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Ex-News Corp. Employee Said to Be Contacted for U.S. Probe

Sept. 16 (Bloomberg) -- Prosecutors investigating hacking and bribery allegations at Rupert Murdoch’s News Corp. are seeking to interview a former employee of a U.S. unit who claims knowledge of illegal activity at the company, according to a person familiar with the matter.

U.S. prosecutors in Manhattan this month contacted a lawyer for Robert Emmel, a former account director at News America Marketing In-Store LLC, about allegations of hacking and possible violations of the Foreign Corrupt Practices Act, said the person, who wasn’t authorized to discuss the matter.

Emmel said in court papers that he had evidence of “widespread illegal activity” at News Corp.’s retail marketing unit and gave it to federal lawmakers and regulators in 2006, the year the company fired him. Emmel made the allegations in a lawsuit News America Marketing brought against him.

Carly Sullivan, a spokeswoman for U.S. Attorney Preet Bharara in New York, declined to comment on whether prosecutors had made the contact. Emmel declined to comment.

Philip Hilder, a lawyer for Emmel, said in an interview that “authorities have reached out” to him. Hilder declined to identify the investigators or what they are seeking.

Suzanne Halpin, a spokeswoman for News Corp., declined to comment on the development.

The contact with Emmel’s lawyer was previously reported by the watchdog group Media Matters for America.

‘Fraudulent Billing’

Emmel, in papers filed in the News America Marketing lawsuit, described the evidence given to lawmakers and regulators in 2006 as “substantial oral and documentary” information of the company’s “extensive billing and revenue-sharing fraud against its customers; its predatory and anticompetitive schemes against competitors” and “fraudulent inflation of its reported earnings unbeknownst to its shareholders.”

Emmel said in court filings that he made the disclosures in mailings and meetings with the staffs of the U.S. Senate Finance Committee, the Securities and Exchange Commission and the New York attorney general’s office.

News America Marketing sued Emmel in federal court in Atlanta in April 2007, claiming he stole trade secrets by keeping a copy of his company computer’s hard drive and other internal documents after being fired five months earlier. News America Marketing also accused Emmel of breaking a December 2006 confidentiality agreement.

No Action

No action was taken against News Corp. by the authorities Emmel contacted in 2006, the company said in a court filing last year before Emmel won a reversal of a verdict against him.

“All of Mr. Emmel’s claims against News America Marketing are meritless,” Halpin said in an interview last month. “There have been three very public lawsuits about these matters, and at no time during any of these legal proceedings was any evidence produced to support Mr. Emmel’s claims.”

Emmel no longer has possession of the documents and is barred by a court order from discussing them unless he is subpoenaed or is cooperating with government investigators.

Since making the disclosures, Emmel has been a witness for rivals who filed civil lawsuits against News America Marketing for anticompetitive practices related to supermarket advertising.

The breach of contract case is News America Marketing In-Store LLC v. Emmel, 07-cv-00791, U.S. District Court, Northern District of Georgia (Atlanta).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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