Selasa, 19 Juli 2011

Phone hacking: live report (AFP)

LONDON (AFP) – 1630 GMT: End of testimony by Rupert and James Murdoch. This report is concluding. AFP will cover Rebekah Brooks testimony to the committee on its main news services.

1626 GMT: Rupert M reads his statement (see at 1453 GMT and later on this live report)

1626 GMT: Tom Watson MP: "Mr Murdoch, your wife has a good left hook."

1624 GMT: Have you considered resigning? Rupert M: "No. People I trusted let me down. They betrayed the company and it's for them to pay. I'm the best person to clean it up."

1618 GMT: AFP's Katy Lee says: The apparent attacker is an associate of UK uncut, but they say the pie attack wasn't on their behalf:

UK Uncut has tweeted: The pie in Murdoch's face was NOT a UK Uncut action, everyone!

"I did try to call them to try to get in touch with Mr Marbles -- unsurprisingly, they hung up."

1615 GMT: James Murdoch reiterates that he has no evidence that phone hacking has been carried out at News Corp's US operations or in any other country.

"Illegal behaviour has no place in this company. That goes for the whole company."

1610 GMT: The attacker is reported to be an alternative comedian tweeting as JonnieMarbles.

1610 GMT: Meeting resumes. James M talks about the out of court settlements with Gordon Taylor and other phone hacking victims.

1608 GMT: Andy Thompson, a member of public from Vancouver, Canada, tells AFP's Nick Morrison that he saw the attacker lunge towards Murdoch holding a green bag with shaving foam in it.

Wendi did indeed jump up to defend him.

1605 GMT: AFP reporter Robin Millard says the Murdochs were about to face the last questioner, Conservative lawmaker Louise Mensch, when a man approached the pair and tried to attack Rupert Murdoch with a plate.

Someone shouted "no, no, no, no!"

A policeman rushed across to apprehend the man.

James Murdoch looked shocked by the incident.

"The sitting is suspended for 10 minutes," chairman John Whittingdale said.

1602 GMT: BBCs Nick Robinson says Rupert Murdoch's wife Wendi Deng was "up like a shot" to defend her husband.

1600 GMT: Unofficial tweet: "So some young guy in check shirt tries to do something to rupert and wendi flies in with a solid biff to him."

1557 GMT: Reports saying a man attacked Rupert Murdoch with a white substance.

1555 GMT: BBC says a young men in check shirt is being held by officers outside the committee room.

1554 GMT: MEETING SUSPENDED TEN MINUTES

1552 GMT: James M: "My anger that were was new evidence emerging as late as the end of 2010m was real. We are trying to put it right."

"Still new allegations are emerging that we are trying to deal with as well."

1550 GMT: Rupert M: "Were mistakes made? Yes absolutely? By people I trusted or they trusted. We were betrayed."

1544 GMT: Rupert M recalls the MPs expenses scandal before the last general election.

"We should look at the most open society in the world, Singapore, where every minister gets a million dollars a year and it is the cleanest society in the world."

1530 GMT: Is it possible editors of your newspapers were unaware of the phone hacking activities? Rupert M: "I can't say because of judicial inquiries."

1528 GMT: James M: In addition to Harbottle & Lewis's conclusions, "the police told us there was no new evidence. The Press Complaints Commission said there was no new evidence. It wasn't until the civil trials began" that new evidence appeared "and we acted on that information immediately."

1523 GMT: Here's a background paragraph from the News Corp-owned Wall Street Journal today:

"In a May 2007 letter, Harbottle & Lewis told News International that it didn't find any reasonable evidence that others were carrying out illegal procedures similar to Mr. Goodman's.

"In an interview last week, Mr. (Rupert) Murdoch characterized that conclusion as a "major mistake." Harbottle & Lewis said Monday it was unable to comment because of attorney-client privilege."

1519 GMT: James M says he can't say what the terms were for the internal inquiry into phone hacking ordered by News Intl from the Queen's lawyers Harbottle and Lewis.

The company based its decision to take no further action on the conclusions submitted by Harbottle and Lewis, James M.

"It is one of the pillars that led the company to believe that (phone hacking) was a matter of the past."

1504 GMT: Interesting standard information at the bottom of Rupert Murdoch's statement: "News Corporation had total assets as of March 31, 2011 of approximately US$60 billion and total annual revenues of approximatelyUS$33 billion."

"News Corporation is a diversified global media company with operations in six industry segments: cable network programming; filmed entertainment; television; direct broadcast satellite television; publishing; and other."

It highlights the financial impact that the phone hacking could have on the company if it gets a reputation for condoning illegal activities.

1501 GMT: More from Rupert M's statement:

"At no time do I remember being as sickened as when I heard what the Dowler family had to endure ? nor do I recall being as angry as when I was told that the News of the World could have compounded their distress.

"I would like all the victims of phone hacking to know how completely and deeply sorry I am."

"I intend to work tirelessly to merit their forgiveness."

1458 GMT: Rupert M: Rebekah Brooks and Les Hinton "both asked to leave". About Rebecca Brooks, "She asked to leave. She had extreme anguish."

The payoffs? For Hinton "It would have been considerable. They are confidential."

