May 25 (Bloomberg) -- Prime Minister David Cameron defended his December 2010 decision to put Culture Secretary Jeremy Hunt in charge of reviewing News Corp.’s bid for British Sky Broadcasting Group Plc, rejecting accusations of partiality.
The U.K.’s media-ethics inquiry heard in London yesterday that Hunt had written Cameron a memo a month earlier arguing that if the deal was blocked, “our media sector will suffer for years.” The prime minister said today that Gus O’Donnell, then his top civil servant, hadn’t been aware of the memo when he judged that Hunt could adjudicate fairly on the deal.
“He didn’t know about that e-mail, but he was in possession of what Jeremy Hunt had said publicly, which was more effusive, more powerful” in support of the offer, Cameron told ITV television. “The really crucial point is: did Jeremy Hunt carry out his role properly with respect to BSkyB, and I believe that he did.”
Hunt, whose future in the Cabinet hangs on arguing successfully that he behaved appropriately, will testify at the inquiry headed by Judge Brian Leveson next week. The opposition Labour Party has repeated calls for his resignation. The top official in Hunt’s department told the probe today the minister aimed to be fair and unbiased, though his special adviser, Adam Smith, grew too close to a News Corp. lobbyist.
Next week’s hearings will also see the appearance of Tony Blair, who courted the support of News Corp. Chairman Rupert Murdoch in the 1990s in his bid to become prime minister.
The inquiry, set up last year in the wake of the phone-hacking scandal at News Corp.’s News of the World tabloid, is hearing from politicians about their dealings with the media. Blair will testify on May 28 and Hunt on May 31, according to a schedule posted on the inquiry’s website.
Home Secretary Theresa May will testify at the inquiry on May 29 and Business Secretary Vince Cable on May 30. Cable originally had responsibility for the BSkyB bid before Hunt. Cameron stripped him of that task after he was recorded by undercover reporters saying he’d “declared war” on Murdoch.
Hunt’s former aide, Adam Smith, was asked to resign last month for passing information to News Corp. on the culture secretary’s thinking while he was deciding on the 7.8 billion-pound ($12.2 billion) bid, which the New York-based company abandoned in July last year to help contain the phone-hacking scandal at its News of the World tabloid.
‘Have to Go’
“Everyone here thinks you have to go,” Smith said Hunt told him after his e-mail exchanges with News Corp. lobbyist Fred Michel became public as part of the Leveson inquiry’s questioning of Murdoch and his son James.
Smith said that while he didn’t disclose anything inappropriate to Michel, he regretted the casual tone of the communications and appearing to sympathize with the lobbyist.
Jonathan Stephens, the senior civil servant in the Department of Culture, Media and Sport, said he thought Smith, whom he described as “the best and the straightest of all the special advisers” had been made aware on several occasions of the rules that limited contact between the government and News Corp. during the takeover review.
The extent of communication between Michel and Smith “was far beyond what would be considered appropriate,” Stephens told the inquiry. “There was an undisputed degree of contact that hugely surprised me.”
Smith told the inquiry yesterday that Hunt and other officials in the department had been aware that he was in contact with Michel though “I don’t think they knew the volume or the extent.”
No ‘Specific Instruction’
He said in a written statement that “I had not received any specific instruction as to how I should deal with the contact I received from News Corp.”
Michel told the inquiry yesterday 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 said. “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.”
In messages released as part of Michel’s testimony, Hunt told the lobbyist repeatedly to go to Smith with questions. Smith told the inquiry it was his job to screen questions and information from Michel for Hunt.
Hunt and Michel also sent messages back and forth in 2010, according to transcripts released today. In July 2010, Hunt texted Michel “Merci, papa,” after the two men had children born on the same night in the same hospital. In October, Michel wrote to Hunt, “You have stamina, daddy!”
The text messages also show that on July 6, 2011, two days after the news broke that the News of the World had hacked the phone of a murdered schoolgirl, Cameron’s director of communications, Craig Oliver, had dinner with Michel. Oliver, who had returned the previous evening from a visit to Afghanistan with the prime minister, requested a “discreet” location. What they discussed isn’t recorded.
They also show Michel trying to get government aides to attend a concert by the band Take That with him two days earlier. Oliver and Rupert Harrison, adviser to Chancellor of the Exchequer George Osborne, were both invited.
Smith’s correspondence showed he and Hunt used Google Inc.’s webmail service to correspond about the News Corp. bid. In September last year, officials at the Department for Education tried unsuccessfully to argue that such communications by ministers and their aides were exempt from freedom-of-information legislation.
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