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The bugger, bugged

After a chance meeting with a former News of the World executive who told him his phone had been hacked, Hugh Grant couldn’t resist going back to him – with a hidden tape recorder – to find out if there was more to the story. . .

When I broke down in my midlife crisis car in remotest Kent just before Christmas, a battered white van pulled up on the far carriageway. To help, I thought. But when the driver got out he started taking pictures with a long-lens camera. He came closer to get better shots and I swore at him. Then he offered me a lift the last few miles to my destination. I suspected his motives and swore at him some more. (I'm not entirely sympathetic towards paparazzi.) Then I realised I couldn't get a taxi and was late. So I had to accept the lift.

He turned out to be an ex-News of the World investigative journalist and paparazzo, now running a pub in Dover. He still kept his camera in the car's glove box for just this kind of happy accident.

More than that, he was Paul McMullan, one of two ex-NoW hacks who had blown the whistle (in the Guardian and on Channel 4's Dispatches) on the full extent of phone-hacking at the paper, particularly under its former editor Andy Coulson. This was interesting, as I had been a victim - a fact he confirmed as we drove along. He also had an unusual defence of the practice: that phone-hacking was a price you had to pay for living in a free society. I asked how that worked exactly, but we ran out of time, and next thing we had arrived and he was asking me if I would pose for a photo with him, "not for publication, just for the wall of the pub".

I agreed and the picture duly appeared in the Mail on Sunday that weekend with his creative version of the encounter. He had asked me to drop into his pub some time. So when, some months later, Jemima asked me to write a piece for this paper, it occurred to me it might be interesting to take him up on his invitation.

I wanted to hear more about phone-hacking and the whole business of tabloid journalism. It occurred to me just to interview him straight, as he has, after all, been a whistleblower. But then I thought I might possibly get more, and it might be more fun, if I secretly taped him, The bugger bugged, as it were. Here are some excerpts from our conversation.

