News Corporation May Face Corporate Charges In U.K. Over Hacking, Bribery

This news won't help the bottom line at Joel Klein's Amplify:

Rupert Murdoch's British newspaper division could face corporate charges in relation to the Metropolitan police's phone-hacking investigation, it has been claimed in a report in the Independent.

Two "very senior figures" at News International, now renamed News UK, have been interviewed in relation to the corporate aspect of the investigation, which is also examining allegations of bribery of public officials, it has emerged.

The allegations indicate that a new line of inquiry is opening into the Murdoch empire, which has potentially serious consequences for News UK, which owns the Sun and the Times. In an attempt at damage limitation following the scandal, News Corp was separated from News UK.

Such an inquiry would mirror events in America, where the department of justice and the FBI are investigating Murdoch's US parent company, News Corp, under the Foreign and Corrupt Practices Act, which can impose severe penalties on companies that bribe foreign officials.

Labour MP Chris Bryant, one of the most vocal critics of News International when phone hacking was uncovered, said the Met had told him they were "actively investigating corporate charges and that they were in correspondence with the American authorities, the FBI".

Bryant said the law in the UK was now as tough as in the US, due to the enactment of the Bribery Act 2010: "Under the Bribery act, the body corporate can have charges laid against it if its corporate governance was so reckless as to be negligent."

The old News Corporation has been broken up into two entities - the entertainment division (21st Century Fox) and the newspaper/publishing/education division (which includes Klein's Amplify.)

Any legal fees, fines and such that come in a U.S. investigation will come out of the newspaper/publishing/education division, since that was where all the hacking and bribery activity occurred.

More than 125 people have been arrested in connection with the various News Corporation hacking/bribery/corruption cases, with more than 40 facing criminal charges.

Rupert Murdoch doesn't seem to be all that concerned with any of this - he just purchased a 5% stake in Vice.

Nonetheless, the News Corporation bribery/hacking/corruption cases bear watching.

Scotland Yard Seek Tape Of Murdoch Admitting News Corporation Employees Bribed Officials

From The Guardian:

Scotland Yard detectives were on Friday attempting to track down a secret recording of Rupert Murdoch admitting to Sun journalists that payments to public officials were part of "the culture of Fleet Street".

A police officer connected to the Operation Elveden investigation into illicit payments from journalists has made a formal request to Exaro News, the investigations website that broke the story, to hand over the undercover tape.

DCI Laurence Smith told Exaro News that the police would seek a production order compelling it to disclose the recording if it did not do so voluntarily. It is understand the police have also approached Channel 4, which aired a small part of the recordings.

The development is the clearest indication yet that police in London are ready to examine Murdoch's private disclosures since the tapes emerged on Wednesday night. Murdoch is recorded saying the culture of paying police officers for stories "existed at every newspaper in Fleet Street. Long since forgotten. But absolutely."

Mark Watts, the editor-in-chief of Exaro News, said he had not handed any material to Scotland Yard and the force had not made clear "what they want, or why exactly they want it".

He said: "We are making public everything that we have, and I cannot see how else we can help. Like everyone else, they just need to keep logging on to Exaro. One thing is for certain, unlike News International, we will not – under any circumstances – betray confidential sources."

Although the 82-year-old media mogul did not admit knowing that any of his employees specifically paid public officials, he was recorded on two separate occasions describing the practice as part of the culture of Fleet Street.

On one clip published by Exaro News, an unidentified Sun journalist asks him: "I'm pretty confident that the working practices that I've seen here are ones that I've inherited, rather than instigated. Would you recognise that all this predates many of our involvement here?"

Murdoch replies: "We're talking about payments for news tips from cops. That's been going on a hundred years, absolutely. You didn't instigate it." Earlier in the tape, Murdoch tells the Sun journalists: "I don't know of anybody, or anything, that did anything that wasn't being done across Fleet Street and wasn't the culture."

News UK, formerly known as News International, has maintained that Murdoch "never knew of payments made by Sun staff to police before News Corporation disclosed that to UK authorities". Scotland Yard, meanwhile, said it would not give a "running commentary" on Operation Elveden.
The press law campaign group Hacked Off on Friday urged the Commons culture, media and sport select committee to recall Murdoch, and said he "may have committed contempt of parliament".

Evan Harris, the associate director of the group, wrote to the cross-party committee's chairman, John Whittingdale MP, saying: "There is a strong prima facie case that Mr Murdoch may have committed contempt of parliament by misleading your committee over his true response to the police investigations into phone hacking and bribery of public officials.

