17   MR BARR:  Sir, good morning.  Can I just confirm that the

            18       audio feed is coming through?  Thank you.

            19           Can Mr Mahmood be sworn, please.

            20                    MR MAZHER MAHMOOD (sworn)

            21                       Questions by MR BARR

            22   MR BARR:  Mr Mahmood, could you give the Inquiry your full

            23       name, please?

            24   A.  Mazher Mahmood.

            25   Q.  You've provided the Inquiry with two witness statements.


                                             1






             1       The first was signed on 14 October of this year and the

             2       second on 8 December.  Are you familiar with the

             3       contents of your witness statements?

             4   A.  Yes, I am.

             5   Q.  Are they true and correct to the best of your knowledge

             6       and belief?

             7   A.  Yes, they are.

             8   Q.  Thank you.  We will take those as read and so I shall

             9       ask questions only arising from certain parts of your

            10       statements.

            11           You tell us that you are currently working as an

            12       investigative journalist at the Sunday Times?

            13   A.  That's correct.

            14   Q.  That you have over 20 years' experience with -- or about

            15       20 years' experience with the News of the World before

            16       that?

            17   A.  That's correct.

            18   Q.  Where you worked also as an investigative journalist,

            19       exposing, as you put it, criminal and moral wrongdoing?

            20   A.  That's right.

            21   Q.  You have overall been working as a journalist for 30

            22       years and you list, at paragraph 2 of your witness

            23       statement, the titles that you've worked for.

            24   A.  Sure.

            25   Q.  The Sunday People, the Daily Mail, the BBC, ITV, the


                                             2






             1       Sunday Times and TV-am.

             2           You tell us that work that you have done has led to

             3       253 successful criminal prosecutions.

             4   A.  It's incorrect, actually.  The total has now gone up to

             5       261, and as we sit here at the moment, at Southwark

             6       Crown Court, two more women are being sentenced as

             7       a result of my work.

             8   Q.  I see, so perhaps we ought to keep a running tally.

             9           You've won several awards including news reporter of

            10       the year at the British Press Awards this year and

            11       reporter of the year in 1999.  I think perhaps the most

            12       high profile of your recent cases has been the case of

            13       the Pakistani cricketers convicted for match-fixing

            14       recently?

            15   A.  That's right.

            16   Q.  You tell us at paragraph 31 of your statement -- we

            17       needn't turn that up -- that your other cases have, for

            18       example, included the exposure of paedophiles, people

            19       traffickers, drug dealers, pimps and even a doctor who

            20       tried to hire you as a hitman?

            21   A.  That's right.

            22   Q.  Can I ask you, before we move any further, about your

            23       work for the Sunday Times, not now but when you first

            24       worked for them?

            25   A.  Primarily the same role, investigative journalism.


                                             3






             1       That's what I've done.

             2   Q.  The point I want to put to you is in a book called Fake

             3       Sheiks & Royal Trappings, Mr Peter Burden suggests that

             4       you left that employment under something of a cloud?

             5   A.  Well, I'm working there again now.  I have to say, I've

             6       listened to Mr Burden's statement here last week and it

             7       is riddled with inaccuracies.

             8   Q.  We'll come to some of the cases that he raised and your

             9       response to them shortly.

            10   A.  Sure.

            11   Q.  But my question at this stage is: is it right that you

            12       left the Sunday Times under something of a cloud the

            13       first time around?

            14   A.  We had a disagreement; correct.

            15   Q.  You tell us something of the way in which corporate

            16       governance worked at the News of the World and the way

            17       in which your investigations were considered and

            18       approved.  At this stage, I'd like to concentrate very

            19       much on your time at the News of the World.  We'll come

            20       to your current employment with the Sunday Times in due

            21       course.

            22           Concentrating now on the News of the World, can you

            23       tell us a little bit, first of all, about how much

            24       information you would need to consider starting

            25       a full-scale investigation?


                                             4






             1   A.  Well, I'd receive information from informants and some

             2       were just people who would phone in with a lead, but

             3       more often than not, it was informants I'd known for

             4       many years who had provided reliable, credible

             5       information in the past.

             6           So first and foremost, I'd have to form the opinion

             7       that the information they were providing was credible.

             8       I'd have to establish that it was worthy of a story for

             9       the News of the World newspaper.  I'd have to establish

            10       myself that it was in the public interest.  I had to

            11       establish there was justification for using subterfuge

            12       and only then would I present the story to the news

            13       desk, who would then go through the same process and ask

            14       me loads and questions and at the next stage, the

            15       lawyers would get involved, whether or not the modus

            16       operandi was justified and then often the approval of

            17       the editor was required and only then would I embark on

            18       any investigation.  So it was quite a thorough process.

            19   Q.  If I could just explore some of that in a little more

            20       detail.  At the News of the World, was this a process

            21       that was largely done orally or was it committed to

            22       writing?

            23   A.  Some of it was committed to writing.  I'd always submit

            24       my initial proposal by email and provide in that email

            25       justifications for why I felt this story was in the


                                             5






             1       public interest and why I felt the use of subterfuge was

             2       justified, and I assume that would also go on to our

             3       lawyers.  That would be forwarded to them for their

             4       approval.

             5   Q.  Can you give us --

             6   A.  But much of the conversation was oral.

             7   Q.  I see.  Can you give us some indication of the

             8       proportion of your investigations that involved the

             9       editor taking a view on whether or not you should

            10       proceed?

            11   A.  Ultimately, the editor made a decision on nearly all the

            12       stories, but he was hands-on on obviously the more high

            13       profile ones.  But the run-of-the-mill stories I'd

            14       liaise with the news desk.

            15   Q.  We'll come in a little more detail later on to the

            16       public interest tests and the question of the ends

            17       justified the means.  At this stage, I'm just interested

            18       in the process.

            19           You talk about logistics and costings being

            20       considered and approved before you proceeded to

            21       investigate.  Was there also consideration of the

            22       specific methods that you were going to use or was that

            23       left to you and your experience?

            24   A.  No, they were discussed -- everything was discussed with

            25       the legal team.  I couldn't go off piste and do what


                                             6






             1       I wanted.  I had to take legal advice and throughout the

             2       investigation I remained in constant touch with our

             3       lawyers.

             4   Q.  On the question of process, can I ask you to compare the

             5       processes that were in place and which you have just

             6       described at the News of the World with those which are

             7       in place at the Sunday Times?  Are there differences?

             8   A.  Essentially they're the same, but at the Sunday Times

             9       it's a lot more stringent and it's more formalised.

            10           I can give you an example, if you wish, of an

            11       investigation I did recently.  I received information

            12       that a gang were involved in insurance fraud.  They were

            13       staging car crashes, an accident claims firm.

            14           So the first thing I did was to speak to the

            15       informant who I'd known for many years.  He's provided

            16       reliable information in the past.  I knew his

            17       background, I knew that the information was credible.

            18       The first stage is that I assessed it and felt it

            19       justified -- satisfied the test of public interest,

            20       satisfied the test for use of subterfuge.  I then

            21       prepared a memo which I sent to the news desk, so that

            22       was then vetted by Steve Bowan(?), the news editor, and

            23       James Mellor, the deputy news editor.  They then asked

            24       various questions and approved it.  It then went to the

            25       head of news, Charles Hymas, who then rang me up and


                                             7






             1       gave me a grilling on sources and the modus operandi,

             2       and then it went to the editor, and I was invited to

             3       a meeting where -- it was attended by John Witherow, the

             4       editor, went through it.  Pia Sarma(?), our legal

             5       director, was present.  Charles Hymas was present and

             6       there was a formal meeting where every aspect of the

             7       story was discussed, minutes were kept of the meeting,

             8       notes were taken, a very rigorous process.  You know, is

             9       the use of subterfuge justified in this case?  Is there

            10       a public interest argument?  There's a formal debate.

            11           That's happened for every single investigation that

            12       I've done at the Sunday Times.  So there's no question

            13       of it not being regulated.  It's a very, very formal

            14       procedure and a very thorough procedure.

            15   Q.  Is it your evidence that that thorough, formal procedure

            16       was more than took place at the News of the World?

            17   A.  Yes, it is.  It was a lot more informal at the

            18       News of the World newspaper, but -- in essence, we still

            19       had to satisfy the same criteria, but it was a lot less

            20       formal, chats with the news desk.  You know, there were

            21       no meetings.  It was a lot more informal.

            22   Q.  Was that informality a cultural thing that connected

            23       with the News of the World as a newspaper?

