U.S. Attorney Recuses Himself From News Corp. Investigation

Blog ››› ››› ERIC BOEHLERT

The United States Attorney for the Southern District of New York, Preet Bharara, has recused himself from the office's ongoing investigation into News Corp. because of a longstanding friendship with a News Corp. board member.

The U.S. Attorney's office does not publicly announce when recusals are made, but spokeswoman Ellen Davis confirmed to Media Matters that Bharara took himself off the investigation several months ago. Bharara consulted with the Department of Justice's ethicist who concluded he did not have to recuse himself, but that "in order to avoid even the appearance of impropriety" he opted to do so, says Davis.

In the wake of this summer's sweeping phone-hacking scandal in Britain, the U.S. Attorney's office launched an investigation into Rupert Murdoch's News Corp. to determine if the company has been engaged in a pattern of corrupt business practices in America.

Allegations include a Murdoch-owned marketing firm hacking into a competitor's password-protecting website in order to steal proprietary information. As part of a civil lawsuit, which was abruptly settled for $30 million, News Corp. admitted its computers were used for the hacking attacks. A News Corp. whistle blower has also gone on the record alleging the same U.S. marketing firm routinely engaged in predatory pricing and other anti-competitive practices. Media Matters reported in September that in the wake of the hacking scandal, U.S. investigators for the first time had reached out to the News Corp. whistleblower.

In recent months, Murdoch and his top lieutenants have focused most of their crisis management on the U.K. scandal. However, any charges brought against News Corp. by the U.S. Attorney Office would likely present enormous political, as well as legal, problems and complicate the company's efforts to control the ongoing scandal damage to Britain.

As Time's Massimo Calabresi previously reported, Bharara's conflict revolves around his longstanding friendship with Viet Dinh. A controversial Republican insider, Dinh served as assistant attorney general early in the Bush administration and co-authored the Patriot Act. After leaving government, Dinh joined News Corp. as a member of its board and has been deeply involved overseeing the company's internal investigation into the hacking scandal; the same topic the U.S. Attorney's office is digging into.

Dinh and Bharara have been close friends for two decades, with Bharara serving as the best man at Dinh's wedding. Bharara was appointed as a U.S. Attorney by President Obama in 2009.

This isn't the only Dinh-related conflict with regards to News Corp.'s hacking scandal and the independent inquiry Dinh is supposed to be overseeing.

As Bloomberg reported this summer:

News Corp. (NWSA's independent directors, obligated to assess Rupert Murdoch and other top executives' handling of the company's phone-hacking scandal, are relying for guidance on Viet Dinh, a board member with personal ties to the Murdoch family.

A Washington attorney and Georgetown University Law Center professor, Dinh has been a friend of Chief Executive Officer Rupert Murdoch's oldest son Lachlan since 2003 and is godfather to Lachlan's second child. In 1992, a decade before they met, the South China Morning Post, then owned by Murdoch, helped Dinh free his sister from a Hong Kong refugee camp.

As for the current News Corp. inquiry, Ellen Davis says the U.S. Attorney's Office does not comment on ongoing investigations.

UPDATED: Here's the full statement from Davis at the U.S. Attorney's Office:

"Many months ago, the United States Attorney, Preet Bharara, solicited opinions from all the appropriate ethics officers within the Department of Justice regarding the potential for a conflict. Each ethics officer formally opined that he need not step aside, but in an abundance of caution and in order to avoid even the slightest appearance of an ethical issue, he voluntarily removed himself from the investigation many months ago. As a result, it is being supervised by the Deputy United States Attorney."

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Rupert Murdoch
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