U.K. Prime Minister David Cameron may be in trouble, as the investigation into the Murdoch holdings show they were angling to use their influence with the U.K. government to their own commercial benefit—apparently illegally. And of course, while no one's actually saying it out loud, I think odds are good that the Fox organization was following the same strategy here. Stay tuned!
In 163 pages of paperwork published by the Leveson inquiry, we can see the dialogue between James Murdoch's camp and the office of Jeremy Hunt, the secretary of state for media, who held in his hands the outcome of the biggest deal in the history of the Murdochs' News Corporation, the £8bn takeover of BSkyB.
According to Tuesday's evidence, Murdoch and his lobbyist, Fred Michel, worked their way through every crack in the walls of Whitehall in search of influence and, in Hunt's office, they found friends who would supply them with information, advice and support, even as Hunt claimed to the outside world that he was being impartial and even-handed.
The evidence is likely to be disputed. These are merely Michel's versions of what was said, so they are hearsay. Furthermore, Michel has told the inquiry that his messages that claimed to report conversations with Hunt were in fact based on talking to Hunt's officials, which would mean that they are also secondhand. But, if the evidence stands up, we are looking at a story of secret and improper collusion of precisely the kind that Murdoch's critics suspected.
At a time when Hunt was required to act in the legal role of a judge overseeing Ofcom's inquiry into the bid, this evidence suggests he was secretly supplying News Corp with information about his confidential dealings with Ofcom, advising them on how to pick holes in Ofcom's arguments, allowing their adviser to help him prepare a public statement, offering to "share the political heat" with them, and repeatedly pledging his support for their position.
If proved, this pushes Hunt's political career to the edge of destruction. It cannot help him that his website currently displays an interview describing him as a cheerleader for Rupert Murdoch. But the pressure may not stop there. The question now is whether Lord Justice Leveson will order the disclosure of more emails or other evidence that could conceivably see the prime minister and his government pushed out to the edge as well.
Cameron can become embroiled in two ways. First, he faces questions about whether he had any kind of involvement in handling the bid for BSkyB, particularly during the quasi-judicial process from June 2010 to July 2011. For the first timeon Tuesday, it was disclosed that Murdoch had raised the bid with him when they met at Rebekah Brooks's house two days before Christmas 2010. Previously, Cameron had refused to answer direct questions about what was discussed on this occasion. His opponents will be interested to know whether he really did keep his distance even as last year the bid was swept up in the political tornado around the phone-hacking scandal.
Second, and potentially even more serious, the prime minister would be in jeopardy if the alleged support for the BSkyB bid proved to be part of a bigger deal between the Conservative leadership and News Corp. In its crudest form, the suggestion is that the Murdochs used the Sun to make sure that Gordon Brown was driven out of Downing Street so that the incoming Conservative government could deliver them a sequence of favours – a fair wind for them to take over BSkyB; the emasculation of the much resented Ofcom; and a severe funding cut to their primary broadcasting rival, the BBC.
This was the core of the toughest exchanges on Tuesday, as Robert Jay QC, for the inquiry, laid out fragments of evidence that suggest this big deal was made, and concluded: "It all falls together, doesn't it?" In reply, James Murdoch passionately denied that he would ever link his newspaper's endorsement of a political party to the commercial interests of his company. "I simply wouldn't do business that way."
Lots more, including how both Murdochs may have made a deal with Prime Minister David Cameron to undercut the BBC.
UPDATE: More here.