James M: "There are no confidentiality agreements that would stop them cooperating with the enquiry. There is no evidence of impropriety."

1455 GMT: Have you paid money since then to Mulcaire and Goodman? "I was very surprised to find that certain contributions had been made."

Who signed the cheques? "I do not know.It would have been the management of the legal cases."

Rupert M: "It would not have come to the managing editor."

James M: "I was as surprised as you are that the payments were made?

Could it have been Les Hinton (who signed the cheques)? Rupert M: "It could have been Les Hinton. It would have been on the approval of the chief legal officer."

1453 GMT: News Corporation has sent round the statement that Rupert Murdoch was refused permission to make at the start, Here are some extracts:

"This is the most humble day of my career. After all that has happened, I know we need to be here today.

"Before going further, James and I would like to say how sorry we are for what hashappened ? especially with regard to listening to the voicemail of victims of crime.

"My company has 52,000 employees. I have led it for 57 years and I have made my share of mistakes.

"I have lived in many countries, employed thousands of honest and hardworking journalists, owned nearly 200 newspapers and followed countless stories about people and families around the world."

1450 GMT: Did News Intl pay Clive Goodman's fees for his trial? James M: "I don't have direct knowledge of that.

"It is customary in certain instance with employees to pay certain legal expenses. Since I have had knowledge it has all been done with legal advice."

1448 GMT: Rupert Murdoch says that perhaps he might have called the News of the World editor only once a month. He wouldn't expect to told about a "600,000 pounds settlement" with Gordon Taylor.

So what would you talk about?

"I would say 'what's doing?' Maybe he would say 'I'm adding pages for football'."

1453 GMT: How often would you speak to the editors of your newspapers. Rupert M: "I would sometimes call the News of the World Editor on Saturdays and the Sunday Times every Saturday.

"Not to influence them. I am not in touch. To say that I am hands on is wrong. News of the World I lost sight of, maybe because it's so small in the general frame of our company."

The editor he speaks to most frequently is the editor of the Wall Street Journal as both men are in New York.

1440 GMT: Why was lawyer Tom Crone sacked? "I don't have knowledge of it."

1439 GMT: James M: "It was the later civil processes that unearthed the additional information. As soon as had that information at the end of 2010 we acted on it"

1438 GMT: Asked why the settlement with Gordon Taylor, head of the Professional Footballers'Association, was made confidential, James M says: "The confidential nature of the settlement was a normal thing in out of court settlements."

1433 GMT: James M says he first became aware that phone hacking was more widespread than initially thought when the company received civil claims last year for compensation from phone hacking victims.

1431 GMT: James M: "We have no immediate plans for a new tabloid Sunday newspaper" to replace the News of the World.

"It has come up in the company but this is not the time to be worrying about that. The company has to get to grips with all these allegations."

Rupert M: "This country does greatly benefit from having a competitive press and therefore a transparent society. That is sometimes inconvenient to some people but it's stronger for it."

1425 GMT: Rupert M: "Each paper had an editorial manager with authority to approve reporters' expenses." A reporter does not have authority, he says.

1423 GMT: Asked about News of the World's use of non-invoiced payments, James M: "Sometimes it is appropriate for journalists to have the ability to use cash but I don't have direct knowledge."

1421 GMT: Rupert M is giving deep reflection to each question before replying. James M is taking a more dynamic pro-active approach, eager to give a full answer to every question.

1417 GMT: James M: "The out of court settlement on Mr (Gordon) Taylor was related to a phone interception by Mr Mulcaire so the underlying interception was not disputed."

"Legal advice was that it was likely that the case could be lost for a total cost of around 500,000 to a million pounds."

"There was no reason to believe anything other than that phone interceptions were in the past... and that settlements could be made without going to the head company.

"I directed that it was all right to settle those cases. I did not get involved with the negotiations."

1415 GMT: Rupert M says there is "no evidence at all" that victims of the 9/11 terrorist attacks were hacked.

"We have seen no evidence of that at all and as far as we know the FBI haven't either," Murdoch said. "If they do, we will treat it exactly the same way as we treat it here.

"I cannot believe it happened from anyone in America. Whether someone from the News of the World or Mr Mulcaire took it on himself to do it, I don't know."

1413 GMT: Asked by Jim Sheridan MP "Do you accept that ultimately you are responsible for this whole fiasco?", Murdoch tersely replied: "No".

When asked who he blamed, Murdoch said: "The people that I trusted to run it (his media empire) and then maybe the people they trusted."

"I knew Mr (Les) Hinton (former News International chairman) 52 years and I would trust him with my life."

1406 GMT: Rupert Murdoch says he visited 10 Downing Street by the back door because he was asked. "I was asked would I come in by the back door."

1403 GMT: Why were more people not sacked when the extent of the phone sacking became known? James M: "Most of them, some of them had already left."

Why did 200 people lose their jobs (when the News of the World closed)?

Rupert M: "We felt ashamed about what had happened. We had broken our trust with our readers."

1401 GMT: Asked when he became aware of the full extent of the phone hacking at the News of the World, Rupert M says: "The police have not given us the Mulcaire diaries (the notes of phone hacker Glenn Mulcaire) so we do know know what they contain.

