of the two-mile stretch between the airport and harbor. as we see the review of funding, we are looking at significant cuts proposed in the areas of grant giving under the homeland security budgets. from you as to what you think these cuts will mean in terms of your ability to take care of them. >> in a nutshell, it comes down to making sure that we are investing smartly in the highest risk areas. we cannot be all things to all people and in all places at all times. we can mitigate risk, based on intelligence and very thing that not puttingat we're putting

the american taxpayer at the highest risk. >> there have been an unusual number of breaches. tsa would provide a report on specific actions taken to improve security and could breaches. when can we expect this report to be available? >> it should be available in the next 30 days. i just saw the draft is to repair my believe it is ready. -- i just saw the draft yesterday. i believe it is ready. he is ready to brief you as soon as your schedule allows. >> think you. -- thank you. >> i want to talk almost

exclusively about the screen partnership program. i may have some written questions that i want to submit if we do not get through with this discussion today, which we may not. the program was created intensely to see what would happen if there was a private sector to alternative out there. does the airport come to you if you want to try that? did they say we want you to bid this process for us? >> yes. >> somebody and then the tsa? >> yes. >> war i might also say someone other than the private sector person -- or i might also say someone other than the private sector person. >> yes. the airport would come in and say we would like to consider somebody other than tsa to run our airport operations. in the past, we have looked at those. we have 16 that were firmer leon that are continuing -- from early on that are continuing.

that is a process. do is to give you a little bit of background for my decision in january, i am clearly interested in any best practices, any efficiencies, anything from the private sector that can help us do our jobs better. we invested billions of dollars in the private sector in terms of technology and ways of accomplishing our mission, including age are issues -- including hr issues. we have invested billions of dollars into private industry to do just that. as far as the work force, my approach is that i believe that tsa should be a federal counter- terrorism agency focused on preventing another 9/11 or something like that from happening.

i have greater flexibility with tsa airports in terms of pinkison maybe a natural disaster. but it -- in terms of in case there may be a natural disaster. there are many who have their own rules, so i am limited in that. i have expanded the number of people within tsa who have access to classified information to help them make better intermissions and -- to help them be better informed and make better decisions. there are five renewals of those 16 this year. i want to keep those employes, assuming they're doing the best possible job. i would note that even those pelletize airports, some arguments have been made -- even

those privatized airports, some arguments have been said that taxpayer money has been used to pay those private airports, not going to federal employees, but private employees. in each of those 16 airports that we have, in each of those are very small airports and cost more than if it were a tsa-run airport. they're the same wages, but there is over head of a private company. so we have those considerations. >> did the gao to agree with that analysis? -- did the gao agree with that analysis? >> they looked at different aspects of the costing. the compared apples to apples or one of the four different models, including retirement

costs, pension costs, and everything. >> you capped this at 16. >> it is not capped. that is what it is renown. i denied 5 back in january. two of them have come back for reconsideration. what i am looking for is a clear essential advantage to the taxpayer and to the travelling public in terms of the security and efficiency. those have been reviewed and we will probably have a decision in the next day's. >> 3 of the montana locations, i think your predecessor had asked them to apply for the private program. >> i am not sure about that. >> i think that is right. i think i can make the comment that tsa went to three of these airports and said why do you not apply for the program program? then in january, you said we will not let you go to the private program. >> i will have to look into that, senator. i'm not sure about that.

>> i think that the private competitor does not give you the flexibility as a government employer. it is outside of the idea that the government will do a better job if the airport and the government knew it the airport had another option. i would consider that philosophy is part of moving forward. transferring people from place to place an little government control -- you have a lot of control when you issue that contract. >> correct. >> frankly, competition is a good thing in almost all places. i believe in the 16 airports to have. it has been a good thing. i do not know of any, kansas city or san francisco performance areas that are outside the norm of tsa. >> your right. at of the 16, -- you are right. al out of the 16 -- out of the 16, some are lower in customer

satisfaction. it is a range. it is fair to say better or worse. >> i am out of time. i will submit more questions. >> ok. >> this is a topic that i am very interested in and of the philosophy of having that out there. i'm glad to hear you say it does not necessarily limited to 16, although i think the overall philosophy that the government can do this better is not necessarily the right philosophy. thank you for the extra time, mr. chairman. >> there is a story in washington state about a gap in security related to rail cars as far as gases and other powerful grosses that can release toxic gases. left idle but running for six hours, i guess unintended

physically. that brings up a couple questions. what can tsa do to work with the federal railroad administration to make sure there are not these kinds of gaps in the system? >> there is an investigation based on the to see what safety issues were addressed. also, this is secured from the standpoint of what is on the train considered as toxic waste and hazard. we work very closely with the railroad industry. in the last two years, with our strong support and encouragement, they have reduced the hazard in urban areas, which is the primary hazard, by 90%. that is by doing simple things such as securing the locomotive

to not parking the trains overnight within half a mile of the capital, not leaving those rail cars with toxic immolation in the where they could possibly used as a weapon. so that has been a positive. i know a little bit about the situation. we will work with them to make sure that those types of situations do not repeat. " you think it is a problem? >> i think it is an issue that needs to be addressed. >> the highest threat urban area, this is a picture of puget sound and what that definition looks like. in this particular case, the train was left 30 miles from the city of nearly half a million people. i think the, uh, which is right here, they take it kind of person that they are left out a high threat area.

the idea that anybody could leave a train with those kinds of chemicals into a coma, it was shocking for them to find out. i think this needs to be addressed. this high threat area and the materials that need for the regulation, both of those, would you agree? >> yes. absolutely. i will look into those. i will review those with our folks. >> in this case, the train was left outside of spokane or not far from spokane. i do not think that spokane qualifies for this either. if you could get some answers, that would regrate. >> yes. -- that would be great. >> yes.

>> i would like to ask you to give us an update on the report that was issued by the gao having to address the transportation worker identification cards. and the fact that tsa has failed to implement and evaluate the program to make sure that only qualified individuals are having access to our ports and and tsa- regulated facilities. one of the biggest concerns was that you have not evaluated in the effectiveness of the program. when your last game before the committee, i had stressed concern that we were giving people a perception of greater safety rather than the reality of greater safety. we are not measuring the effectiveness of this program. can you tell us where we are, six months later, with respect to the gao findings? >> yes. the good news is that we're

doing vetting and background checks for approximately 2 million workers, but particularly dockworkers, port workers. we know who those people are. some do have criminal records and there are disqualifying felonies that would keep somebody from getting a card. the challenge has been in the deployment of the card readers which makes it not so much a flash pass. we had a number of challenges working with both the industry in terms of developing the card readers that can withstand something, for example, in portsmouth or perhaps in orleans or anchorage something.

it's collected enough data from the dock workers themselves to say, ok, will this work? do you have to enter the car? do you have to do a cute? something like that. i think the gao give a six recommendations. we agree with those recommendations. we're making sure that we can get our process done so that the coast guard to has the actual responsibility of using the card readers once they are installed and the companies have a system that is not simply a flash pass or appears to give better screening than it does. you are right. right now, the commerce has not been completely provided the security of the courts. it is a continuing process. >> so you agree we still have a long way to go? >> i would agree with that.

>> what about the issue of -- we are in the position where many of the people who have been enrolled will actually be up for renewal in 2012, which i think you and i talked about before. millions of workers will be and it will be difficult for them. where would they get this renewal? and in the context of the program right now, we have not measured the effectiveness or have the card readers and place or know that we have done something to protect parts security. >> i agree. if you fully paid for and applied and received the card five years ago and you have not been able to use it, that does not sit well with the united states government. that is something that is frankly disappointing. refocus on turn to make sure that we can -- pilots have been done with card readers in

certain ports. some work well. some need some refinement. the wait is for getting that done to move forward. what i am i looking at is needing to make some type of modification in terms of the renewal because people have not been able to use them and extend the time or some other option. >> i would certainly be interested in your keeping the committee updated going forward in terms of the effectiveness of this program and whether or not we have to take a different approach if we are not able to implement the card reader system in an effective way. if not, giving people the perception of greater safety, but the reality is different. i think you for coming before the committee today. >> thank you, senator.

>> >> it is good to see you. we were saying good things about you that the judiciary hearing. i do not know if you heard the. >> i did not know. noted, thank you. >> we have a few grumpy senators about the work of your employees. i have found that there is a huge change in morale and i think you're doing a good job and i like how you defend them hen there were questions raised. they have incredibly hard jobs and do a good job. >> thank you. we appreciate that. >> i was also pleased to see that you have chosen the minneapolis st. paul airport rollout one of three airports where you're rolling out this pre check program. and you have done some others before to prescreen certain

known air travelers. i wondered if you could talk to us about how this will work. what is the right time line for the rollout? >> minneapolis will be in january/february. we're working with the airport to get the malign. we want to make sure that we can provide -- to get them on line. we want to make sure that we can provide the services. there will be a dedicated line for those who are a part of this. they are allowed to go to the designated lane and have that boarding pass with a bar code imbedded with the information. the airlines are critical partners with this. assuming they are part of this low-risk category, then they would be able to keep a jacket on and they're built on and their shoes on and their three- one liquids in their bags and

the laptop in a briefcase. there are no guarantees in this because we will do this random and unpredictable. on the 10th time, you may be asked to do is scream. -- do this screening. >> is the electronic data? >> if you go through the global entry program, then yes, you go to an interview, criminal history check, and some other issues, which allows you to re- enter the country from foreign travel. >> how many people are in it in the few reports to have restarted? >> we have hundreds of thousands who are eligible. right now, it is as domestic-to- domestic. so for somebody flying from

minneapolis to mention them, they would not qualify. there's a lot of interest from overseas, especially in the eu, with all the fights back and forth. but i want to make sure we get it right here domestically before we use it with those who come from overseas. thus far, we have had over 45,000 people go through in the months that we have started. >> you are also rolling out the sticking its body scanner equipment. >> it is a generic align. >> that sounds better. i just call it what it sounds like to me. >> some people have some artificial joints and things. this deals with the privacy issues that have been raised in the past. >> i know you are trying it out at the rochester international airport. >> yes. it is simply a softer modification to the existing equipment with the same

capabilities. at 2 walkthrough -- after you walk through, you can turn and see the generic outline of a person, which is the same for each of you, and, if there is an anomaly, it shows up as a small rectangle. if you have -- it actually nicorette a piece of new direc in a passengers back pocket. as opposed to a full patdown, it is simply that there's something there.

>> how is it going so far? >> vetter positive feedback from travelers who appreciates the private the protection -- the privacy protection. it is the same or better as we push industry to strengthen their detection standards. >> i will ask my remaining questions in writing. we have been working well with the department to move some of the visa wait time. we have workers -- with a focus on some of the work of the tsa. -- we have focused on some of the work of the tsa. >> thank you. >> we appreciate you being here. i know that you and your guys are working really hard and doing the best you can.

let's take a minute. a medical doctor who was 91 has metastatic prostate cancer. when i was 14, i had a ruptured spleen. he is credited with saving my life. i know the family very well. but he is flying back to arkansas. is a two-stop flight. because of that, he had to pack a still catheter. during the procedures, he was patdown five times by five different individuals. he was threatened with opening estero catheter and threatened with not giving on the airplane. -- opening a sterile catheter and threatened with not getting on the airplane. again, this guy is a physician. he is decorated in world war ii.

he has seen and done about everything. he does not complain about anything. but this really did shake him and the family that was accompanying him. they did not feel that he was treated like he should be treated. i think it actually did jeopardize him mentally and physically, the whole bit. we have heard testimony about the pre-flight programs for frequent fliers. is there program or can there be a program for individuals like this who do not fly very often? basically, i would say that with the use of some common sense, we could do some things to prevent these kinds of things from happening. >> yes. i am sorry to hear about his unpleasant experience. if you're likely to give me his name, i can reach out to him and talk with him personally. we're focused on the higher risk, clearly. this doctor friend that you described is not a higher risk.

we have looked at age as a factor in terms of who is on the terrorist watch list. i can tell you exactly the ages and ranges. i was frankly surprised that there were some quite senior citizens who are on the watch list. that being said, it is a small number that, in a risk mitigation and risk-based security approach, where looking at ways to recognize those of a certain age. again, i will not say, but there is a certain age that would be given an expedited screening, recognizing that we do not want somebody to be unwittingly used by somebody carrying something on this has happened overseas in the past. it can be quite a challenge. how do we do that?

how do we make sure it is then evenly and consistently. again, we are looking at that. >> is there the ability to, in training are screeners, that they recognize some of these objects that they come across, the catheter. >> yes. >> that are consistent with this kind of condition. again, looking at these people -- to be honest with you, if the tsa agent cannot look and put all this together with the sick and elderly then he cannot do with somebody who really is a terrorist. in these kind of cases, you ought to feel that something is wrong. in this case, you ought to feel that this checks out. >> that is a good point, senator. i would note that the checkpoint is only one of the various areas

that we use and hopefully a fugitive terrorist will returbe deterred before coming to the united states. but for someone who is a domestic terrorist and is not anybody's radar, of a whole goal is to provide more common sense and said, how can we differentiate from those that the great likelihood is that this person is not a terrorist and what can we do to facilitate the trouble rather than hinder the travel. >> perhaps we can lose a lesson -- we can use lessons we have learned with the 12 and under. we have said that we have a problem here.

again, use those kinds of reasoning for somebody who is sick and elderly in their 90's. looking at the age and the condition, the things that they are carrying, again, like with a that you needatheter to exist -- not exist, but you need to function, and not create the stress. thank you. >> can you tell me what is the ratio of workers to each scanning machine? how many workers does it take to run a machine? >> are you talking about the middle sector? >> i am talking about the scanners. >> i believe it was five people

that were budgeted for this technology with the belief that we would have the capability in fiscal year 2012. that figure is much as the one time and place. it is seven days a week for however many hours that day airport to a point is oveopen. we have to make sure that we do not have a two-hour wait. >> i have gotten different answers. secretary napolitano said that it would be six screeners per machine.

i think your staff told my staff that it would be two 0.5. you have requested a total of 275 scanners and 510 positions. that really concerns me. i am in commercial airports at least twice a week. these days, it seems i am thei eere 3 or 4 times. i have become a bit of an expert on your scanners because i have an . -- an artificial joint. not too long ago, i asked someone if it was possible for me to wait until someone comes back with a scanner. i try to avoid the patdown at all costs. i made a joke about the love pats i had to endure.

sometimes they are unbelievably invasive and very painful for me to endure. i really do not want to have to do that. the minute i hit a checkpoint, start scanning to see if there is a machine in st. louis where i normally go. everybody is pretty good there, except one woman. if i see her coming, i tensed up because i know it will be heavily in terms of the way she conducts her patdowns. i am confused on why we're spending money on this technology for cannot afford to operate it. is it possible for me to wait, and i was asked if i had an artificial joint. they did not know who i was. these people had no idea. they said we will open it for you if you have a joint.

