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News Corp. deputy chief operating officer James Murdoch speaks at the Leveson Inquiry into the culture, practices and ethics of the media at the High Court in London on Tuesday. (Rueters/Reuters)
News Corp. deputy chief operating officer James Murdoch speaks at the Leveson Inquiry into the culture, practices and ethics of the media at the High Court in London on Tuesday. (Rueters/Reuters)

Press, politicians emerge from Leveson inquiry with egg on their faces Add to ...

James Murdoch appeared before an inquiry into media ethics to deny a cozy relationship between the press and politicians, but almost everything the media mogul said indicated that there was one large bed in Britain, with the business and political elite curled up in it.

In testimony that is sure to damage the Conservative-led coalition of David Cameron, Mr. Murdoch, son of News Corp owner Rupert Murdoch, outlined a relationship where he had the Prime Minister’s ear, was friendly with Britain’s Chancellor, and collaborated with a government minister to win a favourable decision for his family’s business interests.

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Mr. Murdoch was speaking at the Leveson inquiry, which was struck in response to the phone-hacking scandal at the Murdochs’ now-defunct tabloid News of the World. It is also exposing the incestuous relationship between British media proprietors and the ruling class.

By far the most damaging revelations concerned the relationship between the Murdochs – who own the Sun and Times newspapers in Britain, as well as Sky News — and Jeremy Hunt, the minister for Culture, Media and Sport. Mr. Hunt’s department was responsible for government supervision of the Murdochs’ attempted takeover of the cable broadcaster BSkyB (James Murdoch was the chairman of BSkyB until earlier this month, and remains a director).

According to e-mails presented during the inquiry, Mr. Hunt’s department actively co-operated with Mr. Murdoch’s executives to ensure that the takeover would be successful.

News Corp owns 39 per cent of BSkyB and wanted to buy the rest, an effort that was derailed after phone-hacking revelations at the News of the World came to light.

The smoking e-mails were presented by the inquiry’s lead prosecutor, Robert Jay. They detailed a relationship between a News Corp. lobbyist, Frédéric Michel, and Mr. Hunt’s ministry. In one of them, Mr. Michel says he knows what the minister will say to parliament about the bid, although it was “illegal” for the Murdochs to have an early heads up (Mr. Murdoch suggested this was a joke).

Another message from Mr. Michel suggested that Mr. Hunt had already made up his mind about News Corp’s bid: “He said we would get there at the end, and he shared our objectives.”

At another point, one of Mr. Hunt’s aides advised him it would be inappropriate to meet Mr. Murdoch in person – so the minister called him on his mobile phone instead.

Last night, Labour leader Ed Miliband called for Mr. Hunt’s resignation, accusing him of “acting as a back channel for the Murdochs.” A spokesman for the Prime Minister said Mr. Cameron was standing by his culture secretary, who “had done nothing wrong.”

Mr. Hunt has asked to testify at Leveson as well. “When I present my evidence the public will see that I conducted this process with scrupulous fairness,” he said in a statement released last night.

Allegations that his government might be tucked inside a rich man’s pocket come at a very bad time for Mr. Cameron, who came to power in May 2010 at the head of a Conservative-Liberal Democrat coalition. Since then, he has tried desperately to dispel the idea that the Conservatives represent only the interests of the wealthy. This week he was branded “arrogant” and out-of-touch by one of his own backbenchers. His party is slumping in the polls (trailing the opposition Labour party by eight points by the most recent account).

Mr. Murdoch, who was largely unflappable through six hours of questioning, bristled when it was suggested that his family’s news outlets traded favourable coverage for commercial gain. When Mr. Jay, the prosecutor, asked if Mr. Hunt wasn’t a “cheerleader” for News Corp, who received glowing coverage in return, Mr. Murdoch became visibly irate for the first time. “Absolutely not,” he said. Positive press, he added, “is not something I would ever link to a commercial transaction.”

But he clearly cultivated politicians on the rise. Mr. Murdoch said he’d met with Mr. Cameron a dozen times when he was opposition leader, and over drinks one night in 2009 personally delivered the news that the king-making tabloid, the Sun, was switching its allegiance to Mr. Cameron’s Conservatives. Mr. Murdoch, the deputy chief operating officer of News Corp., also admitted to being friends with the British Chancellor of the Exchequer, George Osborne.

At a dinner on Dec. 23, 2010, Mr. Murdoch had “a tiny side conversation” with Mr. Cameron, who had been prime minister for seven months, about the BSkyB bid. The dinner took place at the house of Rebekah Brooks, then CEO of News International, and her husband, the race-horse trainer Charlie Brooks, who is Mr. Cameron’s old friend. Together, they form a power elite that is known as the “Chipping Norton set,” named after the upmarket town near Oxford where many of the ruling cabal keep their horses, dogs and second homes.

Ms. Brooks, who was Rupert Murdoch’s protégé, has been arrested in connection with a police investigation into phone hacking and payment to public officials, and may face criminal charges.

The Christmas party may have happened in the English countryside, but it was in a bar in the ritzy London neighbourhood of Mayfair where Mr. Murdoch told Mr. Cameron, then leader of the opposition, that the Sun – Britain’s best-selling newspaper and a crucial political player – was about to endorse his party in the upcoming general election.

It wasn’t just the Conservative party that benefited from a close relationship with News Corp. It was also suggested yesterday that Alex Salmond, the separatist Scottish leader, agreed to lend support to the BSkyB bid in return for the Scottish Sun’s endorsement of his Scottish National Party (To be fair, Tony Blair courted the Murdoch press during his reign and was rewarded with loyalty from its tabloids).

Mr. Murdoch, testifying a day before his 81-year-old father is scheduled to appear at Leveson, gave careful and circuitous answers that were drawn, at times, from a manual of management jargon (“The specificity around certain decisions is not something I engaged in great substance on”).

The last time Mr. Murdoch testified before a phone-hacking inquiry, he was labelled a mafia boss by an MP sitting on parliamentary Culture, Sport and Media committee. The last time his father testified, in the summer of 2011, a protester hit him in the face with a shaving-cream pie. This time, it seems, it’s the government that is emerging stained.

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