Journalism in the Public Interest

What’s the Deal With News Corp’s Other, U.S.-Based, Hacking Scandal?

A guide to News Corp’s far less known hacking scandal on this side of the pond.


News Corporation Chairman and Chief Executive Rupert Murdoch arrives home with his wife Wendi Deng in New York on July 20, 2011. (Lucas Jackson/Reuters)

After testifying before the British Parliament this week, Rupert Murdoch returned to the United States to be greeted with more bad news: The Justice Department is opening up an inquiry into allegations of computer hacking by News Corp's American advertising wing, News America Marketing. The New York Times' David Carr revisited News America's troubled history with "anti-competitive behavior" in a column on Monday. On Wednesday, New Jersey Sen. Frank Lautenberg wrote to Eric Holder calling for a federal investigation into the hacking claims, pointing back to a similar request he had made back in 2005.

What's this other hacking scandal all about?

News America was accused in a 2009 lawsuit of hacking into the computers of one of its competitors, Floorgraphics Inc., to steal detailed information about their sales, clients and finances. Floorgraphics said they first realized they were being hacked in 2004, when they discovered intrusions from computers with IP addresses registered to News America. The company claimed that their information was accessed at least 11 times over four months and that they started losing important clients to News America shortly afterward, leading to a round of layoffs.

There was an FBI investigation into the hacking allegations in 2004, but it didn't end up going anywhere.

Why would News America want to do that?

News America and Floorgraphics Inc. both provide services for clients to promote their products in grocery stores.

According to court testimony from one of the founders of Floorgraphics, George Rebh, News America CEO Paul Carlucci expressed interest in buying the company years before the hacking incident. Carlucci then threatened them after Floorgraphics declined. From the Guardian:

According to transcripts of a trial that took place 10 years after the lunch, the Rebh brothers were astonished. No, they replied, they only wanted to talk about working together and had no intention of selling. George Rebh told the jury that Carlucci then said: "From now on, consider us your competitor and understand this: if you ever get into any of our businesses, I will destroy you. I work for a man who wants it all, and doesn't understand anybody telling him he can't have it all."

News Corp later denied that Carlucci had said this.

Has News America been caught up in any other similar lawsuits?

News America was involved in lawsuits with two other competitors, Valassis Communications and Insignia Systems, who accused News America of engaging in predatory business practices and violating U.S. antitrust law. These cases didn't involve hacking. News Corp settled with Valassis for $500 million and with Insignia for $125 million.

How did the Floorgraphics lawsuit end?

News America settled out of court with Floorgraphics for $29.5 million a little over a week into the trial and then bought the company within the same week.

What happened to the guy who was running News America at the time of this alleged hacking?

Paul Carlucci is now the publisher of the New York Post and is still the CEO of News America.

What does this have to do with the phone hacking scandal in the U.K.?

Nothing so far, but journalists are latching onto it as a window into News Corp's overall culture. The New York Times' Carr has pointed out that there are interesting parallels in terms of how News Corp moved quickly to settle out of court, ensuring that evidence remains sealed and plaintiffs can't talk.

So, wait; how many investigations into News Corp are going on in the United States?

There are three. The Justice Department is currently investigating claims that News Corp hacked into Floorgraphics' computers. The FBI has begun investigating claims that Murdoch papers attempted to hack into the phones of 9/11 victims. Separately, the Department of Justice is looking into the alleged bribes Murdoch papers paid to British police. Fortunately for News Corp, they've got former federal prosecutors on their side. (Here's our earlier story explaining why the United States is getting involved over bribes made abroad.)

Did Murdoch papers hack into the phones of 9/11 victims?

We really don't know. That accusation originated from a story in another British tabloid, The Daily Mirror, that cites an unnamed ex-NYPD officer as its main source. The FBI inquiry came in response to calls from politicians, and not because any incriminating evidence has been found.

Murdoch is the J. Edgar Hoover of the 21st century. What we know so far is only the tip of the iceberg.

