Scotland Yard has launched a new investigation into News Corporation, which may have disastrous ramifications for Rupert Murdoch and his employees. Rodney E. Lever reports.
WHILE THE VICTIMS of Rupert Murdoch’s phone hacking scandal in England get ready to have their day in court within the next two weeks, Scotland Yard has launched a new investigation which will reach into Murdoch’s personal involvement in the crimes as well as the corporate activities of his entire would wide empire.
The ramifications of this announcement might affect his operations in Australia, during or after the forthcoming Australian election.
The Yard is now probing all aspects of the corporate liabilities of News UK. This could have dangerous implications for the parent company in the United States as well as in its birthplace, Australia, and its activities in other countries — even Russia.
One high-ranking member of the army of lawyers who surround Murdoch has been questioned “under caution” — meaning “be careful what you say or your client could face serious charges”.
Two senior executives of News UK have been officially cautioned. One of them is a member of the company’s internal Management and Standards committee, originally assigned to cooperate and assist with Scotland Yard inquiries.
The development has thrown a shockwave through the highest levels of News Corporation management, including those in the United States. Top executives in New York have ordered the Management and Standards Committee in Britain to “scale down” their assistance to the police.
The News Corporation head office in New York has examined the possibility of criminal charges being laid and has warned Britain’s Crown Prosecution Service that this would be against the “public interest” and thousands of employee’s jobs would be lost.
The company’s New York general legal counsel, Gerson Zweifach, has flown to London for emergency talks with the police.
A Scotland Yard source is quoted in British newspaper The Independent as saying Zweifach told police:
“Crappy governance is not a crime. The downstream, effects of a prosecution would be apocalyptic!”
He said that the U.S. administration might immediately also take action against the company and its U.S. licences to operate would be at risk. This would certainly mean the shut down of Fox News and would affect many of its other activities.
Scotland Yard has been investigating every aspect of Rupert Murdoch’s News UK British operations for more than a year and a half. Since then, the company’s survival has depended on income from its Hollywood movie business and Fox News.
The current U.S. Democratic administration has no love for Murdoch, a celebrity cohort of the Republican Party, whose powerful support saved him from bankruptcy when he disastrously borrowed a huge amount of money to buy out the Herald and Weekly Times company in Australia, with its papers now in every capital city. They would be unlikely and probably unable to save him again.
Another major asset is his $8 billion investment in cable network Sky in the UK — which he would be forced to sell at a substantial loss if the UK communications authority Ofcom finds against him in their current investigations of his character as a fit and proper person to control that company.
British Labor politician Tom Watson, the first MP to speak out against Murdoch, is reported as saying he is not at all surprised that Murdoch is in deeper trouble than ever.
“He is solely responsible for the corporate culture that allowed this scandal to damage his global empire,” Watson said.
“I hope other jurisdictions like Russia will also begin to investigate all the activities of News Corporation around the world. The threat that thousands of people may lose their jobs is ridiculous. The company needs to clean up its act. It will survive without him. The people who work for it understand their social responsibility.”
A lawyer working for the Crown Prosecution Service in London says the Metropolitan Police have been suspicious of the operations of News UK for more than two years. The company was unaware that it was under suspicion when detectives obtained a copy of the minutes of a certain board meeting.
Subsequently, the News group was placed under suspicion without it being advised an investigation had begun — even though the strict procedure would have been to tell the company of its rights.
There is no legal provision in the UK for dropping a corporate prosecution just because a company had a large number of employees.
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