amnesia. i would have thought that someone would like to bring that to your attention, that it would concern you. did they forget? >> no. >> okay. what has been obvious to most of the observers from the summer of 2009, that phone hacking was widespread, you knew for sure in january of this year that the one rogue reporter maligned was false, is that right? >> i don't know the date. >> why was edmundson the only person to leave "news of the world" last january? >> mr. watson, we have given all our files and all our knowledge and everything to the police. they have not given us the

diaries, so we do not know what was in that. there was a page which appeared, appeared to be addressed to him. again, that's my son's -- >> mr. watson, perhaps if it would be helpful to the committee if you would like to go through any of the particular detail around why decisions were made by the management team at news international and the precise chronology, it would be more helpful perhaps if i could answer those questions as the chief executive of the regional businesses across europe. i have somewhat more proximity to it. >> i understand the detail points. >> i'm simply offering to help to clarify these matters. >> your father is responsible for corporate governance and it's revealing in itself what he doesn't know and what executives chose not to tell him. so with respect to you i will

come back to you later. mr. murdoch, why was no one fired in april when news international finally admitted that "news of the world" had been engaged in criminal interception of voice mails? >> it was not our job to get in the course of justice. it was up to the police to bring those charges and to carry out their investigation, which we were 100% cooperating with. >> but in april, the company admitted liability for phone hacking and nobody took responsibility for it then. no one was fired. the company admitted that they had been involved in criminal wrongdoing and no one was fired. why was that? >> there were people in the company which apparently were guilty and we had to find them and we had to deal with them appropriately. >> mr. watson, if i can clarify, most of the individuals involved or implicated in the allegations that were there had long since

left the company. some that were still there you mentioned one, exited the business as soon as evidence of wrongdoing was found. and a process was set up in cooperation with the police to aid them with any of those things that they wanted to do. but many of the individuals that were potentially implicated in those civil litigations and potentially in these criminal matters had already left the building and were not in the "news of the world" at this time and "news of the world" executives and journalists, many of whom were not there in 2006 and '07, so it was that some of them had already left. >> thank you. >> you're welcome. >> mr. murdoch, why did you decide to risk the jobs of 200 people before pointing the finger at those responsible for running the company at the time of the illegality, your son and rebekah brooks. >> when a company closes down,

it is natural for people to lose their jobs. we have in this case an army that's continuing every effort to see that those people are employed in other divisions of the company, if they're not part of the small group -- well, i don't know how big the group, whatever group was involved in criminality. >> did you close it because of the criminality? >> hmm? >> did you close the paper down because of the criminality? >> yes, we felt ashamed of what had happened and felt to bring it to a close. >> people lied to you and lied to their readers? >> we had broken our trust with our readers. but it's the important point was we had broken our trust with our readers. >> are you aware that there are other forms of illicit surveillance being used by private investigators that were used by news international?

>> other forms of? >> illicit surveillance, computer hacking -- >> no. >> if the evidence is produced -- >> i mean i think all news organizations have used private detectives and do so in their investigations from time to time. i don't think illegally. >> if it could be shown to you that private investigators working for newspapers in news international used forms of illicit surveillance like computer hacking, would you immediately introduce another investigation? >> that would be up to the police, but we would certainly work with the police. if they wanted us to do it, we would do it. if they wanted to do it, they could do it. >> finally, can i first ask you, when did you first meet mr. alex marinchek? he worked for the company for 25 years. >> i don't remember meeting him. i might have shaken a hand

walking through the office but i don't have any memory. >> okay, thank you. >> thank you. >> again, mr. murdoch sr., could i ask you, i have a number of short questions for you. why did you enter the back door at number 10 when you visited the prime minister following the last general election? >> because i was asked to. >> you were asked to go in the back door of number 10? >> yes. >> why would that be? >> to avoid photographers in the front i imagine, i don't know. i was asked. i just did what i was told. >> it's strange that governing heads of state manage to go in the front door. >> yes. >> yet you have to go in the back door. >> yes. that's the choice of the prime minister or their staff or whoever do these things. >> so under it was the prime

minister's direct instructions that you come in the back door? >> i was asked would i please come in through the back door. >> i don't think that my father has any direct knowledge of the arrangements that were being made for his entry or exit from a particular building, mr. sheridan, respectfully. >> again, mr. murdoch, have you ever imposed any preconditions -- >> which visit to downing street are you talking about? >> just following the last general election. >> i was invited within days to have a cup of tea, to be thanked for the support by mr. cameron. no other conversation took place. it lasted minutes. >> and that's the one you went in through the back door? >> yes. i had been asked also by mr. brown many times. >> through the back door? >> yes. >> can i also ask you, mr. murdoch -- >> and my family who went there many times. >> have you ever imposed any

