Tuesday, 29 November 2011

(11.34)

MR JAY: Sir, the next witness, Mr Davies.

MR NICK DAVIES (affirmed)

Questions from MR JAY

MR JAY: First of all, make yourself comfortable, Mr Davies.

Will I need the evidence bundle that you sent me?

Q. Please, Mr Davies. Your full name, please?

Nicholas John Allen Davies.

Q. In the bundle we provided you, you should see under

tab 1 a witness statement which you kindly provided

right on the button, as it were, in terms of timing, on

27 September 2011.

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Yes.

Q. You have provided a statement of truth at the end of

that statement. Is this your evidence to the Inquiry?

Yes.

Q. The reason, Mr Davies, we're calling you early is that

you obviously provide us with a lot of general

assistance in relation to phone hacking and about

journalistic practices in general, and the rest of the

Guardian's evidence will, as it were, come early in the

new year.

So we understand who you are, for those who don't

know, you are a freelance journalist who has been

working under a part-time contract for the Guardian for

some considerable time; is that right, Mr Davies?

Yes, since 1989, but I was a staff reporter for some

years in the early 1980s at the Guardian.

Q. Aside from working for the Guardian as a special

correspondent, what else do you do?

Occasionally I drift into making television

documentaries as an onscreen reporter and I also had a

phase when I wrote feature films and I write books. I'm

currently writing one about -- or trying to write one

about the phone hacking. It's driving me mad.

Q. Thank you. The book which all of us have read, "Flat

Earth News", that came out in 2008; is that right?

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January 2008.

Q. You do tell us a bit about your journalistic training in

your statement, and this may be of interest to us. It

was between 1976 and --

'78.

Q. With a scheme for university graduates which was run by

the Mirror group.

Yes.

Q. Can you expand upon that just a little --

The Mirror group then owned a little group of newspapers

down in Devon and Cornwall and they had a training

scheme which was based in Plymouth. I think it was

regarded as a pretty good scheme, and they spent

a couple of months teaching us basic skills, shorthand,

typing, newspaper law, and then they sent us out to work

on these local papers and then, after whatever it was,

a couple of years, if you passed your proficiency test,

they hiked up you up to London to one of the Mirror

group's national papers to work on what they called an

attachment for a couple of months. I was very keen to

work on the Sunday People, which was in those days quite

a different creature to the paper it is now.

Specifically, they had just uncovered an intense bout of

corruption among police officers in Central London,

particularly the porn squad, which was heroic work,

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really brilliant stuff, and I wanted to part of that.

So after that training scheme, I went to work briefly

for the Sunday People and it may or may not be relevant,

bearing in mind some of what Richard Peppiatt was just

saying, but I got bullied at the paper. It was

a particular executive who just thought -- he couldn't

tell the difference between leadership and spite and

I couldn't cope, so I fled, which is why I'm no longer

in the Mirror group.

Q. In terms of your training, you said that you covered

newspaper law, which may well have been a bit different

in the mid-1970s compared to what it is now. Did you

cover ethical issues at all?

Actually not very much, I would say. That doesn't mean

to say I'm an unethical person, but I do not remember

talking about ethics at all. This was a tabloid

training scheme.

Q. Fair enough. You're mainly interest in reporting, you

explain in your statement, long-term investigations of

social issues, including poverty in the UK, failing

schools, the criminal justice system, tax avoidance,

falsehood and distortion in the news media. So it's

quite a Catholic, eclectic agenda, as it were.

Yes.

Q. What brought you into becoming interested in the issue

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of phone hacking?

I think a fluke. I was very interested in falsehood and

distortion in the media, which became this book, "Flat

Earth News". The research for that meant that I had to

go and talk to reporters from other newsrooms to get the

story behind stories, to understand what was going

wrong. Those reporters started talking to me about

illegal information-gathering techniques, stuff which

I just, naively, wasn't aware of, and that therefore

formed a chapter in the book about the "dark arts", as

they call them.

When the book was published in January 2008, I was

on the Radio 4 Today programme and also, up against me,

so to speak, was Stuart Kuttner, the then managing

editor of the News of the World, and when I tried to

summarise the chapter about the dark arts, he ridiculed

me. "I don't know what --" this is in summary: "I don't

know what planet Mr Davies thinks he's living on but

it's not one I recognise. This happened once at the

News of the World, the reporter was sent to prison and

that's it."

That was a statement which, I think it is fair to

say, is soundly false, and the result was that it

provoked somebody I had never heard of into getting in

touch with me and saying, "I heard Kuttner on the radio.

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You need to know the truth."

And this person started to provide me with very

solid and detailed information about what had been going

on in the News of the World. This is back

in January/February 2008.

So you understand, the pattern of my work would be I

would usually have three or four big projects going at a

time, because they hit roadblocks. Project A can't

proceed unless I can talk to person A. He's on holiday,

so we'll proceed with projects B, C and D.

So I started to work part-time on that, gathering

bits and pieces from different places over a period

of -- actually, it turned into 18 months before I had

something that was worth printing, which was the

Gordon Taylor story in July 2009. So the short answer

to your question is I stumbled into it accidentally.

Q. No, that's very clear, Mr Davies. In terms of the

chronology of the stories, the Inquiry fully

understands. It has read a massive amount of material,

including an e-book which the Guardian has published.

I'm not sure you're aware --

Oh yes. That's just a collection of stories which the

Guardian hats published.

Q. Yes. It's a helpful summary to the not fully initiated

of the chronology. I'm not going to ask you about

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specific sources, for quite obvious reasons, but in

relation to phone hacking, are you able to assist us at

all, or at least the nature of your sources and perhaps

the number of your sources?

Of phone hacking? Okay.

LORD JUSTICE LEVESON: I want to know about the whole thing

in terms -- I'm sure Mr Jay will turn to it -- and in

particular I would like to know about how journalists

work on a story, how they validate what they're going to

say and how they check up on the sources that they use.

The reason I'm asking you this is because your book

contains a great deal of material which you've obtained

from other people, which a lawyer would call obvious

hearsay.

Right.

LORD JUSTICE LEVESON: That doesn't mean to say it's wrong,

but I am keen that people understand and that I fully

understand precisely how you get to the conclusion you

reach --

Okay.

LORD JUSTICE LEVESON: -- and how solidly based that

conclusion is. I've probably summarised Mr Jay's next

15 questions.

But there's a lot in there.

LORD JUSTICE LEVESON: There is, and I'm happy to leave it

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to you and him to sort it out.

If I try to start with the generality, which is what

you're asking me, I think. First of all, set aside the

kind of time-limited churnalistic activity which

I describe in the book and which Richard Peppiatt has

been talking about. If you give a reporter time, the

most essential working asset for our trade, then I would

say it works like this: that I'm looking for evidence to

discover the truth and I would expect to find that

evidence initially on two primary routes. The first is

the public domain, which I would define as everything

I'm allowed to know simply because I asked for it. And

the public domain has got much bigger in the last few

years, so this involves, for example, conventional

public records, Companies House and much more else, the

use of the Freedom of Information Act to uncover, again,

what you're allowed to know simply because you ask for

it, and of course the use of the Internet. So all

that's there in the public domain. That is, from

a reporter's point of view, low-hanging fruit.

The second primary route -- is this the right

approach? Is that what you want me to --

LORD JUSTICE LEVESON: Yes, definitely.

The second primary route is the most important stuff we

can do, which is human sources, and I mean, I've never

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known an interesting story where everything you needed

to know was available on the first route, in the public

domain. It's kind of almost a definition of a good

story -- in fact, this is an old newspaper maxim. News

is what someone somewhere doesn't want you to know. So

if they're concealing it, you won't find it out there on

the public domain. You have to have human sources. The

most difficult, skilful, interesting, important stuff

that reporters do it is finding human sources and

motivating them to help. It's a terrible interesting

area from a reporter's point of view.

So that's where the mass of work goes on. If that

doesn't yield what you want, there are other secondary

routes to getting information, one of which I learnt

from Harry Evans, who was probably the best journalist

this country has produced since the war. In his memoir,

he describes how, on several occasions, he got his

journalists to persuade people to sue because he could

see that they couldn't get to the bottom of the barrel

and get evidence simply from those two primary routes,

and if there were legal actions ongoing, the judge might

order disclosure into the public court of material that

would help them to see the truth.

Learning from that lesson in this particular story

of the phone hacking, I certainly did whatever I could

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to hook up public figures who had been -- or anybody who

had been a victim, allegedly, of hacking with the

lawyers who might take their case forward so that

eventually something would pop out in open court.

So in general terms, it's those three routes. Am

I answering your question?

LORD JUSTICE LEVESON: Yes.

Then I think we went to the point about how a lot of

this is unattributable, and this comes back again to

that point. If news is what someone somewhere doesn't

want you to know, then very often at the point where you

start to motivate a human source, you run into a genuine

problem on their part. They will say, "Look, if I talk

to you and they realise I've done this, I will lose my

job or my career or I will be beaten up or I will be

arrested or some terrible thing is going to happen", and

it's a very sensitive moment. You have to make these

people safe.

The first step almost all the time is about

a guarantee of anonymity. "They won't know you've talked

to me." That's actually quite a complicated piece

because it isn't simply a question of saying, "I won't

put your name in the paper." It also means I have to

filter the material they give me because if I publish

too much it would become clear by implication as to who

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they are.

In this particular context, if we come back to

something I mentioned briefly that Richard Peppiatt

mentioned and I know the NUJ have mentioned, it's a very

important part of this picture that there is a culture

of bullying in some Fleet Street newspapers, and so it's

not just a question of "I'll lose my job". It's nastier

than that, and the fear is real, and therefore you would

have a high proportion of these sources saying, "I will

talk to you but only on this condition of anonymity",

and I appreciate that's very difficult for the Inquiry.

It means that I've been able to look not only at the

public domain sources but to deal with the human

sources, and then, to answer a question you asked, to

see how it overlaps. If you have, say, 10 or 15

different former reporters from the News of the World

each independently sketching essentially the same

picture, it's a reasonable judgment that any human being

using common sense would come to, to say, "These people

are telling me the truth." If, in addition, you can

find other evidence from the our routes, you'll be all

the more solid.

LORD JUSTICE LEVESON: I understand that and the

explanation, I think, is tremendously important not just

for me but for anybody who's following this Inquiry,

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because it then goes on you to the question in relation

to the topics about which you are going to be asked, how

overlapping that information is.

Mm-hm.

LORD JUSTICE LEVESON: I think that was one of Mr Jay's

questions. How many people are we talking about? Not

to identify them --

Understood.

LORD JUSTICE LEVESON: -- but to seek to validate the

conclusions that you've reached, as opposed to an

individual person who comes and says X and then somebody

else says, "Well, that's rubbish. It's not X."

Okay. So I think you were asking specifically about the

phone hacking story?

MR JAY: Yes.

If we start there.

MR JAY: Yes.

There's a loose assembly of about, I would think,

between 15 and 20 former News of the World journalists

who have talked, on condition of anonymity, in detail to

me or a researcher who was working for me, and they've

been a tremendously important engine driving the story

forward.

