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Andy Coulson Rebekah Brooks Phone-Hacking Trial

Phone-hacking trial: The accounts, the budgets and the night editor

By James Doleman

November 18, 2013 | 9 min read

When court resumed on Monday afternoon, the prosecution continued its examination in chief of Michael Gill, a financial controller employed by News International. Andrew Edis, QC for the Crown, moved on to the issue of cash payments made by the company on behalf of the News of the World (NotW).

Evidence: Harry Scott took to the witness box

Edis asked if tax was paid on cash payments. Gill explained that when a contributor payment was made to an unmamed person the company would have to pay tax on the payment, therefore a payment of £500 to an anonymous person would cost the company far more than one to a named person. Special procedures were used in the accounting system to deal with this and documents were shown to the jury explaining the process. Cash payments were approved “within the managing editor’s office”, the managing editor being one of the defendants, Stuart Kuttner. Then a “runner” or a journalist would go to the cash office to collect the money. The recipient would then sign a receipt which would be returned to the finance department. Cash could also be transferred using “Moneygram” via Thomas Cook.

Mr Laidlaw, QC for Rebekah Brooks, then rose to cross-examine Gill. He asked the witness if he could “speak to” various documents received by the defence from News International. Gill confirmed he had personally compiled the documents concerned and was happy to answer questions on them. The first document shown to the jury was a budget document for the NotW for the period of Rebekah Brooks' editorship of the paper. A problem then arose in court as a number of the legal representatives did not have copies of the documents, when this was resolved Gill continued his testimony.

The first document shown was the editorial budget for the NotW from 1 July 2000 to end of June 2001. Revenue forecast for the paper was in three parts: circulation, advertising and other. Total income was predicted at around £161m, editorial cost was given at around £23m, and other costs were “libel”, “production costs”, “promotions” and “distribution”. Total direct costs were around £85m, share costs about £36m, and operating profit in that year, after contingencies, was forecast at around £30m.

The court was then shown the budget for 2001-2002, which shows the actual spending in 2000-2001. the editorial department overspent, the forecast spending being £23m and the actual spend being around £27m. The court was then shown a list of payments from the paper for just one month of that financial year, April 2002, with, in Laidlaw's words “hundreds and hundreds” of pages, illustrating just how many financial transactions the paper was involved with every day. Laidlaw then highlighted that the weekly payments in that month to convicted phone hacker Glen Mulcaire’s company Nine Consultancy was £1,769, and was contained within a list of “many hundreds” of transactions, some of only a few pounds, others for thousands. This, the witness confirmed, was not an “unusual” month for the NotW.

The witness was then asked if he had done a search for every financial transaction authorised by Rebekah Brooks while she was editor of the NotW. Gill confirmed he had and a large binder of documents was produced in court. Most were, according to Laidlaw, expenses claims from most of people who reported directly to her, such as her then deputy editor Andy Coulson and her personal driver. Gill confirmed that not a single one of these payments, personally authorised by Rebekah Brooks while she was editor, was to Mulcaire or to one of his companies. Gill also confirmed that Mulcaire was “never an employee of the NotW” while Rebekah Brooks was editor.

Laidlaw then asked Gill about Brooks’ period as editor of NotW and what her approach to the budget was. Gill replied that he could not help with that as he was not at the paper at the time. Laidlaw then thanked the witness and sat down.

Andrew Edis QC, for the prosecution, then re-examined the witness and brought into evidence the written agreement between Mulcaire and the NotW from 2001. He asked why the agreement was made out to Euro Research and Information but the payments were made to Nine Consultancy. Gill said he did not have the answer as he had only looked at the financial records. Edis pointed out that the agreement clearly stated the total per annum payment was noted as £92,000 per annum and asked how this should have been approved. Gill replied it should have been at the total amount per year, not the weekly figure.

Edis then returned to the annual budget document for the NotW in 2000-2001, asking if it implied the editorial budget should be getting cut by £600,000. The news department alone overspent by £300,000, and in the same year profit predicted at £39m came in at only £31m. In 2001-2002, the profit forecast was cut to £30m and there was a cut in editorial costs by £2m.

Edis then turned to the list of personal authorisations of Rebekah Brooks, and asked if a similar document could be created for Mr Coulson’s editorship of the paper. The witness replied it could “with a bit of technology support”.

Edis then showed the court a list of payments made by the NotW to Mulcaire and his associated companies. These are described as “RESEARCH 16.6-TXT URGENT” for Euro Reserch and Information. Asked by Edis if he could explain this discrepancy, Gill replied that he could not. Edis asked if he could check and “let us know”.

The witness then left the stand and the jury left the court while a legal matter was discussed.

On the jury’s return the court heard from the next witness, Harry Scott. Scott told the court that he was a journalist who joined the NotW in 1990, originally as a sub-editor before moving on to be night editor of the paper. Questioned by Mark Bryant-Heron for the prosecution, Scott explained the job of a sub-editor was to check facts and re-write stories in the style of the paper. Copy was then passed to the “backbench”, which he compared to creating the window display of a shop, creating page layouts and headlines as well as choosing pictures.

Bryant-Heron asked Scott if he was involved in “standing stories up”. The witness said he had to be sure a story was right as if “you just make it up you get in trouble”. Asked how he did this in practice, the witness stated he would go to the departmental heads and ask “is this right?” and if he was not satisfied he would speak to the lawyer or "just use your common sense". In the case of a “kiss and tell”, if the quotes come from someone directly involved he would “assume it is correct”. The witness added that he was not concerned with the “source of the story” but he might look for additional information such as photographs to back up the story.

The witness was then asked about his activities on 14 April 2002, the day the Milly Dowler voicemail story was published, and when he clocked on. Scott explained that he did “not remember that week at all” but gave the court a general account of his working hours, starting off slowly but working more hours as the week went on, and staying in a hotel on the Friday night so he could be sure of getting into work on Saturday.

Timothy Langdale QC, for Mr Coulson, then rose to cross examine the witness. He went through a detailed discussion of the exact numbers of people working on each “bench” of the paper and what their roles were. Scott told the court that people’s job titles did not always match their actual jobs, and confirmed that when Coulson was editor he would sit at the “backbench” of the paper on a Saturday night. The “benches” were in fact a series of glass fronted offices facing each other. Langdale then went through the names of who sat in which office, some of which the witness could confirm, some of which he was unsure of. An organisational chart of the paper’s structure was shown to the witness and Scott confirmed it was accurate.

Langdale asked Scott if he was a “vital hub” in the paper’s production, to which the witness responded that there were “many vital hubs”, and that given the staffing of the paper there was “not much meat” spare in the editorial process. Scott confirmed his main role was writing headlines, which is “what I specialised in”, and looking after the general design and layout of the paper. The witness also agreed a large number of stories would come in every week, with many never making the paper at all. A “news schedule” was shown to the court from “Friday PM” on the week of the Milly Dowler voicemail article with a proposed story “Missing Milly” listed sixth.

The time having reached 4.30pm, the judge excused the jury and the court rose for the day.

All of the defendants continue to deny all of the charges, the trial at the Old Bailey continues.

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