James Murdoch did not cover up Goodman details: law firm (Reuters)

LONDON (Reuters) – News Corp executive James Murdoch did not try to cover up the truth by blacking out sections of an incriminating letter written by disgraced News of the World royal reporter Clive Goodman, lawyers acting for the company said Thursday.

The lawyers said they, not Murdoch, made the redactions, following the advice of London police.

The 2007 letter published Tuesday said ex-editor Andy Coulson had banned talk in editorial meetings of phone-hacking but not the practice itself, suggesting that the illegal newsgathering method was widely known about.

Murdoch sent an edited version of the letter to a British parliamentary committee investigating the phone-hacking as part of a submission answering further questions from the committee following his personal appearance in parliament last month.

Law firm Harbottle & Lewis also sent an edited but much fuller form of the same letter to the committee as part of its own submission in explanation of its conduct in advising News International, the British newspaper arm of News Corp.

The differences between the two redactions attracted attention, as Murdoch's had blacked out mention of Coulson, the editorial meetings, and a promise to Goodman that he could have his job back if he did not implicate anyone else at his trial.

Goodman was sentenced to four months in jail in 2007 for phone-hacking. He was characterized by the News of the World as a "rogue" reporter acting alone until earlier this year, when the company acknowledged that the practice was more widespread.

British police investigating the scandal have arrested a senior Hollywood reporter at the tabloid, James Desborough, a source with knowledge of the situation said Thursday -- the 13th arrest in the inquiry this year.

Goodman's letter was written to News International's then executive chairman, managing editor and head of human resources in an appeal against his dismissal.

Law firm Linklaters wrote on Thursday: "There has been some media comment over the last two days suggesting that News International made these redactions in order to 'cover up' the truth. That is not correct."

"The redactions were made following guidance from the Metropolitan Police. Those redactions were made by a partner in this firm. No News International or News Corporation officer or employee took any part in deciding what to redact.

Murdoch is likely to be recalled by the parliamentary committee to answer further questions, along with senior ex-colleagues who have contradicted key evidence he gave to the committee last month.

(Reporting by Georgina Prodhan, editing by Rosalind Russell)

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UK lawmakers likely to recall James Murdoch on hacking (Reuters)

LONDON (Reuters) – British lawmakers said on Friday it was likely they would recall News Corp's James Murdoch to clarify evidence on phone hacking he gave to a parliamentary committee following claims his testimony was "mistaken."

Parliament's Culture, Media and Sport Committee said it would write to Murdoch to ask for more details about evidence he gave earlier this month about hacking allegations at the News of the World tabloid that has shaken his father Rupert's media empire.

The two Murdochs, along with former News International chief executive Rebekah Brooks, appeared before the committee on July 19 when they were pressed about phone-hacking and payments to police by News of the World reporters.

"We are going to write to ask for further details on areas where evidence is disputed," said the committee's chairman John Whittingdale.

James Murdoch has already told the lawmakers he stands by his testimony in a letter dated July 22 and released by the committee on Friday.

While the committee voted against immediately recalling Murdoch, chairman of British newspaper arm News International, Whittingdale said it was likely he would be recalled at a later date over claims some of his original testimony was wrong.

Tom Crone, News International's former top legal officer, and Colin Myler, editor of the News of the World until it was shut down earlier this month, have disputed some of James Murdoch's evidence.

Murdoch said he had not been in possession of all the facts when he approved a large payout in 2008 to English soccer executive Gordon Taylor, one of the phone-hacking victims.

But in a statement, Myler and Crone said they had told him of a 2005 email which suggested phone hacking at the tabloid was more widespread than a single "rogue reporter," as News Corp had until recently maintained.

The paper's royal reporter Clive Goodman and private detective Glenn Mulcaire were jailed in 2007 for intercepting the voice messages of royal aides.

Whittingdale said the statement had "raised questions over some of the evidence that we have received" and they would also be contacting Crone and Myler.

