The bullies, bullied

News International is today the victim of events, not the master.

Yesterday was rather frantic for News International: Rebekah Brooks's email, Glenn Mulcaire's apology, and Ford pulling its advertising from the News of the World for the time being. Who knows what was happening away from the public view.

Today may well see further significant developments, perhaps even sackings or resignations. But in all this extraordinary activity it is useful to pause and think about how the current scandal came into being, and what it may indicate.

First, there is the question of timing. The news about Milly Dowler's phone being hacked came almost from nowhere. There was no objective event, such as an arrest or a charge, to explain why this story was published at this time.

As it has turned out, the Dowler revelation is just one of a number of alleged examples where the phones of those simply caught up in a news story have been hacked: victims, friends, and families. These were not members of the Royal Household, as were those in the first phase of revelations; nor were they the celebrities and media people who constituted the second phase of revelations.

These are ordinary people without any public profile other than the unfortunate events which were inflicted upon them.

And out of all these many cases, someone, somewhere chose the Milly Dowler story as the first one to now get into the public domain. The person that made that decision is a practical genius. That Milly Dowler's phone was hacked when she was missing was simply disgusting, and its disclosure was inevitably going to be newsworthy.

But why was that hacking disclosed now?

It may well be that it was sensible to wait to the end of the recent murder trial. It may be that this was the optimal week for disrupting the proposed full acquisition by News Corporation of BSkyB.

Whatever explains the timing, the choice of the Milly Dowler case as the first one of the "ordinary people" cases to lead on was made -- consciously or not -- during a perfect storm combining the renewed awareness of the awful facts of her disappearance and death with the commercial vulnerability of the Murdoch empire.

The second interesting feature of the developing scandal is the weakness of the News International response.

For a media organisation who deals with those engaged in reputation management on a daily basis, the reaction of News International was unimpressive. Yesterday's email from Rebekah Brooks was barely even literate, with "allegeds" and "allegations" inserted so as to render propositions and sentences almost meaningless. The unfortunate spokesperson put up for interviews on the evening news came across as evasive and hapless.

However, this flat-footedness should not be any surprise.

The tactic of News International at each phase of the scandal is to try and close the matter down by explaining away the available facts. Hence we have had the "lone rogue reporter" theory for the Royal Household hackings; and the dismissive "just media tittle-tattle" excuses for the celebrity hackings. That the hacking have now moved on to ordinary people caught up in events has exposed the limitations of previous narratives.

As it stands, News International clearly cannot decide whether to claim it has all the necessary facts (so that it can say that the problem has been dealt with) or that it has not got the necessary facts (so that it cannot comment on what it does not know).

And News International also seems not to know what to say or do about Glenn Mulcaire. On one hand, it is has been very convenient for Mulcaire to be caught by the confidentiality provisions of a settlement agreement, but such a settlement agreement only makes legal sense if he indeed had any employment claims against News International: that he was an employee.

Now, on the other hand, News International is now desperate to distance him as a "freelance inquiry agent". If that is correct, then the settlement agreement binding him to confidentiality would appear to be consistent with it being merely a useful device so as to prevent unwelcome disclosures. They cannot have it both ways.

The stories so far put out by News International are now unravelling. It is early to tell what actually did happen. But it is certain that the "lone rogue reporter" and "freelance inquiry agent" explanatory tactics may be of limited value, if they are of any value at all. However, it must be remembered: the "lone rogue reporter" excuse was the one which Murdoch, Coulson, and Brooks have wanted us -- and Parliament -- to believe all along.

Also for some time, politicians and other journalists have -- as has been pointed out repeatedly by Tom Watson MP -- been too scared to take on News International. But News International surely cannot bully its way out of this scandal as it is today. Whatever damage limitation exercise they mount in the coming hours, their intimidatory bluff has now been called. It is now News International that is having pressure applied upon it so as to force involuntary outcomes.

News International is currently the victim of events, not the master.

If Hugh Grant was able to show a bugger bugged, today we may be seeing what happens when a bully is bullied .

 

David Allen Green is legal correspondent of New Statesman and was shortlisted the George Orwell blogging prize in 2010.

David Allen Green is legal correspondent of the New Statesman and author of the Jack of Kent blog.

His legal journalism has included popularising the Simon Singh libel case and discrediting the Julian Assange myths about his extradition case.  His uncovering of the Nightjack email hack by the Times was described as "masterly analysis" by Lord Justice Leveson.

David is also a solicitor and was successful in the "Twitterjoketrial" appeal at the High Court.

(Nothing on this blog constitutes legal advice.)

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.