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FBI opens inquiry into Murdoch's News Corp.

The agency launches an investigation at the request of U.S. lawmakers alarmed by reports that British reporters may have tried to hack into phones and access records of Sept. 11 victims and their families, in violation of U.S. law.

July 14, 2011|By Richard A. Serrano, Jim Puzzanghera and Kim Geiger, Washington Bureau

Rep. Bruce Braley (D-Iowa) sent a letter to Rep. Darrell Issa (R-Vista), who chairs the House Oversight and Government Reform Committee, asking for an investigation into "whether victims of the September 11, 2001 attack and other U.S. citizens had their cell phones targeted by News Corporation."

Rep. Anna G. Eshoo (D-Menlo Park) made the same request of Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee. News Corp. is "a very, very powerful journalism organization … and we should at least investigate to determine if this happened on this side of the pond as well," she said.

Rep. Mary Bono Mack (R-Palm Springs), chairwoman of a House subcommittee that deals with telecommunications issues, contacted News Corp. to ask if the company's reporters had used hacking techniques that may violate U.S. privacy laws.

"They have been cooperative and assured congresswoman Bono Mack that this is not a U.S. problem," said Ken Johnson, senior advisor to Bono Mack.

Separately, lawmakers called for the FBI, Justice Department and the Securities and Exchange Commission also to investigate whether U.S.-based News Corp. violated the Foreign Corrupt Practices Act, which forbids bribery of foreign officials to obtain or retain business.

Legal experts said that if News Corp. journalists bribed London police, the company and its employees could be criminally prosecuted. But with British authorities already pursuing the case, it would be unusual for the U.S. to get involved.

"I don't think the Justice Department would be in a rush to insert itself" in a British bribery case, said Richard Cassin, a Charlottesville, Va., lawyer who helps clients comply with the Foreign Corrupt Practices Act.

"But because of the disgusting allegations, the public revulsion and the political hornet's nest that all of this created, the Justice Department may feel pressure to get involved," he added.

The Securities and Exchange Commission could seek to enforce the part of the foreign bribery law that requires companies to keep accurate books, Cassin said. If News Corp. employees disguised bribe payments with accounting tricks, the SEC may have grounds to fine the company.

An SEC spokesman declined to comment on the case.

Violations of U.S. anti-bribery provisions carry penalties of up to $2 million. If convicted, employees could face up to $250,000 in fines and five years in jail.

Such convictions could jeopardize News Corp.'s TV licenses. Federal law contains character requirements for holders of licenses for television and radio stations. Felony convictions are grounds for revocation or could be cited to prevent renewals, although such moves are rare.

Asked about the controversy at a congressional hearing Thursday, Federal Communications Commission Chairman Julius Genachowski said the allegations should be investigated but he did not say that his agency would start such an inquiry.

richard.serrano@latimes.com

jim.puzzanghera@latimes.com

kim.geiger@latimes.com

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