do you have to ask? there is no size that says -- there is no sign that says if you have an artificial joint, will open the scanner for you. why not more women? i have to wait a long, long time because there are always more men available to do the patdown s than women. even when i go to the scanner, i actually had a man as i came out of the scanner who checked my watch. he said he could not check it. he had to for woman. really? you cannot check my watch? he said, no, i have to wait for a woman. so i had to wait there and stand there for a long time. >> i am sorry for your

unfortunate experiences. the whole idea of the technology is twofold. one is to protect and to is to increase the throughput. we still have the carry-on bag that we have to review. that takes longer than the person. but we can get more people through with the advanced technology than with the metal detector in general fashion. i can follow-up were you have had those issues. >> almost everywhere. almost everywhere there is a machine. if they have won going -- that is the other thing. if i get in this line, will they let me walk all the way over here. >> i will follow-up on the side issues and see if there is a

machine that can just go through. the general public ought to know that. on our website, we encourage everybody to check all the things that are available if you're a frequent traveler. >> let me just say that the tsa workers have a hard job and they do a good job. but i am used to be my privacy being invaded because i chose a public career. i am not usually one to complain about that. but when you have to travel in public, sometimes these patdowns are not taxable. i'm not exaggerating. there are times when women put

hands on me in a way that, if it was your daughter or your sister or your wife, you would be upset. just so you know that -- not all of them, but some of them do -- and the aggressive ones are really unacceptable. >> thank you. >> down to the bottom of your list. >> it is way down. >> thank you for being here. i would like to rescue a few questions. visa or a little bit of follow- up -- this is -- these are follow-up questions. you charge commercial air

passengers, but you also do sea travel. >> as far as the rails, not that i am aware of. >> i do rail ever known then, from here to union station. do you check passengers routinely? >> we were particularly with amtrak on that. in terms of random and unpredictable screening, we also work with amtrak in terms of training, canine, and funding on some issues. but, no, we do not have primary responsibility. >> ok, that is good.

i may follow up with that at some point. you also talked about some pilot programs with voluntary passenger prescreening program. >> right. what are your time lines on these programs? when will they be implemented? how long will they pilot in your mind? >> tcf -- the tsa creek check will expand to lax, minneapolis- st. paul in february and will be a factor on how soon the airlines and the airports are ready with the technology and a physical check point. my goal is to expand it as quickly and as efficiently as possible. it comes down to our partners,

in terms of the airlines and the airports, to do that. as far as a new crew member, with a pilot in charge of the aircraft, we have a 90-day pilot that goes in january. assuming it goes as successfully as it has, then the plan is to expand that nationwide as quickly as possible. again, there are some i.t. dependencies there that both the pilots association and the air travelers association have been a great job with. the one key is that taxpayers should not be paying for that. so they have stepped up and done that on their own in partnership with us. we do the honor flights for veterans coming into washington to the world war ii memorial. we do have identity-based screening. the 12 and under is nationwide.

i am missing one, i think. the goal is to expand all of the risk-based security initiatives as broadly and quickly as possible with the best security. >> ok. and then you have different evaluation criteria for each one of those. >> right. >> thank you for that. the assessor program is also a part of that in baltimore. i don't know whether we will be expanding that because i do not have been updated to make an informed judgment. >> let me switch gears. going back to 2003, congress restricted tsa to issue new repair stations with security rules. there has been a have -- as been a long history and we still do

not have the finalized rules. -standing is that faa --- understanding is that as a -- my understanding is that faa does not have the general registry of. >> a total of 742 around the world, 53 in europe, and we call them visits. they do not have the authority to do inspections. it is waiting on the approval of the final rules. as you noted, it is a very long process. >> what is the problem here? why is it taking so long? it was decided that in 2003.

this is eight years in the making. >> it clearly goes to aviation security and the inner defenses we have for the global supply chain. i think it has been a factor of the ability of industry to actually put standards in place that were both practical and achievable as opposed to setting an unachievable standard and then working with faa to say, ok, do recognize the repair station from a safety perspective and then, for us, from a security perspective. it may remain not be as consistent as they understand. but it has been too long. there is no excuse for that. it has a critical component of both congressional intent and the administration's intent, for both administrations.

i will get back to you. >> thank you. >> senator rubio. >> we have had a long afternoon, lots of questions. i will be brief and to the point. in florida, we have millions of international travelers. by was hoping you could describe for me the degree of terrorism and training for special procedures in handling international passengers. do you find that to be a special challenge in places that have international travel? >> there are two things that we have as it relates to part 1. we worked with a certain company

that is huge and orlando, that has a huge entertainment facility, to look at it universal. in terms of customer service across the board, how do they do it? how do they do it with, for example, suspicious behavior or somebody who's in a queue to enter a part? we worked with them to say how do you do that? how do you provide that security but with the most customer from leeway to make sure that somebody does not come into a theme park with something bad on them? just in terms of how we lay out the security lines, the process of screening, etc. >> i was in orlando last week. this is what i found. one of the things about orlando

that is unique as opposed to miami or dallas is that there are not a lot of connecting flights. i think it adds a little bit more to traffic that you see for tsa. what do we do for airports like that that have such a high percentage of arrivals and departures from the destination, especially to the way we layup the security line? >> the physical configuration of a checkpoint is dependent on the airport and what it is willing to let us use in terms of space. it is not government-. we have to work with the airport authority and the airlines to say how can we best get our security checkpoint in, especially as we have expanded the use of technology which requires a larger footprint then

the walk-through metal detectors? it really comes down to the old adage -- if you have seen one airport, you have seen one airport. >> you have been asked a lot echeck.he tsa projec do think there would be a good candidate for that? question think you would be an excellent candidate. >> thank you. [laughter] -- >> do you think i would be an excellent candidate? >> i think you would be an excellent canada. >> thank you. [laughter] >> you have probably talked about most of the subjects already, but in terms of the pre check program, do you have an estimate of how much quicker you could process passengers through with it? how much are we talking about

and talking -- how much are we talking about in getting people through the system? >> we are currently using a dedicated line. that is one benefit. there are fewer people in a dedicated line than in a queue. the other is the time going through security because you're not investing as much. you're not taking a life jacket off. you're not taking your boat and shoes all. your beltnot taking and shoes off. if there are very few people in line, it could be the most expedited and efficient process, allowing us to focus on those

that we assess as being higher risk. >> when do you see yourself expanding and how quickly will it move to other airports around the country? >> clearly, there's a greater application in the category airports. the smaller ports may not see as much in 2012 or even in 2013 because they do not have a space for a dedicated line. it would be a smaller checkpoint. but we're looking at how we can do that in some of the smaller airports that would make sense from a risk-based approach. there are some other options that we would rather talk about in a classified setting in terms of other security screening options that would also facilitate this. again, i do not want to go into detail about that in an open

hearing. >> you say that at some point, in terms of getting to an airport before their flight, they would have to be there pre- flight to get cleared. >> that is true. although, the expectation is that there is no guarantee. i would not want somebody to say i am part of the global entry so i am guarantee of screening. it is not guaranteed. i would not want somebody to said it close and ended in a regular screening. >> the federal flight deck office which allows for certain crewmembers to use firearms to defend against acts of criminal violence in situations where you may have individuals that are attempting to get control of an airport, i am interested to know the degree to which this program has been successful.

it has been praised by several groups as having been highly successful, yet we have not seen any expansion of that program since 2004. could you comment on that generally, knowing that we have a limited number of air marshalls available. do you see that as a cost- effective alternative? >> i do not see it as an alternative. i am a strong supporter of the program in that it is another layer defense. it is only partly taxpayer funded. there is training for the pilots and the retraining and certification of them. obviously, in those fights were we do not have federal marshals, i think it is a good deterrent to a possible terrorist attack, even if there is no federal air marshalls, if i can get to the cockpit somehow, there may be an armed pilot in their who will not allow me to do what i'm

going to do. so i am a strong proponent of it. part of it is budget-driven. so how much do we have to fund the program in terms of training and resources? and how many people can cycle in and out of it so it is not a stagnant group? there are thousands of pilots. we see that is a benefit for this. >> my airport in sioux falls has private screeners. we are in the transition of between contractors. does tsa have certain requirements for standards with regard to these contractors as they switch from one private firm to another? with respect to the employees and the types of benefits, who

sets the? >> tsa sets the security that any contractor has to follow, our protocol and standards and all that. they also have to pay a similar which to what tsa workers would make. what we have found in the 16 airports in all but one airport is that those contracts have been more expensive than they would be for a tsa work force for several reasons. eight costs taxpayers more to have a privatized work force. we have seen similar results in terms of customer satisfaction and covert testing that is done at other airports. is there basically clear or compelling something to say that there's reason to change from a tsa-run airport -- earlier, i

describe some of the philosophical aspects about that also. >> thank you. >> one more question for me. the ticket fee amount is about $10 roundtrip. that has been true since 2001. i am for increasing that. you have discussed a lot of things going on. there are a lot of changes. we talked about technology, the large lasp thing, and many, many other costs. can you answer to question for me? number one, to what degree do you consider, as the professional administrator of

all this, that you are protected in the budget situation? secondly, if you are insufficiently protected, then you have a number programs going forward which you might tell me you have the funds to continue to do for the moment, but maybe that does not last very long and it takes a long time for these things to shake down. what would be the cost to you potentially if we did not raise that to get feed? >> thank you for your support on that fee. the congressional intent was to have that feet pay for some of the cost of enhanced aviation across the country. it has not been raised since

that time. but costs have gone up. i am looking for every possible efficiency. that is within tsa and our is there to say tha anything we can do to not cost the taxpayers more? i feel somewhat protected in the sense that i believe that everybody recognizes that what the men and women do the tsa do day in and day out is very important. but the fact that something needs to be done, whether it is tsa or private companies that do it, that is a cost of doing business in the u.s. post-9/11. there has been strong support for not adversely impacting any

security operations. that guidance and direction and working with me makes sure to see that we do not have any cost-cutting for issues outside of the area. in the last six months, i have been doing a tsa headquarters efficiency review to find ways that we can work more efficiently and it still provide the same high level of security that the american traveling public expects. that includes things such as i.t. functions, training functions, things that are inherent with in any large organization. so we put a hiring freeze on certain positions, capped other positions so that people would not be promoted until we get through this current budget issue. we're doing in number of things internally that does not make a dent in the overall deficit that

the super committee is dealing with. but i think there are things that get to the baseline goals that i have that tsa to provide the most efficient security. >> i will let say anymore. the last question goes to senator hutchins. >> i just wanted to follow-up, just to give you a chance to talk about some of the privacy issues and what you're doing about it. i think they're related personal experiences. the general complaint that i hear is just that the -- is just the ait machine and whether or not there was a way to be

shielded while you're putting your hands in the air? what are you doing to minimize that privacy invasion to the extent that you can while i know your conducting some of these other issues? a lot of people feel -- having said all of that, i do want to say that i have been amazed at how wonderful the tsa agents with whom i have billed have been. -- with whom i have dealt have been. >> thank you. >> i had a situation was where i had a patdown. i hated doing it, but they were doing the job, which we all understand. i just think that they have been unfailingly polite in the instances that i have been with them. also, the concerns that were raised in other areas that you have isolated incidences, i want

to know what you will do to find out about things like senator bozeman's constituent? >> i have over 6500 tsa employees. i am sure that they greatly appreciate your comments. >> in national airport, they have done a great job with a lot of hardships from long lines and heavy traffic and all that. >> thank you. i appreciate that. i am a strong proponent of the privacy aspects of what we do. and recognize that we have the terrorists intent that we had on christmas day and what we see in terms of how to best bow but doing that.

my specific direction was that all new systems will have the privacy systems built in. they will not have the private recognition. the role is to move as quickly and efficiently away from the old machines that do provide that grainy image of a person, an individual, and give that generic outline of a person. also, we have two hundred 454 show that we have purchased. we're waiting on the manufacture of the of the top of technology to finish their testing with us of their atr capabilities. they have not demonstrated that quite yet. about to under 40 machines will be converted also. -- about two hundred 40 machines -- 240 machines will be

converted also. >> >> i have a constituent on that list. when they travel internationally, this constituent is on some kind of watch list. she has been detained for hours. she is 11 years old. there has got to be something that triggers when a child is detained for a similar name or something. i hope you can assure some they like that is not going to be common. >> there is some issued there. we can look into that and try to get that addressed.

>> thank you for your time. you have been very generous. >> i echo the comments of senator hutchinson. my experience with tsa has been positive. they work very hard. we go through the same screenings and reveals. they have no idea who we are or what ever. it is important that we give you the tools. sadly the episodes like the 11- year-old and what i was talking about are the kinds of things that crop up. that becomes the public view. my message is that we want to help you any way we can to sort through these things and make things as efficient as possible. >> we appreciate it. the bottom line is with 1.8 million people every day, over

12.5 million every week, 630 million a year, we do have these one-off situations. the vast majority of people go through efficiently. the goal is to reduce these one- offs so that we can provide security in the most efficient and effective way. >> as i have to do privately and perfectly, -- publicly, i think you are the perfect person for this job. you are former fbi. i think you are very serious about it. you are straightforward with us. you talk our language. you do not obfuscate. you do not make excuses. it is a real pleasure to work with you. it makes me feel good about the

future of tsa. >> thank you. i appreciate your support. >> i would say ditto to that. >> thank you. the hearing is adjourned. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute]

>> today, grover norquist, president of americans for tax reform. he talks about the deficit reduction debate, taxes, and government spending at 6:00 on easc-span. >> the decorated veteran and

best selling author finally recognizes and comes to terms with his posttraumatic stress disorder decades after vietnam. >> i started telling him about my symptoms like jumping up in the middle of the night and running outside without knowing what was going on. i would be angry and attacking the car behind me. he said, have you ever been in a war? that hit me so hard in the middle of this room of 80 people. i started bawling, snot coming out of my nose. it was that simple. when he finally got me into some semblance of control, he said, you have ptsd. >> more on that tonight on "q&a." >> arlington cemetery is located

in virginia across the potomac from the lincoln memorial. president obama made a visit to the national cemetery and participated in a wreath-laying cemetery at the tomb of the unknown.

>> present. ♪ ["national anthem"] ♪

>> present.

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>> order.

♪ eyes have seen the glory of the coming of the lord. he is trampling out the vineyards where the grapes of wrath are stored. -- is terrible swift sword.

his truth is marching on. glory, glory, hallelujah. glory, glory, hallelujah. glory, glory, hallelujah. his truth is marching on. ♪ ♪ ♪

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♪ thath a glory in his bosom transfigures you and me. as he died to make men holy, let

us die to make men free, while god is marching on. glory, glory, hallelujah. glory, glory, hallelujah. the glory, glory, hallelujah. his truth is marching on. glory, glory, hallelujah. glory, glory, hallelujah. glory, glory, hallelujah. his truth is marching on. his truth is marching on. ♪

[cheers and applause] >> president obama is in the asia-pacific region this week working on creating a trade zone and looking for international support to rein back iran's nuclear programs. the pacific rim economic summit is being hosted in hawaii. the president also announced the outline of the trans-pacific trade zone agreement. he will be in honolulu until tuesday. he will leave for australia before going on to indonesia. >> i want to make sure that we have taken every step possible to bring peace of mind to the

family members of our fallen heroes. for that reason, this review commission will look at the processes and procedures to make sure we're implementing the highest standards in dealing with the remains of our fallen heroes. in addition to that, i want to make certain that we have taken all appropriate disciplinary action. >> with respect to the most recent accusations, i have never acted inappropriately with anyone period. >> with hundreds of new hours of public affairs programming available each week, the c-span and the library is the resource to find what you want, when you want. it is washington, your way. >> on monday, house democrats

will hold a forum on voting laws. you can watch it live at 2:00 eastern on c-span3. the news international chief executive testified for a second time before the british committee over the phone hacking investigation. members also questioned mr. murdoch about his knowledge of the settlement made to gordon taylor who claimed his voice mail messages were hacked by employees at "news of the world." this is about two hours and 35 minutes.