"We are 100 percent cooperating with the police investigation."

1359 GMT: Rupert M: "I was shocked, appalled and shamed when I heard about the Milly Dowler case only two weeks ago. I was graciously received by the Dowlers."

1358 GMT: Was Rupert M informed of payments made to phone hacking victims Gordon Taylor and Max Clifford? "Nope"

James M: "My father became aware following the out of court settlement. It's something the executives in that country would be authorised to make. It's below the approval threshhold."

1356 GMT: "Who was aware of findings by Harbottle and Lewis which investigated phone hacking on behalf of the company."

Rupert M: "Top legal officers."

1353 GMT: Rupert M says he was unaware of court criticism of Neville Thurlbeck, the News of the World reporter in a story about Formula One motor racing supermo Max Mosley.

1351 GMT: Rupert M said he did not investigate Rebekah Brooks' admission that the News of the World had paid police officers for information because he was unaware of her statement.

"News of the World is less than 1 percent of our company. We employ 53,000 people around the world."

1349 GMT: James M: "There is no evidence that I have knowledge of that Mr (Les) Hinton or Mrs (Rebekah) Brooks did anything inappropriate."

1347 GMT: Whittingdale: "Who else at the News of the World was involved in phone hacking apart from Clive Goodman (who was jailed)?"

James M: "There have been a number of arrests. These are matters for criminal investigations." News Intl has set up its own internal operation to deal with the phone hacking repercussions, he says.

1340 GMT: James M, asked why he said earlier he had not been in full possession of the facts: "When the Sienna Miller case came up we alerted the police and they restarted the investigation.

"We have set up a compensation scheme for legitimate claims from the victims.

"When I said earlier that I was not in full possession of the facts it was in that civil trial that those facts emerged and the company acted as swiftly as possible."

1339 GMT: James Murdoch: "I want to say how sorry I am and how sorry we are to the victims of illegal phone interceptions. It is our determination to put things right."

Rupert Murdoch interrupts: "This is the most humble day of my life."

1337 GMT: Whittingdale welcomes Rupert and James Murdoch. Rupert Murdoch thanks him.

1334 GMT: Whiitingdale refuses, and says they can make a statement at the end. James Murdoch asks to submit a written statement and Whittingdale agrees.

1333 GMT: James Murdoch asks to make a statement.

1325 GMT: The Wilson Room, where the Murdochs will be grilled, is jampacked with 100 or so newspaper journalists and 70 members of the public, AFP's Nick Morrison reports.

1321 GMT: The Murdochs initially refused to appear before the committee but relented after they were formally summoned.

John Whittingdale, chairman of the Culture has promised "forensic" questioning amid public anger over the hacking of crime victims, celebrities and royals.

1320 GMT: Rupert Murdoch, due to start giving evidence in 10 minutes' times, has reportedly engaged public relations consultants to train him for Tuesday's session.

James Murdoch, chief executive of News Corp's Europe and Asia operations, promises to be the focus of scrutiny over payments he reportedly approved to the victims of hacking.

The flame-haired Brooks, who quit as chief executive of News International on Friday, will also be taken to task for her remarks before the same committee in 2003 when she admitted police had been paid for stories.

1317 GMT: Yates: "I have worked out in hindsight that my phone may have been hacked" though it never occurred to him when he was reviewing the initial enquiry.

1315 GMT: In a further tragic twist, police are investigating the unexplained death of whistleblower Sean Hoare, a former reporter at the tabloid who first implicated Cameron's ex-spokesman Andy Coulson in the phone hacking scandal.

1313 GMT: Websites owned by Rupert Murdoch's News International are back up after hit by the Lulz Security hacker group which replaced The Sun's online version with a fake story pronouncing the mogul's death.

The British tabloid quickly took down reports that the 80-year-old had been found dead in his garden after ingesting palladium but visitors to the site were redirected to LulzSec's Twitter feed, which celebrated the high-profile attack.

1309 GMT: More from David Cameron in Lagos: "I don't underestimate the problems."

"Parts of the media committed dreadful, illegal acts. The police have serious questions to answer about potential corruption and about a failed investigation. Politicians have been too close to media owners."

Cameron is to fly home later in the afternoon after cutting his trip short to deal with the hacking scandal, which has overshadowed his visit to Africa aimed at promoting trade.

Cameron has ordered a judge-led inquiry into the phone hacking scandal, and will announce further details in the House of Commons tomorrow.

1306 GMT: Yates's relationship with Wallis: "We did become friends, in about 2000. I would see him about two or three times a year." He denies being a close friend.

1303 GMT: Yates says he asked Wallis whether there was anything in the Guardian's reports that could be embarrassing and "I received a categorical assurance" that there wasn't.

"I did not have a scintilla of concern. I did not raise any concerns because I did not have a scintilla of concern."

He received a CV from Wallis's daughter and passed it on to human resources. "I deny that I secured her a job. I had nothing to do with her employment. I was simply a postbox."

1301 GMT: Assistant Commissoner John Yates, who resigned yesterday, says: "My integrity is intact and my conscience is clear."