Separately, within the private investigation

industry, profession, there are some -- I suppose you

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could call them senior investigators, who are very

worried by the activities of people they would see as

cowboys, who they see damaging the reputation of their

industry, and again, on condition of anonymity, there

are, I suppose, more like four or five or six -- I'm

finding it a little -- but around that number, but no

more than half a dozen, but who have again been

tremendously helpful, partly about the generality of how

they operate, about the skills they use, and also, I

think with all six, about work for newspapers.

So that's two big pools of people. The former

journalists, the PIs, the private investigators.

There's a third pool, which are the victims and

their legal actions, who overlap to a considerable

extent. So if a reporter says, "So-and-so was a victim

of the hacking", then I go to the public figure or their

representative and say, "Well, they're saying this.

Does this coincide with anything you know about?" And

they may say -- I mean, at the top end of the scale,

they may say, "Operation Weeting have just been on my

doorstep. It's definitely true." At the lower end of

the scale, it's: "You know, I always suspected it.

There were these occasions." And then you start this

checking and overlapping business. So those these pools

of people would be very important.

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There are other sources which are very sensitive who

are, I would say, familiar with things that the police

have been doing, who have also been very, I think, brave

and helpful on this story. There are probably others,

but there's -- does that help you? There's a lot on the

News of the World.

Q. Yes, I think that's probably as far as you'd want to go

in terms of identifying the different categories of

sources; is that right?

Yes.

Q. In relation to chapter 7 of your book, "Flat Earth

News", the chapter entitled, "The Dark Arts", is it the

same methodology which you are applying in general

terms? Because it's clear from that that you are

talking to private investigators, you're talking to

reporters or former reporters.

Yes.

Q. Are you talking to those close to the police or within

the police?

I think "close to" would be fair.

Q. "Close to". In terms of quantity, though -- for

example, if you're talking about a particular title --

you mention a number of titles in chapter 7 -- how many

reporters are you speaking to before you have, as it

were, a critical mass which would justify he you putting

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it in print?

I would say a dozen. In almost all cases, around about

a dozen, perhaps a little more.

LORD JUSTICE LEVESON: That's in relation to each title?

Correct, and they tend to be former rather than current.

There's public domain stuff, of course, on my first

primary route.

LORD JUSTICE LEVESON: But it's the same sort of exercise?

In relation of each of the features of which you speak,

it's the same approach, the same sort of validation, or

is it different?

No, it's exactly the same approach that I tried to

describe at the beginning, the public domain and the

human sources. In respect of each title, we have sort

of 12 to 15 sources. That doesn't, of course, mean that

in respect of each allegation in relation to each title

you have 12 to 15 sources, but you're going to have more

than one on any allegation. It's a bit difficult to

talk about it in such general terms. Sometimes you can

have several sources very precisely saying the same

thing. On other occasions, you have a source who -- one

source is saying it very precisely, the other person is

confirming it in more general terms, and then you may

have bits and pieces of public domain or whatever.

It's worth pointing out that a book like that

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doesn't get published without going through a specialist

media lawyer and they comb through it and produce a long

memo saying, "How can you justify this and why would you

print that?" and they won't publish -- it gets amended

as a result of that process and they won't publish

unless they feel they can justify it.

LORD JUSTICE LEVESON: The reason this is obviously very

important is because you are aware some people don't

entirely agree with everything you write in that

chapter.

Of course.

LORD JUSTICE LEVESON: And to get to grips with what is the

culture, practice and ethics of the press, inevitably

I'm looking at all the material, and each editor will

come along and tell me what they want to say, but

therefore I have to get some handle on validity and

indeed weight. You know, I'm sure, that I'm concerned

about anonymous evidence and hearsay is actually a form

of anonymous evidence, so I can only test it through

you.

Yes. I accept that there is that difficulty with what

I have to tell you, and I will tell you the truth as

much as I possibly can. To the extent that I can give

you the evidence I will, but I accept that it's

frustrating for the Inquiry that so much of this has

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come from people who are off the record.

LORD JUSTICE LEVESON: It may be inevitable for the reasons

that you've identified.

There is going to be a gap, isn't there, between what

I know and what I can show you.

LORD JUSTICE LEVESON: Yes. I understand.

Right, I won't interrupt you again, Mr Jay, or at

least probably won't. Possibly won't.

MR JAY: We'll come back to this when we look at chapter 7,

but can I deal with your more general evidence about

systems at the Guardian. This is your witness

statement. At paragraph 5, you say:

"The Guardian has a particularly clear commitment to

ethical journalism."

Mm-hm.

Q. In terms it of the code of conduct of the PCC, is that

provided to all journalists, including journalists in

your position?

Yes. There's actually -- the Guardian has its own code

and the PCC is part of it as an appendix.

Q. And the NUJ code, again, is a separate code, I believe;

is that right?

Yeah. I think it's fair to say it's less often referred

to, but in terms it's more or less the same.

Q. In terms of accountability, the chain -- or the line

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going up from you is the news editor and then, if

necessary, the editor in-chief; is that right?

Yes.

Q. That presumably is standard practice in the whole of the

industry with minor deviations?

Yes, I would think so, and I think I made the point in

there that the people who, generally speaking, are

enforcing the code aren't the PCC or the NUJ or

whatever. They're in the background. It's the news

desk, the features desk, whatever that you're working

for, who are going to say, "Hang on a minute."

Q. You say in paragraph 6 that the concept of public

interest is particularly slippery.

Mm-hm. Paragraph 6? Oh yes, I'm with you.

Q. "Slippery" can mean a number of things. What are you

seeking to convey by the use of that --

What I'm trying to say is that -- first of all, if we

all get over the first hurdle that we understand that

operating in the public interest means we're operating

in the interests of the public, trying to tell them

something that is good, that they need to know. In

operational day-to-day terms, it's terribly difficult to

know exactly where the boundary lines are, and so

sometimes this is a legal point. Section 55 of the Data

Protection Act says you have a public interest defence.

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If I'm working on a particular story in particular

circumstances, do I or do I not have the public interest

on my side? The answer very often is: I don't have the

faintest idea because we don't know where the boundary

lines are. Not because I'm not thinking about it and

not because the Guardian aren't interested; we don't

know quite where the lines are supposed to lie. And

that problem, I think, applies across the board over and

over again to any ethical question that reporters face.

The answer tends to be: well, it would be all right if

it was in the public interest, but we're stymied because

in reality we don't -- I mean, there are some cases

where it's clear. They're so far over the boundary line

that we know that the public interest is on our side or

it isn't on our side, but very often, it isn't clear and

personally, I would like it if somebody set up, by

statute, a public interest advisory body that I or

a member of the public or a private investigator could

go to and get high-quality advice which would be

confidential, but in the event of a dispute, a criminal

prosecution or a civil action, I would be able to

produce that advice and say, "Well, look, this is what

I was told." So they'd have no prior restraint on me,

but I would have some guidance which was weighty in the

event of a dispute.

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Q. I've received a message, Mr Davies. It's no fault of

anybody's. I think you're going slightly too fast for

our transcriber.

Sorry. I'll try to slow down.

Q. One notch only. Your evidence is coming across very

clearly, but it does have to be written down.

Okay.

Q. Can I seek to analyse what you've just said in this way.

Is the problem that in many cases you don't know where

the public interest lies because you don't know what the

truth of the story is or you don't know where your

investigations might lead, and so --

No.

Q. No?

That's not the problem. The problem is that we don't

know where the boundary line is, so ...

Well, one way of approaching it is this. Different

journalists have completely different definitions. So

people from the News of the World will tell you, in all

sincerity, that it was in the public interest that they

exposed Max Mosley's sex life. I profoundly and

sincerely disagree with them. I do not think that was

in the public interest.

Now, I understand that the courts came down, so to

speak, on my side of the argument. They still haven't

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persuaded those other journalists that they're wrong.

They sincerely believe that the boundary line is in

a different place and there have been some cases -- for

example, the John Terry case -- where the courts

themselves have danced on both sides of the line, at

first saying the story about John Terry having an affair

is confidential and then jumping over the line and

saying, "No, actually, it's in the public interest that

this be disclosed", and if the courts aren't clear, how

am I supposed to be the clear, the hack with the

notebook?

Q. Yes.

It's not about not knowing the details of the story;

it's about not knowing what the rule is in operational

terms. Does that make sense?

Q. It does and it doesn't because you, of course, are not

writing this type of story. You're writing a different

type of story. Are you able to assist us with perhaps

even a hypothetical example or an accurate example,

sufficiently anonymised, where the moral dilemma or the

ethical dilemma is laid bear for us?

Well, we had a huge problem with the Wikileaks stuff.

Because in the middle of all this phonehacking, I went

off and persuaded Julian Assange to give all this

material to the Guardian and the New York Times and

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Der Spiegel, and it rapidly became apparent that that

material contained information which could get people on

the ground in Afghanistan seriously hurt. They were

implicit identified as sources of information for the

coalition forces.

I raised this with Julian very early on and he said,

"If an Afghan civilian gives information to Coalition

forces, they deserve to die. They are informers. They

are collaborators." And there were huge tussles between

the journalists and him -- actually, maybe this isn't

a terrible good example because I would say emphatically

it's absolutely clear that we couldn't publish that

information and didn't, but he did. I would love to

have been able to go to a specialist advisory body and

say, "Where is the public interest here?" in order to be

able to show it to him, to persuade him.

The other example I gave in the statement was that

although the Data Protection Act has a public interest

defence, which in principle would allow me, in some

circumstances, to blag information from a bank account

or the DVLA, I've never ever used it because I wouldn't

feel safe, because I don't know where the

Information Commissioner is going to say the boundary

line is. All I know is that he said in principle he

would expect to see very strong public interest before

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he would acknowledge the validity of that defence.

Is this making sense?

LORD JUSTICE LEVESON: Yes, I understand exactly what you're

saying.

There's another example I've just thought of. We have

to be a bit careful about this because this is

information that's not been published. About six years

ago, there was a senior politician in this country whose

child attempted suicide. This is a story which we have

never published and it's very, very debatable as to

whether or not we should have done. You will hear

journalists debating it because it became politically

significant for that politician's career that the child

had done this, and yet we never reported it.

Or another one: should we or should we not have

reported the fact that Prince Harry was fighting in

Afghanistan? That's probably a better example. You

remember this? Prince Harry was sent to Afghanistan.

Before he went, the army and the palace called in

newspapers and said, "This is what we're doing. We're

going to send Harry to Afghanistan. Will you please

black it out, not report it?" And newspapers agreed not

to publish it on the basis that if they did, it would

bring down extra fire on him and the other people in his

squadron and we didn't want to be responsible for that.

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That looks pretty like good thinking. On the other

hand, it meant that we were colluding in what then

became PR story, because when the story was finally

released, the headline was "Harry the hero", but in fact

we had offered him an extra layer of protection by doing

that, and what I --

LORD JUSTICE LEVESON: I'm not sure that's right, actually.

What you'd done was you had given him the same layer of

protection that all his colleagues had. You hadn't

added an extra layer of protection.

