With Phone-Hacking Cover-up Unraveling, News Corp. Faces More Legal Questions In U.S.

Blog ››› ››› ERIC BOEHLERT

Fresh evidence this week that the Department of Justice continues to dig into Rupert Murdoch's business dealings here and abroad: U.S. investigators reportedly delivered a letter to News Corp. attorneys "requesting information on alleged payments employees made to U.K. police for tips," according to Blooomberg.

The DOJ's move, previously encouraged by several Democratic senators, comes in the wake of the Media Matters revelation last week that prosecutors have also reached out to a persistent News Corp. whistleblower, Robert Emmel, who has accused the company of corporate misconduct and unfair business practices. In 2009, Emmel starred as a witness at a civil trial in which a News Corp. subsidiary was accused of hacking a competitor's website.

Those two developments come in the wake of the mini-bombshell in Britain this week alleging that, "Up to a dozen News International executives, including Rebekah Brooks, were told in 2006 that the Metropolitan Police had evidence that more than one News of the World journalist was implicated in the phone-hacking scandal."

The claim, published in The Independent, directly contradicts News Corp.'s long-held public denial that until 2008, nobody inside the company had credible evidence that phone hacking at Murdoch's tabloid, News Of The World, extended beyond a single rogue employee.

All in all, events of the last week have provided Murdoch with a grim reminder of just how a daunting task he faces in terms of trying to salvage News Corp.'s reputation, and of ever putting the current sandal behind him. Indeed, the company is currently facing three police investigations in Britain as well as an ongoing Parliamentary probe, in addition to the DOJ inquiry.

In the U.S., prosecutors first began investigating the claim made in the British press that News Corp. had tried to hack into the phone messages of 9/11 victims. While no hard evidence of that has emerged publicly, DOJ investigators are seeing whether there is a broader problem – a previous pattern -- of corporate misconduct at News Corp. and its subsidiaries in the U.S.

By reaching out to Emmel it appears prosecutors are examining a string a civil lawsuits filed against the News Corp marketing company, News America, which was accused by its competitors of, among other things, hacking into a secure website and stealing proprietary information. At trial, News Corp's admitted the hacking took place, but claimed it could not determine who did the hacking. In all, News America has spent nearly $700 million settling anti-competitive lawsuits in recent years, which would indicate U.S. prosecutors have lots of evidence to comb through in their News Corp. investigation.

According to Bloomberg, that same probe is also examining whether News Corp. employees in the U.K., working for an American-based company, violated the Foreign Corrupt Practices Act, which forbids paying off representatives of a foreign government in an effort to gain a business advantage. This inquiry also goes to the question of whether there's a larger culture of corruption inside News Corp.

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