            24   A.  I think it was, yes, it was a cultural thing.  But

            25       having said that, as I say, I remained in constant touch


                                             8






             1       with Tom Crone, the lawyer.  There were times when

             2       I rang him 2, 3 in the morning for advice.  You know,

             3       can I say this, do this, do that?  So it's not that it

             4       was not regulated.  It was, but there were no formal

             5       meetings, there was no kind of open discussions about

             6       the matters I've just outlined.

             7   Q.  I understand.  You say at paragraph 10 of your first

             8       witness statement that there might be instances when you

             9       were told by the news editor or the editor to look at

            10       a particular individual for wrongdoing.  So is it right

            11       that your stories sometimes started with leads which you

            12       obtained, but on other occasions you were fed leads by

            13       the editorial hierarchy?

            14   A.  95 per cent of all the stories I did, I'd say, were my

            15       own stories from my own sources, but there were

            16       occasions when I was given stories by the news desk or

            17       directly by the editor who had received information and

            18       felt it formed the basis of an investigation for me.

            19   Q.  And if the editor wanted a particular matter

            20       investigated, did that mean that some of the process

            21       that you described earlier was avoided and you would

            22       just automatically investigate, or was there an analysis

            23       of the strength of the information that you were being

            24       provided by the editor?

            25   A.  No, there was always analysis, always.  I mean, the


                                             9






             1       editor would not give me a story that he'd not

             2       considered these factors.

             3   LORD JUSTICE LEVESON:  Sorry, how do you know that?  Is that

             4       because you were party to those discussions?

             5   A.  I was occasionally party to the discussions.  I'd have

             6       a meeting with the editor and he would say, "Look,

             7       I think we should go undercover on this one.  I have

             8       reasonable belief that this person's involved in this

             9       particular crime.  I have a reliable source."  So we'd

            10       go through the same process.

            11   LORD JUSTICE LEVESON:  You say you were occasionally party

            12       to such discussions, but if you weren't, then you

            13       presumably just accepted what was provided for you?

            14   A.  Correct, correct.

            15   MR BARR:  Can you recall any occasion when you were provided

            16       with a lead by an editor and you found yourself turning

            17       around to him and saying, "No, I'm sorry, this is not

            18       enough to go on"?

            19   A.  No, but I mean, there would always be discussion about

            20       the source.  You know, can I speak to the source?  How

            21       reliable is the information?  There was always that

            22       discussion.  It wasn't glossed over just because it's

            23       come from the editor.  There was always a discussion, if

            24       not directly with the editor, then certainly with the

            25       news desk.


                                            10






             1   Q.  Can I now delve into a little bit more detail about the

             2       sorts of cases that you were investigating?  You

             3       provided some exhibits of very recent stories -- and

             4       you've just mentioned one of them -- whilst you've been

             5       at the Sunday Times.  If I may say, so they all seem to

             6       be cases where there is a clear public interest and

             7       we've mentioned some of the stories you did earlier in

             8       your career, which again seem to be clearly in the

             9       public interest.

            10           I'd like to perhaps ask a little bit about some of

            11       the choices which have been a little bit more

            12       controversial.

            13   A.  Right.

            14   Q.  First of all, in terms of choice of subject, it's right,

            15       isn't it, that a lot of your stories have been about

            16       public figures and they have on some occasions included

            17       celebrities?

            18   A.  I wrote more than 500 stories for the News of the World

            19       newspaper.  Of those, a very, very small fraction

            20       involved celebrities.  Very small fraction.

            21   Q.  Understanding your evidence that it was a small

            22       fraction, can I now ask you about what sort of thing did

            23       you consider would make a celebrity story a matter of

            24       public interest?

            25   A.  Clearly criminality was the main factor.  Are they


                                            11






             1       involved in criminality?  Are they involved in moral

             2       wrongdoing?  Are they involved in hypocrisy?  Those were

             3       the factors.  I mean, the parameters were set very

             4       clearly by the PCC code that we adhere to very strongly

             5       at the News of the World.

             6   Q.  So just to look at those, you mentioned three things.

             7       Illegality, I think, speaks for itself.

             8   A.  Sure.

             9   Q.  We need not consider that any further.  Hypocrisy,

            10       similarly.  Can we focus on the moral wrongdoing?  Was

            11       it your view that any form of moral wrongdoing was

            12       sufficient to pass the public interest test and

            13       investigate a celebrity or was there a boundary line

            14       somewhere?

            15   A.  Each case was on its own merits.  I mean, if you had

            16       a member of Parliament who was cheating on his wife with

            17       a mistress, then clearly on moral grounds, you know,

            18       I felt that was justified.  Each one was assessed --

            19       each story was assessed on its own merits.  But we had

            20       to be satisfied that it met the public interest

            21       argument.

            22   Q.  I'd like to ask you about two cases which are mentioned

            23       in your own autobiographical book.  They are both

            24       concerning supermodels and they both concern both drugs

            25       and allegations of prostitution.  One is the supermodel


                                            12






             1       Sophie Anderton and the other is a woman who is named

             2       only in your book at X.

             3   A.  Right.

             4   Q.  If we deal with the drugs side of things first, what was

             5       your view in terms of a supermodel taking drugs?  Why

             6       was that a matter of public interest, in your opinion?

             7   A.  Not taking drugs.  She was selling drugs.  She was

             8       working as a prostitute and selling drugs to clients.

             9       Clear case of criminality.  The same applies for the

            10       Ms X.  The information that we received was that she too

            11       was involved in supplying drugs.  We spent a fortune on

            12       that story and she did not supply us with drugs.  The

            13       story never made the paper.

            14   Q.  Moving on from the drugs to the prostitution, in both

            15       cases it involved offering the woman concerned

            16       a considerable sum of money to see if she would agree to

            17       supply sex in return.  In the first case,

            18       Sophie Anderton, I think the figure was £10,000 and in

            19       the case of X, it was $60,000 for six hours.

            20   A.  Sorry, I think your assertion is wrong there.  It's not

            21       us offering her the money.  They were working with

            22       escort agencies.  That was their price.  They were

            23       demanding that figure.  It's not us offering the money.

            24       It's them demanding that figure, which I think is a very

            25       important distinction to make.  It's not as if we lured


                                            13






             1       them into prostitution or lured them into a hotel room.

             2       It's a common misconception.  We do not engage in

             3       entrapment of that sort.  They were working as

             4       prostitutes with an escort agency.  They had their set

             5       fees.

             6   Q.  I see.  What was it about the fact that they were

             7       offering sex in return for money that you thought made

             8       it a matter of legitimate public interest, not just to

             9       expose an agency but to expose the woman herself?

            10   A.  Well, as I said to you, the primary focus of both those

            11       stories was illegality.  They were dealing drugs to

            12       clients.  I mean, sure, the only way to infiltrate them

            13       was to pose as a client and then the offer would be made

            14       to us.  So that was the main focus of that story.

            15       I mean, the morality of them being a prostitute was not

            16       the main focus for those stories.  The justification was

            17       criminality.

            18   Q.  Are you saying that if it had been just prostitution,

            19       you would not have pursued the story?

            20   A.  Then it would have been a call.  Sure, then it would be

            21       a close call.  I mean, Ms X was a married within woman,

            22       so she was cheating on her husband.  Let's not forget,

            23       these people are, sadly, role models for our kids.

            24       A lot of children aspire to be models, to have the fame

            25       and fortune and the privileges afforded by that fame.


                                            14






             1       So in a sense, they're abusing that position.

             2   LORD JUSTICE LEVESON:  So you say if somebody's famous, that

             3       means anything goes?

             4   A.  That's what they believe.

             5   LORD JUSTICE LEVESON:  No, that's what you believe.  If

             6       they're famous, anything goes?

             7   A.  No, that is a position that they take, that -- people

             8       like Sophie Anderton feel that they are above the law,

             9       they're immune from prosecution and quite frankly, if

            10       I'd not exposed her, there is absolutely no way that

            11       she'd have been caught dealing drugs.

            12   LORD JUSTICE LEVESON:  No, I'm sorry, it's a slightly

            13       different point that I was asking you.  You were saying

            14       if it's just prostitution, it's a close call, but it's

            15       moral grounds, these people are role models.  So do

            16       I gather from what you're saying that if people are

            17       famous, any conflict between what you perceive is their

            18       public persona and what is the public persona is worth

            19       investigating?

            20   A.  Absolutely.  If it's hypocrisy, then very much.  If they

            21       present themselves as wholesome characters and trade on

            22       that status, then privately betray that, then I think

            23       that's totally justified.

            24   LORD JUSTICE LEVESON:  So they have to trade on being

            25       wholesome characters?


                                            15






             1   A.  Sure, but as I say, in both these stories you've

             2       mentioned, the justification was criminality.  If

             3       they're posing in Hello magazine, happy family snaps,

             4       yet secretly working as prostitutes, I think there's --

             5       the moral justification for exposing them is quite

             6       clear, in my view.