>> we understood that nedecision was taken by you, but that you were not made aware at that meeting of the details on why the settlement should be reached. as you know, we subsequently heard that they say they did make you aware of the circumstances of the mail. do you still assert you have no knowledge? >> yes. thank you, mr. chairman. the meeting that occurred on the 10th of june in 2008 was for the purpose of gaining the authorization to increase the offer of settlement they had already made on a number of occasions to mr. taylor and his lawyers. the meeting was short.

i was given sufficient information to authorize the increase of the settlement offer that had been made and authorize them to negotiate that settlement. i was given no more than that. certainly, evidence was described to me that indicated the company would lose the case if it litigated. the nature of the e-mail as it was described, any evidence of widespread wrongdoing, none of these things were mentioned to me, including the detail and substance of the leading counsel's opinion that had been sought and received by them earlier. it was only sufficient information to authorize them to increase the settlement offer they had already made.

>> were you made aware of the existence of an e-mail that tercepts? voice in >> i think this is an important point to be clear on, if i may. the male was -- the e-mail was important for two reasons. it was important because it was a transcript of a voice mail interceptions made on behalf of the news of the world. that was seen as evidence sufficient to conclude the company would lose the case. there was another part of the mill that was important in that it made a another journalist -- named another journalist in the know. the second part was not described to me in any detail at all.

i want to be clear that no documents were shown to me at that meeting or prior. >> it is now your position that you are made aware of the existence of an e-mail that was extremely damaging. >> yes, as i testified in the summer to this committee, i was made aware that there was evidence that the transcript existed. it is dual importance that it was also perhaps the beginning of suspicion that other individuals were involved at "news of the world." that was not described to me. >> did not see a copy of the mill? >> no, i did not. >> were you aware of the opinion of the legal counsel teen? >> i was aware at that meeting counsel's opinion had been obtained. it was described as having to do

with damages and the estimate of damages were the case to be litigated and lost. it was not shown were described to me. the other things in the leading donsel's opinion were not to with damages. >> we have since learned that there was a previous meeting that you had at the end of may. do you remember that meeting? >> i think you are referring to it describes a conversation he had had. i have seen it now but had not seen it before. mr. miler suggests to mr. park that he spoke to james murder. he does not say there was a

meeting. he refers to the conversation he had. neither of us recall the meeting, conversation, or telephone call, or what it might have been. the first substantive meeting i recall was the june 10 meeting with them. i cannot rule out whether he called me or stopped me in the hallway for a brief conversation. >> my colleagues will delve into these questions in more detail. before they do, we want to concentrate on events before hand. >> in 2007, in december, i returned to news corp. as

regional chairman for all of our european and asian operations. that included news international along with five other large entities in the area. in the absence of a full-time ceo after hours moved to the united states to run down jones, i had more direct responsibility for a period time at news international. at the time, he did not discuss with me any matters around mr. goodman, his employment, the subsequent arrest and conviction. the settlement matter predates my presence in the company. i had no discussion with him. he did not raise it with me or brief me on it. >> did you ask? >> did i asked about the goodness settlement?

no, i did not. was sometime before i joined. those convictions and arrests were well over a year before. there was no reason at the time to believe it was anything other than a settled matter that was in the past. >> because of the fact is a significant amount of money that has serious consequences for the future of the company, you do not think it proper that you should make sure it does not happen again? , we relied on the assertions the police have closed the case, that internal investigations had occurred, that two people had been successfully processed and went to jail.

i think it was seen as a matter that was in the past. accountability and been delivered. police had closed the case and investigation. there was no prompt or reason to visit a particular settlement master that was well within his authority to make a judgment on. the authority as a cheap executive manager. i think that when a journalist is arrested at one of the newspapers in the group, it should have been a matter of concern. >> you did not ask your father why you concerned? >> shows that international news

corp. at the time. >> but you spoke with your father. >> i do not think we discussed the "news of the world" matter. he did not raise it with me. >> your father expressed the view that he was very humbled by the whole event. >> i have had some time to reflect on these events. it is appropriate to reflect and think the whole company is humbled by this and what we're trying to do and what i intend to do is try to understand for

the company has not come to grips with some of the issues in front of it. have you any technical advice and we can get? >> i think the telephone companies -- i deny know the technical details. we'd united vice telephone companies on the matter of voice-mail interceptions.

>> -- we do not advise telephone companies on the matter of voice mail interceptions. >> used in so long that your father had to answer for you. -- you stood so long that your father had to answer for you. >> i have had a chance to reflect on what it meant. what i reflected on was where it in this process were there places where the company could have heard the alarm bells, a few well, or seen them more clearly. and to reflect on them dispassionately. if there is a shift that we need to focus on, there was a tendency to react to criticism or allegations as hostile or motivated commercially or

whatnot. what we did not do, amidst all of the din and clamor around a large business like this around the world to try to be able to pick up those things that we could react differently. at no point did i think the company suffered from willful blindness. >> do you think that the evidence of phone hacking was kept from you? >> it is clear to me that, in 2008, for example the information that i received was incomplete. it is also clear to me that, in 2009, upon allegations arising in a newspaper about the to the case, but the full extent of the knowledge within the business or the evidence within the business as well as with the metropolitan police was not made clear to me.

that is something that i am very sorry for. >> who should have told you? >> it is important to remember that, after the resignation of mr. colson in 2007, mr. hanson brought mr. miler in as an outside person who had the responsibility to both clean up the issue, investigate the issue, and move the company ford and the newspaper forward any way that made sure that these things cannot happen again. if he had known that there was wider spread criminality, the there was evidence or suspicion of that, he should have told me those things. >> there was an aggressive denial of the allegations. why did you allow the statement to be issued? >> in 2009, it was the summer

of 2009 and it was a year after the taylor matter. as i said to you and testified to this committee, i think the company did push back to hard -- too hard. within 24 hours of those allegations emerging and the e- mail was a document that the police had possession of. the chief of police issued a matter -- issued a statement saying that the same matter had been a matter of careful and extensive investigation by detectives and there was no evidence to warrant further investigation. we relied on the repeated assertions from the company around the birth of the internal investigations that had been done in 2006 and 2009 and repeated assertions and reassurances by the police

publicly that there was no evidence in the matter as well as a third-party endorsement of the company's actions in the aftermath. we relied on those things too long. i think it is clear that the company did. if i knew then what i know today, with respect to the relevant leading counsel's opinion and the details and the import of the document, the company would have reacted differently and probably in a way similar to that which we have reacted in the last year to move aggressively and determinedly as we can to make sure we put it right. >> there were people in the company who knew what was going on and were not reporting it to you. who should have reported these things to? >> as i answer the question earlier, were evidence or sufficient suspicion of widespread criminality or allegations of it were there,

this was the job of the new editor who had come in to clean this up to make me aware of this thing's -- of those things. on the contrary, was not shown those things in 2008. in 2009, i received the same assertions are on the quality of those investigations of this committee reviewed. >> we would expect you to know what was going on. it begs the question, which you think is worse? knowing it was going on and being willfully blind would or not knowing what was going on? >> the news of the world is the smallest newspaper financially

of four in an operating company which was the smallest by some measures for the company within the european and asian segment. this is a company of over 50,000 employees globally. and appropriately so, we rely on executives to behave in a certain way. and they have to rely on those people and we have to be able to get the job done but they need to do is otherwise impossible to manage every single detail of the company of this scale.

>> this committee, a committee of parliament produced a report in 2009 where we found it inconceivable that one person was involved. that was based on the evidence of 2009. your papers describe this committee and the members of this committee as a disgrace to parliament. should there be another internal investigation rather than ravishing the committee? >> at various times during this process, the company moved into an aggressive defense too quickly. it was too easy for the company to do that with all the noise and clamor around the business. a more forensic look at the specific evidence that had been given to this committee in 2009 which have been something that we could have done. i could have directed the management of the company to do differently. at that time, i had stepped away from day-to-day management

duties. today, i look back at the reaction to the committee report. that is one turning point that the company had taken. >> you made a mistake in not taking that more seriously? >> what i would say is that the company at the highest levels should have had a good look at the evidence that was given to it in retrospect in a 2009 and had a proper look in 2010 and followed wherever that trail lead. >> after the arrest of brooks, we were given a legal response to going down a certain route without question. you are not currently on bail. so can you answer the questions i put to you? >> i have not been arrested and i am not currently on bail. to the extended questions

related to matters of criminal investigation or related to individuals that are currently arrested or on belts that certain things would be inappropriate. >> you just said that you have now read the committee's emissions -- committee some missions. >> i would like to esterase series of questions about those documents. -- i would like to ask you a series of questions about those documents. give me a yes or no answer. did she prepare a detailed memorandum concerning the case which sees said was minor? >> he prepared a memorandum, but it was substantially narrower and did not raise certain things in that memorandum that council raised. that is a critical point. >> that is a yes? >> i would question your

characterization of the detail. i think it was on the 24th of may. >> the memorandum was prepared in advance of this meeting. >> i do not know that. i assume that was the case. some of the things were discussed with me on the 10th of june. >> that is a yes. this memorandum acknowledges the documents and evidence of widespread criminality of "news of the world" and that your position was perilous. >> he did use the words. at no point in that memorandum was it mentioned, white spread -- wider spread criminality with

respect to phone hacking and those crucial details from the lead counsel house bill left out from the 24th. >> yes. >> you are trying to put words into my mouth. the memorandum was prepared. it did not discuss those crucial elements of widespread criminality. it did not mention those individuals involved. >> did you say you met on the 27th of may to discuss the case? >> bayh answer the chairman's -- i answered the chairman's question early on. i did not have a conversation early on. we do not recall that conversation. a conversation or telephone call could have happened. i have no recollection of it. the most substantive meeting occurred on june 10. >> he believed that there was a

conversation and that he relayed the message that you would take a view of the external qc. you said that document exists? >> i do not think it says what you are characterizing it as saying. this is an important point. it was not me who told that two leading counsel. -- it was not me who told them to construct leading counsel -- to instruct leading counsel. they had already done that. >> the note is very clear. he thinks that you wanted him to instruct him. >> he spoke to james murdoch, bought no options, wait for qc's opinion.

it does not say that i told him to seek qc's opinion. eyes have seen that opinion. >> they have stated that there is overwhelming evidence for the involvement of a number of news groups and journalists into the legal requirement into the names. and but what was surrounding the material around attempts to obtain information illegally. in light of these facts, there is a powerful case that there is a culture of legal information -- of illegal information access used at ngn for information. >> he did provide an opinion that was not shown at the time. he did not discuss the terms. includes -- it concludes that

there is sufficient evidence that there was more widespread activity. >> you would meet to discuss the gordon taylor case. >> as i testified to this committee in the past and have written to this committee, the only substantial meeting i have had on the 10th of june was the case. it was to discuss the case. it was in order for them to increase the settlement offers that they had made. that seems to be what is in the documents provided to you. >> did you have a conversation with him on the 10th of june?

jm said that he wanted to think through the options. >> i have seen that note. i recall leaving that meeting with an understanding that they would increase their offer. whether or not there was time to rest on a for a minute,i do not recall that part of the conversation. >> do you accept that they have not had access to their office file since they have left the company? >> that is my understanding. >> on november 5, at 2011, they said that you had a knowledge of the widespread criminality and subsequently confirmed and still believes the opinion of june 3, 2008. you have evidence from at least may 27, 2008 when you met to discuss the memorandum. >> i do not discuss that at all.

i authorized the increase of settlement offers that they had already made. neither him nor i remember a conversation on the 27th of may. mr. silverman's opinion was not discussed in that contest -- context. no further investigation was shown to me at that time. that is what i testified to consistently to this committee in person and in writing. >> you failed to inform him on the 27th of may meeting. we have a recollection of it. is it not inconceivable that to route this two-week. -- throughout this two-week

period that you would discuss with the memorandum or through email given that these were these three documents, they claim that you were previously defending? >> i think that they testified and myler testified to this was like given to me at the june meeting. -- testified that none of those documents were given to me at the june meeting. we do not recall an alleged conversation. we might have had a telephone call. it was not some stances. otherwise, one may have remembered it. that is what happened. the period between those days and on the 10th of june meeting and i was in india.

then i was in hong kong. i returned on the test from -- on the 10th from other stuff in the u.k. and not related to news international. >> did you mislead this committee in your original testimony? >> i did not. >> if you did not, to did? -- who did? >> i have said publicly, i believe this committee will get the evidence by individuals -- was given evidence by individuals either without sole possession of the facts or now it appears in the process of my own discovery in trying to understand as best i can what ever happened here, it was economical. my own testimony has been consistent. i testified to this committee with as much clarity and transparency as i can. where i have not had direct knowledge in the past, i have gone and try to seek answers to

-- and tried to seek answers to try to figure out what happened and what evidence there is. >> a respected lawyer for many years did what? mislead this committee? >> i issued a public statement in it something that gave to you in 2011. it was something that was inconsistent and not right. >> and do you think that mr. myler mislead us as well? >> i do not have a reason to believe that, nor will i have direct evidence. >> you said that the critical new facts as the company saw them emerged from the trial at the end of 2010.

>> to my attention, that is correct. >> we know that this statement was completely untrue. we know that the critical new facts were received in 2008. it was only in 2010 that the company became aware. >> i became aware of those critical facts in 2010 after the process of the civil trial had uncovered some of the police evidence. >> who told you? >> previously, i had received assertions from mr. myler that there was no new evidence. this was 2009 and later. >> you said that it was not a matter of real regret that the facts could not emerge and cannot be done faster. you now know that was not true. >> it is a matter of concern.

what i was trying to discuss earlier with respect to how i think about what we can do differently and how we can improve on what happened to, the amount of transparency between what was known by certain individuals and seen by them. if that had been more transparent to me, that would be more important and more helpful. >> the facts emerged in 2008, the committee was misled? >> certain individuals were aware. none of those things were made available to discuss with me. i was not aware of those things. even in 2009 when the newspaper made allegations about those things, i testified to this fact and have written to you.

the company has relied for too long on repeated assurances as to the quality and rigor of the internal investigations that have been carried out previously. and we also relied on the assertions and reassertion is made publicly by the police that had all of the relevant information. within 24 hours of the 2009 allegations. >> did he mention it or could he have discussed that with you when he have that conversation on the 27th of may? >> we did not have any recollection of the conversation on the 27th of may. >> you agreed with myler to wait for damages. this opinion was being prepared so that you could decide what to do about the claim.

>> with respect to damages. >> it contained the words that i just read to you. spread around horrible allegations, the horrible process. do not believe culture in the newsroom. james would say, get rid of them, cut out cancer. >> that is a good thing to focus on. >> what cancer did you think he was referring to? >> what i can see in that note was the conversation where mr. myler referred to the investigations.

i am assuming these are,with respect to the allegations in his dismissal claims, he does not believe the problem was in the news room. he showed that perhaps he was worried about raising these issues with me because i would have said get rid of them all. i would have said, cut out the cancer. that is the way he would approach it. that is the way i would approach it. i think that speaks volumes. that is also why i was given a narrower set of facts and i -- facts than i would have liked. >> it does suggest that there

was a discussion about a culture of packing. -- of hacking. >> what you are referring to is a transcript of mr. myler as i understand it. >> when you said you had read that, i do not believe the culture in the newsroom. that is a completely different interpretation. >> that is a different interpretation. that would be a punctuation issue. in the transcript, it is hard to come across. none of it was discussed with me. >> you suggest that there was no mention of the e-mail, despite being central to your discussions with colin myler? >> i want to be very clear. and let me say this again.

that was not referred to as the e-mail. it was mentioned to me as evidence that was greece -- important. it proved it was on behalf of "news of the world." it was not shown to me or discussed with me. it might indicate widespread knowledge or wider spread activities of phone hacking. it was important for two reasons. it was evidence that was important to the case. in conjunction with leading counsel's opinion and what i would have liked in retrospect to have had and moving forward on a different footing. >> there was no mention that news group newspapers have actively made use of a larger group as was mentioned in the memo. >> it was only mentioned that

there were voicemail transcripts there. those documents that you are referring to. >> there is no mention of the number of journalists. who were obtaining access to information. >> no. >> after receiving mr silverleaf's opinion, you met myler again, on 10 june, this time with crone, did you not? >> as i have testified extensively, i did meet in the late afternoon with mr crone and mr myler. i did not receive mr silverleaf's opinion. mr crone and mr pike had received mr silverleaf's opinion and i don't know what they discussed about it with mr myler. >> so there was no mention of a culture of illegal information discussed at that meeting. >> certainly not. >> do you still maintain that neither crone nor myler mentioned this, even in passing, given the strength of words used by silverleaf? >> yes, that is exactly right. they did not mention it.