But the crucial words are -- you said, "I'm not sure

that you're r right."

LORD JUSTICE LEVESON: Oh yes, that's because I'm polite.

But I would say, without any hint of politeness, I'm not

sure, you see, what was right then. I tell you, my

initial reaction to that was that we were right to

suppress the information for the safety of those people

involved. After I'd thought about it for a few days,

I changed my mind and thought it was wrong that we did

that and the fact -- the collusion factor was part of

it. There's another example --

LORD JUSTICE LEVESON: I'm happy to have more examples

because this is tremendously important, and I am going

to want to come back at the end of your evidence to talk

about the bodies that you think ought to be in place, as

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I'm sure Mr Jay, the structures that you think ought to

be in place. But can I just say this: that you've

mentioned a story that didn't enter the public domain.

I absolutely would not want anybody to report what

you've said and then to start reinquiry as to whether

that's sensible, as to who it might be or anything.

That is not the purpose of this Inquiry and I hope that

everybody will take that point extremely seriously.

I'm sorry, I --

You're right. I also feel the same way.

LORD JUSTICE LEVESON: Right.

MR JAY: Thank you.

Mr Davies, you deal with some other general evidence

about systems in the Guardian, which others doubtless

will give as well, but can I just touch on one issue in

paragraph 9, namely legal advice and in-house lawyer.

Mm-hm.

Q. All your stories presumably are checked?

Mm-hm.

Q. For defamation and accuracy; is that right?

By the lawyer, yeah, for contempt or any other issues.

Q. And someone forms a judgment a priori, I suppose, as to

whether a story is potentially legally contentious, in

which case the legal scrutiny is more intense, or

whether it appears more uncontroversial, in which case

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it's -- I wouldn't say cursory, but it's less

microscopic; is that right?

Roughly speaking, yes.

Q. In paragraph 11, you deal with ethical issues in

general. The key point you're making here perhaps is

that the commercial imperatives which drive some

journalism are not as clearly in play or in play at all

in relation to this particular title.

This particular ...?

Q. Title. In other words, the Guardian?

Yes. The Guardian is a little bit different to other

newspapers because it belongs to a trust. Therefore it

doesn't have to generate lots of money to pass back to

its shareholders, and I think that that does have

a really important knock-on effect on the internal

culture of the paper. It's the corollary to what

Richard Peppiatt was talking about earlier on, that

where you have a highly competitive, commercially driven

newspaper, that will get passed down from the chief

executive and the management side to the editor, down

through the desks and to the reporters. In a way, all

this story starts with geography. You happen to have in

this country a population of 50 to 60 million people who

for decades have been within a train ride's distance --

within an overnight's train ride's distance of London

82

and Glasgow. So you've been able to publish newspapers

and reach that very, very dense, highly populated

market.

So you have a hugely competitive national newspaper

market. When you compare it to the United States,

a population, say, five times the size, scattered over

a huge geographical area, so you couldn't possibly print

a newspaper in New York, put it on a train and reach LA.

So they grew up with city papers, not national papers,

by and large, and you get one or two in each city.

I hope this is relevant, but if you look at our

national newspaper market, the first -- (a) that is very

important. I don't know whether there's a more

commercially newspaper competitive market in the world.

And within that market, the popular newspapers rely

overwhelmingly on selling the papers to earn their

income. The broadsheets, as they've always

traditionally been called, by contrast rely far more on

advertising, selling advertising space to get their

income.

So within that highly competitive market, it's the

popular newspapers that are trying to sell in the

millions where that commercial imperative is at its most

intense, and it gets passed down through the ranks, as

I think Richard was trying to describe and is often

83

reinforced which the bullying which I have a referred

to.

The broadsheets have less commercial imperative.

Still they have to sell copies to justify their

advertising income, but not as many copies. It isn't as

intense and within that less intense end of the market,

a newspaper like the Guardian that's owned by a trust is

less intense again in its commercial pressure. It is

nonetheless there -- we have to survive -- but it's

mitigated.

Does that make sense?

LORD JUSTICE LEVESON: Yes, certainly. Again, I'm

interrupting. I shouldn't do that. But at one stage

I'm going to want you to talk about the different

imperatives, if you can, that face broadsheets like the

Guardian, which has one type of audience, and the

mid-market or tabloid end, which has a different type of

audience, sells many, many more copies, and whether the

same considerations which you've been discussing really

apply to the different types of story that these

different newspapers promote.

But do you want me to talk about that now or --

LORD JUSTICE LEVESON: Well -- please do.

To take you up on -- because I think I've given the

answer already, which is that the commercial

84

considerations are reduced in the broadsheet paper, and

in particular the broadsheet paper owned by the trust.

What I'm arguing for is that -- journalism doesn't begin

with checking facts. There's a prior stage of selective

judgment. What subjects should we cover? Having

decided to cover this subject, what angle should we

take? What priority do we give it in the bulletin or

the paper? At what length, with what language? This is

all highly selective. How should we make those

selective judgments? Overwhelmingly, they are made on

commercial grounds. So we want the story which is quick

and cheap to do, which is why we recycle agency copy and

other people's stories. We want the story that will

sell papers, so therefore you pick the sexiest possible

way of telling it.

The problems that are associated with that I think

spread across the spectrum. I'm not exempting the

Guardian from problems. We have run stories which were

clearly false. The Jersey children's home -- do you

remember that, a couple of years ago -- where the idea

was that the police had evidence that children had been

killed and buried in the ruins of an old children's home

on the isle of Jersey. That's a classic of what Richard

was trying to describe earlier. The evidence for the

truth of that proposition is screaming its falsehood.

85

So, for example, the police said, "We have been looking

into the ruins of this building and we have found

a cellar which is exactly like the cellar which is

described by our survivor witnesses." It's "very dark".

Cellars are dark. It means nothing. Then they said,

"And in this cellar we found a bath", and it's quite

alarming, this, the sort of hints of torturing. "It's

actually bolted to the floor", as though everybody's

bath was mobile. It's silly. It doesn't make any

sense.

So then the problem that occurred on all newspapers

across the whole spectrum is it's too good a story to

knock down. So it's exactly what Richard was saying.

A reporter from any paper is sent out to Jersey to

follow up on this story. The reporter who rings up and

says, "Actually, this is crap, there's just no evidence

for this at all", they will not be thanked. It's

a great story.

I actually ran a piece in the Media Guardian,

saying, "What are we talking about?" I was speaking

about this in public meetings. I actually bet one

meeting my left finger if the story was true, but

nevertheless we carried on running it.

So it's a problem that spreads to some degree across

Fleet Street, commercial judgments.

86

LORD JUSTICE LEVESON: Yes, I understand.

Okay.

LORD JUSTICE LEVESON: Now I put the reason for my question,

because I have been -- "criticised" is not too high

a word -- for approaching the issue without tabloid

expertise, and I'm keen to understand the extent to

which the issues -- it may be the subject matter is

different, but the issues should be different whatever

title you're working for. Do you understand the point

I'm making?

Yes, okay. There are differences of degree, rather than

kind, I suppose is one way of summarising it.

MR JAY: Thank you. May I deal with the general issue in

relation to sources. This is paragraph 14 of your

statement.

Mm-hm.

Q. You make it clear that you never pay your sources for

their assistance, and in the middle of the page:

"Similarly, I have never come across the Guardian

paying police, public officials or mobile phone

companies."

Mm-hm.

Q. That's your direct experience, is it, Mr Davies?

Yes. Well, yes, it's a negative experience, isn't it,

but it is mine.

87

Q. Then you say:

"For the sake of completeness ..."

That occasionally a meal or a drink is bought, as

you might expect. The question is probably so obvious

it goes without saying, but what are the ethical

ramifications of paying for stories?

Generally speaking?

Q. Yes, and why don't you pay for stories?

I've said in the statement that I think the issue is not

primarily ethical. I'm not one of those people who says

chequebook journalism is inherently evil. I think it's

a practical question. So if you go back to my business

about the human sources on that primary route, the key

thing we have to do -- sometimes easy, sometimes

terribly difficult -- is to motivate people to talk to

us. People of -- like I have to be able to get the

12-year-old child prostitute to talk to me, and the

police officer who is trying to arrest her, and the

social worker who can't control her, and the pimp who's

taking money off her. All of them I have to persuade to

talk to me, and the way to do that with success is to

find a motivation and build a relationship. It's the

most exciting, interesting thing in reporting. If you

pay -- and this is why I say it's practical, not

ethical -- (a) there is a chance that you're giving

88

these people a motive to fabricate, to earn their money,

and (b) at best, you get a very limited amount of

co-operation.

So there have been occasions when I've been, so to

speak, competing with tabloid journalists for the same

story and they've gone in with their chequebooks. If

you could quantify it, they've got the first couple of

pages of the story but I got the whole chapter because

people decided they want to help. That, I think, is

where the problem is. You see, practical rather than

ethical.

There's a subsidiary point where clearly if you --

if a journalist or anybody else is offering to pay money

in contravention of the Bribery Act, then there's

a legal problem, clearly.

Q. As regards the specific example you've given about child

prostitution -- you cover this in detail in

paragraph 20, which is 03000. You make it clear that in

order properly to investigate that case, you were paying

no more than £20 to the children involved, which is, of

course, equivalent to the pathetically small amounts

they would obtain from those purchasing their services.

Yes, it was the only example I could think of where I'd

paid people. It isn't actually paying to motivate them.

It's paying to -- I don't know, it was partly to

89

compensate them for the money they weren't earning, but

I said in here too, I just -- I'd rather they got 20

quid from me than from some businessman doing something

horrible on his way home. I mean, these are children

we're talking about.

Q. On public interest -- you've covered this already --

paragraph 21, the bottom of the same page, you refer to

the kind of ethical mist. You've told us about the

difficulties with Section 55, although no journalist has

ever sought to rely on it.

But you do provide us with two specific or three

specific examples on the next page, 03001.

Oh yeah, I'd forgotten about these.

Q. The first of these is so famous we need not dwell on it

overmuch, but this is an internal News of the World

email which you supplied to the CMS Select Committee

in July 2009.

Yes, and the point is I redacted --

Q. You redacted the transcripts.

Yes, to protect the privacy of those involved.

Q. Then you refer, in the next example:

"The Guardian was offered a story about a former

cabinet minister whose voicemail was hacked."

You felt that that went too far in terms of a breach

of privacy?

90

Yes. The story wasn't offered to me. It was offered to

another reporter, who said, "What do you think?" And

I said I do not think we should be reproducing anything

which rebreaches this man's privacy, so let's not do it.

It's a judgment call. I don't know --

LORD JUSTICE LEVESON: It's been one of the great problems

that I've had for the last week, that I've been inviting

people to breach their own privacy by telling me about

breaches of privacy.

It is a problem, isn't it?

MR JAY: Then the third example, where the public interest,

as it were, fell the other way, is the --

Oh yes.

Q. -- piece you wrote along with a colleague, Amelia Hill,

in the Guardian on 4 July 2011, breaking the story about

the hacking of Milly Dowler's voicemail.