1258 GMT: News Corp is considering elevating Chief Operating Officer Chase Carey to chief executive officer to succeed Rupert Murdoch, Bloomberg News reports, citing people with knowledge of the situation.

"A decision hasn?t been made and a move depends in part on Murdoch?s performance before the U.K. Parliament today, said the people, who weren?t authorized to speak publicly. Murdoch would remain chairman, the people said."

1259 GMT: Fedorcio's testimony ends. Yates begins his testimony.

1256 GMT: Fedorcio says he would not have hired Wallis if he knew then what he knows now.

1255 GMT: Wallis suspended his contract himself last September after New York Times reports about phone hacking, Fedorcio says.

1248 GMT: Blackwood: "Why did you select Yates to do due diligence?"

Fedorcio: "Because he had been leading the work on phone hacking and he seemed appropriate. He is an officer of the highest integrity."

"Were you aware he had been a close friend of Mr Wallis since 1998"

"I knew he was a friend but did not know he had been a friend since 1998."

"I can't recall who suggested that I hire Mr Wallis." It was "certainly not" Rebekah Brooks.

1246 GMT: He e-mailed three people -- Wallis and two others -- inviting them to bid for the contract. Under Met rules, a minimum of three bids have to be sought for a contract.

"At that stage Wallis had just left the News of the World and just set up on his own and was looking for contracts."

1243 GMT: Fedoricio denies that he hired Wallis to help deal with the fallout from the phone hacking scandal. "I never discussed phone hacking with Mr Wallis."

He hired Wallis to help with the Met's corporate affairs.

1235 GMT: Fedorcio confirms that Wallis was hired in September 2009, two months after Yates had reviewed the original phone hacking inquiry.

"I asked John Yates about Mr Wallis who gave him a categorical assurance that there was nothing about phone hacking that could be embarrassing."

"As far as he was concerned, having spoken to Mr Wallis, there was nothing that could be embarrassing."

1234 GMT: Vaz "But why Wallis?"

Fedorcio: "I had met him on a number of occasions. I had known him since 1997. Someone told me he was available. He was not a personal friend that I socialised with after work."

1230 GMT: Vaz: "Why did you emply Wallis?"

Fedorcio: "I was informed a couple of hours ago that I have been referred to the police complaints commission and I have not had a chance to have independent legal advice as others may have done."

Vaz reassures him that he can speak freely.

"The need that I had for external advice and support was that my deputy had quite serious illness. I was under great pressure working long hours. I had been looking for some time to find someone who had the right background and knowledge."

1230 GMT: Stephenson ends his evidence and Dick Fedorcio takes over.

1228 GMT: Why did Stephenson resign? "These are huge events for the Met. I sincerely regret that Mr Yates has gone

"The Met will recover. It has around 50,000 people. Interim arrangments have been put in place.

"We need to make changes in the way we handle media. Much more transparently.

"I'm going because I'm a leader. Leadership is not about popularity, the press, or spinning - it's about making decisions that put your organisation, it's mission, and the people you lead first - it's about doing things that will allow them to be proud of their leaders, and this is much different than mere popularity.

"Today's almost certainly my final professional public engagement after almost 36 years of policing."

1225 GMT: Ten out of 45 staff at the Met's press and PR department (DPA) have worked for the News of the World, either as staff or on work experience, Stephenson says.

1222 GMT: Stephenson says he remembers no particular remarks or parameters that he set for Yates when he asked him to reopen the inquiry.

"He is one of the most senior police officers in the land. I just had a telephone conversation with him."

1220 GMT: Prime Minister David Cameron, in Nigeria, says the hacking scandal is a "big problem" but will be resolved.

1218 GMT: The "hideous nature" of some of the allegations "would have made it a priority" had he been aware of them, Stephenson said. The mobile phone of teenage murder victim Milly Dowler is among those alleged to have been hacked.

1215 GMT: He did not hear that there are "bin bags" full of phone hacking evidence until after Operation Weeting was opened in January this year .

1212 GMT: Stephenson: "I had no way of knowing that the original investigation was so narrow."

1210 GMT: Norman Fowler, a former Conservative minister under Margaret Thatcher in the 1980s and now a member of the House of Lords, the upper house of parliament, says he expects a "good performance" from Murdoch.

Fowler was part of a Lord committee that travelled to New York in 2007 to interview Murdoch.

"I think he will give a good performance and a relaxed performance and I think it would be a great mistake to underestimate the man," he said.

But Fowler believes the committee is "only a step and the most important step is the public inquiry to follow."

1207 GMT: AFP's Nick Morrison spots a group of Socialist Worker campaigners outside, chanting: "Say hey, ho, Rupert Murdoch's got to go!"

Right to Work campaigners alongside have turned up with placards reading: 'Smash Murdoch's evil empire' and 'Jail corrupt cops, not protesters.'

1207 GMT: "Yes I do accept" with hindsight that the Met should have reopened the original investigation.

1205 GMT: Stephenson said he knew Yates was friendly with Wallis but "it was not relevant" when he asked Yates to "establish the facts" of phone hacking.

There was no reason to think the original operation was not a success. "People were sent to prison for it."