preconditions upon a party leader in the u.k. before giving them the support of your newspapers? >> i've never guaranteed anyone the support of our newspapers. we change -- we had been supporting the thatcher government and the conservative government that followed and we changed and supported the labor party whenever it was, 13 years ago, with the direct loss of 200,000 circulation. >> did you ever impose any preconditions on either the labor party -- >> no. >> no preconditions whatsoever? >> no. the only conversations i had with them, mr. blair that i can remember, were about the euro. >> mr. blair visited you halfway around the world. >> he what? >> mr. blair visited you halfway around the world before the 1997

election. anyway, that doesn't matter. >> that was something miss campbell arranged. >> can i also ask you, it's understood that the fbi are investigating 9/11 victims. have you commissioned an investigation into these allegations? >> we have seen no evidence of that at all, and as far as we know, the fbi haven't either. if they do, we will treat it exactly the same way as we treat it here. i cannot believe it happened from anyone in america, whether someone at "news of the world," i don't know. it's certainly unnecessary since everybody -- >> if i can come back to you, james, in a minute. i just want to clarify. if these allegations are any way true whatsoever will you commission an investigation into them? >> absolutely. >> also, you must be horrified

by the scandal and the fact that it's cost you the bskyb transaction and led to the closure of the "news of the world." who do you blame for that? >> a lot of people had different agendas, i think, in trying to build this hysteria. all our competitors in this country formally announced a consortium to try and step us. they caught us with dirty hand and they built this -- >> so it was the competitors that stopped you -- >> no, i think a mood developed which made it really impractical to go ahead. >> mr. sheridan, we have been very clear that serious allegations of wrongdoing have been leveled about the "news of the world" and we believed that the "news of the world" -- the actions of some reporters and

people some years ago have fundamentally tarnished the trust the "news of the world" had with its readers. this is a matter of huge and sincere regret. my father's and the company's. the company's priority very much so is to restore that trust, is to operate in the right way. it's to make sure that the company can be the company that it has always aspired to be. and the removal of the offer to make a pro -- the proposal to make an offer to the bskyb shareholders who are not news corporation is simply a reflection of that priority of moving forward. >> well, i have understanding of what you're seeing but do you understand that people will find that a bit strange? >> and it is our absolute -- it

is our absolute priority to -- what happened at the "news of the world" was wrong. we and i have apologized profusely and unreservedly for that and my father has as well. these are very, very serious matters and we are trying to establish the facts of any new allegations as they come up. we are working closely with the police to find out who was -- where the wrongdoing was and to hold people accountable. and i think importantly as well to the victims of illegal voice mail interceptions, not just have we apologized, but we have admitted liability. the company has admitted liability. and we have set up the appropriate third party compensation schemes to do that. these are all matters that we are fully engaged in. >> i know it's very stressful

for yourselves. mr. murdoch, do you accept that ultimately you are responsible for this whole fiasco? >> no. >> you are not responsible? who is responsible? >> the people that i trusted to run it and then maybe the people they trusted. i worked with mr. hinton for 52 years and i would trust him with my life. >> are you satisfied that the cash payments that were made by the news corporation companies to informants for stories were registered with the appropriate tax authorities? >> i don't know anything about that. >> if people were given money in order to have stories -- >> people were given money to? >> in order to get stories. was that -- did you notify the appropriate tax authorities about this? >> all of our financial affairs

as a public company are transparent, are audited, the tax jurisdictions that the company works in all around the world are worked with transparentally and thoroughly. tax compliance is an important priority for any business, and the company complies with the laws. >> would that also include people who are in regular monthly retainers, registering their affairs? >> i have no knowledge of people and their own tax arrangements. i can speak for the company's tax arrangements. to the best of my knowledge we are a company that takes tax compliance, regulatory compliance, financial and regulatory transparency hugely seriously and it's something that we're very proud of. >> we'll talk about these in

more detail. >> can i just talk to james. they misled the jury. your company has not disclosed internal e-mails that may aid the appeal. why is that? >> i don't have direct knowledge of that, mr. sheridan, i apologize. but certainly if you have additional questions on that in the future, i'm happy to supply, you know, written answers but i don't have direct knowledge and i'm not in a position to answer those questions. >> just a couple more questions. james, could you please confirm or deny whether any news corporation company is the subject of an investigation by the serious fraud office? >> i have no knowledge of that. i have no knowledge of that at this point. >> could you also confirm or deny whether any news corporation company is the subject of an investigation by

