May 31 (Bloomberg) -- Culture Secretary Jeremy Hunt congratulated News Corp.’s James Murdoch about European Union approval of the company’s bid for British Sky Broadcasting Group Plc hours before he was given oversight of the bid in the U.K.
“Great and congrats on Brussels,” Hunt told Murdoch, then head of News Corp. in Europe and chairman of BSkyB, in a text message on Dec. 21, 2010.
In a phone call that afternoon, Murdoch told Hunt of his outrage at comments by Business Secretary Vince Cable to undercover reporters that he’d “declared war” on Murdoch’s father Rupert, the News Corp. chairman, the minister disclosed to a media-ethics probe in London today..
Hunt then texted Chancellor of the Exchequer George Osborne saying he was “seriously worried we are going to screw this up.” Osborne replied: “I hope you like the solution!” Hours later, Prime Minister David Cameron stripped Cable of responsibility for reviewing the bid and gave Hunt the job.
Hunt denied he’d been biased in favor of News Corp.’s 7.8 billion-pound ($12.1 billion) offer. A close aide to the culture secretary resigned after texts and e-mails released to the inquiry showed he’d given private information about his boss’s thinking on the bid and suggested he’d asked for help making the case for it to Ofcom. Hunt is fighting to stay in his job amid calls from the opposition Labour Party for him to resign.
Hunt said that before he took on his oversight role he’d been openly in favor of the deal, which he believed would create jobs and wouldn’t present competition concerns, since New York-based News Corp. already effectively controlled BSkyB with a 39 percent stake. Hunt’s own website included a magazine interview in which he was called a “cheerleader” for the company.
Still, Hunt said, acting in a so-called quasi-judicial role to rule on the deal didn’t mean he felt he had to make a decision with “your brain wiped clean.” He said he set personal preferences aside and relied on regulators.
“I had put aside my policy priorities in this area,” Hunt said at the inquiry headed by Judge Brian Leveson. “Media plurality is a much, much higher-order decision. It’s about the health of the democracy. That was my priority.”
By April 2011, News Corp. had discovered that phone hacking at its News of the World newspaper, which it previously said was limited to a single reporter, was in fact more widespread. Hunt asked for legal advice on whether he should consider hacking in his review of the deal.
‘Issue in Trust’
“The one way that phone hacking could impinge was that there was an issue in trust,” he said. “You had to be confident you could trust the people you were doing a deal with. At that stage it was a matter with News International,” the company’s U.K. publishing unit, and didn’t reflect on News Corp.’s senior management.
News Corp. lobbyist Fred Michel expressed a desire to get the deal approved rapidly in communications with Hunt’s aide, Adam Smith, who resigned last month after the frequency of their contacts was disclosed at the inquiry.
Michel asked Smith on May 29 if the company would be able to get a decision by June 24, which would be “in everyone’s interest,” according to e-mail messages that News Corp. provided to the inquiry. On June 15, he sent another asking, “How do we get things moving?” and complaining that Hunt’s department was moving too slowly.
“We didn’t know that this was a volcano that was about to erupt,” Hunt said. “We were just looking at evidence in the media.”
The eruption came in July, when the Guardian newspaper reported that the News of the World had hacked into the voice mail of a murdered schoolgirl. News Corp. was forced to close the Sunday tabloid, Britain’s biggest-selling newspaper, and withdrew the offer for BSkyB.
Hunt said that before he was given oversight of the bid in 2010, he thought it was “entirely appropriate and proper to have contact with stakeholders” in the bid in his position as the Cabinet minister responsible for the media.
The culture secretary called James Murdoch from his mobile phone in November 2010 after being told by officials that it would be inappropriate to meet him.
Hunt said he hadn’t wanted to hold the formal meeting, because “that would be getting involved in a parallel process” to Cable’s deliberations.
He subsequently sent Prime Minister David Cameron a note requesting they meet with Cable to discuss the bid and saying Murdoch was angry about the way the business secretary was dealing with the offer.
“I do now understand a lot more about quasi-judicial decisions,” Hunt said. “It’s been pretty much engraved on my brain. I now realize it would not have been possible for Vince Cable to attend such a meeting and he would have received very strong advice not to attend such a meeting.”
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