Two Whirlwind Weeks That Changed News Corp. and Brooks

That fateful summer’s day, Rebekah Brooks was at a fertility clinic in London with her cousin, who was to be a surrogate mother for the News Corp. (NWSA) executive after several failed attempts to have a child.

It was there, perhaps at her most vulnerable, on Monday July 4, 2011, that Brooks found out the Guardian newspaper was to publish allegations that journalists at the News of the World had hacked the voice mail of a missing teenager, Milly Dowler, who was later found murdered. Brooks had been editor of the News Corp. Sunday tabloid at the time of the hacking in 2002.

That news story set in train events over two whirlwind weeks that saw the closing of the 168-year-old weekly, Britain’s biggest-selling newspaper, Brooks’s resignation as head of News Corp.’s U.K. unit, police raids and arrests. News Corp. Chairman Rupert Murdoch was forced to drop a bid for full control of British Sky Broadcasting Group Plc. (BSY) Yesterday, just under three years later, Brooks was cleared by a London court of charges of phone hacking, bribery and perverting the course of justice.

“First of all, I didn’t believe it,” Brooks said of the moment she heard about the Guardian story during her testimony at the trial. “Shock, horror, everything.”

Photographer: John Phillips/Getty Images

Rebekah Brooks leaves the Old Bailey after being cleared of charges of phone hacking, bribery and perverting the course of justice in London, on June 24, 2014. Brooks, 46, and six other defendants, including her husband Charlie, spent almost eight months on trial for alleged wrongdoing over a decade at the News of the World and another News Corp. tabloid, the Sun. Close

Rebekah Brooks leaves the Old Bailey after being cleared of charges of phone hacking,... Read More

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Rebekah Brooks leaves the Old Bailey after being cleared of charges of phone hacking, bribery and perverting the course of justice in London, on June 24, 2014. Brooks, 46, and six other defendants, including her husband Charlie, spent almost eight months on trial for alleged wrongdoing over a decade at the News of the World and another News Corp. tabloid, the Sun.

Brooks, 46, and six other defendants, including her husband Charlie, spent almost eight months on trial for alleged wrongdoing over a decade at the News of the World and another News Corp. tabloid, the Sun. Charlie Brooks and three others were also cleared, while former News of the World editor Andy Coulson was found guilty of hacking. The jury is still considering further charges against Coulson and another defendant.

Guardian Blamed

After the allegations first broke, Brooks laid the blame on other media organizations and politicians in the opposition Labour Party around former Prime Minister Gordon Brown, according to an e-mail read out by prosecutors during the trial.

“This is a proper Guardian/BBC/old Labour hit,” she wrote to the then editor of News Corp.’s Times newspaper, James Harding, on Tuesday July 5.

Even as a public outcry gathered momentum, there were messages of support -- from former U.K. Prime Minister Tony Blair, CNN talk-show host Piers Morgan, a previous editor of the News of the World, and Education Secretary Michael Gove.

“Let me know if there’s anything I can help you with,” Blair wrote in a July 5 text message introduced by prosecutors as evidence. “Thinking of you. I’ve been through things like this.”

Photographer: Rob Stothard/Getty Images

Andy Coulson, former News of the World editor and Downing Street communications chief, center, leaves the Old Bailey after being found guilty of hacking in London, on June 24, 2014. The jury is still considering further charges against Coulson and another defendant. Close

Andy Coulson, former News of the World editor and Downing Street communications chief,... Read More

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Photographer: Rob Stothard/Getty Images

Andy Coulson, former News of the World editor and Downing Street communications chief, center, leaves the Old Bailey after being found guilty of hacking in London, on June 24, 2014. The jury is still considering further charges against Coulson and another defendant.

‘Brilliant’ Murdochs

“Thank you, I know what’s it’s like. GB pals getting their own back. Rupert and James have been brilliant,” Brooks replied, referring to Murdoch and his son. “Hopefully even in this climate the truth will out.”

The week that followed saw regular exhortations from Murdoch to Brooks not to give in to demands to resign until the pair had met face-to-face.

