Monday, July 11, 2011

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


Former British Prime Minister Gordon Brown has become the latest known victim of extra-legal information gathering orchestrated by U.K. newspapers owned by NewsCorp Chairman Rupert Murdoch. 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.

Con-men and private investigators working for the papers, including the Sunday Times — the most reputable publication of the group — appear to have illegally gleaned banking, phone, and other records about Brown, including medical data on his infant son, the Guardian reports:

Scotland Yard has discovered references to both Brown and his wife, Sarah, in paperwork seized from Glenn Mulcaire, the private investigator who specialised in phone hacking for the News of the World;

• Abbey National bank found evidence suggesting that a “blagger” acting for the Sunday Times on six occasions posed as Brown and gained details from his account;

• Brown’s London lawyers, Allen & Overy, were tricked into handing over details from his file by a conman working for the Sunday Times;

Details from his infant son’s medical records were obtained by the Sun, who published a story about the child’s serious illness.

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.”

Much of the scandal has focused on Rebekah Brooks, the CEO of News International, who was previously editor of the News of the World and the Sun. It was Brooks who contacted the Browns in 2006 to tell them that she had obtained — likely in violation of privacy rules– records showing that their four-month-old son Fraser was suffering from cystic fibrosis.

But while victims have demanded that Rebekah Brooks resign, Murdoch has given her an “extraordinary show of support,” taking her to dinner yesterday and saying she is his “top priority.”

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.

[updated] The Guardian reports that a “powerful group of News Corp’s shareholders” have accused Rupert Murdoch of “rampant nepotism” and treating his media empire like a “family candy jar.” The shareholder group, which includes banks and pension funds and is led by the Amalgamated Bank, added that was “inconceivable” that Murdoch was completely unaware of systematic phone hacking at the News of the World and other newspapers. [/updated]

No comments: