Will Murdoch’s Woes Cross the Atlantic?

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Rupert Murdoch’s troubles are spreading, as more and more of his British news outlets are implicated in the ugly hacking scandal rocking the United Kingdom. How far will that scandal spread and will Murdoch’s American media properties, like Fox News, The Wall Street Journal or the New York Post, be implicated? So far, that looks unlikely.

Murdoch’s efforts to contain the News Corp crisis have so far failed in Britain. The Tory-led government there on Monday delayed Murdoch’s attempt to take over news channel British Sky Broadcasting, requiring a new set of regulatory reviews of the proposed deal. A growing number of politicians and government officials in Britain are publicly opposing the takeover.

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Reports also emerged on Monday that former British Prime Minister Gordon Brown was hacked not just by Murdoch’s British tabloids, but also by his marquee paper, The Times of London. The case is particularly embarrassing for Murdoch because it reportedly involves the acquisition of the medical file of Brown’s son, who suffers from cystic fibrosis, and because Rebekah Brooks, a News International executive at the heart of the scandal, was directly involved, according to The Guardian:

In October 2006, the then editor of the Sun, Rebekah Brooks, contacted the Browns to tell them that they had obtained details from the medical file of their four-month-old son, Fraser, which revealed that the boy was suffering from cystic fibrosis. This appears to have been a clear breach of the Data Protection Act, which would allow such a disclosure only if it was in the public interest. Friends of the Browns say the call caused them immense distress, since they were only coming to terms with the diagnosis, which had not been confirmed. The Sun published the story.

So far the U.S. side of the story is limited. A group of shareholders has expanded a previously filed lawsuit that alleged nepotism at News Corp to include new charges that the News Corp board failed sufficiently to oversee and prevent abuses by the publications involved in the hacking scandals.

There has been some speculation that Murdoch’s son, James Murdoch, deputy chief operating officer of News Corp could face charges under the Foreign Corrupt Practices Act if reports that News Corp hackers routinely made payments to government officials for corrupt purposes are true. In theory that might be possible, but in practice no one is thinking of such action at the Justice Department. Generally speaking, the FCPA is employed when the host country has no mechanisms for prosecuting such behavior on its own. There is a full-blown investigation of the hacking scandal already underway in Britain.

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