Hunt Memo to Cameron on News Corp. Raises Impartiality Questions

U.K. Culture Secretary Jeremy Hunt told Prime Minister David Cameron he backed News Corp.’s planned takeover of British Sky Broadcasting Plc a month before Cameron appointed him to review the bid, a media-ethics probe heard.

“The U.K. has the chance to lead the way, but if we block it, our media sector will suffer for years,” Hunt wrote in a draft of a note he sent to Cameron on Nov. 19, 2010. The note was read out to the inquiry in London yesterday. Hunt wrote that it would be “totally wrong to cave into” demands that the offer be rejected on media-plurality grounds.

Cameron set up the Leveson Inquiry last year partly to fend off criticism that his Conservative Party was too close to Rupert Murdoch’s News Corp. (NWSA) It’s turned its attention this week to the government’s handling of the BSkyB bid, over which Hunt and the premier insist they acted properly. Yesterday’s disclosure raises new questions about Cameron’s and Hunt’s impartiality.

Cameron was forced to transfer responsibility for the bid to Hunt in December 2010, after Business Secretary Vince Cable, who was previously in charge, was recorded by undercover reporters saying he’d “declared war” on Murdoch. News Corp. dropped the 7.8 billion-pound ($12.2 billion) offer for full control of BSkyB in July last year to help contain the phone- hacking scandal at its News of the World tabloid.

The U.K.’s top civil servant, Gus O’Donnell, declared in December 2010 that previous public statements by Hunt in favor of News Corp. didn’t compromise him. Cameron’s office didn’t immediately comment on whether the prime minister had told O’Donnell about Hunt’s memo.

‘Impartial Arbiter’

David Cameron gave responsibility to Jeremy Hunt for deciding on the BSkyB bid when he knew only too well that the culture secretary was actively supporting the bid,” the opposition Labour Party’s deputy leader, Harriet Harman, said in an e-mailed statement. “The prime minister should never have given him the job. It is clear that Jeremy Hunt was not the impartial arbiter he was required to be, and he should already have resigned.”

The inquiry heard yesterday from Fred Michel, a News Corp. lobbyist, and Hunt’s former special adviser, Adam Smith, who resigned last month after News Corp. released internal e-mails to the inquiry showing he’d given Michel inside information on Hunt’s thinking. The culture secretary’s future in his job depends on successfully arguing that Smith was acting without his approval.

Michel said he’d been under the impression that Smith was acting on Hunt’s behalf. “For me it’s self-evident that a special adviser is someone who represents the secretary of state,” he told the inquiry. “There are two or three events when I had the impression that some of the feedback I was given had been discussed with the secretary of state before it was given to me.”

Quasi-Judicial Role

Smith, who’ll return tomorrow for more testimony, said officials in Hunt’s department had been aware he was in contact with Michel and hadn’t raised objections. He said he believed that Hunt’s “quasi-judicial” role in deciding on the BSkyB bid didn’t extend to his advisers.

Michel also said that Gabby Bertin, one of Cameron’s press advisers, had sent supportive messages to Rebekah Brooks, then the chief executive officer of News Corp.’s U.K. publishing unit, following the revelation in July last year that the News of the World had hacked the phone of a murdered schoolgirl in 2002. He said he didn’t know the content of the messages, though he’d been asked by Brooks to pass on her thanks.

Brooks, a friend of Cameron’s, was charged this month with trying to cover up the phone-hacking scandal.

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To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net.

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