Rush for safe havens as euro fears rise

US benchmark borrowing costs plunged to levels last seen in 1946 and those for Germany and the UK hit all-time lows as investors took fright at what they see as a disjointed policy response to the debt crisis in Spain and Italy. In a striking sign of the flight to haven assets, German two-year bond yields fell to zero for the first time, below the equivalent rate for Japan, meaning investors are willing to lend to Berlin for no return. US 10-year yields fell as low as 1.62 per cent, a level last reached in March 1946, according to Global Financial Data. German benchmark yields reached 1.26 per cent while Denmark's came close to breaching the 1 per cent level, hitting 1.09 per cent. UK rates fell to 1.64 per cent, the lowest since records for benchmark borrowing costs began in 1703. "They are extreme levels because we are in an extremely perilous situation. People just want to put their money somewhere where they think they will get it back. People may soon be paying Germany or the US to look after their money," said Gary Jenkins, head of Swordfish Research, an independent credit analysis company. The flight to safety came as the situation in Italy and Spain, the eurozone's third- and fourth-largest economies, deteriorated further. Italy held a disappointing debt auction and saw its benchmark borrowing costs rise above 6 per cent for the first time since January. The euro fell 0.8 per cent against the dollar to under $1.24 for the first time in two years. Confusion over how the Spanish government's rescue of Bankia, the stricken lender, will be structured led the premium Madrid pays over Berlin to borrow to hit fresh highs for the euro era at 540 basis points. Analysts said the elevated level meant that clearing houses could soon raise the amount of margin, or collateral, that traders need to post against Spanish debt, a move that led to the escalation of crises in Portugal and Ireland. The European Central Bank has made clear to Spain that it cannot use the bank's liquidity operations as part of a recapitalision of Bankia. However, the central bank said on Wednesday it had not been officially consulted on the plans. Equity markets globally fell on the eurozone fears with bourses in Paris, Frankfurt and London all dropping 2 per cent. But Nick Gartside, international chief investment officer for JPMorgan Asset Management, noted that while US bond yields had halved since April last year the S&P 500 equity market was at the same level. "One of those two markets is mispriced. Core government bonds are an efficient market and they are ahead," he added. Investors said borrowing costs for the US, UK and Germany were likely to continue to fall amid a worsening economic backdrop and the threat of more central bank intervention. Wealth managers have been moving client assets into currency havens in recent weeks, with the Swiss franc and the US dollar among the biggest beneficiaries "Risk aversion, a rapidly slowing global economy and unusually low policy rates will pin these short and intermediate maturity bonds at unprecedented low levels for quite a while," said Mohamed El-Erian, chief executive of Pimco, one of the world's largest bond investors. Mr Gartside said he could easily see German rates going below 1 per cent, following a path that only Japan and Switzerland have taken among major economies, while the US and UK could dip under 1.5 per cent. Markets are increasingly resigned to more turmoil until policy makers take more radical action. The two most popular plans of action for investors are for the ECB to buy Spanish and Italian bonds in unlimited size or for eurozone countries to agree on a fiscal union involving the pooling of debt. "You have to throw everything at it. Spain is just too big for half measures. The next intervention has to be not just massive in size but it has to show a total commitment," said Mr Jenkins. He recommends that the ECB set targets either for the premium Spain and Italy pay to borrow over Germany or for their yields.

Euro break-up 'could wipe 50pc off London house prices'

Property prices in the capital’s most sought-after postcodes have been driven up by investors moving funds out of assets held in euros to buy into what is seen as a “safe haven” alternative. Foreign money seeking a refuge from the wider economic turmoil accounted for 60pc of acquisitions of prime central London property between 2007 and 2011, according to a report by Fathom Consulting for Development Securities. If the shared currency broke up completely, London property would initially be boosted by the continued flight towards a safe haven, the report predicts. But, once the break-up had taken place, demand for these assets as an insurance against this event would start to ebb. “Although fears about a messy end to the euro debt crisis may account for much of the gain in prime central London (PCL) prices that has taken place over the past two years, we find that a break-up of the single currency area is also the single greatest threat to PCL,” said researchers.

Leveson - The Hunt is on

Up until now, Lord Justice Leveson has only held the future of the British press in his hands. Today, despite all his protests to the contrary, his inquiry may determine the fate of the culture secretary, Jeremy Hunt. The judge insists that it is not his job to put any minister in the dock and that he certainly will not be giving his verdict on whether there have been any breaches of the ministerial code. Nevertheless, the prime minister has made it clear that he sees today's hearing as the moment when Mr Hunt must defend his much criticised handling of News Corp's £8bn bid for total control of BSkyB. The culture secretary has, I'm told, submitted more than 160 pages of internal memos, emails and text message transcripts to the Leveson Inquiry. I understand that he will insist that, despite having originally been a cheerleader not just for Rupert Murdoch but also for his bid, he acted in ways which frustrated it rather than accelerated it once he was made the minister in charge. He will claim that he referred it to the broadcasting regulator Ofcom when told by officials that it wasn't necessary to do so. He is likely to face questions about why he did not follow Ofcom's advice to refer the bid to the Competition Commission. He is likely to reply that he was given legal advice that he had first to consider News Corps offer to spin off Sky News so as to deal with so-called plurality issues. The culture secretary is likely to be asked how he can claim to have been unaware of the scale or nature of the contact between News Corp and his political adviser, Adam Smith - who resigned once his flood of emails and texts were revealed. I understand that Jeremy Hunt originally believed that his adviser had done nothing wrong and told friends he would resign himself rather than letting a junior official resign for him. The prime minister shows no sign yet of wanting to force him out - believing that however bad things may now look, Mr Hunt didn't actually do anything wrong or anything which helped the Murdochs and their bid. Labour argue that - even before today's hearing - it is evident the culture secretary should go as he is in breach of the ministerial code for failing to supervise his adviser, and for misleading the House of Commons when he wrongly asserted he had published all contacts between his department and News Corp - as well as claiming never to have intervened to affect the outcome of the bid.

Coulson on Sheridan perjury charge

David Cameron's former communications chief Andy Coulson has been charged over allegations he committed perjury during the trial of former MSP Tommy Sheridan. The 44-year-old was detained for questioning at Govan police station in Glasgow by officers from Strathclyde Police. More than six hours later, the force confirmed he had been arrested and charged with perjury. A report will be sent to the procurator fiscal which will decide if Coulson is to face court proceedings. The former News of the World editor gave evidence at Sheridan's perjury trial at the High Court in Glasgow in December 2010, while he was employed by Downing Street as director of communications. At the trial, he claimed he had no knowledge of illegal activities by reporters during the time that he was editor of the now-defunct newspaper. He said: "I don't accept there was a culture of phone hacking at the News of the World." Sheridan was ultimately jailed for three years in January last year after being found guilty of perjury during his 2006 defamation action against the News of the World. He had been awarded £200,000 in damages after winning the civil case but a jury found him guilty of lying about the tabloid's claims that he was an adulterer who visited a swingers' club. The former Scottish Socialist Party (SSP) leader was convicted of five out of six allegations in a single charge of perjury relating to his evidence during the civil action at the Court of Session in Edinburgh. Sheridan was released from jail in January this year after serving one year of his sentence and vowed to continue the fight to clear his name. Coulson was arrested last year in relation to Scotland Yard's long-running investigation into phone hacking at the newspaper. He was held in July on suspicion of conspiring to intercept communications and corruption, and had his bail extended earlier this month. Coulson resigned as editor in 2007 after the paper's former royal editor Clive Goodman and private investigator Glenn Mulcaire were jailed for phone hacking. In May that year, he was unveiled as director of communications and planning with the Conservative Party. He quit his role as Downing Street communications chief in January last year after admitting the News of the World phone-hacking row was making his job impossible.