What happened to the whistleblower who exposed Murdock?
OH Thats right this is what money and power can do ,swept under the rug ?Seen it first hand with our whistleblower case.Thats why i turned to youtube to warn other whistleblowers not to blow the whistle!
You can view it under (OSHA whistleblower)in four parts.It only covers part of what we went through with OSHA.They do not cover how we were retaliated against with proof given to OSHA.They do not even show how the company knowingly sent a second five ton lift from the four i locked out unsafe and OSHA had complete companys documentation of this.The second OSHA investigator told me how bad it is in OSHA and the reason he talked was he grew up with my brother and boy did he talk!These videos will come later.Its amazing what power and money can do.There is no protection so do not become a whistleblower.REMEMBER WERE JUST THE MIDDLE CLASS
      Gregg S


The News Corp Blues & The Fox Plumbers

There’s an old secret story of perversion around Hollywood in the 1950s. It’s about the iconic 20th Century Fox studios. It’s a story of creepy, childish behavior by guys who had too much money and power. Their moral and ethical corruption inevitably led to criminal doings. Those good old boys knew well that a good movie story has a beginning, a middle and an ending.

Now for us, let’s begin our story with an ending.
Last week the News of the World closed in London. Public and private outrage over illegal spying on both celebrities and regular people led to a speedy stock decline by the parent News Corporation. Rupert was forced to close up shop at News of the World.
Over here another News Corporation division is doing quite well. Fox News division is a big-box outlet store for anything “conservative.” That means any slanted story or any contrived falsehood with the purpose of coaxing the viewer to believe the lie. Journalistic ethics be damned. The only goal was to get more viewers and make more money the any other News Corporation media division.
If Fox News lies were proved true, our United States would devolve into some mediaeval oppressive Handmaid’s Tale. Women would be reduced to chattel by anti-abortion inquisitors. Every citizen would be bound by slave labor wages to pay off debt arranged by a conspiracy of the US Congress and Banking Cartels.
This is not science fiction. This is happening now in the soggy dreams and vile works of the chiefs of News Corporation and Fox News. The guy who runs Fox News is Roger Ailes. You must have heard about old Roger. Roger worked for Richard Nixon, and then for Ronald Reagan, and then for both Bushes, and then other big-time republicans. For the right wing, Roger’s resumé grants him special national treasure status. A latter day hero of the constitution.
Wait! Go back to Nixon.
Good old boy Roger Ailes began his career in the Nixon White House. Recall that Richard Nixon was forced to resign from office in his second term. Nixon did not resign for the good of the nation. The leaders of the republican party and the US Congress told him to resign or he was to be impeached, tried and removed from office. Had he not resigned Nixon would have been tried and convicted for obstruction of justice and treason. So Nixon plea bargained a resignation to keep out of jail.
The time line:  Spring of 1972 the republican national committee created the committee to reelect the president. In a mysterious and pungent twist of acronym the RNC called it CREEP. Bags of cash were given to CREEP. Some of the CREEP cash went to a gang of criminal types called the plumbers who burglarized the Democratic National Headquarters in Washington. They snatched inside information on the Democrat’s plans for the election. The gang was founded by White House counsel John Ehrlichman, Ailes boss, who eventually served prison time for his efforts. Nixon denied any knowledge of the plumbers. Nixon’s secretary fumbled the oval office tapes into erasing a talk Nixon had about the plumbers. Remember the seventeen minutes?

Good old boys sometime think that regular people are too stupid to see the truth.

Now, here’s the secret story about 1950s Fox. The good old boys who ran Fox studios installed a hidden two-way mirror in a concealed office. Through the mirror they could ogle young women dressing and undressing for screen tests. At some time in the 1960s or 1970s they closed the mirror room. Spying on starlets was illegal then and now. But in the 1950s it was a good old boy offense. Laughable and trivial.
Maybe not so inconsequential any more. The present day perversion at Fox is given to us by the good old boys at News Corporation and Fox News. And it does not involve two-way mirrors. Their technology is state of the art and direly invasive of regular people’s lives and right to privacy. How can regular people support unethical networks like Fox anything, or Sky TV anything. Or papers like The NY Post or the Wall Street Journal or the Australian or the Times of London and on and on. The list is long.

