Phone-hacking trial: Rebekah Brooks was 'inexperienced' in many aspects of News International CEO role

The trial of former News International chief executive Rebekah Brooks, the prime minister's former director of communications Andy Coulson and six others began at the Old Bailey on 28 October. The Drum will be in court for the duration of the trial, which is expected to last at least four months, and will provide comprehensive updates on this blog.

The trial is scheduled to examine seven counts that include conspiracy to intercept communications in the course of their transmission, conspiracy to commit misconduct in public office, and conspiracy to pervert the course of justice.

Coverage will be provided by James Doleman, who was acclaimed for his exhaustive and responsible reporting of the Tommy Sheridan perjury trial.

Court resumed this morning with the reading of the final section of the transcripts of police interviews of Cheryl Carter, Rebekah Brooks' former personal assistant (you can find part one here).

Evidence: Witness Susan Panuccio

The police interviewer began this section by questioning Carter's statement that seven boxes of documents removed from News International's archives mainly contained "some shit" she wanted to get out of the way, and documents belonging to Carter herself. In the interview, Carter told the police that she stored the documents under Brooks's name as she thought the archive would not allow her to store them under her own name as she was "only a PA". Carter denied any suggestion that she had been told by anyone to remove the documents from the archive on 8 July 2011, a few days before the News of the World was set to close.

The police questioning then turned to Carter's planned move to Australia, which the court heard yesterday was stopped when she was arrested and her passport seized by police. Asked if Brooks had helped her get a job with a News International title in Perth, Carter confirmed "she put a word in for me".

Police then asked Carter if she was aware of the police investigation into phone-hacking. She replied that she was and that Brooks was very upset about it. She denied, however, that she had linked this investigation, which led to the arrest of Brooks 10 days later, with the boxes. "In my mind I was doing nothing wrong, I knew what was in those boxes," she said. She also denied there was anything suspicious about Brooks helping her get a job in Australia as she planned to run her make-up business there and the newspaper job was only a stopgap. "On my children's life that is not what I'm all about," she told the police interrogator. "I'm not that person." The interview transcript then ended.

The next witness called was Susan Panuccio. After being sworn in Panuccio told the court that in 2008 she became chief financial officer of the News International Group in the UK, although in 2010 she returned to Australia to take up the same role with News Group there. Andrew Edis QC, for the prosecution, asked the witness about the role of the managing editor of the News of the World, a position held by defendant Stuart Kuttner. Panuccio told the court that the managing editor's role was to look after budgets, administration and HR matters for the specific title. Edis asked if someone at a paper was making payments for illegal acts, whose role it would be to stop it it. Pannuccio replied it would be a combination of people; the managing editor, the editor and senior journalists.

Jonathan Laidlaw QC, for Rebekah Brooks, then rose to cross-examine the witness. He told the court that he had a number of financial issues he wished to discuss. Panuccio confirmed that she had been appointed as CFO by James Murdoch when he arrived from Sky TV, and that this change of leadership had happened during a "very challenging financial climate" and she saw her role to "refresh and improve" the financial governance of the company. The witness was asked about the period when Brooks took over from James Murdoch as CEO and she agreed that this was a very different role to editing a paper and she was "inexperienced" in many aspects. However, Panuccio said Brooks' time at News International had been a financial success.

Laidlaw then moved in to discuss the financial management of News International and suggested to the witness that whatever the checks and balances in place it was usually possible for someone acting in bad faith to exploit the system at least for a time, and Panuccio agreed it was. Asked about Stuart Kuttner, the witness told the court that he was experienced and "good at his job". The witness also agreed that monitoring payments for any "illegal or unethical" actions was the primary responsibility of the managing editor, Kuttner.

The defence QC asked the witness if she had ever heard of convicted phone hacker Glenn Mulcaire or any payments to him before his arrest in 2006. Panuccio confirmed she had not and agreed that payments to him would be processed by the financial department if authorised by a "desk head" or the managing editor. It was only from 2008, the former CFO told the court, that this changed and a higher level of authorisation was required.

