Media regulator's Project Apple examines phone-hacking evidence to decide on 39-year-old's stewardship
Ofcom has stepped up its investigation into whether James Murdoch is a "fit and proper" person to sit on the board of BSkyB, forming a project team to examine evidence of phone hacking and corrupt payments emerging from the police and the Leveson inquiry.
The media regulator set up a dedicated group of seven or eight staff under the name Project Apple at around the turn of the year as part of an assessment that is also taking in whether News Corporation is a fit and proper controlling investor in the satellite broadcaster.
If Ofcom concluded that either Murdoch or News Corp were not appropriate owners, the regulator could revoke Sky's licence to broadcast in the UK, forcing it to switch off its channels, unless Murdoch stepped down from the board or News Corp sold its 39.1% stake.
The existence of Project Apple emerged following a freedom of information disclosure by Ofcom in response to questions from the Financial Times. Board meeting minutes released by Ofcom show that members discussed the existence of the project on 24 January and that the regulator's general counsel had "compiled files of relevant advice and evidence".
It is understood the Ofcom officials are liaising with the Metropolitan Police's Weeting and Elveden teams investigating hacking and bribery allegations – and studying evidence given to the Leveson inquiry on press standards. Ofcom's work is still at an early, or assessment stage, but guidance issued by the regulator makes it clear that it could make a ruling on the "fit and proper" status of Murdoch or News Corp ahead of the conclusion of any criminal trials.
Although Murdoch last week stepped down as executive chairman of News International, the owner of the Sun and the Times, the 39-year-old is determined to remain as the head of BSkyB. He took over from his father as chairman at the end of 2007, having spent the previous four years as chief executive.
However, Murdoch faces a number of challenges to his continuing chairmanship of Sky. In addition to Ofcom's inquiry, his stewardship of News International will be judged as part of a wider inquiry into phone hacking at the News of the World by MPs on the culture, media and sport select committee. Their final report is due later this spring.
Sky declined to comment on the developing Ofcom investigation, but insiders insisted the company was relaxed given that the regulator had an ongoing duty to ensure that any broadcaster passes the fit and proper tests as laid out in law. The company believes that Ofcom's position has not altered since Ed Richards, its chief executive, wrote to three Lib Dem MPs in July of last year to say that it was "continuing to gather and analyse information" from the Met and elsewhere.
Meanwhile, the solicitor acting for Rebekah Brooks, the former News International chief executive, accused the Leveson inquiry into phone hacking and media ethics of presiding over a "spectacular failure" in allowing a senior Scotland Yard officer to give evidence about the arrest of Sun journalists over alleged illegal payments to public officials.
Stephen Parkinson, writing in the Daily Telegraph, said Metropolitan police deputy assistant commissioner Sue Akers' comments could threaten the arrested Sun journalists' right to a fair trial. Parkinson, the head of criminal litigation at Kingsley Napley, said: "Those of us representing the current and former journalists, particularly at the Sun, who bore the brunt of the prejudicial comments, will inevitably make the point that publicity of this kind does not fade from the memory."