Rupert Murdoch is mobbed by the British press. Photo credit: 2Story

Update: On Thursday, the New York branch of the FBI opened a preliminary investigation into allegations News Corp tried to hack into the phones of September 11 victims.

The British phone hacking scandal, which has sparked public outrage and prompted Rupert Murdoch’s News Corp to close The News of the World and pull out of its bid for British Sky Broadcasting (BSkyB), has spread across the Atlantic and is now rocking Murdoch’s New York-based media empire at its very core. Allegations that journalists working for Murdoch might have hacked into the phones of the victims of the September 11 terrorist attacks are potentially devastating for News Corp and its US assets Fox News, The Wall Street Journal, The New York Post and 20th Century Fox.

Jay Rockefeller, a key Democratic senator and chairman of the Senate commerce committee, along with other Democrat senators, has called for the authorities to investigate whether News Corp journalists targeted US citizens and whether the News of the World phone hacks may have violated American laws. Rockefeller, Barbara Boxer and Frank Lautenberg sent letters to the Justice Department and the federal regulatory agency Security and Exchanges Commission in which they “raised questions about possible violations of the U.S. Foreign Corrupt Practices Act, an antibribery law that U.S. authorities have enforced with vigor in recent years,” reported The Wall Street Journal. The Foreign Corrupt Practises Act makes it illegal for an U.S. person or company to pay foreign officials to obtain or retain business.

“The reported hacking by News Corporation newspapers against a range of individuals – including children – is offensive and a serious breach of journalistic ethics. This raises serious questions about whether the company has broken US law,” boomed Rockefeller, who added, “my bet is we’ll find some criminal stuff. This is going to be a huge issue.”

  • “Potential liability flows from journalists at News of the World to its parent, News International, to its parent, News Corp., which is a publicly held company in the United States,” noted CNN.

“The limited information already reported in this case raises serious questions about the legality of the conduct of News Corp. and its subsidiaries under the FCPA,” Lautenberg wrote.

  • Far-reaching repercussions. “The Daily Mirror has already claimed that News of the World reporters attempted to bribe a New York police officer for access to the phone records of victims of the September 11 attacks,” noted Samira Shackle at The Staggers, The New Statesman rolling blog. “If this is substantiated, it will have far-reaching repercussions in the US. Republican politicians in particular have close ties to Murdoch because of his Fox News network, but it is unlikely that this would take priority over their commitment to terror victims and war veterans.”
  • Murdoch: A great bad man. “No one should begrudge the Guardian, the BBC, CNN, the New York Times and others their fun at his expense, nor take it too seriously,” warned former chairman of the Telegraph Newspapers Conrad Black at The Financial Times. “He is, as Clarendon said of Cromwell and the British historian David Chandler updated to Napoleon ‘a great bad man’. It is as wrong to dispute his greatness as his badness … Although his personality is generally quite agreeable, Mr Murdoch has no loyalty to anyone or anything except his company. He has difficulty keeping friendships; rarely keeps his word for long; is an exploiter of the discomfort of others; and has betrayed every political leader who ever helped him in any country, except Ronald Reagan and perhaps Tony Blair. All his instincts are downmarket; he is not only a tabloid sensationalist; he is a malicious myth-maker, an assassin of the dignity of others and of respected institutions, all in the guise of anti-elitism. He masquerades as a pillar of contemporary, enlightened populism in Britain and sensible conservatism in the US, though he has been assiduously kissing the undercarriage of the rulers of Beijing for years.”

Despite a shock few weeks, Murdoch will be pleased to learn that a few commentators have begun to question whether the phone hacking scandal isn’t perhaps being somewhat over-played in the media.

  • Phone hacking hysteria overdone? Writing at The Daily Mail, Steven Glover wondered if “all this hysteria is not a touch overdone?” “I can’t recall a story that has so obsessed politicians and the media. Being a journalist, I am naturally agog, though I wonder whether the wider nation is as convulsed with shock and rage as David Cameron appears to believe.” “Can’t we get this scandal in perspective?” pleaded Glover. “Rupert Murdoch is on the way out, and on the whole I’m pleased about that. Others working for News International will follow, some of them in handcuffs. The Metropolitan Police have some explaining to do. An inquiry into all that seems a good idea. But, believe it or not, there are actually some more important issues in the world than phone hacking. Moreover, this country does still have pretty good newspapers, and a wide variety of them, too, which our political class must not be allowed to destroy in its Robespierrean fervour.”