>> despite this information going to the very heart of the problem that you and they were meeting to discuss, namely that taylor settlement, they didn't raise anything within the silverleaf opinion other than those two issues. >> they gave me sufficient information to authorise the increase of the settlement offers that they had already made, that they had commenced making some weeks before, without my knowledge. they left that meeting with the authority to continue to negotiate. they did not give me any of the relevant documents that you referred to. they did not discuss them with me in the terms that you describe. they did not discuss wider- spread phone hacking, allegations of wider-spread criminality or the like. nor did they discuss with me the wider findings, or wider views, contained in the leading counsel's opinion. >> so having waited for silverleaf's opinion, you did not bother to ask about its contents. >> as i testified earlier, mr silverleaf's opinion was discussed with me in the context of damages and estimates of potential damages that could be

made, which was again the relevant information for mr myler and mr crone to leave the meeting with authority, or implied authority, to increase their settlement offers. >> you talked to crone and myler for up to 15 minutes without any detail emerging about what the opinion said, other than those two points. >> i think if all of those other details had been discussed, it would have been a lot longer meeting. >> or why the opinion made it necessary to offer mr taylor a very large payment. >> i am sorry, could you repeat that, mr watson? >> you did not ask why the large payment was necessary. >> it was made very clear to me that the case would be lost, that there was evidence in the case that linked the voicemail interceptions to the news of the world, and that if litigated the company would lose. there was an estimate of damages. adding plaintiff's costs and the company's own costs to that, an

estimate was made -- i think i testified to you of this in july -- of somewhere between £500,000 and £1 million. this was what would be required to settle this case. relative to litigating the case, losing and spending that money, it was a reasonable decision to go with the very strong legal advice that had been received. >> why do you think mr crone and mr myler immediately questioned your previous testimony to this committee? >> i cannot speculate as to why they did that. >> when you appeared here last time, you said that "outside legal advice had been taken on the expected quantum of damages." you have just mentioned that. "their advice was that the case would be lost and that, in the absence of any new evidence -- i was certainly not made aware of any new evidence -- ", as you have said again this morning, 15 "it was simply a matter related to events that came to light in 2007 and in the criminal trials before i was there. it was a matter in the past." having now seen mr silverleaf's advice, do you accept that this is not an accurate assessment of the advice received from external counsel, and that the committee was misled by crone and myler on that particular point?

>> can i clarify that? i think you are referring to my testimony with respect to that, and i stand by my testimony. that was my understanding at the time, and that was precisely how i understood it at the time and why it was reasonable to make the decision that was made. with respect to having now seen the leading counsel's opinion, as i said earlier this morning, it would have been better if the whole nature of that opinion and all of the issues contained in it were made clear to me, but none of those things were discussed with me at the 10 june meeting or other meetings or conversations at all. the only substantive meeting was the 10 june meeting between mr crone and mr myler. the only things that were discussed were the things that mr crone and mr myler deemed sufficient for me to authorise them to increase the settlement offers that they were already

engaged in making to a much larger sum. >> mr murdoch, it is clear you are not going to answer any of my detailed questions. i was not going to do this, but i feel that, given that it is in the papers this morning, i need to tell you that i have met neville thurlbeck. although the meeting was supposed to be in confidence, i think there is a public interest in revealing what he said to me. i know you have not seen this yet. i will make it available to you. he said to me, "no one asked of crone, 'before you went in to see james murdoch, did you discuss what your strategy with him would be with anyone else?' he discussed the strategy with me at one point. what he did was this: just before he went to see murdoch and to clear the funds and to say we've got to settle, he had to speak to me about what the transcript for neville was all about. 'neville, we've got a problem because of this. what's this all about?'" >> who is this, tom? >> this is neville thurlbeck. >> is it colin myler he is talking to? >> this is neville thurlbeck

talking to tom crone. "i looked at it. 'i don't know, tom. i never received it. i don't know.' i'm looking at it and saying: 'clearly, it's hacked. who is it? you'd better speak to x. somebody must have asked x to do this. i mean, x was asked to do so many of these by people on the newsdesk at the time. he would know. he would have to be pretty dumb [not to know]. so, tom comes to me and i give him a full explanation. 'tom, this had nothing to do with me. we discussed things.' 'right, fine,' he said. 'however, this shows that this had gone through the office. it's gone through the office; it's gone through x, through his computer in the office, so clearly news international are culpable and we're going to have to settle. and i'm going to have to show this to james murdoch.' the reason i can remember him saying that was because i said to him, 'please, do you have to show him this? because he's going to assume the worst of me and he's going

to think it's all to do with me. is there any way we can get round this?' and he said to me, 'nev, i'm sorry but i'm going to have to show him this because it is the only reason why we're having to settle. i've got to show him this.' i said, 'tom, i'm going to lose my job.' he said, 'not necessarily. not necessarily.'" could that be a true and accurate account of neville thurlbeck's recollection? >> i have no idea of the conversation that mr thurlbeck allegedly had with mr crone around that. i would be very happy to see that if you can provide it to us at another time. but i can tell you that at no point did mr crone or mr myler discuss evidence or suspicion of wider-spread phone-hacking during the meeting of 10 june or otherwise in relation to increasing the offer of settlement with mr taylor's attorneys. >> i pressed him on this, mr murdoch. he said, "this is not some vague memory.

i was absolutely on a knife edge. he was going to show this to james murdoch. there's only going to be one conclusion he is going to jump to, which is get rid of thurlbeck. tom took it to him. the following week, i said to him, "did you show him the email?" and he said, "yes, i did." now tom can't remember if he showed it him now or spoke to him about it, but he said, "yes, i did." i then said to thurlbeck, "so, he did show it to him?" he said, "he said "yeah" this is thurlbeck saying to me what crone said to him. "he said, 'yeah, yes. it's all right. it's fine. we're settling.'" >> mr crone, i think, testified to you that he did not show me the e-mail. my understanding is now that the e-mail was subject to some particularly stringent confidentiality agreement with mr taylor's attorneys and the police or something like that. mr myler was part of that confidentiality ring, i believe, but it was not shown to me at all. i have only recently seen the e-

mail itself, which is as described. "here is the transcript for neville." then there are large blocks of redacted text of the actual things. that is all i have seen, which is what you have seen. i saw it recently; it was not shown to me before. i am answering your questions in as clear and consistent a way as i can. >> we published it in our report in 2010. you didn't look at it then? >> yes, i think i saw the words at that point. >> we published the e-mail. >> with the redactions, yes. >> i would have hoped that you might have looked at our report. >> as i testified earlier, i did look at the report. mr watson, i really can't say what mr crone and mr thurlbeck may have discussed. we are happy to see that and deal with that, but my recollection is very clear. all i can testify to you about is what i knew at the time, what i was told at the time and what i was not told at the time. >> are you familiar with the word mafia? >> yes, mr watson. >> have you ever heard the term omertà? it is the mafia term for the code of silence. >> i am not an aficionado of such things.

>> would you agree that it means a group of people who are bound together by secrecy, who together pursue their group's business objectives with no regard for the law, using intimidation, corruption and general criminality?

>> thank you, mr chairman. i would like to ask you some questions, mr murdoch, about the decision to settle the taylor case, because you have rightly said that the meeting you had on 10 june 2008 was really about understanding what level of settlement should be paid. and, in fact, mr silverleaf is quite clear in his note: the brief he'd had from your company was not really, "should we settle or not?" but "how much should we be prepared to pay and what are the tactics for concluding that settlement?" when was the decision taken? when did you take the decision that this case had to be settled? >> i did not take the decision that it had to be settled. mr crone and mr myler had, previous to the meetings with me, already started to pursue that path, and i think that has

become clear in the documents that have been provided to you by mr pike, after news international waived privilege on those things. my understanding is that it was mr crone who started the settlement discussions some weeks beforehand, and it didn't come to my attention until after it was necessary -- they felt it necessary -- because the number had gotten large enough that it was going to draw my attention to it. they had already sought to settle, or mr crone had sought to settle, at a variety of levels before. >> when you gave evidence to us in july, you said with regards to the settlement that you were, "certainly not made aware of any new evidence -- it was simply a matter related to events that came to light in 2007 and in the criminal trials". do you still stand by that statement? >> that is what i understood at the time, and i was not made aware of new things in 2008. yes. >> although you are saying now that you were aware of the transcripts, but were you aware the transcripts were new evidence? certainly all the internal discussion of them that we've seen suggests that it was regarded as new evidence. >> i think it was a new disclosure. i don't remember how exactly it was described -- as "new" or not. it was certainly presented as, "there is evidence; here it is". they didn't show it to me, but they said, "it's a transcript of voicemail interceptions that have proved that it was on behalf of the news of the world", and that's what i was told. >> it was clearly new information; it wasn't

information that had come out of the trials, because this wasn't known. >> yes, but i think, to be clear, it was an instance of voicemail interception that had already been part of the trials beforehand, i.e. that it was mr taylor -- his voicemail being intercepted. i think that was one of the counts that mr mulcaire was tried on. >> did you challenge them when you were having this conversation? because the taylor case was one that -- i mean, farrer's noted that they thought it was so weak the case ought to be struck out when it was filed in 2007, and yet less than a year later you are authorising it to be settled for up to £500,000. did you question why this massive turnaround had taken place? >> well, the whole history of the case and the pleadings and whatever farrer's or our own counsel had said about it was something that predated my involvement in the company. it was brought to me as case simply that would be lost.

it was described briefly to me that there was evidence of the voicemail interception transcript -- the transcript of the voicemail interception -- that proved that it was for or on behalf of the news of the world, that it was open and shut that the company would lose it, and that it was important to settle the case, because litigating the case would be costly, and it was seen as a matter of the past. it was seen more as the end of something that had been going on before, as opposed to the beginning of something new. >> were you told how much michael silverleaf had recommended the company settle at? >> i was given -- i was certainly told the number. and the number that sticks out in my mind, i think, was -- i want to say four hundred and something thousand pounds plus expenses and whatnot, and i believe that was ultimately -- >> that was the ultimate -- the number that was settled on, and it may have been that that was discussed -- >> but were you told what the number was in silverleaf's opinion? he gives a clear view as to what he thinks the next step should be. >> yes, i think in his opinion, which i did not see at the time, it was described as £250,000 -- possibly more -- plus costs of both sides. >> he was recommending an increase from 150, which had

been offered, to 250. >> yes. >> by the time you met on 10 june, that had already been increased to 350. >> yes. >> so was this described to you at all -- the fact that these increases were being made and that you were being asked to sign off on a payment that was potentially double what the qc had recommended in his recommendation to the company? >> no. the escalation of those offers, and the back and forth, is something that has come to light to me only recently, and it was described to me that an offer had been made. i can't remember the exact number of the offers that they talked about at the time, but it had been rejected and they -- mr croner and mr myler -- thought it would cost something in the range of between £500,000 and £1 million, but that when you added up the costs of both sides of litigating, plus the damages recommended, they thought that that was reasonable and they gave me very strong advice that it was commercially reasonable to settle. >> so when you had this meeting on 10 june, that was the first you heard of all this? there was no pre-briefing? you had no idea what they were coming to talk to you about? >> the first i've heard of -- what did you say, sorry?

>> of the fact that you were going to have to settle the case, the fact that it was this amount of money. i mean, were you even aware of the gordon taylor case before this meeting? >> yes, it was certainly the only substantive discussion that happened, as we discussed at some length earlier, this question of -- >> what does that mean, though -- "substantive"? what is "nonsubstantive"? >> it's the only conversation that i recall. it went into some details about authorisation to settle this thing and the evidence that was there. as we discussed just a few minutes ago, there is this question of whether or not there was a conversation or a telephone call, or something like that, on 27 may. neither mr myler nor i recall it, but neither of us rule out the possibility that a brief heads-up or a discussion in a hallway or a telephone call had happened. >> in the note that tom crone prepared for colin myler, which we have discussed earlier, the "for neville" e-mail is only one of three issues that he cites with the case. the other two were the existence of the contract between the news of the world and glenn mulcaire for him to obtain information about gordon taylor, and also

information that had come to the company from the police -- information relating to the information commissioner's work, which suggested that there were examples of other journalists at both the news of the world and the sun who were involved in illegal activities. that was given equal, if not more prominence, by tom crone in his note. was any mention of that made to you at all? >> no, and i think it is important just to reiterate that the memorandum that mr crone prepared was not shown to me or shared with me at any time during this period. i have since read it and those things were not discussed. what was discussed was simply sufficient information to get authorisation to increase the level of settlement. none of those other things were discussed with me. >> so you made your decision to give them consent to negotiate a settlement of up to £500,000 with gordon taylor simply on the basis that you were told the case would be lost, and you were

told the reason it would be lost was because of the existence of this transcript, and those are the only reasons. >> and that there was advice, when you added in costs of both sides, that made it reasonable to settle at a higher level. i followed their advice to settle; i didn't decide to settle. they had strong advice to settle and i consented to that advice of the senior legal manager for many, many years and the editor of the news of the world, who i had no reason at the time to believe had anything other than the best interests of the company at heart in saying, "this is the advice to settle." >> had you asked what the silk's recommendation was -- the silk's advice you were waiting for -- you would know that they were asking to settle at a very high level, a level at which it might be unreasonable to accept that any court would ever award that amount of damages. >> well, i am not sure that's

the case. i think -- >> that's certainly what mr silverleaf seemed to suggest in his note. >> but mr collins, if you take the £250,000 or more and you add in the costs, both of mr taylor as well as those of news international, were they to pursue that, you can get to higher numbers. so you have to add in both sides of those costs, which can be well over £100,000 on each side, depending on the complexity and so on. so, from the standpoint of the amount that was agreed, they described to me that they had received counsel's opinion that this amount would be appropriate. they thought it was the right thing to settle, as they testified to you. they gave strong advice that it was the right thing to settle and i followed that advice. >> just a final thing on that, in terms of the advice you get. did you ever say to them, "this has already been part of a trial"? that is what you understood -- that is what you told us. "why don't we just go to court? what is the risk? this case is already known about. there's only this small amount of new evidence. the mulcaire link to gordon taylor is already known. one of our journalists has

already gone to prison for this. there is no one else involved, there is nothing new. what are the risks of going to court?" >> it was described to me that there was clear evidence that 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 that it would lose the case and there was an amount of damages that were possible. rather than go through that, it was reasonable to avoid that expense and distraction. >> but did you discuss the reputational risk to the company that might come out of a case like this? >> i don't recall a particular discussion, although i think that it was seen as dragging up matters of the past and as desirable not to have all these things dragged up again. as i testified to you in july, i wasn't aware at the time that there was any confidentiality, or anything out of the ordinary in terms of the confidentiality, but i think that i wrote to you in august, saying that confidentiality was, in fact,

discussed between the different lawyers. that was something that became clear to me after the fact. >> we have been discussing reputational risks, which are often seen as a normal part of companies deciding whether to settle or not, because you might pay an awful lot more settling than you would going to court. when jon chapman gave evidence to us, he said that many companies, particularly big companies, pay out because they do not want stuff to be raked up. is that something that you discussed with tom crone and colin myler? were you worried that other things would be raked up if this went to court? >> there was no discussion necessarily of other things, because no other things were mentioned, but it seemed pointless to take it to court, given the fact that it would probably be high profile. the company was certain at the time that it would lose the case. it was just a question of assessing what the cost of going through the process is and whether there is a way to remove that or take that cost, or something like it, earlier and avoid all that. >> is this the way things are normally settled in your business -- people come to you and say, "we have to pay out this money," and, rather than asking why, you just say,