Good old boy Rupert Murdoch is a board member of the libertarian and fascista Cato Institute along with his peers the carious Koch Brothers. It’s psychopathic how such minions of small government and no taxes pay A-list hackers big money to eavesdrop on regular people and celebrities. How often does Fox News hack into Voice Mails and cell phone calls over here in the USA? Their sister operation over in the UK made a normal practice of such spying.
Fox News il Duce Roger Ailes learned the craft of espionage on regular people when he was so close to the plumbers of Watergate fame.
The time has come for Rupert Murdoch to shut down more of News Corporation’s far flung tainted branches of empire.

Quick Rupert, slam the door and turn off the lights on the festering Fox News before your stock takes another dive.

Another instance which illustrates how accepting a substantial monetary settlement to drop charges against illegal behavior we unknowingly encourage rich individuals or their businesses from attempting criminal activities. As long as they believe they may gain from the action without risking jail, they are prepared to pay off their accusers if caught. We each need to consider if this is a pattern we want to continue to endorse.

How about ICC opens another branch to deal with International monetary crimes? Then, giant a hard labor camp will be needed to accomodate countless $$$$$$$$$ millionaires. And it is still possible, although a natural (secularly occurring Cosmic?) transition has been disturbed by unnecessary human push driven by greed of unwise or blind human groups. 
Please optimistically consider the following writing: The ICC was not created by only powerless good guys! But there will be lots of good guys in it if we can afford to keep Mr. Obama in the virtual power of the world governance, though I doubt how many will be from African, Arabian, Asian and other wealthy nations of which some of the government heads are filthy rich to become worse than war criminals many are referring to or talking about!
Because of honestly motivated guys in Obama’s administration, today we have begun to hear facts about these normally “Invisible Middle Sources (IMSs)” working for “Invisible Actual Heads (IAHs)” with dogmatic narrow mind-set who have believed, in traditional political ways by controlling Medias, that money can always suppress negatively done or planned dishonest acts.
Just don’t hate any group of blind people, have patience for own happiness and support Obama’s administration and watch more facts will surface.
It will be wise to remember that above all there is a silently and secularly occurring transition also caused and enhanced by cosmic power behind all human controlled powers.

I was in London early last week when the scandals began to break.  I even brought a couple of papers home.  Murdoch has at least two dailies in London that I know of, including the once vaunted London Times.  It was front page news.  Some allegations said Prime Minister David Cameron had hired a former Murdoch-ite as a press assistant and that he had lunched with Murdoch a number of times.  (Murdoch was in the middle of negotiations to buy ‘BSkyB,’ a London based sattelite news service.)  Further, the allegations of Murdoch reporters bribing London police officilials, including officers, hit the airwaves.
How contrite of Murdoch to sit up there to deny culpability in any of the alleged wrongdoings.  Reminded me of most of Nixon’s cronies during Watergate hearings.  Also reminded me of the Nuremberg Defense: “I was just following orders.”  (Not suggesting that Murdoch or News Corp was torturing or killing people though.)

My question is:  What will most likely happen next?  I cannot say for certain whether they have indeed been complicit in this wrongdoing.  Naturally, further investigation is needed to determine whether they are truly guilty.  (In my opinion, they are guilty of more than they have admitted to). 

So, what will happen next?

Paying police for news stories is common in many parts of the non-Western world. I would like to see some investigative reporting about these bad practices.

Looks like some of the very same folks who would be quick to jump to the defense of the NY child killer, or the people accused of blowing up a embassy have no problem convicting Murdock simply because some of entities his lean right.  The New York Times and Propublicia, (headed by a former Fox employee ?), and leaning left would get similar support if they were accused, well before the facts are known.


When Floorgraphics discovered they were attacked and their customer lists, patents and copyrights were stolen, their then attorney went to the United States Attorney General and asked that this CRIME be investigated.

Apparently after a short investigation the US Attorney told Floorgraphic’s attorney that the matter was a civil matter.

Who was that US Attorney that made that decision:

            Christopher Christy

Questions for Propublica Reporters:

Why is Christy the favorite GOP potential Presidential candidate of Wall Street?

Who in the US Attorney’s office in Manahattan (Mary Jo White) decided not to prosecute Todd Christy (brother of Chris)  for insider trading?

