May 31 (Bloomberg) -- U.K. Culture Secretary Jeremy Hunt will spend today defending his handling of News Corp.’s bid for British Sky Broadcasting Group Plc, with his career hanging on his testimony.
Prime Minister David Cameron appointed Hunt to rule on the 7.8 billion-pound ($12.1 billion) takeover in December 2010, after Business Secretary Vince Cable had been recorded telling undercover journalists he had “declared war” on News Corp. Chairman Rupert Murdoch. Last month, one of Hunt’s aides resigned after News Corp. released e-mails and texts showing he’d been in constant communication with a company lobbyist during the bid.
Fending off opposition calls for his own resignation, Hunt has argued he should be allowed the chance to defend himself. A whole day at the inquiry into media ethics headed by Judge Brian Leveson has been set aside for his testimony, twice the amount allotted to the four other Cabinet ministers to be questioned in London this week.
“His problem is what appears to have been active collaboration with News Corp.,” Carl Gardner, a former government lawyer and legal commentator, said in an interview. “Those e-mails show his office working with News Corp. to try to change Ofcom’s view,” Gardner said, referring to the broadcast regulator, which had to make a recommendation on the deal to Hunt.
As Leveson turns his inquiry’s focus to politicians, Cameron’s government has found itself in the spotlight, with a third of his Cabinet, including himself, due to give evidence. One aide described the process, with ministers questioned under oath by a trial lawyer, live on television, and their e-mails and text messages published, as a nightmare.
It is also highlighting tensions within the coalition government. Yesterday Cable defended his own behavior toward News Corp., telling the inquiry he had been “seriously disturbed” after colleagues passed on “veiled threats” from the company that his Liberal Democrat Party would be “done over” if he made the wrong decision on the bid.
Cable has previously said his hostility toward News Corp. was vindicated when the company shut down its News of the World newspaper last July, after reports it had hacked the phone of a murdered schoolgirl, prompting Cameron to set up the Leveson probe. The company dropped the BSkyB bid shortly afterward.
Liberal Democrat leader Nick Clegg, the deputy prime minister, has repeatedly contrasted his and Cable’s attitude toward Murdoch with that of Cameron’s Conservatives. Clegg told a meeting on May 29 that until the phone-hacking scandal erupted, “almost the entire political class competed to bow and scrape in front of Rupert Murdoch.”
While Cable refused any meetings with News Corp. when he had responsibility for the bid, e-mails and text messages released to Leveson show the lobbyist, Fred Michel, in constant contact with Hunt and his aide, Adam Smith. Hunt and Michel, whose wives gave birth in the same hospital, exchanged texts referring to each other as “Daddy” and “Papa,” even after Hunt was given responsibility for the bid and said all communication should go through Smith.
Robert Jay, the lawyer for the inquiry, said on May 24 that Michel had made 191 phone calls and sent 158 e-mails and 799 text messages to Department of Culture, Media and Sport officials, 90 percent of them to Smith. Jay said Michel’s internal e-mails referred to Hunt’s office being supportive of the bid in a way that wasn’t made public, including saying News Corp.’s concessions in the deal meant it was “game over” for those who opposed it.
Hunt and Smith both chose to use Google Inc.’s web-mail service rather than their official e-mail accounts to discuss the bid. Hunt’s office hasn’t returned calls asking why. One text message showed Smith asking Michel to send a document to his Google account, rather than his official one.
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