Laidlaw then asked the witness to comment on Brooks' own recollection of the financial processes in 2006, when she was editor of the Sun and approved a number of cash payments via Thomas Cook. Laidlaw stated that Brooks' belief was that Thomas Cook payments were treated differently from cash. Panuccio replied that as she had not been directly involved in that area in 2006 she could not comment. Laidlaw put it to the witness that a Thomas Cook payment would not be anonymous as the newspaper would know the identity of the payee. Again, the witness said she had no direct knowledge of this. Laidlaw asked if he could jog her memory. "My memory is not jogged," Panuccio replied.

The defence QC then moved on to discuss the contract for £105,000 a year between the News of the World and Glenn Mulcaire. Laidlaw suggested that this money would have come from the newsdesk budget and, if broken up into weekly payments would not show up on the system as an amount needing higher approval. Panuccio said that this was not how it should have happened but agreed it was possible.

Laidlaw then moved on to discuss Panuccio's knowledge about the company's email deletion policy. The witness recalled there was a delay in implementing this but was not sure of the reason. Emails discussing this were displayed in court and the QC suggested that there was "no sinister significance" and this was being implemented to save storage space in News International's email system, the witness agreed and a number of communications about the policy were displayed to the jury.

The witness was then asked about her knowledge of Brooks' "lack of IT abilities" and agreed that she had "used a Blackberry" which she was "surgically attached to". Panuccio told the jury that the former News of the World editor "did not like to embrace new technology". The witness was asked if Brooks ever used the iPhone or iPad she was given as part of the News International executive team. Panuccio said as far as she was aware Brooks remained wedded to her Blackberry.

Finally Laidlaw asked the witness to comment "on the woman herself". Panuccio agreed that Brooks never displayed any lack of integrity and could be "at times" generous. The witness said that Brooks was like "any other CEO I've worked for" and could be "demanding at times".

The court then took a short break.

Jonathan Caplan QC, for Stuart Kuttner, then cross-examined the witness. He asked if Panuccio agreed that his client was a "man of integrity", to which she replied: "When I've dealt with him, yes." Caplan then went over the approval process for payments within the News of the World and suggested that his client would not generally be involved in payments if these had been authorised by department heads, to which the witness agreed. The QC then showed the witness an email from 2005 in which his client proposed a 50 per cent cut in payments to "Nine Consultancy", Glenn Mulcaire's company. Panuccio told the court that this appeared to be related to the preparation of the 2006 budget but she had no further knowledge of the outcome of the discussion.

Andrew Edis for the Crown then re-examined the witness. He brought into evidence a document showing "News of the World budget notes" for 2006-2007 between "SK" and "AC". This showed a proposal to cut Nine Consultancy's budget by £28,000 and the witness was asked if this was ever implemented. Panuccio replied that she had no direct knowledge as this was before her time as CFO. The witness said that when looking at budgets she would not expect the editor or managing editor to go through a budget "line by line". However, she agreed that every payment would have to be authorised either manually or online and if a payment came to her which she was "not familiar with" she might question it depending on the level of trust she had for the person submitting the request.

Judge Saunders then read a question submitted by the jury. This was: "How many internal audits were carried out during the time Mulcaire was under contract with the News of the World?" Panuccio replied that she was unsure as it would depend on what process the audit was looking at. Asked by Saunders if these would not have picked up how much Mulcaire was paid, the witness replied again that this was outside the sphere of her immediate knowledge.

The court then rose for lunch.

Click here to view more posts from The Drum's daily trial coverage

Get The Drum Newsletter

Build your marketing knowledge by choosing from daily news bulletins or a weekly special.

Come on in, it’s free.

This isn’t a paywall. It’s a freewall. We don’t want to get in the way of what you came here for, so this will only take a few seconds.