"okay"? >> no. mr collins, reasons were given to me around the relevant evidence in the case, not in relation to wider phone hacking, but in relation to this case, and it was very strong advice that the company would lose the case. >> but you did not challenge why such a large amount was being recommended. you did not ask what the qc's opinion was on the appropriate amount to settle. you took tom crone's and colin myler's word for it that that was the appropriate amount and that that was what you were going to have to pay. >> and that they had sought leading counsel's opinion and this is where they had come out. >> if you had asked, you would have got a slightly different picture. you would have understood why. it is almost impossible now to look at the silverleaf document and ignore why he recommends the level of settlement that he does, because of the overwhelming evidence against the company that he finds. but in this case, you did. you knew none of that. you didn't know that he had actually recommended a substantially lower amount than you were now being told to sign

off. you didn't ask anyone about it. you just agreed with tom crone and let them get on with it. >> i was given a range where this litigation was likely to settle. i was told that, in the damages estimated by leading counsel, they had sought leading counsel's opinion that the estimates plus costs for both sides would land within this range, and i was given strong advice to settle the case. i went along with that advice. >> honestly, it may not be the mafia, but that is not management today. it does not sound like a textbook example of how you might settle something like this. >> again, just to put this in context, while it is a large amount of money, and looking at it in retrospect, we can say that more transparency around things like the leading counsel's opinion and to have been able to have actually seen that, or for other senior executives outside the newsroom to have seen that -- i don't have any knowledge that anyone did; i certainly didn't -- would certainly have been desirable, but in the context of the overall european business, the news international business and businesses that i was running, this was something that was within the responsibility of the editor and the legal manager of news group newspapers.

they had come to me with strong advice. they described sufficient information to get the authorisation that they were seeking, and it was left to them to manage the issue. >> this is my final question. you never considered any other option, other than settling the case at the level that tom crone recommended ultimately when you had that meeting? >> i think the only options available were to go forward litigating the case, or to settle the case and think that through. whether there were other questions, i do not recall. i recall leaving that meeting with a clear sense that they would do that, and i think that is what they left that meeting with as well, as they testified to you. >> just to clarify some of the points that i am still a bit unsure about from the answers you have given to tom watson and damian collins, you are not aware that the meeting took place on 27 may, and neither was colin myler -- i get that -- but do you recall at some point

saying to colin myler, "let's wait for the silk's view," which is what was in the note to julian pike? julian pike said that colin myler had rung him up and that you had said to him, "let's wait for the silk's view." do you recall saying that to colin myler? >> i don't recall that. i do want to be clear: there is no record or assertion of a meeting; there is a reference to, potentially, a conversation that neither mr myler nor i recall. it may have happened, but i don't have a recollection of a conversation about waiting for the silk's view. >> okay. but you wanted the opinion of the silk before you agreed to authorize? you wanted that. >> i think if they hadn't had a silk's view when they came to me on 10 june, i probably would have asked what leading counsel thought of it etc., but they did, and they came to me with a recommendation that leading counsel had provided information about.

>> okay. the bit i am struggling with now is that you seemed to be indicating to damian that you were not aware of the figure that michael silverleaf had quoted for what the amount could be. you understood that there were costs on top, but you just said, if i remember rightly, that you were not actually aware of the exact numbers that michael silverleaf gave. am i right? >> i was not provided with the document itself at all. it was described to me that there was a range, that leading counsel's opinion had been sought and that this was a reasonable range. >> it's just that when you came before us last time you seemed to be very precise about what the silk's opinion was. when adrian sanders asked you about this last time, your answer to him was that the "advice was that the damages could be £250,000", which is absolutely spot on -- that is exactly what he said. >> which, mr davies, is exactly what i just said in answer to mr watson's question.

>> but when you answered damian, you seemed to be saying you were not really entirely sure what the number was that michael silverleaf was saying; you just knew the number plus the cost, or whatever. usually, people come the second time round and they are more on the ball than they were the first time round; you seem to be more vague this time round than you were the first time round, and i just wonder why that might be. >> well, that's certainly not my intent. there were a lot of numbers, i guess, going around: we had the £425,000 that, ultimately, it settled for in damages, plus the costs and so on. as i testified earlier, i am aware that mr silverleaf said it could be £250,000 -- possibly more -- in damages, and then, in these considerations, you add on those costs. i am trying to be as specific

and transparent as i can with you. >> the other thing is that when you came last time round, you sort of described this brief meeting on 10 june with colin myler and tom crone -- 15 minutes maximum, i think, is how you described it. today, you have twice described it as a substantive meeting, which, again, seems to be a slightly different emphasis from last time round. how do you explain the discrepancy between a short, 15-minute meeting and, now, a substantive meeting? >> first of all, i think i said that it was 15 or 30 minutes; in the diary records, it is, i think, recorded as about 30 minutes -- it was scheduled for that; i don't know how long it actually took. i think mr crone said to you it was 15 minutes, but i can't recall. i referred to it as substantive because it was the only meeting where this material -- the question of this thing -- was discussed in any level of detail. as i have said to you, exactly what was presented to me at that time was sufficient to give them the authority to go and increase the offer, but no more. >> and the sufficient

information that you referred to, am i right in thinking that it was, first, "we're going to lose the case" and, secondly, "if we lose the case, the cost is going to be £250,000 plus whatever the costs might be of going to court"? >> yes. >> is that you are saying is the sufficient information that you were given to settle? >> and also the existence of evidence that linked the particular voicemail intercept in question to the news of the world -- that is important -- as well as that leading counsel's opinion was that, yes, the company would lose the case and that a certain amount was arranged that was agreed upon. >> what was the basis on which you arrived at the figure in terms of authorising farrer's to go up to £500,000? what was your rationale for authorising a level up to £500,000? >> i don't remember the £500,000 limit, but i think the advice that was given to me by mr crone and mr myler, as i have testified to you, was that the range would be between £500,000

and £1 million, with damages plus costs, and they made a strong recommendation that that should be pursued. >> but julian pike said, when i asked him whether they were prepared to settle this case at any price, or whether there was a cap they were prepared to go up to, in which case, after they had reached it, they would say, "well, that's it. we've been generous enough. we'll see you in court", he said to me that the £425,000 was getting close to the cap. when i pressed him, he said that the cap was £500,000. now, that was beyond tom crone's authorisation, so presumably, it must have been you who authorized it that they could go up to £500,000, because julian pike was very clear that that was the amount that he was authorized to go up to, to settle the case. >> certainly, £500,000 was beyond mr crone's authorisation. i believe that his authorisation was much, much lower, with

respect to legal settlements, which is some £10,000. to try to be clear, mr crone and mr myler had already attempted to settle 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, because it was £10,000 for mr crone. >> who had given them the authority to try to settle at a lesser amount than you were agreeing to, but at higher amounts than they were authorized to give? who had given that authorization? >> certainly, in the documents that i've seen recently and that you've seen as well, it appears that mr crone took it upon himself to authorize a settlement of £50,000, and then £150,000. i certainly did not authorize that, nor the increase to £350,000 that came later. that was not at my authorization, nor do i have any records. we've looked quite hard at this to find any records of other executives at news international who could have done so -- the chief financial

officer, for example -- and there is no record of any of that. >> so tom crone had the authority to settle for up to £10,000, and yet, completely unilaterally, he was instructing your lawyers to settle a case for £150,000, 250,000 without any authority from anyone else even though his authority level was £10,000? >> presumably, he, mr myler and mr pike had discussed those things, but they did not come to me until 10 june, as i have said. >> i still come back to the same question: who gave the £500,000 cap to julian pike then? >> certainly, at the 10 june meeting, a range was discussed, and if that was the cap that mr crone wanted to give mr pike, that was there. i had agreed certainly with them that, within a range, as we discussed -- something above £500,000 when you include costs -- they had the authority to go out to try to settle it, which is the advice that they had given me. >> had you given them a cap?

you say, "something above £500,000", but that sounds like a minimum. i'm on about what the cap was. >> the point here is the damages number, plus the costs to both sides to litigate it. i don't recall the discussion of a cap on damages, although it would have been quite normal to say, "go and have a go at this number", but i don't recall that. >> did you give a cap or not? >> certainly, i didn't imply that they could settle at any number -- i want to be absolutely clear about that. they gave me a range, and within that range, i said that they could go and pursue the settlement. >> did they come back to seek your authorization when they had a figure that had been agreed? did they have to come back for you to say, "okay. let's go with that"? >> they had authority to go to

settle the case within the range that they had presented to me. whether or not they came back and there was a confirmation of what had happened or how it had gone at some point in the future, there were no subsequent meetings with the two of them on the subject, but they may have called me or had a confirmatory discussion that way. >> you see, the problem i have is that it all seems very cavalier to me -- very cavalier with money. given that your organization is so successful, i can't believe that you've been so successful by being so cavalier with money. you sort of pay off an employee who has been to prison -- you give them a quarter of a million pounds without a blink of an eye to pay them off, even though they had been to prison and brought the company into disrepute. you agree to settle cases with no real cap in place, just some sort of a ballpark figure that people are left to go along with. you think that the company should have counsel's opinion,

but you don't ask even to see the opinion when it comes, even when it is a substantial amount of money. the bit i have a problem with is that you seem to characterise this -- your sort of defence for this -- cavalier approach as, "well, this is the news of the world. it's a tiny part of our business. i really can't be bothered trifling about with these sorts of things." i used to work for asda. i don't know how big asda is compared to news corporation. >> i think it's owned by wal- mart, so it's big. >> exactly. asda is owned by wal-mart. i am pretty safe in saying that wal-mart is bigger than news corporation. >> i think you are very safe. >> absolutely. i guarantee that if someone had said to the chief operating officer of asda -- a small but not inconsiderable part of wal- mart -- "we have a problem. a legal case is going to cost us in the region of £500,000," any chief operating officer of asda that i have ever dealt with in my entire life would have said, "for god's sake, let me have a look at that."

i find it absolutely incredible that you did not say, "how much? £250,000? let me have a look at that." i cannot even begin to believe that that is a course of action that any self-respecting chief executive or chief operating officer could possibly take, with so much of the company's money and reputation at stake. >> mr davies, i think that it is important to note -- i have testified to this effect, and i have tried to describe this to you in some detail -- that the situation we had was that a description was given very clearly by senior legal counsel that the case would be lost, and a description of why it would be lost, with respect to the linkage of the voicemail intercepts. it was very clear that there was a losing case on the cards. there was an amount of money

that was substantial; you are absolutely right. i was assured that, within a range, leading counsel had concurred that that was where it would, or could, settle. within that range, i authorized mr crone and mr myler to go and negotiate that. the way that the company has always operated is to rely on executives directly responsible for a unit of the business -- a paper, etc. -- to go and do the things that they needed to do, under the assumption that they would be appropriate and lawful, and that they would be questioned from time to time, and come to senior management with issues. i was given sufficient information to authorize that settlement. i was not given no information; i was given sufficient information, and i asked the question, "is there a leading counsel's opinion? what do they say?"

"they say that within this range is reasonable." it was a reasonable decision to settle that case -- to agree with their advice and take no further action -- because no other evidence, and none of these other issues that we have discussed today, came to light during that conversation or at that meeting. >> at what sort of level would the settlement or the advice of counsel have needed to be for you to have wanted to say, "let me have a look at that?" how much money were you prepared to give away on the say-so of somebody who was authorized to give up to £10,000? the bit that i cannot understand is that there was a culture, apparently, of trusting executives to make the decisions, and going with the flow and all the rest of it, with maybe a few challenging questions here and there. if that was the case, why did tom crone have only a £10,000 limit? if you are happy to take his advice to settle for nearly £500,000, that does not strike me as the kind of company that said to tom crone, "we are only giving you the authority to settle for £10,000." that does not make sense. there is a mismatch between the culture that you are trying to

portray and the strict £10,000 authorization limit that tom crone has. >> mr davies, there is a contrast here between controls -- financial controls to make sure that things are, hopefully, recorded and authorized properly and so on, and that if they are not, they are dealt with in the right way -- and following the recommendation of experienced counsel. this is the strong recommendation of very experienced counsel, who had some 20-plus years as counsel of news group newspapers. a new editor had come in and had a fresh look at all of these issues, i had assumed. they made a strong recommendation, and i followed it. there are two pieces here, if i can try to be helpful. one is the decision whether to settle, or to increase the authority, within a range of, as i recall, £500,000 to £1

million, which does imply a cap -- all in: costs and so on. then there is the decision -- or rather the lack of a decision -- to say, "are there other things here that we should be looking at?" again, sufficient information was given to authorize them reasonably to negotiate, within a range, the increase of the settlement offers that they had already made, but nothing more, and nothing to indicate any other action. there are two sets of things to consider there. >> how much of that was to do with confidentiality? what part of that sum was the confidentiality element? >> as i testified to you in july, at the meeting of 10 june 2008, confidentiality as a cost item, if you will, was not discussed. it was not my understanding at the time that confidentiality was a line item, if you will, that would increase the cost and so on. it is entirely customary for certain settlement agreements, and settlement agreements of this nature, to be confidential. that is normal practice in many

businesses, if not all, when faced with certain legal claims. as i wrote to you in august, it later became clear to me, after my testimony to you, that in documents that had i not been privy to, or conversations that i was not part of, confidentiality was discussed as a cost in that settlement. i wrote to you in august to clarify that point. i hope that is helpful. >> can i just ask a final question about all this? as a result of this, do you now run things differently? do you deal with things differently? do you have a more hands-on approach to the way you deal with things in your company as a result of this? can you not see that, actually, this really is pretty lax for somebody in your position? >> it is a huge focus for the business, and has been for the past year, to get to the bottom of this issue, definitely, and

to co-operate with the police with respect to their criminal investigations, and with this committee, as well as with the judicial inquiry into the press, politicians and police that is under way. crucially, we should learn the lessons from these episodes and ask, "first of all, how can we improve the on-the-ground governance of operating companies around the world, including news international? how can we improve transparency with senior management on a global or regional basis, and operating companies in various territories?" we have taken a number of measures to do that. you ask how. for example, at news international and all of the operating companies that i have authority for, we have instituted a more formal board review process. at news international, we have actually put an internal board in place and appointed a chief compliance officer, full time, around those things. i meet outside executives --

from within news corporation, but outside news international. i meet with that board; we have had one meeting already with a substantive compliance agenda around these things. the goal is to go through, in great detail, legal matters that are facing the company, ongoing reputation risks, governance risks, compliance and so on. for example, just in the last week, out of one of these processes, in india we have retrained over 1,000 staff with respect to compliance and risk. these are things that i take very seriously, as i have throughout my entire career. clearly, the transparency that was achieved around this set of issues was not good enough, and it is something that i am determined to sort out. it is something that we believe in very strongly. >> i have one question regarding mr. davies's line of questioning. the 10 june meeting was the

first substantive meeting that you had over this. they came to you to ask for authorization to increase what they were offering. do you remember what they were offering before they came into the meeting? >> i now know that the previous offer they had made was £350,000, but i do not recall the exact amount that they discussed with me at that time. >> this is your first substantive meeting with people you have just described as having a very low authorization limit. did you even ask them who gave them the authority to offer that £350,000, or whatever, beforehand? >> again, i do not recall them mentioning the £350,000 offer. i now know that that offer was made the week before while i was abroad, and i did not have a discussion with them about that at the time.

i think i would have been more focused -- i was more focused -- on what the total amount would be for this to settle, given the strong advice that the case would be lost. that was what was focused on. >> you did not ask, "who the hell gave you authority to offer that in the first place?" >> their authority levels were not top of mind during that conversation. >> to your knowledge, were any other people involved in that chain of authorization -- stuart kuttner, for example, or jon chapman? >> to my knowledge, the authorization process was that i think mr crone was authorized independently to make a £10,000 legal settlement. mr myler, the editor, would have been £50,000, and other members of the executive committee -- the chief operating officer, the chief financial officer -- would have been authorized, i believe, up to £500,000. >> did they go through any of those? >> i can find no record of those authorisations being sought or given. we have looked, and tried to find out exactly how that escalation occurred during that period. >> so as far as you are aware, it really was the tom crone and

colin myler show? >> i think mr crone and mr myler -- i think it is in the documents given to you -- were very much driving the agenda around the gordon taylor litigation. i believe that is what mr chapman testified to you as well. >> i want to come to mr crone and mr myler a little bit later, but the memo that tom crone wrote for colin myler was produced on a saturday -- a very busy day for the news of the world -- for the following tuesday. he is clearly expecting colin myler to have a meeting with you, which he says he cannot be at because he is preparing for a holiday. when did you first see that memo? >> i did not see that memo at the time; i first saw that memo recently -- since i gave evidence to you in july.