             7   MR BARR:  I'd like to ask you now about whether or not

             8       there's a difference between what is in the public

             9       interest and what interests the public.  In your mind,

            10       is there a difference or not?

            11   A.  Of course there is.  I mean, the public are very

            12       interested in gossip and tittle-tattle and showbiz

            13       stuff, but for me, as I said, the premise is very, very

            14       clear.  Public interest is, for me, moral wrongdoing,

            15       obviously criminal acts, hypocrisy, with the public

            16       being deceived, all aspects that are encompassed by the

            17       PCC code.

            18   Q.  When you were discussing with your subeditors and

            19       editors whether or not to pursue an investigation, was

            20       the interest of the story to the readership a factor

            21       that was taken into account?

            22   A.  I mean, there was a lot of tension at the

            23       News of the World.  We were always being criticised, so

            24       we were extra cautious to comply with the PCC code.  The

            25       emphasis was always, you know: does this pass the public


                                            16






             1       interest test?  Is there justification for using

             2       subterfuge?  Is there any other way that we could obtain

             3       the same information without using subterfuge?  Those

             4       were the primary factors.

             5   Q.  I understand that answer, but it doesn't quite respond

             6       to the question that I put, which is: when you were

             7       discussing stories and whether to proceed or not, was

             8       the interest of the story to the public ever a factor

             9       that was --

            10   A.  It wasn't discussed.  As I say, that was never a factor.

            11       The public would love to hear about this was never -- it

            12       was never put in those terms.

            13   Q.  Can I ask you about the PCC for a moment, please?

            14       You've explained how you've often had to respond to

            15       complaints and that you put a lot of effort into doing

            16       so.  In fact, you've even described being taken off

            17       investigations in order to respond to complaints.

            18   A.  That's right.

            19   Q.  The Inquiry has heard evidence of at least some

            20       journalists taking a far less serious attitude towards

            21       the PCC and putting particular emphasis on the fact that

            22       the PCC isn't, for example, able to impose a fine.  But

            23       was the attitude that you describe in your statement to

            24       the PCC unusual at the News of the World?

            25   A.  I can only speak for my own work.  I mean, whenever


                                            17






             1       a complaint came in to the PCC, it was treated very

             2       seriously.  As I've explained, it required a lot of

             3       effort, and in 20 years, I didn't have a single PCC

             4       complaint upheld against me.  Numerous came in and it

             5       was quite a laborious task answering PCC complaints but

             6       we did.  It was a priority.  That was my experience.

             7           As I said, even though the paper is now closed,

             8       there are currently two complaints pending, and I've

             9       spent hours doing transcripts and answering those

            10       complaints, even though no sanctions can now obviously

            11       be imposed.  So it shows how seriously we take the PCC

            12       code.

            13   LORD JUSTICE LEVESON:  We or I?

            14   A.  I.  And the paper.  As I say, I was pulled off

            15       investigations, which was quite annoying actually.

            16       I was working on an investigation, and they'd say, "No,

            17       sorry, you have to reply to this PCC complaint, get that

            18       out of the way first and then go out on the road."  So

            19       it's not just myself.  It was the lawyers to the paper

            20       to the editor.

            21   MR BARR:  You described the lawyer and the editor taking the

            22       matter seriously.  Can I ask you about the attitude of

            23       your colleagues, your fellow reporters?  What was the

            24       feeling amongst your colleagues?

            25   A.  I didn't have a great deal of dealings with other


                                            18






             1       reporters on the paper.  I had my own little team that

             2       I worked with and we certainly took it very seriously,

             3       but I didn't have a lot of interaction with other

             4       reporters on the paper.

             5   Q.  It's right, according to Mr McMullan, who gave evidence

             6       here recently, that he worked for a time with you; is

             7       that right?

             8   A.  Again, this was -- this came as news to me.  I may have

             9       seen him in the office.  I've never worked with the

            10       chap.  I can't even recall talking to him.  Completely

            11       untrue.  He's never worked with me on a single

            12       investigation.  As I say, I don't know him.

            13   Q.  Can I move now to the question of private investigators,

            14       please?  You explain in your statement that there was

            15       a time early on in your career with the

            16       News of the World when you did use private investigators

            17       and your statement sets out the way in which they were

            18       used.  Can I ask you now, though, whether you can recall

            19       ever working with Mr Derek Webb?

            20   A.  On private investigators -- can I just stress very

            21       clearly that I never ever commissioned a private

            22       detective to do any work for me.  I never paid a private

            23       detective, contrary to the report in this morning's

            24       Independent.  It's simply not true.

            25           Derek Webb is a man that I came across I think on


                                            19






             1       one or two occasions.  He may have worked on one or two

             2       of my investigations, and again, he was assigned to my

             3       stories by the news desk.  I can't remember what stories

             4       they were but I think only on a couple of occasions.

             5   Q.  Can I now move to the question of chequebook journalism?

             6       I've put to you a moment ago examples where really very

             7       considerable sums of money were in play on the

             8       supermodel investigations that you did.  What was your

             9       approach on the News of the World to the use of

            10       payments, first of all to sources?

            11   A.  Well, to sources, obviously people came to us because

            12       they wanted to sell stories and we made no bones about

            13       the fact that we paid for stories.  We advertised it.

            14       I don't think there's anything wrong with that, as long

            15       as the individuals are not profiting from their crimes

            16       by doing so.  I mean, if they were whistle-blowing and

            17       helping us expose drug rings and paedophile rings and

            18       expecting a fee for that, then I see nothing wrong with

            19       that.

            20   Q.  Is there a difficulty that if you offer money and you

            21       advertise for stories, that it's going to tempt people

            22       to embellish or, even worse, simply to fabricate?

            23   A.  Sure.  That's what we're here for.  It is our job to

            24       assess the credibility of the information we receive.

            25       Nothing would get in the paper unless its were


                                            20






             1       thoroughly checked and went through our lawyers.  That

             2       is our role, to check the information.

             3   Q.  We've again heard evidence of an investigative

             4       journalist who, with his colleagues, presented stories

             5       to tabloid newspapers which had these lines open for

             6       people to come forward with stories and it seemed from

             7       the evidence he adduced that getting the stories

             8       published, even when they were fictitious, was very easy

             9       indeed.  Can I ask you, what checks did you apply when

            10       you received a lead?

            11   A.  That certainly isn't my experience, not at all.  I mean,

            12       we'd end up paying heavy fees if we got it wrong.  As

            13       I've said, the majority of my stories came from

            14       informants who provided me credible information in the

            15       past but we'd make every check that we could before

            16       embarking on investigation and I have to tell you that

            17       a lot of the investigations are quite expensive, they

            18       involve quite an investment, so we have to be sure

            19       ourselves that the information sounds credible.  So

            20       depending on obviously what the story was, we'd try and

            21       make as many checks prior to embarking on the

            22       investigation.  We'd have to have a belief that the

            23       information was genuine and if it wasn't, we'd soon find

            24       out.

            25   Q.  Are you saying that because of the nature of the sort of


                                            21






             1       investigations that you got involved in, there might

             2       have been a difference between your experience and that

             3       of your colleagues doing other work on the

             4       News of the World?

             5   A.  Perhaps, but I don't believe that fabricated stories

             6       could get into the paper.

             7   LORD JUSTICE LEVESON:  You don't believe that?

             8   A.  I don't believe that as a matter of course, people could

             9       phone in with fabricated stories and they would end up

            10       in the paper.  There were stringent checks in place.

            11   LORD JUSTICE LEVESON:  Did you happen to see the film

            12       Starseekers(sic)?

            13   A.  No, I've not seen that.

            14   LORD JUSTICE LEVESON:  The evidence that we heard last week?

            15   A.  No, I didn't see that.

            16   LORD JUSTICE LEVESON:  Mr Atkins?

            17   A.  No, I didn't see that, I'm sorry.

            18   LORD JUSTICE LEVESON:  You've never heard about this work

            19       that was done whereby he placed false stories in

            20       newspapers?

            21   A.  I didn't see that.  No, I didn't, no.

            22   LORD JUSTICE LEVESON:  It's some time ago.  I would have

            23       thought that it would be something that all those

            24       involved in journalism would have been fascinated by.

            25   A.  No, I didn't see it.  I'm sorry.


                                            22






             1   LORD JUSTICE LEVESON:  Very good.

             2   A.  It's certainly not my experience.

             3   MR BARR:  You explain at paragraph 29 of your witness

             4       statement that in your experience there were very few

             5       formal contracts between the person coming forward to

             6       the newspaper and the newspaper for money to be paid and

             7       that it was largely done on trust.