Julian Assange's fight to evade extradition to Sweden appears doomed despite stay of execution

Julian Assange's fight to evade extradition to Sweden appeared doomed today though he was given a stay of execution by the highest court in the land. His celebrity-endorsed legal battle trundled on without him as the self-proclaimed champion of truth and transparency remained stuck in London's notorious traffic, undoubtedly disappointing his legion of fans. While vastly diminished in number from the early days of the furore surrounding the WikiLeaks founder, they were as vociferous as ever, penned in outside the Supreme Court yesterday, carrying megaphones, guitars and banners proclaiming “Free Assange” and “God Save Julian”. Mr Assange, 40, had argued that an European Extradition Warrant from Sweden to face allegations of rape and sexual molestation was invalid as the public prosecutor who issued it did not constitute a “judicial authority”. He denies the accusations, insisting they are “politically motivated”. His case was partially trumped by the French translation of the words judicial authority, which judges at the Supreme Court said carried a far wider meaning that simply a judge or court. By a majority of five to two they decided the practice by many European countries to have public prosecutors issue such warrants countered the interpretation in United Kingdom and his appeal failed. Nevertheless they granted his lawyers 14 days to apply to have the case re-opened after they insisted that they had not been given an opportunity to argue on the very legal points on which the judges had based their decision.

FORMER Downing Street communications chief Andy Coulson has been arrested on suspicion of committing perjury during the Tommy Sheridan trial

Andy Coulson has been arrested on suspicion of perjury. Picture: Getty

FORMER Downing Street communications chief Andy Coulson has been arrested on suspicion of committing perjury during the Tommy Sheridan trial at the High Court in Glasgow, the Crown Office said today.

 

The 44-year-old was detained in London this morning by officers from Strathclyde Police.

 

Coulson gave evidence in Mr Sheridan’s perjury trial at the High Court in Glasgow in December 2010.

 

He was also arrested last year in relation to Scotland Yard’s long-running investigation into phone-hacking at the News of the World.

 

He was held in July on suspicion of conspiring to intercept communications and corruption and had his bail extended earlier this month.

 

A Strathclyde Police spokesman said: “Officers from Strathclyde Police Operation Rubicon detained a 44-year-old man in London this morning under section 14 of the Criminal Procedures Scotland Act on suspicion of committing perjury before the High Court in Glasgow.

 

“It would be inappropriate to comment any further at this time.”

 

It is understood Coulson is on his way to Glasgow.

 

Operation Rubicon detectives have been looking at whether certain witnesses lied to the court during Sheridan’s trial as part of a “full” investigation into phone hacking in Scotland.

 

Mr Coulson, then employed by Downing Street as director of communications, told the trial in December 2010 he had no knowledge of illegal activities by reporters while he was editor of the News of the World.

 

He also claimed: “I don’t accept there was a culture of phone hacking at the News of the World.”

Former News of the World Editor arrested in dawn raid on his London home

 

PR man: Andy Coulson was held today by Strathclyde Police,David Cameron’s former No 10 spin doctor Andy Coulson was arrested today on suspicion of committing perjury.

Mr Coulson, 44, was detained at his home in Dulwich at 6.30am by seven officers from Strathclyde police and taken to Glasgow where he will be questioned.

The case centres on claims that he misled a court about his knowledge of phone-hacking during a criminal trial in Glasgow. The former News of the World editor, hired by the Prime Minister as his director of communications, told a court in 2010 that he had no knowledge of illegal voicemail interception when in charge of the tabloid.

During the perjury trial of former Scottish MP Tommy Sheridan, Mr Coulson said: “I don’t accept there was a culture of phone hacking at the News of the World.” He also denied knowing that the

 newspaper paid corrupt police officers for tip-offs. Mr Cameron has faced questions over his decision to bring Mr Coulson into the heart of government. Mr Coulson has already been arrested by the Met on suspicion of phone-hacking and bribing public officials.

The perjury charge, which carries a maximum prison sentence of seven years, is potentially the most serious facing the former Conservative Party spokesman.

One Downing Street source said the arrest came as a “complete surprise”.

Mr Coulson was a major witness in a trial involving Sheridan who was accused of lying in court during a libel victory against the NoW.

Coulson was editor when it published a story that labelled Sheridan an adulterer who visited swingers’ clubs. He was called as a witness and told the court that he had no knowledge of illegal activities by reporters.

Sheridan was jailed for three years last year after being found guilty of perjury during his 2006 defamation action against the NoW. He had successfully sued the newspaper over its claims.

Strathclyde police announced its probe into Mr Coulson last July but it was thought to be taking a back seat as five major Scotland Yard inquiries into the Murdoch media empire rumbled on.

However, the Standard can disclose that officers from Scotland recently visited London to interview several former NoW staff about their old boss.

Under Scottish law a suspect is detained on suspicion of an offence unlike in England and Wales where a suspect is arrested. Mr Coulson has not been charged.

Worth nearly £4m: David Cameron is one of 18 millionaires in the Cabinet

PA

THE combined wealth of the Cabinet is more than £70million, with Prime Minister David Cameron worth almost £4million, it was revealed yesterday.

The new Cabinet “rich list” shows more than two thirds of the Cabinet – 18 out of 29 ministers – are millionaires.

Many of them will directly benefit from George Osborne’s decision to slash the 50p top rate of tax to 45p in the Budget.

The PM’s property and salary make him worth at least £3.8million, according to a report by intelligence firm Wealth-X.

It estimates Mr Cameron has liquid assets of £190,000 from current and previous salaries, while his house in North Kensington is valued at £2.7million, and his Oxfordshire home at £960,000.

The report says his combined wealth with wife Samantha, the daughter of landowner Sir Reginald Sheffield, could rise to £25.3million with inheritances.

Chancellor Mr Osborne is said to be worth £4.5million thanks to property and his trust fund from the family wallpaper firm Osborne & Little.

The richest Cabinet member is said to be House of Lords leader Lord Strathcylde, who is worth an estimated £9.5million due to inheritance and his stake in the family’s estate management company.

Defence Secretary Philip Hammond is reported to have an £8.2million fortune from his stake in the nursing home company Castlemead.

Culture Secretary Jeremy Hunt is thought to be worth £4.8million from his Hotcourses business.

Foreign Secretary William Hague has made an estimated £4.8million from public speaking, consultancy and writing, the report says.

Environment Secretary Caroline Spelman is worth an estimated £4.5million.

The figures primarily reflect the value of properties owned by Mrs Spelman and her husband Mark, a senior partner at consulting firm Accenture.