>> so effectively that was a private note from tom crone to colin myler, and was not copied to you. >> it was not copied to me. it was not shared with me. >> would you agree that the fact that you cannot recall having a meeting or a discussion -- certainly colin myler cannot recall having a meeting that tom crone expects to happen, hence his writing a pretty serious memo -- adds the question of how these two characters are dealing with each other, and whether they are being full and frank with what they are up to? >> i couldn't possibly speculate about all the conversations they might have had with each other. i just don't know. >> one of the great words that has come out of this inquiry is that people have occasionally "refreshed" their memories. colin myler has told us that he is unable to verify details about the meeting or the discussion that may or may not have taken place on 27 may 2008, because news international has refused him access to the relevant documents -- presuming some relevant documents exist. will you undertake now -- so that mr. myler can refresh his memory, to use that term -- to give him access to any documents he needs surrounding that meeting or otherwise?

>> i can tell you that if there is an occasion to review a policy around former employees' access to systems, we can review that and i can come back to you on that. i can tell you that i have gone and looked for records around my own diary with respect to conversations during that period. i am happy to provide my calendar to you. there is no record of a conversation or a meeting on 27 may, with mr. myler or with anyone else, on this matter. i can provide you with those calendar events all the way through. >> but if he has made a note of it, or documents exist on his computer in there that might be helpful to us, he should surely have access. wouldn't you agree with that? >> i think we, the company and, around all these issues, the management standards committee -- the independent management standards committee, for that matter -- have looked at all those things, and if there is an occasion to revisit those,

certainly i will raise it with them. >> in the spirit of being open and transparent. >> very much so, and i am happy to provide you with my own calendar and notes around the entire period. >> it is a peculiar meeting, or non-meeting. >> well, i don't think anyone is suggesting that it is a meeting, mr. farrelly. mr. pike records a note that mr. myler told him of a conversation -- so, a second- hand note of a conversation that neither mr. myler nor i recall. neither of us rules out the possibility of a brief conversation on that day -- a telephone call or what have you -- but it certainly would not have been a substantive meeting, because otherwise one of us would have recalled it. >> just in terms of the way people are dealing with each other, you are very clear that you told them to go and settle, whereas the notes made by julian pike of his conversation with tom crone are quite clear that "jm said he wanted to think through options."

you said that that is not the case. that again raises questions about what these people are telling each other, and whether they are being honest with each other -- if you are telling us the truth. >> i think mr. crone and mr. myler have both testified to this committee -- well, certainly mr. crone did -- that they left that meeting with the understanding that they had the authority to go and settle; the authority that they were seeking to increase their offer was something they left that meeting with. i don't know what that note from mr. pike is referring to, whether or not there was a loose end that mr. crone or mr. pike or somebody had to be -- i just don't know. >> can i just step back on your position and responsibilities? you took over when les hinton moved over to the wall street journal, and you were running the international, or the europe and asia, operations of news corp. when les moved, were you effectively executive chairman of news international? >> i was chairman of news

international when les -- mr. hinton -- moved to new york, to dow jones, and did spend time, obviously, on the business, and relied on the senior manager of the business, who had been in place for some time. it was always the case that we, the company, would appoint a full-time ceo to replace mr. hinton, and it took about 18 months to get to that point. >> that was rebekah brooks? >> yes, that's mrs. brooks. >> in september 2009? >> yes, although i think effectively it was announced in the summer of 2009, and she started to play a much bigger role. >> so you are the chairman -- formally or effectively? >> i think formally i was the chairman of news international. >> the executive chairman or -- >> i don't recall. i may have been the executive chairman. >> who was the de facto chief executive of news international, running the show, before rebekah was appointed? >> we had an executive group of a chief operating officer, myself as executive chairman,

and a chief financial officer, and i instituted involving the editors more transparently in the business operation. >> so you were executive chairman? >> yes. as i say, i might have been named executive chairman, but i was effectively executive chairman. >> in this meeting on 10 june -- you could not have been clearer on this -- the "for neville" e- mail, in its wider significance, was not mentioned; just the fact that it involved the news of the world. when you had this meeting, did you know who gordon taylor was? >> i don't recall if i knew who he was beforehand, but mr. myler would have told me, i assume. >> did you ask in the meeting, "who the hell is this gordon taylor?" >> i don't recall if i asked.

i recall being aware of it at the time. whether it was prior to the meeting, or i was made aware in the meeting who mr. taylor was, i don't recall. >> did you know what he did for a living? >> well, i was told. as i just said to you -- just to be clear, mr. farrelly -- i don't know if i had a lot of knowledge about mr. taylor's role beforehand. >> the one thing that, right from the outset of this, really showed us -- and, i think, any 10-year-old -- that the news of the world's line did not stack up was the fact that gordon taylor was not a member of the royal family or the royal household. did you not say, "but he's not royal"? >> i think the point here is not so much whether or not i was told who gordon taylor was but, really, when i came to news corporation in 2007, i did not receive a briefing on all the matters of 2006. it was december 2007. i was aware that the editor had resigned over these things; two

people had gone to jail and one of them was a reporter. the details of the specific voicemail interception involving the royal family, and the fact that mr. goodman was the royal reporter -- those things were not top of mind for me. >> okay, but you are authorizing a settlement that turns out to be substantially above, in terms of damages, what the qc is talking about, and you are not even curious enough to say, "hold on. how come glenn mulcaire has hacked this man's phone when he's not royal?" when at that particular time, as far as you are concerned, it is only the royal reporter who's involved. >> as i said, the details of the original goodman prosecution, in terms of his being the royal reporter and that it was a voicemail interception involving the royal family, were not top of mind for me at the time. i was given a set of information that this was a case; it was an old matter; there was no

question but that it was the same glenn mulcaire who was convicted before and so on, who had been working with the news of the world with mr. goodman -- but mr. goodman i don't believe was discussed at the meeting -- and there was a piece of evidence that would ensure that the company would lose the case, because indeed the interception in question was on behalf of the company. that was the information i was given. >> did you ask, "and who the hell else has this glenn mulcaire been hacking"? >> i do not believe so. i think it was known at the time that this was a voicemail interception that had already been prosecuted by the police. the police had said, "there isn't anything more here", and they had shut their investigation and successfully prosecuted the individuals concerned. >> i have got this growly australian accent rattling around in my head at the moment, who would then go on to

say, "and how much more is this glenn mulcaire going to cost me?" do you think your dad might have asked more questions than you? >> i couldn't begin to speculate. >> and it did not occur to you to ask whether glenn mulcaire was doing this off his own bat, and who else was authorizing it. >> no, it >> no, it was definitely 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 relevance of the evidence that was described to me. >> it is remarkably incurious. are you always so incurious with all the other businesses that you run in news corp? >> i think it is important, mr. farrelly, to be clear here that the questions were asked with respect to, is there evidence, what is the evidence about, and is the case going to be lost? i was told a leading counsel had provided opinion within a range that a settlement recommendation was made. it was not as if there wasn't a

conversation -- it was not a terribly long conversation. in my view, it was a settled matter. i was given a very, very strong recommendation by senior and experienced legal counsel and the editor of the news of the world, who had been with the business for some time and in the industry for some time. i had no reason to believe, nor was i provided with any reason to believe, that anything further was afoot. >> in terms of the qc's opinion, it either did not occur or clearly did not seem relevant to you to even ask for a copy. >> i understood at the time -- and it was described to me at the time -- that the leading counsel's opinion was with respect to damages. i was given an answer about the range of damages and what it would take to settle, with respect to what mr. taylor's requirements were, in terms of what he might want to settle for and how to do that. that was the discussion that was had and it was deemed sufficient. >> were you not at all curious to ask whether the qc had said anything else? >> seeing as i was told that

the qc had been asked to opine on damages, and it was described to me what the range of damages were, it did not occur to me to probe further. >> so you didn't even ask how long this qc's opinion is, in case you thought "if it is just a few pages long" -- which it is -- "i might just have the chance to read it in the car to the airport." >> it was described to me that the opinion was made with respect to damages, and there weren't other things there. it did not seem necessary for me to ask for a copy of it, nor was it forthcoming. >> do you know how widely the qc's opinion was circulated? >> i do not know. >> do you know whether it was circulated or asked for by rebekah brooks when she took over? >> i do not know. >> the "for neville" e-mail was published far, far earlier than our report in february 2010. it was actually published shortly after 14 july 2009, when it was disclosed to us.

>> it was in the newspaper allegation in 2009. >> it was distributed to this committee by nick davies, the journalist, and we then published it. >> do you remember where you were when the guardian produced that story and then, a week later, they came and these documents were published following our session? >> when the newspaper allegation was made, i was in the united states. i believe i was in idaho at a business conference. >> at the time, were you based in london generally? >> yes, i returned to the uk the following week. >> okay. do you remember what your reaction was? 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 uk. i received a copy of the article and the allegations made

-- was asked, "is this true?" and it went back to the news of the world, because mr. crone and mr. myler had handled the settlement. the answer came back very strongly that investigations and inquiries have been made, that previous investigations have been made and had uncovered no new evidence at all -- the same assertions and assurances that you received at this committee in 2009. indeed, it was well before i returned to london. it was only 24 hours after the allegations in the summer of 2009 emerged that the metropolitan police issued a statement saying that there was no new evidence and that this had been a matter of a very serious investigation by experienced detectives and there was nothing new to investigate, which was not equivocal. >> so when the story was published and the e-mail was published, you did not even think at that stage, "well, i'd better have a look at these transcripts that were mentioned

to me a year previously and while i'm at it i'd like to have a look at the qc's opinion." you didn't ask? >> the transcripts themselves? >> the e-mail. >> yes, but as you said, there was not much in it. i think it was in the facsimile of it or something like that. i remember the blocks of redacted text and one piece there. >> so even at that stage in the middle of 2009 as the executive chairman of news international, you are possibly the only person in london who still thinks that there is one rogue reporter and one private detective? >> as you are aware, mr. farelly, within 24 hours the police issued a statement, and recall that the "for neville" e-mail actually came from the police in the civil trial disclosure process. so they issued a statement saying that there was no new evidence. >> you had it for a year. >> yes, but they said that there was no new evidence --

the police had had it 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 clear that thorough investigations had been done and that, as i said earlier on in today's testimony, the company relied for too long on assurances about the thoroughness and scope and completeness of those investigations as well as the assurances of the police. >> can i just now move back to news international and news of the world's reaction to some of these events? in july 2009 you said that they had been too quick and too aggressive in their defense. when they talk about a thorough investigation clearly that did not happen because a thorough investigation did not even unearth the qc's opinion, which was pretty damning. clearly, now you will take responsibility as executive chairman for that failing. >> i think, as i said, the

company -- and i do share a responsibility as a senior executive in the company -- relied for too long on very strong assurances, both internally, inside the company, around the quality, scope and thoroughness of the investigations that had been made on an ongoing basis, as well as in 2006 and 2007, and also on the assurances from outside the company from the police who, it is presumed, had more information and were the last word, if you will, on the investigations that they carried out and which led to two successful prosecutions in 2006. i have said that the company relied on those things too long and i have said that i am sorry for that. it is something that -- you know -- we are determined, in how we operate the business going forward, that we make sure these things don't happen again. >> the news of the world editorial on 12 july 2009 pretty much repeated news international's statement. it said, amongst other things,

that there was no evidence that news of the world journalists had "instructed private investigators or other third parties to access voicemails of any individual." you will accept now that colin myler, the editor at the time producing that editorial and the legal manager, tom crone, in position at the time, knew 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 the other things is a matter that would be speculation if i got into that. i think you have spent a lot of time with mr. myler and mr. crone. i think it is also a matter for this committee. >> similar statements were made, which we referred to, about our committee report in 2010. can i just very quickly deal with mr. crone and mr. myler who have taken issue with you?

mr. pike has already told us that he knew that people from news international were not telling the truth, principally mr. myler and mr. crone, as soon as they opened their mouths in evidence in july 2009. can i add something else into the mix, as far as what mr. crone and mr. myler have told us? originally, mr. crone told us: "i questioned neville thurlbeck then and i have spoken to him about the same subject since then. his position is that he has never seen that email, nor had any knowledge of it." yet now we have an e-mail that crone sent on 24 may 2008 to mr. pike, in which he says, "i went through the new taylor docs with x today".

