News Corp.'s U.K. Actions Under Scrutiny In U.S. The newest legal front for Rupert Murdoch's media giant involves the Foreign Corrupt Practices Act, a 1977 law banning U.S. firms from paying bribes to government officials abroad. The British division of the U.S. company has admitted that private investigators working for one of its newspapers paid police for information from confidential databases.

News Corp.'s U.K. Actions Under Scrutiny In U.S.

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Now, as NPR media correspondent David Folkenflik reports, the company is facing legal troubles here in the U.S.

DAVID FOLKENFLIK: John Coffee is director of the Center of Corporate Governance at Columbia Law School, and he says the company is moving swiftly to contain the threat.

JOHN COFFEE: The most striking feature of the current standoff is that News Corp has pretty much assembled a dream team of all-star, foreign corrupt practice litigators.

FOLKENFLIK: That team includes former top federal prosecutor Mary Jo White, former U.S. Attorney General Michael Mukasey, and Mark Mendelsohn, formerly the Justice Department's chief enforcer of that very law.

COFFEE: You don't put all that investment into this without having some serious concerns about what might happen.

FOLKENFLIK: In July, members of parliament grilled former assistant police commissioner Andrew Hayman. He'd enjoyed lavish dinners with top editors of the News of the World while leading an earlier inquiry into phone hacking by the tabloid.


UNIDENTIFIED WOMAN: Mr. Hayman, while a police officer, did you ever receive payment from any news organization?

ANDREW HAYMAN: Good God, absolutely not. I can't believe you suggested that.

UNIDENTIFIED MAN: Lots of people did.

HAYMAN: Oh, come on. I'm not letting you get away with that.

FOLKENFLIK: Hayman left the police force in 2007 and became a paid columnist for Murdoch's Times of London. Alexandra Wrage is president of TRACE, a not-for-profit firm that helps companies comply with anti-bribery laws. She says the law does not set a minimum level for improper payments that trigger prosecution.

ALEXANDRA WRAGE: News Corp is a U.S. company, and the FCPA - the Foreign Corrupt Practices Act - was designed to prohibit companies based in the U.S. or trading on U.S. stock exchanges from paying bribes to government officials - very broadly defined, certainly to include police officers - overseas.

FOLKENFLIK: Alexandra Wrage says she ultimately expects federal authorities to go after News Corp in this case, and that the company will yield.

WRAGE: I think there's a lot of background noise over which points the company could win and which the Department of Justice would be likely to win, or the SEC for that matter. And I just don't think that's going to be the final analysis. The final analysis is going to be, if it's as bad as it sounds, how quickly can they settle? What remedial measures will they have to implement, and how bad will the fine be?

FOLKENFLIK: David Folkenflik, NPR News, New York.


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