Exclusive - News Corp exec suspected in leak

LONDON, Jul Fri Jul 22, 2011 8:03pm BST

Pedestrians walk past a sign outside of the News Corporation Headquarters building in New York July 22, 2011. REUTERS/Lucas Jackson

Pedestrians walk past a sign outside of the News Corporation Headquarters building in New York July 22, 2011.

Credit: Reuters/Lucas Jackson

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LONDON, Jul (Reuters) - A leading private investigations firm said it had strong reason to suspect that Will Lewis, a senior executive of Rupert Murdoch's News Corporation, was involved in "orchestrating" a leak of material from a competing news organisation which helped Murdoch's business interests.

Kroll, one of the world's biggest corporate investigations firm, was hired by London's Telegraph Media Group, a competitor of Murdoch's London-based News International, to find out who had leaked unpublished excerpts of a secret audio recording that Telegraph reporters had made of Business Secretary, Vince Cable.

The investigation firm says in a report, prepared for the Telegraph last March, that it could not categorically identify the source of the leak. One main reason for this, Kroll said, was that the Telegraph Media Group's information security systems were too porous and too many people had access to the relevant systems for the leaker to be pinpointed.

A News International spokesman did not respond to a request from Reuters seeking comment from Lewis.

Kroll advised the Telegraph that because of the number of people who had access to data banks - including employees for telecoms giant, BT, to whom the Telegraph outsourced technical support functions - that even if the leak investigation continued, it was unlikely to produce a conclusive result.

However, Kroll investigators say in the report that they have strong reason to suspect that Will Lewis, a former chief editor at the Daily Telegraph and by late 2010 a senior executive at News International, was involved in facilitating the leak, along with another former Telegraph employee who also later moved to News International.

In the Telegraph recording, first reported by the BBC, Cable said that he had "declared war" on Rupert Murdoch. At the time, in December 2010, Cable was responsible for deciding whether the government should allow Murdoch to acquire the 61 percent of satellite broadcaster BSkyB the media magnate did not already own.

As a result of the leak, Cable was stripped of his responsibility for the BSkyB deal and the Telegraph faced awkward questions about why it did not publish Cable's anti-Murdoch comments itself. The Telegraph hired Kroll to investigate how the suppressed Cable material had leaked out.

Lewis, who earlier this year became one of News International's most senior executives, more recently became a key member of News Corporation's management and standards committee which is overseeing efforts to deal with the phone hacking and bribery scandal that has shaken Murdoch's media empire. Kroll did not interview Lewis during the course of its investigation.

A spokesman for News International's management and standards committee told Reuters he would not comment directly on the contents of the Kroll report and that "any inquiries for the BBC should go to the BBC." News International did not respond to requests for a comment from Lewis and others named in the report.

Spokespeople for New York-based News Corporation and its chairman Rupert Murdoch did not reply to emailed requests for comment.

A BBC spokeswoman told Reuters that it would not reveal its source.

Representatives from the Telegraph had no immediate comment. Vince Cable did not respond to requests for comment.

Kroll refused to comment.

Reuters is a competitor of the Journal and of Dow Jones Newswires, the financial news agency that News Corp acquired along with the Wall Street Journal in 2007.

CIRCLE OF KNOWLEDGE

The Kroll report details the lead up to and fall out from the leak.

"We have established that on 9 December, the circle of knowledge of an impending 'big story' by the same team who broke (a major political story about British parliamentary expenses) extended to ... a former Telegraph employee now employed by News International ... (who) works closely at News International with the former Telegraph editor Will Lewis, both of whom have strong motivations to damage the Telegraph," Kroll's report says.

"In the period between 9 and 21 December there was extensive telephone, text and social contact between (the former Telegraph employee), Lewis, and individuals within the authorized circle of knowledge," the report continues. The private investigators say they "believe it is more than likely that their knowledge of the big story grew. News International was the only media organisation we identified as having extensive contacts with the authorized circle of knowledge during this period."

"Given their employment with News International, their antipathy towards the Telegraph, and their knowledge of the story, we have a strong suspicion that (the other former Telegraph employee) and Lewis were involved in orchestrating the leak of the information," Kroll's investigators said.

Kroll concluded "that it is likely that the leak was as a result of unauthorised access to TMG's systems, most probably from within the organisation and by someone with admin rights to TMG's IT environment ... The copying of the audio file by either of these methods constitutes theft."

Kroll found that whoever was responsible for the leak "had to have the help of someone who could access the audio file." Kroll identified "one of the individuals who had the relevant Admin rights to access the file" as a computer help desk technician who shortly after Kroll began its investigation left the company.

In an interview with Kroll investigators, the technician denied any involvement in the leak, according to the report. But the investigation company said that there were contradictions between a part of his story and that of another witness that led them to question his credibility.

Kroll said that prior to leaving the Telegraph group, the computer technician re-formatted his IPad, erasing all data on it, and cut up the SIM card on his IPhone. The technician told investigators he wiped out the data and his IPad because he wanted to give a "clean" device back to the Telegraph when he left the company.

An analysis of e-mail traffic to and from Telegraph offices by Kroll showed "extensive" contacts between people inside the Telegraph with knowledge of the full contents of the Telegraph's audio recording of Cable and people at News International. In the month the controversy became public there were 550 e-mails between Will Lewis, a former Telegraph employee and a senior journalist still at the Telegraph.

Kroll said that they had no reason to believe the Telegraph reporter in question was involved in the leak, but that it was possible that he inadvertently confirmed information about the Cable recording to his friends who worked for Murdoch.

Kroll investigators found that around 15 information technology personnel on the Telegraph staff had access rights to the data banks which contained the unpublished Cable audio. Because the Telegraph group outsourced some of its help desk functions to BT, up to 50 of the British telecommunications giant's employees also had theoretical access to the relevant servers, Kroll found.

Because so many people, including people outside the Telegraph group, had access to the section of the Cable audio which discussed Murdoch, Kroll advised the Telegraph that while it could eliminate several categories of potential leakers as suspects, the circle of people with possible access was too large to enable them to pinpoint the leakers for certain.

As a consequence, Kroll advised the Telegraph to halt the investigation because it was unlikely to produce a conclusive result.

After the recording of Cable's Murdoch remarks became public, media commentators speculated about whether News International personnel had somehow played a role in the leak, given Lewis' connections in both companies and his alleged close friendship with BBC journalist Robert Peston. It was Peston who first reported Cable's comments to the undercover Telegraph reporters.

The leak, which occurred just as government deliberations over whether Murdoch should be allowed to take over BSkyB were heating up, embarrassed Cable, a senior member of the Liberal Democrat party which is the junior party in Britain's coalition government.

It also embarrassed the Telegraph group, a major Murdoch competitor. Media critics suggested the newspaper had tried to suppress Cable's anti-Murdoch remarks because they might cause Cable to be taken off the BSkyB decision, which would not have been in the Telegraph's business interests.

The Kroll report notes that the closing price for BSkyB shares on December 1 last year was 721 British pence, but that by December 22 -- a day after Cable was stripped of responsibility for the BSkyB decision -- the broadcaster's shares had risen to 743 pence.

The government reassigned the BSkyB decision to another British Cabinet Minister, who had publicly indicated that he was likely to approve the acquisition. Government deliberations on BSkyB became moot this month after Murdoch abandoned his bid to acquire the balance of the broadcaster's shares in the wake of the phone hacking uproar.

(Editing by Simon Robinson and Ralph Boulton)