A corporate charge against News International over making payments to public officials could have destroyed the company, a court heard yesterday.
The parent company of the Sun and the News of the World (chief exec Rupert Murdoch pictured above with Sun staff) had worked fully with police but the co-operation allegedly lessened as more reporters were arrested and the threat of a corporate charge remained.
Detectives on Operation Elveden were accused of attacking the freedom of the press as they carried on the investigation, Kingston Crown Court heard.
A top lawyer at parent company News Corporation described the prospect of a corporate charge as "devastating" and "apocalyptic".
News Corporation set up a Managing Standards Committee (MSC) in 2011 to investigate its business practices following the phone-hacking scandal.
Det Supt Mark Kandiah was involved in Operation Weeting that year, which brought a criminal case against former News of the World editors Rebekah Brooks and Andy Coulson.
He was appointed senior investigating officer on Operation Elveden and said the MSC had been helping police by providing them with information.
"At that stage it [Operation Elveden] was just confined to police officers," Dt Supt Kandiah told the court.
"Later the MSC began adducing emails that tended to show that the royal correspondent at the News of the World might have been paying royal officers.
"When I took over [Operation Elveden] I became aware that the MSC was also conducting a review of other newspapers, such as The Sun.
"I knew that they were conducting their own investigation into this paper.
"A small amount of material was provided to Operation Elveden from the MSC about one of the defendants, Jamie Pyatt."
He explained that Sun reporter Pyatt, 51, was arrested following the disclosure from the MSC.
"More emails were arriving from the MSC, who were clearly concerned with what they were finding," Dt Supt Kandiah continued.
"My decision was to not rush into action, but that we wait to make more detailed requests of the MSC, and try to develop the evidence to the point where we could make a more mature decision."
Other emails adduced by the MSC included activities relating to former head of news Chris Pharo, 45, and managing editor Graham Dudman, 51.
From this police began making their own independent enquiries outside of MSC disclosure.
Dt Supt Kandiah said Operation Elveden was one of the biggest operations he had ever worked on.
It involved more than 70 police staff at any one time – twice what would be used for a murder enquiry.
But the MSC were co-operating on the basis that no corporate charge would be brought against News Corporation, it was claimed.
Dt Supt Kandiah insisted there was never any such arrangement between police and News Corperation.
Nigel Rumfitt QC, defending Pharo, said: "They were keen to be seen to cooperate with the police."
Dt Supt Kandiah agreed.
"They were doing this because, in part, the company [News Corporation] had suffered a huge hit to its reputation about the allegations surrounding the Milly Dowler phone-hacking affair," Rumfitt continued.
"They certainly were cooperative," Dt Supt Kandiah answered.
"And they were also very anxious that the extent of the wrongdoing within the organisation might lead to News Corporation being prosecuted," said Mr Rumfitt.
"Certainly as time went on that became more and more of an issue," Dt Supt Kandiah replied.
In early 2012 further arrests of Sun journalists were made, after which the MSC became less cooperative with police, Rumfitt claimed.
"After the first arrest the attitude of the MSC began to change… and they became less cooperative?" Rumfitt asked.
Dt Supt Kandiah said: "That was my judgement… I would say that the degree of operation became more difficult and challenging."
"You were accused of being involved in some kind of attack on the freedom of the press?" asked Rumfitt.
Dt Supt Kandiah agreed it was true.
Rumfitt suggested Dt Supt Kandiah was concerned people viewed the relationship between the police and News International as being too cosy.
After voicing a number of concerns a meeting was convened in December 2012, including lawyers from News Corporation, representatives from the MSC and police officers.
"I wanted to do a criminal investigation but the MSC's idea of how it was to progress was at odds with mine," Dt Supt Kandiah said.
Rumfitt then cited minutes from the meeting involving Gerson Zweifach, a leading lawyer at News Corporation.
News Corp had just learned that they might still be a suspect in the case, rather than individual journalists.
