News Corp. (NWS) was sent a letter by U.S. prosecutors investigating foreign bribery, requesting information on alleged payments employees made to U.K. police for tips, according to a person with knowledge of the matter.
The letter is part of an effort by the U.S. Justice Department to determine whether News Corp. violated the Foreign Corrupt Practices Act, or FCPA, according to the person, who declined to be identified because the matter isn’t public. News Corp. fell 1.7 percent on the news.
The inquiry advances an existing U.S. probe that is reviewing claims that victims of the Sept. 11, 2001, attacks had their phones hacked by News Corp. employees. The letter doesn’t carry the same legal force as a grand jury subpoena, which would compel a response under law.
Earlier this year, it was revealed that reporters at New York-based News Corp. (NWSA)’s News of the World had hacked the voicemail accounts of celebrities and a young girl who had been kidnapped and murdered. Investigators subsequently began looking into allegations that the tabloid’s staffers made payments to police officers in return for confidential information.
The FCPA, enacted in 1977, makes it a crime for U.S. businesses or their employees to pay off representatives of a foreign government in an attempt to gain a commercial advantage. Federal prosecutors have broad discretion to interpret the law and its definition of who qualifies as a government official.
Former Government Lawyer
In July, News Corp. retained attorney Mark Mendelsohn of Paul Weiss Rifkind & Garrison LLP, according to the Wall Street Journal, which is owned by News Corp. Prior to joining the law firm, Mendelsohn had overseen the Justice Department’s FCPA investigations.
Suzanne Halpin, a spokeswoman for News Corp., didn’t immediately return calls seeking comment on the letter. Last week, she declined to comment on the probe. Jerika Richardson, a spokeswoman for Manhattan U.S. Attorney Preet Bharara, whose office initiated the FCPA investigation, declined to comment.
Last month, U.S. Attorney General Eric Holder met with relatives of victims of the Sept. 11 attacks, who had requested a meeting about allegations of hacking by News Corp.
London’s Daily Mirror had reported that News Corp. reporters unsuccessfully tried to have a former New York police officer obtain phone records of victims of the attacks. News Corp. Chairman Rupert Murdoch told U.K. lawmakers in July that he has “seen no evidence of these allegations.”
New York Post
News Corp.’s New York Post that month told employees to retain files related to any attempts at unauthorized access to third-party data, or illegal payments to government officials made to obtain information, according to a memorandum reproduced on The Poynter Institute’s Romenesko website.
News Corp. is facing three police investigations in the U.K. as well as a Parliamentary probe regarding phone hacking by reporters at the News of the World.
The company shut down the tabloid and scrapped its bid for the rest of British Sky Broadcasting Group Plc after a report that its journalists deleted voice mails from the murdered schoolgirl’s phone.
News Corp. fell 3 cents to $16.90 in Nasdaq Stock Market trading.
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.
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