Yes.

Q. We have that, I'm sure everybody has seen it, under our

tab 3.

Mm-hm. There the question was whether or not we were

digging up the grief of the family again by publishing

this story.

Q. We know what the outcome of the balancing exercise was,

but why, in a nutshell, did you come down in favour of

publication?

91

This is tricky stuff, but -- so I think first, what we

were disclosing was so important that we needed to find

some way of getting it into the public domain. On the

other hand, you know, the family have been through hell.

I really was worried about digging it up. So the step

that we took to try to reduce the impact for the family

was that via Surrey Police we sent a detailed message

saying, "Look, here's what we are preparing by way of

the story. This is just to alert you to the fact that

we're expecting to publish this within the next 48

hours."

I think they were actually on holiday but they came

back, I think, in time to get that message. So that was

the best we could do in the circumstances. I think it

was absolutely was right to get it into the public

domain, and I think Mrs Dowler gave evidence about this,

that she was upset by the story, which is -- you know,

I wish she hadn't been upset and we did what we could to

soften the impact by sending that detailed warning.

Q. You refer on the second page of this article --

What's the tab number?

Q. Tab 3 of the bundle we've prepared. Level with the

upper hole punch, Mr Davies.

Yes.

Q. The deletion of the messages. You say, four lines down:

92

"According to one source, this had a devastating

effect."

We heard about that directly from the Dowlers.

Yes.

Q. You're not going to tell us who that source is, so

I won't even ask you, but --

It's better not to.

Q. Thank you. A bit later down, you refer to a senior

source familiar with the Surrey Police investigation.

Yes.

Q. Can I ask you this question, without naming anybody: do

you happen to know who it was who hacked into

Milly Dowler's voicemails?

There's two stages to this. The facilitator was

Glenn Mulcaire. There's a misunderstanding, I think,

around the way that he operates. He doesn't actually,

on the whole, do the listening to the messages himself.

Most of that is done by the journalist themselves.

Mulcaire's job was to enable them to do that where there

was some problem, because he's a brilliant blagger, so

he could get information, data, from the mobile phone

company. And occasionally I think he did special

projects. I think perhaps the royal household would be

an example.

So if you ask who hacked Milly's voicemail, the

93

answer is that Mulcaire facilitated the hacking by one

or more News of the World journalists and our

understanding of the facts is that it was one or more of

the News of the World journalists who then had to delete

the messages in order to enable more to come through.

Q. That's helpful. I think that's as far as we can

properly take it but it explains one or two statements

which have been put in the public domain at the time

that the Dowlers' evidence was given to this Inquiry.

Before I come to the dark arts and your book, may

I deal with a couple of points in relation to the PCC.

Under tab 2, you'll find, I hope, some evidence you gave

to the Select Committee on 21 April 2009, together with

Professor Greenslade. You were, as it were, a double

act on that day and I think he's in the room today. We

can read that carefully for ourselves. Indeed, some of

us have done beforehand.

Just alight upon something you've said. At page 131

at the top right-hand side, Mr Davies.

Mm-hm. 131 the top right, yes.

Q. Professor Greenslade talks about the McCanns.

Are you sort of there in the middle of that column?

Q. Yes.

The McCanns were a classic case?

Q. Yes. Just noting that and we'll skim-read that, but

94

that may or may not chime with evidence we heard last

week. Indeed it probably does. But at the bottom of

the page, question 434, you were asked:

"How effective do you think the PCC is in upholding

standards?"

Without reading this out, Mr Davies, what in summary

did you say to this Inquiry about the effectiveness of

the PCC?

In relation to the McCanns specifically?

Q. More generally, I think.

I think that the history of the PCC's performance

undermines the whole concept of self-regulation.

Re-reading this evidence, because you sent it to me at

the end of last week, I noticed that I was speaking up

for self-regulation, but I wouldn't any more. I don't

think this is an industry that is interested in or

capable of self-regulation.

I think probably at this point I was at the edge of

that conclusion, but hadn't quite come to it. I think

I felt that perhaps the problems which I'd seen in the

PCC, particularly with handling the original outbreak of

phone hacking in 2006/7, the McCann case and the

Max Mosley case, might have been the result of the

particular chair and the particular director, and for me

there was a turning point in -- this is April '09. We

95

published the Gordon Taylor story in July, and

in November, the PCC published the second report on

phone hacking. Different personnel, different chair.

The former -- well, I think the same director, but the

man who is now director was involved in the production

of that report, Stephen Abell, who I regard as a good

man.

But the report was terrible. Just an awful piece of

work. You know, my editor resigned from the code

committee in protest. He went on the radio and said,

"This is worse than useless", which I think was an

understatement. And that shifted me across the line.

I just think -- I do not trust this industry to regulate

itself. I say this as I love reporting. I want us to

be free. You have a huge intellectual puzzle in front

of you. How do you regulate a free press? But it

obviously doesn't work. We're kidding ourselves if we

think it would, because it hasn't.

Q. This is the report, which is no longer on the PCC

website, which referred to, I paraphrase, some of the

Guardian's more dramatic claims not being borne out by

the evidence or words to that effect?

Yes, and along the way there was some slippery

behaviour, slippery handling of evidence.

Q. Now may I come to Flat Earth News.

96

Mm-hm.

LORD JUSTICE LEVESON: Just before you start, it's not just

an intellectual puzzle, Mr Davies, because it has to

work and it has to work for everybody. It has to work

for the press and it has to work for the public.

Yes.

LORD JUSTICE LEVESON: So it has some real practical issues.

Yes. I think the point you've just made there is

terribly important, that in the past what has tended to

happen is that whatever debate may have occurred -- for

example, in the Calcutt commissions, the model that has

emerged has been dominated by the needs and thinking of

Fleet Street, and no system that is designed within that

shape is going to succeed and be stable. It has to take

account of the victims of the media. That's the crucial

first step. We have to stop only thinking about the

freedom of the press and build in satisfactory ways for

those people to get remedy.

LORD JUSTICE LEVESON: Well, I hope that that thinking has

started, and I was impressed by some of the

contributions in that regard that were made at the

seminars.

Mm-hm.

LORD JUSTICE LEVESON: Because it's something that your

business has to think about and help me work out.

97

Mm. We're going to come to this later, did you say?

LORD JUSTICE LEVESON: I think we are, yes.

All right.

MR JAY: I have it in mind as sort of the -- not the coda to

your evidence, but at a later stage early in the

afternoon.

Okay.

Q. Sorry, but before I come to Flat Earth News, may I just

ask you a couple of questions about one piece, which is

under tab 5 in the bundle, Mr Davies.

Yes.

Q. It's a piece you wrote on 27 January 2011 in the

Guardian.

Hang on, there's lots of pieces in this tab.

Q. Yes.

What's it about?

Q. It's called "News of the World phone hacking, Nick

Davies' email to MPs". It's about a dozen pages into

tab 5?

I've found it.

Q. It's a six-page piece. I think what you're doing

here -- but correct me if I'm wrong and it's clear that

this is what you're doing. You sent some information to

the Select Committee and you're just publishing it in an

article in the Guardian; is that right?

98

Yes. This is a memo that I wrote for the Select

Committee that wasn't published and then they

eventually, months later, put it on their website and at

some moment, the Guardian ran it on the Guardian's

website.

Q. Can I just ask you about the third page, please?

Third page. Yes.

Q. Just to understand the source of your information, in

general terms to the extent to which you can assist, but

if there are sensitivities here, please tell me -- you

say at the top that:

"Paperwork held by the CPS shows that police began

their investigation in January 2006 by analysing data

held by phone companies. This revealed a vast number of

victims, indicated a vast array of offending behaviour,

but the prosecutors and police agreed not to investigate

all the available leads."

How do you know that?

Because a good human source showed me that paperwork.

Q. Fair enough. The same presumably applies to the next

paragraph:

"In addition, the CPS paperwork shows that

prosecutors were persuaded by the police to adopt

a policy of ringfencing evidence so that even within the

scope of the limited investigation, there would be

99

a further limit on the public use of evidence in order

to ensure that sensitive victims would not be named in

court."

So --

Same source.

Q. That's the same source?

Yes.

Q. Then the next paragraph it's clear that the Guardian

made use of the Freedom of Information Act some

considerable time later, in January 2010, and that

demonstrated that at that stage there were 4,332 names

or partial names of people and in whom the men had an

interest.

The "men" you're referring to are Goodman, Mulcaire

and then generically one other man who has not been

charged; is that right?

Yeah. In August 8, 2006, the police arrested

Glenn Mulcaire, Clive Goodman and one other person,

whose identity I know but he's never been named in the

public domain. They seized material from those three.

Q. Indeed.

And my freedom of information request was a request for

a statistical summary of what was in that seized

material from those three people. And I put the

application in way back and Scotland Yard breached the

100

statutory requirement to reply within 20 working days.

That's why it didn't come through until January.

Q. We can guess what the primary source of the information

was. It was Mr Mulcaire's notebook, presumably, was it?

Yes, I think it would be. There's a little bit of

Goodman and a little bit of the third guy, but it's

going to be mostly Mulcaire.

Q. And so we understand your methods, if I can so describe

it, and you've told us about this earlier, the Freedom

of Information Act is a tool at your disposal. How

often, approximately, have you used it in order to

obtain information in the context of the phone hacking

issue?

Oh, on the phone hacking? Only two or three times. And

it got very complicated because they were being blocked

and knocked back and I seemed to get reviews and I had

to take an appeal to the ICO. I would think it's

a maximum of three different applications, but it may

have been that they started as only one or two and split

as different blockages occurred in the route. You see

what I mean? One went all the way to the

Information Commissioner's office before they gave in.

Q. Flat Earth News.

Mm-hm.

Q. Chapter 7.

101

Yes.

Q. We've photocopied relevant pages. I think they have

been provided to the technician, but if not, we'll

manage without them. At page 257 --

257? That's before. Hang on, 257? Are you sure?

Q. Between, sorry, it's between 256 and 259, doesn't

actually have a 257 at the bottom, but it's part 4

"Inside Story", "The Dark Arts" starts at 259.

Right.

Q. You caption it with a quote from Alastair Campbell, who

will explain what he meant by that in more detail

tomorrow.

Okay.

Q. 259, "The Dark Arts". You start off with a review of

the Information Commissioner's work, the raids in

relation to Mr Whittamore, as I was summarising to the

Inquiry when I opened the formal part of this Inquiry on

14 November.

Do I have this right, Mr Davies, that quite a lot of

this is material in the public domain, but it was

boosted or bolstered and substantiated by Freedom of

Information Act requests which you made of the

Information Commissioner's office?

Not quite right. So you have the two reports on

Operation Motorman that were published in 2006, freedom

102

of information applications that were made by

Michael Ashcroft, Lord Ashcroft, which then went into

the public domain when they were replied to, so they're

not mine, they were Lord Ashcroft's, and thirdly, direct

contact between myself and a member of the Whittamore

network. Possibly two members.

Q. Thank you.

And also I pestered the Information Commissioner's

office until they were blue in the face for bits and

pieces.

