Rupert Murdoch and News Corp. Target of Fresh Attacks From Shareholders and Lawmakers
Phone hacking and cover-ups were "part of a much broader, historic pattern of corruption," says attorney representing large stakeholders.
Some shareholders and congressional Democrats have taken their campaign against News Corp. up a notch.
On Tuesday, two pension funds and a bank that own shares of the media conglomerate added more charges to a previous lawsuit that alleges mismanagement and corruption at the company.
Tuesday’s additions to the original lawsuit, first filed in March, accuses News Corp. board members Rupert and James Murdoch, as well as Chase Carey and others, of failing to correct illegal conduct that battered the company’s reputation and stock price.
Beyond the hacking scandal, the amended lawsuit accuses News Corp. of anti-competitive behavior at U.S. subsidiaries News America Marketing and NDS Group that has already resulted in nearly $1 billion in damages.
In the original complaint, News Corp. was accused of nepotism in its $615 million acquisition of Shine Group that allegedly resulted in a $250 million windfall for Elizabeth Murdoch, Rupert’s daughter.
“The revelations surrounding News Corp.’s corporate governance lapses get worse with each new disclosure,” said Grant & Eisenhofer partner Jay Eisenhofer. “In fact, our new complaint shows that the illicit phone hacking and subsequent cover-ups at News of the World were part of a much broader, historic pattern of corruption at News Corp. under the acquiescence of a board that was fully aware of the wrongdoing, if not directly complicit in the actions.”
The fresh accusations from the pension funds and bank came a day after several Democratic members of the House Oversight and Government Reform Committee joined an earlier two members in calling for investigations into, among other things, whether News Corp. hacked the voicemails of 9/11 terror victims.
Politico reported Monday that Rep. Bruce Braley, D-Iowa, wrote a third letter to committee chairman Rep. Darrell Issa, R- Calif., that was cosigned by six House members, whereas his previous letters were co-signed by just one member.
“We have just observed the tenth anniversary of the Sept. 11th attacks on our nation and these victims deserve to know whether they were targeted in this offesive and potentially illegal manner,” the letter said.
A spokesman for Issa accused the Democrats of trying to divert attention away from their mandate, which is oversight of the federal government, including workforce policies, the Postal Service and expenditure of money.
“This is yet another whiny admission by the minority of their ineffective approach to oversight that is more focused on obstructing current investigations than on using their resources to uncover waste and abuse in government,” Issa's spokesman told Politico.