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Wednesday, July 13, 2011 FULL SHOW | HEADLINES | NEXT: Egyptian Protests Grow amidst Widespread Frustration over...
2011-07-13

"The Murdoch Empire Could Be Undone": British Phone-Hacking Scandal May Prompt U.S. Criminal Probe

Guests

Ilyse Hogue, senior adviser at Media Matters for America, a research and information center dedicated to comprehensively monitoring, analyzing and correcting misinformation in the U.S. media.

Kevin Zeese, lawyer and spokesperson for the government accountability group ProtectOurElections.org.

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The British phone-hacking scandal engulfing Rupert Murdoch’s media empire has crossed the Atlantic and could impact his maze of interests in the United States. The watchdog group, ProtectOurElections.org, has called on the FBI and the U.S. Securities and Exchange Commission to launch criminal and civil investigations into possible prosecution under the Foreign Corrupt Practices Act in the wake of the scandal that began in the United Kingdom. The act makes it illegal for a U.S. corporation to bribe, or attempt to bribe, foreign officials. More than half of Murdoch’s profits come from his U.S.-based Fox TV operation, which encompasses at least 27 local Fox networks and is available to more than 100 million U.S. households. Shortly after our broadcast, Murdoch’s News Corporation bowed to government and public pressure and withdrew its bid to take full control of broadcaster BSkyB, dashing its hopes of a rapid expansion in television. We speak with Ilyse Hogue, senior adviser at Media Matters for America, and Kevin Zeese, a spokesperson and lawyer for ProtectOurElections.org. [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: The phone-hacking scandal engulfing Rupert Murdoch’s media empire has crossed the Atlantic, could impact Murdoch’s maze of interests in the United States. The government accountability group ProtectOurElections.org has called on the FBI and the Securities and Exchange Commission to launch parallel criminal and civil investigations for possible prosecution under the Foreign Corrupt Practices Act—this in the wake of the scandal that began in Britain.

The group says the scandal overseas is evidence of violation of the act, because the company is headquartered in the United States. It’s urging both agencies to seek warrants to search the company’s New York offices amidst fresh allegations that News of the World journalists hacked into the voicemail of Americans killed in the World Trade Center attack nearly a decade ago. A key U.S. senator has joined calls for such an investigation: Senate Commerce Committee Chair Jay Rockefeller said the authorities should consider whether journalists working for the media giant had broken U.S. law.

At least nine reporters face formal corruption charges related to the scandal, along with a number of police officers. A retired senior police officer in London’s Metropolitan Police said yesterday Murdoch’s News International had deliberately obstructed his inquiry into phone-hacking allegations during 2005 to ’06. Former Deputy Assistant Commissioner Peter Clarke estimated the number of victims could reach up to 4,000.

PETER CLARKE: In reality, very little material was produced. Therefore, while we were able to prosecute the specific offenses under investigation, we were unable to spread the inquiry further with News International because of their refusal to cooperate more broadly.

AMY GOODMAN: British lawmakers have called on Robert Murdoch, his son James Murdoch, the former News of the World editor Rebekah Brooks to testify before the British Parliament. They also plan to question British Prime Minister David Cameron about his links to Rupert Murdoch. Cameron’s former spokesperson, Andrew Coulson, has already been arrested.

Meanwhile, the British government yesterday joined efforts to block Rupert Murdoch’s bid for broadcaster BSkyB, dashing his hopes of a rapid expansion in television as the scandal over phone hacking by one of his newspapers widens. Labour leader Ed Miliband told reporters he hopes Murdoch will withdraw his bid.

ED MILIBAND: This is an opportunity for politics to rise to the occasion. This is an opportunity for the House of Commons to show it understands the depth of public concern, it understands the scale of outrage there is, and it understands the fundamental point that we cannot have Rupert Murdoch expand his reach in British broadcasting while these investigations—while these allegations are still being investigated and as they come out. And I hope that if the House of Commons reaches a clear view, Mr. Murdoch will then do the right thing, and he will listen to the House of Commons, he will listen to the peoples’ representatives elected to the House of Commons and withdraw his bid.

AMY GOODMAN: That was British Labour leader Ed Miliband. Barely an hour later, a spokesman for the government said it too will back the motion, creating a huge political hurdle for the takeover of BSkyB by Murdoch.

Here in the U.S., millions of Americans continue to consume Murdoch-owned media. More than half of Murdoch’s profits come from his Fox TV operation, which encompasses at least 27 local Fox networks and is available to more than 100 million U.S. households. Murdoch also has huge influence in the film industry, through his Hollywood studio 20th Century Fox. In 1976, he bought the New York Post, which has since become News Corporation’s flagship tabloid. He also owns the Wall Street Journal.

For more on Murdoch’s empire and a possible investigation into its U.S. holdings, we’re joined by two guests in Washington, D.C.: Ilyse Hogue, senior adviser at Media Matters for America, which monitors and corrects misinformation in the U.S. media, and Kevin Zeese, a spokesperson and lawyer for the government accountability group ProtectOurElections.org. He has written an open letter to the FBI and SEC urging them to investigate Murdoch’s News Corporation here in the U.S.

Kevin Zeese, what exactly—what response have you gotten, and what exactly do you think this will accomplish? How significant is this phone-hacking scandal of the Murdoch empire?

KEVIN ZEESE: It’s a industrial-size phone-hacking scandal. As you said, 4,000 people could be affected. I’ve seen reports even double that number. So, we’ll have to see how this investigation plays out.

