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Rupert Murdoch ‘Confused,’ Misled U.K. Parliament, Firm Says

Rupert Murdoch was “confused or misinformed” when he gave testimony to British lawmakers investigating phone hacking by News Corp.’s News of the World tabloid, the company’s former U.K. law firm said.

The alleged confusion resulted in News Corp.’s chairman giving “inaccurate and misleading” statements about why the company’s U.K. unit hired Harbottle & Lewis LLP in 2007 when it was faced with phone-hacking claims, the firm said in a letter to parliament made public today. Murdoch had said he relied on a clean bill of health from the law firm.

Murdoch, who testified with his son James last month, may have confused Harbottle’s “narrow” focus on an employment dispute with that of BCL Burton Copeland, another firm that performed a nine-month review of potential privacy breaches at the News International unit, the firm said.

Harbottle, based in London, “was not retained to provide News International with a ‘good conduct’ certificate which it could show Parliament, or anyone else, years after the event and for wholly different purposes,” the firm said in the letter. “Such use of its advice was expressly prohibited under its terms of engagement.”

A call to BCL Burton Copeland about its probe wasn’t immediately returned. News Corp. (NWSA) has declined to comment on the new letters published today.

Rebekah Brooks

Parliament’s Culture, Media and Sport Committee, which heard testimony last month from the Murdochs and former News of the World editor Rebekah Brooks, sought new statements after conflicting comments were filed with lawmakers by other former executives. The scandal has led to News Corp.’s shuttering of the 168-year-old newspaper and forced it to abandon a 7.8 billion-pound ($12.8 billion) bid for the rest of British Sky Broadcasting Group Plc.

Harbottle said its review was limited to a study of e-mails sought as evidence in a wrongful-termination claim filed by the tabloid’s former royal reporter, Clive Goodman, who was fired after being jailed with private investigator Glenn Mulcaire in 2007 for hacking into celebrities’ phones.

The firm, after studying an “isolated” group of e-mails between Goodman and five executives, determined the others didn’t know about Goodman’s hacking activities, as he claimed. Harbottle sent a letter to News International with its findings in May 2007 and put the file into archived storage.

“Its exercise was specifically and only to assist News International in an internal appeal by Mr. Goodman against his dismissal,” the law firm said. “It was a short and limited exercise lasting two weeks.”

Chapman’s Role

Jonathan Chapman, a former director of legal affairs at News International for eight years until he quit in June, made similar comments about the Harbottle review in a separate letter filed with parliament.

Murdoch’s description of Harbottle’s 2007 review was “very misleading” because the probe was never intended to be a “general internal inquiry or investigation into the issue of voice-mail interception at the News of the World,” Chapman said.

The Murdochs last month blamed Harbottle for delaying resolution of the scandal, saying the firm had convinced the company the illegal activity was limited. The Metropolitan Police opened an investigation of hacking in January after new evidence emerged in civil lawsuits against News International.

A full internal probe of widespread criminal wrongdoing would have required unlimited access to all company e-mails and other documents, direct access to key witnesses and the hiring of forensic accountants and computer analysts -- none of which Harbottle had in 2007, the law firm said.

‘Wider Criminal Activity’

Harbottle “was not retained to look for evidence of wider criminal activity and did not do so,” the law firm said.

The firm’s managing partner, Glen Atchison, said last month the firm asked News International to release it from “professional duties of confidentiality” so that it could respond to “inaccurate statements” in Murdoch’s testimony. The request was granted after initially being denied.

Chapman and Daniel Cloke, the former head of human resources at News International, reviewed the e-mails at the request of Les Hinton, then chief executive of the U.K. unit, before they were passed to Harbottle. They found “no reasonable evidence of knowledge by others of voice-mail interception in the e-mails reviewed,” according to Chapman’s letter.

“I do not understand why the Burton Copeland investigative exercise is no longer referred to by News International,” Chapman said. “Nor do I understand why the 2007 e-mail review has now apparently become so hugely significant.”

Ken Macdonald, the former U.K. director of public prosecutions, told a separate group of lawmakers last month Harbottle had evidence that indicated “serious criminal offenses” by News Corp. workers.

To contact the reporters on this story: Erik Larson in London at elarson4@bloomberg.net; Lindsay Fortado in London at lfortado@bloomberg.net

To contact the editor responsible for this story: Christopher Scinta at cscinta@bloomberg.net

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