Bloomberg News

Demands Mount in U.S. Congress for News Corp. Hacking Probes

July 14, 2011

July 14 (Bloomberg) -- Outrage over alleged bribery and phone hacking at a News Corp. tabloid in London mounted in Washington as lawmakers demanded probes of whether the company violated anti-corruption laws and Sept. 11 victims’ privacy.

The scandal will be raised at a House hearing today on Internet privacy, said Ken Johnson, a spokesman for Representative Mary Bono Mack. The California Republican’s staff contacted News Corp. several times yesterday to seek “assurances that this is a uniquely U.K. problem,” Johnson said in an interview yesterday.

“We want to make sure the contagion is not spreading,” he said.

Employees of the now-defunct News of the World are accused of hacking hundreds of mobile-phone voicemails, including those of murder and terrorism victims, and bribing police for confidential information. The scandal led New York-based News Corp. yesterday to drop its 7.8 billion-pound ($12.5 billion) bid for full control of British Sky Broadcasting Group Plc.

At least six U.S. lawmakers yesterday urged government agencies including the Justice Department and Securities and Exchange Commission to investigate possible violations of U.S. law. Among them were Democratic Senators Jay Rockefeller of West Virginia, Barbara Boxer of California, and Frank Lautenberg and Robert Menendez of New Jersey.

“The reported allegations against News Corporation are very serious, indicate a pattern of illegal activity, and involve thousands of potential victims,” Boxer and Rockefeller said in a joint statement. “It is important to ensure that no United States laws were broken and no United States citizens were victimized.”

Anti-Corruption Law

Rockefeller, Boxer and Lautenberg wrote to Attorney General Eric Holder and SEC Chairman Mary Schapiro asking their agencies to examine whether News Corp. violated the Foreign Corrupt Practices Act following allegations that employees of the News of the World had bribed U.K. police.

The U.S. Justice Department is reviewing the lawmakers’ letters, agency spokeswoman Laura Sweeney said, declining to comment further. SEC spokesman John Nester declined to comment. White House spokesman Jay Carney said the Obama administration is aware of the situation and referred questions about the scandal to the Justice Department and SEC.

Teri Everett, a spokeswoman for News Corp., declined to comment. Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

Tabloid Closed

News Corp.’s U.S. holdings include the Fox television networks, the Wall Street Journal newspaper and the Dow Jones newswire. The phone-hacking and bribery allegations at News of the World prompted News Corp. Chairman and Chief Executive Officer Rupert Murdoch to close the 168-year-old tabloid, which published its last edition on July 10.

Boxer, Rockefeller, and Menendez cited accusations that News Corp. employees had hacked into the phones of Sept. 11 victims and requested an investigation of whether the privacy of any U.S. citizen was violated. Two New York Representatives, Republican Peter King and Democrat Louise Slaughter, also called for probes into whether 9/11 victims were targeted.

King, who chairs the House Homeland Security Committee, asked the Federal Bureau of Investigation to investigate reports that News of the World reporters attempted to get a New York police officer to help hack into the voicemails of Sept. 11 victims and their families.

“It is revolting to imagine that members of the media would seek to compromise the integrity of a public official for financial gain in the pursuit of yellow journalism,” King wrote in a letter to FBI Director Robert Mueller.

Privacy Concerns

Representative Lamar Smith, a Texas Republican who chairs the House Judiciary Committee, stopped short of calling for an investigation by the Justice Department.

“It is clear that British officials are taking these allegations seriously,” Smith said in an e-mail. “I am confident that the Justice Department is following this issue closely and will take necessary actions if they believe U.S. laws were violated.”

Bono Mack has expressed concern about privacy in the wake of the phone-hacking scandal and said July 12 she is asking companies including Apple Inc. and Google Inc. about the security of mobile devices.

Witnesses for today’s hearing will include Federal Communications Commission Chairman Julius Genachowski and officials from the Commerce Department and Federal Trade Commission.

The FCC won’t involve itself in the U.K. probe of the News of the World scandal, Genachowski said July 12 in Washington.

“Obviously there is a process going on in the U.K., and that is a U.K. process, and I don’t expect we will be involved with that,” Genachowski told reporters after an unrelated FCC meeting.

--With assistance from Anthony Palazzo in Los Angeles and Molly Peterson and Jeff Bliss in Washington. Editors: Michael Shepard, Allan Holmes

To contact the reporter on this story: Eric Engleman in Washington at eengleman1@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net


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