News Corp execs got mafia tips to bully clients

Written by Bloomberg | Updated: Sep 28 2011, 06:41am hrs
A News Corp unit that used lessons gleaned from mafia films to motivate employees and crush rivals is the latest arm of Rupert Murdochs media empire to be swept up in a probe that began with hacking and bribery allegations.

Already the subject of inquiries in America and the UK of police payoffs and illegal voice-mail access by its British newspapers, News Corp has been asked by US investigators for documents relating to its News America Marketing Group, which places in-store ads in supermarkets and retailers worldwide, according to source.

The expanding review by US prosecutors of potential wrongdoing at News of the World, which represented only 1% of annual revenue for News, has now touched a subsidiary that generated four times that much, and about 12% of the parent companys profit for fiscal 2011. That unit, rivals claimed in court papers, has expanded by flouting antitrust laws, and in one case, computer hacking. News Americas CEO, also publisher of the New York Post, testified in one case that he used popular mafia films such as A Bronx Tale and The Untouchables to teach employees how to instill fear in potential clients.

There is a pattern of anticompetitive behaviour, said Melanie Sloan, executive director of Citizens for Responsibility and Ethics, a US government watchdog group. Weve seen it in Britain, and weve seen it in America. Suzanne Halpin, a spokeswoman for News America, declined to comment.

The company has threatened competitors, lied to its own clients, and made improper payments to supermarket chains to retain business, say the lawsuits. News America has repeatedly been accused of illegal tying, or pressuring advertisers to hire it for its newspaper coupon business, say court records.