Me So, how's the whistleblowing going?
Him I'm trying to get a book published. I sent it off to a publisher who immediately accepted it and then it got legal and they said, "This is never going to get published."
Me Why? Because it accuses too many people of crime?
Him Yes, as I said to the parliamentary commission, Coulson knew all about it and regularly ordered it . . . He [Coulson] rose quickly to the top; he wanted to cover his tracks all the time. So he wouldn't just write a story about a celeb who'd done something. He'd want to make sure they could never sue, so he wanted us to hear the celeb like you on tape saying, "Hello, darling, we had lovely sex last night." So that's on tape - OK, we've got that and so we can publish . . . Historically, the way it went was, in the early days of mobiles, we all had analogue mobiles and that was an absolute joy. You know, you just . . . sat outside Buckingham Palace with a £59 scanner you bought at Argos and get Prince Charles and everything he said.
Me Is that how the Squidgy tapes [of Diana's phone conversations] came out? Which was put down to radio hams, but was in fact . . .
Him Paps in the back of a van, yes . . . I mean, politicians were dropping like flies in the Nineties because it was so easy to get stuff on them. And, obviously, less easy to justify is celebrities. But yes.
Me And . . . it wasn't just the News of the World. It was , you know - the Mail?
Him Oh absolutely, yeah. When I went freelance in 2004 the biggest payers - you'd have thought it would be the NoW, but actually it was the Daily Mail. If I take a good picture, the first person I go to is - such as in your case - the Mail on Sunday. Did you see that story? The picture of you, breaking down . . . I ought to thank you for that. I got £3,000. Whooo!
Me But would they [the Mail] buy a phone-hacked story?
Him For about four or five years they've absolutely been cleaner than clean. And before that they weren't. They were as dirty as anyone . . . They had the most money.
Me So everyone knew? I mean, would Rebekah Wade have known all this stuff was going on?
Him Good question. You're not taping, are you?
Me [slightly shrill voice] No.
Him Well, yeah. Clearly she . . . took over the job of [a journalist] who had a scanner who was trying to sell it to members of his own department. But it wasn't a big crime. [NB: Rebekah Brooks has always denied any knowledge of phone-hacking. The current police investigation is into events that took place after her editorship of the News of the World.]
It started off as fun - you know, it wasn't against the law, so why wouldn't you? And it was only because the MPs who were fiddling their expenses and being generally corrupt kept getting caught so much they changed the law in 2001 to make it illegal to buy and sell a digital scanner. So all we were left with was - you know - finding a blag to get your mobile [records] out of someone at Vodafone. Or, when someone's got it, other people swap things for it.
Me So they all knew? Wade probably knew all about it all?
Him [...] Cameron must have known - that's the bigger scandal. He had to jump into bed with Murdoch as everyone had, starting with Thatcher in the Seventies . . . Tony Blair . . . [tape is hard to hear here] Maggie openly courted Murdoch, saying, you know, "Please support me." So when Cameron, when it came his turn to go to Murdoch via Rebekah Wade . . . Cameron went horse riding regularly with Rebekah. I know, because as well as doorstepping celebrities, I've also doorstepped my ex-boss by hiding in the bushes, waiting for her to come past with Cameron on a horse . . . before the election to show that - you know - Murdoch was backing Cameron.
Me What happened to that story?
Him The Guardian paid for me to do it and I stepped in it and missed them, basically. They'd gone past - not as good as having a picture.
Me Do you think Murdoch knew about phone-hacking?
Him Errr, possibly not. He's a funny bloke given that he owns the Sun and the Screws . . . quite puritanical. Sorry to talk about Divine Brown, but when that came out . . . Murdoch was furious: "What are you putting that on our front page for? You're bringing down the tone of our papers." [Indicating himself] That's what we do over here.
Me Well, it's also because it was his film I was about to come out in.
Him Oh. I see.
Me Yeah. It was a Fox film.
[A pause here while we chat to other customers, and then - ]
Him So anyway, let me finish my story.
Me Murdoch, yes . . .
Him So I was sent to do a feature on Moulin Rouge! at Cannes, which was a great send anyway. Basically my brief was to see who Nicole Kidman was shagging - what she was doing, poking through her bins and get some stuff on her. So Murdoch's paying her five million quid to big up the French and at the same time paying me £5.50 to fuck her up . . . So all hail the master. We're just pawns in his game. How perverse is that?
Me Wow. You reckon he never knew about it?
Him [pause] I don't even think he really worried himself too much about it.
Me What's his son called?
Him James. They're all mates together. They all go horse riding. You've got Jeremy Clarkson lives here [in Oxfordshire]. Cameron lives here, and Rebekah Wade is married to Brooks's son [the former racehorse trainer Charlie Brooks]. Cameron gets dressed up as the Stig to go to Clarkson's 50th birthday party [NB: it was actually to record a video message for the party]. Is that demeaning for a prime minister? It should be the other way round, shouldn't it? So basically, Cameron is very much in debt to Rebekah Wade for helping him not quite win the election . . . So that was my submission to parliament - that Cameron's either a liar or an idiot.
Me But don't you think that all these prime ministers deliberately try to get the police to drag their feet about investigating the whole [phone-hacking] thing because they don't want to upset Murdoch?