             8   A.  Again, this is based on my experience with my contacts

             9       and my informants.

            10   Q.  The Inquiry has heard some evidence of bargains being

            11       made on trust and then not being honoured by newspapers.

            12       Were there any circumstances in which you would not pay

            13       a source, having promised money?

            14   A.  No, not in my experience.  Again, you know, as a result

            15       of my investigations, obviously I have criminals after

            16       me, people I have exposed.  The last thing I want is my

            17       informant being disgruntled as well.  So I'd make sure

            18       they were paid what we'd agreed to pay them.

            19   Q.  Is it your evidence that that was invariably the

            20       practice?

            21   A.  That was -- that's right.

            22   Q.  I'm not going to ask you any detailed questions about

            23       phone hacking, but could I just ask you this -- and when

            24       you answer, please don't name any names: were you aware

            25       that phone hacking was going on at any time during your


                                            23






             1       work with the News of the World?

             2   A.  No, I was not.  As I said in my statement, the first

             3       time I heard about it was following an arrest.

             4   Q.  Was that the arrest of Clive Goodman?

             5   A.  Correct.

             6   Q.  After Clive Goodman was arrested, did it become the talk

             7       of the office?

             8   A.  Of course.

             9   Q.  And at that point, did you hear anything about whether

            10       anybody else -- and again no names, please -- had been

            11       involved?

            12   A.  No, but I mean all the fingers were pointed towards the

            13       news desk.

            14   Q.  And at any time between Mr Goodman's arrest and

            15       conviction until the close of the News of the World, did

            16       you hear from anyone within the News of the World that

            17       anybody else apart from Clive Goodman had been hacking

            18       mobile phones?

            19   A.  No.  I mean, clearly rumours were about, of course, but

            20       there was no firm evidence.

            21   Q.  Mr Mahmood, can we move now to your second statement?

            22       Again, I'm going to deal with it only by picking up

            23       certain matters you raised.  The rest is formally in

            24       evidence and can be read by others.

            25           Can I ask you first of all about the case of the


                                            24






             1       Crown v Shannon?  This involved a man who I think was

             2       a television actor and you had done an investigation

             3       which led to him being convicted of a drugs offence.

             4   A.  That's right.

             5   Q.  And you exhibit the judgment of the Court of Appeal.

             6       For the technician, it's tab 5.  Then if we could have

             7       the first page of the judgment on the screen, please.

             8           If we could have the paragraph which starts with the

             9       word "held" up in the centre, please.  We see here, in

            10       summary form, the way in which the court decided

            11       Mr Shannon's appeal against conviction.  I'm interested

            12       in the passage which starts about halfway down, once

            13       it's come into focus -- thank you -- at paragraph E.  It

            14       says:

            15           "... there was no general rule requiring a court on

            16       grounds of fundamental fairness not to entertain

            17       a prosecution at all in cases of incitement or

            18       instigation by an agent provocateur, regardless of

            19       whether the trial as a whole could be a fair one in the

            20       procedural sense; that the judge found correctly that

            21       the evidence fell short of establishing actual

            22       incitement or instigation of the offences concerned and

            23       that in any event, the admission of the evidence would

            24       not have an adverse effect on the procedural fairness of

            25       the trial."


                                            25






             1           So is the point of exhibiting this case to point out

             2       that a court held that you and your team had not in fact

             3       incited or instigated an offence at all?

             4   A.  Absolutely.  Besides this, he then went to the European

             5       Court, went to Strasbourg, where once again the judges

             6       there ruled that there was no entrapment.  It's quite

             7       annoying, this myth of entrapment.  We do not entrap

             8       people.  Frankly, I don't believe you can entrap people

             9       in the manner they suggest.

            10   Q.  I see.  In the same case, could we now have up on the

            11       screen page 54, please?  It's the top of the page that

            12       I would like to have brought up.  Thank you.

            13           Here I want to concentrate on essentially the

            14       flavour of what it was that you did in order to execute

            15       the sting.  Starting from the second line, it reads:

            16           "He said that because his (Mahmood's) name was

            17       well-known in showbusiness circles, he decided that it

            18       was necessary to set up an operation in which he posed

            19       as a sheik, invited the defendant to the Savoy Hotel,

            20       collecting him in a Rolls Royce and giving him dinner in

            21       the River Restaurant, all on the basis of a fictitious

            22       offer and intention to invite him out to Dubai as

            23       a celebrity to participate in the opening of a nightclub

            24       out there.  Mahmood, who had booked a suite at the Savoy

            25       in the name of His Royal Highness Sheik


                                            26






             1       Mohammed al Kareem justified his representing himself as

             2       a sheik moving in royal circles by saying: 'The only way

             3       to get into [the defendant's] circle is to pose as

             4       somebody who he would want to come out and meet and want

             5       to relax with.  Get him to feel, if anything, we are

             6       above him and he will be himself.'"

             7           So it's right, isn't it, that effectively what was

             8       being dangled in front of him was the prospect of a very

             9       lucrative and attractive trip to Dubai?

            10   A.  Sure, but again, can I make very clear that we were

            11       acting on reliable information.  We knew that Mr Shannon

            12       was actively involved in dealing drugs, so we acted on

            13       that information, and yes, this was the only way to get

            14       him to -- of course we provided the environment for him

            15       to commit the crime, a crime that he was predisposed to

            16       committing.

            17   Q.  My question is this: accepting, as the judges found,

            18       that this was not a case of instigation or incitement,

            19       what it is, though, is a question where a very

            20       considerable carrot was dangled in front of the target?

            21   A.  Well, if you think that opening a nightclub in Dubai and

            22       being a celebrity attending that function is

            23       a considerable carrot, then so be it.  But once again,

            24       as I say, if I dangle a big carrot in front of you,

            25       would you be able to supply me with cocaine or a fake


                                            27






             1       passport or a firearm?  You would not, and even if you

             2       wanted to, you wouldn't know where to begin, you

             3       wouldn't know where to go.  These are people that are

             4       pre-disposed to commit these crimes anyway, and all I'm

             5       providing is a snapshot of what they're doing anyway.

             6   Q.  In fairness to you, it's right that you point out very

             7       often that ordinary law-abiding people wouldn't know

             8       where to start with supplying drugs, for example, or

             9       whatever you are investigating, but my question is this:

            10       from an ethical point of view, did you think that there

            11       was any ethical limit as to the size of the carrot that

            12       you could dangle in front of a target to tempt them into

            13       committing a criminal offence?

            14   A.  Well, as I said, just being a -- making a personal

            15       appearance at the opening of a nightclub is not a huge

            16       carrot to dangle.

            17   Q.  If we move from the specific to the general, to the

            18       theoretical, then: is there a point at which you would

            19       think: "That's too big a carrot, it's just not fair or

            20       ethical to offer this person such a big incentive to

            21       commit a criminal offence"?

            22   A.  This was one of the earlier investigations.  I think

            23       1993, was it?  It was one of the early investigations we

            24       did.  As time went on, we did refine our modus operandi,

            25       and of course it was a consideration.  I mean, our


                                            28






             1       lawyers would be very careful in determining our

             2       methods.  They would scrutinise us very carefully.  Yes,

             3       it was a considerable.

             4   Q.  So if it was a consideration -- I'm trying here to tease

             5       out, in the mind of a very experienced investigator,

             6       where the ethical lines are.  So where is the ethical

             7       line, in your view, about the size of the carrot?

             8   A.  As I've said to you repeatedly, no matter what the size

             9       of the carrot, you cannot entrap people into committing

            10       these crimes.  However, the public perception is that

            11       because they've offered a huge carrot, that has resulted

            12       in the crime taking place.

            13   LORD JUSTICE LEVESON:  I'm not sure about that.  Let's just

            14       test it.  Assume you get somebody who himself takes

            15       illegal drugs.  So they are guilty of possession of

            16       drugs, so they do know where they can get hold of drugs.

            17       And you provide a picture or paint a story which makes

            18       it extremely attractive for them to go to the next

            19       step --

            20   A.  No, that is not the case.  I mean, first of all --

            21   LORD JUSTICE LEVESON:  But that's the question you're being

            22       asked.

            23   A.  No, that's not the case at all.

            24   LORD JUSTICE LEVESON:  But that's because of the reliability

            25       of your information?


                                            29






             1   A.  The reliability of the information and we do not dangle

             2       huge carrots.

             3   LORD JUSTICE LEVESON:  Then it's a question of what's a huge

             4       carrot.

             5   A.  Exactly, and I don't want to go into modus operandi

             6       because I --

             7   LORD JUSTICE LEVESON:  I understand that and I'm not trying

             8       to, but I'm trying to test the proposition, because I'm

             9       sure you would agree that somebody who did use drugs,

            10       who was given a large carrot, might very well go the

            11       extra stage to then supply rather than simply possess.