the financial services authority? >> i don't believe so, but -- not to my knowledge. >> and finalally, please confirm or deny whether any news corporation company is the subject of an investigation by hmrc? >> not to my knowledge. we have ongoing dialogue with the hmrc and the various subsidiaries here, but as far as investigations are concerned, i have no knowledge of one. >> okay, thank you. >> thank you. mr. murdoch, who made the recommendation to close down "news of the world" to the board of news corp? >> did i? >> who made the recommendation to close down the "news of the world"? i assume it was a board decision that was made by news corp? >> it was the result of a discussion between my son and i and senior executives and ms. brooks one morning. we called the board of news corporation, the whole board, to seek their agreement. >> you've already suggested it's

because you felt ashamed. there's not a suggestion that it was a commercial decision to decide to close "news of the world"? >> far from it. >> okay, moving on to the financial government's arrangements within news corp, mr. james murdoch, you suggested earlier that the payments to mr. taylor were not notified at news corp level because of the finance thresholds. could you tell us a bit more about that. i understand it took your -- you had to agree for the payment to mr. taylor. could you tell us was that a financial level managerial decision? >> i'm very happy to discuss -- thank you, it's a good question. i'm very happy to discuss the matter of mr. taylor. the out of court settlement with mr. taylor was related to a voice mail interception that had occurred previously and was actually one of the counts, as i understand it, of the 2007

trial. so it's important to think back to 2008 to understand what we knew then, what i knew then and what the information was in the context. so the underlying interception was not a disputed fact. secondly, it was the advice and further to that i should say, it was the advice and the clear view of the company that if litigated, that the company would lose that case, that it was almost certain to lose that case because the underlying fact was not in dispute. thirdly, the company sought distinguished outside counsel to understand if the case were litigated and if it were to be lost, which was the great likelihood, what the financial quantum would be or what that would cost. what that would cost the company. it was advised that with expenses, legal expenses and damages that that could be between 500,000 and a million pounds or thereabouts. i don't recall the exact number.

i think it was 250,000 plus expenses plus litigation costs, something like that. lastly, this was in the context in the first half of 2008, and this was my first real involvement with any of these issues, where there was no reason at the time to believe that the issue of the voice mail interceptions was anything but a settled matter. and i -- and that it was in the past after the successful prosecution of the two individuals we discussed as well as the resignation of the editor. so the settlement, the out of court settlement was made in that context and it was within the authorities, as i understood it, of news international to be able to make those out of court settlements in due course without going to the global level company. i at the time was the regional head for europe and asia of news corporation, and i directed that

it was all right to settle that, but did not get involved in any of the negotiations directly about that settlement, but i do -- but i do recall in 2008 that those are the things that were known. >> can i just add my son had only been with the company for a matter of a very few weeks. >> it was a few months, but i had come back to the company in the end of 2007 in the middle of december and this was sometime, i don't recall the exact date, but sometime in the first half of 2008. >> so given you were new to the company, six months, i don't want to have a bothersome argument about that, but what financial payments could news international executives sanction, people like tom crohn or rebekah brooks without recourse to you? >> generally speaking, the way the company will operate, as any

company will operate, within certain financial parameters from a financial planning perspective, we'll look at a budget for a year. much like a house will manage its budget and say how much money do we have to spend and how much do a particular department have to spend and as long as they stay within those guidelines, as long as they stay within those guidelines, the belief is that they should be empowered to make those judgments to, you know, spend those moneys and achieve the ends that they can. i don't have it at the tip of my fingers the precise financial authorities in that. but i can -- i can discuss after the committee hearing with you what exactly you'd like to know and we can discuss whether or not it's right to come back to you with that. >> what would it have taken -- what level of financial payout would it have taken to require an authorization from the board of news corp? >> oh, i think for the full board it's in the many -- it's

in the some millions, but i don't know the exact answer there. >> do you know how much has been paid out to people authorized by your executives? >> paid out in what way? >> paid out as settlements. >> legal settlements? i do not know the total -- i do not know the total number. but around the world it's customary to reach out of court settlements in civil litigations, in civil matters, and it's something that rather than go through the lengthy and sometimes expensive litigation process with the risk that that often entails, it's customary to try to reach out of court settlements in many cases. >> i'd just add that we have a very strong committee at news corporation who would know about this. neither of us are members of that. they are outside directors and they review all these things. >> thank you. building on that then, how is it possible to make payments to people if they don't invoice you or are not an employee of the