Him Yeah. There's that . . . You also work a lot with policemen as well . . . One of the early stories was [and here he names a much-loved TV actress in her sixties] used to be a street walker - whether or not she was, but that's the tip.
Me and Chum MLTVA?!
Me I can't believe it. Oh no!
Chum Really??
Him Yeah. Well, not now . . .
Chum Oh, it'd be so much better if it was now.
Him So I asked a copper to get his hands on the phone files, but because it's only a caution it's not there any more. So that's the tip . . . it's a policeman ringing up a tabloid reporter and asking him for ten grand because this girl had been cautioned right at the start of his career. And then I ask another policemen to go and check the records . . . So that's happening regularly. So the police don't particularly want to investigate.
Me But do you think they're going to have to now?
Him I mean - 20 per cent of the Met has taken backhanders from tabloid hacks. So why would they want to open up that can of worms? . . . And what's wrong with that, anyway? It doesn't hurt anyone particularly. I mean, it could hurt someone's career - but isn't that the dance with the devil you have to play?
Me Well, I suppose the fact that they're dragging their feet while investigating a mass of phone-hacking - which is a crime - some people would think is a bit depressing about the police.
Him But then - should it be a crime? I mean, scanning never used to be a crime. Why should it be? You're transmitting your thoughts and your voice over the airwaves. How can you not expect someone to just stick up an aerial and listen in?
Me So if someone was on a landline and you had a way of tapping in . . .
Him Much harder to do.
Me But if you could, would you think that was illegal? Do you think that should be illegal?
Him I'd have to say quite possibly, yeah. I'd say that should be illegal.
Me But a mobile phone - a digital phone . . . you'd say it'd be all right to tap that?
Him I'm not sure about that. So we went from a point where anyone could listen in to anything. Like you, me, journalists could listen in to corrupt politicians, and this is why we have a reasonably fair society and a not particularly corrupt or criminal prime minister, whereas other countries have Gaddafi. Do you think it's right the only person with a decent digital scanner these days is the government? Whereas 20 years ago we all had a go? Are you comfortable that the only people who can listen in to you now are - is it MI5 or MI6?
Me I'd rather no one listened in, to be honest. And I might not be alone there. You probably wouldn't want people listening to your conversations.
Him I'm not interesting enough for anyone to want to listen in.
Me Ah . . . I think that was one of the questions asked last week at one of the parliamentary committees. They asked Yates [John Yates, acting deputy commissioner of the Metropolitan Police] if it was true that he thought that the NoW had been hacking the phones of friends and family of those girls who were murdered . . . the Soham murder and the Milly girl [Milly Dowler].
Him Yeah. Yeah. It's more than likely. Yeah . . . It was quite routine. Yeah - friends and family is something that's not as easy to justify as the other things.
Me But celebrities you would justify because they're rich?
Him Yeah. I mean, if you don't like it, you've just got to get off the stage. It'll do wonders.
Me So I should have given up acting?
Him If you live off your image, you can't really complain about someone . . .
Me I live off my acting. Which is different to living off your image.
Him Yeah, but you're still presenting yourself to the public. And if the public didn't know you -
Me They don't give a shit. I got arrested with a hooker and they still came to my films. They don't give a fuck about your public image. They just care about whether you're in an entertaining film or not.
Him That's true . . . I have terrible difficulty with him [points to pap shot of Johnny Depp]. He's really difficult. You know, I was in Venice and he was a nightmare to do because he walks around looking like Michael Jackson. And the punchline was . . . after leading everyone a merry dance the film was shot on an open balcony - I mean, it was like - he was standing there in public.
Me And you don't see the difference between the two situations?
Chum He was actually working at this time? As opposed to having his own private time?
Him You can't hide all the time.
Me So you're saying, if you're Johnny Depp or me, you don't deserve to have a private life?
Him You make so much more money. You know, most people in Dover take home about £200 and struggle.
Me So how much do you think the families of the Milly and Soham girls make?
Him OK, so there are examples that are poor and you can't justify - and that's clearly one of them.
Me I tell you the thing I still don't get - if you think it was all right to do all that stuff, why blow the whistle on it?
Him Errm . . . Right. That's interesting. I actually blew the whistle when a friend of mine at the Guardian kept hassling me for an interview. I said, "Well if you put the name of the Castle [his pub] on the front page of the Guardian, I'll do anything you like." So that's how it started.
Me So, have you been leant on by the NoW, News International, since you blew the whistle?
Him No, they've kept their distance. I mean, there's people who have much better records - my records are non-existent. There are people who actually have tapes and transcripts they did for Andy Coulson.
Me And where are these tapes and transcripts? Do you think they've been destroyed?
Him No, I'm sure they're saving them till they retire.
Me So did you personally ever listen to my voice messages?
Him No, I didn't personally ever listen to your voice messages. I did quite a lot of stories on you, though. You were a very good earner at times.