1203 GMT: Andy Thompson, 40, managing director of Canadian theatre company The Virtual Stage, said he was on a working holiday to London to see West End shows but decided to attend the hearing after friends said it was open to the public.

"This is the best show in town this afternoon," he said.

"How often do you get a chance to sit in a room with the Murdochs and Rebekah Brooks while they get grilled by MPs? It's a completely historic day to be in London."

1201 GMT: Blackwood: "Were relations (with the media) clouded by friendship?"

"I have no reason to doubt the assurances given by Mr Yates" about his relationship with Wallis.

1159 GMT: Tom Miller, 22, law student in the queue for the hearing: On phone hacking: "It's obviously wrong but I can understand that it goes on because of competition to get stories.

"But, while I want the truth to come out about hacking, if the press are going to be terrified of going to jail after this then that's not a good thing.

"I do believe the Murdochs and Rebekah Brooks should be held to account but I also think freedom of the press is paramount."

1157 GMT: AFP's Nick Morrison, at Portcullis House, reports: "Jemima Khan has just arrived, surrounded by crowds of photographers, flashbulbs popping."

1156 GMT: "I have never had a conversation with Mr Wallis about phone hacking." Stephenson says the committee will have to ask Fedorcio how Wallis came to be employed by the Met.

1154 GMT: "I have no information that the Metropolitan Police was engaged in a conspiracy" to hush up phone hacking, he says, adding that he received repeated assurances that there was nothing new in the Guardian's 2009 reports.

1151 GMT: Asked why his Champneys stay does not yet appear in the Met police's hospitality files, Stephenson said: "I made sure it was put in the hospitality register and it will be published in the next quarter's publication."

1148 GMT: Around 40 members of the public were queueing up outside Portcullis House, a modern office block across the road from the Houses of Parliament, where Rupert and James Murdoch are due to be questioned.

Rupert Murdoch, Australian-born chairman and chief executive of his News Corporation global media empire, is due to appear in the Wilson Room at 2:30pm (1330 GMT).

Murdoch's car was mobbed by photographers as it arrived at the building and then sped off again. It was not clear if he had managed to get in another way.

1147 GMT: Stephenson says he was told that News International publications had 42 percent of newspaper readership and so he thought it was important to have a relationship with him.

1144 GMT: Did you try and persuade The Guardian that its coverage of phone hacking was exaggerated?

"Yes. Mr Yates gave me assurances that there was nothing new in the Guardian's report. Mr Yates will tell you that himself."

1141 GMT: James Clappison MP asks about Stephenson's 18 dinners with News International staff and seven or eight with Wallis. "Was that necessary?"

Stephenson: "We meet with media to enhance the reputation of the Met," establish context and several other reasons.

"But I accept that we need to change the way we do it."

1139 GMT: David Winnick MP: "Is it not inappropriate for any police officer to receive substantial hospitality?" like the commissioner's five week stay at Champneys.

Stephenson: "It was a family connection. It was very generous. It enabled me to get back to work. It was not a secret. It was declared."

1136 GMT: "I don't agree" that accepting hospitality from Champneys health farm was not the best thing to do. "I had a serious injury and was wheelchair bound.I wanted to get back to work as soon as possible."

1132 GMT: Nicola Blackwood MP cites a 2006 report which found evidence of "widespread and organised undercover marketing of confidential information" to the media.

It identified 228 transactions with various newspapers including the News of the World., she says, asking him whether that did not mean he should have taken phone hacking more seriously.

Stephenson says "even with that report" phone hacking was not a major priorioty like counter terrorism operations and Stephen Lawrence.

1128 GMT: "I most certainly did not tell the Mayor" (Boris Johnson) about the imminent arrest of Rebekah Brooks. The reason is that I would not want to compromise the Mayor ."

1121 GMT: Stephenson says he knew of Rebekah Brooks' arrest "maybe a day or two days" beforehand. "That is entirely proper."

Of his failure to report the hiring of Wallis to Home Secretary Theresa May, he said: "I'm fully aware it has been interpreted negatively."

Stephenson said the contract with Wallis only became relevant when he was linked to the phone hacking investigation.

But "there was no suggestion that Wallis was involved in phone hacking. News International said it was a tiny issue."

1120 GMT: He was given assurance by a senior police officer that there was nothing new in the phone hacking investigation, so saw no need to query the appointment of Wallis.

1116 GMT: When he took office as commissioner he asked for briefings on various subjects from counter terrorism to the murder of black teenager Stephen Lawrence but never thought that phone hacking was a major problem, so never looked into it.

1114 GMT: On Prime Minister David Cameron's employment of former News of the World editor Andy Coulson, Stephenson denied having taken a swipe at Cameron in his resignation statement.

But he added: "Wallis was never employed to provide personal advice to me. He was employed in a minor role."

"When Coulson resigned as News of the World editor he was associating his name with hacking" whereas Wallis had never at that time been linked to hacking.

1113 GMT: His resignation was against the advice of many people "including my wife".

1111 GMT: He is "not apologetic" for his stay at Champneys health farm but when he became aware that Neil Wallis was connected with Champneys he felt it was significant.

