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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but we ran out of time, and next thing we had arrived and he was asking me if I would pose for a photo with him, "not for publication, just for the wall of the pub".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

MUCHTAR ZAKARIA/AP PHOTO
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Breaking the consensus

Even IMF researchers are calling time on free market dogma and the neoliberal orthodoxies of the past 30 years.

What has come over the International Monetary Fund? Not content with playing the good cop to Europe’s bad in the ongoing Greek crisis – in which it has been arguing for debt relief and less austerity – the fund has just published an article in its in-house magazine by three of its leading researchers entitled “Neoliberalism: Oversold?”. Their answer is “yes”.

The article takes aim at two of the most important aspects of the neoliberal economic agenda that has been so influential since the early 1980s. The first is the removal of restrictions on the movement of capital across international borders – so-called capital account liberalisation. Readers of a certain age will recall that 40 years ago there were strict limits on the amount of foreign currency one could buy before going abroad on holiday and companies had to show evidence of the need to import supplies to gain access to the foreign exchange market. Such restrictions were even harsher for international investment – making it almost impossible for institutions in one country to invest in the equity and bond markets of another.

Neoliberal theorists decried this situation as absurd. Rich countries have abundant capital, so the rate of return on it is relatively low, they argued. Poor ones are capital-scarce, so the returns on investment are high. Erecting artificial barriers preventing capital from flowing from rich countries to poor ones was therefore like stopping water from flowing downhill: an unhelpful intervention in the natural order of things, with detrimental consequences for all. During the 1980s and 1990s, international capital controls were thus dismantled worldwide – and often as a precondition for IMF assistance. The scale of private cross-border capital flows rocketed and soon eclipsed those of public-sector lenders, such as the World Bank and the IMF itself. 

But while these private capital flows were large, it quickly became obvious that they could also be extremely erratic. Throughout the 1990s, a succession of big developing countries enjoyed huge inflows of money  to be used for financing government spending and infrastructure development. But in each case, the new sources of funding turned out to be fickle, as private investors proved far less tolerant of heterodox economic policy than official funders had been. The result was a succession of crises – in Mexico in 1994, in east Asia in 1997, in Russia in 1998, in Argentina in 2001 – as the newly discovered rivers of capital suddenly began flowing the other way.

The IMF became well known at the time for insisting that these occasional stunning crashes should not derail liberalisation: they were just the price of reforms not fully complete. The new IMF article, in the June edition of Finance & Development magazine, disagrees. After nearly 30 years, it argues, the growing pains have not stopped. Open capital accounts have indeed increased developing countries’ access to capital for development but, strikingly, there is little evidence that this has raised growth rates. And there is no question that it has exaggerated the boom-bust business cycle, increased inequality and raised the odds of periodic financial crises.

Couched as it is in the equivocal language of cost-benefit analysis, this change of tune might sound inconsequential. It is not. Twenty years ago, Malaysia’s prime minister, Mahathir Mohamad, was branded an international pariah for reimposing capital controls to insulate his country from the east Asian financial crisis. The new IMF article concludes that such measures are “a viable, and sometimes the only, option”.

The second plank of the neoliberal agenda at which the IMF article takes aim will be even more familiar to UK readers: curbing the size of the state. In the 1980s and 1990s, the main emphasis on this front was on privatisation. As that agenda began to run its course, emphasis shifted to methods of constraining governments’ abilities to run excessive deficits of spending over revenues – and rules to avoid the accumulation of too much public debt. The Maastricht rules introduced by the eurozone countries in 1993, which mandated annual deficits of no more than 3 per cent of GDP and public debt of no more than 60 per cent, were perhaps the most prominent example.

For most of the 2000s, such self-denying ordinances seemed to be costless virtues.  Then, in 2007, the global economic crisis hit. After a brief flirtation with increased state spending when confronted with the steep recessions of 2008-09, the governments of the eurozone and the UK were converted again to the crucial importance of shrinking public debt and cutting spending. The notion that cutting spending can (or even is necessary to) boost growth – of “expansionary fiscal contraction” – came roaring back into fashion.

***

The IMF broached its dissent early in the post-crisis period, with its economists expressing scepticism over the pace and timing of austerity in Europe. Christine Lagarde, the fund’s managing director, and Olivier Blanchard, its chief economist, argued for relaxing spending constraints and turning a blind eye to debt burdens until depressed economies were solidly recovering. 

Gossip-mongers at the World Economic Forum in Davos put it down to the fact that they are both French and therefore constitutional backsliders on matters of fiscal prudence; and policymakers preferred to pick up on pseudo-scientific economic sound bites such as the idea of a public debt tipping-point at 90 per cent of GDP. In reality, however, the IMF was merely stating the clear conclusions of conventional economic models – models that the vast difference since 2009 in the recovery of the US, which did not opt for austerity, and Europe, which did, appears to have proved largely correct.

The new IMF article drives home the point. The “short-run costs of lower output and welfare and higher unemployment”, it concludes, “have been underplayed, and the desirability . . . of simply living with high debt and allowing debt ratios to decline organically through growth is underappreciated”. Austerity is often self-defeating and debt limits by themselves are meaningless.

Is this two-part mea culpa on both capital flows and the size of the state a major landmark in the evolution of the IMF’s thinking – and could this be important in practice, given the intellectual heft that the Washington institutions bring to the international policy debate? It is, and it could.

Will it rehabilitate the IMF as an institution among the populations of the countries it is meant to serve? Here I am more sceptical. There is no question that there was disagreement on policy in east Asia in 1997, for example. But the real problem with the IMF’s intervention had to do not with the correctness of its prescriptions but their legitimacy. The single most enduring image of that painful period was the photo of the then managing director of the IMF, Michel Camdessus, arms folded and frowning like a schoolmaster giving detention, watching over President Suharto of Indonesia as, humiliatingly, Suharto bowed to the inevitable and signed up to the fund’s financing plan.

In many developing countries, memories of unjust colonial domination are raw and if the IMF is to help resolve the growing dissatisfaction of populations with policymaking elites, it will need to do more than just make improvements to its advice – no matter how sincere and welcome such improvements may be. The reality that, in effect, power over its assistance belongs exclusively to a handful of rich economies will have to change. Reforming its governance to give developing countries more control is the place to start.

In the UK, meanwhile, we can have no such complaints. We have no one to blame for taking neoliberalism’s crazier ideas too seriously but ourselves.

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

Macroeconomist, bond trader and author of Money

This article first appeared in the 02 June 2016 issue of the New Statesman, How men got left behind