Q. And they --

Gave me bits and pieces, but not as much as I wanted,

which is why the pestering went on. So it's that

overlap thing again.

LORD JUSTICE LEVESON: That's what journalists do.

MR JAY: You'll understand, Mr Davies, that on Thursday

we're going to be covering all of this with Mr Thomas.

Yes.

Q. Including Freedom of Information Act requests and an

analysis of the 13,343 requests you refer to at

page 260, so we're going into it all in considerable

detail.

Yes.

Q. It may not be necessary to cover all the ground with

you.

103

I'm asked to point out this to you, though. At the

bottom of page 262, if you just bear with me. You say

that the judge, who is His Honour Judge Samuels QC,

asked a highly relevant question. This is when the case

reached the --

Blackfriars Crown Court.

Q. -- Crown Court at Blackfriars, and the question was

words to the effect:

"Where are the journalists?"

Mm-hm.

Q. You say at the bottom of the page:

"The prosecutor could not explain."

Yes.

Q. But I'm asked to put to you that the prosecutor could

and did explain that some journalists had been

interviewed and the decision was taken that there was

insufficient evidence to prosecute. Were you aware of

that?

I am aware that journalists were interviewed. That's

a statement of the fact; it isn't an explanation as to

why neither they nor the newspapers were prosecuted. Do

you see?

Q. Yes.

So that the prosecutor is simply restating the fact that

this hasn't happened. The question is: Why? That's one

104

of the things I was pestering the Information

Commissioner's office about and this is one of the

things this they did help me on. They explained, which

did not come out in court -- and correct me if I've got

this wrong, but I'm pretty sure that I'm right -- that

when they were looking at this prosecution, they said to

themselves, "If we prosecute the Fleet Street

newspapers, first, they will hire very expensive QCs and

we will have to do the same; secondly, they're going to

tie us up in endless pre-trial argument, which again is

going to be very expensive. We simply don't have the

legal budget to do this."

So that explanation, which was given to me by the

ICO subsequently, was not given, as I understand it, in

court. The explanation, do you see, as against the --

somebody's shaking their head behind you. I don't know

whether it's --

Q. Whether they are or not, I'm concentrating on what

you're saying.

LORD JUSTICE LEVESON: Don't you worry about anybody else.

Oh, sorry.

LORD JUSTICE LEVESON: They'll make their views clear at

some stage.

What I'm giving you is an accurate summary of what the

ICO told me, and in answer to your question, the

105

explanation for the fact of the non-prosecution of the

newspapers, I believe, was not expressed in court.

MR JAY: Are you able to tell us -- but if you can't, please

confirm it -- who it was at the Information

Commissioner's office who give you that explanation.

You know the truth is I cannot remember whether I spoke

to them on the basis that I wouldn't name them or not,

but it was an authoritative figure who knew what they

were talking about. I could check with the ICO and come

back to you. I think it's probably all right, but

I don't want to break the terms of the conversation.

I simply can't remember. Do you want me to follow up on

it?

Q. Not at this stage, Mr Davies. It's something that I can

take up with the relevant people on Thursday.

Okay.

Q. I'm just making a note on the transcript so that it

doesn't fall within any gaps, in case I don't remember

to.

You deal generally with the issue of journalists

over the next few pages to the top of page 265.

Yes.

Q. Presumably, Mr Davies, you, amongst others, would invite

the Inquiry to take this up with the former Information

Commissioner when he gives evidence on Thursday?

106

The specific issue being: why didn't you prosecute the

newspapers?

Q. Yes.

Yes. Have you -- am I allowed to ask, have you had

access to the raw material that the ICO obtained from

the Whittamore network?

Q. I don't normally answer questions.

I'm sorry.

LORD JUSTICE LEVESON: It works the other way around here.

What I'm trying to say is I did have access to that, as

you can tell from some of the stories I wrote on all of

it two years ago, and I'm not a lawyer, I'm

a journalist, but it seemed to me surprising that there

hadn't been a prosecution of the newspapers as well as

the PIs.

Q. The Inquiry has had access and the core participants

have seen it to material provided by the Information

Commissioner's Office which has not been made available

for (inaudible).

Okay.

Q. May I bring you forward, but possibly back in time, to

page 266 of "The Dark Arts" --

Yes.

Q. -- where you embark upon a review of, really, the next

20 pages or so of a range of matters which, if you look

107

at page 266, about a third of the way down, you say

this:

"It's never easy to look back from the midst of the

epidemic and see how the germ first started to spread.

There has always been a little dirty play, a little

illegal stuff going on in the shadows of Fleet Street."

And what you undertake here, do I have this right,

Mr Davies, is a sort of historical review which brings

a narrative forward, starting perhaps from the 1970s

when the Commissioner at Scotland Yard, of course, was

Sir Robert Mark, when he carried out a massive clean-up

operation, as we all know, and you bring the story

forward to more or less the present day; is that right?

That's what I was trying to do, yes.

Q. So I can understand the position then, when you mention

Z, at page 267 --

Yes?

Q. -- at about what point in time are we talking about? Is

this the 1980s or some different time period?

The timeframe of Z's activities on the behalf of

Fleet Street?

Q. Yes.

Begins in the early 1980s, I think 1982, but early

1980s, and stretches forward into the very recent past.

My belief is that he was still active at the time that

108

I was researching and writing the book.

Q. The nature of your information in relation to Z, can

I ask you this question: is there anything here in the

book which derives directly from Z himself? If you

don't want to answer that, just say so.

No, it doesn't come from Z himself. It's a combination

of exactly those two primary routes: public domain and

human. So, yeah.

Q. In terms of quantity, the number of human sources, are

we talking the same sort of numbers as you've mentioned

previously, about a dozen, or are we talking some

different number?

Okay. First of all, this guy is very well-known, so

I covered -- when he was originally tried for police

corruption, I covered his trial. His activity for

newspapers is something I already knew about, just

because I'm a reporter and was aware of him. So that's

a slightly unusual aspect of it, that I'd already come

across him.

Sources? Gosh. I would think you have five or six

individuals who I spoke to during the research of the

book about his activity, and -- I think it's all right

to say this -- one of the things that happened was

after -- I told you how I stumbled into this, people

started talking about him: "Christ, I remember him". So

109

I then contacted Scotland Yard and asked somebody I know

there who is reasonably senior, "Will you brief me on

this?" I think one of the things that had emerged --

I have to be careful not to identify -- along the way

there had been an operation by Scotland Yard to

prosecute this individual, Z, to stop him acting as

a go-between between newspapers and corrupt officers,

and therefore that was a clear signal that there were

people in Scotland Yard who were aware of his activities

and trying to stop him. So I tried to get into that

part of the Yard and somebody senior came and met me in

a hotel lobby and spent several hours helping me out

with the history of this man's activity as they knew it.

So it's the sort of four, five, six reporters during

the research, the Yard briefing, various public domain

sources, there are two trials here -- one of which

I covered, the other which I wrote about; the second

trial comes from the attempt to stop him -- and then my

own background knowledge.

Q. Page 269, you mention a particular private investigator.

Yes. Right up the top?

Q. Yes.

Yeah, gotcha.

Q. The Inquiry doesn't really wish to go into the detail of

this at this stage, although it's right to say that this

110

particular individual has been the subject of Panorama

programmes, certainly one programme, I've seen it.

You're not the only one -- not to diminish what you're

saying -- who covers him as well.

No.

Q. Can I ask you though, please, about 271, the second

paragraph. When you say that these two were merely the

brand leaders:

"By the mid-1990s, Fleet Street was employing

several dozen different agents to break the law on its

behalf. Most were private investigators, a few were

ordinary civilians who developed the knack of blagging

confidential official out of banks and phone companies."

Then you refer to someone in Ruislip who was

regularly conning ex-directory numbers and itemised

phone bills out of BT.

Again, please, so that we understand the evidential

strength of this, the sources of your information?

Okay. So there you've got reporters from a lot of

different newspapers talking about their use of private

investigators, you've got some of the investigators who

I referred to, the kind of senior members of the

profession, helping me out, and you have some public

domain material. So the person from Ruislip was

convicted in the public domain and there were records of

111

that trial occurring.

I'm pretty sure that there was background in the ICO

as well. I don't know whether it was in the Motorman

reports or one of the other -- I think it might be in

the first Motorman report, there was quite a lot of

useful background on scale. This is from memory.

Q. There are four examples given, which correlate with what

you're just saying.

-- I haven't read it.

Q. At the start of the --

Okay.

Q. Fair enough. The activities of these private

investigators, have I understood this paragraph

correctly, that in essence they were carrying out the

same sort of activities as Mr Whittamore and his team?

Or were they doing something different?

I think there's a possible -- at least five different

possible activities. So number one, blagging

information out of confidential databases. Two, there

are hints of voicemail hacking coming out. There are

hints of email hacking coming out. There are hints of

burglary coming out. And what's the other one? Oh,

corruption of police officers.

Q. Ransacking bins?

No, corruption of police officers is coming through

112

quite strong, and -- well, the bins is a rather quirky

thing on the side with a quirky bloke, but those five

activities are being talked about by reporters. If

we're talking just at that basic level of what people

are telling me, what the PIs are telling me, what the

reporters are telling me, they're covering those five

kinds of activities.

Q. Thank you. The relevance of Z bears particularly on the

issue of police corruption, I think; is that right?

Correct.

Q. We're perhaps in the realm of another module of this

Inquiry, but if I could be forgiven for asking you one

question about it -- or perhaps not just one, maybe more

than one -- are you able to give us any sense of the

scale of this activity?

Z's activity?

Q. In relation to the police.

It's very difficult to quantify it. I mean, I'm not

quite sure how cautious we're being about identifying

him, but when Scotland Yard attempted to stop him, they

mounted a prosecution, there was a trial. The trial did

not convict him; it acquitted him. There was some

coverage at that time where, for example, it was

suggested that every crime reporter in Fleet Street will

be drinking champagne tonight and there were crime

113

reporters being quoted saying, "This is a great day for

the freedom of the press." If you set this against what

reporters and PIs and Scotland Yard themselves are

saying about the man's activities, I think it's fair to

say that he was involved over a number of years in quite

casual activity, carrying cash from newspapers to

corrupt police officers, and that was particularly clear

from the police point of view, who I think felt really

frustrated and angry about what was going on. Because

this is not just about breach of privacy. There were

examples -- I can't remember whether I've given them in

the book, I can remember one of them which I was given,

but where active inquiries were impeded by the sale of

this information.

Q. Towards the top of page 272, you refer to a particular

title.

Mm-hm.

Q. You understand that there is a sensitivity about that?

Mm-hm.

Q. Can I understand, first of all, though, approximately

when did the events you describe at this point on

page 272 occur?

Hang on. I just have to read it so that I can catch up

with you.

Okay. I think we're here in the early and

114

mid-1990s.

Q. Possibly a bit earlier, I'm told, because the Mail's

offices moved to Kensington in 1989, and therefore if

there's drinking at the Wine Press in Fleet Street, it

must have been before then. Is that possible?