subsidiaries? >> i'm sorry? >> how is it possible to transfer cash or some other form of remuneration to people who don't invoice you or who are not employees of new corp subsidiaries. >> i cannot -- i don't know the exact arrangements of that. i've never -- i don't do that myself. but to tell you how that's done. but sometimes in certain instances, you know, it is appropriate for journalists or managers in a certain environment to have the ability to use cash in some instances, but it is -- but it is customary for them to record those and all of the expenses, cash expenses as well as invoice expenses should be looked at and recorded. >> so things like use of petty cash could be quite big sums of money or small. at the moment you don't necessarily -- you just record that the journalist gave it to somebody? >> and to be -- and i don't

have -- i don't have direct knowledge of all of those arrangements. >> i was going to ask if payments could be made to family members of those alleged to have been hacked, but is it possible other forms of remuneration can be used in your company apart from cash and bank transfers. travelers checks, vouchers, things that can be redeemed for cash. >> i don't have knowledge of that. >> just looking at some of your corporate governance at page 2 and page 4 of your own code, it talks about directors, employees and officers of news corporation acting to the principles set forth, including consultants, agents, supplies and business partners that adhere to the standards. we would never ask a third party to formally act, it would violate these standards. could you tell me on the financial side how you as an organization try to make that happen. >> how we work is that each newspaper has a editor or

manag manager, titles vary. but they have to approve the expense claims of every reporter. the reporter has no authority to pay moneys out. >> so the managing editor's office often manages a lot of the expenses and budgets and should do so and is directed to do so with propriety. >> do you require your executives to make annual statements that they have abided with your codes of conduct and ethics? i used to work for a company -- >> every colleague around the world of news corporation receives the code of conduct, a set of -- it's a pamphlet that has some detail in it but it's not too much, so that people read it.

with respect to what ethical conduct is required -- >> we'll make it available to you. >> very happy to make it available to you. it's about ethical conduct, the laws, breaking the rules. we also conduct workshops around the world with staff from mumbai to manchester, around those rules and that code of conduct and it's something that we tried very hard to communicate as crisply as we can to everyone in the business. >> and finally, and i appreciate mr. murdoch's statements at the beginning, given you've been in the media spotlight and perhaps i expect not appreciated the attention that you've had, will this make you think again about how you approach your headlines, your targets in the future? you know, that could be people from celebrities or others, will

you think again about what your headlines will say? >> i think all our editors certainly will. i'm not aware of any transgressions. as a matter of taste, it's a very difficult issue. we have in this country a wonderful variety of voices and they are naturally very competitive. and i'm sure there are headlines which can give offense. but it's not intentional. >> james? >> i think it's important that one of the lessons, if you will, from all of this for us is that we do need to think, i think, as a business as well as an industry in this country more forcefully and more thought fully about our journalistic

ethics, about what exactly the codes of conduct should be, not just for news international, our u.k. publishing subsidiary, but also for the industry as a whole, and what sort of governance should be around this whole area. and we welcomed last week the prime minister's announcement of a judicial inquiry into both journalistic ethics but also relationships, as i understand it, with the police and politicians and things like that. and i think that's a really good thing for the country and for all of the interested parties to engage with fully. and one of the specific actions that we've taken to try to be as proactive as we can around this, is we've actually set up something that we call the management and standards committee that is outside of the actual management of our publishing company and reports to the independent directors or through the independent directors of our global public board, precisely to look at this

issue around, first, the specific issues, how we cooperate with the investigations, how we deal with allegations of wrongdoing and get to the bottom of it, but also and i think importantly how we coordinate and cooperate and proactively engage with those judicial inquiries and how we start to set a code of conduct and a code of ethics that we think and that it thinks is something that can both be a paragon for all of our newspapers but all of the industry, but also something that really has teeth and can hold the company to account. it's independently chaired, this management standards committee, and we think it's going to be a much better way to go in the future and we'd like -- and we'd like over the next six months and years to really be judged on the actions that the company takes to put that right and to put that in place. >> thank you. >> i'd just like to say, if i

