If corporations really were people, Rupert Murdoch’s News Corporation would be breaking rocks. That’s the take-away from yesterday’s astonishing ruling by Geoffrey Vos, the judge presiding over the phone-hacking civil trial here. In agreeing to settle with thirty-seven victims yesterday the company clearly hoped to be able to draw a line under the scandal, which has already seen the closure of the world’s best-selling English language tabloid, The News of the World, and both Rupert Murdoch and his son James forced to give evidence before a Parliamentary select committee. With the trial scheduled to begin on February 13, the Murdochs must have hoped that if they could make the case go away by paying off the plaintiffs then the steady drip of information about News Corp.’s criminal activities—which include phone hacking, payments to police and breaking into e-mail accounts—might stop before it lead higher up the corporate chain of command.
The company’s first problem is that the thirty-seven victims who agreed to settle include many of the most famous boldface names—actor Jude Law, who had his phone messages hacked and was himself the target of physical surveillance by Murdoch’s men for a period of years received £130,000 (over $200,000); his ex-wife Sadie Frost got £50,000 (over $77,000); last May Law’s ex-girlfriend, Sienna Miller, was paid £100,000 (over $150,000) to settle her claim—it didn’t include all of them. Singer Charlotte Church, for example has yet to settle. So far just over half of those victims who have actually filed suit have agreed to settle. And there are literally hundreds of additional victims whose names have not yet been made public.
But a much bigger problem is that the documents already disclosed because of the civil suit suggest that in addition to routine invasions of privacy and bribery, Murdoch executives may also have been guilty of destroying evidence in order to cover up the company’s crimes. And as Richard Nixon and his henchman learned the hard way, it’s the cover-up that gets you in the end.
When News Corp.’s lawyer, Dinah Rose, told the judge, “There comes a point when we’re three weeks away from trial and…we can say enough is enough,” arguing the company had already turned over sufficient evidence to the plaintiffs, she sounded like any corporate lawyer used to getting her way. But Vos wasn’t buying. In ordering News Corporation to turn over three of their executives’ laptops and six desktop computers he said News Group, Murdoch’s British newspaper arm, “are to be treated as deliberate destroyers of evidence.”
“I have been shown a number of emails,” he said, “which show a rather startling approach to the email record.” Three days after Sienna Miller’s lawyers wrote to News Group asking the company to preserve any emails relating to phone hacking, “a previously conceived plan to conceal evidence was put in train by [News Group] managers,” the judge said.
Even as they apologized for the violations of privacy that led to yesterday’s settlements News Corporation’s lawyers were careful not to make any further admission of guilt. The corporation told the judge he could approve levels of compensation “as if senior employees and directors of [News Group] knew about the wrongdoing and sought to conceal it by deliberately deceiving investigators and destroying evidence.”
Take just a minute to think about what the company might have meant by using the word “director” there. Andy Coulson, the former editor of News of the World who later served as David Cameron’s spin doctor wasn’t a company director. Nor was Clive Goodman, the “rogue reporter” whose arrest started the whole scandal. But Rebekah Brooks, the Murdoch favorite who went from editing the Sun to running News of the World to running both papers’ parent company, was a director. And so was James Murdoch.
The idea behind News Corporation’s non-denial denial was to get the settlements approved quickly without actually admitting anything. But Vos’s ruling was crystal clear: “The day you can say ‘that’s enough’ is the day I give judgement—although you can’t even say it then because of the number of other cases waiting in the wings.”
A year ago I’d have said the Murdochs stood a good chance of shutting this whole thing down with a wave of the checkbook. Yesterday’s ruling made it pretty clear that isn’t going to happen. And while it would still be a reckless man who’d bet against Rupert Murdoch, the odds against James Murdoch taking a fall just got a little shorter.