What we asked the SEC and the FBI to do is to investigate the Murdoch empire, News Corp., for violations of the Foreign Corrupt Practices Act. What that act does is makes it illegal for a U.S. corporation to bribe, or attempt to bribe, foreign officials. And Murdoch’s empire is incorporated in Delaware, it’s traded on the NASDAQ, and it’s headquartered in New York City, so it’s a U.S.-based corporation. The allegations of bribery are coming very strong from the U.K. Just the potential bribes at the London police are 100,000 pounds. That’s $160,000. And the failure to report those bribes raises NASDAQ questions, as well, so there could be some additional regulatory problems there.

The Foreign Corrupt Practices Act was enacted in the '70s, when there was a lot of evidence of U.S. businesses trying to bribe for business overseas, and it was an attempt to kind of clean up that effort. And it provides for both criminal and civil penalties. The criminal penalties are for individuals involved—it could affect the Murdoch family, individually—and for the corporation. For willful violations, individuals can face up to a $5 million fine for each violation—so, 4,000 violations, up to a $5 million fine for each violation, if it's willful—and they can face years in jail, as well. In addition, the corporation can be fined up to $25,000,000 per violation, if it’s criminally violated and it’s a willful violation. The SEC can also institute civil fines up to $100,000 per violation. So these are pretty serious.

This is not the only problems they have, though. Just on Monday, three institutional investors in News Corp., including the New Orleans retirement fund, a labor pension fund and a bank, filed a lawsuit seeking a billion dollars in damages for the damage that has been done to the business. And they described no oversight by the board, systemic violations, and Murdoch using this corporation as his own piggy bank. So he faces potential civil problems with that, as well.

And then, finally, the FCC regulates these television stations, which cover 40 percent of the United States, and those licenses are in jeopardy.

So, the Murdoch empire could be undone here. We sent the mail out by snail mail on Monday. I also sent it to an FBI agent we’re working with on investigations of Karl Rove and the Chamber of Commerce by email on Tuesday. So we’re trying to push this along as fast as we can. But it just went out, so we haven’t gotten a response yet. But our experience is that the government will take these seriously when there’s clear evidence of violations. And we expect there will be an investigation both by the SEC, the FBI and the DOJ.

And they need to act quickly, because the evidence in U.K. is that they will act, the News Corp. will act, to obstruct justice. They deleted over a million emails to hide what was going on. They actually—there’s reports that they actually hacked into the phones of some of the police investigators and used the information about affairs, about misuse of frequent flyer miles, about padding of expense accounts, minor things, side issues like that, to stop them from investigating News Corp. So, the Department of Justice needs to act quickly. They need to act, because this is the time where you either deter this kind of behavior or you decriminalize it. And if the Department of Justice enforces the rule of law, we can prevent this kind of activity from occurring in the U.S. media. If they do not enforce the rule of law, they essentially de facto decriminalize it. We can see more of this kind of corruption in our media.

AMY GOODMAN: Ilyse Hogue, I want to bring you into this conversation, with Media Matters for America. You have written a piece for The Nation magazine about why Americans should care. Jay Rockefeller, key U.S. senator, chair of the Senate Commerce Committee, says the authorities should consider whether journalists working for the media giant broke U.S. law. Explain the significance of this.

ILYSE HOGUE: Well, we’re very pleased that Senator Rockefeller came out last night. We think it’s significant, in that Congress has the authority to hold hearings about just what went wrong. And as Kevin is saying, if Congress gets involved, it’s much more likely that the Department of Justice will take this case quite seriously. As your viewers might want to know, the Australians are also calling for an investigation. So this has turned into a global scandal.

And I think it’s really important for Americans to understand, we cannot wait until the crisis reaches the boiling point that it has in the U.K. It has significant cultural, political and financial costs that we don’t want to bear over here. We have to act preemptively. We have seen this pattern for a very long time. This is the man who owns the network that constantly deceives and distorts news, that has their Washington editor instructing their news anchors to link the president to socialism, when even he admits that that is not true. The suit that Kevin just talked about is in addition to a suit that had already been filed for nepotism at the company. And, you know, the chairman of Fox News, Roger Ailes, was just found two months ago to be using News Corp. investigators to tail a small-town newspaper editor he fired, having nothing to do with News Corp. business at all. Now, you know, folks know that Roger Ailes is known to be paranoid, but the questions is: why did it not raise eyebrows at News Corp. that these resources were being appropriated for Ailes’ personal vanity projects? And I think we have got to ask all these questions.

It’s critically important that your viewers also understand, as Kevin mentioned the Chamber of Commerce, News Corp. lobbies extensively. They lobbied the SEC—or the FEC to raise the cap on media ownership, which is what allowed Murdoch to get so much power over our information in the United States. And they, just six months ago, gave the Chamber of Commerce $1 million, while the Chamber, as recently as two weeks ago, was lobbying Congress, with a lot of support from Republicans, to weaken the Foreign Corrupt Practices Act, the very law that they could be prosecuted under right now.

We’ve got to connect the dots. We’ve got to ask the questions. And we cannot let this scandal reach the proportions that it has in the U.K. before we act. We have called for congressional hearings. We’ve been joined by three different groups already, calling for congressional hearings—CREW, CREDO, as well as Public Campaign. I know Center for American Progress is also calling on the DOJ to investigate under the Foreign Corrupt Practices Act. I mean, I think we’re starting to see Americans really engage, ask why this man who has so much power has been given free reign over our media to lie and now potentially actually spy on private American citizens.

AMY GOODMAN: Well, I want to thank you both for being with us, Ilyse Hogue, Media Matters for America, and Kevin Zeese, lawyer and spokesperson for ProtectOurElections.org.

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