he said that x now remembered the transcript -- and x can only be neville thurlbeck, despite the redactions, because of the context, the door-knock and the showdown that the e-mail refers to. those two statements -- crone's e-mail and what he said to us -- are totally at odds with each other. how does that reflect on mr. crone's reliability as a witness? >> with respect, mr. farrelly, it is a question for this committee to judge the evidence given to it. i have been very clear that i believe that this committee was given evidence by executives either without full possession of the facts, or that was not as complete as it should have been. i am sorry for that, and the company is. it is not good, and it is something that i am determined to make sure does not happen again. the only thing i can speak to, with respect to the evidence given to you -- and i have made a statement to this effect -- is that assertions that mr. crone and mr. myler made about my knowledge were wrong. >> yes. mr. crone also said, when he

came back, "for the first time he" -- that's you -- "realized that the news of the world was involved and that involvement involved people beyond clive goodman. on that basis, he authorized a settlement." he could not have been more categoric. your denial could not have been more categoric. again, how does that reflect on mr. crone's reliability? >> i am sorry, can you repeat that piece of transcript? >> yes. mr. crone came back to the committee to say, of the settlement authorization, "for the first time he" -- that's you -- "realized that the news of the world was involved and that involvement involved people beyond clive goodman. on that basis, he authorized a settlement." >> there is a lot of supposition -- would have known, might have known, should have known and this and that. what never happened was mr. crone and mr. myler showing me the relevant evidence, explaining that evidence and its relevance, or talking about wider-spread criminality, the queen's counsel's opinion -- all these things. that simply did not happen. people can suppose that i might

have understood, but, at the end of the day, those things were not provided to me. as i said earlier, i was given sufficient information -- and only sufficient information -- to authorize the increase of the settlement offers that mr. crone and mr. myler had already eagerly been increasing in order to achieve a settlement, even before it had to come across my desk. that is what i received; i received nothing more. >> i am just drawing to a conclusion, chair. to be absolutely clear, if mr. crone and mr. myler are telling the truth, you are not telling the truth; if you are telling the truth, they are not telling the truth. >> mr. farrelly, i have looked at some of their testimony and it is quite interesting. there is a lot of supposition in it, such as, i would have known, they understood me to know -- 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 showed me and discussed with me the real significance of the queen's

counsel opinion. they never went that far. it was a very confusing and muddled session, to be honest -- i agree with that. but it is for this committee to decide the quality of the evidence and the testimony that it is receiving; it is not for me to pre-judge that. >> my final question is this: given all the evidence that was clearly there within news of the world, given the cost of all this, the closure of the news of the world and the loss of the merger with bskyb, do you think you have handled this competently? >> i have spent quite a bit of time reflecting on my decisions and behavior, and the company's behavior more generally, in this matter. for that time in 2008 and leading up to the middle of 2009, i had direct responsibility as executive

chairman, as you put it. it might have been executive chairman in title -- we don't focus that much on titles. with respect to the settlement, for example, i think i behaved reasonably, given the information that i had. i do think -- and i share in the responsibility for this and i am 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 2007 with respect to its own investigations, and with understanding how to dispassionately look at what were perceived as attacks as opposed to legitimate criticism from the outside. i think part of sharing that responsibility and part of taking responsibility is also making sure that those things do not happen again and making sure of the quality of the

business that we see and that i see with colleagues everywhere round 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 this whole saga and your evident lack of curiosity about asking questions that were screaming to be asked shows you to be competent or incompetent? yes or no? >> no, i do not think it shows me to be incompetent and i do not think, for the record, that i would characterize it the same way you just did. >> mr. murdoch, i apologize in advance, but i am going to have to leave the committee immediately after asking you my last question. we have children the same age, i think, and i have to go back home and pick them up from school. >> oh, good. good luck. >> when your father appeared

before us in july, he promised to undertake a review of news corporation's properties all around the world in order to ensure that this scandal could never happen again. to your knowledge, how is that review coming? >> a number of activities are under way. some of them are discrete to different regions, so the newspaper businesses in australia, for example, have undergone a review of editorial practices and so on and so forth. as you know and as we have informed this committee, in the uk 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, into all of the titles; not just the news of the world -- is well under way and is a matter of great activity and a lot of detail. i hope that that is concluded early in the new year, although that is being managed separately to the business.

as i mentioned earlier, from a corporate perspective and from a governance and compliance perspective, we are making the changes that we think will hopefully ensure greater transparency around things if they do go wrong, but also ensure the disciplines and the prioritization of matters around transparency up and down the chain of the business. i actually 37 feel they are coming along well. i do not have perfect knowledge of the management and standards committee independent review -- nor should i, as an executive involved in this part of the business. i think one of the real lessons learned here is to avoid allowing -- not to be too pat -- the newsroom to investigate itself. i think having independent eyes and having a stronger and more proactive corporate presence when things are raised or when an alarm goes off is one of the key lessons that we have learned. >> in advance of the australian

government's inquiry into media standards over there, to your knowledge, is the resignation of john hartigan yesterday as the head of your australian arm related either to phone hacking or to any unethical practices in the australian arm of the company? >> i am not involved in the australian part of the business, but i would think certainly not. >> okay. to your knowledge, how many other news international papers have been hacking either phones or e-mails, other than the news of the world? >> the management and standards committee -- the investigation is under way. i really do not want to prejudge the outcome of that investigation. it is an important investigation. if there is evidence that is found, there will be matters of criminal 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 are taking these issues. the company is moving determinedly to provide whatever information there is to the police in those instances. but that matter is a matter of a criminal investigation, and i should not talk too much more about it. >> i might ask the counsel whether it would be in order for you to say not which journalists but which papers -- that is all i ask -- in news international have, to your knowledge, been involved in the hacking of phones, because that would not prejudice any individual police investigation. >> at this point i have no knowledge of any of the other papers being involved in the hacking of phones, but i do not want to prejudge the management and standards committee work, and nor have i seen all the work that it is doing. >> when last you came before us, i asked if you were aware of the allegations that victims of phone hacking had been hacked on american soil, and you said that you were not aware of any such allegations.

since that time, mr. mark lewis, the lawyer for the victims, has told us that he is representing victims who were hacked by news international journalists on american soil. what do you know of that matter today? >> i know that it is a matter of activity for the management and standards committee. it is looking into that and co- operating with the police here and the ongoing investigations, as well as with any matters in any other jurisdiction with respect to activities of the uk newspapers. i have no knowledge of the veracity or substantiveness of those allegations. >> so you have no knowledge of those international claims. do you still have no knowledge -- you stand by your earlier testimony -- that 9/11 victims or their families were hacked by agents of news corporation? >> that is correct. a lot of investigation and a lot of work has been done on that subject, and, so far, there is nothing to confirm it, as i understand it. >> so far, you are coming up empty. it would seem that, at best,

mr. tom crone misled this committee in his most recent evidence. in answering questions from my colleague tom watson, the exchange went as follows: "mr. watson: did you arrange for the lawyers of phone hacking victims to be monitored by private detectives?" "tom crone: no." "mr. watson: did you arrange for a dossier to be kept on them and follow up on their private lives?" "tom crone: no." "mr. watson: have you ever received or commissioned reports on the civil case lawyers that involved private investigators?" "tom crone: let me just think about that last question. i may have in 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 that, as recently as may 2010, mr. crone instructed farrers, news international's solicitors, to look into the personal relationship that may or may not have existed between mr. lewis and the lawyer charlotte

harris, also representing the victims of phone hacking? >> mr. crone and another news of the world employee at the time did engage certain private investigators -- i am not sure of the details around that as you describe it -- to surveil plaintiffs' lawyers. i want to say for the record that it is appalling. it is something i would never condone and the company should never condone. it was shocking when i found out, and it is just unacceptable. >> when did you discover that the lawyers of plaintiffs had been put under surveillance by news international? >> very recently -- the last few weeks. it is important to say that that was absolutely not a corporate activity that was condoned, and it is absolutely not appropriate.

mr. crone and the other person did not do that with any authority or any knowledge by me. i would never condone that behavior. >> does your internal review of the evidence suggest -- you are stating for the record -- that mr. crone authorized that surveillance of victims' lawyers? >> there was surveillance that was done by mr. crone and another executive at the news of the world. which private investigator and what bits between them, i do not know, but they were involved in that. >> are you aware that mr. lewis's family, including his 14-yearold daughter, was trailed by private investigators? would you agree with me that that is completely despicable and has absolutely no place in the practices of a modern media corporation? >> i totally agree with you. i was not aware of that allegation, but if it is the case, as i have just said, the whole affair is just not acceptable and not on. >> are you aware that private investigators investigated my colleague tom watson, and other members of this committee and the predecessor select committee -- in fact all members of the predecessor committee -- during the time of their investigations into your company?

>> i am aware of the case of the surveillance of mr. watson; again, under the circumstances, i apologize unreservedly for that. it is not something that i would condone, it is not something that i had knowledge of and it is not something that has a place in the way we operate. i think it is important to note that certain surveillance of prominent figures in investigative journalism and things like that is acceptable but, in this case, that is absolutely not acceptable. you have my unequivocal statement to that effect and my apology on behalf of the company -- even though i did not condone it, would not condone it and don't agree with it. >> i'm sure that mr. watson will have some follow-up questions on that later. may i put it to you, mr. murdoch, that it seems that every month, if one is following the hacking scandal here in the united kingdom, there is another set of revelations about

unethical behavior by news international executives? the latest is the scandalous revelation of surveillance of the lawyers of victims and those lawyers' families, and of members of the select committee investigating the company. you have spoken repeatedly here today about the review of practice in your newsroom and referred to the need to clean up your act, and to how proactive the company is trying to be in cleaning up its act. do you not agree that it would be better for news corporation to make a clean breast of things and get out in the open every unethical practice that has yet to come to light, thereby avoiding the drip, drip, drip of incredibly damaging revelations that seem to come out week after week, month after month, in relation to this scandal? >> i think it's important to note that much of the disclosure around these activities around police payments and phone hacking really started to come to light as we came to grips with this. much of the disclosure has actually been by news corporation and news

international: first of all in respect of the initial disclosure around a journalist who was since arrested in january this year, which led to the restarting of the police investigation into the news of the world and the phone hacking pieces, with the disclosure of sufficient evidence that we thought that the police should open an investigation into police payments as well. that was something that was there that we didn't know about previously. when it came to light, we acted very quickly. since the end of 2010, as the company has found things out and discovered the extent of what has been suspected of happening -- again, a lot of it is a matter for police investigation -- we have sought to be as transparent as the company can be. that is certainly the posture of the business, of the chief executive of the business, of the management and standards committee and at the board level of news corporation.

to the extent that we can be transparent in as timely a way as possible about any behavior that is unacceptable or illegal, we are seeking to deal with it. we are dealing with it with full co-operation with the police investigations that are ongoing and by being as transparent as we can, given that criminal investigations and a judicial inquiry are ongoing, 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 -- for those matters that the police allow you to release, as a leader of the company, mr. murdoch, will you guarantee to this committee now that you will publicize every nefarious practice that has happened in your company to do with the scandal and allow it to be known before the guardian or others expose it on newsnight or in other media outlets? will you come forward and admit wrongdoing where you have evidence of it and where such

admission will not prejudice a police investigation? >> first of all, i just want to be very clear about the corporate governance structure that we set up recently around these matters. the disclosure of information -- alongside with and to the police -- is a matter of utmost importance to the management and standards committee, and the independent management and standards committee is responsible for information and disclosure around judicial inquiries, new press practices, and so on and so forth. it is absolutely in my interest to be as transparent as possible and to avoid these things, which was why in april this year, when the company admitted liability to wider- spread phone hacking, we set up compensation schemes, asked victims to come forward and apologized unreservedly to victims of those voicemail interceptions. we have asked repeatedly for information to come forward that can help us get to the bottom of this, underscore the issue and move forward in a way that is as transparent and

appropriate as possible. >> when mr. crone and mr. myler last appeared before our committee, i put it to mr. crone that his credibility had been damaged by the contradictions in his testimony versus his testimony before the committee in 2009. it will obviously be further damaged by the revelation that he said he did not authorize surveillance on victims' families and lawyers, when clearly he did -- and not a long time ago but as recently as may 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 that the evidence that we were given by mr. crone in september was not true? >> my understanding is that this information came to news international's attention very, very recently -- in the last few days or weeks -- and it is something that was not known to us and confirmed. >> so you would have done had

you had more time to look at it. if you knew that we had been misled by mr. crone, you would have supplied that evidence to the committee. >> i do not know exactly when others in the company became aware of it, or our legal counsel and so on, but, again, on the matters to disclose before this committee, i have tried to be as complete as i can in sending you documents and things that we have understood and found out since my last testimony. >> i am sure that you would agree that only news corporation can clear up this mess, so i wish you luck in pursuing your ethical review of the company. thank you. >> given the line of questioning that louise pursued, it is only fair to allow tom to come in. >> james, you will be aware that the convicted private investigator glenn mulcaire targeted prince william. that came out in the original inquiry. this week we have found out that the private investigator derek webb also targeted prince william. you will probably know, but it has not been publicly confirmed, that the private investigator jonathan rees targeted at least one friend of prince william in 2006.

is that right? >> i was not aware of that particular piece, but i may have been -- i do not recall. >> i know that because i have an invoice from news international supply company ltd from jonathan rees regarding that, so can 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 do not see that there is any reason why we could not show that. i think it has been known 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 ltd and did a number of pieces of work for the company. could you check the invoices and let us know what that is

about? >> absolutely. if you provide those with us, we can check those and come back to you. >> are you aware of any other private investigators that targeted prince william? >> i am not aware of any other private investigators. >> could you let us know what the activities were for the private investigator john ross? >> it is the first time i have heard that, so if you want -- >> he worked for you. and alex leighton? >> if you would like, mr. watson, perhaps you could write to us and we could go through all of that and be as fulsome as possible. >> given that we are talking about private investigators, i would like to ask you now. could you also examine the activities of the private investigator barry beardall? >> i am not aware of the individual identities of private investigators that were used, but perhaps it would be helpful, mr. watson, just to clarify one of the things that the company is doing around this. the use of private investigators clearly has been, in the industry and by the news of the world, too widespread, and i

have just apologized to you and to the other members of the previous committee, as it was described to me, for what was inappropriate surveillance. one of the things -- one of the key changes -- that we have 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. in fact, no private investigator, under our new guidelines and new rules around this, can be hired or contracted by a newspaper without the editor going to the chief executive of the company for approval, so that the use of these private investigators does not get out of hand and is only in extremis done for appropriate public interest purposes. >> under the circumstances, mr. murdoch, i would like to say that that is a great relief to me. >> i am glad. it is something that we look forward to having in place. >> we do agree. at last. are you aware of the serious organized crime agency investigation codenamed

operation millipede? >> operation -- no, i am not aware of that. >> i won't go there, don't worry. i am just asking if he was aware. can you let me know whether the company admitted liability to e-mail hacks during any of the settled civil cases? i am thinking of taylor, miller or clifford. >> i do not believe so. i am not aware of any of that. >> if it is subsequently found, could you go back and let us know if that's the case and write to us if you did accept liability? you've got some lawyers with you. >> i will consult with counsel about that to hopefully clarify those things, but i am not aware of any of the computer hacking that you have talked about in the past. >> your lawyers behind you might be able to let you know 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? >> yes, if you just ask them now. we've got a bit of time. yes or no. >> they would like to get back

to us. they are not aware. >> okay. at the news corp agm a few weeks ago, board director viet dinh told me that he would investigate allegations of computer hacking. has he discussed that with you? >> no. mr. dinh has oversight authority at a board level for the work that the management and standards committee is doing, and i would understand that it's on the agenda for the management and standards committee and is being pursued with vigor. >> are you aware that former army intelligence officer ian hurst has now had it confirmed that he is a victim of computer hacking? >> no, i am not aware of that. >> and that 16 others associated with him have had their e-mails illicitly read? >> no. >> tom, i am advised that you are straying into areas that could relate to the police investigations. >> okay. this is about me, chairman. you may be aware or may not be aware, given the line of questioning, that operation tuleta contacted me last week to say that my name appears on seized electronic devices and they need more information to

rule me out as a victim. are you aware of that? >> i have no knowledge of that. >> okay. i thank you for your apology, on behalf of the company, for the surveillance undertaken by private investigator derek webb. can i bring to your attention a conversation that i had with another former senior employee of news international on this matter, who has asked to remain anonymous because they are frightened about the consequences? he said to me in relation to the original inquiry and members of this committee, "the diktat went out, you know, 'dig up as much information as you can on the members of the committee'." do you know who might have sent out that diktat? >> no, i have no knowledge of that. >> he said to me about rebekah brooks -- you might find this amusing, you might not, "she

didn't like you at all" -- that's me -- "she took an absolute pathological dislike to you. she saw you as the person that was threatening." did rebekah brooks discuss my line of inquiry on the 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 rebekah brooks discussed the inquiry, with tony blair? >> i certainly had very little to do with the former prime minister, and i have no knowledge of any other discussions with him about this or other matters. >> okay, thank you. >> mr. murdoch, did the lack of appropriate corporate governance give a false sense of security that news international was untouchable?