            12       Of course, supplying drugs, I don't need to be told, is

            13       a very, very much more serious offence.

            14   A.  Sure, I understand that.  But I have to say that our

            15       methods have been tested time and time again in the

            16       courts.

            17   LORD JUSTICE LEVESON:  Oh, it wouldn't necessarily provide

            18       a defence.

            19   A.  Sure.

            20   LORD JUSTICE LEVESON:  I'm not suggesting it would.  It's

            21       a question of what the ethical limits are for you, not

            22       what the legal limits are for the criminal law.

            23   A.  Sure.  No, it's something we are conscious of.

            24   MR BARR:  Can I ask you to turn to page 58 of the judgment.

            25       If we could have that up on the screen, please.


                                            30






             1           I'm interested in the passage which starts at (c).

             2       This is where the court is dealing with one of the

             3       points raised by the defendant:

             4           "It was suggested that this might have given

             5       employees of the News of the World grudge motives rather

             6       than a motive simply to expose criminal activity on the

             7       part of the defendant.  In this respect, the defence

             8       relied inter alia on passages from the video prior to

             9       the defendant's entry onto the scene which were said to

            10       demonstrate animosity towards the defendant, in

            11       particular a reference by Mr Mahmood to the defendant as

            12       a 'toerag', coupled with laughter at the prospect that

            13       'if He supplies, his career is over", and, "He could get

            14       banged up tomorrow'."

            15           I'm not interested in whether or not there was

            16       a grudge motive.  You can put that out of your mind.

            17       What I'm interested in is the way in which you desirable

            18       Mr Shannon and the prospect of ending his career.  Is it

            19       right that you regarded him as a "toerag"?

            20   A.  That's right, because -- let's not forget I was acting

            21       on information.  I don't want to use the privacy of this

            22       room to disclose the informant, but the way he treated

            23       the informant was particularly despicable and, as I say,

            24       he was regularly dealing cocaine.  He had scales.  He

            25       was measuring cocaine up and dealing cocaine.  So this


                                            31






             1       was in relation to his treatment of the informant.

             2   LORD JUSTICE LEVESON:  Was that adduced in evidence in the

             3       court?

             4   A.  I think it was mentioned in court.

             5   LORD JUSTICE LEVESON:  That he had scales?

             6   A.  I think it was mentioned in court.  I'm not sure, but

             7       I think it was mentioned.

             8   MR BARR:  There seems to be a certain amount of relish in

             9       the phrase "coupled with laughter at the prospect that

            10       if he supplies, his career is over".  Are you, when you

            11       conduct these investigations, looking forward to the

            12       prospect of the target actually committing the offence

            13       which you're approaching him about?

            14   A.  Not at all, no.  I think there have been instances where

            15       we've exposed celebrities, Johnny Walker being one of

            16       them, who have thanked me for exposing them.  This was

            17       a celebrity who I received information was involved in

            18       drug taking and supplying drugs to his colleagues.  He

            19       turned up at a hotel room with a bag of cocaine in his

            20       pocket.  I subsequently exposed him, he pleaded guilty

            21       and then thanked me for helping him resolve the demons

            22       that were possessing him at the time.  He was grateful

            23       for my intervention.

            24   Q.  So what is it that motivates you, then?

            25   A.  Well, it is the public duty.  I mean, there have been


                                            32






             1       cases where we've embarked on investigations that have

             2       not even been for the newspaper.  I mean, last month

             3       there's a man called John Batty(?) who was jailed.  He

             4       pleaded guilty to sexually abusing a child who I think

             5       was about 11 or 12 at the time.  Again, this was never

             6       going to be a story for the paper.  The young girl rang

             7       me up and told me what had happened to her and could

             8       I assist?  She said, "If I go to the police, there's no

             9       evidence.  Will you be able to help?" Myself and

            10       a colleague helped to gather the evidence, it went to

            11       court and at Chelmsford Crown Court he pleaded guilty.

            12           We risk our lives on a daily basis.  You know,

            13       I live under the shadow of death threats.  The

            14       motivation is very clear.  Yes, exposing criminality

            15       gives me great satisfaction and I'm proud to have jailed

            16       paedophiles and arms dealers and drug dealers and the

            17       likes.  That's my motivation.

            18   Q.  I see.  We may return to that topic in a little while.

            19       Can we move on to the next case that you've drawn to our

            20       attention in tab 6.  We don't need anything on the

            21       screen just yet.  It's a case of the Crown v Hardwicke

            22       and Thwaites.  This was another drugs sting which led to

            23       the conviction of two people.

            24           Now, A feature of this case was that the jury said

            25       that had they been allowed to take what described as the


                                            33






             1       extreme provocation into account, they would undoubtedly

             2       have reached a different verdict.  I understand from

             3       your second witness statement that the point you would

             4       like to make is that the jury didn't have the full facts

             5       before them because certain matters had been withheld

             6       from evidence; is that right?

             7   A.  That's right.  The jury were not allowed to see the

             8       entire video in which they were confessing to previous

             9       crimes and extensive drug dealing in the past.  I'm sure

            10       that had the jury seen those elements, they would have

            11       reached a different conclusion.

            12           However, they did appeal the sentence, which was

            13       upheld.

            14   Q.  This decision also had some other interesting passages

            15       in it that we might look at.  Could we have up on the

            16       screen, please, paragraph 27.  I'm afraid there aren't

            17       page numbers.  We have, at paragraph 27, the court

            18       dealing with arguments about your behaviour and that of

            19       your colleagues and whether or not it was illegal.  If

            20       we look at the quotation, it says:

            21           "The way in which such investigations are pursued,

            22       albeit they may rightly or wrongly be described by some

            23       as distasteful, is not, in my view, judicially to be

            24       condemned where it is not unlawful.  Thus, when

            25       I examine the facts of this case and, in particular, the


                                            34






             1       acts of these particular journalists on the 2nd and

             2       3 September 1998, and set those against the offences

             3       with which the defendants are in consequence charged

             4       before this court, I readily conclude, borrowing and

             5       adapting the words of Lord Steyn in the case of

             6       R v Latif once more, the conduct of Mr Mahmood and his

             7       colleagues was not so unworthy or shameful that it would

             8       be an affront to the public conscience to allow the

             9       prosecution to proceed.  Realistically, any criminal

            10       behaviour, if any has been established, by these

            11       journalists was venial compared to that of the

            12       defendants."

            13           That takes me to the question of whether there are

            14       circumstances where you consider it is ethical to break

            15       the law in order to get a story in the public interest.

            16       What do you say to that proposition?

            17   A.  Yes, there are.  There certainly are.  The public

            18       interest is the overriding factor.  I've purchased child

            19       pornography, for example, which clearly is an illegal

            20       act, and that led to a conviction.  So yes, there are

            21       times when we do cross the line, but the overriding

            22       factor is the public interest.  I've never been

            23       prosecuted so for drugs or offences relating to work

            24       that I've done.

            25   Q.  I'm not suggesting that it's wrong to do that.  What


                                            35






             1       I want to explore with you is where do you draw the

             2       line?  Because this goes straight into the question of:

             3       when does the end justify the means?  Where do you draw

             4       the line?

             5   A.  Certainly in the example I've just given you, buying

             6       child pornography, clearly the end justifies the

             7       meaning.  Clearly.  And exposing drug dealers.  If we

             8       buy drugs, we expose drug dealers and that's our

             9       intention.  Clearly the end justifies the means.  Does

            10       that mean we'd go out and rob a bank to show that banks

            11       could be robbed?  No, we would not.

            12   Q.  You're coming on to what I was just going to ask you.

            13       At what point is it unacceptable?  We had a witness

            14       earlier who gave the very extreme example that you

            15       wouldn't murder someone to get a story in the paper.

            16   LORD JUSTICE LEVESON:  More particularly, he wouldn't murder

            17       a High Court judge, to be fair.

            18   MR BARR:  You wouldn't rob a bank to get a story.  Can you

            19       think of an example, from all your years of experience,

            20       of something which was right on the line?  What are the

            21       sorts of decisions that made you sweat?

            22   A.  I can't think of an example.  I think I'm perfectly

            23       happy with all the 500 investigations that I've done,

            24       all 500 of them.  They fulfil the criteria, in my view,

            25       that they satisfied the public interest.


