FBI launched a probe to determine whether Rupert Murdoch's company violated the Foreign Corrupt Practices Act, which forbids US companies from paying bribes abroad.
News Corp faces potential US probe over alleged payments to UK police officers
WASHINGTON // Even amid wall-to-wall coverage of contentious budget negotiations in the US Congress, the behaviour of Rupert Murdoch and his News Corp employees has attracted attention in the US.
After suggestions that News Corp papers may have hacked the phones of victims of the 9/11 attacks in the US, the FBI launched a probe to determine whether the company violated the Foreign Corrupt Practices Act (FCPA). The law forbids US companies from paying bribes abroad. News Corp is headquartered in the US.
Legal experts say it is not clear whether charges under the FCPA can or will be pursued. Heather Lowe, legal council with Global Financial Integrity, a Washington-based NGO, said while there are "some grounds" for investigation, "there are a lot of factors going into whether or not a company will be charged", including overlapping jurisdictions between the US and UK.
Even then, Ms Lowe said, "it may be that the US government isn't willing to give up that jurisdiction, or give up that control, because it is a big case in the US. Those kinds of decisions can be very political."
Prosecution under FCPA can lead to significant penalties. On July 13, the Florida-based Armor Holdings admitted to funnelling bribes to a United Nations official to secure contracts to supply body armour to UN peacekeepers. It paid more than $15 million (Dh55m) in penalties. In 2008, Siemens pleaded guilty to two violations of FCPA and paid $1.6 billion in penalties.
Journalists working for one of News Corp's papers in Britain, the News of the World, are alleged to have paid bribes to police officers and to have illegally tapped as many as 4,000 phones, from British royalty, relatives of victims of a 2005 terror attack in London, a teenage murder victim as well as celebrities and politicians.
So far there is no evidence that employees at any of Mr Murdoch's other media properties engaged in the same sort of conduct. Nevertheless, observers note that Mr Murdoch's outlets embrace similar practices.
Mark Feldstein, a professor of media and public affairs at Maryland University, said: "His MO has been to use very similar business and journalistic practices in all the countries in which he has operated, from the sensational tabloid coverage to the conservative politics. Whether that also includes illegal methods of news gathering, I guess, remains to be seen."
For News Corp, a probe could open a Pandora's Box, Mr Feldstein said.
"Once investigations begin, they tend to take on a life of their own. So if there are other illegal activities that the company has been engaged in, that could easily come to light as an offshoot of a foreign corrupt practices probe."
Mr Murdoch's public profile is considerably higher in the UK than the US, where his media empire includes the Wall Street Journal, the New York Post, Harper Collins publishers as well as Fox News.
Fox News has carved out its own niche in the US market but while the scandal in Britain has been widely covered by Fox's network rivals, Fox News has been noticeably less keen.
Indeed, when Fox News finally reported on the story on Friday, Steve Doocy, host of Fox and Friends and Robert Dilenschneider, a media analyst on the programme, suggested that it was incongruous that hackings into the Pentagon and major US banks did not receive the same kind of media attention as the accusations against News Corporation.
On Monday, the Wall Street Journal aimed its own broadside at the media for its extensive coverage of the scandal.
Readers, the paper argued in an editorial, should "see through the commercial and ideological motives of our competitor-critics". In a swipe at print rivals The Guardian, which broke the hacking story, and The New York Times, the editorial criticised, "lectures about journalistic standards from publications that give Julian Assange and WikiLeaks their moral imprimatur. They want their readers to believe, based on no evidence, that the tabloid excesses of one publication somehow tarnish thousands of other News Corp journalists across the world."
That position is not likely to help the Journal's reputation, said Mr Feldstein, who argued that even if no legal proceedings were brought in the US, News Corp's US titles could still be tainted by the scandal.
To "attack the people who are exposing this misconduct, implicates [the WSJ] in the cover-up and suggest they are more a partisan tool or a business tool of Murdoch than an independent newspaper."