US will be careful in any legal move against Murdoch


By Rashmee Roshan Lall

Could the tempest raging around Rupert Murdoch in Britain pose any threat to the US operations of the media tycoon’s stately News Corporation?

Yes and no. The list of imponderables is long – but so is the proverbial arm of American law.

NewsCorp is solidly headquartered on the American side of the Atlantic, and the bribery of officials overseas would technically make the company liable under a 34-year-old US law that seeks to limit the bad behaviour of US companies abroad.

In this context, it would be significant if, as reported but not confirmed, the US Department of Justice really did sound out the UK’s Serious Fraud Office this week about allegations that Murdoch’s now-defunct News of the World had bribed British police.

And it is surely noteworthy that the rising chorus of US calls for Mr Murdoch’s head includes one from self-confessed “smut peddler” Larry Flynt. The controversial pornography publisher has fought many legal battles against the regulation of free speech, and he makes common cause with Mr Murdoch on principle.

But not in practice. “I do not create sensationalism at the expense of people living private lives,” Mr Flynt wrote smugly in TheWashington Post.

Finally, it has to be telling that Mr Murdoch is reaching the point at which America’s deep and fierce red-blue political divide is sometimes tenuously bridged. Late last week Peter King, the chairman of the homeland security committee of the House of Representatives, joined several Democrats to call for an FBI inquiry into claims that NewsCorp journalists had hacked into the phones of members of families of September 11, 2001 victims.

It is this last development that is giving America the most pause, and Mr Murdoch and his aides possibly their biggest headaches. The slightest proof that NewsCorp illegally and insensitively dabbled in the agony of September 11 victims could engulf Mr Murdoch’s whole American flotilla of disparate media companies, and sink it without a trace.

Democratic Senator Barbara Boxer of California has already questioned whether Mr Murdoch’s media licences could be revoked, since licence-holders must be of “good character”.

Ms Boxer is a leading liberal but some columnists are now suggesting that “messing with 9/11 victims” could provoke conservative supporters of Mr Murdoch’s divisive but popular media outlets to turn against him.

Clearly, it is more than a sense of “gotcha” triumphalism that is leading some regionally significant independent newspapers such as the Seattle Times to editorialise as follows: “When it rains, it pours, and the storm continues for media mogul Rupert Murdoch and his much-maligned News Corporation. Deservedly so.”

The paper continued with sober emphasis: “The FBI has opened a preliminary review into NewsCorp … Agents are trying to figure out if they should progress to a full investigation and if US law gives them jurisdiction to bring charges. Please proceed.”

On the face of it, it would be relatively easy for the authorities to proceed. The 1977 Foreign Corrupt Practices Act (FCPA) clearly prohibits any payment to a “foreign official” to “obtain or retain business”.

Mike Koehler, who teaches business law at Butler University in Indiana, and who blogs about the Act, says Scotland Yard’s admission that News of the World reporters paid at least five police officers at least £100,000 (Dh593,000) in exchange for information used in stories in 2003 should be damning enough.

British police officers, he says, qualify as foreign officials and payments that allowed a paper “to obtain non-public information to write sensational news stories – and thus sell more newspapers – would seem to fit the type of FCPA enforcement”.

But a newspaper, some could legitimately point out, is not a widget manufacturer. Could a newspaper really be held to account under the FCPA?

It is unclear how a media organisation would be prosecuted under the Act. Companies such as Lockheed Martin, Halliburton and Exxon have been the example to date, because the FCPA has traditionally targeted companies held to be unfairly gaining market share in certain sectors through bribery.

Prof Koehler and some others insist that NewsCorp is liable. But even if so, is there really any appetite here to prosecute the Murdochs and perhaps bring down their controversial media empire?

Yes, but captains of caution are steering the mission that could torpedo NewsCorp. The Obama administration is moving with a measured tread, keeping a wary eye on the minefield of right-wing political opinion it would have to negotiate. There is a danger that such a prosecution could be blown away as another left-wing conspiracy against the forces of righteous good.

This is why only one person close to the White House, John Podesta who oversaw Mr Obama’s transition to the presidency after his 2008 victory, has said anything publicly about the affair.

“This isn’t just one rogue editor,” Mr Podesta said, “[but] an empire that was built on a set of journalistic ethics that’s beginning to explode and unravel. They were routinely bribing public officials … this is not a two-week story.”

In his comment you can discern the dim outline of trouble for Mr Murdoch and his American empire. How far this possibility really develops remains to be seen.

Rashmee Roshan Lall, the former editor of the Sunday Times of India, is now based in Maryland

World Report