1110 GMT: Stephenson says a decision had to be made quickly because of the importance of the build up to next year's London Olympics.

1108: GMT: Stephenson: "When I took the post I was clear that I would never allow the story to be about me. Clearly there have been very significant stories about me."

1107 GMT: Committee chairman Keith Vaz MP says he was invited to the News International summer party but did not attend.

1105 GMT: People enter the Grimond Room, where the Home Affairs Committee will meet, and take their seats.

1104 GMT: Labour leader Ed Miliband tweets: "What people will want to know is whether James and Rupert Murdoch have some remorse for what happened and to account for what they knew."

1102 GMT: Max Beckham, 21, a student from London, was at the front of the public queue for the Culture committee hearing at Portcullis House in Westminster after being the first to arrive at 6.30 am.

"I'm looking forward to seeing Rupert Murdoch - he's the one at the top so to have him under the spotlight is important.

"I don't think a lot is going to come out of it though - he's a professional, he knows what he's doing," Max says. "But I want to be here for the atmosphere and because it's a historic occasion."

1100 GMT: Welcome to AFP's live report on hearings by two British parliamentary select committees into phone hacking at the News of the World and alleged payment of police officers.

The Home Affairs Committee, beginning at 12 noon, will quiz Sir Paul Stephenson, who has resigned as Metropolitan Police Commissioner after the revelation that the Metropolitan Police hired former News of the World Neil Wallis as a consultant.

Also facing questioning by that committee is John Yates, who stood down yesterday as Assistant Commissioner at the Met and Dick Fedorcio, the Met's Director of Public Affairs and Internal Communication.

The Culture, Media and Sport Committee, starting at 2.30 pm, will grill Rupert Murdoch, chairman of News Corporation, and his son James, chairman of UK subsidiary News International, through which the group owned the News of the World.

Rebekah Brooks, former News International chief executive, will also appear, despite having been arrested on Sunday and interviewed by police for several hours.

Murdoch attacked as defends self to UK parliament (Reuters)

LONDON (Reuters) – Rupert Murdoch was attacked by a protester on Tuesday while giving evidence to a British parliamentary committee at which he defended his son and his company over a scandal that has rocked the British establishment.

After two and half hours of evidence from the 80-year-old magnate and his 38-year-old son James, a man appeared to rise from the public area of the committee room and tried to hit the elder Murdoch with a "custard pie" -- a dish of white foam.

As James rose and police moved in, watched live by millions on television, Rupert Murdoch's 42-year-old wife Wendi Deng, who had been sitting right behind her husband, leaped forward to slap the man. He was hauled away and the session suspended.

Ten minutes later, the session resumed with an apology from the chairman and a comment from one lawmaker that the Murdochs had shown "immense guts" to continue taking questions. Rupert Murdoch had removed his jacket.

At the start of proceedings, the elder Murdoch had rejected personal responsibility for the phone-hacking and corruption scandal but, with his son, said the company was deeply sorry and intended to resolve the issue as quickly as possible.

Sitting next to James, who opened the much-awaited proceedings in a packed committee room at Westminster by apologizing to victims of voicemail hacking, the Australian-born chief executive of News Corp interjected:

"I would just like to say one sentence," he said.

"This is the most humble day of my life."

He later said he was "shocked, appalled and ashamed" when he read two weeks ago of the case that has transformed the smoldering scandal into a "firestorm", in the words of Prime Minister David Cameron. It has shaken Britons' trust in the press, police and politicians, including Cameron himself.

Murdoch has shut down his top-selling Sunday newspaper, the 168-year-old tabloid News of the World, and dropped a strategically important buyout bid for broadcaster BSkyB.

But asked flat out if he considered himself personally responsible "for this fiasco", Murdoch replied simply: "No."

Asked who was, he said: "The people that I trusted to run it, and then maybe the people they trusted." His son said they did not believe the two most senior executives to have resigned, Rebekah Brooks and Les Hinton, knew of wrongdoing.

Several people were ejected from the packed public area of the room as proceedings were beginning after holding up posters reading "Murdoch wanted for news crimes". Outside, demonstrators also kept vigil throughout the hearing.

During questioning, Murdoch insisted that he had been misled when previously denying that phone hacking at the News of the World went beyond the case of a reporter who was jailed for the offence in 2007. Occasionally slapping the table in apparent frustration, he said the paper was only a small part of his business, suggesting he could not supervise it personally.

Asked about one of 10 journalists arrested this year by police probing hacking, he said gruffly: "Never heard of him."

He added: "This is not an excuse. Maybe it's an explanation of my laxity. The News of the World is less than one percent of our company. I employ 53,000 people around the world."

APOLOGY

As the session before the lower house media committee got under way, the chairman rejected a request by James Murdoch, the 38-year-old heir apparent and chairman of British newspaper unit News International, to make an opening statement.

However, after a first question, the younger Murdoch began by offering an apology: "I would just like to say how sorry I am and how sorry we are to particularly the victims of the illegal voicemail interceptions and to their families.

"It is a matter of great regret, of mine, of my father's, and everyone at News Corporation. These actions do not live up to the standards that our company aspires to everywhere around the world and it is our determination to put things right, to make sure these things do not happen again and to be the company that I know we have always aspired to be."

