News Corp. Accused of Paying Off Public Officials, Too

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Photo: Handout/2012 News International (NI Group Ltd)

Rupert Murdoch's Sun on Sunday has already been eclipsed. The day after the media mogul released his tabloid replacement for the News of the World, which closed last year amid phone-hacking allegations, the Leveson Inquiry into the company's illegal activities has expanded to include a "culture at The Sun of illegal payments" to a "network of corrupted officials" in the government and military. According to Deputy Assistant Commissioner Sue Akers, who is leading the investigation, "frequent and sometimes significant sums of money" were delivered to important people as approved "at a very senior level within the newspaper."

Murdoch released a statement that does not deny the allegations. "As I've made very clear, we have vowed to do everything we can to get to the bottom of prior wrongdoings in order to set us on the right path for the future," said the News Corporation boss of his British newspapers. "That process is well underway. The practices Sue Akers described at the Leveson inquiry are ones of the past, and no longer exist at The Sun. We have already emerged a stronger company."

While police bribery had been the focus, the more widespread alleged payments are especially relevant to continued investigations by the FBI, which could still charge the U.S.-based company with violating the Foreign Corrupt Practices Act. Sun journalists have already been arrested for what Akers described as common incidents well know to management, like Rebekah Brooks, a former Sun editor and close Murdoch lieutenant:

Ms. Akers said that the payments from The Sun went far beyond the occasional lunch or dinner, with one public official receiving more than $125,000 over several years, and a single journalist being allocated more than $238,000 in cash to pay sources, including government officials.

It was clear from references in the e-mail messages — to staff members’ “risking losing their pension or job” and to the need for “tradecraft” like keeping the payments secret or making payments to friends or relatives of the officials — that the journalists in question knew that the payments were illegal, Ms. Akers said.

“Systems have been created to facilitate such payments whilst hiding the identity of the officials receiving the money,” she said. “The e-mails indicate that payments to ‘sources’ were openly referred to within The Sun, with the category of public official being identified, rather than the individual’s identity.”

She added: “Some of the initial e-mails reveal, upon further detailed investigation, multiple payments to individuals of thousands of pounds. There is also mention in some e-mails of public officials being placed on ‘retainers,’ and this is a line of inquiry currently being investigated.”

There are currently three probes underway against News Corp., plus an internal investigation that has been turning over potentially damning evidence to authorities. Law enforcement is focusing separately on phone hacking, e-mail hacking, and the bribery of public officials. Around 40 people have been arrested company-wide, including past and present editors at The Sun and the News of the World. News Corp. has settled dozens of lawsuits from spying victims, with hundreds more in the works.

Charges have not been filed against Sun employees, and earlier this month, Murdoch appeared at the paper's offices to pledge his allegiance to the arrested journalists, ending their suspensions and promising to cover their legal costs. "Amazing! The Sun confirmed sale of 3.260,000 copies yesterday," Murdoch bragged on Twitter this morning. "Thanks all readers and advertisers. Sorry if sold out - more next time."