Dominic Grieve, the Attorney General, has £2.9million from private investments “funded by salaries as barrister and QC,” the report says.

Other Cabinet millionaires include International Development Secretary Andrew Mitchell, thought to be worth £2.2million. The former investment banker owns a number of homes.

Minister Francis Maude has built up an estimated £3.2million pot from his former work as the managing director at Morgan Stanley and other directorships.

Deputy Prime Minister Nick Clegg is said to be worth £2million.

Home Secretary Theresa May’s £1.7million wealth is attributed to her owning two homes and her former career as a financial consultant.

Justice Secretary Ken Clarke is said to be worth £1.6million thanks to his political career and various directorships including a stint as deputy chairman of British American Tobacco. And Wealth-X says David Willetts’ wealth of £1.6million may have been boosted by artist wife Sarah Butterfield’s earnings.

The richest person in the Commons, according to the report, is Tory MP Zac Goldsmith, who inherited £284million from his financier father.

And the richest Lib Dem is said to be John Hemming, whose stake in the software company JHC is estimated at £10million.

Last week, the Mirror revealed multi-millionaires Michael Spencer and Sir Anthony Bamford had given thousands of pounds to the Conservatives within hours of Mr Osborne’s tax decision.

Labour MP Gareth Thomas, the Shadow Cabinet Office Minister, said last night: “No wonder David Cameron and George Osborne are so out of touch with just how tough the rest of the country is finding the rising cost of living.

“It also explains why the Cabinet thought the Budget’s tax-cut for millionaires was a good idea even as taxes went up for everyone else.”

A Downing Street spokesman said last night it was “complete nonsense” to suggest the Camerons could be worth £25million.

“They own two houses – in Witney and in London – and that’s it,” insisted the spokesman.

Bankia shares are suspended in Madrid

Trading in shares in the Spanish lender Bankia have been suspended in Madrid. The market regulator CNMV said it was "due to circumstances that may affect the normal share trading". Bankia is reported to be due to ask the government for a bailout of more than 15bn euros ($19bn; £12bn) after a board meeting later on Friday. Bankia, which is Spain's fourth-largest bank, was part-nationalised two weeks ago because of its problems with bad property debt. Any extra government money would be on top of the 4.5bn euros in state loans that the government had to convert into shares in the group in the part-nationalisation process. Shares in Bankia's parent company Banco Financiero y de Ahorros (BFA) have also been suspended. Bankia was created in 2010 from the merger of seven struggling regional savings banks. It holds 32bn euros in distressed property assets.

UK Jobseekers who reject help for alcohol and drug addiction face benefits cut

Unemployed people suspected of suffering from alcoholism or drug addiction will have their benefits cut if they refuse treatment for their condition, the work and pensions secretary, Iain Duncan Smith, will signal on Wednesday. In a sign of the government's new benefits regime, which lies at the heart of Duncan Smith's cost-cutting welfare changes, staff in Jobcentre Plus offices will be encouraged to cut the jobseeker's allowance of claimants who reject treatment for addiction. The new rules will come into place in October 2013 when the universal credit, which is designed to wrap benefits into one payment, is introduced. A new claimant contract lies at the heart of the universal credit reforms. Claimants will have to sign a contract in which they agree to look for work in exchange for an undertaking from the government to support them while they do so. Government sources said the contract would allow Jobcentre Plus staff to say that a suspected addict is in breach of their commitments if they refuse help for alcoholism or drug addiction. Duncan Smith will give a flavour of the new rules when he addresses an event in parliament organised by Alcoholics Anonymous (AA). He will say: "The outdated benefits system fails to get people off drugs and put their lives on track. We have started changing how addicts are supported, but we must go further to actively take on the devastation that drugs and alcohol can cause. "Under universal credit we want to do more to encourage and support claimants into rehabilitation for addiction and starting them on the road to recovery and eventually work. Getting people into work and encouraging independence is our ultimate goal. Universal credit will put people on a journey towards a sustainable recovery so they are better placed to look for work in future and we will be outlining our plans shortly." It is understood that the work and pensions secretary will not make a formal announcement on Wednesday of the powers that will be handed to Jobcentre Plus staff. Duncan Smith wants to use the event to focus on what he regards as the positive work AA does in helping to treat alcoholism. A government source said: "Iain wants to focus on the brilliant work Alcoholics Anonymous does in changing people's lives. He really wants to encourage people who have drink problems to go to AA for treatment. It will transform their lives and will help them into work." The source said Duncan Smith believes it is right to give jobcentre staff powers to cut benefits if an addict refuses treatment because they can detect signs of trouble. The source said: "The universal credit will allow staff in Jobcentre Plus offices to say: this person has been unemployed for some time. The staff know if people are addicted to alcohol. They know the people they are dealing with. "But we want this to be positive and to be about signposting people to superb organisations that can help them. This is about changing their lives. It is very important to support addicts into the workplace." But if claimants refuse they will have their benefits docked. "There will be sanctions," the source said, citing cuts to the jobseeker's allowance as an example. Ministers believe that one indicator Jobcentre Plus staff can use to see whether a claimant is an addict is the amount of times they apply for a crisis loan. "If you are applying for that up to 10 times a year then that is a sign of a chaotic life," one source said. Analysis by the Department of Work and Pensions shows that almost 40,000 people claim incapacity benefit with alcoholism declared as their "primary diagnosis". Of these, 13,500 have been claiming for a decade or more. There are about 160,000 "dependent drinkers" in England who receive one or more of the main benefits. There are 1m violent crimes a year that are related to alcoholism and 1.2m admissions to hospitals a year related to alcoholism. Universal credit is the most important element of Duncan Smith's welfare reforms, developed during his years in opposition through his Centre for Social Justice, which is designed to achieve his central goal of encouraging people into work. It will integrate tax credits and out-of-work benefits into one payment, with the aim of smoothing the transition to work. Labour has given the universal credit a cautious welcome, though it has taken issue with the scale of benefit cuts. Lord Low of Dalston, the vice-president of the Royal National Institute of Blind People who sits as a crossbencher, told peers this year: "Though it has some very sensible and progressive things at its core, in the shape of the universal credit, nevertheless it goes too far to most people's consciences in the way in which it takes vital support away from some of the most needy in our society."

