The Guardian reports:
James Murdoch and News Corp could face corporate legal battles on both sides of the Atlantic that involve criminal charges, fines and forfeiture of assets as the escalating phone-hacking scandal risks damaging his chances of taking control of Rupert Murdoch’s US-based media empire.
As deputy chief operating officer of News Corp – the US-listed company that is the ultimate owner of News International (NI), which in turn owns the News of the World, the Times, the Sunday Times and the Sun – the younger Murdoch has admitted he misled parliament over phone hacking, although he has stated he did not have the complete picture at the time. There have also been reports that employees routinely made payments to police officers, believed to total more than £100,000, in return for information.
The payments could leave News Corp – and possibly James Murdoch himself – facing the possibility of prosecution in the US under the Foreign Corrupt Practices Act (FCPA) – legislation designed to stamp out bad corporate behaviour that carries severe penalties for anyone found guilty of breaching it – and in the UK under the Regulation of Investigatory Powers Act 2000 which outlaws the interception of communications.
Tony Woodcock, a partner at the City law firm Stephenson Harwood, said section 79 of the 2000 Act enabled criminal proceedings to be brought against not only a company, but also a director or similar officer where the offence was committed with their “consent or connivance” or was “attributable to any neglect on their part”. Woodcock said: “This could embrace a wide number of people at the highest level within an organisation, such as a chief executive – not just the individual who ‘pushed the button’ allowing the intercept to take place or someone (perhaps less senior) who encouraged or was otherwise an accessory to the offence, such as an editor.”
While the UK phone-hacking scandal has been met with outrage in the US, the hacking itself is unlikely to prompt Washington officials into action. But because NI is a subsidiary of the US company, any payments to UK police officers could trigger a justice department inquiry under the FCPA.
The 1977 Act generally prohibits American companies and citizens from corruptly paying – or offering to pay – foreign officials to obtain or retain business.
The Butler University law professor Mike Koehler, an FCPA expert, said: “I would be very surprised if the US authorities don’t become involved in this [NI] conduct.”
The Guardian also reports:
Police are investigating evidence that a News International executive may have deleted millions of emails from an internal archive in an apparent attempt to obstruct Scotland Yard’s inquiry into the phone-hacking scandal.
The archive is believed to have reached back to January 2005, revealing daily contact between News of the World editors, reporters and outsiders, including private investigators. The messages are potentially highly valuable both for the police and for the numerous public figures who are suing News International (NI).
According to legal sources close to the police inquiry, a senior executive is believed to have deleted “massive quantities” of the archive on two separate occasions, leaving only a fraction to be disclosed. One of the alleged deletions is said to have been made at the end of January, just as Scotland Yard was launching Operation Weeting, its new inquiry into the affair. The allegation directly contradicts NI claims that it is co-operating fully with police in order to expose its history of illegal newsgathering.
The alleged deletion of emails will be of particular interest to the media regulator Ofcom, which said it had asked to be “kept abreast” of developments in the Met’s hacking investigation, so it can assess whether News Corp would pass the “fit and proper” test that all owners of UK television channels have to meet.