may, that it doesn't take away at all from what we've been saying about our apologies or our blame for anything, but this country does greatly benefit from having a competitive press and, therefore, having a very transparent society. that is sometimes very inconvenient to people. but i think we're better and stronger for it. >> thank you. >> before i bring in my next colleague, can i just come back to something raised which of the closure of the "news of the world." can i ask you, is it your intention to launch a new tabloid newspaper? >> no, there's no -- >> we've made no decision on that. >> there's no decision on that. >> so for the moment there are no plans to have a news international title coming out on the tabloid end of the market? >> there are no immediate plans for that. >> you've talked in the past to

moving to seven-day news rooms. there's speculation that subbed had been reserved. >> i think we leave all those options open. that is not the company's priority now. there -- you know, in the last week it has come up in the company, but, you know, my father' direction and my direction is that this is not the time to be worrying about that. the company has to move forward on all of these other actions and really get to grips with the facts of these allegations and understand them as fully as we can. >> can i appeal both to the witnesses and indeed to members to try and keep brief because we still have quite a lot to get through. >> good afternoon. in your statement the 7th of july, 2011, to james murdoch, you said that the company paid out of court settlements approved by me.

i did not have a complete picture when i did so. what do you know now that you did not know then? >> i think the -- essentially the new information that emerged that is critical here is the information that came out of the ongoing process of civil litigations in 2010. at the end of 2010, the presentation of evidence, which had not been in our possession previously from this civil litigation, that widened the circle definitively or at least made it very apparent that was was very likely that the circle was wider than the two individuals, mr. goodman and mr. mulkhair from previously and it was that information that was critical. if i can go back to my previous testimony just earlier today around the settlement with mr. taylor, the commercial and legal

rationale if you will around that settlement was very, very clear, which was that the underlying fact was not in dispute and was a known fact from a previous trial. the advice was very, very clear as to what sort of damages could be expected to be paid. and it was quite clear and quite likely that if litigated, the company would lose that case. and in the context of none of this other information, this is a full year before some of the new allegations in the press arose from afar, so this is -- and there was no reason to believe at the time that it was anything other than in the past. now -- so knowing then what i know now, would i have still directed to negotiate to settle that case? i would actually. but i would have coupled it with the other actions that we've taken since the new evidence emerged at the end of september, 2010, and that is to immediately

go and look at whatever we could find internally around the individuals involved, to immediately contact the police about what they -- about information that may be of great interest to them, to put in place the process which took a little while and we did it i think in the early part of 2011 around admitting liability to the civil litigants, putting a process in place to get to the bottom of what legitimate allegations there were, apologizing unreservedly to the victim of those illegal voice mail intercepts, which were absolutely inexcusable. and having a system of compensation there. so

newspapers, but we can -- i'm sure we can provide you with that information. >> what advice with tom crohn give you in relation to the payment to gordon taylor. >> the advice is as i described it which was that the underlying fact in the case was a known fact, it was a previous fact that had come up in the trial -- >> but were you aware the case involved the criminal act of phone hacking? >> pardon me, sir? >> were you aware the case involved the criminal act of phone hacking? >> that was my -- that was my understanding that that was what the litigation was for damages

for the illegal voice mail interception. >> when did you get this advice? >> in the first half of 2008. >> in 2009, mr. crohn and mr. miler informed us that they decided to settle mr. taylor's claim based upon the advice received from the company's external legal advisers. was this advice received from farra and coe, slifrolicitors? >> they have done work for us. i don't know which external counsel they engaged on that. >> did you see whether it was from them or anyone else? >> no, the advice that i had was oral from mr. miler and mr. crohn. >> and what was the advice. >> as i described. >> it simply to settle? >> and that outside legal advice had been taken with respect to the quantum of damages that were expected. that their advice was that the case would be lost and that their advice was that in the absence of any new evidence,

certainly no new evidence was made aware to me, in the absence of any new evidence to this, this was simply a matter that was due to events that came to light in 2007 and before i was there and this was a matter -- and the police as well had closed their case and said there was no new evidence here. so the context of it was that it was about events that were a year or more old, that underlying activities prior to that, and that was where we were. >> was part of the advice given that the high payment would ensure the matter was kept confidential? >> no, not at all. the confidential nature of an out of court settlement is a normal thing. i don't know of many out of court settlements that are not kept confidential. there are some, i'm sure. but there was nothing about confidentiality. i think i understand where you're going with this, mr. sanders. but, no, the amount paid and the advice there was on resting on

