Rupert Murdoch Phone Hacking Scandal - A US Analysis

Guest Blogger Paul Parisi in at the Keyboard Today

      Imagine this.  A billion dollar corporation accused of an international scandal.  The whistleblower that snowballed the investigation ends up dead under suspicious circumstances. ...
 Numerous employees are accused of unethical, immoral, and ultimately illegal behavior.  Their tales lead to the resignation and eventual arrest of a high level executive of the company and the resignation of several law enforcement officials including the chief of police.  The questioning ends up in the country’s highest inquiry body where the CEO of the corporation is forced to explain his ruthless management style while investigations into his operations open up worldwide. 

     Now please fire up your iPad, unlock your smart phone, or simply flip on your flat screen.  What sounds like the beginning of an entertaining suspense novel is unfolding before our very eyes.  What would pass for a Hollywood blockbuster starring George Clooney and Reese Witherspoon in the States is unraveling across the Atlantic.  

     Rupert Murdoch’s multi-national, billion dollar journalism empire is crumbling around him based on allegations of bribery and illegal wiretapping in the U.K.  Scotland Yard arrested the former head of Murdoch’s News of the World even while their chief resigned amid the allegations of endemic bribery.  Sean Hoare, the man who first blew the whistle on reporters hacking into public and private citizens’ phones, has died although unreleased autopsy results confirm the death was not suspicious.  Even the FBI has joined the fun and opened up an investigation.

     

     It’s incredible and seems to be the tip of the iceberg.  Where will this lead in the U.S.?  Allegations abound that News of the World reporters hacked into voicemail accounts of 9/11 families, and even went so far as hacking into the voicemail of a missing 13 year old girl and deleting unheard voicemails to make room for more.  If these allegations are true, other uses of illegal phone hacking will surface. 

   

     Murdoch’s media empire stretched from coast to coast.  He owns over one hundred media outlets.  There is no telling how far the hacking has gone.  Who knows where it stretches?  Is this the reason Hollywood reporters and magazines know personal information seemingly before their celebrity subject?

     It is important to note that no one is accusing and there is no evidence that Rupert Murdoch was involved in any of this.  If true, it seems to be a result of his undying demand for fresher and faster stories and his minions desire to increase sales.  

     So what happens in the U.S. if the allegations extend here?  What are some of the legal ramifications?

1. It’s illegal wiretapping under the United States Code.  Each instance is punishable by up to five years in prison and various civil damages to the injured parties.  This punishment exists for those who did the wiretapping as well as those who directed it.
2. Bribing federal law enforcement officials is punishable by up to two years in prison and various fines under the U.S. Code.
3. At least in New York State, bribing state law enforcement officials is punishable by up to fifteen years in prison if the total amount paid is over ten thousand dollars.  
4. The state law enforcement officer who received the bribe can also be prosecuted under state law and, in New York State at least, the punishment could be up to fifteen years in jail if the total amount received is over ten thousand dollars.  
5. Bring on the lawsuits.  Any person who these reporters listened to illegally will probably sue for monetary damages seeking enormous sums of money from one of the richest and most powerful men in the world claiming his negligent supervision fostered an environment where illegal wiretapping was accepted, if not directly authorized, by executives.
6. Can shareholders sue Murdoch’s company or Murdoch himself for the loss of value in their stock due to the illegalities?  Only if they could show the company acted fraudulently.  We can expect some suits of this sort to be filed at least.  Whether they can be proven is another thing.
7. Congressional hearings – Senator Frank Lautenberg (D-NJ) has already called for an official inquiry into News Corporation’s U.S. operations based on a 2004 trial where a NewsCorp employee hacked into a rival marketing firm’s website and stole confidential information pushing the company to the brink of bankruptcy.  

     It’s easy to see the Nuremberg defense for the phone hackers – “I was just doing what I was told.”  It’s not a defense, but may allow police and prosecutors to use the little fish to prosecute the big fish.  It will be interesting to hear it unfold, and the biggest bombshells are probably yet to come.  

     What do you think will happen?  How far do you think this goes?  Congress increased competition by deregulating the telecommunications industry in 1996.  Was this a wise decision in light of recent events?

Paul Parisi is a former Bronx Assistant District Attorney and is currently an assistant district attorney at an top secret location in New York State.  Keep your eye out for his blog, coming soon!