Metropolitan police anti-corruption unit investigated over payments

Scotland Yard is investigating allegations that detectives working for its anti-corruption unit have been paid thousands of pounds by a firm of private investigators. A parliamentary inquiry was told today that invoices, also seen by the Guardian, purport to show how a firm of private investigators made payments in return for information about the Metropolitan police investigation into James Ibori, a notorious Nigerian fraudster. On Tuesday, the Commons home affairs select committee was told by a lawyer involved in the case that invoices showed about £20,000 of potential payments to police officers in what amounted to an undetected case of "apparent corruption right at the heart of Scotland Yard". In recent weeks, as the Guardian investigated the allegations, the Met has sought to discourage the paper from publishing details about the case. But , after MPs heard the evidence, the Met dropped its previous insistence that there was "evidence that casts doubt on the credibility" of the allegations. A police source with knowledge of the investigation, which has been ongoing since October, said developments over the last 24 hours had now led police to take the allegations more seriously. The case revolves around a private investigation firm called RISC Management. Five years ago the firm was hired to work for Ibori, a former Nigerian state governor, after he discovered he was being investigated by the Met for serious fraud. Ibori recently pleaded guilty to money laundering and was jailed in the UK, after the conclusion of a major investigation into his financial affairs. The allegation now being investigated by police is that some detectives on the Met's Proceeds of Corruption Unit, which investigated Ibori, were receiving payments in exchange for information about the ongoing investigation. Invoices and other documents appearing to support the allegations have been anonymously posted to the Met and Independent Police Complaints Commission (IPCC). The documents have also been seen by the Guardian and separately sent to the home affairs committee, which is conducting an inquiry in whether private investigators should be subject to statutory regulation. Keith Vaz, the chair of the committee, has said there is growing concern in the wake of the phone-hacking scandal that some private investigators are operating in "the shadows" of the law. The Commons inquiry has been scrutinising the nexus between private investigators - many of whom are retired police officers - and their former colleagues who are still serving. On Tuesday morning, Mike Schwarz, a lawyer who represents one of Ibori's co-accused, told the inquiry about what he understood to be the significance of the material. He said it indicated possible corruption at the heart of the police investigation into the Nigerian politician's money laundering activities. The invoices are alleged to be from RISC Management to Speechly Bircham, a top firm of lawyers hired by Ibori to prepare his defence. Schwarz told MPs the invoices "perhaps" documented "payments made by RISC Management to sources, presumably police officers or those close to the investigation". He added: "The records, which I think the committee have, show about half-a-dozen payments totalling about £20,000 over a period of eight or nine months [...] it appears to be inappropriate if not corrupt." Schwarz told the committee that he believed RISC Management had been hired to "extract" information from the police investigation into Ibori. He said he had also seen emails - which he believed had also been forwarded to the committee - which confirmed "contact" between detectives investigating Ibori and the private investigators. Schwarz, from Bindmans solicitors, represents Bhadresh Gohil, a London-based solicitor jailed along with Ibori for orchestrating his money laundering scam. Gohil is now considering an appeal. Gohil is understood to have been sent the invoices, anonymously, while in Wandsworth Prison last summer. In a statement, the Met said: "The [force] is investigating an allegation that illegal payments were made to police officers for information by a private investigation agency. The Directorate of Professional Standards (DPS) referred the matter to the Independent Police Complaints Commission in October 2011 which agreed to supervise a DPS investigation into the allegations." Following Schwarz's evidence to parliament, the Met said it had dropped its previous claim to have recently "uncovered evidence" casting doubt on the allegations. Previously, the force had suggested an active line of inquiry was the theory that Gohil or his associates had fabricated the allegations to undermine the prosecution. In a previous statement, provided on Friday, the force said: "As a result of inquiries police have uncovered evidence that casts doubt on the credibility of these allegations. Warrants have been executed at two addresses in London and a quantity of paperwork and computer equipment recovered." Two weeks ago, following raids on properties, one of which was the Gohil's family home in Kent, the force said: "Officers believe that they have identified the originator of the information and a line of enquiry suggests that there may have been an attempt to pervert the course of justice." However, sources at the Yard said previous statements no longer fully represented their position. A source with knowledge of the Met inquiry said the change of stance was unrelated to Schwarz's parliamentary evidence. The source said that, instead, there had been developments in the investigation over the last 24 hours. Schwarz named three serving Met police officers in his testimony to parliament as being potential "culprits": detective inspector Gary Walters, detective constables named as John MacDonald and "Clark". All three officers declined an opportunity to respond to the allegations when contacted by the Guardian last week. However, RISC Management indicated Walters would deny "any and all allegations". RISC Management denied all the allegations about the company, saying it was not aware of the Scotland Yard investigation and had no knowledge of the alleged financial records. The firm confirmed it had been hired by Ibori's lawyers but denied making corrupt payments, saying it "has never paid a serving police officer for information and would never approve such payments". Keith Hunter, chief executive of the company, said: "RISC management does not need to pay serving police officers for confidential information as we pride ourselves on our ability to provide positive solutions and accurate information legitimately. RISC Management has a highly respected reputation for conducting professional investigations". He added that his company was "proud to have a network of highly professional consultants, contacts and resources. These individuals are hired precisely because of their unique skill set and expertise". He accused Schwarz of "grandstanding" in front of the Commons committee, instead of taking the "correct course of reporting the matter to the police". He said Schwarz had not produced any evidence to support his claims and acted for a convicted solicitor, Gohil, who was jailed for seven years for money laundering. Speechly Bircham denied any knowledge of wrongdoing and said it would be willing to assist with any police inquiries. The law firm stressed Schwarz did not suggest in his evidence to parliament that Speechly Bircham was "party to illegal or corrupt payments" and said any such allegation would be false and defamatory. Ian Timlin, the former Speechly Bircham lawyer who was at the time representing Ibori, said neither he nor the firm had "any knowledge of any payments to police officers for information." He added: "At no time, did RISC ever inform me who or what was the source/s they were paying."

Three killed in northern Italy earthquake

Three people have been killed in a 5.9-magnitude earthquake that struck northern Italy near Bologna, according to reports. The quake that struck at just after 4am local time was centred 21.75 miles north-northwest of Bologna at a relatively shallow depth of six miles, the US Geological Survey said. Italian news agency Ansa, citing emergency services, said two people were killed in Sant'Agostino di Ferrara when a ceramics factory collapsed. Another person was killed in Ponte Rodoni do Bondeno. In late January, A 5.4-magnitude quake shook northern Italy. Some office buildings in Milan were evacuated as a precaution and there were scattered reports of falling masonry and cracks in buildings. The tremor was one of the strongest to shake the region, seismologists said. Initial television footage indicated that older buildings had suffered damage. Roofs collapsed, church towers showed cracks and the bricks of some stone walls tumbled into the street during the quake. As dawn broke over the region, residents milled about the streets inspecting the damage. Italy's Sky TG24 showed images of the collapsed ceramics factory in Sant'Agostino di Ferrara where the two workers were reportedly killed. The structure, which appeared to be a hangar of sorts, had twisted metal supports jutting out at odd angles amid the mangled collapsed roof. The quake “was a strong one, and it lasted quite a long time”, said Emilio Bianco, receptionist at Modena's Canalgrande hotel, housed in an ornate 18th century palazzo. The hotel suffered no damage and Modena itself was spared, but guests spilled into the streets as soon as the quake hit, he said. Many people were still awake in the town since it was a “white night”, with shops and restaurants open all night. Museums were supposed to have remained open as well but closed following the bombing of a school in southern Italy that killed one person. The quake epicentre was between the towns of Finale Emilia, San Felice sul Panaro and Sermide, but was felt as far away as Tuscany and northern Alto Adige. The initial quake was followed about an hour later by a 5.1-magnitude aftershock, USGS said. And it was preceded by a 4.1-magnitude tremor. In late January, a 5.4-magnitude quake shook northern Italy. Some office buildings in Milan were evacuated as a precaution and there were scattered reports of falling masonry and cracks in buildings. In 2009, a devastating tremor killed more than 300 people in the central city of L'Aquila.

