The U.S. Justice Department is preparing subpoenas as part of preliminary investigations into News Corp. relating to alleged foreign bribery and alleged hacking of voicemail of Sept. 11 victims, according to a government official.The issuance of such subpoenas, which would broadly seek relevant information from the company, requires approval by senior Justice Department leadership, which hasn't yet happened, the person said. [...]
The Federal Bureau of Investigation separately has begun an inquiry into whether News Corp. employees tried to hack into voice mails of Sept. 11 victims, people familiar with the early-stage probe have said.
There are two issues here. First, whether the bribery charges in Britain represent a violation of U.S. laws against, well, foreign bribery. The second is whether the same alleged hacking operations that have so badly damaged News Corp's British operations crossed directly onto U.S. shores.
NBC is reporting that the Justice Department has been in contact with Floorgraphics, now also a News Corp. subsidiary, about the alleged allegations of News Corp. hacking there in 2004 (before the company was purchased by Murdoch):
Bill Isaacson, the lawyer for Floorgraphics, a New Jersey-based advertising firm, told NBC News he was contacted this week by two federal prosecutors and an FBI agent based in New York seeking information about claims that the firm’s computers were hacked by News America Marketing, the advertising division of Rupert Murdoch’s News Corp., seven years ago.The allegations were first reported to the FBI in 2004 and prompted investigations at the time by the bureau, the Secret Service and the New Jersey Division of Criminal Justice, according to documents obtained by NBC News and congressional correspondence.
While never prosecuted, the claims became a key part of a civil lawsuit that Floorgraphics filed against News America. The case was resolved six days into a 2009 trial, when News America agreed to buy Floorgraphics' assets for $29.5 million as part of an out-of-court settlement.
As NBC and others point out, this is probably not an investigation specific to the Floorgraphics charges, since it was rendered moot by their News Corp. purchase, but likely is part of an inquiry by the Justice Department as to whether a broader pattern of phone and computer hacking existed/exists within American News Corp. operations. Despite Michael Isikoff's assertion in the above-linked story, the Floorgraphics charges are not the only such allegation. It's not even the only allegation leveled against that one specific arm of News Corp, in fact: in sum, settling just that set of charges cost News Corp in excess of half a billion dollars.
In other news, James Murdoch managed to put himself in more hot water with his earlier testimony before a committee of Parliament that strikingly contradicted two of his subordinates regarding what he knew and when he knew it. The New York Times reports that there may be an investigation into those specific claims:
“Clearly James Murdoch has got questions to answer in Parliament, and I’m sure he will do that,” Mr. Cameron said during a visit to an auto plant in the British Midlands.On Friday, Tom Watson, an opposition Labour lawmaker who has been prominent in the hacking inquiries and is a member of the parliamentary committee, told the BBC that he would “formally” ask the police to investigate the executives’ assertions.
“This is the most significant moment of two years of investigation into phone hacking,” Mr. Watson said.
Referring to the executives’ account, he said on BBC television: “If their version of events is accurate, it doesn’t just mean that Parliament has been misled, it means the police have another investigation on their hands.”
Taken all together, it seems News Corp.'s troubles may only have just begun.