Who employs Christopher Christy’s wife who has a close to a million dollar per year salary, for a no show job?

Who contributed over $2m to Christy’s election committe slush fund? (not his regular campaign fund)

Who authorized the “hit jobs” on former Gov. Corzine’s appearing nearly daily in the New York Post?

J Edgar Hoover? I thought it was Charles Foster Kane

James B Storer

July 23, 2011, 12:16 p.m.

The comments to this ProPublica report are most interesting and welcome.  We have spent much time writing letters and discussing the situation we are in, but often with an air of “misery loves company.”  Over the past week or so, I feel we are witnessing little wisps of hope toward the breaching of the burgeoning imprisoning walls of greed, immorality and corruption that have seemed too powerful to overcome.  The secrecy long protecting capitalism running amuck is beginning to loosen, and we are able to see clearly the roots coordinating and imposing our difficulties.  Corporatism may prove to be in danger of splintering of its own greed, with encouragement here and there by a seemingly awakening public.  The forces that seem to own our government are seeking to overthrow all laws and rewrite them.  It now should be clear to all of us due to revelations this past week that the goal is to establish a Fascist State.  You other media outlets who are too foolish to acknowledge the danger, or too gutless to print objectively must be encouraged to wake up.  We commoners are seeing past the fog; thus, you are too.  Admit it.
  The comments today are wise and thought provoking.  I am personally indebted to that of Martin Pitts:  Indeed:  (…CARIOUS Koch Brothers).  Carious is a new adjective to me, and I am adding it to my meager vocabulary.  It fits nicely in your comment.
  Skartishu, Granby MO

Who knows what details are true or not. To me, the most important piece of this story is the part that is most obvious, yet is not being reported on enough…  That is, the dangerous possibilities that can occur when there is a cozy relationship between powers: law enforcement, politicians, and the press. On this end, we have to look no further than Fox News to see this cozy relationship in full effect, with such political powerhouses as Palin, Rove, and Huckabee having a political “news” voice on a “fair and balanced” news outlet. Or what about Tony Snow, a former Fox employee, taking on the role of Bush’s press secretary?

With these obvious collisions, we can absolutely, with 100% certainty, make the claim that Fox’s ability to hold politicians accountable is most definitely compromised. We can also guess that with such obvious and blatant lack of judgement (ie blatantly contradicting the very serious and important checks & balances role the media should play in the process), that more serious “covering up” of one another’s sins is in fact likely. That type of political power working in cahoots is just plain dangerous to human nature.

Nothing that comes out about News Corp will/ would surprise me. Nor should anything surprise us. Their attitude and ethics are already on display for the world to see.

Eric Holder investigate New Corp?  You’ve got to be kidding.  The only thing Holder investigates are federal whistleblowers.


July 24, 2011, 1:10 p.m.

Why is this investigation being limited to News Corp?  Telephone and email hacking is used to silence whistle blowers in the U.S. -
I have watched calls come into my Verizon Blackberry 8830 and seen both the calling number and the voice mail message disappear before I could get to it.

ANYONE Can Hack Your Telephone - see this link for network TV segments describing telephone spying: 

Google:  cellphone spying or cellphone spyware to see how it works and how easy and inexpensive it is to purchase.
Ever wonder why we don’t hear from bank whistle blowers with all the fraud in the banking and mortgage industries?  Whistle blowers are being silenced while law enforcement looks the other way.

I certainly enjoyed reading these comments up until the trite Bush/Fox bashing began.

Thank you to those not espousing blame on single entities and not derailing the conversation to make points to your friends, but choosing to make thoughtful non-dogmatic responses.

Much appreciated

What is refreshing is to see the public reaction. Regardless of the legal ramifications, the public now knows that FOX news is not real news. Murdock admitted FOX channel programming is is created for 20-year-olds and has no validity for an adult audience. Broadcasting non-factual information as news is illegal in Canada so FOX doesn’t broadcast there. Maybe it is time for the US government to apply some similar requirements. If politicians want to lie they should buy ad time on to spew their lies, not parade false claims on the network news.

zrants, good for Canada. We used to have antitrust laws here in the U.S. also. The beginning of that end started with abolishing The Fairness in Broadcasting Act by the Reagan regime. In the 90’s the communications bills took care of the rest. One of those bills gave media owners and operators something they never had before, full freedom of speech. That gave them the right to pick and choose what they want the public to hear.