                                            36






             1   Q.  The final point I'd like to deal with from this judgment

             2       is at paragraph 31, please.  Here we're coming back to

             3       the question of what your motives are.  If I pick up at

             4       paragraph 31, the second sentence:

             5           "The decision as to publication [and this was

             6       a story that was published just before the police,

             7       I think, made arrests] did have some significance

             8       because it showed beyond argument what were the real

             9       priorities so far as the journalists and the newspaper

            10       were concerned.  When the time had clearly come for the

            11       police to be informed, but if that step were taken the

            12       newspaper was likely to be unable to publish its story,

            13       it was the needs of the newspaper rather than the

            14       interests of justice which were regarded as paramount.

            15       But the judge's refusal to consider the priorities of

            16       the investigators was of no great significance because,

            17       as we have already said, he gave full weight to what the

            18       journalists in fact did."

            19           So there we have the Court of Appeal finding that

            20       your real priorities were as a journalist, wanting to

            21       publish a story.  Was that a fair finding you would

            22       accept?

            23   A.  Very much so.  I mean, I'm a journalist.  That's what we

            24       do.  We publish stories, we sell newspapers.  That's

            25       what we do.  But at the same time, the public interest


                                            37






             1       is of paramount importance too.  I mean, we always

             2       liaise with the police so that they can make arrests and

             3       secure the evidence and we're happy to co-operate fully

             4       when we can.  Of course, our motive is to publish an

             5       article in the newspaper.  I'm not a police officer, I'm

             6       not a social worker; I'm a journalist.

             7   Q.  The cases we've gone to so far are cases in which the

             8       convictions have been upheld.  That's not always been

             9       the case, has it?  We can look now at some of the cases

            10       you draw our attention to in which the conviction has

            11       not been upheld.  The first, at tab 7, is the case of

            12       Mr Kramer(?), and you tell us that he initially was

            13       convicted, I think on a guilty plea?

            14   A.  That's right.  This is a man who provided me with a fake

            15       passport and provided me with a quantity of drugs, and

            16       then offered to supply me an even larger quantity of

            17       drugs.  He was arrested as a result of our work and

            18       pleaded guilty, sentenced to four and a half years.  He

            19       then appealed and the conviction was reduced by a period

            20       of nine months.  Later down the line, he discovered that

            21       one of the informants involved in this investigation had

            22       been discredited and appealed again and the conviction

            23       was quashed.  I was not even made aware of the fact that

            24       this appeal was taking place or in fact that it had been

            25       quashed until I read about it in the paper.


                                            38






             1   Q.  This is Mr Gashi, is it?

             2   A.  That's right, Gashi, who has now been described as an

             3       unreliable witness and has mental health problems.

             4   Q.  It's fair to say that Mr Gashi has caused problems in

             5       a number of the cases you've been involved in?

             6   A.  That's right.

             7   Q.  Mr Kramer's case is now the subject of civil

             8       proceedings, isn't it?

             9   A.  That's right.  I think he's taking action against us for

            10       malicious prosecution, which is bizarre, because we

            11       don't bring the prosecutions, but nevertheless it's

            12       ongoing litigation.

            13   Q.  I see.  I won't go into the details for that reason, but

            14       perhaps we could have up on the screen the document at

            15       tab 7 because I'd just like to draw attention to the

            16       text almost at the bottom of the page, where we see the

            17       way in which advertisements were made for things to

            18       investigate.  It reads, three lines up from the bottom

            19       of the penultimate paragraph:

            20           "Do you know a scandal that Maz should expose?  If

            21       so, you can ring him any time."

            22           And then there was a telephone number and an email

            23       address at the News of the World.

            24           What sort of percentage of your investigations arose

            25       from advertising of that kind?


                                            39






             1   A.  A very, very small proportion.  Very small.  The

             2       majority were people ringing up to say, "My neighbour is

             3       claiming dole when he shouldn't be", just minor

             4       offences.

             5   Q.  I see.  Perhaps we can go to tab 8, where you draw our

             6       attention to the case of Alin Turku(?) against News

             7       Group Newspapers Limited.  This is a judgment in civil

             8       proceedings, isn't it, proceedings which were brought

             9       for defamation --

            10   A.  That's right.

            11   Q.  -- by Mr Turku.  But the subject matter was the plot

            12       that you uncovered to kidnap a very famous footballer's

            13       wife?

            14   A.  That's right, Victoria Beckham.

            15   Q.  And that investigation has been the subject of

            16       criticism, hasn't it, from various quarters?

            17   A.  That's right.  I mean, last week you were told, one,

            18       that it was a figment of my imagination, the entire

            19       plot, by one of the witnesses here.  And you were also

            20       told that the entire story rested on one taped

            21       conversation in a snooker hall.  Well, your witness was

            22       wrong on both counts.  It was not a figment of my

            23       imagination and it did not rely on one conversation and

            24       there was no snooker hall involved.

            25           We received information that we believed to be


                                            40






             1       credible, collated a lot of evidence, taped evidence,

             2       a series of meetings that all pointed to -- and let's

             3       not forget, these were eastern bloc criminals, serious

             4       criminals who were convicted, as a result of my work, of

             5       stealing works of art from the Sotherby's vault, which

             6       in itself is no mean feat.

             7           We presented our evidence to the police.  They

             8       vetted it all, went through our tapes, forensically

             9       examined it all.  The CPS, some months later, decided to

            10       charge these individuals.  The case was -- in fact, it

            11       was dropped, I think, didn't get to court, was dropped

            12       on the basis that the informant you mentioned, Gashi,

            13       had failed to disclose to the CPS and the police that

            14       he'd received a payment in connection with this story.

            15           However, as you mentioned, it did go to court in

            16       this defamation case, where Mr Justice Eady went

            17       through --

            18   Q.  If I can just stop you there, Mr Mahmood, because I'm

            19       going to take you through it.

            20   A.  All right.

            21   Q.  Because in the light of the evidence we've heard about

            22       this, it's right that I should.  We don't need to have

            23       the first page up on the screen.  It suffices for me to

            24       say that what the judgment does at the start is explain

            25       that the claimant was described in Romania as a very


                                            41






             1       intelligent criminal.  He'd secured political asylum in

             2       this country on a completely false basis and even when

             3       that was uncovered, he'd been able to stay here because

             4       he'd also lied about his age.

             5   A.  Right.

             6   Q.  He was arrested with forged identity documents and it

             7       transpired that not only had he deceived the immigration

             8       authorities, he'd also deceived his employers, getting

             9       a job despite his immigration status.

            10           Perhaps now I can ask for page 2, paragraphs 6 and

            11       7, to go up on the screen.  Let's take an excursion off

            12       to another subject of interest to the Inquiry, and

            13       that's the subject of conditional fee agreements.  In

            14       this case, it's right, isn't it, the claimant was

            15       represented by a solicitor advocate acting on a CFA?

            16   A.  That's right.

            17   Q.  And the consequence of that was because the claimant was

            18       impecunious, even a win to the News of the World would

            19       leave it out of pocket in terms of costs?

            20   A.  That's right.  I think we won the case, and I can't

            21       remember what the figure was, but it wasn't much change

            22       from £500,000.  So it was an expensive win.

            23   Q.  That was recognised in the judgment, looking at the last

            24       sentence of paragraph 6.  Having summarised the

            25       position, Mr Justice Eady concluded:


                                            42






             1           "The defendant's position is thus wholly

             2       unenviable."

             3           And this, of course, is a case which, as you say,

             4       the News of the World won?

             5   A.  That's right.

             6   Q.  Having pause just to look at the CFA figure, can we now

             7       move and have up on the screen, please, paragraphs 41

             8       and 42.  Thank you.  This is the matter you adverted to

             9       a moment ago, the point at which the Crown offered no

            10       evidence in the criminal prosecution relating to the

            11       kidnap plot.  It explains the problem that there was

            12       with Mr Gashi at paragraph 41.

            13           Moving on to 42, it refers to the details of the

            14       problem:

            15           "The new information to which counsel referred

            16       related to another News of the World investigation in

            17       which Mr Gashi had been the informant.  It concerned

            18       alleged drug dealing by Wandsworth parking attendants,

            19       on which an article had been published on 1 September

            20       2002.  Mr Altman, counsel for the prosecution, told the

            21       court on 2 June 2003: 'Whatever the true position about

            22       the source of the drugs, the evidence reveals that Gashi

            23       had set up Z and others [ie the parking attendants] into

            24       committing the offences when there was simply no

            25       evidence that they had been committing such offences


                                            43






             1       previously.'  The prosecution in the current case was

             2       now in possession of information first indicating that

             3       Gashi had set up individuals for an earlier

             4       investigation by the News of the World.  Secondly, it

             5       confirms that he was in financial difficulty before the

             6       current investigation got under way, and thirdly, that

             7       he had lied about the history of the matter in the

             8       witness statement that he had made for the purposes of

             9       the potential prosecution.  One other matter which came

            10       to light and which has caused us great concern was

            11       evidence that Gashi had unquestionably lied to the

            12       police in this investigation about the receipt of money

            13       for his information.  Of course, the receipt of reward

            14       money necessarily impacts upon the perception one may

            15       have about his motives."

