British MP to detail new covert ops by News Corp

LOS ANGELES (AP) - British lawmaker Tom Watson plans to detail new findings of covert surveillance techniques employed by News Corp. that go "beyond phone hacking."

Watson said he would reveal details at the company's annual shareholders meeting Friday that "will leave the company liable to civil liability but also huge reputational harm."

News Corp. officials declined to comment.

Watson, a Labour Party member of Parliament, has spearheaded a 2 1/2-year probe into phone hacking and alleged police bribery scandal at the company's British newspaper unit.

He made the comments to reporters Thursday in a conference call from Los Angeles, but gave few details.

"We know they've used tracker devices, private investigators to follow people, as well as phone hacking. Tomorrow, I want to talk about a particular aspect of other technological surveillance, but I'll leave that for the shareholders," he said.

Watson said he will be acting as the proxy for 1,669 nonvoting shares owned by labor group AFL-CIO. He will likely be allowed to speak along with other shareholders.

The meeting represents the first time that 80-year-old Chief Executive Rupert Murdoch has faced shareholders with small stakes since the hacking scandal broke in early July.

The media conglomerate was rocked by evidence that its now-shuttered tabloid, News of the World, hired a private investigator who tapped into the cellphone voicemail of a 13-year-old who disappeared in 2002 and was later found murdered.

Murdoch and his son James, who is in line to succeed him, were grilled by Watson and other lawmakers in a parliamentary committee hearing in late July. The elder Murdoch said he was ashamed at what happened but declined to take personal blame, saying he was the best person "to clean this up."

Murdoch grips control of News Corp. through his family trust's 40 percent stake of voting shares. A key backer is Saudi Prince Alwaleed bin Talal, who controls 7 percent. The voting stock represents less than a third of the company's total $44.4 billion market value.

That dual-class share system has come under renewed fire. Critics say the company's board is dysfunctional and management has poor oversight of the company.

Jay Eisenhofer, co-lead attorney in a shareholder lawsuit against News Corp. on charges of mishandling the affair, said on the same call that it would be a victory even if 20 percent of votes are cast against the reelection of Murdoch and his two sons, James and Lachlan. That's because that would be nearly half the 53 percent of votes unaffiliated with the family, he said.

Proxy advisory firm Institutional Shareholder Services has recommended voting out all existing board members, including Murdoch and his sons, while Glass Lewis and Egan-Jones recommend voting against the sons, among others.

Cowen & Co. analyst Doug Creutz said shareholder pressure could persuade the board to split the chairman and CEO roles, both of which Murdoch holds, or come up with a succession plan that does not involve his offspring.

"A significant enough "No' vote could pressure the board into making meaningful corporate governance changes, which we would view positively," he said in a research note Thursday.

Other analysts have downplayed the impact the newspaper scandal has had on the company, which derives most of its profits from pay TV channels such as Fox News, movies from 20th Century Fox and other TV entities.

Upcoming Events