicemail interceptions and then the settlement procedure will then take its course. >> final question -- >> i'm not aware of -- >> should a case come to court and not be settled out of court, is it your position that in all circumstances no further questions asked you will pay any award made against glenn mullcare, or will you be more discriminate? >> i think every case has to be seen on its merits, and that's the -- and i think that's the appropriate way for the courts and the company to proceed. >> i think we have finished up. i thank you for your attendance. >> thank you, mr. chairman.

[inaudible conversations] >> as this hearing wraps up, the ap has been following this story today saying in part james murdoch insisted that he told the truth when he said he'd been kept in the dark about the culture of criminality at the now-defunct "news of the world" tabloid. further down mr. murdoch told lawmakers it was appalling that his own company had used private investigators, also acknowledging one of his former top lawyers and another employee had commissioned spying on attorneys who represent people whose privacy had been violated by the "news of the world." murdoch said that that was something i would never condone, and, of course, the story continues. this is james murdoch's second appearance before this committee. numerous investigations of the scandal continue, and we will keep you updated on major development as they come to light. well, the u.s. senate gavels in today at 9:30 this morning

beginning with a half hour of general speeches. at 10 the senate's expected to begin two hours of debate on a measure dealing with cross-border air pollution. at noon they will resume consideration of a net neutrality resolution with two votes to follow at 12:05. then about 2:30 there will be up to four votes including job legislation and the annual appropriations bills. live coverage of the senate here on c-span2 begins at 9:30 eastern this morning. until then, the head to have transportation administration announced a precheck for airline passengers which allows for faster screening at the airport. john pistole made the announcement at a senate commerce and transportation committee hearing. [inaudible conversations]

>> i'll bring the hearing to order. senator rockefeller is on the floor managing a bill there and asked if i would take over for a bit, and i was more than willing to do that. i thank everyone for being here today. this month marks the tenth anniversary of the transportation security administration which was established on november 19, 2001. just after 9/11. from the beginning tsa has been charged with protecting our entire transportation system, and despite this, tsa has primarily focused on aviation security, and appropriately so. but, in fact, 98% of the tsa budget is dedicated to aviation security. and that leaves less than 2% for

trains and public transportation which terrorists have fixated on for years as the bombings in london, mumbai and madrid demonstrate. according to reports, when bin laden was killed this spring, documents recovered at his compound showed that he had trains in his sight and in his mind that he wanted to attack in our country. our rail network is as vast as it is open, and rail offers easy access and a chance to strike high casualties. americans take ten billion trips aboard trains, subways and other forms of public transportation each year compared to 700 million flights each year. make no mistake, the threat to

america's rail network is real, and we've got to do more than we have to keep it secure. and it doesn't mean at all that we should overlook aviation security. it only means that we've got to take a more balanced approach to making transportation in our country safer. aviation security remains a serious concern, particularly in my home state of new jersey where we have witnessed security lapses at newark liberty airport, one of the busiest in the country. in one incident a carry-on bag containing a knife got past the agents at the airport, and another passengers were able to enter secure areas without being screened. incidents like these raise concerns about our ability to protect the public as they move through our aviation system. but i also remain concerned about the ability to scan the baggage effectively as airline baggage fees cause passengers to

carry on more and more bigger bags. and the bottom line is this, that while we have serious fiscal challenges in our country, we can't put a price on human lives. and nothing is more important than keeping our communities, families and economy safe. and i'm pleased that we have administrator pistole here for his efforts. i've worked with him and know that a capable leader, works very hard at the job and does it very effectively. so i look forward to hearing from him on the security of our entire transportation system. and not to be critical at all, but to say, look, we have to be alert to all of the risks that our people take, and we want to reduce them wherever probable. possible. so i thank you, mr. pistole, for being here, and be i don't see

senator hutchison here, but in terms of arrival, i'll call on senator isakson, georgia. >> thank you very much, mr. chairman. i appreciate it, and i want to thank administer per pistole for being here and having this hearing. i represent hartsfield-jackson international airport, the busiest airport in the unite which boards about 90 million passengers a year and has the most takeoffs and landings of any commercial airport in the united states. so airport security is very important to me, and like every other member of the senate commerce committee, i go through tsa security 50 or 60 times a year, so tsa security is very important to me. and i appreciate very much the hard work the administrator has done and particularly in recent weeks his timely response to an