            16           I should clarify straight away that it's right,

            17       isn't it, that later in the judgment the court made

            18       a finding that you had told the police all about the

            19       payment to Mr Gashi.  So there's no criticism of you in

            20       that regard.

            21           What I would like to ask you is: in relation to this

            22       Wandsworth parking attendant story, did you have any

            23       involvement in that story at all?

            24   A.  Yes, I did.  I think I wrote the story.  I can't

            25       remember the details of it, but certainly there were


                                            44






             1       parking attendants that had sold me drugs.  I can

             2       remember one chap selling me -- he had a whole bag of

             3       cannabis in his car, took me to his car and gave me some

             4       cocaine -- cannabis, rather.  And I think there was

             5       somebody else that sold cocaine.  From memory.  It was

             6       a long time ago; I don't recall the details.

             7   Q.  I don't really need the details.  What I'd like to ask

             8       you next is: it's right, isn't it, as we see from the

             9       judgment, that there was plainly a real problem with the

            10       way Mr Gashi behaved during the course of that

            11       investigation?

            12   A.  I think that later transpired.  I don't think it went to

            13       court, actually.  I don't think there was -- I certainly

            14       didn't give evidence in that case.

            15   Q.  I see.  What I want to ask now, what arises from that:

            16       if there was a problem with Mr Gashi's behaviour because

            17       he'd set up Z and the others into committing the

            18       offences, it calls into question the supervision on

            19       these investigations.  You say in your first witness

            20       statement that it's your responsibility --

            21   A.  Sure.

            22   Q.  -- to supervise and make sure everybody stays on the

            23       right side of the ethical line.

            24   A.  Sure.

            25   Q.  Obviously something went wrong on this case.  Can you


                                            45






             1       help us with what supervisory arrangements were in place

             2       on this investigation?

             3   A.  As I say, I can't remember the details of that

             4       investigation, but the very nature of my work means

             5       that, you know, I'm dealing with the bottom echelons of

             6       society quite often.  We're dealing with some pretty

             7       obnoxious people.  That's the only way you can expose

             8       crack dens and drug dealers.  We have to deal with

             9       people of this ilk.  And as I've said, what counts is

            10       the reliability of their evidence, which we test.  In

            11       the Beckham case, there was clear evidence -- and

            12       Mr Justice Eady agreed with me on that -- that there was

            13       a plot to kidnap Victoria Beckham.  I mean, you may get

            14       information coming from very undesirable cases and it is

            15       our role to check the information.

            16           Certainly in the case you're referring to, these

            17       guys did sell me drugs.  It didn't go to court.  I can't

            18       remember the full details.

            19   Q.  I understand all of that, but my question was about

            20       supervisory arrangements.  I think your answer, if

            21       anything, demonstrates the need, when working in these

            22       murky worlds, to have particularly good supervisory

            23       arrangements.  Are you able to help us with what

            24       supervision there was on this --

            25   A.  Yes, there was supervision.  On the Beckham Inquiry


                                            46






             1       there was complete and utter supervision.

             2   Q.  I'm not asking you about --

             3   A.  That story -- I can't recall the details of that story.

             4   Q.  I see.

             5   A.  It was a long time ago.  As I say, I've written more

             6       than 500 stories for the paper.

             7   Q.  In general terms, what sort of supervisory arrangements

             8       would you have to ensure that somebody who was working

             9       on your team didn't cross the line?

            10   A.  The purpose of informants is that -- I mean, these are

            11       people that are embedded in that criminal world.  Their

            12       role is largely to introduce us in.  Quite often they're

            13       not required at all.  They can just give us the

            14       information and we act alone.  But in cases where they

            15       are involved, they are very closely supervised, well

            16       briefed on what they can and cannot say, and you know,

            17       everything's on tape, so there's no scope for them to go

            18       off piste, as it were.

            19   Q.  You say no scope to go off piste.  Plainly, Mr Gashi

            20       managed to do just that in the parking case.

            21           Can I ask you this: as a very experienced

            22       investigative reporter, are there any particular

            23       supervisory measures that you would recommend are

            24       essential for investigative journalists?

            25   A.  Well, it all comes back to the PCC code.  I mean,


                                            47






             1       I think the code sets the parameters very firmly of what

             2       we can and cannot do.

             3   Q.  If the code tells you what you can and can't do,

             4       I suppose my question is more about how do you make sure

             5       that those working with you stay on the "can" side of

             6       the line?

             7   A.  Certainly when they're working with us, invariably I'm

             8       present or one of my colleagues is present and dictating

             9       the terms of the way they behave.

            10   Q.  Mr Mahmood, I'm not at this stage trying to criticise

            11       events from the past.  What I'm trying to do is tease

            12       out from your experience if there are particular

            13       safeguards that you think are important to ensuring that

            14       journalists in the future, working in these murky

            15       worlds, stay on the right side of the line?

            16   A.  Absolutely.  There should be full briefings for anybody

            17       involved in any investigation.  They must be aware of

            18       the PCC code and must also abide by any advice we get

            19       from our lawyers.  As I say, on every investigation,

            20       we're constantly in touch with our lawyers.

            21   Q.  We can move on now to -- if we can have up on the

            22       screen, please, a page which has paragraph 94 at the

            23       top.  Thank you.

            24           I need to tell everyone that on the page before,

            25       paragraph 93 is dealing with the question of whether


                                            48






             1       there was or was not a plot, which, as you pointed out,

             2       has been the matter of some criticism.  We see at the

             3       very top of the page, last sentence in the paragraph:

             4           "On the evidence before this court, therefore, the

             5       balance of probabilities lies firmly in favour of the

             6       defendant."

             7           That's the News of the World, the judicial finding

             8       of the plot.

             9           In paragraph 94, the finding was, wasn't it, that

            10       there wasn't a gang but there was a group of loose

            11       associates prepared to take part in any criminal

            12       activity that suited them?

            13   A.  Correct.

            14   Q.  Then paragraph 95, there it is some criticism of the

            15       reporting.  The criticism is of the attribution of

            16       a surveillance role to the claimant in the action, isn't

            17       it?

            18   A.  That's right.

            19   Q.  And the court found that that was an invention?  Is that

            20       criticism a criticism which you accept?

            21   A.  Of course, we accept the criticism by Mr Justice Eady,

            22       but having said that, that was information that I was

            23       provided and I relied on the information given to me by

            24       Gashi.

            25   Q.  I see.  So you would say, would you, that this was


                                            49






             1       a case of an inaccuracy which was regrettable, but in

             2       the circumstances one for which the newspaper was not

             3       culpable?

             4   A.  Absolutely.

             5   Q.  Can we go on to another criticism, on paragraph 104.  At

             6       paragraph 104, we see the way in which Mr Justice Eady

             7       summarises matters:

             8           "There may be a good deal of sloppiness and

             9       inaccuracy in what was published.  There was no plot to

            10       kidnap the Beckham children as such.  Gashi managed to

            11       extract comments to the effect that they would be

            12       kidnapped if they happened to be with their mother but

            13       that was as far as it went.  Nor could the gang be said

            14       to be on the brink of the kidnap.  Nor was there any

            15       evidence that the Beckhams' Cheshire home was being kept

            16       under surveillance.  The claimant was not allotted

            17       a surveillance role; nor had he done or said anything to

            18       support the allegation, at least anything which the

            19       News of the World journalists knew about.  There was

            20       nothing to justify the assertion that he was in charge

            21       of surveillance.  The only conclusion I can draw is that

            22       it was a bit of creativity on the part of Mr Mahmood or

            23       one of the subeditors."

            24           It doesn't matter for the Inquiry's purposes quite

            25       what the source of the inaccuracy was, but my question


                                            50






             1       to you: it must be a matter of regret, mustn't it, that

             2       on such a high profile and important story, there was

             3       a good deal of sloppiness and inaccuracy when it was

             4       published?

             5   A.  That I don't agree with.  I think it might be worth your

             6       while looking at the taped evidence on this.  The

             7       assertion that there was not a plot to kidnap the

             8       children -- I mean, very clearly you see one of the

             9       members of the gang saying that's precisely what they

            10       intend to do.  So I think that on that point I would

            11       disagree.

            12   Q.  I see.  So on the facts --

            13   LORD JUSTICE LEVESON:  But actually, Mr Justice Eady said

            14       that Gashi managed to extract comments to the effect

            15       that they'd be kidnapped, but that was as far as it

            16       went.

