Testimony in phone hacking case spotlights U.K. Olympics minister

LONDON -- News Corp. executive James Murdoch's behind-the-scenes lobbying campaign spilled out into the public domain Tuesday, casting a harsh light on the British government's Olympics czar.

Murdoch was speaking before the media ethics inquiry set up in the wake of the country's phone hacking scandal, which has shaken the U.K.'s establishment with revelations of journalistic misdeeds, police corruption and corporate malpractice.

Some of Murdoch's testimony revisited his own role in the scandal, but also revealed how senior British ministers went out of their way to smooth the path for one of his biggest-ever business deals.

Particularly damning was correspondence showing how Olympics czar Jeremy Hunt secretly backed Murdoch's multibillion-dollar bid for full control of satellite broadcaster British Sky Broadcasting Group PLC. As the minister charged with deciding whether to refer the takeover deal to Britain's competition authority, Hunt was meant to have been neutral.

"I am approaching the decision with total impartiality and following strict due process," Hunt told lawmakers in January 2011. But a cache of text messages and emails published by Leveson's inquiry Tuesday suggested that Hunt was fighting on Murdoch's side the whole time.

"He said we would get there at the end, and he shared our objectives," was how an email from News Corp. lobbyist Frederic Michel described Hunt's attitude.

Other emails appeared to capture Hunt's office providing Murdoch with sensitive intelligence on his political opponents and offering advice on how best to present his bid. At one point Adam Smith, Hunt's special adviser, sent a text message to Michel boasting that "I [have] been causing a lot of chaos and moaning from people here on your behalf."

One message even quoted Hunt's statement a day before it was due to be delivered to the House of Commons -- a breach of parliamentary protocol that Michel described as "absolutely illegal."

Later Tuesday, Hunt issued a statement saying that some of the evidence "reported meetings and conversations that simply didn't happen." He said he has asked to move forward his appearance at the Leveson inquiry so he can present his side of the story.

"I am very confident that when I present my evidence the public will see that I conducted this process with scrupulous fairness," Hunt said.

During Tuesday's hearing, inquiry lawyer Robert Jay repeatedly needled Murdoch on the propriety of these back-channel communications.

"Do you think it's appropriate, Mr. Murdoch, that here you are getting confidential information as to what's going on at a high level of government?" Jay asked.

Murdoch hesitated before giving an awkward laugh.

"What I was concerned with here was the substance of what was being communicated, not the channel by which it was communicated," he said.

Murdoch was eventually forced to drop the proposed deal following the eruption of Britain's phone hacking scandal in July, but the emails could still be damaging.

As secretary for culture, Olympics, media and sport, Hunt is the most senior government official dedicated to the 2012 Games. If it were proven that he had given Murdoch special favors, his lead role on the games -- where a level playing field is guaranteed for all -- might be in jeopardy.

Prime Minister David Cameron expressed confidence in the 45-year-old minister, but within minutes of Murdoch's testimony, opposition politicians were calling on Hunt to step down.

"All politicians, including Labour, became too close to the Murdochs, but this is in a completely different league," Labour leader Ed Miliband told journalists. "We have Jeremy Hunt engaging in detailed discussions with a party, News Corporation, that is bidding to take over BSkyB and he is supposed to be the impartial judge."

The nature of the Murdoch family's links with senior politicians is one of the key questions raised by the phone hacking scandal. Critics of News Corp. argue that Conservative Party politicians -- including Hunt -- waved through the BSkyB deal in return for favorable press coverage.

Murdoch, showing little emotion, repeatedly denied the charge Tuesday.

"I would never have made that kind of a crass calculation. It just wouldn't occur to me," he said.

Murdoch's testimony gave a feel for his company's considerable clout, detailing 20-odd dinners, lunches, breakfasts and other meetings with Cameron and other leaders -- including former prime ministers Gordon Brown and Tony Blair.

Earlier in the hearing Murdoch was forced to defend his record at the head of his father's scandal-plagued British newspaper arm, saying that subordinates prevented him from making a clean sweep at the now-defunct News of the World tabloid.

Murdoch repeated allegations that the tabloid's then-editor Colin Myler and the company's former in-house lawyer, Tom Crone, misled him about the scale of illegal behavior at the newspaper.

Leveson asked Murdoch: "Can you think of a reason why Mr. Myler or Mr. Crone should keep this information from you? Was your relationship with them such that they may think: ‘Well we needn't bother him with that' or ‘We better keep it from it because he'll ask to cut out the cancer'?"

"That must be it," Murdoch said. "I would say: ‘Cut out the cancer,' and there was some desire to not do that."

Murdoch's father Rupert, News Corp.'s executive chairman, is scheduled to testify before Leveson on Wednesday morning.

Media analyst Paul Connew predicted more pain for British politicians. "James Murdoch's appearance is only the warm up act," he said.

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Associated Press writer Danica Kirka contributed to this report.