Murdoch Tells Inquiry He Didn’t Seek Favors From Prime Ministers

April 26 (Bloomberg) -- Rupert Murdoch told a media-ethics inquiry he never sought favors from any prime minister to bolster News Corp's commercial interests. (Source: Bloomberg)

Rupert Murdoch told a media-ethics inquiry triggered by News Corp.’s phone-hacking scandal in Britain that he never sought favors from any prime minister to bolster the company’s commercial interests.

News Corp. doesn’t consider business needs when deciding which politicians to back in its newspapers, Murdoch said under oath in London yesterday. The 81-year-old chairman spoke as the company’s closeness to U.K. Prime Minister David Cameron’s Cabinet led to the resignation of Adam Smith, an adviser to Culture Secretary Jeremy Hunt.

“I’ve never asked a prime minister for anything,” Murdoch said after questions about his New York-based company’s political ties going back 30 years. “I took a particularly strong pride in the fact we’ve never pushed our commercial interests in our papers.”

Murdoch’s son, News Corp. Deputy Chief Operating Officer James Murdoch, gave the inquiry details Aug. 24 on the company’s interaction with lawmakers as it sought to buy the 61 percent of British Sky Broadcasting Group Plc (BSY) it didn’t already own. Hunt, the minister who had to rule on the deal, faced calls in Parliament yesterday to resign after e-mails released at the hearing showed leaks to News Corp. during his deliberations.

BSkyB Timing

The elder Murdoch said it was a coincidence News Corp. revealed its plan to take over BSkyB, the U.K.’s biggest pay- television provider, a month after Cameron was elected in May 2010.

“I don’t think we gave any thought to the timing of it except that it would be good to talk to all the directors when they were together,” said Murdoch, who will appear for a second day of questioning today.

News Corp. abandoned the 7.8 billion-pound ($12.6 billion) bid at the peak of the phone-hacking scandal last year.

Shares (NWSA) of News Corp. rose 4 cents to $19.27 in New York trading yesterday.

Murdoch showed skill as a “crafty silver fox” in the way his answers avoided any damage, said Duncan Lamont, a lawyer at Charles Russell LLP who represents some of News Corp.’s broadcast competitors.

Robert Jay, the inquiry’s lawyer who questioned Murdoch, stopped the hearing early yesterday “and will have saved some good stuff for today -- he is crafty too,” Lamont said.

Downing Street Tea

Cameron invited Murdoch to his 10 Downing Street residence in London for tea after the 2010 election, to thank him for the support of his newspapers, Murdoch said. He told the new prime minister his titles would “watch carefully” to make sure he kept his campaign promises, and didn’t discuss BSkyB, he said.

Murdoch and Cameron met repeatedly after the politician became leader of the opposition Conservative Party in 2005, including a 2008 trip where Cameron flew on a Murdoch family member’s jet to meet the Murdochs on a yacht in the Mediterranean, the executive said.

“Politicians go out of their way to impress people in the press, and I don’t remember discussing any heavy political things with him at all,” Murdoch said. “There may have been some issues discussed passingly. It was not a long meeting.”

Smith, Hunt’s special adviser, stepped down yesterday, saying he had “gone too far” in his contacts with News Corp. Hunt told lawmakers that while he had authorized contact, “I didn’t know the volume of those communications or the tone of those communications.”

Cameron told lawmakers that Hunt has his “full support” and should be allowed to stay in his post while the inquiry continues.

Politicians Not Told

“Rupert Murdoch kept stressing that it is a myth that he ever wanted favors from the politicians in return for supporting them,” Mark Lewis, a lawyer for victims of phone hacking, said after the testimony. “It’s a shame that no one ever told the politicians.”

The inquiry, led by Judge Brian Leveson, began last year after evidence emerged that phone hacking at the company’s News of the World tabloid was rampant and police opened probes into bribery and computer hacking by journalists at News Corp.’s other U.K. titles. About 45 people have been arrested, including former News Corp. journalists, and the company closed the News of the World in July in response to public outrage over the scandal.

Political Influence

The review is shedding light on the extent of News Corp.’s political influence since Murdoch started buying British newspapers in 1969. Some phone-hacking victims told the inquiry News Corp.’s U.K. unit was able to cover up the scandal for years due to its links to lawmakers and police.

The comments are Murdoch’s first public testimony since he appeared at a parliamentary committee probing the scandal in July, a day he called the “most humble” of his life. Murdoch said abuses in the U.K. media went beyond voice-mail interceptions by journalists at the News of the World.

Since July, News Corp.’s internal committee probing phone hacking and bribery has “actively cooperated” with London’s Metropolitan Police and the U.S. Department of Justice, turning over evidence of possible illegal activity, Murdoch said yesterday in a statement to the committee.

1981 Lunch

Murdoch also said he never sought to curry favor with politicians when asked about a 1981 lunch with former Prime Minister Margaret Thatcher, when he was buying the Times, or during Tony Blair’s decade in office.

“In the 10 years he was in power, I never asked Mr. Blair for anything, nor indeed did I receive any favors,” Murdoch said. “I try very hard to set an example for ethical behavior.”

James Murdoch said April 24 that he discussed the BSkyB bid with Cameron at a private Christmas dinner in 2010. The “tiny side conversation” took place two days after Cameron had removed responsibility for deciding whether to allow the takeover from Business Secretary Vince Cable, Murdoch said. Cable had been recorded by undercover journalists saying he had “declared war” on the Murdoch family.

In July, Cameron said “the clock has stopped” on Murdoch’s influence over British politics. He made the comment the same month that ex-News of the World editor Andy Coulson, who resigned in 2007, was arrested in the phone-hacking probe. Coulson was Cameron’s press chief until January 2011, when he quit as a result of the scandal.

Regulator Ofcom is examining whether News Corp. is “fit and proper” to own its 39 percent stake in BSkyB. The watchdog opened a separate probe into BSkyB’s Sky News channel this week to investigate e-mail hacking by a reporter.

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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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