Rupertgate scandal grows exponentially, may threaten News Corp.

Posted by AzBlueMeanie:

Some of the headlines from Britain and the U.S. today show that the Rupertgate scandal is growing exponentially and has expanded to the U.S. Legal liability could threaten News Corp. It looks as if the "Watergate" media feeding frenzy has begun. I'll try to do a quick summary.

Britain's Daily Mirror newspaper reported on Monday that News of the World journalists had offered to pay a New York police officer to retrieve the private phone records of victims of the September 11, 2001, attacks. NOTW reporters tried to access 9/11 phone data: report | Reuters.

The Guardian and Independent newspapers reported on their websites earlier on Monday that journalists from Rupert Murdoch's newspapers repeatedly tried to hack into Brown's voicemails when he was finance minister and prime minister. The Guardian said News International reporters had repeatedly targeted Brown, trying to access his voicemail and obtaining information from his bank account, his legal file and his family's medical records. Ex-UK PM Brown may have been phone hacking victim | Reuters. It also said Brown's London lawyers had been tricked into handing over details from his file by a conman who, it said, worked for the Sunday Times. In addition, and perhaps most damaging, a Guardian investigation found that details from Brown's infant son's medical records may have been obtained by the mass-market Sun.

Rupert Murdoch and the British government tried to draw the financial and political sting from a newspaper phone-hacking scandal by referring his $14-billion media takeover to regulators, even as police said former prime minister Gordon Brown appeared to have been a hacking target. By referring News Corp's bid for the highly profitable pay-tv operator BSkyB to a lengthy competition probe, the government hoped to shield it from a tide of outrage over allegations that News of the World reporters accessed the voicemails of murder and bomb victims, among others. Murdoch delays BSkyB bid; Brown a hacking target | Reuters. Conservative Prime Minister David Cameron has come under fire for his closeness to Murdoch's media empire; he is a friend of Rebekah Brooks, the News International chief executive who was editor at the News of the World during much of the alleged hacking; and he chose another former News of the World editor, Andy Coulson, as his communications chief. . . Other allegations emerged on Monday that News of the World had bought contact details for the British royal family from a policeman and tried to buy private phone records of victims of the September 11, 2001, attacks in the United States. Police declined comment. . . Piling the pressure on Murdoch, who flew to London on Sunday to limit damage to his media empire, U.S. News Corp shareholders suing over the purchase of a business run by Murdoch's daughter filed a revised complaint, saying the British phone hacking scandal reflected how the company's board fails to do its job.

A powerful group of News Corp's shareholders have accused Rupert Murdoch of "egregious" behaviour and treating his media empire like a "family candy jar." The shareholder group, which includes banks and pension funds, accused Murdoch of "rampant nepotism" and using News Corp resources for "his own personal and political objectives." News Corp shareholders attack Murdoch | The Guardian. The institutional shareholders, led by the Amalgamated Bank, said it was "inconceivable" that Murdoch would not have been aware of rampant phone hacking at the News of the World. "It is inconceivable that [James] Murdoch and his fellow board members would not have been aware of the illicit news gathering practices. And yet, the board took no real action to investigate the allegations until 7 July 2011, when Murdoch selected two of his co-directors to deal with the imbroglio," the shareholders said in a legal filing in Delaware, where News Corp is registered. "[They] show a culture run amuck within News Corp and a board that provides no effective review or oversight."

The quickly developing scandal has moved far beyond the now-defunct News of the World, with the U.K’s Guardian reporting that journalists from across the News International newspaper group, owned by NewsCorp, “repeatedly targeted” the liberal Brown for more than 10 years while he served as Chancellor of the Exchequer and then Prime Minister. Murdoch’s Company Improperly Targeted PM Gordon Brown, Could Face Criminal Prosecution In U.S. | ThinkProgress. Brown joins other members of his Labour Party, members of the royal family, victims of terrorism, murder, and their family members in being targeted with shady or allegedly illegal practices by the newspapers. Journalist Carl Bernstein, whose investigation into the Watergate break in helped bring down President Nixon, has dubbed the rapidly expanding scandal “Murdoch’s Watergate.”

But Murdoch may soon have bigger problems on his hands. Legal experts told the AP today that his company could face criminal prosecution in the U.S. for his U.K. papers’ alleged bribery of British police officers, which would be a violation of the Foreign Corrupt Practices Act (FCPA). According to the the Department of Justice, “The FCPA prohibits payments made in order to assist the firm in obtaining or retaining business.” Thus the papers’ use of bribery to obtain information which helped sell newspapers could fall under the act’s purview. And even though the bribery occurred entirely in Britian, NewsCorp is an American company, incorporated in Delaware, and held accountable for its foreign subsidiary’s actions. Even if the corporation wasn’t directly involved in bribery, it could be found in violation of the law for turning a “blind eye.”

The legal experts told the AP they would be surprised if the Securities and Exchange Commission and the DoJ have not already opened investigations into the matter and said the decision to shutter News of the World was potentially an attempt to limit Murdoch and NewsCorp’s legal exposure.

NewsCorp is also the parent company of the Wall Street Journal and Fox News, which have largely ignored the scandal.

 Murdoch’s Company Improperly Targeted PM Gordon Brown, Could Face Criminal Prosecution In U.S. | ThinkProgress.

Shortly after Scotland Yard began its initial criminal inquiry of phone hacking by The News of the World in 2006, five senior police investigators discovered that their own mobile phone messages had been targeted by the tabloid and had most likely been listened to. The disclosure, based on interviews with former and current officials knowledgeable about the investigation, raises the question of whether senior criminal investigators had concerns that if they aggressively investigated The News of the World, they would be punished with splashy stories about their secrets, some of which were tabloid-ready. British Tabloid Targeted Investigators’ Phone Messages – NYTimes.com.

Deputy Prime Minister Nick Clegg on Monday became the most senior official to publicly urge Rupert Murdoch to drop a $12 billion bid by his embattled News Corporation for Britain’s most lucrative satellite broadcast company, British Sky Broadcasting, as the government sought advice on possible regulatory proceedings. A Top British Leader Urges Murdoch to Drop TV Deal – NYTimes.com.

David Carr on media at the New York Times writes A Tabloid Shame, Exposed by Earnest Rivals – NYTimes.com. Logic and fairness would suggest that it was folly to concentrate so much power in the hands of someone who already controlled many national media assets. So where was the outrage? Well, check who owns the megaphone. The News Corporation has historically used its four newspapers — it also owns The Sun, The Times of London, and The Sunday Times — to shape and quash public debate, routinely helping to elect prime ministers with timely endorsements while punishing enemies at every turn. . . The global implications for the News Corporation are tougher to discern. Will the damage jump the pond and hurt the company’s American operations or just be seen as a Piccadilly sideshow?

In truth, a kind of British Spring is under way, now that the News Corporation’s tidy system of punishment and reward has crumbled. Members of Parliament, no longer fearful of retribution in Mr. Murdoch’s tabloids, are speaking their minds and giving voice to the anger of their constituents. Meanwhile, social media has roamed wild and free across the story, punching a hole in the tiny clubhouse that had been running the country. Democracy, aided by sunlight, has broken out in Britain.

Rupert Murdoch built an empire on sleazy journalism and political influence and corruption. Hopefully justice will finally catch up to this sleazebag and his family.