Police Hid News Corp. Phone-Hacking Extent, Prosecutor Says

London police probing News Corp. (NWSA)’s phone-hacking in 2006 didn’t show prosecutors evidence that more than two people were involved, preventing a full examination of the scandal, the lead lawyer in the case said.

David Perry, who represented Britain’s Crown Prosecution Service, limited the case to former reporter Clive Goodman and ex-private detective Glenn Mulcaire for lack of evidence that other journalists had intercepted celebrities’ voice mail, he told the media ethics inquiry in London today.

“We were informed that there was no such evidence,” Perry said to the judge-led inquiry via video-link from Northern Ireland. “I can’t recall which officer gave that reply.” Others have testified to the inquiry that police had information at the time of more phone-hacking victims and potential wrongdoers.

While Goodman and Mulcaire pleaded guilty and were jailed in 2007, the full extent of the hacking scheme was suppressed until 2010, when victims’ civil lawsuits revealed the criminal case had only touched the surface of the scandal. James Murdoch, the deputy chief operating officer of New York-based News Corp., stepped down yesterday as chairman of pay-TV company British Sky Broadcasting Group Plc (BSY) in the latest fallout from the scandal.

The 2006 criminal case involving News Corp.’s now-defunct News of the World tabloid revealed just a few of the 180 potential victims known to police at the time and the public wasn’t made aware until years later others had been targeted. Perry said today he didn’t know some officers had worried evidence of a wider conspiracy was being ignored.

Manageable, Simple

“The most important consideration is to keep the case manageable and for the presentation of the case to be simple for all concerned,” Perry said of the limits to his criminal case. “By taking a sample of victims and including them within an indictment, you get a picture of the criminality.”

Since the scandal widened, more than 30 people affiliated with News Corp.’s U.K. tabloids have been arrested, including former editors of the News of the World and reporters at its Sun daily newspaper. Victims have told the inquiry the 2006 case was hampered by a too-close relationship between police and News Corp.’s U.K. publisher, News International.

The inquiry, led by Judge Brian Leveson, also heard testimony today from the CPS’s director of public prosecutions, Keir Starmer, who will be responsible for any charges filed against those arrested in the new police probes.

Starmer said former Metropolitan Police assistant commissioner John Yates who resigned in July over his links to News International, resisted in 2009 when Starmer asked whether evidence from the 2006 criminal case should be reviewed again.

‘Push-Back’

Starmer focused on an internal News of the World e-mail unearthed in a civil case and labeled ’for Neville,’ suggesting other reporters, such as ex-chief reporter Neville Thurlbeck, may have been involved in phone hacking. The e-mail contained a transcript of a voice mail. Thurlbeck was arrested last year.

“There was a degree of push-back against my suggestion that there should be a further investigation of the ’for Neville’ e-mail,” Starmer said. “Mr. Yates said it was not new and it had been seen before and I understood at that stage he didn’t see any reason to look at it.”

Ken Macdonald, the U.K.’s former director of public prosecutions, also told the inquiry today he had no reason to believe in 2005 and 2006 that the wrong decisions were being made regarding phone-hacking prosecutions. Macdonald was later hired by News Corp. to advise its board on handling the scandal.

The scandal prompted News Corp. Chairman Rupert Murdoch to close the News of the World in July and drop a 7.8 billion-pound ($12.5 billion) bid for full control of BSkyB.

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

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

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