incident that took place in atlanta. and i want to thank administrator for that. what happened, mr. chairman, is a whistleblower went to wsb-tv in atlanta with undercover video of the loading of carts, food carts onto airplanes at hartsfield-jackson international airport as well as the passage of alleged employees through the turnstile using one badge when four people would go through. these raised serious questions as to whether or not tsa rules were being circumvented or, in fact, that maybe things could be slipped on through the gourmet carts onto an airplane that should not have been there. the administrator issued an immediate investigation. i received a letter today with a partial response in terms of what they have cleared, but a commitment that they're going to complete the investigation of the videos to make sure that they, before they comment on whether or not there were actually breaches. and while i understand because of the nature of security and because television is public in

the united states, we can't always talk about everything that we require for the bad guys might be watching. but to the extent possible, i hope the the administrator today will discuss some of these issues and some of redundancy of the agency's requirements and inspection to make sure that these security items are being taken care of. but i want to end where i began by saying i represent the busiest airport in the world, passengers from every state and every country in the world go through atlanta, georgia's airport, and i hope the administrator will address some of the issues raised in the report today. thank you, mr. chairman. >> thanks very much. i'm please today call on the chairman of the environment committee, senator boxer. she's very busy, as we all are, but she's always there ready to go to work on the next thing. senator boxer. >> senator, thank you so much. and by the way, thank you for

your support today in that important bipartisan markup we had of the highway bill. mr. chairman, this is a timely hearing, i'm very happy to see you here, mr. pistole. i wanted to to point out that i have a hearing over in foreign relations on the violation in syria, and as chairman of the subcommittee i'm going to need to leave, but i wanted to leave you with some very clear points, if i could. in california the travel ask -- and tourism employs more than 800,000 californians. a 2010 survey found that more than 60% of travelers would take two to three more trips a year if hassles in screening could be reduced without come propoising security. of course, that's the goal that you've been working on, sir. at a time when our nation is suffering from 9% unemployment, the potential to increase demand and create jobs in our travel industry cannot be ignored, and i wrote to the administrator

inport of his earths to create a new -- his efforts to create a new program, and i'm excited about an announcement that i believe is expected shortly of an expansion. um, a trusted traveler program not only has the potential to reduce the need for invasive screening of low-risk travelers, it could also help tsa better focus resources where they're needed the most. and this program called tsa precheck started in october. and as i understand it, i'm not going to give away everything here because i want you to have the chance to do that, we're going to hear about an expansion of this program to several other airports including one very busy one in my state. the if that is right and i'm right on that, may i thank you public my for that -- publicly for that because i've been calling for this for a long time. and, um, and i want to reiterate no one who supports this ever

wants to compromise security. i was honored to be able to write the law that allows the pilots to carry guns in the cockpit to protect the aircraft. i also wrote the language that expanded the air marshal program to long haul flights. as we know, those flights were all long haul that were hijacked that fateful day. so i am looking forward to hearing about this, reading about your testimony in support to have air marshal service. my understanding is we're robust, we're good, and i know some of it is classified, but to the extent that we could be reassured on that, and also to make sure that our guns in the cockpit law is working well and that the training is going forward and we're not impeding those trained pilots from protecting the aircraft. because we all know when worse comes to worse, the instruction is, unfortunately, not a good one. we'll have the military there

shooting down an aircraft. i think the pilot should have every right assuming he or she is trained to protect that aircraft. so, mr. chairman, i thank you so very much. i look forward to reading the testimony, and if i'm right on this, this news, then i thank you so much, sir. >> thank you very much. senator -- [inaudible] >> thank you, chairman, and i'll submit some statements for the record. i would say thanks for your important and good work, mr. pistole. i want to talk a little bit when we get time for questions about this issue of tsa at airports and what i continue to believe would be the importance of a private sector competitor if that's what the airport wants to do. i very well remember this debate when tsa was created, and the theory was that texas sa would -- texas sa would benefit

if airport and tsa and everybody else knew that there were other options to look at if there are problems, whether they're problems like the problems that, at hartsfield-jackson, at that airport, whether it's the airport in springfield, missouri, the spring field-branson airport that would like to go to a outside provider or the can kansas city airport which is about halfway, probably, in size between the springfield-branson and the huge operate in atlanta who's had a private provider the the whole time and had what i thought was some unfortunately experience just even trying to ec tend that -- extend that private contract. as it turned out, the courts agreed whenever your agency was taken to the claims court to talk about this. and i want to talk about that a little more. but all of us understand the critical importance of your work. i want to join ms. boxer's comments on -- senator boxer's