‘Save euro’ plea to Germans as Spain slumps

BRITAIN yesterday piled pressure on German Chancellor Angela Merkel to save the euro. 6 comments Related Stories PM: Make or break for euro HE to issue plea to Merkel to fork out as only way to stave off meltdown New French Pres gets a soakingFrench warning for CameronSarky poll malarky will leave PM narky David Cameron and Chancellor George Osborne said she must use her financial clout to stop the single currency collapsing. The PM hammered the message home in emergency talks via video-link with Mrs Merkel and French president Francois Hollande. It came as the chaos in Greece spread to Spain — with fears of a run on banks in both countries. Greeks have taken £560million from local banks in the past week. And yesterday Spain’s Bankia bank was forced to deny reports customers had taken £800million out of its coffers in the past seven days. Last night the fears hit Santander UK as credit rating agency Moody’s downgraded the bank along with its Spanish owner and 15 other Spanish banks. And credit agency Fitch downgraded Greece on fears it will be booted out of the Eurozone. Earlier, Mr Osborne said the Treasury had drawn up emergency plans to cope with Greece quitting the euro. He told MPs: “Britain will be prepared for whatever comes.” Mr Cameron had warned countries such as Greece and Spain can only survive if richer countries did more to “share the burden of adjustment”. He also backed Eurobonds to raise billions to prop up crisis-hit countries — a proposal that would have to be bankrolled by Berlin. After the video chat, a Downing Street spokesman said the PM urged the eurozone to take “decisive action to ensure financial stability and prevent contagion”.

Spain’s banking crisis reached Britain’s high streets last night when the credit rating of Santander UK was cut.

In a sweeping reassessment, ratings agency Moody’s announced in Madrid that it is downgrading 16 Spanish banks because it could not be sure of the ability of the country’s government to provide the necessary support.

Santander UK was among the banks highlighted after the ratings agency took aim at its parent Banco Santander, based in Spain. 

The Spanish banking crisis has hit the British high street, with the news that Santander has had its credit rating cut

Santander is one of the biggest players in UK retail banking, having taken over the former Abbey National, Alliance & Leicester, Bradford & Bingley and most recently the English branches of the Royal Bank of Scotland.

The new lower A2 credit rating is certain to be a cause of anxiety to Santander UK’s millions of British customers. 

Nevertheless, they can be confident that their deposits up to £85,000 are guaranteed by the British government should there be a loss of confidence.

'Queen of Disco' Donna Summer 'thought she became ill after inhaling 9/11 particles'

The 63-year-old singer, who had hits including Hot Stuff, Love to Love You, Baby and I Feel Love, died in Florida on Thursday morning. She had largely kept her battle with lung cancer out of the public eye. But the website TMZ reported that the singer had told friends she believed her illness was the result of inhaling toxic dust from the collapsed Twin Towers. On Thursday night tributes were paid to the singer, considered by many to be the voice of the 1970s. A statement released on behalf of her family — husband Bruce Sudano, their daughters Brooklyn and Amanda, her daughter, Mimi from a previous marriage and four grandchildren — read: “Early this morning, surrounded by family, we lost Donna Summer Sudano, a woman of many gifts, the greatest being her faith. "While we grieve her passing, we are at peace celebrating her extraordinary life and her continued legacy.

Investigators are questioning Mexico's former deputy defence minister and a top army general for suspected links to organised crime

Grafitti saying 'Z 100%', referring to the Los Zetas cartel, near to where 49 mutilated bodies were found in Northern Mexico. Photograph: Miguel Sierra/EPA

Investigators are questioning Mexico's former deputy defence minister and a top army general for suspected links to organised crime, in the highest level scandal to hit the military in the five-year-old drug war.

Mexican soldiers on Tuesday detained retired general Tomás Angeles Dauahare and general Roberto Dawe González and turned them over to the country's organised crime unit, military and government officials said.

Angeles Dauahare was number 2 in the armed forces under President Felipe Calderón and helped lead the government's crackdown on drug cartels after soldiers were deployed to the streets in late 2006. He retired in 2008.

Dawe González, still an active duty general, led an elite army unit in the western state of Colima and local media said he previously held posts in the violent states of Sinaloa and Chihuahua.

An official at the attorney general's office said they would be held for several days to give testimony and then could be called in front of a judge.

"The generals are answering questions because they are allegedly tied to organised crime," the official said.

Angeles Dauahare said through a lawyer that his detention was unjustified, daily Reforma newspaper reported.

If the generals were convicted of drug trafficking, it would mark the most serious case of military corruption during Calderón's administration.

"Traditionally the armed forces had a side role in the anti-drug fight, eradicating drug crops or stopping drug shipments," said Alejandro Hope, a security analyst who formerly worked in the government intelligence agency.

"After 2006, they were more directly involved in public security, putting them at a higher risk of contact [with drug gangs]," he said.

About 55,000 people have been killed in drug violence over the past five years as rival cartels fight each other and government forces.

Worsening drug-related attacks in major cities are eroding support for Calderón's conservative National Action Party, or PAN, ahead of a 1 July presidential vote.

Over the weekend, police found 49 headless bodies on a highway in northern Mexico, the latest in a recent series of brutal massacres where mutilated corpses have been hung from bridges or shoved in iceboxes.

Opinion polls show Calderón's party is trailing by double digits behind opposition candidate Enrique Peña Nieto from the Institutional Revolutionary Party, or PRI, which says the government's drug strategy is failing.

Traditionally, the military has been seen as less susceptible to cartel bribes and intimidation than badly paid local and state police forces, who are often easily swayed by drug gang pay offs.

But there have been cases of military corruption in the past. Angeles Dauahare himself oversaw the landmark trial of two generals convicted of working with drug gangs in 2002.

Those two generals were convicted of links to the Juárez cartel once headed by the late Amado Carrillo Fuentes, who was known as the Lord of the Skies for flying plane load of cocaine into the United States.

Since then, the Sinaloa cartel - headed by Mexico's most wanted man Joaquín "Shorty" Guzmán - has expanded its power and is locked in a bloody battle over smuggling routes with the Zetas gang, founded by deserters from the Mexican army.