>> mr. rotheram, i don't quite understand your question. i wouldn't say that there is a lack of appropriate corporate governance. i think we had an instance here, as i have testified -- >> you've changed the corporate governance. >> we have tried to strengthen a number of procedures, but from a governance perspective i would not call this a failure of governance. i think there was 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 have tried to do is strengthen some procedures around that to make sure that there's more transparency there. >> i did not mention "failure"; i said "lack of appropriate corporate governance". >> okay, lack. sorry. my apologies. >> you said earlier that you wanted to strengthen it, so obviously there must have been some flaws in the corporate governance, but is it not the case that you failed to show the urgency or the will to deal with unethical practices at

news international because, quite frankly, successive chief executives since 1989 have believed that they could do whatever they wanted and get away with it? >> i cannot possibly speak to what chief executives in the past had believed they could do and what they couldn't. i can say that as soon as evidence came to light to me -- unequivocal evidence -- around wrongdoing this company has moved with determination and with vigor to sort this out. i think it is very, very important that the company takes responsibility for what happened, both with respect to liability with victims of illegal voicemail intercepts, which the company did and which i fully support, as well as move to make whatever changes are necessary, and pursue with vigor whatever allegations arise to make sure that (a) people who are involved in wrongdoing are held to account and we aid the police to do that, and (b) that we make sure, to the extent

at all possible, that these things don't occur again. i don't think that there's been -- certainly not in my experience in the company -- a sense that anyone is untouchable, actually. what we want as a business -- what we want to be -- is a business that aspires to be where we are, doing the good work of serious journalism, of serious creative endeavor outside in our other businesses, and that these things don't happen in the future. >> do you understand the significance of the date i gave -- 1989? >> pardon me. >> do you understand? it's my accent. >> no, it wasn't that; it was just something -- i'm sorry. >> do you understand the significance of the date i gave, which was 1989?

>> i think i know where you're going. >> okay. do you want me -- >> are you referring to the hillsborough coverage in the sun? >> i am, of course i am. absolutely. it is the case that the reference to 1989 is because that was when the sun newspaper published lies about the hillsborough disaster under the banner headline, "the truth". the question that i would like you to answer is, did the fact that the sun got away with telling outrageous lies in 1989 lead news international into believing they could do whatever they wanted without reproach? >> all i can say about that, and i would like to say it clearly, is that i would like to add my full apology for the wrong coverage of that affair. i would like to add that voice to successive editors of the sun and chief executives of news international who, since that incident, have apologized. i would 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. obviously i had no involvement, or really proximity to it, but i have since looked at it. i am aware of the concerns and the hurt that it caused, and it's something that we are very sorry for, and i am as well. >> is it in the public interest to tell lies? >> certainly not. >> okay. you mentioned that a journalist at the sun had been arrested earlier. did employees working at the sun newspaper 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, mr. rotheram. i hope you understand. >> are you aware that the words "the sun" appeared in the evidence file of convicted private investigator, glenn

mulcaire? >> i was not aware of that. >> okay. if this particular publication is implicated in phone hacking, and if it's revealed that the sun does appear in the mulcaire file, will you close this paper, like you did with the news of the world? >> i think, mr. rotheram, it's important not to prejudge the outcome of any investigations, nor is it, i think, appropriate to prejudge what actions the company might take to deal with those. >> you don't rule it out? >> i don't think we can rule, and i shouldn't rule, any corporate reaction to behavior of wrongdoing out. that will be a decision taken at the time, given whatever is out there. i don't think it would be right to rule out any behavior, but it is important not to prejudge any outcomes from the investigations. there are important police investigations, and there are important internal investigations that we are actively pursuing to make sure that our papers are as good as they can be, and that they can keep the trust of their readership and continue to

perform the important role that they have -- that i believe that they have -- in their communities. >> mr. murdoch, you've now seen the opinion of leading counsel, michael silverleaf. if any employee had seen it, according to your governance and your code of conduct within news corporation, should that have been reported, and to whom? >> i think -- i am not aware of the requirements 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 findings and content of that opinion, it certainly would have been appropriate for it to be shown to more senior legal counsel in the company, away from the news of the world, as well as in full to me, for example, and others. >> okay. so far, you have asserted that

you did not see the opinion and certainly were not briefed on the full contents of it. >> that is correct. >> i cannot find at the moment any evidence that definitively says that mr. myler saw the opinion or was briefed on the full extent of it, but something's happened between 2008, when it is clear, certainly, mr. pike had it, because he was amending it, and also it's a strong suggestion that mr. crone certainly saw it. nobody else seems to have been made aware specifically of certain allegations. however, 18 months later, there is so much evidence that it is brought to your attention, so who brought it to your attention at the end of 2010 -- this whole business with sienna miller and all the other civil litigation? was it tom crone who came forward? >> it was a matter -- no, first of all, there were a

number of civil actions that were following their process as it went through. it was certainly in the second half of 2010 that the company -- i was not at this point involved in the day-to-day management of 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 referred to as a drip, drip of allegations out there -- for the evidence that they had. up until the end of 2010, the police still asserted that there was nothing new that they saw as worthy of opening up a new investigation, but, certainly, the company decided, and the management company decided, that if evidence emerged in the civil cases, that was sufficient to warrant further investigations -- that the company would act on that very quickly, and the company did. i don't recall who came to me precisely to discuss that, but it was a matter of discussion among a number of senior executives at the end of 2010.

>> so you said no to tom crone earlier. could it have been colin myler? could it have been rebekah brooks? >> mrs. brooks, as the chief executive at the time, was certainly involved in those activities. she was running the company until the summer of 2011. >> just going back to the transcript of julian pike's notes of his call with colin myler on 27 may; it has already been read out largely by mr. watson. it talks here about "didn't believe culture in the newsroom" -- we have already had that discussion; editors and below did not know a lot -- and "here investigation into ie, nw, sk". were you ever made aware of the outcome of that investigation into those three individuals? >> i received, throughout the period from 2009 onwards, after the allegations came out in the newspaper, repeated assurances that internal investigations had been conducted, that they were thorough, that they had

concluded that there was no evidence whatsoever of wider- spread phone hacking. that was something that was repeated i know to you -- to this committee -- in 2009, and those were the same assurances that i was being given as well, also by the public statements of the police at the time. >> further in the note, there is a reference to "have e-mail from member of staff". nothing is written about it. is it possible for you to give us some assurance -- or at least go away and make sure that this happens -- that such evidence has been presented to the police as part of their investigation? >> certainly so. first of all, co-operation with the police and providing them with everything that the company can and that they require is paramount. that is a very important point to make. with respect to the particular document that he is referring to, i can't speculate what it is. i suspect it is the evidence we

have been discussing in this committee. >> yes, although, unfortunately, julian pike does not make that specifically clear. turning to financial governance -- i think i discussed this with you in july -- with the evidence that you sent back to us, you talked about how the editor had a £50,000 limit and the managing editor was involved, but any cash payments required the permission of the editor specifically or the deputy editor. is that still the case, or are there alternative arrangements? >> actually, one of the changes we have made is to significantly tighten up cash payment requirements to the extent that, for a time, they were banned in the company. as the new chief executive and the management and standards committee work through that with the editors in terms of what sort of petty cash arrangements should be made, those things have been adjusted a little bit. but the cash payment terms are dramatically tightened up, and i think are rare at this point, if at all. i would be very happy to send

you the policies and guidelines that have changed. when the management and standards committee's recommendations are finalized after their investigations are complete, we intend to be very transparent with respect to both practices and a code of conduct on journalistic practices, but also things like cash payments. >> building on that, it sounds like you have made some changes, so would it now be fair to suggest that there are controls perhaps on the maximum amounts that can be paid out by a single person to another person within a certain time frame? >> very much so. >> when you provided evidence back in july, you suggested there were no aggregate limits. >> i think right now there are very strict limits. i do not have at my fingertips the exact numbers of those limits. not only are there limits, but the number of people who can make cash payments and authorize them has been restricted dramatically. >> i want to ask a final question on mr. mulcaire and his legal costs and damages,

which i raised when we last met. just before i do that, this whole inquiry is really about this committee being misled, and therefore essentially what news international knew, who knew it and when they knew it. as part of what you call an aggressive defense, on 28 february, in reaction to our report, two members of the committee were named in the news of the world editorial. tom watson was not called "mad"; he was called "top toadie", and i was a former journalist on the observer mainly pursing an agenda from my pals at the left-wing rag. it went on to say, "sadly, the victims here are you, the public." well, how true was that? very quickly after that appeared, the next big settlement was with max clifford in march 2010. this is about what news international knew, who knew it

and when. you were the executive chairman then, but rebekah brooks was the chief executive. were you in any way involved in the rumored £1 million settlement with max clifford? >> i was not involved with the arrangements with mr. clifford. i was informed of them, but in very general terms. i was not involved in that. at that point, i was not running the business day to day. >> but you were the chairman. >> yes. >> were you consulted at all? did anyone come to you for the benefit of your experience in having settled the previous case? >> mrs. brooks did discuss the settlement, 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 did not seek your authorization? did she seek your views? >> no, it was discussed with me

in general terms, but not from an authorization perspective. as the chief executive of the business with full day-to-day responsibility, she could make those judgments. >> did you know who max clifford was? >> yes, i was aware of who max clifford was. >> did you say, "well, he's not a member of the royal family, either"? >> as i recall -- i will tell you exactly what i knew -- there had been a previous commercial arrangement some years earlier with mr. clifford, i was told, which was around publicity for clients or the like, and it was seen that it was desirable to enter into an agreement like that for the future and that that would be a good thing to do with mr. clifford. with respect to any specifics about the litigation, it was just seen as taking a commercial arrangement with mr. clifford going forward, which was in both parties' interests, rather than having an acrimonious litigation. on the litigation specifically, i was not particularly briefed on the ins and outs. >> i have an australian voice rattling around in the back,

asking, "hell, how much is this glenn mulcaire going to cost me now and in the future?" those questions were not asked by you at that stage? >> i think it is 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. mulcaire had been convicted of, so it was not at that point a new piece of wrongdoing or anything like that. in fact, i am 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 of that. >> do you remember whether he served full particulars of claim on the news of the world, news international? >> i wasn't involved in that level of detail. >> i know that the settlement is confidential, but could you confirm whether he served a claim or whether it was just a threat? >> i can discuss with counsel and come back to the committee, whether or not that is

appropriate or confidential. >> do you know whether you went through the same process as with the gordon taylor settlement, of seeking outside qc's opinion, perhaps michael silverleaf again? >> i am not aware and, again, i was not involved directly in the max clifford settlement. >> could the company confirm whether that process was followed and whether there is a qc's opinion? >> we can certainly write to the committee with what details are appropriate around arrangements with mr. clifford. i am happy to do that. >> just again on the basis of what the company knew -- having given a strident defense just days beforehand -- who knew it and when they knew it, would you consider a request from the committee that, if there is a qc's opinion, suitably redacted, and no doubt after checking with mr. clifford, to preserve any personal details, it might be released to us, as the silverleaf opinion has already been released to us? >> in general, mr. farrelly, it is probably wise not to go down the path of routinely waiving privilege on legal advice around matters of litigation, matters involving individuals and matters involving the company. as i have said, i am happy to go back to counsel and to the

company and say, "what can we provide with respect to details around the mr. clifford arrangements?" i am happy to write to you on that basis, but i do not want to make any particular commitment about waiving privilege. >> i hope we will follow up in a letter as well. finally, following our last session, mr. murdoch, your senior, said effectively that it was wrong to pay glenn mulcaire's legal costs, particularly as you had issued an apology to the dowler family whose phone he had 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 mulcaire, the company will stand him good for.

>> i am not a lawyer -- forgive me, mr. farrelly -- but i think there are questions here, with respect to mr. mulcaire being a co-defendant, of were there to be a case or damage award against him, that he was conducting work on the company's behalf, and then really the company is liable for those things. that is my understanding. again, i can provide more detail on that, if you like, but i think there is a legal point there -- i am not a lawyer, but there is legal point there that is worth noting, if he was an agent doing it on behalf of the business. >> it is vicarious liability. >> that's the word, yes, thank you, dr coffey. >> if he is now in a position where he cannot pay his legal costs and therefore cannot mount a defense, if he is sued, the court would just make an award against him, but that is an award that the court makes

against him and not you, because you will also be in the dock with a claim, and a separate award may be made -- certainly no doubt will be made -- against you. so if you are backing him on any awards against him, we are back to where we were before the july committee: you effectively are making good an indemnity to glenn mulcaire still. is that right or wrong? >> with respect, mr. farrelly, i don't think that is the right characterization. the word that i didn't know -- dr. coffey is right -- this notion of vicarious liability, is important, and this is a matter of law and the courts. the question of paying for the defense is one thing, and the question of the court awarding damages and the company being vicariously liable for those things is another. it seems like we are engaging in legal speculation. >> i am sure you are engaged in legal speculations. i don't see your lawyers behind you all nodding in unison with you.

but we are back in the position where you will be effectively supporting the man who hacked milly dowler's phone. is that right or wrong? >> i am happy to come back on this. i don't think your characterization of our supporting mr. mulcaire is accurate or right. the management of the company and the management and standards committee have taken a view on reviewing the legal expenses of various people around these matters, and to cease paying the legal expenses for mr. mulcaire, as my father, when he testified to you in july, indicated. the question of what legal issues there are in the event of future litigations is something that i could not possibly comment on. >> my final question on this is that more than 5,000 names are now being looked at that appear in mr. mulcaire's notebooks, any amount of whom might sue news international and glenn mulcaire. what will be the test for news international as to whether they pay any award that is made to glenn mulcaire?

will it just be his word that somebody authorized it, or will he have to satisfy a test -- leap a hurdle -- to prove that there was authorization from the company for that particular hacking he did or whether it was just off his own bat? will there be a test? will you discriminate between different cases in terms of standing behind mr. mulcaire? >> the company has set up an independent process, as i think you are aware, mr. farrelly, to deal with civil cases coming through. sir charles gray, as an independent person -- a former high court judge as i understand it -- is setting up a process to deal with claimants coming through. >> i am talking about the courts, not charles gray's process. >> yes.

there are a number of test cases coming through over the next number of months, which will give the judge dealing with this a sense of what the damages number will be in these cases and what the ranges are. as the company has admitted liability where legitimate claims are made, this is a question for the independent management of the cases and the company to judge which claims are legitimate and which are not, with respect to voicemail interceptions. the settlement procedure will then take its course. on the specific test, to be clear, i am not aware of the specifics of that. >> 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 mulcaire? or will you be more discriminate? >> i think every case has to be seen on its merits. that is the appropriate way for the courts and the company to

proceed. >> i think we have finished our questions. i thank you for your attendance. >> thank you, mr. chairman. >> this week, prime minister kamen discusses youth unemployment, the eurozone crisis, and border security. prime minister's questions tonight at 9:00 p.m. eastern on c-span. on monday, house democrats hold a forum on voting laws. you can watch that live at 2:00 p.m. eastern on c-span3. >> the c-span.org home page is now