You've just identified the title. No, that doesn't make

any sense at all, does it? The Wine Press are an

innocent party in this. They're not responsible for

what goes on in their bar, but Wine Press was

a long-established watering hole for Fleet Street,

particularly for Fleet Street crime reporters and police

officers, and the fact that one particular newspaper

moved several miles to the west doesn't change the fact

that that's the pond where the fish are and the reporter

from that newspaper is going to go back. Everybody's

not going to follow them down the road. I'm confident

this is post '89. In fact, I'm confident this is early

and mid-1990s, as I described.

Q. I'm just putting a point to you. You have given the

answer and that's fine, Mr Davies.

How many reporters at the Mail gave you the

information you refer to, namely handing over quite

substantial amounts of cash?

Do you remember I said there are different layers of

detail, but there were three in particular who helped me

115

on that aspect of it. These are former Mail reporters.

Q. Was it known where the money was going?

Absolutely clearly. This is where it gets terribly

difficult because, for example, there was quite a lot of

specific detail with this particular story. This is how

we got the information. There was a clear indication of

who the recipient detective was, so who it is that Z is

passing the money to, how much was passed, but that's

what I was saying earlier on; it's not just a question

of concealing the identity of the journalist. If you

disclose the precise detail, then by implication you

identify the source.

I think it's fair to say that the Mail, who we've

identified now, are absolutely not alone here in their

relationship with Z. I think it was, as I say, casual

and widespread.

Q. Page 273. You deal with one particular matter, namely

access to a government database.

Mm-hm.

Q. The source you refer to with access to a government

database, who was that person? I'm not asking you to

identify the person, but give us some idea as to the

modus operandi here. Can you help us?

As to who's talking to me?

Q. Yes.

116

It says: a reporter who has now left the Mail. Again,

it's one of these things where you have a lot of

different reporters who have worked there talk about the

blagging of confidential data and then different

individuals go into different elements of detail on it.

Q. Presumably then -- is this right, Mr Davies -- towards

the bottom of page 273, it's the same point in relation

to the Sunday Times; is that right?

The point being?

Q. That it's probably former Sunday Times reporters who are

providing you with the information?

Yes. Again, you have about a dozen or 15 former

reporters who are talking and overlapping to different

degrees on different subjects.

Q. We note what you say at the top of page 274 about the

routine use of private investigators?

Mm-hm.

Q. One expert blagger told you -- have I understood it

correctly -- that he was working for the Sunday Times?

Yes. He's going back a bit.

Q. Back to about when?

I reckon late 80s, that particular person. He's one of

your kind of senior figures who doesn't like the way it

all took off.

Q. Then you refer, towards the bottom of page 274, to

117

a former reporter of the Times who then brought

proceedings against an employment tribunal. That's

Mr David Connett, is it?

This is the Sunday Times. Correct, and I sat in on that

Tribunal hearing and covered the evidence that came out.

So that's public domain again.

Q. Yes, and the ruling of the employment tribunal again is

a document in the public domain and we'll be looking at

it in due course.

You deal with someone else, this time the Sunday

Telegraph, at page 276. This is in relation to Dr David

Kelly.

Mm-hm.

Q. Then at 277, you point out that the -- or one of the

reporters at the Times used Steve Whittamore.

Mm-hm.

Q. I think it's clear from the table which is on the second

of the two Information Commissioner's reports, "What

price privacy now?"

Mm-hm.

Q. Although the Times only features --

Marginally.

Q. -- in those single figures. Can I ask you about

a specific question I'm invited to put to you. 277,

two-thirds this of the way down, you say:

118

"Lord Ashcroft and another peer, Lord Levy, both had

their tax records blagged by somebody who appears to

have been working for the Sunday Times."

Then to look at Lord Levy in particular:

"Bogus calls were made to the Inland Revenue by

somebody posing as Lord Levy before the Sunday Times

wrote about his tax payments in June 2000 ..."

What happened there, I think, is that the Sunday

Times put this story to Lord Levy and Lord Levy applied

for an injunction to restrain publication. Were you

aware of that?

Sounds familiar. I'm not sure, but it sounds possible.

Q. Although in the end, the injunction was refused by

a High Court judge on public interest grounds.

It may well be.

LORD JUSTICE LEVESON: Is that a convenient moment, Mr Jay?

MR JAY: Sir, it is. We are on track in terms of the

overall timetable. I may need to conclude Mr Davies by

about quarter to 3.

LORD JUSTICE LEVESON: Very good. I just want to remind

everybody that although we're obviously looking at these

title by title, it is no part of this part of the

Inquiry to make decisions of fact about who did what to

whom, and I repeat that at various points so that nobody

should misunderstand the significance of what we're

119

doing.

MR JAY: Thank you.

LORD JUSTICE LEVESON: Thank you very much. 2 o'clock.

pm)

(The luncheon adjournment)

1

2 (2.00 pm)

3 MR JAY: Mr Davies, we're still on "The Dark Arts".

We're

4 now onto Trojan horses, bottom of page 277. We

heard

5 evidence about this yesterday from Mr Hunter, as

you're

6 probably aware.

7 A. Hurst.

8 Q. Hurst. Pardon me. Can I ask you there about the

9 example you give in the middle of page 278, the

mirror

10 wall device. That was used by a businessman, not

11 a journalist?

12 A. Yes.

13 Q. Relating to the tax affairs of Dame Shirley Porter.

14 A. I can't remember this bit at all. Keep going. Oh,

15 I see. It was not a journalist but a business --

yes.

16 LORD JUSTICE LEVESON: When you're talking about a

mirror

17 wall, you're not talking about a title?

18 MR JAY: No. This presumably is in the public domain

since

19 the person involved, Mr Stanford, who you name, was

20 fined for an offence under the Interception of

21 Communications Act?

22 A. Correct, so my source are the reports of that

public

23 domain trial.

24 Q. Certainly, and there's not a public interest

offence, as

25 it happens, to a breach of section 1 of that

statute.

1

A. As I understand it, correct.

Q. Although you point out that there may have been a public

interest in the underlying story, don't you?

A. I can't remember, but maybe.

Q. Can we move on to the art or craft of binnology, which

you cover at on a page 279. There's some examples where

this might have been done in the public interest. For

example, page 281, you give the Jonathan Aitken example,

don't you?

A. Mm-hm.

Q. This information in relation to the activities of

Mr Pell, again, in general terms, where does it come

from?

A. The best single source is a book who was written by

a journalist whose first name was Mark and I'm

embarrassed to say I can't remember his second --

LORD JUSTICE LEVESON: Watts?

A. Could be. I think that sounds right.

LORD JUSTICE LEVESON: I got it from your book.

A. Right, so a reliable source! Yes, so he wrote an entire

book about Benjamin Pell, which is hugely detailed. So

that would be one. Then there were news reports at the

time of his activities and there are also reporters in

the background talking about him.

MR JAY: You give us another example which you describe as

2

"little gems" at the bottom of page 281.

A. I can't see it.

Q. Memos between the then Prime Minister and the late

Philip Gould --

A. Yes.

Q. -- published in the Sunday Times, the Times and the Sun.

So we have a series of examples which you provide in

"The Dark Arts". Then at 282 and following, you

consider the wider public interest issues?

A. Yes.

Q. And some of the exchanges between the then

Information Commissioner and the then chairman of the

PCC, all of which we're going to hear about in much more

detail, at least from one side of the horse's mouth, on

Thursday. So if you don't mind, I'll leave off those.

But I think we get a sufficient flavour of the sort of

material which you bring together to distill and to

buttress these writings; is that correct?

A. Yes.

Q. Thank you. I'm asked to put to you some questions,

Mr Davies, and to the extent to which I haven't already,

I will deal with them specifically. The first general

question, and I can put it quite generally: do you agree

that you did not put any of your criticisms, whether it

be of the Sunday Times, the Times or the

3

Associated Newspapers titles, to any of the individuals

concerned or to the papers concerned before you

published this book?

A. Emphatically not to the newspapers concerned. The

underlying thought -- if you look at the codes of

conduct -- there's a popular belief that they say you

always have to go to the subject of your story. None of

them say that. And it's -- I mean, I've been doing this

so long I now lecture young reporters in how to do this,

and what I say is it's crucial that you don't behave

like a robot. Story by story, case by case. You must

remember you're here to try to tell the truth about

important things. Will you be assisted or obstructed in

that basic simple task if you go to the other side and

tell them what you're working on and ask them for

a comment?

If you just look at it numerically, more often than

not, the answer will be: well, it's going to help you to

go to the other side. But there are a significant

number of occasions when the answer is no. Sometimes

that's for legal reasons, sometimes it's for ethical

reasons and sometimes for practical reasons.

In the case of these newspapers, it was practical.

I believed then and believe now that if I had tipped

them off about what I was doing, they would have gone

4

straight to the Guardian and applied all sorts of

pressure of various kinds to try to persuade the

Guardian to stop me doing that. And I didn't want the

Guardian put in the firing line. I'm a freelance, I'm

writing my own book, I didn't want them brought into it

and I also didn't want to be told to stop. I feel that

there was a real jeopardy to the success of the

operation, and so for that reason, I made the deliberate

choice not to go to them.

Sorry, did you want to say something?

LORD JUSTICE LEVESON: (shakes head)

A. The underlying thing is that if you go back to the

process I'm trying to follow -- the public domain

sources, the human sources, the early material -- what

you're trying to do is to get yourself to a point where

you can say, "Right, that's true, this statement is

true, that statement is true", and then to put it out

there, and if you've got to that point, and you can see

that going to the subject of the story puts you in

jeopardy, puts your ability to tell the truth in

jeopardy, then you wouldn't take that extra step, or

there might be ethical reasons for not going to the

other side, or there might be legal problems.

MR JAY: You've covered just the practical probables or

prudential problems. What sort of matters would fall

5

under the categories of ethical problems on the one hand

and legal problems on the other hand?

A. There are other practical problems that occur as well.

Ethical, I think the classic case is you're covering its

trial of a paedophile and he is accused of raping and

abducting and murdering children and you're preparing

the background story that's going to be published or

broadcast once the trial is over. Do you really want me

to go and ask this man what he says about his abduction

and rape and murder of children? And I think the answer

is you don't want me to do that. There's an ethical

problem there. Do you ask Hitler what he thinks about

concentration camps?

For example, the BBC code of conduct, which is

a particularly intensely thought-out, good one, uses

precisely that expression, "overriding ethical or legal

reasons".

So that's a relatively unusual block, but it's

there. If you follow me, anyway. I take that view.

Legal is two categories. One, which I would come

across from time to time, which is where I have obtained

information which could be deemed to be confidential.

There's a risk that if I let the other side know, I'm

going to get myself injuncted and I did a story --

I might have referred to it in the statement,

6

actually -- where I spent months digging into the tax

affairs of a particularly wealthy man in order to

exemplify the way in which very wealthy people don't

have to pay tax because they hire clever lawyers and

accountants to find their way through the law or they

just break the law.

