Thursday, July 21, 2011

News Corp Gearing Up For Scandal Spreading To US?

News Corp is busy hiring big-name lawyers to represent different portions of the company in the US against possible legal action from the hacking scandal that threatens to overtake the company in the UK.
The company's nine independent directors hired former Manhattan U.S. Attorney Mary Jo White and former Attorney General Michael Mukasey, who served under President George W. Bush.

The directors are said to be increasingly concerned about Rupert Murdoch's stewardship of the firm and appear to be bracing for new U.S. legal trouble.

By denying knowledge of the phone hacking, bribery and hush money rampant at News of the World, experts said Rupert Murdoch and his son James may have left themselves open to shareholder charges of incompetence.

Separately, The Wall Street Journal reported News Corp. hired Washington lawyer Mark Mendelsohn, a top expert in the Foreign Corrupt Practices Act.
These are prudent moves that any corporation would have to take, but it also signals just how serious the company is considering the possibility of charges in the US. They're worried about shareholder suits and criminal investigations.

At the same time, there are reports that there are still other news outlets in the UK that engaged in similar behavior, including ones that aren't affiliated with News Corp. They include The People (operated by The Mirror Group) and even Piers Morgan was accused of such tactics before coming to CNN.
On Tuesday, a member of Parliament accused the CNN anchor Piers Morgan of phone hacking when he was the editor of The Daily Mirror. Mr. Morgan strenuously denied the accusations and demanded an apology. And last week, news reports showed that the actor Jude Law has brought a hacking lawsuit against The News of the World’s sister newspaper, The Sun.

Five former journalists at The News of The World’s rival Sunday newspaper, The People, run by the Mirror group, said in interviews that they regularly witnessed hacking in that newsroom in the late 1990s to early 2000. “I don’t think anyone quite realized the criminality of it,” said one former reporter at The People, who spoke on condition of anonymity. A former reporter for the Sunday Mirror, another News of the World rival, described the extensive use of private detectives to obtain personal information. A former senior News of the World editor, Neil Wallis, who has been arrested on unspecified accusations of phone hacking, left The People in 2003 to join the Murdoch tabloid.

Nick Fullagar, director of communications for Trinity Mirror, the parent company of The Daily Mirror and The People, said, “Trinity Mirror’s position is clear. Our journalists work within the criminal law and the P.C.C. code of conduct,” referring to Britain’s press regulatory body, the Press Complaints Commission. Within Mr. Murdoch’s empire, the flagship daily tabloid The Sun has also been accused of hacking phones. The lawsuit by Mr. Law, filed last month, says that four articles published in 2005 and 2006 were based on intercepted voice mail.

It also comes as no surprise that News Corp affiliates are soft-pedaling the news coverage; the Fox News Network has devoted a fraction of the coverage that CNN or MSNBC has done, and the NY Post has all but buried the scandal as compared to either the Daily News or the NY Times. The Wall Street Journal has covered the story prominently, but that's the exception rather than the rule.

The scandal is also threatening to take down the British government as new revelations about the hiring of former News of the World editor Andy Coulson as Prime Minister David Cameron. Apparently, he didn't undergo the usual top level background checks of others up for similar positions.

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