News Corp. Scandal unfolding a foundation of Conspiracy

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THE STORY

News Corp., Rupert Murdochs media empire had recently found itself tangled in a phone hacking scandal. And although sufficient evidence could not be gathered by investigators.

Although the investigators could not find sufficient evidence to confirm that the organizations journalist may have hacked the phones of 9/11 victims the U.S. authorities began to dig deeper into the evidence. The British police found no records with names or telephone numbers of the victims of September 11 in News Corps News of the World tabloid, which is now closed for investigation, as per information given to the Federal Bureau of Investigation (FBI).

The Scotland Yard (Londons Metropolitan Police Service) examined large number of phone records, but found none among the victims of the would-be phone hacking, to be those from 9/11.

The New York Police Department also told the FBI that no indication of such occurrences had been found. But the latter continues to probe the hacking claim.

Why? The bureau keeps insisting on the hacking claim. Another News Corp. property, The New York Post told its employees to keep any documents relevant to the inquiry.

The Daily Mirror had released an article earlier that journalists from News Corp. had tried to hack the phones of 9/11 victims. This was not the only allegation against News Corp. U.K. The allegations included phone hacking that also targeted celebrities, politicians and murder victims. After U.S. lawmakers requested the FBI and the Justice Department and they opened an investigation to see if any laws had been violated.

A DOMINO EFFECT

Mike Koehler, an assistant professor of business law at Butler University, said federal corruption probes that begin as inquiries into one part of a company often expand into searches for similar conduct elsewhere. In the case of News Corp., claims that its U.K. Sunday tabloid News of the World allegedly bribed British police sparked the Justice Department to examine whether such conduct amounts to a violation of U.S. corruption law.

In addition to these allegations, News Corp is also being scrutinized for other allegations including a supermarket-coupon and advertising unit. It has been a chaotic investigation. Lawmakers had to get the Justice Department in the U.S. to investigate. The coupon case is more than five years old, meaning the statute of limitations would likely bar prosecution of the matter even if investigators uncovered criminal activity, the people said. The issue was brought to federal prosecutors years ago, but nothing came of it, according to congressional correspondence.

New Jersey-based firm Floorgraphics claimed employees at News America Marketing hacked into its website in 2003 and 2004, in a lawsuit. The case was settled in 2009 when News Corp. bought Floorgraphics’ assets and clients for $29.5 million.

U.S. authorities are trying to determine whether they can find a pattern of misdeeds at News Corp. that continued into 2006 or more recently, according to the people familiar with the matter. If evidence is found along with proof that executives were rewarded for wrong doing, for example, it would then open the investigation into matters beyond the five-year period.

Along with the phone-hacking allegation and a look at whether News Corp.’s U.K. reporters broke U.S. law when they allegedly bribed British police officers in return for information this is the third line of inquiry into the company being pursued by U.S. prosecutors.

CONTRADICTIONS

GOODMAN

Clive Goodman, a former reporter at the tabloid and the only one convicted so far in the scandal, admitted that phone hacking had the “full knowledge and support” of others at the paper and was “widely discussed” at daily editorial meetings. This was revealed in an internal letter written by him in March 2007. The letter addressed the human resources director of News International, demanding that Goodman be reinstated to his job at the weekly tabloid despite his conviction on phone-hacking charges. Goodman had pleaded guilty to illegally accessing messages left for aides to the royal family. But he wrote that the eventual decision to fire him was surprising because of the internal common knowledge of the phone hacking.

In another potentially explosive passage that was found, the reporter said that the paper had promised that he could return to his job if he agreed to be the person they could lay charges on.”I expect the paper to honor its promise to me,” Goodman wrote.

JAMES MURDOCH

The statements contradict the paper’s insistence that hacking was confined to a single reporter who had tapped into the voicemails of Britains royal household. News International, the British branch of News Corp. said in a statement that it recognized the seriousness of the letter and that it was working constructively on it with Parliament and the police. Four people from top position at News International and the News of the World have been chosen by lawyers to reappear next month before a parliamentary committee looking into the scandal.

James Murdoch had told lawmakers last month that, in authorizing a large out-of-court settlement with a former soccer star whose phone had been tapped into, he had not known of an email in the case suggesting that more than one journalist was involved in hacking. Two members of the committee said they were likely to recall this chairman of News International because they believe he had given the panel misleading evidence. He will also be questioned to clarify on the new allegations made.

Not working in his favor are the additional allegations by 2 former senior News of the World executives have said that Murdoch was fully aware of the email related to the case involving the former soccer star. The onetime soccer player Gordon Taylor was paid $1 million in 2008 to keep silent in accordance to critics.

“There are several points where the evidence we’ve received from James Murdoch is contradicted by evidence we’ve had from others, so those are the issues we are going to want to pursue further,” John Whittingdale, the head of the parliamentary committee said.

Les Hilton, the executive chairman of News International, said in his defense, In September 2009, I told the Committee there had never been any evidence delivered to me that suggested the conduct had spread beyond one journalist. If others had evidence that wrongdoing went further, I was not told about it.

As with every statement released by the members of News Corp., this too was contradicted by Clive Goodman who stated that, The decision is inconsistent because [redacted] and other members of staff were carrying out the same illegal procedures.

News Corp.s conspiracy has spiraled out of control at the moment, and will only prove to cause trouble for the organization and its related businesses. This is a matter of trust and business integrity, and should all the allegations and accusations be proven true to the point, the company has dug its own hole. The question is, was any of this worth it?

Sources: The Wall Street Journal, Los Angeles Times, New York Times

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