US politicians add to the heat on Murdoch's empire
Thursday 14 July 2011
In a dangerous development for Rupert Murdoch's News Corp, prominent United States Senators have demanded that the firm be investigated under US corruption laws over payments made to British police officers.
The public fury that has engulfed Mr Murdoch's businesses in Britain last night looked on the brink of spreading to the US, the country at the heart of his media empire, as families of the victims of the 9/11 terrorist attacks demanded an inquiry into allegations that they were targeted by News of the World journalists.
David Cameron has agreed to investigate an unsourced claim in Monday's Daily Mirror that NOTW journalists asked a private investigator to hack into the phones of 9/11 victims. The Daily Mirror reported that the unnamed private detective had turned down the NOTW's request for help with hacking into victims' phones. The allegations drew an angry reaction from the families of victims. Sally Regenhard, vice-chairwoman of 9/11 Parents and Families of Firefighters & World Trade Center Victims, who lost her son in the attacks, said she supports an American investigation. "It's hard enough for people to deal with the 10th anniversary... this just adds more salt to the wounds," she told the Politico website.
Four Democratic Senators have called for a criminal investigation into News Corp, which they said may have broken the Foreign Corrupt Practices Act, which forbids any company doing business in the US from paying bribes anywhere in the world. In a joint letter to the Attorney General yesterday, Eric Holder, Senators Barbara Boxer and Jim Rockefeller wrote: "The reported allegations against News Corporation are very serious, indicate a pattern of illegal activity, and involve thousands of potential victims. It is important to ensure that no US laws were broken and no US citizens victimised."
The New Jersey Senator Frank Lautenberg also wrote to Mr Holder and to the head of the Securities and Exchange Commission, the stock market regulator, demanding investigations. "The limited information already reported in this case raises serious questions about the legality of the conduct of News Corporation and its subsidiaries under the FCPA. Further investigation may reveal that current reports only scratch the surface of the problem."
Mr Murdoch and his advisers have been examining ways to protect the rest of his global business empire, which include selling all the company's UK newspapers. But at the moment they do not believe there are buyers for News International. The company's more lucrative businesses in the US include the Hollywood studio 20th Century Fox, the Fox television network and the Fox News cable channel.
News Corp shares were rebounding on the US stock market yesterday, partly in response to suggestions that it may be about to end its newspaper operations. Most of the institutions which have bought shares of News Corp in recent years are more excited by its prospects in cable television and satellite broadcasting than by its newspaper portfolio. And the abandonment of the bid for BSkyB frees up cash that can be returned to shareholders, another reason pushing the stock higher.
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