When it came time to legal that, to get it into the

paper, they had seven different lawyers working on it

because of the fear of what this man could do to us in

the court. On one side, there were defamation

specialists, who were saying, "You have to go to him and

put this stuff to him", and then there were very

experienced lawyers on the confidentiality side, one of

whom's now become a judge, saying, "Don't go near him.

If you go near him, this story will never see the light

of day." And in the end I had to go to him and have

very carefully choreographed conversations where I was

checking facts without him knowing quite what the story

was about. It was an uneasy compromise.

So confidentiality is one problem for us and the

other is privacy, which I personally don't come up

against so often, but insofar as the Human Rights Act

now has Article 8 and Article 10 there, it can be

problematic. There was an example where the Sunday

Mirror did a kiss-and-tell job on a well-known public

7

figure and they had bought up the woman's story. They'd

got her letters and photographs. There was no doubting

the truth, the accuracy of what she was saying about the

public figure, but at 4 o'clock on the Saturday

afternoon they went to the public figure and asked for a

quote. In my book, this is a reporter operating like a

robot who hasn't seen the danger and within an hour or

two, the Sunday Mirror was injuncted and eventually they

lifted the injunction. But by that time they had lost

several editions, hundreds of thousands of pounds worth

of income.

Now, I have my own reservations about doing those

kinds of stories, but what I'm trying to point to is the

danger of automatically going to the other side. So

legal, ethical, practical.

LORD JUSTICE LEVESON: Of course, everything turns on facts.

A. Yes.

LORD JUSTICE LEVESON: And you will doubtless have seen in

the press, if you didn't otherwise hear about it, of the

evidence that we had from Mr Mosley about the need to

check stories because once the cat is out of the bag, it

can never be put back in.

A. Yes, and I think you have a powerful point, even more on

privacy than accuracy.

LORD JUSTICE LEVESON: Oh, there's no question, no question.

8

Yes, but for him there's a twin question, isn't there,

because there was --

A. The Nazi element of the story.

LORD JUSTICE LEVESON: Correct. But how does that play into

your analysis of the circumstances in which you go to

a particular target?

A. I think -- first, I don't think the Max Mosley story

should have been printed, but if I were the reporter

trying to get that story into the public domain, I would

understand that if I go near Max Mosley, he's going to

get an injunction on breach of privacy grounds and it's

an interesting contradiction, actually, because the

official story from the News of the World is: "Oh, well,

we've got Article 10 on side here. This is in the

public interest. This is our freedom of expression."

But the underlying fear would be that that's not going

to be the way the court sees it and that they are going

to injunct. So I don't approve of the story, but I can

understand why they didn't go near him. Have I answered

your question?

LORD JUSTICE LEVESON: Yes, you have, and I also understand

why they didn't go near him.

A. I think that's all they're saying. It's tricky -- you

see, on the confidentiality thing, which is something we

deal with more often, we did a long, complicated and

9

probably deeply tedious series a few years ago about

corporate tax avoidance. It was a very noble thing to

do. I don't know whether anybody read it. It went on

the for days.

Now, towards the end of that, we were contacted by

somebody who gave us internal paperwork from Barclays

Bank which described tax shelters which Barclays was

providing to corporate clients. We thought there were

two reasons why it was in the public interest to publish

this: (a) this is about the avoidance of tax, the

frustration of the Parliamentary will as to what tax

should be paid, (b) this was at a time where Barclays

was in negotiation -- ultimately fruitless ones, but

were in negotiation about taking taxpayers' money to

bail them out of the credit crisis, and therefore the

fact that they were it is selling tax shelters was

particularly in the public interest.

So we put those documents on our website with

a story, and that went up late one evening. Alan

Rusbridger will tell you the story in more detail but by

1 or 2 o'clock in the morning, there were powerful

lawyers onto us and onto a judge, arguing that these

were confidential and they got the injunction and that

was it. We had to remove the documents. We were not

able to publish that story. It comes back to this point

10

about the difficulty of making these judgments about

what's in the public interest. We felt very

aggrieved --

LORD JUSTICE LEVESON: I hope you've not just broken the

terms of that injunction.

A. No, no, I haven't given you the detailed contents of the

paperwork.

LORD JUSTICE LEVESON: Your lawyer tells you you haven't.

A. Thank you. Just this once. No, but you see -- that

again, you see -- the lesson from that incident for

a reporter is the danger of a court interpreting the law

of confidence in such a way as it to frustrate what you

genuinely consider to be your legitimate function.

MR JAY: Thank you.

A. Can I just add, you know I said "practical"? Apart from

the kind of intimidation question, the big problem is

PR. If you go to the subject of a story and that

subject has professional PR advice, if you give them the

time to manoeuvre, they'll put the story out on their

own terms. So they'll change the angle, and so to

speak, scoop you, and -- Alastair Campbell, for example,

who I know he's giving evidence, was brilliant at doing

this if newspapers went to him too early.

So more often than not you will want to go to the

other side. You want to go to the other side in case

11

there's some killer fact you haven't thought of and you

want to go to the other side if you want to use the

Reynolds defence. So I can't quantify it, but more

often than not you will, but it has to be story by

story, a judgment taking those factors into

consideration.

Q. Thank you. A series of questions now from someone else,

Mr Davies. Between which dates did you carry out your

research for Flat Earth News, approximately?

A. Calendar years 2005/6 and fragmentary research in the

first three months of '07. I finished writing it at the

end of March '07.

Q. Would you agree to disclose your sources regarding

comments about the Daily Mail so that your allegations

can be properly investigated?

A. I can disclose those sources if the sources will agree

to be disclosed.

Q. But not otherwise?

A. Really not, and I think the Mail would feel the same way

about their own sources.

Q. I'm asked to point out, and so I will, that the Mail or

Associated Newspapers generally wishes it to be made

clear it strongly refutes the allegations that the

Daily Mail had a policy of bribing policemen and civil

servants in order to obtain stories as you allege. They

12

also wish to make it clear that they refute generally

the allegations you make against them in the book, which

are incapable of specific refutation because they lack

any meaningful detail. Do you follow that?

A. Mm.

Q. Do you understand also the difficulty they have, and to

the extent that we have, that without you giving us your

sources -- and we fully understand why you can't -- that

which substantiates your book cannot be tested

evidentially. Would you accept that?

A. That's true of some but not all. I mean, for example,

where you look at the Motorman material, we know as

a matter of public domain fact that the Mail came out

top of the league table which the ICO published

in December 2006. I was at the Select Committee hearing

in September 2009 where the new Commissioner,

Christopher Graham, said that the ICO had made it clear

to newspapers that if they wanted to examine that

material, they could, and he's then said in his evidence

that no newspaper has come to the ICO to ask whether

they can examine the material which we seized from Steve

Whittamore. It seems to me that if the Mail want to

discover whether there was law-breaking in that

material, that was something they could this done/is

something they can do. It may be that they have now --

13

I can't obviously say -- but certainly at that stage, if

Christopher Graham is to be believed, that hadn't

happened and that route is open to them without having

to tangle with the confidential sources.

There's a second possibility where Z is concerned

about internal accounting. I just don't know what their

internal accounting systems are like, so -- the payments

that I was particularly being told about were cash, so

it may simply be that you draw the cash and it leaves no

specific footprint as to why it was being drawn, in

which case that isn't going to help us. But if there is

anything in the accounting system that actually shows

a payment going from the paper to Z, then that would

help the Mail to get to the bottom of the truth without

running up against the problem of off-the-record

sources. I mean, it's a pretty fine investigative

paper. I think they can get quite a long way without

me.

There's also the whole business of what

Scotland Yard has on that source. Again, it's in the

public domain that Scotland Yard mounted a surveillance

on him. I don't know what they came up with but it

would be interesting to ask.

So I do accept that there are real difficulties with

the Mail dealing with some of the things I've been

14

telling you, and it's frustrating, I accept that, but

I think there's an area where they could try and see

what they can find.

Q. In terms, generally, of the incidents of corruption

which you list, I think from your evidence already we

have some sense of the timescale.

A. Yes.

Q. We go back to the 1970s, Z is in the 1980s. The

information gathered, page 272 -- this is surrounding

The Wine Press in Fleet Street. You give the date for

that, probably in the early 1990s; is that right?

A. I'm saying mid, up to about 1996/1997 I'm talking about

there.

Q. Then page 279, which is the activities of Mr Benjamin

Pell.

A. It's not really corruption, is it?

Q. No?

A. Can I just interrupt you, before you go on, while we're

on corruption. My understanding of the position with Z

is that he goes right back to the early 80s, kind of

'82/'83, but comes a long way forward. My understanding

is he was still active when I was researching the book,

so that's a long span of activity of that kind.

On the police corruption side, there's the

investigator who you pointed me to at the top of

15

page 269, who we haven't actually named in this session.

That is materially about corrupting police officers.

There's a lot of detail which has emerged about that.

It involves three newspapers, not the Mail, but that's

the period, late 80s through to '99, where he goes to

prison, and then again, he's out and active from about

2005, although I don't know that there's evidence of

police corruption in that second period. But there's

that long initial period.

Q. I've already put the point to you about whether you put

your allegations to Associated Newspapers and you've

explained generally why you didn't. I think I've

covered that.

A. Mm-hm.

Q. I'm invited to ask you to comment your view, really, of

your fellow Guardian journalist Mr David Leigh.

A. Yeah.

Q. Apparently there are three instances that are given to

me. The first, he procured House of Commons notepaper,

using it in order to claim he was acting on behalf of

Jonathan Aitken MP and faxing it to the Ritz hotel in

Paris in order to obtain a copy of Mr Aitken's hotel

bill. First of all, as a matter of fact, are you aware

that Mr Leigh did that?

A. I think that's probably factually wrong. There was this

16

famous incident -- it's referred to as the "cod fax".

I think David was working at "World in Action" at that

time and wasn't part of it. There was a senior

executive at the Guardian who I believe was responsible

for the cod fax and if you want to get to the issue

rather than the individual -- I think you're wrong in

putting David in the story, but is it the issue you're

interesting in? Was that a bad thing to do?

Q. I think there are two layers to this. There's a factual

layer, which you've addressed, but then there's a more

general one, a conceptual one, I suppose, that even if

it's true, which you say it isn't, would you approve of

it?

A. I don't want to dodge the question. I think it's not

true of David, but I think it is true of the Guardian.

The Guardian did what you describe but I'm pretty sure

David Leigh wasn't working for the paper at the time.

Q. Fair enough.

A. This is blagging, really, isn't it?

Q. Yes.

A. Section 55 of the Data Protection Act. Do you have

public interest on your side when you do this? In this

murky area, I think top of everybody's league table of

what is in the public interest is the exposure of

serious crime, and at the end of this long saga

17

involving Jonathan Aitken, the Guardian eventually

published this story which disclosed that as our

Minister of Defence dealing with establishing arms

deals, he was lining himself up to receive enormous

bribes, and when the Guardian eventually got that into

the public domain -- I'm not libelling anybody here;

this is all already written -- they said that if there

had been a more serious example of political corruption

since 1945, they would like to be told what it was.