            17   A.  Sure.

            18   LORD JUSTICE LEVESON:  That's what he says, the judge says.

            19   A.  That's right.

            20   MR BARR:  So he seems to have that point and is still

            21       critical.  Do you accept these criticisms?

            22   A.  I don't, no.

            23   Q.  If you don't accept the criticisms, I'm not going to

            24       explore them further here, but can I put this general

            25       point to you: you would accept, wouldn't you, that it's


                                            51






             1       very important for an investigative journalist to be as

             2       accurate as possible?

             3   A.  Absolutely.  We try our best.

             4   Q.  We needn't have it up.  You set out the material parts

             5       in your witness statement which everyone can read.

             6   A.  Right.

             7   Q.  In paragraph 113, you're described as hard-bitten and

             8       cynical, but the proposition that you'd made the story

             9       up is roundly rejected by the judge, isn't it?

            10   A.  That's right.

            11   Q.  Thank you.

            12           Can we move now very briefly to the red mercury case

            13       or dirty bomb plot.  Here, as I understand it, the point

            14       you wish to make in response to the criticisms that had

            15       had made is that the defendants were acquitted by the

            16       jury and that the trial ran the distance?

            17   A.  No, that's not just the criticism I'd wish to make.

            18       I think it goes a lot further than that.  I received

            19       information from a source that appeared to be very

            20       reliable, a businessman, that some people -- he'd been

            21       approached to supply some material for a dirty bomb and

            22       the people that had approached him -- again, this was

            23       a businessman who worked in the city -- that approached

            24       him seemed very credible.  I had a meeting with that

            25       individual that was seeking to buy red mercury.  As soon


                                            52






             1       as I'd had that meeting, I saw that this was a potential

             2       serious threat here, even though I was sceptical about

             3       the whole notion of red mercury.

             4           We did the right thing.  We went straight to the

             5       police, to the anti-terror squad, said, "This is what

             6       we've been approached, this is what we've collated

             7       evidence-wise", and then they started the investigation.

             8       I was signed up for that job alone as a participating

             9       informant so they dictated my entire role in that

            10       investigation.  All subsequent meetings were controlled

            11       by the anti-terror squad because obviously this was

            12       a matter of national security.

            13           So I think it's unfair to criticise me over that.

            14       We did what any responsible journalist or any

            15       responsible citizen would do when told about a potential

            16       terrorist plot.  You go straight to the police.  That's

            17       what we did.  The decision to prosecute was made by the

            18       CPS, who obviously felt the evidence was sufficient and

            19       I think even after the trial collapsed, they issued

            20       a statement saying that the case had been properly

            21       brought and they felt it was the right thing to do.

            22   Q.  I see.  Moving now to the final matter I want to put to

            23       you.  It's the question of your investigation of the

            24       snooker player, Mr John Higgins.  You've exhibited to

            25       your statement a copy of the decision in relation to the


                                            53






             1       way in which his professional body dealt with him and

             2       his manager, and as I understand it, the points that you

             3       want to bring out is that for all the criticisms that

             4       have been made of your work on this story, the fact

             5       remains that Mr Higgins was disciplined for two serious

             6       offences of misconduct and his manager was banned for

             7       life; is that right?

             8   A.  It goes beyond that.  I think that the criticism is

             9       completely unfounded.  It's been suggested that we

            10       doctored videos.  In fact, your witness also suggested

            11       that we doctored videos in the cricket case.  That's an

            12       allegation even the defendants haven't made.

            13           So you have all these people making suppositions and

            14       wild accusations, but the Higgins case is a case in

            15       point.  This was a man I was told was involved in fixing

            16       matches, had done it previously.  We had meetings with

            17       him and his manager.  His manager confirmed that he

            18       would throw games and there was a discussion with

            19       Higgins in which he even discussed how we should pay him

            20       the money for fixing a frame, how he wanted us to pay

            21       off his villa in Spain.

            22           The investigation was praised by the governing body

            23       of snooker, Barry Hearne, who introduced new regulations

            24       as a result of our investigation.  These guys were found

            25       guilty -- pleaded guilty to the charges brought by they


                                            54






             1       are professional association.

             2           So on that one -- you know, it bemuses me how anyone

             3       could criticise us over that one.

             4   MR BARR:  Thank you very much, Mr Mahmood.

             5   LORD JUSTICE LEVESON:  Could I just ask a couple of

             6       questions?

             7                      Questions by the Judge

             8   LORD JUSTICE LEVESON:  It's not directed to your

             9       investigations that expose criminality at all.  It goes

            10       back to two features.  First of all, the moral

            11       investigations which you say were only a very, very

            12       small part of your work, but which actually are rather

            13       more significant part of what I'm considering.  Do you

            14       take the view that somebody who is, say, a member of

            15       Parliament, if involved in an extramarital affair, is

            16       justifiably the subject of a public investigation and

            17       exposure simply because he's a member of Parliament?

            18   A.  That's right.  I mean, we vote for these people.  They

            19       hold public office.  We expect a certain code of

            20       behaviour from them.  I don't think I'd vote for my MP

            21       if I knew that he was cheating on his wife.  How could I

            22       trust him to represent me?  That's my personal opinion.

            23   LORD JUSTICE LEVESON:  So there's no privacy for such

            24       a person at all?

            25   A.  I don't think there should be.  If you hold public


                                            55






             1       offence, you should be open to scrutiny.

             2   LORD JUSTICE LEVESON:  And the same would be so for anybody

             3       who may be an actor or an author, anybody who's made

             4       money from the public?

             5   A.  No, no, no.  We're talking about -- I mean, MPs are

             6       people who are elected and they hold public office.

             7       I think it would be slightly different for actors and

             8       the likes.

             9   LORD JUSTICE LEVESON:  So you wouldn't --

            10   A.  There would have to be grounds.  If they are appearing,

            11       as I said, in Hello magazine as happy families and

            12       cashing in on their status as, you know, happily married

            13       individuals, family men, and then are cheating, then

            14       sure, they should be exposed for hypocrisy, if there's

            15       a degree of hypocrisy about it.

            16   LORD JUSTICE LEVESON:  But the mere fact of celebrity would

            17       not be sufficient?

            18   A.  No, not in my opinion.

            19   LORD JUSTICE LEVESON:  Yes.  Did you work day by day in the

            20       offices of the News of the World or were you detached?

            21   A.  I was detached.  I'd seldom come into the office.

            22   LORD JUSTICE LEVESON:  I see.  Have you seen on the

            23       recording or read the evidence that Mr McMullan gave to

            24       the Inquiry?

            25   A.  Yes, I have.  He hasn't worked for a paper for many,


                                            56






             1       many years and it certainly doesn't --

             2   LORD JUSTICE LEVESON:  I'm not interested in when he worked

             3       for a paper.

             4   A.  Sure.

             5   LORD JUSTICE LEVESON:  What I want to know is this: does he

             6       give an account that you recognise?

             7   A.  Not at all.

             8   LORD JUSTICE LEVESON:  Not at all?

             9   A.  Not in the least, no.

            10   LORD JUSTICE LEVESON:  So it should carry no credence at

            11       all?  That's why I asked you whether you went into the

            12       office, because you could say, "Well, actually,

            13       I couldn't tell you", but if you're saying it doesn't,

            14       that I would like to know.

            15   A.  Sure.  Well, no, it doesn't.  It certainly doesn't

            16       reflect my experience at News of the World.

            17   LORD JUSTICE LEVESON:  But you didn't go into the office.

            18   A.  I was in and out of the office, of course, you know,

            19       but -- I mostly worked away from the office, but I was

            20       in constant touch with the news desk.

            21   LORD JUSTICE LEVESON:  I see.  Thank you very much.

            22   MR DAVIES:  Might I just complete one point of fact, if

            23       I may?

            24   LORD JUSTICE LEVESON:  Yes.

            25                      Questions by MR DAVIES


                                            57






             1   MR DAVIES:  Mr Mahmood, you were asked about

             2       Mr Justice Eady's judgment in the Turku case.  Do you

             3       know whether there was an appeal in that case?

             4   A.  Yes, I think there was.

             5   MR DAVIES:  Can you tell us what happened?

             6   A.  I think we decided to settle, largely on commercial

             7       grounds.  It's a question to put to the lawyers, really.

             8   MR DAVIES:  Thank you very much.

             9   LORD JUSTICE LEVESON:  Thank you very much.  We'll have

            10       a short break.

            11   (11.50 am)

            12                         (A short break)

            13   (12.01 pm)

            14   LORD JUSTICE LEVESON:  Yes, Mr Jay.

            15   MR JAY:  Sir, the next witness is Mr Neville Thurlbeck,

            16       please.