We also heard once again that those bills would “produce competition and reduce costs” and create jobs. And once again it didn’t do that at all but the opposite happened. We used to have 40k independently owned radio stations here. Now it’s about 4k.

Every time I hear them say “produce competition and reduce costs” I cringe into a fetal position. I remember when Reagan said that about health care. They said that about many things that are now much more expensive. I think they said the same thing about the tariffs that were removed also, how that would also create jobs. They just forgot to mention that it would create jobs in other countries.

Elizabeth Dolinski

July 26, 2011, 11 a.m.

Want to know how the “business side” is reacting? Our media director wrote an analysis of how the scandal will effect advertising revenue for News Corp here:

RE: News Corp-NYPD

In December 1996 I became acquainted with a woman who was in her mid-40s and rather short - perhaps 4’ 9” or 10”  She said her name was “Adelle Dayan” - her actual name? Who knows. It didn’t matter to me one way or the other who this woman was. After knowing her only briefly I thought that she and her partner were some sort of scam artists.

She approached me on First Ave at 69th St. Actually, she bumped into me. She had with her a black labrador. That was, I suppose, the draw for me. When she bumped into me, I stopped to pat the dog and during afew moments of ostensible apology, this woman started talking to me in a friendly, chatty way. I thought that, like me, she was another lonely person on the Upper Eastside.

At first I thought she lived in the neighborhood and was out that evening walking her dog. I subsequently learned that it wasn’t her dog. She’d either borrowed or rented the dog. She was overly friendly, even to the point of being pushy. I thought perhaps because she was so short that this was a compensatory style. Initially, I did not think of her as a scammer.

But I was manipulated by this person. What little I learned about her –I was never quite sure how much if anything of what she said was true. She told me that she had a “partner,” a remarkably tall Englishman who, she told me, worked for the NY Post, and that they lived in or kept an apartment in a walk-up on 3rd Ave at 67th St. It was close to the corner on the East side of the Ave. One day I saw her in the drug store across the street, and I followed her to the building, eventually got in, went up the stairs and knocked on the door of the apartment she’d told me she shared with the Brit. A tall thinnish man in his fifties opened the door. I asked if “Adelle” was home. Booze on his breath, he curtly informed me that I had the wrong apartment. But before he shut the door in my face I caught afew glimpses of the interior. There was alot of electronic-looking equipment. When I later asked Ms Dayan about the contents of the apartment, she explained that they had a “sound studio.”

I asked her about the nature of her relationship with the Brit because of their Mutt & Jeff extremes. She was vague as to the nature of their relationship.

During another encounter I had with Adelle Dayan she bragged that she and her Brit buddy worked (1) for News Corp (the Brit was some sort of reporter for the Post); and (2) for NYPD. I asked what she and her friend did for the NYPD, but she changed the subject and never said.

I thought this was just more of her lies, as she seemed to be a little bag of lies. She was a sleazy sort of person. I think she actually lived somewhere on Long Island. I got a similar impression of the Brit, that he was a sleazy person, even tho I’d seen him for only afew seconds at the door.

I’d forgotten about the strange encounters that I’d had with this woman over a period of a month or so in 1996 to early 1997. I’d been marginally connected to someone working for WNYW channel 5 News during this time. Yet now I’ve begun to wonder about my own experiences.

Don’t know if my vague memories are in any way helpful to anyone looking into shady News Corp activities in New York. I am now reviewing these memories in light of what’s coming out about Murdock/News Corp operations, and I think it’s conceivable, even highly probable that certain News Corp personnel used/paid for NYPD cooperation to bug, track, surveille, and otherwise invade the privacy of ordinary New Yorkers (or anyone from anywhere). And vice versa: that elements of NYPD utilized their News Corp contacts to surveille, track, bug and otherwise invade th privacy of people who were not committing crimes, or under investigation for anything. I think that’s probably what that “sound studio” and the sleazy couple were about.

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