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What the Murdoch news means for the U.S.

Adriene Hill Feb 29, 2012

Adriene Hill: James Murdoch, the son of Rupert Murdoch, has resigned as chairman of News International. That’s a division of News Corporation which also owns Fox News, the Wall Street Journal and many other media outlets around the world. James Murdoch will remain with News Corp. and will head up the company’s international television business.

Sarah Ellison is author of “War at the Wall Street Journal” and joins us now for more. Good morning.

Sarah Ellison: Good morning.

Hill: So what’s this news mean?

Ellison: In terms of James stepping down, it’s not entirely surprising that he would be further distancing himself from the U.K., but it is a further diminishment of his role obviously at the company. I mean, this is somebody that a year ago was the heir apparent to succeed his father. That’s obviously been a huge question over him for a long time, but it’s just now even more certain that he’s not going to do that. And if his name were anything but Murdoch, he wouldn’t be at the company.

Hill: Now, what’s it going to mean here in the U.S.?

Ellison: Given the investigations that are going on in the U.K. into corruption and bribery, the main implication in the U.S. of that investigation — specifically the bribery investigation — is whether or not the Department of Justice is actually going to bring charges against News Corporation for violating the Foreign Corrupt Practices Act. And so I think what they’re trying to do is preserve — what the company’s trying to do is sort of preserve the U.S. business and cast off the U.K. business, which is already so damaged by the scandal that we’ve been all hearing about now for the better part of nine months.

Hill: And when will we find out if the Department of Justice here in the U.S. does decide to proceed?

Ellison: It’ll be months and months and months. I mean, the FBI is continuing an investigation — I think they are looking at not just the U.K., but they’re also looking at other arms of News Corporation. This is going to be a very slow-moving investigation. But what I think News Corp.’s lawyers are doing — and it’s very smart — is to have the best bargaining position with the Justice Department eventually: You need to hand over everything that you can possibly, express great contrition and have sort of promised to clean yourself up and show that you get it, in terms of getting that this corruption needs to be ratted out and all that kind of thing. And that’s what they’re doing right now. The Justice Department, I don’t think, will move for many months.

Hill: Sarah Ellison is author of “War at the Wall Street Journal.” Thanks.

Ellison: Thank you.

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