Those are the highlights. As I drove home past the white cliffs, I thought it was interesting - apart from the fact that Paul hates people like me, and I hate people like him, we got on quite well. And, absurdly, I felt a bit guilty for recording him.

And he does have a very nice pub. The Castle Inn, Dover, for the record. There are rooms available, too. He asked me if I'd like to sample the honeymoon suite some time: "I can guarantee your privacy."

-- Listen to the audio now --

This article first appeared in the 11 April 2011 issue of the New Statesman, Jemima Khan guest edit

Photo: Christopher Furlong/Getty Images
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Meet Momentum: the next step in the transformation of our politics

The leadership election was just the start - this is the next step. 

Something big happened in British politics this summer. After years of being told there was no alternative to austerity and the stale politics of despair, something amazing happened.

Given just half a chance, hundreds of thousands of people seized an opportunity for a new kind of politics. A form of politics that was kinder, more honest and straight talking. One that refused the political counsel of despair and offered a simple yet powerful alternative: Hope.

As we now know it was Jeremy Corbyn that so clearly and forcefully articulated this simple yet powerful message. One that explained a now obvious, self-evident truth -  that austerity is a political choice, not a necessity.

A quarter of a million people, 60 per cent of the total leadership vote, overwhelmingly made Jeremy Corbyn their new leader. Shortly afterwards Labour’s conference gave Jeremy and his shadow cabinet a clear mandate to turn the Party into an anti-austerity party of hope and bold alternatives.

Whether people agree with Jeremy Corbyn's politics or not it's becoming increasingly clear his victory has blown politics wide open. As US actor Shia LaBeouf recently exclaimed, “British politics just got very exciting”.   

But more important is that these changes are good for our democracy. The British public deserve real choices not forced, technocratic arguments about variations of the same dead end arguments. Once again we've been reminded we should never fear articulating bold, radical and credible alternatives to the problems facing our economy, country and planet.

After years of cuts, privatisation and the handing over of ever more power to unaccountable vested interests, our country is crying out for such new ideas and leadership.  On everything from climate change to the housing crisis, we need solutions that are credible, bold and radical. It's why our party recently established an economic advisory group headed by a range of highly respected economists like the Nobel Prize-winning economist Joseph Stiglitz and Thomas Piketty. Yes, we'll be radical but never at the expense of credibility.

So we've broken the mainstream political mould of the past 35 years, offering something new and positive - a kinder way of doing politics. And yet to read some newspapers or listen to some political commentators you could be forgiven for thinking we've ushered in nothing short of political armageddon. A theme many have picked up on is something the Tories are clearly pushing, namely that the “Labour Party is now a threat to our national security, our economic security and your family's security”.

In the unwritten rule of parliamentary politics and etiquette this is, even by Tory standards, a desperate low-blow. If there were any doubt that both they and the powerful vested interests they represent felt threatened, this should put paid to it.

Be under no illusion - the powerful, the exploiters, the excessively wealthy will not pull their punches. By standing up to them, both Jeremy and the Labour Party will face an unparalleled assault that will make what happened to Ed Miliband pale into insignificance.

That's why the need for a social movement to work for a more democratic, equal and decent society inside and outside the Labour Party couldn't be greater. One that can help make the political space necessary for the new ideas we so badly need.The array of vested interests confronting us cannot be taken on by one man or even a single political party in Westminster. Instead, we need a bigger, broader, deeper alliance that can confront such powerful, vested interests.

That's why today, four weeks after ballots closed in the Labour leadership election; I'm so very pleased to announce the launch of Momentum.

Momentum is a grassroots network arising out of, and following on from the Jeremy Corbyn for Labour leader campaign.

It plans are as bold as the challenges that confront it. It will organise in every town, city and village to create a mass movement for real, progressive change.

It will work with Labour members to transform our Party into a democratic institution worthy of its founders' original aspirations. A Party with not just the right policies for a General Election but ultimately the collective will to enact them in government.

But we also understand politics has changed and is changing. The top-down, command and control, monolithic political structures of yesteryear are fast fading. The political eco-system of today is both vast and diverse. Whilst out Party can play a key leadership role in future political change it must also understand it does not have a monopoly on opposing vested interest.

That's why Momentum will strive to bring together progressives campaigning for social, economic and environmental justice across the country. Be they individuals or groups we'll reach out into our communities and workplaces to campaign and organise together on the issues that matter to all of us.

Throughout the campaign, Jeremy spoke about building a social movement to work for a more democratic, equal and decent society. Now is the time to make this a reality and to build on this  - Momentum.

Clive Lewis is the MP for Norwich South and an Opposition frontbencher. 

photomontage by Dan Murrell
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Greece is just the canary in the mine – there are still crises aplenty to come in global finance

While all eyes are on the eurozone, larger troubles are brewing.