The elder Murdoch said he had seen no evidence to support a suggestion his journalists might have tried to spy on the families of victims of the 9/11 attacks in the United States. The FBI is looking into that allegation.

The two Murdochs sat side by side at a table facing the horseshoe of lawmakers asking their questions. Occasionally, the younger Murdoch attempted to break in to answer questions posed to his father.

POLICE UNDER FIRE

With a second British police chief quitting on Monday over the scandal, Cameron cut short a trade trip to Africa and was due to return in time for an emergency debate on Wednesday in parliament, which is delaying its summer recess.

Speaking in Lagos, Nigeria, before flying home as the committee hearing began, Cameron said he was committed, through new investigations, to addressing three key problems: "The wrongdoing in parts of the media and the potential that there is corruption in the police and ... the third ... which is the relationship between politicians and the media."

But he also signaled a desire to push the agenda away from a scandal that has dominated every debate for two full weeks:

"The British public want something else too," Cameron said.

"They don't want us to lose our focus on an economy that provides good jobs, on an immigration system that works for Britain, a welfare system that is fair for our people."

The Murdochs' appearance before parliament's media committee was expected to attract a television audience of millions, not only in Britain, but also notably in the United States, where Murdoch controls Fox television and the Wall Street Journal among other businesses.

"I want to feel the atmosphere in the room and actually witness history unfold," said Max Beckham, 21, from London as he lined up for one of the few public seats on offer. "This hearing could signal the end of Rupert Murdoch's reign."

Another eager witness in the public gallery, Canadian tourist Andy Thomson, 40, called it "the best show in town."

DEFENSE CRUMBLED

Murdoch's British arm, News International, had long maintained that the practice of intercepting mobile phone voicemails to get stories was the work of a sole reporter on the News of the World who, along with a private investigator, were jailed for several months in 2007.

That "rogue reporter" defense crumbled under a steady drip-feed of claims by celebrities that they were targeted.

The younger Murdoch, whose future as heir-apparent to the company is under threat as shareholders question his ability, said he was aware, before News International agreed to cooperate with police on a new inquiry this year, of payments made after 2007 to some public figures who had complained of phone-hacking.

He also said the company had paid legal fees for the convicted investigator Glenn Mulcaire, though said he had been shocked to discover it. As lawmakers questioned whether that might indicate News Corp was buying Mulcaire's silence, both Murdochs said they would try to end payments if that was possible under the terms of any contract with Mulcaire.

The floodgates opened two weeks ago when a lawyer for the family of a murdered teenage schoolgirl said the paper had hacked her phone when she was missing, deleting messages and raising false hopes she could be still alive.

The ensuing outrage prompted News Corp to close the 168-year-old News of the World and drop a $12 billion plan to take full control of pay TV operator BSkyB, and saw the arrest of former News International Chief Executive Rebekah Brooks, a Murdoch protégée who once edited the newspaper.

Cameron has faced questions over his judgment in appointing former News of the World editor Andy Coulson as his communications chief, while London police chief Paul Stephenson and anti-terrorism head John Yates stepped down over links to Coulson's former deputy, appointed as an adviser to the police.

A News Corp board member told Reuters the group's independent directors were fully behind Rupert Murdoch. There has been talk in recent days that Chase Carey would be elevated from chief operating officer to take over from Murdoch, as CEO, with the latter staying as chairman.

Corporate governance watchdog PIRC, which advises many institutional investors said the younger Murdoch should step down as chairman of BSkyB: "Other investors share our opinion," it said in a statement. "The risk of contagion is great ... How, in reality, can someone facing challenges on all sides expect to devote sufficient attention to chairing a FTSE 100?"

On Monday, Standard & Poor's said it may cut News Corp's credit rating from the current BBB+, given the risks associated with widening legal probes in Britain and pressure for an FBI investigation in the United States.

WHISTLEBLOWER DEAD

In another development, police said a man believed to be former News of the World journalist Sean Hoare was found dead at his home near London on Monday.

It was Hoare who told the New York Times that phone hacking at the tabloid was far more extensive than the paper had acknowledged at the time. The former show business reporter also told the BBC he was asked by Coulson, who went on to work for the prime minister, to tap phones.

Brooks, who is due to appear after the Murdochs, resigned as News International chief executive on Friday and was arrested by police on Sunday on suspicion of corruption and intercepting communications before being released on bail.

QUESTIONS FOR CAMERON

Conservative Prime Minister Cameron, who took office in May 2010 after 13 years of Labor rule, is facing the worst crisis of his premiership as his decision to hire former News of the World editor Coulson as his communications chief in 2007 comes back to haunt him.

Coulson quit the paper earlier that year when the paper's royal reporter was jailed for phone hacking. Coulson said he knew nothing of the practice but took responsibility.

Coulson resigned as Cameron's spokesman in January when the long-running scandal came back to life. He was arrested earlier this month and is also free on bail.

Few expect Cameron to quit but he appears weakened as head of a deficit-cutting coalition and might find his room for maneuver limited.