JPMorgan's Trading Loss Is Said to Rise at Least 50%

The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank’s initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses. When Jamie Dimon, JPMorgan’s chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan’s distress, fueling faster deterioration in the underlying credit market positions held by the bank. A spokeswoman for the bank declined to comment, although Mr. Dimon has said the total paper trading losses will be volatile depending on day-to-day market fluctuations. The Federal Reserve is examining the scope of the growing losses and the original bet, along with whether JPMorgan’s chief investment office took risks that were inappropriate for a federally insured depository institution, according to several people with knowledge of the examination. They spoke on the condition of anonymity because the investigation is still under way. The overall health of the bank remains strong, even with the additional losses, and JPMorgan has been able to increase its stock dividend faster than its rivals because of stronger earnings and a more solid capital buffer. Still, the huge trading losses rocked Wall Street and reignited the debate over how tightly giant financial institutions should be regulated. Bank analysts say that while the bank’s stability is not threatened, if the losses continue to mount, the outlook for the bank’s dividend will grow uncertain. The bank’s leadership has discussed the impact of the losses on future earnings, although a dividend cut remains highly unlikely for now. In March, the company raised the quarterly dividend by 5 cents, to 30 cents, which will cost the bank about $190 million more this quarter. A spokeswoman for the bank said a dividend cut has not been discussed internally. At the bank’s annual meeting in Tampa, Fla., on Tuesday, Mr. Dimon did not definitively rule out cutting the dividend, although he said that he “hoped” it would not be cut. John Lackey, a shareholder from Richmond, Va., who attended the meeting precisely to ask about the dividend, was not reassured. “That wasn’t a very clear answer,” he said of Mr. Dimon’s response. “I expect that shareholders are going to suffer because of this.” Analysts expect the bank to earn $4 billion in the second quarter, factoring in the original estimated loss of $2 billion. Even if the additional trading losses were to double, the bank could still earn a profit of $2 billion. And many analysts and investors remain optimistic about the bank’s long-term prospects. Glenn Schorr, a widely followed analyst with Nomura, reiterated on Wednesday his buy rating on JPMorgan shares, which are down more than 10 percent since the trading loss became public last week. What’s more, the chief investment office earned more than $5 billion in the last three years, which leaves it ahead over all, even given the added red ink. But the underlying problem is that while these sharp swings are expected at a big hedge fund, they should not be occurring at a bank whose deposits are government-backed and which has access to ultralow cost capital from the Federal Reserve, experts said. “JPMorgan Chase has a big hedge fund inside a commercial bank,” said Mark Williams, a professor of finance at Boston University, who also served as a Federal Reserve bank examiner. “They should be taking in deposits and making loans, not taking large speculative bets.” Not long after Mr. Dimon’s announcement of a dividend increase in March, the notorious bet by JPMorgan’s chief investment office began to fall apart. Traders at the unit’s London desk and elsewhere are now frantically trying to defuse the huge bet that was built up over years, but started generating erratic returns in late March. After a brief pause, the losses began to mount again in late April, prompting Mr. Dimon’s announcement on May 10. Beginning on Friday, the same trends that had been causing the losses for six weeks accelerated, since traders on the opposite side of the bet knew the bank was under pressure to unwind the losing trade and could not double down in any way. Another issue is that the trader who executed the complex wager, Bruno Iksil, is no longer on the trading desk. Nicknamed the London Whale, Mr. Iksil had a firm grasp on the trade — knowledge that is hard to replace, even though his anticipated departure is seen as sign of the bank’s taking responsibility for the debacle. “They were caught short,” said one experienced credit trader who spoke on the condition of anonymity because the situation is still fluid. The market player, who does not stand to gain from JPMorgan’s losses and is not involved in the trade, added, “this is a very hard trade to get out of because it’s so big.” He estimated that the initial loss of just over $2 billion was caused by a move of a quarter percentage point, or 25 basis points, on a portfolio with a notional value of $150 billion to $200 billion — in other words, the total value of the contracts traded, not JPMorgan’s exposure. In the four trading days since Mr. Dimon’s disclosure, the market has moved at least 15 to 20 basis points more against JPMorgan, he said. The overall losses are not directly proportional to the move in basis points because of the complexity of the trade. Many of the positions are highly illiquid, making them difficult to value for regulators and the bank itself. In its simplest form, traders said, the complex position assembled by the bank included a bullish bet on an index of investment-grade corporate debt, later paired with a bearish bet on high-yield securities, achieved by selling insurance contracts known as credit-default swaps. A big move in the interest rate spread between the investment grade securities and risk-free government bonds in recent months hurt the first part of the bet, and was not offset by equally large moves in the price of the insurance on the high yield bonds. As the credit yield curve steepened, the losses piled up on the corporate grade index, overwhelming gains elsewhere on the trades. Making matters worse, there was a mismatch between the expiration of different instruments within the trade, increasing losses. The additional losses represent a worsening of what is already the most embarrassing misstep for JPMorgan since Mr. Dimon became chief executive in 2005. No one has blamed Mr. Dimon for the trade, which was under the oversight of the head of the chief investment office, Ina Drew, but he has repeatedly apologized, calling it “stupid” and “sloppy.” Ms. Drew resigned Monday and more departures are anticipated.

Rebbeca Brooks learned this morning that she will be taken to court over accusations of perverting the course of justice in relation to the phone hacking scandal.

The former editor of the News of the World and the Sun is to be charged with five others, including her husband Charlie Brooks.

Alison Levitt QC, principal legal adviser to the Director of Public Prosecutions, announced the decision at 10am, days after Mrs Brooks appeared at the Leveson inquiry into press ethics.

Mr and Mrs Brooks said: "We deplore this weak and unjust decision. After the further unprecedented posturing of the CPS we will respond later today after our return from the police station."

^{Rebekah Brooks arriving at the Leveson Inquiry}

Rebekah Brooks turns screw on Jeremy Hunt with 'hacking advice' email

Jeremy Hunt, came under renewed pressure when the former News International chief executive Rebekah Brooks disclosed an email appearing to show he had sought the company's advice over how Downing Street should respond to the mounting phone-hacking scandal. The email, which also suggests Hunt sought to avoid a public inquiry into phone hacking, emerged on another day of extraordinary disclosures about the intimacy between Rupert Murdoch's company and government ministers. The email from News Corporation lobbyist Frédéric Michel written in June 2011 told Brooks that Hunt was poised to make an "extremely helpful" statement about the company's proposed acquisition of BSkyB, saying the takeover would be approved regardless of phone-hacking allegations. Michel also warned her, days before the Guardian revealed that murdered teenager Milly Dowler's voicemail had been targeted by the News of the World, that "JH [Jeremy Hunt] is now starting to looking into phone-hacking/practices more thoroughly" and that he "has asked me to advise him privately in the coming weeks and guide his and No 10's positioning". During five hours of testimony, Brooks revealed she dined with George Osborne on 13 December 2010, when she discussed Ofcom's initial objections to News Corp's £8bn bid. The objections had been sent in a confidential "issues letter" by the media regulator to her company three days before. Following a short discussion, the then News International boss reported to James Murdoch the next day that Osborne had expressed "total bafflement". In a steely and at times tetchy performance, Brooks said her lobbying of the chancellor had been "entirely appropriate" because she was "reflecting the opposite view to the view he had heard by that stage from pretty much every member of the anti-Sky bid alliance". But Robert Jay QC, counsel to the inquiry, said that the email demonstrated that it was "obvious that he was supportive of your bid, wasn't he", a suggestion Brooks rejected. The disclosures about her conversations with the chancellor will increase the likelihood that he is called to appear before the inquiry. He is the only one of eight ministers who have submitted statements to Leveson not to have been asked to appear. Though less damaging than some in Downing Street had feared, Brooks' testimony also proved embarrassing for David Cameron. She revealed the prime minister signed texts "DC" or sometimes "LOL" – until she explained that the phrase meant "laugh out loud", not "lots of love". She said she typically texted Cameron once a week, and twice a week during the 2010 election campaign, dismissing as preposterous reports that he sometimes texted her up to 12 times per day. Brooks said any email correspondence between her and politicians was now held by News International. She had only copies of emails and texts that were on her BlackBerry during a six-week period in June and July 2011, but a single message from Cameron had been "compressed" and could not now be read. Brooks confirmed that she had socialised with Cameron at least twice within four days in Oxfordshire during Christmas 2010, the culmination of a year in which they had already met at least five times. The first contact of the festive season was at a dinner at her house on 23 December, when there was a conversation about the BSkyB bid. The second was a previously undisclosed "mulled wine, mince pie" party organised by her sister-in-law on Boxing Day 2010, an event at which she was unsure if she had spoken to Cameron or his wife, Samantha, although "my sister-in-law tells me they were definitely there". Although Brooks has been arrested in connection with phone hacking and bribery investigations, and on suspicion of perverting the course of justice, the inquiry also heard that she had discussed the growing hacking allegations with Cameron at some point during 2010. She said the prime minister – who at that point was still employing former News of the World editor Andy Coulson – had asked her for an update. "I think it had been on the news that day, and I think I explained the story behind the news. No secret information, no privileged information, just a general update," Brooks said. The disclosure will add to the pressure on Cameron to explain why he failed to challenge Coulson about the hacking allegations against him at any time after the Guardian broke the story in July 2009. However, the most serious evidence to emerge regarded Hunt, whose fate has been hanging in the balance since Rupert Murdoch provided 163 pages of News Corp emails to the Leveson inquiry, which suggested that Michel had obtained a large amount of information about the progress of ministerial approval of the BSkyB bid. Finding a fresh email from Michel that had eluded Murdoch's legal team last month, Brooks showed that she had been told that Hunt would essentially approve the long-delayed takeover because he believed "phone hacking has nothing to do with the media plurality issues" that were increasingly concerning rivals. Michel told Brooks that the sought-after approval would happen later in the last week of June 2011.