“People only accept change when they are faced with necessity and only recognise necessity when a crisis is upon them,” said Jean Monnet, the French political economist whom many consider to be the founding father of the project of European integration. The decisive No vote against the terms of an international bailout in the Greek referendum has certainly plunged Europe further into crisis – but will it also bring change? And, if it does, what are the implications for Greece, the eurozone and the rest of the world?

At the heart of the Greek crisis are two interconnected questions. Both have become especially urgent in the case of Greece but the same issues are hotly contested throughout the world’s advanced economies. The first is how to deal with public debt when it becomes too high. The second is what the proper role of a country’s central bank is – and who should decide that.

The problem of public debt is the better known of the two. Greece’s public debt is very large, at about 180 per cent of its gross domestic product. Private investors will not lend to the country as a result: Greece has “lost market access”, as the jargon goes.

The rest of the 19-member eurozone maintains that a combination of fiscal belt-tightening and liberalisation can pull Greece back into a virtuous circle of growth, shrinking debt and falling interest rates. The country’s governing Syriza party argues that the past five years have shown this to be wrong: it says that only an upfront write-off of a significant part of Greece’s public debt will work. Who is right? The referendum on 5 July provided a partial answer by indicating that the debt has reached the limit of political sustainability. But technical arguments, too, are needed to sway Greece’s creditors. The critical intervention on that front came a few days earlier.

On the evening of 2 July, the International Monetary Fund – one-third of the so-called Troika that bailed out Greece in 2010 and 2012 – shocked all sides by publishing its latest analysis of the country’s predicament. It concludes that Syriza’s position is, in essence, correct: it is implausible that the public debt can be put on a sustainable footing without substantial debt forgiveness.

The importance of this announcement lies less in the verdict – it had long been whispered that the IMF had lost faith in the creditors’ plan – than in how it has been put in the public domain. Now that the IMF has backed a write-off, the strategy of “extend and pretend” is no longer credible. Why would private investors step back in if the official arbiter of global finance has publicly decreed that Greece’s debt is unsustainable?

The fundamental issue at hand is of a relevance far beyond Greece. Since the financial crisis of 2008, the developed world has opted to sweat off excessive public debt over time, rather than confront it by negotiating a one-off relief. The result has been sloth-like economic growth and a chronic dent in confidence over the future. Whether preserving the sanctity of contract law or promoting economic dynamism is the better way to ensure that creditors ultimately get a better deal is the question of the age.

Following the IMF’s volte-face, could the alternative path finally be tested in Greece? Breaking the spell of constructive ambiguity could simply force Greece’s creditors to disown the debt problem as insoluble. Yet it might just provide a face-saving way out: a justification to grant debt relief that will pass muster with national electorates, in Greece and perhaps even beyond.




So much for the debt question. The other conundrum at the heart of the Greek crisis – concerning the proper role and governance of the central bank – is even more urgent. For weeks, there has been a slow-motion run on Greece’s banks. Depositors uncertain of how the debt problem will be resolved (and fearful that the only way out is an exit from the euro) have been withdrawing cash or transferring money abroad. As is normal in such a situation, Greece’s banks have had to borrow from their central bank to fund these withdrawals. Until recently, that central bank – the European Central Bank (ECB), the second member of the Troika – was happy to comply.

On 28 June, however, that changed. Greece’s banks were told they would have to manage on their own. But no bank can hope to meet withdrawals during a bank run from its own reserves. So the banks were forced to close and capital controls were introduced. Cash withdrawals are restricted to €60 per day and there are strict limits on the transfer of funds abroad. The resulting economic disruption and social distress risk ­overtaking any negotiations on the debt problem.

The ECB’s decision is unprecedented in the annals of banking. The raison d’être of a central bank is to preserve the stability of the banking system – to act as the lender of last resort, should there be a run on a commercial bank. Yet the ECB has decided to do the opposite: to exacerbate a bank run in Greece by abrogating that cardinal role.

Why did it do it? The ECB cites an unavoidable conflict of interests peculiar to running a currency union. It claims that its mandate is to operate in the interests of the citizens of all the eurozone member states, and that has required it, in exceptional circumstances, to act against the interests of one of them. In a narrow and lawyerly sense, this defence is valid. Politically, it is toxic. A country’s unelected central bankers seem to be dictating the fate of its elected government – and of its citizens’ deposits.

