Murdoch company in pay-TV piracy scandal 'paid Surrey Police'

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The News Corp subsidiary at the heart of claims it used computer hackers to crack rivals' technology made a £2,000 payment to a British police force for "assistance given to us in our work", The Independent can reveal.

NDS, a London-based specialist in satellite television encryption technology, said yesterday that a payment made to Surrey Police in the summer of 2000 was a “charitable donation” for which it had received a written acknowledgement.

But a cache of 14,000 internal emails belonging to the London-based company shows that its deputy head of security, Len Withall, asked for a cheque to be drawn for £2,000 as payment for “some work” he had been doing with the force over the previous six months.

Mr Withall, who was a former detective chief inspector with Surrey Police before joining NDS in the early 1990s, asked for the payment to be made from a special budget “set aside to Police/Informants for assistance given to us in our work”.

Surrey Police, which was rocked last year by revelations linked to the News of the World’s hacking of murdered schoolgirl Milly Dowler’s mobile phone, said it could not find a record of the payment on its accounting records but was conducting further investigations.

Payments to police by private companies are not illegal and are made frequently for events such as the policing of a football match.

But the revelation that a corner of Rupert Murdoch’s media empire was seeking to pay a British police force for unspecified work will fuel the controversy surrounding allegations that NDS supplied the encryption codes of rival companies to hackers in several countries, including Britain, who then created pirated “smart cards” for sale on the black market.

NDS, which is being sold to computing giant Cisco for a $5bn in a deal which is expected to net News Corp $1bn, has issued a comprehensive statement strongly denying that it promoted piracy or provided any codes to hackers, saying it was in contact with them only to gather intelligence on their activities and assist law enforcement bodies. It has successfully defended four claims from rivals complaining their business was damaged by its activities.

The NDS email cache, published yesterday in Australia by the Australian Financial Review, suggests that the company was also prepared to pay police in return for their assistance. The payment was first identified by the BBC’s Panorama but it was not included in this week’s programme outlining allegations about the activities of NDS in Britain after Surrey Police failed to confirm it.

In a message written at 9.27am on 9 June 2000 with the subject title “Cheque for Police”, Mr Withall outlined the reasons for the payment, mentioning that it would need to be authorised by his superior, Ray Adams, a former commander in the Metropolitan Police and its one-time head of criminal intelligence.

Mr Withall wrote: “Over the last six months, I have been doing some work with the Surrey Police. In our budget under code 880110 there is an amount set aside for payment to Police/Informants for assistance given to us in our work. With Ray’s authority, could you please make out a cheque in the sum of £2,000 payable to the Surrey Police and forward it to my office.”

The Australian Financial Review, which yesterday produced a fresh barrage of allegations about the business activities of NDS in Australia, said it had received a demand from London law firm Allen & Overy on behalf of the company asking for the email cache to be removed because it contained confidential details about NDS staff.

When The Independent yesterday approached NDS asking about the nature of a payment made to Surrey Police, the company said in a statement: “This was a one-off charitable donation of £2000 to Surrey police in August 2000. NDS’ support and donation was acknowledged with a thank you from Surrey Police.”

After being provided with details of Mr Withall’s email, the company said: “Thank you for pointing out the copy of the email from the 9th June 2000 that highlighted a request made by the appropriate channels to our finance department. The payment was a charitable donation and we have a letter of thanks from Surrey Police to confirm that.”

Mr Withall did not respond to a request last night to comment on his email.

In a statement Surrey Police said: “Surrey Police has been made aware of an apparent payment of £2,000 made by NDS to the Force in August 2000. We are currently making further enquiries regarding this matter.”

Under so-called “private hire” rules, police forces can be requested to provide officers for duties such as the policing of large public events such as sports matches or music festivals. Such arrangements are governed by strict rules of transparency and it would be unusual for a company to have to pay officers carrying out law enforcement work.

The requested payment to Surrey Police by NDS, whose global headquarters is located in Staines, a part of west London which falls under the responsibility of the Surrey force, is part of a pattern of links between the company and law enforcement bodies around the world which have proved a valuable recruiting ground for the News Corp subsidiary.

As well as recruiting former British police officers, the company has employed former members of the Israeli security services, including the former deputy head of the Shin Bet domestic security service, and an American Army intelligence officer.

In separate development, the Australian Federal Police also revealed yesterday that it was assisting Scotland Yard with its inquries following a referral “in relation to News Corp” received at the height of the News of the World phone hacking scandal last summer.