ORAL EVIDENCE

"If they come up with statements which are quite plainly different to those given to the committee by James Murdoch, we will want to hear James Murdoch's response to that, and chances are that may well involve oral evidence again as well," he said.

Lawyers Harbottle and Lewis, who have also faced criticism over their role in an internal News International investigation into phone hacking in 2007, will also be asked by the committee for details of their work.

Later, Mulcaire issued a statement through his lawyer saying he was not acting on his own initiative when intercepting phone messages while in the pay of the newspaper.

"He (Mulcaire) was effectively employed by News of the World from 2002 to carry out his role as a private investigator ... he admits that his role did include phone hacking," the statement said.

"As an employee he acted on the instructions of others.

Any suggestion that he acted in such matters unilaterally is untrue," the statement added.

Allegations of hacking at News Corp's British newspapers, in particular reports that journalists accessed the voicemails of murder victims, have triggered a judicial inquiry and calls from some politicians to cap News Corp's media ownership.

It has already led to News Corp dropping its $12 billion bid for the 61 percent of pay-TV broadcaster BSkyB it does not own and put James Murdoch's position in the spotlight.

The board of BSkyB, which reported a better-than-expected 16 percent jump in full-year revenue to almost 6.6 billion pounds on Friday, voted unanimously on Thursday to keep James Murdoch as its chairman.

However some politicians are keen to keep up the pressure on News Corp and James Murdoch in particular.

"It's my view that Murdoch, Crone and Myler should have been invited today," said Labour lawmaker and Culture, Media and Sport Committee member Tom Watson.

"I understand from the decision we took that when we receive the evidence, no later than August 11, we are meeting the week after that to decide whether to invite them at that point."

Rupert Murdoch described his appearance before the committee as the "most humble day of my life." The 80-year-old's testimony was interrupted when a British protester threw a plate of foam at him during the hearing.

The attacker, Jonathan May-Bowles, a comedian who uses the name Jonnie Marbles, pleaded guilty to causing harassment, alarm or distress on Friday. [nL6E7IT0TF]

The phone-hacking scandal has barely been out of the headlines since it erupted at the start of the month and has engulfed the British establishment.

Baroness Buscombe, the head of the newspaper watchdog, the Press Complaints Commission, which has been heavily criticized for failing to address the issue, became the latest person to step down in the wake of the furor.

London's police chief Paul Stephenson and John Yates, Britain's most senior counter-terrorism officer, have already been forced to quit.

(Writing by Michael Holden and Tim Castle, Editing by Sonya Hepinstall)

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James Murdoch contradicted by his ex-legal manager (AP)

By JILL LAWLESS and CASSANDRA VINOGRAD, Associated Press Jill Lawless And Cassandra Vinograd, Associated Press – 2?hrs?36?mins?ago

LONDON – James Murdoch was under pressure Friday over claims he misled lawmakers about Britain's phone hacking scandal, as a lawmaker called for a police investigation and Prime Minister David Cameron insisted the media scion had "questions to answer" about what he knew and when he knew it.

The presumed heir to Rupert Murdoch's media empire testified before a parliamentary committee that he was not aware of evidence that eavesdropping at the News of the world went beyond a jailed rogue reporter. But in a sign that executives are starting to turn against the company, two former top staffers said late Thursday they told him years ago about an email that suggested wrongdoing at the paper was more widespread than the company let on.

The claim brings more trouble for the embattled James Murdoch, who heads the Europe and Asia operations of his father's News Corp., as his family fights a scandal that has already cost it one of its British tabloids, two top executives and a $12 billion-dollar bid for control of lucrative satellite broadcaster British Sky Broadcasting.

Tom Watson, a legislator from the opposition Labour Party, called for Scotland Yard to look into the allegation and said it "marks a major step forward in getting to the facts of this case."

