25 May 2012

Hunt’s former aide faces second day at Leveson

Jeremy Hunt’s former aide Adam Smith is to make his second appearance at Leveson, after it emerged that the culture secretary favoured News Corp’s bid for BSkyB weeks before he was put in charge.

A memo from Jeremy Hunt emerged during evidence given to the inquiry by Adam Smith on Thursday.

Dated November 2010, it begins: “James Murdoch is pretty furious at Vince’s referral to Ofcom” (it was reported on 4 November that Business Secretary Vince Cable had asked the media regulator to investigate the proposed transaction).

The culture secretary goes on to explain that if the bid is successful, James Murdoch plans to turn News Corp into “the world’s first multiplatform media operator available frompaper to web to TV to iPhone to iPad”.

He proposes that “sensible controls can be put into any merger” to ease concerns about media plurality in the UK. “I think it would be totally wrong to cave into the Mark Thompson/Channel 4/Guardian line that this represents a substantial change of control given that we all know Sky is controlled by News Corp now anyway.”

Mr Smith, who will face more questions at the enquiry on Friday, stood down as Culture Secretary James Hunt’s special adviser the day after James Murdoch had appeared at Leveson.

Mr Smith told the inquiry that he believed Jeremy Hunt “didn’t have much of a relationship with the Murdochs” and that he was not particularly close to News Corporation.

News Corporation lobbyist Fred Michel today insisted he had the “impression” that Culture Secretary Jeremy Hunt was aware of details being passed on to him about the BSkyB bid.

Mr Michel said he believed some of the “feedback” he was given by special adviser Adam Smith had been “discussed” with his boss Mr Hunt.

The comments came as Mr Michel gave evidence to the Leveson inquiry on Thursday over News Corp’s attempt to acquire the whole of BSkyB.

Mr Smith, who quit after admitting his contacts with Mr Michel were too close, is due to appear as a witness later.

The lobbyist said he had the “sort of impression that some of the feedback I was being given had been discussed with the secretary of state before I was given it”.

‘Uncharted territory’

Although he was not given legal advice on the nature of “quasi-judicial” ministerial decisions, Mr Michel said he knew he was not meant to have “direct discussions” with the culture secretary about the controversial issue.

I was never of the opinion that it was inappropriate to at least try to put the arguments to these officers. Frederic Michel

He said he regarded the extent of contacts with Mr Hunt’s special adviser Adam Smith and other officials as “uncharted territory”.

“I think we had discussions on the fact that it was very important that the decision rested with the secretary of state, that it was not appropriate to have direct discussions with the secretary of state unless they were formal and minuted,” he said.

“I was never of the opinion that it was inappropriate to at least try to put the arguments to or make representations to these officers.”

News Corp PR chief Fred Michel tells Leveson it was

Mr Michel made 191 telephone calls and sent 158 emails and 799 texts to Mr Hunt’s team between June 2010, when News Corp announced its BSkyB takeover bid, and July 2011, when it abandoned the plan amid outrage over the News of the World phone-hacking scandal (see video).

Of these, more than 90 per cent were exchanged with Mr Smith, the inquiry was told.

Mr Smith sent 257 text messages to Mr Michel between November 2010 and July 2011.

The lobbyist said he sought to promote News Corp’s bid with officials in the Department for Business, Innovation and Skills and the Department for Culture, Media and Sport, as well as with Labour and Liberal Democrat politicians.

“This was something I did across both departments and political parties as well, including the opposition,” he said.

‘Professional and reliable’

Mr Michel told the inquiry he could not say whether Mr Hunt or Mr Smith supported News Corp’s takeover of BSkyB.

Adam [Smith] has always been a very warm, professional, available adviser. Frederic Michel

Referring to the special adviser, he said: “Adam has always been a very warm, professional, available adviser, and always very diligent in his work with me.

“The only interactions I have had with him were always professional and reliable.”

Robert Jay QC, counsel to the inquiry, asked him: “Is it your evidence that Mr Hunt was keeping an open mind, he was impartial, and would decide the bid on its merits at the appropriate time?” Mr Michel replied: “Yes.”

Keeping up morale

The lobbyist played down a suggestion that he “spun” or “bigged up” the information Mr Smith gave him in order to reassure Mr Murdoch about the progress of the bid.

But he admitted he may have tried to “keep morale up” at News Corp during the period until decision-making power on the takeover was stripped from Business Secretary Vince Cable and given to Mr Hunt.

“I think my emails, as they were internal emails, were an accurate account of the conversations I have had,” he said.

“Whether there was any exaggeration or spin, it depends. I would say perhaps during the period of when we were dealing with BIS (the Department for Business, Innovation and Skills), the morale was quite low because we had not much success on representation of this.

“Maybe I was trying to keep the morale up internally.”

Friendly relations

Mr Michel’s evidence revealed the extent of the friendly relations between the News Corp PR man and the Culture Department.

On Christmas eve 2010, shortly after Jeremy Hunt replaced Business Secretary Vince Cable as the minister with responsibility for News Corp’s bid for BSkyB, Michel sends a note to the culture secretary informing him that the lobbyist is News Corp’s point of contact for communications with the Culture Department.

Hunt’s reply is significant: “Thanks, Fred. All contact with me now needs to be through official channels until further notice.”

Michel then spins the message back to News Corp as follows: “Just spoke to JH. Said he was very happy for me to be the point of contact with Adam going forward.”

Subsequent communications with Hunt show Frederic Michel apparently flattering the culture secretary for his public appearances. “You were great at the Commons today,” he texts on 3 March 2011. Hunt replies: “Merci. Large drink tonight.”

10 days later Michel compliments Hunt for his appearance on BBC television: “Very good on Marr – as always,” to which Hunt responds: “Merci. Hopefully when consultation over, we can have a drink of coffee like the old days.”

Later that year, during Wimbledon fortnight, Michel texts Hunt to tell him he has just spotted him on TV watching the match between Andy Murray and Rafael Nadal.