advice from outside counsel with respect to the amount that we would be expected to pay in damages plus expenses and litigation costs. >> did you question why such high payments were made to mr. taylor and to mr. clifford? it's suggested to be 700,000 pounds and a million respectively, for invasions of privacy, when the record amount of privacy damages awarded pie a court remains 60,000 pounds ironically against the "news of the world. ". >> mr. sanders, i did question the amount but not in relation to the 60,000. as you recall, and i'm sure you do, the chronology here, the settlement made against 700,000 pounds was after the authorization of the settlement after the advice that we sought from senior distinguished outside counsel with respect to the quantum of damages that

could be expected to pay, which in damages terms was quarter of a million pounds plus expenses and litigation costs was expected to be between 500,000 and a million pounds is my recollection of it. and i think that chronology is important. i think afterwards you would have obviously had maybe different information, but it wasn't afterwards, it was before. >> you have since said that when you approved the taylor settlement, it did not actually have all the facts. what do you know now that you did not know then? >> as i've testified, mr. sanders, and respectfully, mr. chairman, the key facts, the key evidence that came to light at the end of 2010 as the lengthy due process of the civil litigations involving these matters took their course, it was those -- it was that process that unearthed the key evidence there. it was really only after that even that the police -- that any said they should restart the investigation. as soon as we had that new

information at the end of 2010, which indicated to us that there was a wider involvement, we acted on it immediately. >> tom crohn said last week he did not know why he left news group newspapers. can you clarify why he was asked to leave after 26 years of service? >> well, last week the "news of the world" -- two weeks ago i guess, "news of the world" published its last paper and he was involved with "news of the world" matters over the years. but the company believed and in the management of the company believed that it was time to part ways. i was not involved in those direct discussions with him and i can't comment on the nature or their content. i don't have knowledge of them. >> final couple of questions. the new statesman carries a story last week that news international subsidized andy coalson's wages after he left your employ. can you shed any light on that?

>> i have no knowledge of andy colson's wages after he left the company's employment. >> finally, are you familiar with the term willful blindness? >> mr. sanders, would you care to elaborate? >> it is a term that came up in the enron scandal, willful blindness is a legal term. it states that if there is knowledge that you could have had and should have had but chose not to have, you are still responsible. >> mr. sander, do you have a question? respectfully, i don't know what you'd like me to say. i'm not aware of that particular phrase. >> but you are familiar with the term because i've explained it to you. thank you, mr. chairman. >> thank you, mr. sanders. >> i've heard the term where and we were not ever guilty of that. >> thank you. philip davis. >> as you -- i'm not sure if you

have knowledge of this or not but when we had our inquiry in 2009, the evidence given by news international executives was rather hopeless really. they came with a game plan. their game plan was to tell us that they didn't know anything. they couldn't remember anything. and they didn't know anybody who would know anything. and i just wonder just so we can get off on a reasonable footing, what sort of coaching you've had today and who's advised you on how to handle this session and what their advice was? >> with respect to today, after scheduling this appearance, we took -- we took some advice around what the context of this sort of a setting. it's my first time and my father's i think first time in a committee meeting like this. mostly logistics and so on, what sort of questions you ask, but we were advised fundamentally to

tell the truth. and to come and be as open and transparent as possible. and that's my and my father's intent, intention, and we hope that we can show you that that's what's happening. >> mr. murdoch sr., you in answer to questions from mr. watson seemed to indicate that you had a rather hands-off approach to your company. i think the point you made was that "news of the world" was less that 1% of your entire worldwide business, and so you wouldn't really be expected to know the ins and outs of what was going on. could you just give us an illustration of how many times -- how often you would speak to the editor of your newspapers? how often you'd speak to the editor of the sun, for example, how often you would speak to the editor of the "news of the world." >> very seldom. sometimes i would ripping the editor of "news of the world" on

saturday night and say we have news tonight, just to keep in touch. i'd ring the editor of "the sunday times" nearly every saturday. not to influence what he has to say at all. i'm very careful to premise any remark i made to him, it's just an inquiry. i'm not really in touch. but to say i'm hands-off is wrong. i work a 10 or 12-hour day and i cannot tell you the multitude of issues that i have to handle every day. "news of the world" i lost sight

of maybe because it was so small in the general frame of our company, but we're doing a lot of other things too. >> if i can help you out here. if somebody had told me that you would speak to something like the editor of the sun at least daily and maybe twice a day, would you recognize that description or would that be -- >> no. >> you wouldn't historically, traditionally have spoken to the editor of "the sun" on that number of times? >> no, no. i'd like to, but no. >> so when you said you speak to the editor of "news of the world" maybe on a saturday night before the publication, not to influence them, i absolutely understand that. i'm just intrigued as to how these conversations go. i would imagine it would go something along the lines of anything to report? you know, anything interesting

