HOT OFF THE WIRE

Breaking News

Tweet TWEET

News Corp. Scandal Prompts U.S. Lawmaker Privacy Questions

U.S. lawmakers pressed regulators to address whether consumers’ phones are vulnerable to hackers and asked what federal agencies are doing to protect privacy amid allegations of hacking by a News Corp. (NWSA) newspaper.

Representative Mary Bono Mack asked Federal Communications Commission Chairman Julius Genachowski at a House hearing today whether “American consumers are as vulnerable as politicians and celebrities in London.”

“We often hear that privacy laws in Europe are much stricter than they are in the U.S.,” said Bono Mack, a California Republican and chairman of the subcommittee on commerce and trade. “If that’s so, it’s hard to understand how the phone hacking incidents in Britain could have gotten so far out of hand.”

Employees of News Corp.’s now-defunct News of the World are accused of hacking hundreds of 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. (BSY)

The Federal Bureau of Investigation is examining whether employees of Rupert Murdoch’s News Corp. tried to hack into the phones of Sept. 11 victims. “We’re aware of certain allegations pertaining to a possible hacking by News Corp. personnel and we’re looking into those charges,” Jim Margolin, a spokesman for the FBI’s New York office, said in a phone interview today.

Calls for Investigations

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.”

The U.S. Justice Department is reviewing the lawmakers’ letters, Laura Sweeney, an agency spokeswoman, said yesterday, declining to comment further. John Nester, an SEC spokesman, declined to comment.

9/11 Families

Boxer, Rockefeller, and Menendez yesterday cited accusations that News Corp. employees had hacked into the phones of Sept. 11 victims and requested a probe 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 U.S. 9/11 victims were targeted.

“I feel that the FBI should investigate whether News Corp. hacked into voicemails of 9/11 families,” Sally Regenhard, vice chair of the 9/11 Parents & Families of Firefighters and WTC Victims, said in an e-mail.

“If this proves to be true, then it is an egregious violation of personal privacy and security,” Regenhard said. “This is a further victimization of a group which has already been victimized by the deaths of their loved ones on 9/11.”

Representative Bruce Braley, an Iowa Democrat, today called for an investigation by the House Oversight and Government Reform Committee into whether News Corp. violated U.S. anticorruption law and hacked into phones of U.S. citizens.

The committee “has a duty to protect the privacy of Americans and to hold U.S. corporations accountable,” Braley wrote in a letter to the oversight panel’s chairman, Representative Darrell Issa, a California Republican.

Wiretap Laws

At today’s hearing, Representative Anna Eshoo, a California Democrat, called on the House Energy and Commerce Committee to investigate the “burgeoning scandal of News Corp.”

Asked by Bono Mack if there are sufficient safeguards to protect U.S. citizens from the phone hacking alleged to have taken place in Britain, Genachowski said there are “several laws in place that address hacking issues,” including federal wiretap laws and state laws.

Teri Everett, a News Corp. spokeswoman, didn’t immediately respond to requests for comment today.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

Protecting Children

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. It published its last edition on July 10.

The News of the World scandal was one of several privacy- related topics explored during today’s hearing as members asked whether more legislation or regulation is needed to protect consumer data online.

Several lawmakers talked about online protections for children, including Representatives Edward Markey, a Massachusetts Democrat, and Joe Barton, a Texas Republican, who jointly introduced on May 13 “do not track kids” legislation, which would require online companies to obtain parental consent for collecting children’s personal information.

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.