Because all modern banking systems depend on trust, this political flaw carries risks of practical disaster. The euro will not survive long if suspicions of the ECB’s political motives spread beyond Greece. Who in Portugal, Spain or Italy will trust that their savings will not be locked up, too, if they have the temerity to elect the wrong leaders?

The role of the ECB is unique – because it is the single monetary authority for a collection of separate states. The question of whom a central bank should answer to, however, is universal. The absurdity of the current situation in Greece shows that if a central bank is to underpin a modern financial system, it must be accountable to the people that the system serves, rather than to anyone else – or, even worse, to no one.

Yet are these questions of Greece’s debt and its banks so important, after all? The immediate reaction in the financial markets has been muted. The euro has not collapsed and there has been no panic selling of shares. However, even if Greece’s banks reopen and its debt is resolved, there is another respect in which the long-term impact of the Greek crisis on the international financial system threatens to be profound. This is that it has accelerated, probably beyond the point of no return, the decline of the system of global economic governance that lasted from the end of the Second World War to the mid-2000s.

At its centre is the IMF – a global finance equivalent of the UN Security Council – an institution with a reputation for inflexibility but one that in reality underwent three significant transformations in the 1990s and 2000s on the back of three existential crises. The first came out of the east Asian crisis of 1997-98, when the IMF learned that imposing conditionality on crisis-hit countries was neither practically effective nor politically wise. As a result, it rewrote the design rules for international bailouts; henceforth, conditions should be limited to a small number of high-level monetary and fiscal targets and the detailed policies required to hit them should be left to the discretion of the domestic political authorities.

The second big reform came out of the Argentinian crisis of 2001-2002. There, the IMF made the error of succumbing to private creditors’ pleas to increase lending months before Argentina’s default. Afterwards, the rules were once again revised. There would be no more lending to overindebted countries without imposing substantial debt write-offs on existing creditors first.

During this period, the IMF was confronting a constitutional problem: the disproportionate voting power of the United States, Japan and its European members and the convention of giving Europeans the top job. By the late 2000s, with the emerging markets contributing a substantial portion of the world’s GDP, such a situation was increasingly untenable. Here, too, things were on the brink of changing – but then, in 2010, the Greek crisis struck.

Everything went into reverse. Governance reforms were shelved. The Europeans needed control, and that required having no change on votes and first one former French finance minister (Dominique Strauss-Kahn) and then another (Christine Lagarde) in charge. Meanwhile, a bailout was hatched with no time for the lessons of the 1990s. Witness the latest negotiations, bogged down by recriminations over the minutiae of VAT and pension reforms; and the belated admission that Greece’s debt is unsustainable without significant debt relief.

The IMF’s stark regression has not been lost on the emerging markets, which have responded by moving away from the existing international architecture. Many countries have accumulated substantial foreign exchange reserves to insure themselves against crisis, rather than risk having to resort to the IMF. The Brics countries (Brazil, Russia, India, China and South Africa) have gone further still, establishing a mini-IMF for themselves, the Contingent Reserve Arrangement. China has set up its Asian Infrastructure Investment Bank. The message in each case is the same. Since the old global system has failed to change, the new powers will make one of their own.




All eyes are now on the eurozone but larger troubles are brewing elsewhere. The Chinese economy is slowing, more quickly than anyone expected. Japan is going for broke, printing money with deliberate abandon. Meanwhile, the most powerful central bank in the world, the US Federal Reserve, has begun to reel back in what once seemed like a limitless supply of dollars that has underwritten global finance for the past seven years.

Cracks are beginning to appear – strange portents in the economic heavens. The Japanese yen has lost a third of its value over the past two and a half years. The Swiss franc gained the same amount in a single day in January. The latest shock comes from China, where on 12 June the Shanghai index commenced a crash that has so far wiped off almost a third of its value. That is more than €1.5trn destroyed: as if Greece’s debt had been written off five times over.

So there are crises aplenty to come for the international economy – and change, as Monnet argued, there will undoubtedly be. But for the first time in 70 years, we will confront it with an international system that has been severely weakened – not least by the debacle in Greece.

Felix Martin is the author of “Money: the Unauthorised Biography” (Vintage, £9.99)

Macroeconomist, bond trader and author of Money

This article first appeared in the 09 July 2015 issue of the New Statesman, The austerity war