* Questions about accuracy in U.S. securities filings
* British probe into News Corp expected to take the lead
By Jeremy Pelofsky and Carlyn Kolker
WASHINGTON/NEW YORK, July 11 Rupert Murdoch's
News Corp (NWSA.O) could face probes by U.S. authorities for
possibly violating bribery laws, compounding the media mogul's
problems after a phone-hacking scandal in Britain.
The Obama administration has significantly stepped up
enforcement of anti-bribery laws in the last two years, winning
big settlements from the likes of Daimler AG DAIGn and BAE
Systems Plc (BAES.L) by focusing on bribes they paid to foreign
officials to win lucrative contracts.
Bribes for business have represented the bulk of these
anti-bribery cases brought by the Justice Department and the
Securities and Exchange Commission. It is unclear whether U.S.
authorities would use scarce resources to probe News Corp over
bribes allegedly paid to British police and other officials for
information that became news scoops.
Employees of Murdoch's now-shuttered News of the World
tabloid have been accused of hacking into personal voicemail
and paying bribes. British authorities are investigating.
Legal experts in the United States said News Corp could
face scrutiny on this side of the Atlantic Ocean as U.S.
officials probe whether any of the allegations, if proven true,
violate the U.S. Foreign Corrupt Practices Act.
That law makes it a crime for any company with U.S. ties to
bribe foreign officials to obtain or retain business.
British media outlets reported that News of the World
reporters bought phone details for the royal family from a
security officer. The Daily Mirror newspaper reported, citing
an unidentified source, that News of the World reporters had
also offered to pay a New York police officer to retrieve the
private phone records of victims of the Sept. 11 attacks.
At a minimum, the News Corp would be at risk for violating
laws on accurate accounting reporting if the bribes were paid,
according to legal experts. News Corp shares trade on Nasdaq
and the company files its financial reports with the SEC.
"Would the Department of Justice go after them on a
criminal basis? Hard to say. But the SEC definitely has a stake
in this," said Alexandra Wrage, a legal expert on bribery who
is the president of the firm TRACE, which helps companies
comply with anti-bribery and anti-corruption laws.
SEC LIKELY TO LEAD ANY PROBE
"How did they account for these payments? If you falsify,
misrepresent on your books what this money was spent on,
straight out of the box you have a FCPA violation," Wrage
A Justice Department spokeswoman declined to comment, as
did a spokesman for the SEC. News Corp representatives were not
immediately available for comment.
The United States has been pushing other countries to step
up their enforcement of anti-bribery laws and a stiff new law
in that vein took effect July 1 in Britain. However, it would
not apply to the News of the World case because the alleged
activity took place before the measure came into force.
One lawyer said U.S. prosecutors would likely defer to
their British counterparts and raised questions of whether a
criminal case here could be made since prosecutors would have
to show bribes were paid to obtain or retain business.
"It's a million-to-one shot," said the attorney, who
declined to be identified because he did not want to jeopardize
any business with News Corp.
Ed Rubinoff, a Washington-based attorney with Akin Gump
Strauss Hauer and Feld, said any investigation would likely be
led by the SEC and focus on how the company reported and
accounted for any alleged bribes it paid as well as what
controls it had for such payments.
If a probe is initiated, that could signal a broadening of
the U.S. government's interpretation of the law, Rubinoff said.
However, the difficulty could be in proving that any bribes
gave News Corp a business advantage, Rubinoff said.
"This would be pushing the boundary a good bit more," he
said, adding that "you don't have to prove all those elements
for a record-keeping violation."
Another possible headache for Murdoch's empire is that a
bribery inquiry that started in one country could go global and
such investigations can drag on for years and cost tens of
millions of dollars.
"Another potential issue here that should be of concern to
the company is it is very common for FCPA inquiries to focus on
a discrete set of facts, but then for a company to do a
world-wide internal review," said Michael Koehler, a professor
of business law at Butler University.
"It's very common for enforcement agencies to ask the
'where else?' questions," he said.
(Editing by Christopher Wilson
(Additional reporting by Andrea Shalal-Esa in Washington and
Yinka Adegoke in New York.)