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Murdoch Was Angry Over Elton John Settlement, Ex-Sun Editor MacKenzie Says

News Corp. Chairman Rupert Murdoch took a “hands-on approach” to his U.K. newspapers, the Sun tabloid’s former editor told an inquiry into press ethics, recounting Murdoch’s reaction to a story about Elton John.

Murdoch was angry about the Sun paying a 1 million-pound ($1.54 million) settlement to the pop singer over a false news story in 1987, the inquiry heard today from Kelvin MacKenzie, who edited the Sun from 1981 to 1994. The story wrongfully claimed Elton John had paid for sex with underage “rent boys.”

“Murdoch thought I’d gone too far,” MacKenzie said. “I then received something like 40 minutes of nonstop abuse” during a phone call from Murdoch. “It wasn’t so much the money of course -- it was the shadow it cast over the paper.”

The inquiry was called for last year by Prime Minister David Cameron in response to a phone-hacking scandal at another News Corp. (NWSA) tabloid, the News of the World, which the New York- based company shuttered in July to contain public outrage over the scandal. Murdoch, 80, told lawmakers in live testimony last year that he wasn’t responsible for the scandal and that he’d “lost sight” of the News of the World.

MacKenzie said he spoke with Murdoch “most days” and that the chairman took an interest in “whether it was upbeat enough, and that kind of thing.” Murdoch didn’t interfere with editorial matters, he said.

The inquiry, overseen by Judge Brian Leveson, has heard evidence from celebrities, crime victims and other targets of media interest to determine problems in the relationship between the public and the press. Further segments of the inquiry will examine the U.K. media’s relationship with police and politicians, then suggest changes.

‘No Certainty’

MacKenzie, questioned about his views on accuracy, defended his record and said, “there is no certainty in journalism, in the same way there’s no certainty in the legal world.” He told the same inquiry in October that he checked the source of a story one time in his 13 years as editor of the Sun -- for the Elton John story.

“I never did it again,” MacKenzie said in October. “Basically my view was that if it sounded right it was probably right and therefore we should lob it in.”

MacKenzie also told the inquiry it “wouldn’t surprise” him if Sun journalists had paid police officers for information under his leadership, although he wasn’t aware of any payments himself. Police bribery by News of the World reporters is one of the three related probes, along with phone hacking and computer hacking by journalists, or their private investigators.

‘Journalist at Heart’

The Sun’s current editor, Dominic Mohan, told the same inquiry today that Murdoch often calls him “several times a week” and sometimes “not for a month or two.” Murdoch also takes a regular interest in the tabloid’s iPad application, asks about the number of visits to the Sun’s website and complains sometimes about slow download times, Mohan said.

“He’s a journalist at heart and will be very curious to know what we’re putting on the front page and will want to know if I have a good headline,” Mohan said of Murdoch.

Leveson told lawyers today there was no chance he would recommend the government call off the inquiry as the result of a potential error in a Guardian newspaper article about the phone- hacking scandal. The publication last month corrected a story from July about the News of the World’s interception of the voice mails of murdered schoolgirl Milly Dowler in 2002, when she was still missing -- a story that triggered the closure of the tabloid and the start of the inquiry.

Voice-Mail Deletions

The Guardian changed the story to say the News of the World’s reporters hadn’t deleted Dowler’s messages to make room for new ones and hindered the police search. A report on the events surrounding the voice-mail deletions is expected soon from the Metropolitan Police, Leveson said.

Police have arrested 17 people since January after it was revealed the interception of voice mails was more widespread than News Corp. had said. News Corp. said today it hired a new group general counsel, Gerson Zweifach, a partner with law firm Williams & Connolly LLP, to replace Lawrence Jacobs, who left in June to pursue other opportunities.

To contact the reporter on this story: Erik Larson in London at elarson4@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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