Morgan must have known of phone hacking, journalist says

CNN star Piers Morgan was an extremely hands-on tabloid editor who must have known that phone hacking was rife at his paper, a former employee has alleged at a U.K. media ethics inquiry.

"Nothing happened at the newspaper without him knowing," former employee tells inquiry

Former Daily Mirror journalist James Hipwell leaves the High Court after appearing before the Leveson Inquiry into media practices in London on Wednesday. (Suzanne Plunkett/Reuters)

CNN celebrity interviewer Piers Morgan was an extremely hands-on U.K. tabloid editor who must have known that phone hacking was rife at his paper, a former employee claimed Wednesday.

Business journalist James Hipwell said voicemail interception was an everyday activity at the Daily Mirror tabloid, where he worked as a columnist providing stock tips.

Hipwell told a British inquiry into media ethics that while he had no direct evidence that Morgan, the Daily Mirror editor at the time, was involved in the practice, he said it was impossible to imagine that Morgan had been kept in the dark.

"Nothing happened at the newspaper without him knowing," Hipwell testified, speaking a day after Morgan was grilled Tuesday in a tense, nationally televised hearing before the inquiry.

Before his U.S. television career, Morgan ran two British tabloids — Murdoch's now-shuttered News of the World, between 1994 and 1995, which has been at the centre of the U.K. phone hacking scandal, then the rival Daily Mirror, which is not connected to the Murdoch empire, where he stayed for nearly a decade.

Hipwell and Morgan have a long history. Both were investigated as part of an inquiry into market manipulation after it emerged that Morgan had made a quick profit of thousands of pounds by buying shares that were promoted in the next day's paper.

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Morgan was cleared of wrongdoing, but Hipwell and another tipster, Anil Bhoyrul, were convicted in 2005. Hipwell expressed remorse over his role in the stock scam but said he always believed that his former boss had been as guilty as he was.

"I can understand why people think that I have an axe to grind against him," Hipwell told the inquiry.

By Hipwell's account, phone hacking was a matter of routine — a "standard journalistic tool for gathering information." He said journalists openly boasted about breaking into phones to intercept voicemails.

He challenged Morgan's unsupported assertion Tuesday that a tabloid editor could only monitor about 5 per cent of his journalists' work, saying he often saw Morgan inspecting reporter's computer screens or working late into the night to tweak headlines.

Morgan "stamped his authority on every single page," Hipwell said. "The newspaper was built around the cult of Piers."

Morgan, 46, has already dismissed Hipwell's claims as the "unsubstantiated allegations of a liar and convicted criminal." Trinity Mirror Group lawyer Desmond Browne made a similar argument, saying his newspaper group rejected Hipwell's allegations.

However, testimony to the inquiry is given under oath, meaning speakers could be subject to criminal proceedings if found to have violated any British laws.

More than a dozen News of the World journalists have been arrested in the hacking scandal, senior executives with Murdoch's News Corp. media empire have lost their jobs, and top U.K. police officers have resigned over their failure to tackle the problem.

Authorities on Wednesday arrested their first serving police officer as part of an investigation into bribes paid to police by journalists seeking scoops.

Murdoch firm doesn't have to pay editor's legal bills

A former editor of the News of the World has lost a legal bid to make the owner of the now-defunct newspaper pay his legal bills.

Andy Coulson left the Rupert Murdoch-owned tabloid after a reporter and a private investigator were jailed for hacking in 2007.

He became Prime Minister David Cameron's communications chief but resigned when the phone hacking scandal erupted earlier this year.

On Wednesday, a High Court judge ruled that Coulson's severance agreement did not require the company to pay his costs relating to allegations of criminal behaviour.

London police said a 52-year-old woman, who has not been identified, was arrested on suspicion of corruption and misconduct in a public office. The woman was detained at a house in Essex, in southeastern England, and was being questioned.

Eight people, including a reporter working for The Sun tabloid, have so far been arrested as part of the police corruption inquiry, although no one has yet been charged.

Separately, a court ruled Wednesday that Murdoch's British newspaper company must keep paying the legal fees of a private investigator at the centre of the scandal.

High Court justice Andrew Morritt said the News International subsidiary News Group Newspapers was bound by an agreement last year protecting Glenn Mulcaire from costs and damages arising from voicemail litigation in which they were joint defendants.

The company, itself a subsidiary of Murdoch's News Corp., had tried to end the contract after it emerged publicly that it was still guaranteeing the costs of a convicted criminal. Mulcaire was jailed briefly in 2007, along with News of the World royal correspondent Clive Goodman, for eavesdropping on the phone messages of royal aides.

Goodman and Mulcaire remain the only two people ever convicted over the practice.