"As far as the victims of phone hacking are concerned, the appropriate course of action is for the committee to recall him at the earliest available opportunity to explain the discrepancies between the expressions of remorse he made to you and the defiant and unrepentant tone of his private remarks earlier this year."

Murdoch has squirmed out of trouble before and he may squirm out of trouble here.

We'll just have to see how far these inquiries go and what accountability Murdoch faces.

Chris Bryant, MP: Murdoch Should Be Charged With Corruption In U.S.

The Fourth of July fireworks continue for Rupert Murdoch:

A prominent Labour MP has said US authorities should press corporate corruption charges against Rupert Murdoch's global empire after he admitted in a secretly recorded meeting with staff on the Sun that payments to police were part of "the culture of Fleet Street".

Chris Bryant, who has been compensated for phone hacking by the defunct News of the World, said the latest revelations were "another reason" for the FBI to take action under the foreign corrupt practices act, which makes it an offence for American companies to pay public officials on foreign soil.

The MP for Rhondda said he had spoken to the Met police, and claimed the force had been in touch with the FBI. But he added that he believed the UK authorities were reluctant to consider bringing any corporate corruption charges in the UK because the force was "waiting for Operation Elveden [the investigation into unlawful payments made to public officials] to finish".

Meanwhile, Labour colleague Tom Watson, MP for West Bromwich East, has written to a leading US politician, Senator John D Rockefeller, asking him to ensure the US authorities' investigations into News Corporation "are not inhibited in going to the very top".

The latest scandal over alleged payments to police erupted after Sun journalists secretly taped a 45-minute meeting in March between Murdoch and at least 24 staff who had been arrested in relation to Scotland Yard's Elveden investigation.

Although Murdoch does not admit to knowing that any of his employees specifically paid officials, he is recorded as saying the culture of paying public officials for stories "existed at every newspaper in Fleet Street. Long since forgotten. But absolutely." Murdoch says he first knew about the Prevention of Corruption Act 1906, which until recently made it a crime to pay police and other public officials, a few weeks before his meeting with staff. The act has since been superseded by the Bribery Act 2010.

On the recording, one unidentified member of staff interjects: "So, completely oblivious to the fact that the long-term practice of this company to pay public officials was illegal, my job description meant that as a result of that, it came directly through my particular department. You can understand how we all feel that we are effectively being made scapegoats."

The News Corporation chief executive replies: "Yeah. And one of these high-priced lawyers would say it's our fault, but that situation existed at every newspaper in Fleet Street. Long since forgotten. But absolutely. It was the culture of Fleet Street."

But then the media mogul appears to admit he knew it was common practice.
A Sun journalist asks him: "I'm pretty confident that the working practices that I've seen here are ones that I've inherited, rather than instigated. Would you recognise that all this predates many of our involvement here?"

Murdoch says: "We're talking about payments for news tips from cops. That's been going on a hundred years, absolutely. You didn't instigate it."

Bryant believes this is enough for the US authorities to act: "American law is much tougher than UK law: you don't have to prove that a director knew it. The mere fact that a company engaged in paying public officials is enough to bring a body corporate charge … the charge can be brought because the directors did not have a governance system in place to stop it."

He said he had been told by the Met that they had been in talks with the FBI.

Mark Lewis, the lawyer representing the Dowler family and other phone-hacking victims, said Murdoch's private remarks would be held up by lawyers in the US where a number of civil claims are being prepared over phone hacking under various US acts, including the stored communications act and the wiretap act.

He said: "No doubt the FBI will be very interested in comments that suggest a senior director of a company was fully aware of payments to foreign officials. As far as the US claims are concerned, this raises further evidence of knowledge at the highest levels of News Corp of unlawful activities."

The Obama administration will never go after Murdoch, of course.

They're too busy going after whistleblowers in the U.S. government to be bothered prosecuting Rupert Murdoch and News Corporation under the Foreign Corrupt Practices Act.

But as more and more becomes known about how Murdoch's newspapers operated and what he knew about those operations, it's clear the evidence is there to prosecute them under FCPA.

Even if the U.S. government doesn't prosecute Murdoch and News Corporation, you can be sure the Mark Lewis and Norman Siegel will use the latest revelations in the civil cases they're bringing against News Corporation for hacking on U.S. soil.

Murdoch/Klein Hire Duncan Press Flunky

Leonie:

Rupert Murdoch’s empire expands; now Duncan’s former flack/press secretary now working for Murdoch and Joel Klein at Amplify.  He left US Ed Gov in November.