Part of the minutes read: "It [a prosecution] could kill the corporation and 46,000 jobs would be at jeopardy.
"This job [cooperating with police] was to defend the company… this is not in the public interest.
"This is crappy governance and the downstream effect of a prosecution would be devastating and apocalyptic."
Rumfitt said: "The point that he was making was that if the company was charged, rather than individual employees, that could have a regulatory impact in the United States, and they could withdraw certain licences and the company could go bust."
Editors and reporters at Britain's best-selling tabloid newspaper paid tens of thousands of pounds to contacts in the police, prisons, and military to land exclusive stories, it is said.
Pyatt is accused with Pharo, reporter Ben O'Driscoll,38, and managing editor Dudman, 51, John Troup, 49, and John Edwards, 50, of paying for confidential information at The Sun between 2002 and 2011.
Dt Supt Kandiah said no material was adduced by the MSC against journalists at The Times and Sunday Times.
Oliver Blunt QC, for Dudman, asked Dt Supt Kandiah why a number of documents purporting to be payment authorisations at Sun editor level had only surfaced during the trial.
Blunt said the authorisations of certain payments had come from Rebekah Brooks' successor at The Sun, Dominic Mohan.
He read an email sent from Dudman on 1 February 2006, telling staff at The Sun not to make cash payments "without Rebekah [Wade's] approval".
"It may be a trite remark, but these documents only came to our attention during the course of this trial," Blunt said.
Dt Supt Kandiah replied: "Certainly I have seen similar forms – maybe not by the editor."
Blunt suggested Dt Supt Kandiah had seen cash payment request forms during his investigation, rather than authorisation forms.
Dt Supt Kandiah reiterated that what had started Operation Elveden was material provided by the MSC to the police.
He added that the MSC had been aware who the suspects were.
Questioned by Peter Wright QC, prosecuting, Dt Supt Kandiah said there was no direct evidence of a refusal to cooperate on the part of the MSC.
He admitted the relationship between the MSC and police had become "more difficult" since following arrests of Pharo and Dudman in early 2012.
By late 2013 a Police and Criminal Evidence Act application had potentially been issued to assist with investigations, Dt Supt Kandiah said.
"Has there ever been any application for a production order that has required an order by a judge, in relation to The Sun?" asked Wright.
"I will have to go away and check," Dt Supt Kandiah answered.
He added that there was no indication that anybody involved at NI or MSC had "fiddled" with any documents or material sought by police.
"In terms of misrepresenting the situation, was there anything there?" asked Mr Wright.
"No sir," Dt Supt Kandiah said.
Jurors then heard again from DC Servijt Sadhra, officer in charge of the investigation of Dudman and John Troup.
DC Sadhra admitted that the police had discovered no emails from Troup to The Sun relating to a story written by Troup entitled "Hitman's Hanging".
The Sun published an exclusive by Troup on 23 November 2007 that convicted hitman David Croke had committed suicide inside HMP Whitemoor.
DC Sadhra said no email material had been discovered of Troup sending the story to The Sun.
He also admitted that the police had not procured a statement from Sun reporter Simon Hughes, who called the Ministry of Justice as regards the death of Croak on 22 November.
Nor had the police obtained a statement from the press officer at the MOJ who took the call, the court was told.
Jurors heard that on 22 November, when the call was placed to the MOJ, that Troup was actually working undercover on another story.
Troup was undercover investigating how two CDs containing personal details of 25 million people had been lost by HM Revenue and Customs.
William Clegg QC, for Troup, read at length an article published in The Sun relating to the undercover story.
Clegg described Troup as having written in The Sun that he had been undercover in a £1.99 high-vis jacket.
"You probably had no idea about this other article?" said Clegg.
"No I did not," replied DC Sadhra.
Jurors then heard from DC Natalie Wilson, in charge of the investigation of O'Driscoll, who voluntarily handed himself in at Uxbridge police station.
DC Wilson confirmed O'Driscoll, at 38, was the youngest of the defendants, and has no previous convictions.
The trial continues.