CEO Rupert Murdoch announced the changes today in a staff memo. He named General Counsel Gerson Zweifach to serve as Chief Compliance Officer, with responsibility “to create a more robust global compliance and ethics program.” Associate General Counsel Lisa Fleischman will make day-to-day decisions as Deputy Chief Compliance Officer. Both will report to the company board and its Audit Committee. In addition, News Corp will be divided into five “compliance groups,” each with a full-time Group Chief Compliance Officer who’ll report to Zweifach. There will be two in Los Angeles — one for Cable and Broadcast and another for Film and TV Production. In addition, there will be compliance groups for Europe and Asia, Australia, and in New York for News and Information. “We recognize that strengthening our compliance programs will take time and resources, but the costs of non-compliance – in terms of reputational harm, investigations, lawsuits, and distraction from our mission to deliver on our promise to consumers – are far more serious,” Murdoch says. He adds that the company has already strengthened and expanded anti-bribery training, and has begun to review anti-corruption controls “in selected locations around the globe.” The review “is not based on any suspicion of wrongdoing by any particular business unit or its personnel. Rather, it is a forward-looking review based on our commitment to improve anti-corruption controls throughout the company.”
James Murdoch’s Hacking Defense Weakens: He Saw 2008 Email Warning That Lawbreaking Was ‘Rife’ At Tabloid
It’s come to this: The News Corp Deputy COO says he saw, but didn’t actually read, a newly released email from 2008 that would demolish a key part of his defense in the News Of The World hacking scandal. The email included a note warning that a hacking victim wanted hush money to hide the fact that the scandal was bigger than News Corp had publicly acknowledged. “Unfortunately, it’s as bad as we feared,” former News Corp lawyer Colin Myler wrote to Murdoch asking for five minutes to discuss the matter. “No worries,” Murdoch replied three minutes later as he proposed times when they could talk.
The documents, released today by the parliamentary committee investigating the scandal, rip at Murdoch’s main defense against the charge that he tried to cover up the full extent of the lawbreaking. Murdoch insists that he did not obstruct justice when he agreed in mid-2008 to pay hacking victim Gordon Taylor — the former head of the Professional Football Association — $1.2M on the condition that he keep quiet about the matter. Murdoch says he really believed at the time what News Corp had said publicly including to Parliament: that the problem was limited to a single, rogue reporter. Yet the email reveals that Taylor knew otherwise and “wishes to be vindicated or made rich.” Taylor
So now no member of the Murdoch family sits on the boards of News Corp’s marquee British newspapers. The London Evening Standard is reporting from regulatory filings that James Murdoch in September “dramatically resigned” in a “surprise move” as a director of the various News Corp companies that publish The Times, The Sunday Times and The Sun. James faces calls to also quit as chairman of BSkyB at next week’s annual general meeting. But James is still enjoying his promotion to News Corp deputy chief operating officer in New York last April and a News International spokesman confirms that James remains chairman of the company. NI remains at the center of the UK phone hacking scandal.
U.S. prosecutors are checking to see if News Corp violated the Foreign Corrupt Practices Act. They have have written to request info on alleged bribes paid by its employees to UK police, Bloomberg reported. The inquiry comes on the heels of a Justice Department and FBI probe investigating claims that victims of the Sept. 11, 2001, attacks had their phones hacked by News Corp employees. The request for information in the bribery case doesn’t carry the same legal force as a grand jury subpoena, which would compel a response under law. News Corp is the target of three UK police investigations and a Parliamentary probe on phone hacking by reporters at the News of the World. The company shut down the newspaper and abandoned BSkyB takeover plans after allegations that its reporters deleted voice mails from a murdered schoolgirl’s phone.
In London meanwhile, Scotland Yard said it won’t force reporters at The Guardian to reveal their sources on the bribery and phone hacking cases after all. They had sought the names under the UK’s Official Secrets Act, normally used to prosecute spies. “This decision does not mean that the investigation has been concluded,” the police said in a statement. The department said their probe “has always been about whether a police officer has leaked information and gathering any evidence that proves or disproves that.” The Daily Telegraph and Sky News have …
Double Humiliation: Murdochs Testify Before Parliament About Scandal; Rupert Attacked With Shaving Cream Pie During Hearing
News Corp Chairman/CEO Rupert Murdoch’s testimony before a British Parliament committee was briefly suspended after he was nearly hit in the face by a protestor armed with a plate of shaving cream. His wife Wendi sprang to his defense and deflected the assault. Police have arrested the attacker. James Murdoch criticized authorities for not protecting his 80-year-old father better. Proceedings were recessed for 15 minutes before resuming. What a humiliating thing to happen in the House of Commons when the eyes of the world are watching. Here is my live-blogging of the evidence presented by Rupert and son James Murdoch before the MPs:
1714: Rupert says there is no evidence that families of 9/11 victims had their phones hacked. James is more cautious, saying he doesn’t know the veracity of the “appalling” allegations.
1709: Committee resumes. James denies any inference that out-of-court settlements were paid to buy silence. Says only became aware of Milly Dowler voicemail hacking when it broke in the press.
1700: Rupert Murdoch has been apparently hit in the face with a plate of shaving foam by a man shouting, “Greedy.” James Murdoch has remonstrated with police for not protecting his father properly.
1659: Rupert Murdoch’s wife Wendi Deng defended her husband. What a shameful thing to have happened in the House of Commons.
1655: A shout and James Murdoch springs to their feet. A policeman dashes across the room. Police are handcuffing man behind his back. Proceedings suspended.
1651: Asked why Rebekah Brooks suggested there were still more revelations to come, James claims ignorance. He apologises for what’s happened.
1650: Rupert admits the way News Corp has handled the crisis is “terrible”, but he doesn’t believe that either James or Les Hinton made any great mistakes.
Rebekah Brooks Resigns As CEO Of News International
This is huge. Hinton has been one of Rupert Murdoch’s closest lieutenants for 52 years in Australia, the UK and the U.S. But he ran News International during the anything-goes years when the News Of The World phone hacking took place. Hinton says that he didn’t know what was going on under his watch: “That I was ignorant of what apparently happened is irrelevant and in the circumstances I feel it is proper for me to resign from News Corp. and apologize to those hurt by the actions of News of the World.” Murdoch — who rewarded Hinton in 2007 by putting him in charge of Dow Jones, owner of The Wall Street Journal – says the resignation is “a matter of much sadness to me.”
New York, NY, July 15, 2011 – News Corporation today announced the resignation of Les Hinton, Chief Executive Officer of Dow Jones & Company and Publisher of The Wall Street Journal, effective immediately. Mr. Hinton, a 52-year veteran of News Corporation, has led Dow Jones since December, 2007.