So I would say you are top of the scale public

interest on that piece of blagging.

Q. That's page 281 of your book.

A. Oh, is it?

Q. "If there's a more serious act of corruption in post-war

British politics, we would be interested to know of it."

A. Not a bad memory.

Q. The second example that's put to me I think it's better

if I just ask it directly of Mr Leigh when he comes next

week?

A. Okay.

Q. The third one, that he apparently accepted information

from Benjamin Pell that Pell had acquired from other

people's dustbins. Is that something you know about?

A. I wrote about it a bit in the book. He was very --

LORD JUSTICE LEVESON: Page 281.

18

A. Yes. He was very clever about it. David's a fantastic

reporter and the good reporters -- the Martha Gellhorns,

the James Camerons, the David Leighs -- have a kind of

artful dodger about them, and he could see the exciting

potential of this extraordinary man who was digging

material out of significant people's dustbins, but he

could also see that the Guardian were never going to pay

for it. Out of a mixture, I think I said in the book,

of poverty and principle, it wasn't going to happen. So

he very cleverly passed Benjamin on to somebody else who

could deal with him and this somebody else was a friend

who was highly likely to tell him if anything

interesting emerged from the bin.

So I think he got himself very close to the line and

just stayed on the right side of it. I thought it was

clever of him. This is exactly the sort of thing I'm

talking about. Is that in the public interest or not?

Who knows where the line is? Really, really tricky

judgments that many could up. He took a call on it.

Q. Could we look, please, to the future and press

regulation generally.

A. Mm-hm.

Q. The matter which was, as it were, parked before lunch

but which we promised or threatened that we would come

back to.

19

Could you give us some thought to that now and tell

us your views?

A. First of all, it's really difficult. I think that as

two starting thoughts -- we said the first one, that we

have to consider the needs of media victims as well as

media organisations.

The second one is that just as an intellectual

exercise, I wouldn't start with what we've got. We've

got this horrible concoction of common law and statute

and regulation and it's a mess. I think that it's

helpful to start with a blank sheet of paper and you

could conceptually draw a line down the middle of that

piece of paper and say really there are two different

kinds of problem. The most important problem is

falsehood and distortion, within which there is

defamatory falsehood and distortion, and on the other

side of this line you put unethical behaviour, within

which the worst is probably the invasion of privacy.

So if you take the first of those, if you start with

a blank sheet of paper and say, "What should we do about

falsehood, distortion and defamation?" I don't think

you'd come up with anything like the law we have. You

wouldn't invent, for example, the concept that damages

should be paid to somebody whose reputation has been

hurt by a publication. Surely you would say, "If that

20

happens, if I publish something which falsely damages

somebody's reputation, what they deserve is a correction

of equal prominence. Not the PCC's weasel words, 'due

prominence'; equal prominence to what I published."

That's a complete balance, and I think the same

applies generally to falsehood and distortion. This is

the thing that most upsets people about what we do, and

so having crossed this line and abandoned the idea of

self-regulation, I want somebody to pass a law that

says: if you publish, in newspapers, magazines, books,

wherever, and you make a statement which is demonstrably

false, you have to correct it with equal prominence.

First of all, this is good for the freedom of the

press. The worst burden, I think it's fair to say, we

suffer under is libel law. It constantly prevents us

telling the truth about important things. It has

a terrible, chilling effect, and I bet you every editor

in Fleet Street, from Rusbridger to Dacre, would be

happy to see the back of defamation law. There's a few

learned friends here who might not be happy but it would

be an enormous advantage to the freedom of the press.

And yet we can satisfy the needs of victims, but I would

do that not through the courts but through some sort of

simple --

LORD JUSTICE LEVESON: I'm not sure that's not a bit

21

simplistic because those who have been defamed obviously

want to get the defamation corrected, but in the

meantime they've been put through the grinder for the

time it takes to get it corrected.

A. Yes, but --

LORD JUSTICE LEVESON: They are entitled to some redress for

that, and in our system, the only redress we have is the

commodity called money.

A. But I wouldn't push this through the courts. I want an

arbitration system that's quick. I would put statutory

deadlines on it. If a newspaper publishes a statement

of fact, they should already know whether or not it's

true and be in a position to justify it pretty quickly.

I would say if someone makes a complaint about a

statement I have made -- you might think this is bonkers

but within four weeks we ought to have a hearing. And

that hearing shouldn't be in court; it should be in some

sort of arbitration system. That system would make

a finding of fact and it could be appealed to the courts

only on point of law.

You have a system rather like this in maritime law,

where they have specialist lawyers who act as

arbitrators. I've been researching it a little bit and

it works. You see as a starting point -- if you start

with a blank sheet of paper and just think it logically

22

through, you don't run into the contradiction between

the freedom of press and the need for regulation. You

can actually make something happen which increases the

freedom of the press and gives media victims a quick,

effective reply.

I know it's simple what I'm saying and it's

a complicated argument. I'm trying to provide

a starting point.

LORD JUSTICE LEVESON: No, no, I'm very grateful. Indeed,

the idea of having some sort of arbitral system you may

have heard that I've suggested to a number of people

over the course of the last two weeks.

A. Mm-hm.

LORD JUSTICE LEVESON: But whether one removes the law of

libel entirely is perhaps something rather different,

and it would be a rather odd consequence, wouldn't it,

of all the problems that have caused this Inquiry to say

we should have even a greater licence for the press to

print whatever they want?

A. No, because -- you take the McCann case, the horrific

falsehoods being published about those people. They

don't have to sue and go through that long, drawn-out

process, expensive, exhausting process. They trigger

the complaint. Within four weeks, they get an

arbitration decision. Surely the newspapers are not in

23

a position to justify the factual statements that were

made about them. All those newspapers who have made

them have to publish corrections with equal prominence.

The Daily Express has to put it on their front page,

where the allegation was. They get justice, fairness,

truth, much, much quicker. They don't get damages.

I don't think they wanted damages.

And on the other side is my -- all the business of

ethical behaviour, in particular breach of privacy at

the core. Over and over again, you come back to that

business: "It's all right if it's in the public

interesting."

LORD JUSTICE LEVESON: So you want the arbitral system also

to provide you --

A. No, they're what I'm after --

LORD JUSTICE LEVESON: I'm very content with a system that

is professionally based that takes work away from the

court. I'm not in the business of trying to get more

work into court.

A. What I'm after there with the public interest is

a beginning, some sort of advisory set up. It might be

part-time specialists with whom I can communicate.

I send them an email and say, "Here's the situation.

Here's what I'm planning to do. Will you, in

confidence, give me a guide? Am I or am I not operating

24

with public interest on my side?" And then I have that

and I then proceed, and if there is then a civil dispute

or a criminal prosecution, that's disclosable. Up until

that point, it's secret. Yes? And if it turns out that

I've ignored that advice, that's going to weigh heavily

against me.

LORD JUSTICE LEVESON: Or not taken it.

A. Yes, or not even asked for it in the first place.

That's a bit like refusing to do a Breathalyser. The

presumption is that you've got something to hide.

You see, I think Max Mosley has a point about it

being too late to deal with the privacy problem after

the story's published, after those horrific videos

flashed around the world of his naked body. But his

proposed remedy is too severe. It involves prior

restraint, and all of us are allergic to that. So I'm

trying to set up a system where the signal would be sent

to us very clearly before publication that if Max sues,

we're going to lose, so we know -- and furthermore when

that's disclosed, it's going to make us look

particularly bad.

But there's another case -- I think it's all right

to say that this -- which is the Blunkett case. The

tabloids went after David Blunkett and said, "You're

having an affair." That, to me, was prurient and

25

unjustified intrusion into that man's private life.

However, as they dug deeper into his private life, they

found a bit of public interest. They said, "Ah, this

woman's nanny has had her Visa application fast-tracked

by Blunkett", and he had to resign. That's the counter

case against Max's argument, that if you'd gone to

Blunkett before publication, he would and should have

got the injunction on the basis of what we know. If you

give us the freedom to continue making the decision,

then you leave it open to us to say, "Even though

they've warned us against this, we've going to publish

because we think we can get to the bottom of the pile."

So I don't think it's such a bad idea.

LORD JUSTICE LEVESON: No, I'm not --

A. I don't know any other journalist who agrees with me,

I'll confess.

LORD JUSTICE LEVESON: That's an interesting fact too.

A. We're very old-fashioned people.

MR JAY: In the example of Mr Blunkett that you gave, the

chance ascertainment of a public interest nugget, as it

were, was a wholly adventitious by-product of a story

whose initial basis, you say, was without a public

interest justification; is that correct?

A. Yes, but there's something to be said for that maxim

about publish and be damned. If there's a really

26

difficult question underlying this, who should decide

what we should publish? Should it be the court or

politicians or journalists? And kind of at the end of

the day, I think there is something in publish and be

damned. Let those journalists make their judgement.

MR JAY: We can hear you very well but you're going too

fast. The good news is --

A. I'm nearly finished. I'm not sure quite sure what's

happening now. Are we finished?

Q. I think you should complete the answer you were giving

to your satisfaction and then maybe we will have

finished?

A. About publish and being damned. So if the Blunkett

story at first sight looks like a breach of his privacy,

we should nevertheless have the freedom to carry on and

make the mistake and take the risk and then if we can

find the public interest gem beneath the pile, then we

can justify it. I think it gets very difficult if you

get into the area of prior restraint. I really do.

I think that that's not -- that shouldn't be part of the

solution.

LORD JUSTICE LEVESON: Of course, one of the problems about

getting advice requires you to make a value judgment

about the facts. I'm not commenting one way or the

other, but if you go back to the example concerning

27

Mr Mosley, the News of the World argued that the facts

were A, and Mr Mosley was saying most emphatically it

was not A.

A. Okay. I think my system can cope with that because

if -- this is the Nazi theme?

LORD JUSTICE LEVESON: Yes.

A. That's all right to say that? That's all public

knowledge?

LORD JUSTICE LEVESON: It's comparatively public knowledge.

A. So if, when I send my email in confidence to the privacy

advisory folk, I say, "In this video which we secretly

shot, he is acting out some sort of Nazi fantasy", and

on that basis they say, "Okay, you've probably got some

public interest", if then subsequently it's shown that

we never even translated what was on it and we are

wrong -- let's just say we were wrong in simple terms

about that fact. That's going to weigh very heavily

against us because that email is going to be produced.

So if we've given the advisory group false facts, we're

in trouble. So there is an incentive to be honest with

the advisory people.

LORD JUSTICE LEVESON: I understand.

MR JAY: Mr Davies, thank you very much for assisting the

Inquiry.

LORD JUSTICE LEVESON: Thank you very much. Before you go,

28

is there anything that you feel you've not had the

opportunity to say on a topic which you've obviously

thought about very deeply?

A. No, I think --

LORD JUSTICE LEVESON: Thank you very much indeed.

A. Thank you.

MR JAY: Mr Barr is taking the next witness.

LORD JUSTICE LEVESON: Thank you, Mr Jay. Just give

everybody a moment to move around, Mr Barr.

Right.