Rebekah Brooks refused to name source of Brown son story

Rebekah Brooks has denied that The Sun hacked the medical records of Gordon Brown's four-year-old son - and refused to disclose the source of the information to the Leveson Inquiry She also insisted that the paper had permission from the former Prime Minister and his wife before publishing an article about the child's medical condition. Brooks said that she and Gordon's Brown wife Sarah "were good In a written response to the Inquiry's questions submitted in October last year Brooks set out a detailed description of safeguards put in place to check stories. The former tabloid editor and News International chief executive also denied commissioning any computer hacking or feeling any "negative pressure" from proprietor Rupert Murdoch. Much of the 12-page statement consists of explanations of the processes used to check accuracy and sources, train staff and decide whether to run a particular story. Despite those efforts, there were "failures from time to time" - significantly so at the News of the World, Mrs Brooks conceded. "I was horrified when I learned of them and I was and am deeply sorry about the further anguish that was caused to Milly Dowler's parents in particular," she wrote. Corporate governance was taken "seriously" within the newspaper group though, she added. Mrs Brooks also told the inquiry: :: She was not aware of any use of computer hacking: "I have been specifically asked by the Inquiry whether I or the newspapers where I worked ever used or commissioned anyone who used 'computer hacking' in order to source stories or for any other reason. I did not and I was not aware of anyone at either the News of the World or The Sun who did." :: There was a crackdown on the use of private investigators following highly critical reports by the Information Commissioner's Office and the Commons media and sport select committee. "I believe their use is now virtually non-existent," she wrote - noting there were exceptions such as using them to track down convicted paedophiles who had broken their bail conditions. :: The use of cash payments had been "considerably tightened up". :: It would be "highly unusual and not practical" for an editor to check the accuracy and sources of stories going into their paper other than the biggest or most controversial. :: There were "numerous examples" of times when she resisted publishing a story because the invasion of privacy outweighed any public interest or because it was more important to alert the police to criminal activities than to secure an exclusive. "It is quite wrong to believe that the press simply publishes what it can get away with, irrespective of the ethical requirements," she insisted. :: The industry felt privacy laws had "slowly crept in through the back door", stymieing legitimate journalism but failing to regulate inaccurate internet gossip. :: In her decade as a national newspaper editor she "never experienced or felt any negative pressure either financial or commercial from the proprietor. In fact the opposite is true. There was always constant advice, experienced guidance and support available." There was no financial motive to print exclusive stories. "Professional pride was the biggest incentive."

David Cameron sent commiserations to Rebekah Brooks after she resigned as News International chief executive over the phone hacking scandal

David Cameron sent commiserations to Rebekah Brooks after she resigned as News International chief executive over the phone hacking scandal, the Leveson Inquiry has heard. Ms Brooks said the indirect messages from the Prime Minister were "along the lines" of "keep your head up" and had also expressed regret that he could not be more loyal in public. She also received sympathetic messages from other senior figures in 10 and 11 Downing Street, the Home Office, the Foreign Office and some Labour politicians, including Tony Blair. The glimpse of Ms Brooks's network of high-powered friends and contacts came as she took to the witness box, despite being under investigation by police. Ms Brooks said she only had access to around six weeks of texts and emails from her time as NI chief executive, from the beginning of June to July 17 last year. Only one of those emails was relevant to the inquiry, according to her evidence. One of the text messages had been from Mr Cameron, but the content was compressed and unreadable, she said. Robert Jay QC, counsel for the inquiry, asked Ms Brooks about reports that she had received sympathetic messages after her resignation last July. "I had some indirect messages from some politicians but nothing direct," she replied. "A variety - some Tories, a couple of Labour politicians. Very few Labour politicians. I received some indirect messages from Number 10, Number 11, the Home Office, the Foreign Office..." She said Tony Blair had been among them but Gordon Brown had not. "He was probably getting the bunting out," she added, provoking laughter in the courtroom. Questioned on whether reports were correct that Mr Cameron's message had urged her to "keep your head up", Ms Brooks responded: "Along those lines." Pressed on whether the premier had also conveyed regret that political circumstances meant he could not be more "loyal", Ms Brooks replied: "Similar, but very indirect."