"If their version of events is accurate, it doesn't just mean that Parliament has been misled, it means police have another investigation on their hands," Watson told the BBC.

James Murdoch, who was not testifying under oath at Tuesday's parliamentary hearing, could face sanction if it becomes clear he deliberately misled lawmakers — but the prospect is highly unlikely. The last time the House of Commons fined anyone was in 1666.

The House of Commons no longer has the power to imprison a nonmember, but it could refer a case to the Metropolitan Police.

Still, News International, News Corp.'s British newspaper arm, said James Murdoch stood by his statement about the scandal, which exploded with revelations journalists at the News of the World tabloid hacked the phone of a 13-year-old murder victim while police were still searching for her and broadened to include claims reporters paid police for information.

That set off a firestorm which hit at the highest reaches of British society. It forced Rupert Murdoch to shutter News of the World, prompting a spate of high-profile resignations and departures at News Corp. and delivering the 80-year-old media baron and his son to be grilled before lawmakers.

Cameron, who himself has been tainted by the scandal after hiring an ex-News of the World editor, continued to distance himself from a once-cozy relationship with the Murdochs.

"Clearly James Murdoch has got questions to answer in Parliament and I am sure that he will do that," Cameron said Friday, adding the Murdochs had "a mess to clear up."

James Murdoch, in his testimony, batted away claims he knew the full extent of the illegal espionage at the News of the World when he approved a 700,000 pound ($1.1 million) payout in 2008 to soccer players' association chief Gordon Taylor, one of the phone hacking victims.

News International had long maintained that the eavesdropping was limited to a single rogue reporter, Clive Goodman, and the private investigator he was working with to break into voice mails of members of the royal household.

But an email uncovered during legal proceedings seemed to cast doubt on that claim. It contained a transcript of an illegally obtained conversation, drawn up by a junior reporter and marked "for Neville" — an apparent reference to the News of the World's chief reporter, Neville Thurlbeck.

Because it seemed to implicate others in the hacking, the email had the potential to blow a hole through News International's fiercely held contention that one reporter alone had engaged in hacking. If James Murdoch knew about the email — and was aware of its implication — it would lend weight to the suggestion he'd approved the payoff in an effort to bury the scandal.

James Murdoch told lawmakers he was not aware of the email at the time, but former legal adviser Tom Crone and ex-editor Colin Myler contradicted him.

"We would like to point out that James Murdoch's recollection of what he was told when agreeing to settle the Gordon Taylor litigation was mistaken," they said. "In fact, we did inform him of the 'for Neville' email which had been produced to us by Gordon Taylor's lawyers."

The Conservative lawmaker who heads the committee, James Whittingdale, said James Murdoch would be asked in writing to clarify his testimony, but would not be recalled before the committee.

Murdoch's News Corp. is trying to keep the damage from spreading to its more lucrative U.S. holdings, including the Fox network, 20th Century Fox and the Wall Street Journal.

British politicians have felt the heat too, with the country's top two party leaders falling over each other to distance themselves from papers they once courted assiduously.

Cameron's former communications director — Murdoch newspapers veteran Andy Coulson — came under fresh scrutiny Thursday after it was reported that he did not have a top-level security clearance, which spared him from the most stringent type of vetting.

The former News of the World editor was arrested this month in connection with allegations that reporters at the tabloid intercepted voice mails. Victims included celebrities, crime victims and politicians.

Lawyers could also have been targeted, according to The Law Society. It said solicitors had been warned by police that their phones may have been hacked by the paper.

Scotland Yard, accused of failing to properly investigate the scandal for years, has also been asked to investigate another explosive claim: That journalists bribed officers to locate people by tracking their cell phone signals.

The practice is known as "pinging" because of the way cell phone signals bounce off relay towers as they try to find reception. Jenny Jones, a member of the board that oversees the Metropolitan Police Authority, called for the inquiry into the alleged payoffs by journalists at the News of the World.

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Robert Barr contributed to this report.

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