going on? and the editor of the "news of the world" says, no, a standard week. we've paid gordon taylor 600,000 pounds. surely -- >> he never said that sentence. >> surely in your weekly conversations with the editor of "news of the world" something as big as that, paying somebody a million pounds, paying somebody 700,000 pounds, surely you would have expected the editor to drop it into the conversation at some point during your weekly chat. >> no. >> you wouldn't have expected them to say that to you? >> no. i didn't really call him weekly, i would call him at least once a month, i guess. >> what would you discuss with him? if that wasn't on the agenda, what was on the agenda? >> i'd say what's doing? >> sorry? >> i'd say what's doing? >> what sort of response. >> he might say we've got a great story exposing x or y or he'd say, well, actually nothing

special. >> james, would you -- >> he might refer to the fact how many extra pages went into football that week. >> but he wouldn't tell you about a million pound payoff. >> no. >> it's just interesting to somebody like me. >> he would pick other people to tell me that, if anyone was to. >> james, would you acknowledge then in your view that you overpaid max clifford and gordon taylor? >> well, i can't speak to the arrangements with mr. clifford, as i don't have direct knowledge in terms of i wasn't involved in those pieces, in that piece. with respect to the taylor settlement, i gave a judgment given the advice of counsel, given the advice of the executives involved and going back and looking at what we knew in 2008 and looking at that advice, remembering that advice,

and looking at the context of the time if we step back those few years, three years now, you know, it was a decision that given that context was a decision that i would still stand by, i think. >> it just seems a bit -- >> certainly i think the -- sorry, mr. davies. >> apparently there was a contract with mr. clifford which was cancelled by mr. colson. >> i don't know about that at all. i don't know if you have knowledge about it. >> i'm sorry, you were going on? >> it just seems strange to me -- >> i don't know what was in the contract. i know there was a particular arrangement with max clifford. >> we might ask you to come back with details about that. but it seems odd to me as a layman, 600,000, a million pounds, andrew gray had his phone hacked and he doesn't have

600,000 or 500,000 or 200,000, he got 20,000. it seems bizarre somebody can have their phone hacked and get 20,000 and somebody else gets 600,000 or a million. surely you can see that the difference that most people draw is that one was when it was all out in the open and everybody knew about these things, andy gray, and the other was paid when it was all trying to be kept rather quiet, 600,000. do you not see that to most people looking at that, it sort of smells a bit? >> mr. davies, i understand where you're coming from and i understand how -- these are big sums of money we're talking about. 100,000, 200,000, 600,000, that's a lot of money. you look at that and say why would a company -- why would a company do that. and i would go back to my answer to mr. sanders' question, which was just to be precise about the chronology here. really -- and i'm not a lawyer,

i apologize. >> i got your answer. >> mr. davies, i'd like to answer this question. my understanding is that the 60,000 settlement, the judgment in the mosley case, which was after the advice given around the gourdrdon taylor settlement an important chronology. and courts and judges have set a different -- you know, a different standard here. what we knew and what i knew at the time was that we had senior distinguished outside counsel who had gone to say if this case was litigated and if we were to lose the case, if the company were to lose the case, what sort of damages would we expect to pay. and we were -- and the company received an answer that was substantial. >> the answer was 250,000 so you settled to 600. mr. davies, it's important to be clear, mr. davies, i apologize,

but it is important to be clear. the 600,000 or 700,000 included damages, legal fees and an estimation of what it would have cost otherwise, because the other side of the negotiation understands this. so it's damages plus costs that gets you to that number. it is important -- respectfully, it is important to be clear about that, because i agree, they are big numbers. >> i want to concentrate on payments you made to your staff. going back to the trial of glenn mulkhair and clive goodman, clive goodman, was pleading guilty to a criminal offense. did news international pay clive goodman's legal fees for his trial? >> i was not -- i do want to be clear with the chronology. first of all, i do not have firsthand knowledge of those times. remember, that my involvement in these matters started in 2008. in 2007-, up until december i ws

totally focused as chief executive of a public company. >> who would know. >> but i can try to answer the first question first. it is customary with employees or with other -- with litigation to pay some set of legal expenses on behalf of those to try to bring all of the evidence to a court and so on, and that's all been done in accordance with -- since any involvement that i've had any knowledge of this in accordance with legal advice about what the proper way to do things was. but i can speak to the 2007 arrangements. i don't have firsthand knowledge of those. >> i'll try to help out. clive goodman employed the services of a qc called john kelsey frye. i don't know if he's a lawyer at news international --

