Phone hacking scandal deepens

[Peter Lemkin]

Rupert Murdoch donated $1m to a pro-business lobby in the US months before the group launched a high-profile campaign to alter the anti-bribery law the same law that could potentially be brought to bear against News Corporation over the phone-hacking scandal.

News Corporation contributed $1m to the US Chamber of Commerce last summer. In October the chamber put forward a six-point programme for amending the Foreign Corrupt Practices Act, or FCPA, a law that punishes US-based companies for engaging in the bribery of foreign officials.

Progressive groups in the US have speculated that there is no coincidence in the contemporaneous timing of the Murdoch donation and the launch of the chamber's FCPA campaign, which they claim is designed to weaken the anti-bribery legislation. "The timing certainly raises questions about who is bankrolling this campaign if it's not News Corporation who is it?" said Joshua Dorner of the Centre for American Progress action fund.

Ilyse Hogue of the monitoring group Media Matters said the donation was in tune with Murdoch's track record. "Time and again we've seen News Corporation use their massive power and influence to change laws that don't suit them. The proximity of this contribution and the chamber's lobbying campaign at least should raise eyebrows."

The Chamber of Commerce dismissed the suggestions of a link between its campaign and the News of the World scandal as "preposterous" and "completely false". "Our efforts to modernise an outdated act have been ongoing for nearly a year," a spokesman said, adding that the aim of the proposals was to obtain clear rules of the road for American businesses.

The FCPA can imprison and fine individuals and companies. It was signed into law in 1977 as a means of clamping down on the bad behaviour of US companies abroad. In recent years it has been increasingly usesd. The 10 heaviest FCPA settlements have all occurred since 2007 and total $2.8bn.

News Corporation, which has its headquarters in the US, emphasises in its corporate literature that it has a global anti-bribery policy. "We don't offer, give, solicit or accept bribes or kickbacks, either in cash or in the form of any other thing or service of value," it says.

But evidence has come to light that News Corporation employees working for the News of the World bribed police officers in the UK. "What News of the World did would seem to fall squarely within the parameters of the FCPA," said Philip Raible, a media lawyer with Rayner Rowe LLP in New York.

The chorus of demands that News Corporation face an FCPA investigation has grown steadily louder in the US in the past two days. The former governor of New York, Eliot Spitzer, has called in Slate for an immediate investigation of the company for violation of the anti-bribery act.

Congressional representatives have added their voices to demands for an official investigation. Bruce Braley, a Democratic member of the powerful House oversight committee, told CNN that Congress itself should look into whether Murdoch's company broke anti-bribery laws.

A Republican representative in New York, Peter King, has called on the FBI to look into claims that News of the World was involved in phone-hacking activities in the US. And several members of Congress have written to the US attorney general, Eric Holder, asking him to see whether News Corporation has breached the FCPA.

The Securities and Exchange Commission, which has the authority to investigate companies under the FCPA, said any civil prosecution it undertook would only be made public if it asked the courts for an injunction prohibiting further violations of the law.

http://www.guardian.co.uk/media/2011/jul...-lobbyists