Rebekah Brooks to lift lid on David Cameron friendship

Former Sun and News of the World editor Rebekah Brooks is expected to lift the lid on her close relationship with the Prime Minister in evidence to the Leveson Inquiry. David Cameron is said to have texted Mrs Brooks, telling her to "keep her head up" after she resigned from News International last July. It has also been claimed that the 43-year-old former editor sent Mr Cameron more than 12 text messages a day. After her editorships Mrs Brooks went on to become chief executive of Rupert Murdoch's UK newspapers division News International in September 2009 until she resigned in the wake of the hacking scandal last July. She and racehorse trainer husband Charlie are key members of the influential Chipping Norton set, which also includes Mr Cameron and his wife Samantha, Top Gear presenter Jeremy Clarkson, and Mr Murdoch's daughter Elisabeth and her PR guru husband Matthew Freud. The inquiry has already heard that Mrs Brooks regularly met Mr Cameron and other top politicians along with Rupert and James Murdoch. She hosted a Christmas dinner on December 23 2010, just two days after Business Secretary Vince Cable was stripped of his responsibility for media takeovers for saying he had "declared war" on the Murdochs' News Corporation empire. Mrs Brooks's wedding on June 13 2009 was attended by Mr Cameron and former prime minister Gordon Brown, and in March Mr Cameron was forced to admit that he rode a retired police horse loaned to Mrs Brooks by Scotland Yard from 2008 to 2010. An updated biography of Cameron: Practically A Conservative, claims he told Mrs Brooks she would get through her difficulties just days before she stood down over the phone hacking scandal. There has speculation that the Leveson Inquiry could release emails and text messages sent between Mr Cameron and the former News International chief executive. According to Daily Telegraph columnist Peter Oborne, Mrs Brooks has kept all the texts she received from the Prime Minister. Mrs Brooks has twice been arrested by Scotland Yard detectives investigating allegations of phone hacking, corrupt payments to public officials, and an attempt to pervert the course of justice. She was bailed and has not been charged. She will not be questioned about anything that could prejudice the continuing police investigation into phone hacking or any potential future trials. Mr Cameron set up the Leveson Inquiry last July in response to revelations that the now-defunct News of the World hacked murdered schoolgirl Milly Dowler's phone after she disappeared in 2002. The first part of the inquiry, sitting at the Royal Courts of Justice in London, is looking at the culture, practices and ethics of the Press in general and is due to produce a report by October.

Sam Ibrahim headed to jail

Former Sydney bikie boss Sam Ibrahim has been sent back to jail for allegedly breaching his parole. The 46-year-old was arrested yesterday at his home in Sydney's north-west at Bella Vista by a police strike force targeting the city's bikie gun war. The New South Wales Parole Authority revoked parole for the former Nomads boss after receiving a report from parole officers alleging he had been taking prohibited drugs and failing to obey directions. The arrest followed a police raid of his house last Friday, which was part of an operation targeting 18 homes and businesses linked to feuding Hells Angels and Nomads bikies. The house had been sprayed with bullets only a week earlier, in one of nine tit-for-tat shootings between the gangs in just over a week. Ibrahim is being held at Silverwater jail, ahead of a public hearing by the NSW Parole Board later this month. The board will decide whether to keep the former Nomads boss in prison until his sentence expires on October 7, or whether to extend his jail time. Ibrahim spent five months in jail as part of the 15-month sentence over the violent kidnapping of a 15-year-old boy in 2009. His arrest was part of a crackdown by the Gangs Squad's Strike Force Kinnara, which was set up to combat an escalation in bikie gun crime. The strike force also arrested convicted Sydney drug boss Bill Bayeh a fortnight ago for an alleged breach of parole.

Rupert Murdoch was branded “not a fit person” to run a major company

 Rupert Murdoch was branded “not a fit person” to run a major company in a bombshell report by MPs today. His son and business heir James was accused of “wilful ignorance” towards phone hacking, while Murdoch executives were accused of lying to cover it up. The verdicts leave the 81-year-old tycoon fighting to justify his leadership of a worldwide empire including the broadcaster BSkyB. He faces being dragged before Parliament to apologise. The force of the report was partly diminished by a row between members of the culture select committee. Four Conservatives voted against the final draft because they felt the attack on Rupert Murdoch’s fitness  to run a company was over the top. However, the final 100-page report backed by the Labour and Lib-Dem MPs on the committee amounted to one of the most scathing parliamentary verdicts on an international business. The MPs said Rebekah Brooks, former News of the World editor and chief executive of News International, “should accept responsibility” for the culture that led to Milly Dowler’s phone being hacked, along with hundreds of others. The report also found editors, lawyers, the police and prosecutors guilty of a catalogue of failings. Several former Murdoch lieutenants were singled out for misleading Parliament, including former News International executive chairman Les Hinton, former News Group  lawyer Tom Crone, and former News of the World editor Colin Myler. It criticised the Director of Public Prosecutions, Keir Starmer, and the former Metropolitan Police acting deputy commissioner John Yates, saying “they both bear culpability for failing to ensure that the evidence ... was properly investigated.” Rupert Murdoch was accused of “wilful blindness” about the mounting evidence of phone hacking. The verdict will add muscle to shareholders seeking to topple Mr Murdoch and to critics demanding that media regulator Ofcom strip him of his broadcasting licence. The report accused the Murdoch companies of trying to “buy the silence” of victims by awarding huge payouts to victims of hacking such as football players’ union boss Gordon Taylor. Verdicts on some figures who have been arrested by the police were held back in case they hampered fair trials. Among these was Andy Coulson, the former News of the World editor who was hired by David Cameron as his spin chief at No 10. The ferocious conclusion, which divided the committee in a series of votes on the final wording, was that Mr Murdoch was ultimately to blame and therefore not fit to hold his position. It said: “On the basis of the facts and evidence before the committee we conclude that, if at all relevant times Rupert Murdoch did not take steps to become fully informed about phone-hacking, he turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications. “This culture, we consider, permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International. We conclude, therefore that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company.” The committee branded it “simply astonishing” that Rupert and James said it was not until December 2010 that they realised that News International’s claim that hacking involved a single “rogue reporter” was untrue. It poured scorn on James Murdoch’s “lack of curiosity” that raised “questions of competence”. Mr Hinton was “complicit in the cover-up at News International” that included paying inflated compensation to victims. Mr Crone and Mr Myler misled the committee by answering questions “falsely”. The final devastating verdict on Mr Murdoch was a triumph for Labour MP Tom Watson who drafted the conclusions. But the 11-member committee divided along party lines, with the full denunciation being passed by the vote of a single Liberal Democrat member. Mr Watson said of Rupert Murdoch: “More than any individual alive, he is to blame. Morally, the deeds are his. He paid the piper and he called the tune.” Conservative MPs Louise Mensch and Philip Davies insisted the MPs had no right to make such a ruling and hit out at “partisan” voting by Labour members led by Mr Watson and Paul Farrelly. Mrs Mensch said Tory members could not back the declaration, describing it as “wildly outside the scope” of the committee and “improper attempt to influence” watchdog Ofcom.” Mr Davies said Mr Murdoch was “very clearly” a fit and proper person to run a major firm, pointing to the jobs he had created. He added: “Many people may conclude that some people’s conclusions were written before any of the evidence was heard, and that is very sad.” Mr Watson said he was disappointed there had been splits, but insisted Mr Murdoch must be held to account for crimes at News Corporation. Committee chair John Whittingdale said he did not vote on any of the amendments in the report, but hinted at his opinion on whether it should have branded Mr Murdoch unfit, saying: “I would merely observe that as well as being the chairman of the committee, I am a Conservative MP.” Lib-Dem member Adrian Sanders who was effectively left with the casting vote, sided with the Labour view. He said he would have faced accusations of party bias whichever way he had decided. After the report was published Mr Watson said he had “reason to believe” that even more the material in the form of hard drives was in the hands of the Serious Organised Crime Agency. He sought to extend the probe into new areas — including claims News Corp could be in contempt of Parliament over claims they sought to use private investigators to dig dirt on committee members. He also said politicians — including Tony Blair and Gordon Brown as well as David Cameron and George Osborne — should reveal their email and text message contacts with News Corp executives.