Authorities Launch FCPA Probe of Murdoch Holdings

An international probe of News Corporation and its leaders demonstrates the broad scope of the Foreign Corrupt Practices Act. The FCPA investigation follows more than 100 civil claims that threaten to topple the Rupert Murdoch media empire.

Murdoch's UK newspaper company, News International, has settled more than 60 claims brought by politicians, athletes, entertainers and others who were allegedly damaged by News International's wiretaps and voicemail interceptions. The company's wrongdoing extends back at least to 2003 when journalists hacked the voicemail of a missing girl and hampered the police investigation of her disappearance. The latest investigation focuses on The Sun, a UK daily tabloid owned by News Corporation. Authorities are investigating bribes allegedly paid to police for information published in various Murdoch assets.

U.S. authorities have jurisdiction over the global company because News Corporation maintains financial offices in Manhattan. The FCPA investigation could result in millions of dollars of fines being levied against Murdoch and company executives. Company leaders could be jailed for knowing about employees' illegal activities and authorizing them or failing to take action to stop them.  FCPA penalties are based on the benefit that the defendant gained from its corruption. Authorities also consider mitigating factors such as cooperation with investigators. There's reason to believe that any penalties ultimately imposed could be harsh: Last year, for example, an individual who bribed telecommunications officials in Haiti was sentenced to 15 years in prison for FCPA violations.

While the FBI and the Department of Justice head up the FCPA investigation, the Securities and Exchange Commission is conducting a parallel analysis of false financial information that News Corporation allegedly used to mask the identities of individuals whom journalists bribed for information. 

Categories: International Compliance
Tags: fcpa