British culture secretary Jeremy Hunt told chancellor George Osborne he was “seriously worried” the government was going to “screw up” the BSkyB deal hours before he was given control over the bid, the Leveson Inquiry heard.
He sent text messages to the chancellor after receiving a phone call from James Murdoch questioning the legitimacy of the process when secret recordings of business secretary Vince Cable “declaring war” on News Corporation emerged.
Timed at 4.08pm, Mr Hunt’s message to Mr Osborne read: “Could we chat about Murdoch Sky bid? I am seriously worried we are going to screw this up. Jeremy.”
He immediately sent a second, saying: “Just been called by James M. His lawyers are meeting now and saying it calls into question legitimacy of whole process from beginning. ‘acute bias’ etc.”
A couple of minutes later, Mr Hunt sent an email to Andy Coulson, the former News of the World editor at that time working as British prime minister David Cameron’s director of communications.
“Could we chat about this?”, he wrote.
“I am seriously worried Vince Cable will do real damage to coalition with his comments.”
At 4.58pm, with the formal appointment of Mr Hunt to take over examination of the takeover bid to be announced within the hour, the chancellor replied by text to Mr Hunt: “I hope you like the solution.”
It also emerged Mr Hunt sent a “great news” message to James Murdoch on the same day. The text, sent at 1pm on December 21 2010, was one of a number from Mr Hunt to Mr Murdoch, inquiry chairman Lord Justice Leveson heard.
It read: “Great news on Brussels just Ofcom to go,” - a reference to the bid clearing legal hurdles in Europe.
The inquiry also heard Mr Hunt carries out all of his email communication using his personal gmail account, not his official departmental account.
Mr Hunt said: “That’s the only email account I use. My department email gets looked at by my private office and if there is anything they need to show me they show me but the only email account I use is my personal account.”
Downing Street announced that responsibility for media competition and policy issues was passing to Mr Hunt shortly before 6pm on December 21st.
Asked for his personal opinion of the bid prior to taking responsibility, Mr Hunt said: “I was sympathetic to the bid. I hesitate to say supportive.”
But he issued a staunch defence of his ability to “set aside any views you have” in taking the quasi-judicial decisions - and insisted his actions backed that up.
“My suitability for the role is demonstrated by the actions I took when I did take responsibility for the role because I believe I did totally set aside all those sympathies.”
He went as far as to “set up a process explicitly to make sure” that happened.
In January 2011 News Corp put together a proposal that would take Sky News out of the deal to appease claims it would have too much control over the UK news media.
That was a “pretty big offer” that government should consider, Mr Hunt said.
But he made James Murdoch “very cross” when he decided that he would get advice from two regulators, instead of one, on the plans, he told the inquiry.
“From Mr Murdoch’s point of view he considered that was tantamount to wanting to kill the deal,” he added.
Mr Hunt said claims made on July 4th that murdered schoolgirl Milly Dowler’s phone had been hacked by the News of the World made him question the News Corp bid.
In the days after the allegations the Murdoch empire announced it was shutting down the Sunday newspaper.
“That, for me, was a very significant moment because then I began to wonder whether there could be an issue that spread beyond News International to News Corporation,” he said.
“I asked myself, if they found it necessary to close down a whole newspaper, this is a big big decision for News Corporation, is there a corporate governance issue here?”
“Is this a company that doesn’t actually have control over what is going on in its own company?”
Mr Hunt lavished praise on his former special adviser Adam Smith, who he had told to quit following disclosures of his close contacts with News Corp lobbyist Fred Michel during the bid process, describing him as highly intelligent and able.
He admitted that Mr Smith had not been given any specific instructions about how to act as the “official point of contact”.
“I do not think he was given any express instructions,” he told the inquiry, but he had attended meetings that should have left him aware of the requirements of the quasi-judicial process.
“He was present at all the meetings where we had advice from lawyers and officials.
“He heard, as I heard, all the things we needed to be careful about.”
The culture secretary said there was a “degree of pushiness” about Mr Michel that meant he began to limit his replies to text messages to one word.
The inquiry heard he “didn’t predict this barrage of contact” from the New Corp lobbyist.
Mr Michel sent 542 text messages to Mr Smith, which Mr Hunt said worked out at about five a day.
“We didn’t anticipate that at all,” he added.
The inquiry also heard that before Mr Hunt took responsibility for the bid he wanted to make representations about it to Mr Cable.
Lawyers at the department for culture, media and sport advised him not to intervene in the process. He cancelled a meeting with James Murdoch as a result of the advice but spoke to him by mobile phone instead.
He said: “I cancelled that meeting not because I thought it was wrong to have contact with News Corporation but because I thought they would be wanting to have the meeting with me that Vince Cable had refused to have with them, that therefore to have that meeting would be creating a parallel process in a way that might not be seen to be appropriate.”
Mr Hunt agreed that it was not the legal advice he wanted to hear. Asked if he was frustrated by it, he said: “I think I had a concern about the situation where we had this very important, significant merger in my sector, I didn’t think there was a particular problem with it. The organisation concerned said that they did feel that they were encountering a number of obstacles.”
Asked why it was appropriate to speak on a mobile phone if he had been advised a meeting was inappropriate, he said: “I didn’t see a telephone call as a replacement for the meeting.”
He added: “I just heard Mr Murdoch out and basically heard out what he had to say about what was on his mind at the time.”
He later received a text from Mr Michel that said: “Thanks for that call with James today, greatly appreciated. Will work with Adam to make sure we can find you helpful information. Warm regards, Fred.”
Mr Hunt replied immediately: “My pleasure.”
Pressed on what that meant, Mr Hunt said: “I probably gave him a sympathetic hearing but I would not have said that I can get involved in that decision because I had taken on and accepted the advice that I couldn’t.”
Labour has been calling for Mr Hunt to resign since the extent of the contact between him, his special adviser and News Corporation emerged.
Prime minster David Cameron has refused to order his independent adviser on the ministerial code, Sir Alex Allan, to launch an inquiry, insisting the Leveson Inquiry was the best way to examine any allegations.
PA