Brooks received “horrific death threats” as a “sexist witch hunt” ensued, she said during her testimony.

With pressure mounting on the government to delay a decision on the proposed takeover of BSkyB, the U.K.’s biggest pay-television broadcaster, Prime Minister David Cameron announced July 6 there would be an inquiry into the hacking scandal, which he called “absolutely disgusting.” Opposition leader Ed Miliband joined the clamor for Brooks to step down.

Murdoch described the hacking revelations as “deplorable and unacceptable” in a statement on Wednesday July 6, while backing Brooks as head of the company’s U.K. unit, News International.

Final Edition

The following day Brooks spoke to all News of the World staff at a town-hall meeting, informing them that the coming Sunday’s edition would be the last.

“The News of the World is in the business of holding others to account,” James Murdoch, News Corp.’s deputy chief operating officer, said in a statement to staff that day. “But it failed when it came to itself.”

Meanwhile, Rupert Murdoch phoned Cheryl Carter, Brooks’s assistant, urging her to stop her boss from quitting.

“He wanted to make sure I was looking after her and he said ‘Please, do not let Rebekah resign,’” Carter said during her testimony in March.

Against this frenetic backdrop, prosecutors said during the trial, people close to Brooks began to put in place plans to hide evidence from police. Between July 6 and July 9, Carter conspired with Brooks to remove seven boxes of notebooks from the News International archive, showing Brooks had something to hide, they alleged. The pair denied the accusations.

Carter was cleared yesterday by the jury of obstructing justice.

Plan B

With work under way on the final edition of the News of the World, Brooks’s thoughts turned to the management of the scandal, as seen in an e-mail sent to James Murdoch entitled “Plan B.” That suggested that blame might be laid at the doors of company executives including Les Hinton, the then chief executive officer of News Corp.’s Dow Jones unit, and Colin Myler, the newspaper’s final editor.

The “result of a report when published would slam Les, Colin, etc. and vindicate my position (or not),” she said in the e-mail sent at 7:16 a.m. on Friday July 8, which was revealed by prosecutors.

“I am ring-fenced clearly and properly,” she said. “It will be written as a slippery slope for me but I hardly have any reputation left.”

Coulson Arrested

Away from the hubbub of News Corp.’s London offices, the police investigation into phone hacking and corruption claimed its first major scalp in the shape of Coulson.

The former News of the World editor, who went on to become a media adviser to Cameron, was arrested July 8 and held at a south London police station on suspicion of phone hacking and making illegal payments to public officials. The newspaper’s former royal reporter, Clive Goodman, was also arrested.

The jury is still considering bribery charges against Coulson and Goodman.

On Saturday July 9, with Rupert Murdoch scheduled to fly to the U.K. the next day and a meeting with James Murdoch penciled in, Brooks’s mother arrived at her farm, Jubilee Barn near Chipping Norton in Oxfordshire, to offer emotional support to her daughter.

As the final issue of the News of the World was sent to the presses, plans were put in place by the company to seal the offices, remove desks and documents in order to co-operate with the police probe.

Murdoch Meeting

On the morning of Sunday July 10, Brooks and her husband traveled from their Oxfordshire home to James Murdoch’s house, around a 25-minute journey, to discuss the handling of the furor and the fate of the BSkyB bid.

The main event of the day, though, was a meeting with Rupert Murdoch. From Oxfordshire, Brooks drove to London to see him for the first time since the Dowler revelations became public.

It was then that Brooks tendered her resignation, which Murdoch refused to accept.

“It really was now time, with the closure of the News of the World,” Brooks told the court. “I felt that it was probably the right thing to do.”

Murdoch and Brooks appeared in the street outside his Mayfair apartment, to be surrounded by photographers and television crews. What was his priority now, Murdoch was asked. “This one,” he said, gesturing at Brooks.

Blair Contact

A second exchange between Brooks and Blair, revealed by prosecutors, began July 10. Blair opened with “Hi it’s Tony.” They made arrangements to speak by phone the following day, with Brooks replying: “Can’t wait xx.”