>> he's not. >> he's probably one of the most eminent lawyers in the country, certainly one of the most expensive lawyers in the country and the sort of go-to lawyer for celebrities. it seems odd to me that a journalist on the "news of the world" who's pleading guilty here to a crime uses in mitigation probably the most expensive lawyer in the country, which obviously leaves most people to suspect that his legal fees were not being paid for by himself but were being paid for by news international. now, given that he was pleading guilty to a criminal act, phone hacking, which presumably leads to summary dismissal, gross misconduct, why on earth would news international even think about, even dream about paying the legal fees of somebody who was engaged in criminal activity and committed something that was clearly gross misconduct? >> mr. davies, i don't have any direct knowledge of the specific

legal arrangements with mr. goodman in 2007, so i cannot answer the specifics of that question. but i can say -- because i've asked the question more recently than that with respect to who the company pays legal fees, what contributions to legal fees do we make, does the company make, and so on and so forth. and i think i can tell you that in asking the question i have been surprised, and this is legal counsel telling me this, that it is customary in here to sometimes make payments, but i have no direct knowledge of that particular instance that you mention and if you have any additional specific questions about that, perhaps, mr. chairman, we can follow up on that and i'm happy to do that.

>> it's all very well. these are issues that go back some time. were any payments made subsequently to them after their conviction? did news international make any payments at all to those two people following their convictions? >> may i -- i'd like to answer that question. i think it's a good question and it's a specific question. the -- to my knowledge upon asking, because there were allegations made that legal fees had been paid after those -- after that time in 2007 to those. i asked the question myself and i was very surprised to find that the company had made certain contributions to legal settlements. i don't have all of the details around each of those -- not legal settlements, sorry, legal fees around there. and i just -- and i was surprised. i was very surprised to find out -- >> who authorized them. >> -- that that had occurred. >> who authorized them? >> they were done, as i understand it, in accordance with legal counsel and the strong advice -- >> i didn't say who advised it,

who signed off? who at news international agreed to -- who signed the checks? who agreed to pay -- make those payments? >> i do not know who signed off those -- >> you know -- you talked about the managing editor. would the managing editor have made that decision? >> it would have been the management of the legal cases, i would think, but i think we have to -- you know, i'm happy to go back and look at that. but it ca-- >> it would certainly not come before having to do with the managing editors. >> would it have been above the managing editor or below? >> it would be above. >> above. >> this would have been on legal advice, payments made about how to handle litigations, and again, i don't have direct knowledge or details around the current status of those. but i can tell you i was as surprised as you are to find that some of those arrangements had been made.

>> mr. murdoch sr., i seem to be getting further with you, for which i'm grateful. would it have been les hinton? would he have agreed? would he have had to sign that? >> it could have been. >> it could have been. would have been or could have been? >> could have been. >> who else could it be? >> the chief legal officer. are you talking about signing checks or approval? >> both. >> signing checks could be -- it would be on the instructions of the chief legal officer. >> james, you said that you weren't involved in the decision to get rid of tom crohn. whose decision was that? >> the management of the company at the time recently the chief executive, mrs. brooks. >> that was her decision? >> she was chief executive of the company and senior level personnel skigdecisions are mad

them. >> he left the day or the day after allegations were made about phone hacking. was that linked? did he resign? was he sacked? what happened to stewart cortner? how did he leave the company? >> that i don't know. that would have been for -- that would have been at the time a "news of the world" matter for them. >> why did les hinton resign? >> les hinton resigned, sadly, last friday, following rebekah brooks resignation and saying i was in charge of the company during this period that we are under criticism for and i feel i must step down. >> were either rebekah brooks or

les hinton, were they asked to leave or did they ask to leave? >> they both asked to leave. >> why did you not accept rebekah brooks's resignation when she first offered it? >> because i believed her and i trusted her and i do trust her. >> so why did you accept it the second time around then? >> in the event -- she just insisted. she was at a point of extreme anguish. >> can you tell us how much all of these characters have been paid off? how much they have been given as a financial settlement on their departure from news international? >> no, i can't tell you. but in the case of mr. hinton, it would certainly be considerable because there would be pensions for 52 years serv e service. >> 10 million? 5 million, 10 million? >> it's certainly confidential. >> and is there anything --