U.S. authorities
are stepping up investigations, including an FBI criminal inquiry, into
possible violations by employees of Rupert Murdoch's media empire of a
U.S. law banning corrupt payments to foreign officials such as police,
law enforcement and corporate sources said.
But U.S. investigators have
found little to substantiate allegations of phone hacking inside the
United States by Murdoch journalists, the sources added.
The
FBI is conducting an investigation into possible criminal violations by
Murdoch employees of the U.S. Foreign Corrupt Practices Act (FCPA), a
law intended to curb payment of bribes by U.S. companies to foreign
officials, a U.S. law enforcement official said.
The
U.S. official said that if any law enforcement action was pursued by
U.S. authorities against Murdoch employees, it would most likely relate
to FCPA.
If it is found to have
violated the FCPA, Murdoch's News Corp, which has its headquarters in
New York, could be fined up to $2 million and barred from U.S.
government contracts, and individuals who participated in the bribery
could face fines of up to $100,000 and a jail sentence of five years.
Executives could be liable if they authorized bribes or knew about the practice but failed to stop it.
In
practice, U.S. authorities have usually settled FCPA cases in return
for large cash payments from companies, who can sometimes avoid legal
admissions of guilt.
Much of the
evidence police are examining in the News Corp case was handed over to
investigators by the company, who have set up a special clean-up unit in
London and hired batteries of lawyers in Britain and the United States,
some of whom specialize in FCPA cases, company sources said.
The
U.S. Justice Department and Securities and Exchange Commission also
have jurisdiction to pursue civil cases against alleged violators of the
law.
Bloomberg news service
reported last year that Justice Department prosecutors sent News Corp,
U.S. parent of Murdoch's UK media properties, a request for information
on alleged payments which journalists made to British police officers in
return for news tips.
LAWYERS
Sources
close to News Corp said the Management and Standards Committee (MSC),
the unit which the company set up to deal with phone hacking and related
investigations, for some time had been concerned about the consequences
of U.S. investigations of possible FCPA violations.
Both
News International and parent company News Corp declined to comment.
Reuters is a competitor of Dow Jones Newswires, a unit of News Corp.
Last
July, the company retained Mark Mendelsohn, who served as deputy chief
of the Fraud Section in the Criminal Division of the U.S. Justice
Department. Mendelsohn, now in private practice, was internationally
respected as an architect of the DOJ's Foreign Corrupt Practices Act
enforcement program.
News Corp
sources confirmed that the Management and Standards Committee was also
working with Williams & Connolly, a prominent Washington law firm
specializing in white-collar crime cases.
The
New York Times reported last year that one of the lawyers working on
the News Corp case was Brendan Sullivan, a Williams & Connolly
partner known for his public defense of White House aide Oliver North
during Congressional investigations into an arms-for-hostages scandal
during the administration of U.S. President Ronald Reagan.
News
Corp announced last month that another Williams & Connolly partner,
Gerson Zweifach, would become its top new in-house lawyer. He is also
expected to join the Management and Standards Committee.
Company
sources said that, via the MSC, News International was routinely
sharing with its outside lawyers, including Williams & Connolly,
evidence which had been uncovered of suspected questionable practices
including payments to British police officers.
The MSC declined to comment.
Among
evidence turned over by the company to British authorities are emails
and financial records which allegedly chart the payment of more than
100,000 pounds ($158,000) to police contacts, mostly in sums of under
1,000 pounds.
A company source said
the records showed many or most of the payments intended recipients
were listed in company records under false names.
THREE INVESTIGATIONS
London's
Metropolitan Police Service for months has been investigating an
assortment of suspected abusive practices which journalists at the News
of the World and other Murdoch London newspaper properties are alleged
to have routinely employed in recent years.
British detectives are conducting three parallel investigations.
One
inquiry, known as Operation Weeting, is investigating alleged phone
hacking, and a second inquiry, Operation Tuleta, is investigating
allegations of computer hacking. The third investigation, Operation
Elveden, is investigating allegations that journalists paid police
officers bribes in return for story tipoffs. The head of the three
investigations said this week she was increasing the number of police
looking at police payments.
The law
enforcement source said U.S. authorities found no evidence to
substantiate allegations that potentially illegal reporting tactics that
were alleged to have been widespread in Britain were also employed by
Murdoch journalists in the United States.
Law
enforcement and corporate sources said no evidence had turned up to
corroborate a Daily Mirror accusation that journalists from Murdoch's
now defunct News of the World sought to hack into voice mail messages of
victims of the al Qaeda attacks on New York and Washington of September
11, 2001. The Mirror is a competitor of Murdoch's London tabloid, the
Sun.
London police have arrested
30 people, including journalists and police officers, in connection with
its three journalism-related investigations. Last month, four current
and former journalists on the Sun, the largest-circulation British
paper, as well as a serving police officer were arrested in connection
with Operation Elveden.
Sue Akers,
the officer in charge of all the investigations, said on Monday that 14
people so far had been arrested in connection with Operation Elveden,
but indicated that more investigators were likely to be added to the
inquiry, which she said still had some time to run.
To
date, no criminal charges have been filed against any of the
individuals arrested over the past year, who include Rebekah Brooks, a
former CEO of Murdoch's London papers, and Andy Coulson, a former
Murdoch editor who became top media adviser to Prime Minister David
Cameron.
However, current
investigations trace their roots back to the 2006 arrests, and
subsequent guilty pleas, of News of the World royal reporter Clive
Goodman and private detective Glenn Mulcaire on phone hacking charges.
($1 = 0.6331 British pounds)
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