comments on the importance of foreign travel. we're looking at ways to make the visa process work better and make entry and exit from the country work better. and i think there are ways to meet the security needs to have country and still encourage -- of the country and still encourage the friendship and economic imfact foreign travelers make. you know, they stay longer, they spend more, and they invariably in almost all cases they like us better when they left than they did when they came. so there are all kinds of positive repercussions here unless the memory is how terrible it was get anything and out of the country. and i know your organization is more and more conscious of that all the time, but this committee would be very interest inside working with you to provide the encouragement and tools and support you need to make that part of traveling to america work if a way that insure -- in a way that insures safely but also encourages people want to

come and want to come back. and, chairman, i'd yield back my time. >> senator cantwell. >> thank you, chairman lautenberg, for chairing this important meeting, and i look forward to hearing from the tsa about the important security measure both on the cargo front and on the passenger side. but before i turn to that, i did want to say congratulations, mr. chairman, to united airlineses and to alaska airlines because just on monday united became the first u.s.-based air carrier to fly a domestic flight using a mixture of jet fuel and drop-in aviation biofuel. and beginning today alaska airlines will operate 75 flights over the next 11 days with 20% biofuel blend. both are pushing forward on this important area. mr. pistole, i appreciate you being here, and in many ways i think you have a difficult and thankless job.

and our neigh's security and safe -- nation's security and safeguarding is such a critical and important issue with over 400 commercial airports and over 700 million air passengers each year. that is a huge challenge. and i know that there have been various implementations of technology both at our ports and in washington state, we move a lot of cargo container traffic. but we certainly believe in an international standard that will help us prevent dangerous cargo from ever reaching our shores. once it's into one of our ports, it's already too late, so we certainly want to hear what we're doing on a global basis to make sure that those technology deployments are happening. and like my colleagues, want to hear about on the aviation side the passenger screening and profile issues and to make sure

that we are meeting a variety of challenges that come with those responsibilities. and so like my previous colleague mentioned these security measures are important, but they're important that we keep commerce moving as well because it's critically essential, particularly at this hard-hit economic time the make sure that we're doing all we can to continue to move traffic. so i appreciate you holding this hearing and look forward to asking mr. pistole some very specific questions about the process both with passengers and cargo. thank you, mr. chairman. >> senator -- [inaudible] >> thank you, mr. chairman. i'll wait to ask questions. i appreciate mr. pistole being here today and for the difficult and important work you do to keep our country safe. >> [inaudible] >> let's just move to questions. i'll waive my time as well. >> thank you very much.

the ranking member of the committee, senator hutchison s here. >> well, thank you very much, it's good to have you back since we had you for your con confirmation, we'll see how you've weathered the storms. and, of course, there have been some. i just want to say that i think there are still kinks that need to be worked out for the privacy and comfort of passengers who are going through these, especially these new machines where you have to put your hands up and get photographed. and i hope that you are continuing to work on those things because i do hear a lot of complaints about them, and having gone through them, i understand those concerns. um, also i just hope that we will continue -- i think the senator from missouri said to try to make travel a pleasant experience, particularly international travel where we have guests coming in to our

country, and we want them to have a good experience and want them to come back. but i think it is -- you have had a terrifically difficult job which we know, and i would like to hear your statement about whether you are finding improvements and what your future suggestions are going to be, and with that, i'll put the rest of my statement in the record and listen to you and be able to ask questions. thank you, mr. chairman. >> thank you very much. and now i call on mr. pistole, and i ask you now, mr. pistole, to make your testimony as everyone knows, i believe, that john pistole is administrator of the transportation security administration, and

administrator pistole will update us on tsa's efforts to insure the security of our transportation system. and i want to thank you for coming, mr. pistole and would now ask you to give your testimony. >> well, good afternoon and thank you, chairman lautenberg and ranking member hutchison, distinguished members of committee. it's a privilege and an honor to be here today to testify. thank you for that opportunity. when i last appeared before the committee, we were talking about risk-based security initiatives, and most of that was still in the formulative stage. where we are now, i'm pleased to report that we have begun implementing several key as penalties of risk-based security and testing others at airports around the country. and all with the singular goal, and that is to provide the most effective security in the most efficient way. as this initiative expands, we

must insure that each step we take actually strengthens security as we continue monitoring intelligence that indicates terror is continued intention involving transportation assets. anecdotally, last week i told senators lieberman and collins in their committee that our authors continue to find -- officers continue to find four to five guns each day, people who are -- have carry-on bags that are trying to get on the plane. and in the last seven days since that hearing, we've prevented over 30 more guns from being carried into the cabin of an airplane including nine just yesterday, nine in one day. so because risk-based security is focused on reducing the size of the hay stack -- >> let me interrupt you for a conute and ask you, do you