News Corp. Workers Pay Price for U.K. Checkbook Reporting

Journalists at Rupert Murdoch’s best-selling Sun tabloid in Britain are paying for a culture of bribery that may have been an industry standard until scrutiny from News Corp. (NWSA)’s phone-hacking scandal put an end to it.

Even as reporters at Murdoch’s competitors start to be arrested, the bribery case will focus on News Corp. (NWSA) because its internal investigators are scouring documents and turning over evidence to police, said Roy Greenslade, a newspaper columnist and journalism professor at London’s City University. That process isn’t being replicated at other British publishers, where such payments were likely typical, he said.

“The checkbook is a common way of obtaining stories across all tabloids -- it’s part of the trade, it’s part of the code,” said Greenslade, a former Daily Mirror editor who also worked at the Sun and Murdoch’s Times. “If someone asks for money, be they a prostitute or a policeman, I imagine the newspaper would pay,” he said, without referring to a specific title.

The Metropolitan Police Service has arrested 44 people in the bribery probe, known as Operation Elveden, including reporters, editors, police officers, health-care workers and a prison employee detained today. The case, triggered by evidence uncovered in the underlying phone-hacking case, is still leading to arrests of Sun journalists as News Corp. tries to move on from the scandals that have cost it at least $315 million in legal fees and other costs.

20 Journalists

About 20 Sun journalists have been arrested for bribery, including royal editor Duncan Larcombe, who writes about Prince William and his wife Kate Middleton, now the Duchess of Cambridge. That’s double the employees detained over phone hacking at New York-based News Corp.’s now-defunct News of the World tabloid, where the scandal started.

Murdoch’s competitors were drawn into the bribery affair in July when a reporter for the Daily Star Sunday, published by Northern & Shell Plc, was arrested, followed by detainments of one current and one former journalist for Trinity Mirror Plc (TNI), publisher of the Daily Mirror and the Sunday Mirror.

“It would have been naive to assume that some of these issues could not extend to some other newsrooms,” Douglas McCabe, a media analyst at Enders Analysis in London, said in an e-mail about the arrests going beyond News Corp.

Trinity Mirror spokesman Rupert Smith declined to comment. He has previously said the company is cooperating with police. Sam Bowen, an outside spokesman for Northern & Shell, and News International spokeswoman Daisy Dunlop also declined to comment.

‘Endemic’ Criminality

Labour Party lawmaker Chris Bryant, a victim of phone hacking who reached a settlement with News Corp., said criminality at the company’s tabloids was “endemic.”

Illegal behavior was “promoted as a standard way of doing business and then covered up,” Bryant said in an e-mail.

The bribery probe was never intended to focus only on News Corp., a Metropolitan Police Service spokesman said in a phone call. “The MPS has always made it clear that officers will go where the evidence leads them,” he said.

Details of how News Corp.’s U.K. unit, News International, allegedly paid for stories emerged in a lawsuit by a former employee. Matt Nixson, an ex-features editor at the Sun who previously worked at the News of the World, sued for wrongful termination after he was fired over claims he approved a payment to a prison official for information about a murderer.

Page Lead

The News of the World usually paid 750 pounds for a “page lead” scoop and offered 1,000 pounds ($1,200) for particularly compelling tips, Nixson, who hasn’t been arrested, said in court papers. He said he didn’t realize the prison payment was wrong because the company’s code of conduct only prohibited payments to criminals and witnesses in criminal trials, and that payments to civil servants were frequent.

The Met doesn’t have a reason to demand the same kind of search for evidence from News Corp.’s competitors because doing so could amount to a “fishing expedition,” said Greenslade, who said he never approved of or witnessed such illegal payments.

After lawmakers accused News Corp. of hindering past probes that failed to uncover the extent of phone hacking, the company created an internal panel to investigate wrongdoing at its U.K. papers and cooperate with police. The panel, the Management and Standards Committee, angered journalists who said their sources were being compromised to save the company’s reputation.

Police have had an “unprecedented relationship” with the News Corp. investigators who are “prepared to disclose documents to us in a way that hadn’t been done in years gone by,” Sue Akers, the MPS officer leading the investigations, told lawmakers Sept. 4.

Protocol Cooperation

While News Corp.’s competitors aren’t dealing with the same internal and external scrutiny, Northern & Shell’s Express Newspapers unit has agreed to a “protocol” for cooperation, Akers said. Seventy officers are working on the bribery investigation, she said.

Chris Frost, chairman of the ethics council at the National Union of Journalists in Britain, said reporters didn’t use their own money for payments and executives were careful not to ask too many questions.

“Newspapers often make payments to people who give them story ideas or information,” Frost, who is also a journalism professor at Liverpool John Moores University, said in a phone interview. “The key question is less whether journalists should have paid for it, but should officials have sold it?”

While paying for stories isn’t always illegal, it amounts to bribery when a public official gives information pertaining to their jobs, Greenslade said.

Serious Offenses

The Met started the phone-hacking probe in January 2011, after earlier investigations in 2006 and 2009 failed to uncover the conspiracy. The bribery investigation was spawned when Ken Macdonald, Britain’s former top prosecutor who was hired by News Corp. to advise its board on the phone-hacking scandal, found additional evidence of what he called serious criminal offenses.

Macdonald declined to comment for this story. When he was asked about the file by lawmakers in July 2011 probing News International, he said, “I can’t imagine anyone looking at that file and not seeing crime on its face.”

Mark Lewis, one of the first lawyers representing victims of phone hacking, said bribery spread across the industry as journalists moved from title to title and took sources with them. He said News Corp. should suffer the consequences even if other publishers aren’t hit as hard.

News Corp. “is not paying the price for others,” Lewis said. “If convicted, they pay the price for what they did.”

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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