Brooks, by now exhausted, was ordered to stay away from the office to rest. Even so, she spoke to Blair for about an hour on Monday July 11, passing on her notes to James Murdoch in an e-mail that was read to jurors.

During the conversation, Blair offered to act as an unofficial adviser to Brooks and the Murdochs, urging her to set up an independent inquiry to probe the allegations.

“Keep strong and definitely sleeping pills,” Blair said, according to the e-mail. “Need to have clear heads and remember no rash short-term solutions as they only give you long-term headaches.”

Bid Dropped

Culture Secretary Jeremy Hunt referred News Corp.’s offer for BSkyB to U.K. antitrust regulators on July 11. Two days later, the bid was abandoned as the Murdochs attempted to limit the fallout from the hacking scandal.

Brooks finally resigned Friday July 15, saying in a statement that she didn’t want to be the “focal point of the debate” any longer. She was escorted from the company’s London offices with nothing but her handbag, a soft case and her disabled BlackBerry, Jane Viner, News International’s head of facilities, said during the trial.

“I’m really sorry about it all,” Blair said in a text July 15. “Call me if you need to. T x.”

On the same day, Hinton resigned as CEO of Dow Jones and Rupert Murdoch met with the family of Milly Dowler to apologize, while News International ran apology advertisements in all British newspapers.

The police investigation was now closing in on Brooks.

‘Properly Terrified’

“Properly terrified,” Brooks said in a flurry of text messages to Blair on Saturday July 16. “Police behaving so badly.”

“Everyone panics in these situations and they will feel they have their reputation to recover,” Blair replied.

Brooks was arrested on Sunday July 17 in a parking garage below a police station in southeast London over phone-hacking and bribery allegations.

“As I got out of the car, the police officer arrested me there and then,” Brooks said as she testified in March. She spent 12 1/2 hours in custody, declining to answer any questions aside from providing police with a prepared statement.

While she was in custody Charlie Brooks and a security detail put in motion a complex series of maneuvers to prevent police, who were searching properties in London and Oxfordshire, from finding laptops, prosecutors said during the trial. As dramatic as prosecutors made the operation sound, jurors cleared both Brookses, Carter and a News Corp. security guard of charges related to obstruction of justice.

Charlie Brooks and a team of security guards exchanged a series of texts and calls coordinating the return of a laptop under the guise of delivering a pizza.

Trash Bins

“Broadsword calling Danny Boy. Pizza delivered and chicken is in the pot,” read a text sent from one security guard to another, referring to a line from the 1968 film “Where Eagles Dare.” The scheme was frustrated when a cleaner found the laptop in a bag behind trash bins and turned it in.

Charlie Brooks spent the rest of the day at the couple’s London apartment waiting for news of his wife. He told the court a friend, Chris Palmer, arrived and they drank wine before ordering two pizzas.

“At that point we wanted a bit of blotting paper,” he said. “We had drunk six bottles of red wine that night. I was glued to Sky News. There was precious little information coming out of the police station.”

When Brooks returned to the flat, she told the court, she found her husband “several sheets to the wind.” Among the hidden items, now missing, was Charlie’s “rather large porn collection.”

In two short weeks, Rebekah Brooks’s world had spun out of control from one of the nation’s most powerful media personalities to a national pariah facing the prospect of a criminal trial.

Just over six months later, though, there was happier news for the Brookses. Rebekah’s cousin, the surrogate mother, gave birth to a baby girl, Scarlett, on Jan. 25, 2012.

For News Corp. too, the affair brought about lasting change. On June 28, 2012, Murdoch announced the company was being split in two, with the film and television assets being separated from the scandal-tainted publishing business as 21st Century Fox Inc.

Despite hacking costs that exceeded $500 million, the market value of the companies has doubled since before the scandal, together totaling almost $90 billion.

To contact the reporter on this story: Jeremy Hodges in London at jhodges17@bloomberg.net

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

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