March 5 (Bloomberg) -- The Metropolitan Police commissioner who resigned as a result of News Corp.’s phone-hacking scandal told a judge-led inquiry into media ethics that commanders were “obsessed” with their portrayals in tabloid headlines.
Paul Stephenson, who led the force during part of the voice-mail interception probe of News Corp.’s News of the World newspaper, said it was difficult for himself and others to ignore media reporting that was often “unfair.” The scandal at Rupert Murdoch’s U.K. unit triggered the inquiry in London.
“It is very difficult if you are the subject of unfair reporting,” Stephenson said at the inquiry in London today. “It’s very difficult to be very detached about it, so one can become obsessed about the headlines.”
As the extent of the phone-hacking scandal became apparent in July, Stephenson resigned over his links to a former News of the World executive editor, Neil Wallis, who was hired as a public relations adviser to the police. Wallis was arrested in the hacking probe three days before Stephenson stepped down.
News Corp. is now the subject of three investigations, including a police-bribery probe that resulted in 11 arrests of current and former journalists at its Sun tabloid. Murdoch closed the 168-year-old News of the World in July to try to contain public anger after it was revealed reporters had hacked into the mobile-phone messages of a murdered schoolgirl in 2002.
Champneys Health Resort
Stephenson said he decided to resign when a newspaper reported that Wallis was a media consultant for the Champneys health resort when he stayed there following surgery on his leg. One of his deputies, John Yates, resigned amid allegations he wrongfully secured a job for Wallis’s daughter.
Stephenson also told the inquiry, led by Judge Brian Leveson, that he suspected members of the force’s management board were leaking to reporters, leading to “disharmony” at the force known as Scotland Yard.
“There were stories about conversations in the private management board that I can’t imagine how they would have got there any other way,” Stephenson said. “There was a little too much gossiping about things that ought to be confidential.”
Stephenson told a lawyer for the inquiry today he often paid for drinks and meals with newspaper editors and frequently met them after he became deputy commissioner in 2005 and commissioner in 2009. Several of the meetings were with Wallis, he said.
Press, Police Relationship
The inquiry into the relationship between the press and police was called for after earlier probes of voice-mail interceptions at Murdoch’s Sunday tabloid in 2006 and 2009 failed to uncover the extent of the practice. An inquiry lawyer, Robert Jay, said last week the public feared the police and News Corp.’s U.K. unit, News International, had a possibly “corrupt” relationship.
Elizabeth Filkin, the former head of investigations into wrongdoing in Parliament, told Leveson today about an internal police report she published in January about the relationship between the force and the press. Her study found police were too close to the media and that officers should beware of drinking with reporters and potential “flirting” by journalists.
“Most of the people I spoke to in the Met felt there was excessive hospitality” with the press, Filkin said today. “People were saying it isn’t a proper thing for public servants” who must be seen as independent “to be receiving a lot of hospitality from particular individuals or businesses.”
‘Calling in Favors’
Filkin also said there is a problem with former Met employees “very quickly joining the media” or becoming private investigators and “calling in favors” from the police force.
In a related matter, the FBI is investigating allegations that a billboard company formerly owned by News Corp. bribed Russian officials in violation of the U.S. Foreign Corrupt Practices Act, according to a person familiar with the matter.
The Federal Bureau of Investigation’s New York office is already monitoring a probe by U.K. police into allegations that journalists at the company’s British newspapers paid police officers and government officials for story tips.
Now the FBI is investigating whether News Outdoor Russia, a billboard company News Corp. sold in July, paid bribes to local officials to secure the best sites for its outdoor ad messages, according to the person, who refused to be identified because the investigation isn’t public.
The expansion of the existing FCPA probe to unrelated activities in Russia is standard practice during corruption investigations, the person said. Whenever there’s an FCPA inquiry, investigators try to review the subject company’s behavior around the world, not just in one location, the person added.
As for the U.K. investigation, it isn’t clear whether U.S. prosecutors would interpret the U.K. payments as a violation of the FCPA, which was originally intended to stop payments to foreign government officials to gain a competitive advantage.
Julie Henderson, a spokeswoman for News Corp., declined to comment on the Russia matter. The billboard investigation was reported earlier in the Wall Street Journal.
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