John Yates, the other senior officer to resign, followed Stephenson before parliament's home affairs committee. As he did last week, he defended his decision in 2009 not to reopen inquiries after the Guardian newspaper ran a story alleging hacking had been widespread at Coulson's News of the World.

Stephenson was subjected to over an hour of intensive questions about his relationship with Wallis, his acceptance of a free spa break and his force's failure to reopen inquiries more swiftly into allegations that hacking was widespread.

(Additional reporting by Michael Perry in Sydney, Jodie Ginsberg in Lagos and Michael Holden, Stephen Mangan, Clare Kane, Kate Holton, Mike Collett-White, Paul Sandle, Paul Hoskins, Neil Maidment, Rosalba O'Brien, Christina Fincher, Peter Griffiths, Joanne Frearson and Georgina Prodhan in London; Writing by Alastair Macdonald; Editing by Jon Boyle)

Goldman's profit engine stalls; shares fall (Reuters)

NEW YORK (Reuters) – Goldman Sachs Group Inc rattled investors with earnings that fell far short of expectations because of sharp declines in bond trading revenue, long a key source of profits for the investment bank.

Goldman, once Wall Street's largest bond trading house, reported its sixth consecutive quarterly decline in that business, where Chief Executive Lloyd Blankfein earned his spurs.

Equities trading, which typically produces lower margins, produced stronger revenue for the company during the quarter.

Goldman's fixed income, currency and commodities trading revenue fell 53 percent to $1.6 billion, far worse than analysts had expected.

On a conference call, Chief Financial Officer David Viniar said the bank is likely to lay off about 1,000 employees by the end of the year, or about 3 percent of its staff.

Analysts questioned whether Goldman and its Wall Street rival Morgan Stanley are losing ground to larger commercial banks, which are traditionally less nimble in trading than the investment banks.

"What happened? Did they lose market share?" asked Chris Whalen, an analyst who covers bank stocks at Institutional Risk Metrics, based in Los Angeles. "It seems like Goldman and Morgan Stanley cannot compete with the big commercial banks."

Goldman attributed the trading weakness to insipid client activity and a lack of clear market direction. Unlike JPMorgan Chase & Co and Citigroup Inc, which posted better-than-expected trading results last week, Goldman does not have a commercial banking operation to bulk up revenue or the flexibility to boost its earnings by drawing money from huge loan loss reserves.

"Goldman can't release reserves, and JPMorgan, Wells and Citi can. That's the difference," said Keith Davis, bank analyst and principal at money manager Farr, Miller & Washington in Washington.

Viniar said trading feels "a little better" so far in the third quarter, but he cautioned that the business will be slower for the foreseeable future.

Overall, Goldman earned $1.05 billion, or $1.85 per share, in the second quarter, far below the $2.27 per share analysts had forecast. Adjusted for special charges, Goldman earned $2.75 per share a year earlier.

"During the second quarter, the operating environment was more difficult given global macro-economic concerns," Blankfein said in a statement.

"In addition, certain of our businesses had disappointing results as we reduced our market risk," he added.

Goldman shares fell 2.7 percent at the market open but later recouped a bit. They were down 1.4 percent at $127.50 near midday.

The shares are down by about a quarter so far this year, underperforming the broader market. Investors have been holding off buying the stock because of the weak trading environment and worries over financial regulation, which is set to cut further into Goldman's revenues.

A DAMPER

"The markets haven't been that great, and I just think a lot of financial institutions, because of regulatory concerns, they've held back a little bit on proprietary trading and other aspects of their business," said Mark Bronzo, portfolio manager for Security Global Investors, who does not hold Goldman stock. "All of that is going to put a damper on trading results."

Indeed, Goldman's value-at-risk, a key measure of how much risky trading activity it took on during the quarter, dropped nearly 26 percent from a year earlier and 11 percent from the first quarter. Value-at-risk is now at its lowest level since the third quarter of 2006.

On the bright side, Goldman's performance in investment banking, where it advises clients on mergers or debt and equity issuance, was strong, although not strong enough to make up for the trading declines. Investment banking revenues overall rose 54 percent to $1.45 billion.

Net revenues in the bank's investment and lending business, where it trades and holds equity stakes for its own account, were hurt by weak equity markets and fell 42 percent to $1.04 billion. The bank took a loss of $176 million from its investment in Industrial and Commercial Bank of China Ltd.

Goldman has been on a cost-cutting campaign, but the reductions so far haven't been enough to stem its profit decline. Second-quarter operating expenses fell 23 percent from a year ago to $5.67 billion. Goldman aims to cut $1 billion in non-compensation costs by the middle of next year, and has recently started to lay off some staff.

"The firm is in the process of implementing expense reduction initiatives," Goldman said in a statement, without elaborating.

Goldman accrued $3.2 billion for compensation, bonuses and benefits in the second quarter, down 16 percent from a year ago. Its compensation ratio was unchanged from the previous quarter at 44 percent.

The bank's return on equity, a key metric of shareholder return, fell to 6.1 percent in the latest quarter, half of the level just three months ago and far below its returns of more than 30 percent during the boom years of 2006 and 2007. (Reporting by Lauren Tara LaCapra; additional reporting by Jonathan Spicer; editing by Knut Engelmann and John Wallace)