U.S. authorities are stepping up investigations, including an FBI criminal inquiry, into possible violations by employees of Rupert Murdoch's media empire of a U.S. law banning corrupt payments to foreign officials such as police, law enforcement and corporate sources said.
But U.S. investigators have found little to substantiate allegations of phone hacking inside the United States by Murdoch journalists, the sources added.
The FBI is conducting an investigation into possible criminal violations by Murdoch employees of the U.S. Foreign Corrupt Practices Act (FCPA), a law intended to curb payment of bribes by U.S. companies to foreign officials, a U.S. law enforcement official said.
The U.S. official said that if any law enforcement action was pursued by U.S. authorities against Murdoch employees, it would most likely relate to FCPA.
If it is found to have violated the FCPA, Murdoch's News Corp, which has its headquarters in New York, could be fined up to $2 million and barred from U.S. government contracts, and individuals who participated in the bribery could face fines of up to $100,000 and a jail sentence of five years.
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Executives could be liable if they authorized bribes or knew about the practice but failed to stop it.
In practice, U.S. authorities have usually settled FCPA cases in return for large cash payments from companies, who can sometimes avoid legal admissions of guilt.
Much of the evidence police are examining in the News Corp case was handed over to investigators by the company, who have set up a special clean-up unit in London and hired batteries of lawyers in Britain and the United States, some of whom specialize in FCPA cases, company sources said.
The U.S. Justice Department and Securities and Exchange Commission also have jurisdiction to pursue civil cases against alleged violators of the law.
Bloomberg news service reported last year that Justice Department prosecutors sent News Corp, U.S. parent of Murdoch's UK media properties, a request for information on alleged payments which journalists made to British police officers in return for news tips.
LAWYERS
Sources close to News Corp said the Management Standards Committee of News International (MSC), the unit which the company set up to deal with phone hacking and related investigations, for some time had been concerned about the consequences of U.S. investigations of possible FCPA violations.
Both News International and parent company News Corp declined to comment. Reuters is a competitor of Dow Jones Newswires, a unit of News Corp.
Last July, the company retained Mark Mendelsohn, who served as deputy chief of the Fraud Section in the Criminal Division of the U.S. Justice Department. Mendelsohn, now in private practice, was internationally respected as an architect of the DOJ's Foreign Corrupt Practices Act enforcement program.
News Corp sources confirmed that the Management Standards Committee was also working with Williams & Connolly, a prominent Washington law firm specializing in white-collar crime cases.
