Culture Secretary Jeremy Hunt told his special adviser to quit after highly damaging emails revealing the close relationship between his department and the Murdoch empire were released, the former aide said.
Adam Smith said the Secretary of State had reassured him that he had only been doing his job and not to worry on the evening the documents were published.
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But the following day Hunt spent the morning in meetings before calling in Smith and telling him everyone “thinks you need to go”, he said.
After the emails were published, Smith told the Culture Secretary that if the pressure became so great that it would help if he resigned he would “not hesitate to do so”.
He said he could not remember verbatim what Hunt had said in response. “It was something along the line ‘It won’t come to that’,” he added.
Smith told his boss the emails were one-sided and “in many cases exaggerated” and Hunt accepted the explanation.
The pair then went for a drink with other special advisers in the Department for Culture, Media and Sport and he was told not to worry.
Smith said the following day he was “aware Mr Hunt was having meetings and I was not present”.
Asked what Hunt said to him, he replied: “To the best of my recollection, ‘Everyone here thinks you need to go’ was what he said.
Smith said the pair then discussed how much they had enjoyed working together.
Smith was warned that James Murdoch’s evidence to the Leveson Inquiry might be relevant to him, and so watched the April 24 session on TV.
He said in a written statement: “I was surprised to hear evidence about emails which it was said I had sent to News Corp, as I did not recognise much of what was said.”
He added: “My initial reaction was that the evidence that had been presented was not the whole picture, that there was a great deal of exaggeration in Mr Michel’s emails and that there were in fact relatively few emails from me to Mr Michel.”
Smith said following the publication of the documents no-one approached him to go through the contents. “At no time was I invited to consider the evidence which had been published with Mr Hunt or with the Permanent Secretary or anybody else. Neither did Mr Hunt nor anybody else criticise my conduct.”
After the meeting with Hunt at which he was told he had to resign, Smith was handed a resignation statement, which “came from the Cabinet Secretary’s office”.
It began: “While I believed it was part of my role to keep News Corp informed …” but Mr Smith objected to the words “I believed” and refused to include them.
Smith ‘said BSkyB bid would go ahead’
Jeremy Hunt’s former special adviser told a News Corporation lobbyist that the media giant’s BSkyB takeover bid would go ahead once plans to spin off Sky News were accepted, the Leveson Inquiry heard today.
But Adam Smith said he did not remember telling Fred Michel it would be “game over” for opponents of the buyout after the proposal to make the news channel a separately listed company was announced.
At the time other media groups criticised News Corp’s intention to buy the 61% share of BSkyB it did not already own, alleging it would concentrate too much power in Rupert Murdoch’s hands.
Michel, News Corp’s former director of public affairs in Europe, sent an email to fellow executives on 23 January last year based on a conversation with Smith.
He wrote: “His (Mr Hunt’s) view is that once he announces publicly he has a strong UIL (undertaking in lieu, namely the Sky News spin-off plans), it’s almost game over for the opposition.”
Smith, who quit as Hunt’s special adviser last month after admitting he got too close to Michel, said much of the lobbyist’s email was factually accurate but disputed its tone.
He told the inquiry: “I think that that’s a sort of colourful explanation of the process.
“If you have an undertaking in lieu that Ofcom (the broadcasting regulator) and the OFT (Office of Fair Trading) say satisfied the plurality concerns that Ofcom had identified, then the whole point of that is that then there are no plurality concerns. So the deal would go ahead.
“I don’t remember saying ‘game over for the opposition’, but I can imagine we had a conversation along those lines about the process and talking around what happens.”
Michel’s email said Hunt was “keen to get to the same outcome” as News Corp.
But Smith disputed this: “I wouldn’t have said that … They didn’t have the same outcome. Mr Hunt’s aim was to follow the process, whereas I’m sure Mr Murdoch’s aim was to acquire the remaining shares.”
Robert Jay QC, counsel to the Leveson Inquiry, suggested: “The wider objective was the same outcome, namely the securing of the bid for News Corp, because he thought in policy terms that was desirable.”
