(AP) News Corp. said Wednesday that its general counsel, Gerson Zweifach, has been designated the company's chief compliance officer, in charge of a review of its anti-corruption controls.
The review began last summer after disclosures that journalists working for the British tabloid News of the World hacked into voicemails left for murdered schoolgirl Milly Dowler and gave her parents and police false hope that she was alive by deleting messages when the mailbox became full. The case led to probes that uncovered a phone hacking scheme that police allege had more than 600 targets.
News Corp. later shut down the tabloid, and several top executives resigned, including Rebekah Brooks, the chief of the company's British operations. So far, police have arrested 43 people in the scandal, including Brooks and a former editor at the tabloid, Andy Coulson.
So far, the company has booked $224 million in costs related to the ongoing British probes, including millions of dollars in settlements for hacking victims including the Dowler family and celebrities Jude Law, Sienna Miller and Sadie Frost.
Zweifach was hired in February. He and associate general counsel Lisa Fleischman are to head a compliance and ethics program and report regularly to the board of directors. Until June, the company's compliance probe had been headed by former U.S. Assistant Attorney Joel Klein. Klein is now in charge of News Corp.'s fledgling for-profit education business, Amplify.
The company said it will appoint five compliance officers to oversee each of the company's two operating units in Los Angeles; its Europe and Asia group; its Australia group; and its New York news and information group.
Rupert Murdoch, the company's chief executive and controlling shareholder, said in a memo to staff Wednesday that the anti-corruption review "is not based on any suspicion of wrongdoing" but rather "a forward-looking review" meant to improve its ethics procedures.
"We recognize that strengthening our compliance programs will take time and resources, but the costs of non-compliance in terms of reputational harm, investigations, lawsuits, and distraction from our mission to deliver on our promise to consumers are far more serious," he said in the memo.
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