See reference in Edweek to his twitter debate w/ Diane below, in which Hamilton supported the notion of edu-entrepreneurs vs. teachers in improving education.  I guess he chose which camp to join.

http://shar.es/YBxWK

Ah yes - the Duncan/Obama education team seems to be feeding both Michelle Rhee's StudentsFirst wingnut group and Rupert Murdoch's for-profit education company.

Just in case anybody thinks working for Murdoch is not a big deal, let me remind you that a second front in the hacking case was opened last week when six current and former Murdoch employees were arrested in a whole new hacking investigation.

So many Murdoch employees have been arrested in the scandal that you may be having a difficult time keeping track of the players.

I know I am.

Fortunately for us, UK Progressive has a handy chart with a list of all the arrests and all the crimes allegedly committed.

Here's the chart:

Let me also remind you that for a while there, Joel Klein was running the News Corporation response to the scandal.

He has since given up that job as the scandal looking to be winding down and Murdoch's for profit education business looking to be winding up.

But with a whole new hacking investigation going on and Murdoch's newspaper/education division open to hundreds of millions of dollars in hacking claims in civil court, Klein just may have to go back to his old job of trying to staunch the damage from the hacking/corruption scandals to Murdoch's business.

Maybe former Duncan flunky Justin Hamilton can help out.

He's pretty skilled at jive already.

He'd be perfect trying to bullshit people that nothing evil happened under Rupert's tenure.

NY Post Dragged Into News Corp. Bribery Scandal, Murdoch Faces FCPA Case Against Him

The NY Times published a piece about News Corporation and Rupert Murdoch yesterday that said, essentially, Murdoch and his company had their mojo back, the hacking scandal was behind them and the company was out to buy new properties.

That was yesterday.

This was today:

The new round of criminal charges brought in the UK against former senior News International editors has once raised again the prospect that Rupert Murdoch's New York-based parent company may be prosecuted under US anti-bribery laws, and complicates the rehabilitation of his son James as a possible successor to lead the global media empire.

The charges brought against Rebekah Brooks, who ran Murdoch's newspaper holdings in Britain, Andy Coulson, former editor of the now defunct News of the World, and two other former News International employees exposes the parent News Corporation to possible action under the Foreign Corrupt Practices Act. The FCPA exists to prosecute US-domiciled companies for acts of bribery and corruption that they might commit abroad.

An official of the British ministry of defence, Bettina Jordan Barber, also faces trial for allegedly receiving £100,000 from Murdoch's tabloid newspapers for information that led to a series of published stories. The allegation that money passed hands clearly falls within the legal remit of the FCPA.

Mike Koehler, professor of law at Southern Illinois school of law and author of the blog fcaprofessor.com, said the charges "would be hard for the Department of Justice and the Securities and Exchange Commission to ignore. We have been hearing allegations for a year and a half now, now we clearly have charges against high ranking officials at a foreign subsidiary," he said.

The new charges, and the allegation of bribery of a military official, come as a setback for News Corporation at a very sensitive time for the company. The media giant is preparing to split itself in two, separating the TV and broadcasting arm from the scandal-hit newspaper and publishing division.

The developments also bring to a crashing halt the recent perception in America that News Corporation had begun to recover its confidence after months on the defensive as a result of the phone-hacking scandal.

...

 The new charges will increase pressure on the company. Koehler said US authorities would be looking to see how high up the chain of command the bribery scandal reached. "The question will be what did James know and when did he know it," he said. Ultimately he predicted News Corp would reach a settlement with the Justice Department rather than go to trial, but he said that News Corp faced some uncomfortable investigations in the coming months.

The FCPA has two main components, one that relates to the bribing of foreign officials and another that relates to books and record keeping. It is often the latter that causes companies the biggest headaches. Characterising a bribe as "miscellaneous expense" is a serious offence.

"This latest news is an escalation of the FCPA case," said Koehler. But he said he expected the case could still take some years to be resolved.

 In addition to that FCPA problem for Murdoch, the Daily Beast's Peter Jukes alleges News Corporation employees may have either bribed a U.S. military officials or known that News International employees in Britain had bribed said officials and used the information obtained through the illegal payments in the NY Post:

Did News Corp. Illegally Purchase Saddam Hussein Photos from U.S. Officials? 

Dozens of employees have already been arrested for allegedly paying off British officials—and sources now tell Peter Jukes that U.S. agents may also be implicated, as questions arise over how they scored controversial photos of Saddam Hussein.

 While the scandal that shuttered Britain’s best-selling tabloid, News of the World, has gone quiet ahead of next year’s phone-hacking trials, Britain’s parallel investigation into what has been described as a “culture of illegal payments” to public officials at sister daily The Sun has shifted into high gear. And this week Scotland Yard handed over several new files from its investigations into the alleged bribery to public prosecutors in the U.K., for a decision over whether to press formal charges against some of the 54 individuals arrested so far in the controversy.

