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Since 2008 – Progress Through Politics

FOTHOM XLII: Boom! With one Data Dump the Hackgate Scandal goes Global ACTION DIARY

Tom Watson, the MP who led the charge against Murdoch’s UK empire, is asking for help

On the eve of Lowell Bergman’s excellent PBS documentary (tonight 10 PM PBS) on the original Hackgate allegations that closed News of the World, we have a data dump which actually takes the hacking allegations to a whole new level: to a global News Corp security group which appears to have been behind pay-TV hacking across the world.

Last Night’s BBC1 Panorama Documentary

Through a series of reconstructions, hidden surveillance cameras and interviews with the key players, Panorama alleges that the piracy which crippled ITV Digital was a deliberate attack by the News Corp. subsidiary NDS, which produces about 75 per cent of the encryption software that protects access to pay-tv.  The programme centres on an exclusive interview with Lee Gibling, the man behind The House of Ill Compute website which was, until it was closed down in 2001, the main source of codes and software for manufacturing pirate access cards.

Gibling claims he was approached by Ray Adams, head of NDS security, when he was caught hacking BSkyB cards. Rather than threatening prosecution, Gibling alleges that Adams offered him employment instead, and paid him over $100,000 a year to expand the site and distribute software and codes that could breach the encryption of BSkyB’s rivals. Adams vehemently denies these allegations, and maintains he hired Gibling to provide anti-piracy advice.

Panorama interviewed another computer hacker, Oliver Koemmerling, who was recruited by Adams to work at NDS’ security facility in Israel where managed to crack the rival encryption software devised by Canal Plus, which was at the heart of ITV Digital’s anti piracy protection. The time codes of the code that soon appeared on The House of Ill Compute website suggest that Koemmerling’s crack had been passed on. But by who? Gibling maintains that Adams passed the code on to him to encourage piracy of ITV Digital cards. Adams vehemently denies this, although Panorama produced internal company documentation which appeared to support the allegations that the code came direct from NDS.

ITV Digital collapsed in 2002, losing $2 billion for its investors and 1,500 jobs in the UK. In the BBC documentary, Simon Dore, former Chief Technical Officer ITV Digital said: “The business had its issues aside from the piracy, no question, but those issues I believe would have been solvable by careful and good management. The real killer the hole beneath the water line was the piracy. We couldn’t recover from that”.

NDS has been a target of police investigations since 1996 when an Israeli tax raid on their Jerusalem HQ reportedly uncovered evidence of board members bugging their rival’s phones, as documented in Neil Chenoweth’s book Virtual Murdoch. In 2002 NDS was sued in California for $1 billion by rival smart-card manufacturer Nagrastar and its parent company Echostar for hacking their access cards, and by Canal Plus for passing on these details to pirates.

Eventually Canal Plus exited the case when its Italian arm was bought by News Corp. to create Sky Italia. In 2008 a Californian jury found in Echostar’s favor over the piracy allegations but awarded only nominal damages. The subsequent appeal process went all the way up to the Supreme Court, which last week upheld the allegations that NDS had violated antipiracy laws but still refused to reverse a previous ruling that Echostar should cover the $19 million legal costs incurred by NDS. The executive in charge of Sky Italia, Tom Mockridge, replaced Rebekah Brooks as chief executive of News International when she resigned over the phone-hacking scandal in Britain this summer. Last September Financial Review reported NDS was being put up for sale to “distance” it from News Corp. Ten days ago-a few days after the planned first broadcast of the Panorama documentary-NDS was sold to Cisco for $5 billion.

The Killer Blow

More revelations this morning seem to suggest these pay-TV hacking allegations are not just limited to the UK. Though neither NDS nor News Corp. are named in the case, there is still an ongoing trial in Syracuse, Sicily over piracy and access card hacking. The defendant, Pasquale Caiazza, who is accused of decrypting the cards of Nagrastar Italy, has been linked with a former NDS consultant Davide Rossi through Italian police surveillance tapes. According to The Independent this morning the newspaper claims to have documents in its possession which prove Pasquale Caiazza was receiving regular payments from a HSBC bank account controlled  by News International.

But now we know the source of the Panorama and Independent documentation, a massive data dump of Ray Adam’s emails which Neil Chernoweth at the Australia’s Financial Review has managed to secure after a four year long investigation:

Download a sample of the 14,400 emails held by former NDS European chief for Operational Security Ray Adams

Explore a sample of the 14,400 emails on DocumentCloud

A secret unit within Rupert Murdoch’s News Corporation promoted a wave of high-tech piracy in Australia that damaged Austar, Optus and Foxtel at a time when News was moving to take control of the Australian pay TV industry.

The piracy cost the Australian pay TV companies up to $50 million a year and helped cripple the finances of Austar, which Foxtel is now in the process of acquiring.

A four-year investigation by The Australian Financial Review has revealed a global trail of corporate dirty tricks directed against competitors by a secretive group of former policemen and intelligence officers within News Corp known as Operational Security.

So calling to action all Mooq who want to see the scale of potential piracy and anti-competitive practices by News Corp across the world. I’ve a feeling this could be huge, and do for News Corp what Milly Dowler did for News International.

On this, and the HCL Data Pool 3 emails that form the basis of the Met’s three investigations into News International, Murdoch’s top down hierarchical approach has failed to understand both the digital domain and new peer to peer media, and how small local events have network effects. News of the World was killed by online campaigns against the advertisers. The very hackers it is alleged NDS used to take down rivals could well have provided the data to turn the tables

It’s new media versus old: and we know who will win this one



  1. Do you remember me posting the piece about my step father the man who put DirecTV on the air?  Remember me saying that he was forced to sue a Newscorp affiliate and when Newscorp purchased DirecTV he was shown the door?  Guess what company he had to sue?  Don’t guess it was NDS if you had any questions about what went on there, you got someone who could ask him.

  2. fogiv

    The author is some flaky british guy. Hope it doesn’t suck, but I got a t-shirt too, so I’ve got that to fall back on.  😉

    Nice work on this, chap.  Per usual.

  3. From HuffPo. (seems to be a problem with the page so I’m not posting a link)

    LONDON, March 29 (Reuters) – An angry Rupert Murdoch on Thursday declared war against “enemies” who have accused his pay-TV operation of sabotaging its rivals, denouncing them as “toffs and right wingers” stuck in the last century.

    “Seems every competitor and enemy piling on with lies and libels. So bad, easy to hit back hard, which preparing,” News Corp Chief Executive Murdoch, 81, tweeted.

    On Thursday, it appeared that Murdoch had had enough of apologising. “Enemies many different agendas, but worst old toffs and right wingers who still want last century’s status quo with their monopolies,” he tweeted.

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