But Smith insisted: “That wasn’t his objective. Now his objective is to carry out his legal and statutory duties.”
The inquiry was yesterday shown a memo Hunt sent Prime Minister David Cameron arguing the case for News Corp to take over BSkyB, just weeks before he was given quasi-judicial oversight of the bid.
The note, dated November 19 2010, warned that Business Secretary Vince Cable’s decision to refer the bid to regulator Ofcom could leave the Government “on the wrong side of media policy”.
‘Bombarded’ with information
Smith said the Culture Secretary and his department knew he was in contact with Mr Michel, who “bombarded” him with information about News Corp’s BSkyB takeover bid.
“I would have thought on the odd occasion that I did mention to Hunt one of the issues that I thought was worthy of his attention, I would I think almost certainly have said, ‘Fred’s told me X, Y or Z’,” he said.
“They generally knew I was in touch. On some certain issues they certainly knew. But I don’t think they knew the volume or extent.”
The inquiry heard yesterday that Michel exchanged 191 telephone calls, 158 emails and 799 texts with Hunt’s team between June 2010, when News Corp announced its bid, and July last year, when it abandoned the plan amid outrage over the News of the World phone-hacking scandal.
Of these, more than 90% were exchanged with Mr Smith, who himself sent 257 text messages to the News Corp lobbyist between November 2010 and July last year.
Smith said today 95% of his contact with Michel was via his mobile phone, with only a “handful” of calls made using his office landline.
‘I think we are in a good place tonight, no?’
Smith told the inquiry he could not remember advising News Corp it would be OK for the Culture Secretary and Murdoch to talk by telephone after being pressed about an email Michel sent to James Murdoch on November 15 2010, saying Hunt had received “strong legal advice” not to meet them that day but it would be fine to chat by mobile phone.
He dismissed suggestions that there had been any frustration that Hunt could not communicate with Business Secretary Vince Cable, who was previously responsible for the deal, about the bid.
“I think the frustration, if there was any, was more about that Mr Hunt wanted to talk to Mr Murdoch about the bid and broadband and local TV and all sorts of issues.”
After Hunt made a statement to Parliament, Michel texted the special adviser saying it had gone well.
When he received no reply, he texted again four hours later saying: “I think we are in a good place tonight, no?”
Smith responded, saying: “I agree, coverage looks okay. Let’s look again in the morning.”
Pressed on how that could be interpreted, Smith insisted he meant that the Culture Secretary thought the statement had gone well.
He accepted that some of his text message exchanges with Michel might have appeared conspiratorial but insisted: “Nothing like that was happening.”
He added: “I think these texts were me being flippant and too loose with my language.”
Jay said: “It’s just the accumulation of text messages which arguably give rise to an impression. One can’t identify one particular message and say ‘Aha, this means X rather than Y’. It is just the series of them. Do you accept that?”
Smith replied: “I can see how the perception would be created, yes.”
He denied giving a “sneak preview” to News Corp about the department’s intentions.
He insisted information he gave to Michel, who went on to email details to Murdoch with the claim that it was “highly illegal”, was the same briefing Hunt had given to News Corporation four days earlier.
Smith ‘wasn’t that fussed’ over bid
Smith said he did not feel he was speaking for Hunt on the details of the BSkyB takeover process in his conversations with Michel.
He told the hearing: “I wouldn’t have been doing my job if I had had to run and check what Mr Hunt thought about every stage of the process.
“In this particular bid, I would argue that I was actually just being more of a buffer and a channel of communications rather than representing Mr Hunt’s views to anybody.”
The former special adviser said he “wasn’t that fussed” about whether News Corp’s BSkyB takeover went ahead, but thought it should go ahead as long as no new issues were thrown up by a period of consultation.
He said: “On the wider issue, I looked at if from the point of view of the consumer not probably being that concerned because they get their news or watch their TV, and don’t really mind too much about where that comes from.”