The allegations that News Corp., which owns The Sun, made illegal payments to British defense personnel, police officers, and health workers in exchange for confidential information sparked widespread public outcry, which triggered investigations by the U.S. Department of Justice, Federal Bureau of Investigation, and Securities and Exchange Commission in the summer of 2011. Under the U.S. Foreign Corrupt Practices Act, American-owned companies who suborn foreign officials can incur large fines and possible prison sentences for senior executives. These investigations typically take two years to complete.

But The Daily Beast has learned that The Sun may have made another potentially corrupt payment, to a U.S. official on American soil.

On Friday, May 20, 2005, two Murdoch-owned tabloids, The Sun and the New York Post, ran front-page pictures of Saddam Hussein in his underwear, and inside the papers, more photos of the former Iraqi leader in U.S. captivity. According to Fox News, the Multinational Forces spokeswoman in Baghdad said the images could have been taken between January and April 2004, “based on the background of the photos and appearance of him.” Given the context of the Abu Ghraib revelations and ongoing, violent insurgency in Iraq at the time, multiple sources reported that President George W. Bush was upset about the leak. “There will be a thorough investigation into this instance,” deputy White House spokesman Trent Duffy told The New York Times, “[The president] wants to get to the bottom of it immediately.”

No investigation has ever found the source of the leaked pictures, but buried in the contemporary reports is a glaring admission. The Sun’s then-managing editor, Graham Dudman, told the Associated Press that his newspaper paid “a small sum” for the photos. Dudman would not elaborate “except to say it was more than 500 British pounds, which is about $900.”

Sources close to the story have told The Daily Beast that the payment was significantly greater, and was made to a U.S. official on American soil. Meanwhile, Scotland Yard detectives arrested Dudman in January of this year on suspicion of making corrupt payments involving British officials. He has yet to be charged with any criminal offense in the U.K.

(Incidentally, in 2005, Dudman said in a statement, “The Sun obtained [the Hussein] pictures by professional journalistic methods, and by any standards this is an extraordinary scoop as shown by the way it has been followed in the world’s media.”)

In 2004 former News of the World editor and current CNN host Piers Morgan was sacked from the U.K.’s Daily Mirror publishing fake photos of British soldiers abusing Iraqis. Given this history of hoaxes, The Sun would have been very cautious about accepting the Hussein photos in 2005. Expertise in both photographic manipulation and the physical details of Iraqi life would have been required to authenticate the pictures before they were procured. If the procurement and verification of the photos happened on American soil by a News International contact from the U.K., their movements may have been recorded by U.S. immigration. Any financial transaction would also most likely have left an audit trail.

The Sun’s editor in 2005, Rebekah Brooks, appeared to be oblivious to the illegality of paying public officials for stories when she appeared before a House of Commons Select committee a couple of years before. However, in his verbal evidence to the Leveson Inquiry into press ethics, Rupert Murdoch, chair, CEO and head of corporate governance for News Corp., told Lord Justice Leveson under oath in May (PDF), “I believe that paying police officers for information is wrong.”

The problem for Murdoch and the board of News Corp. may be that these pictures were published on both sides of the Atlantic on the same day, perhaps suggesting some kind of advance co-operation between the American parent company and the British News International subsidiary. If there is any evidence that there was prior knowledge by senior executives of payment for the pictures, this could bring the possibility of a U.S. investigation and charges with stiff penalties for illegal payments to public officials.

Last year, New Corp. set up a Management and Standards Committee, tasked with assisting British police with uncovering evidence of corrupt payments. The MSC holds a vast database of internal News International emails and communications, and answers to former U.S. assistant attorney general and News Corp. board member Viet Dinh. It is not known whether any requests for information have been made to the MSC regarding The Sun’s activities in May 2005, when the Hussein pictures were published.

Neither representatives from the FBI nor News Corp. responded to The Daily Beast’s requests for comment on the fresh revelations at the time of publication.

 Yesterday's NY Times story absolving Murdoch and News Corp from any more consequences related to the hacking/bribery scandal seems to have come too early.

I know the Obama administration wants nothing to do with a FCPA case against Murdoch and News Corporation, but as more and more information becomes public about the scandal and the criminal activities of N.I. bribing government officials in Britain, they may have no choice.

And now with the Peter Jukes story dragging the NY Post into the mess, we may yet see some Posties frogmarched into custody.