One week ago, Rupert Murdoch's longtime aide, Les Hinton, was forced to resign as publisher of the Wall Street Journal because of the central role he'd been playing for years in News Corp.'s unraveling phone-hacking scandal. Hinton's resignation, unthinkable just four weeks ago, signaled the severity of News Corp.'s woes in America.
Now another Murdoch publisher, Paul Carlucci, who oversees the New York Post, may be facing renewed questions from prosecutors about his business past and what role he played in a News Corp. computer hacking scandal that unfolded right here in the U.S.
The allegations were part of a larger anti-competitive practices scandal that has already cost Murdoch's company hundreds of millions of dollars in legal setbacks and settlements, and a scandal that highlights what appears to be a culture of corruption inside News Corp.'s American operations. It's a culture that flies in the face of Murdoch's insistence that the hacking at his British tabloid represented an isolated incident.
The background: A New Jersey start-up company, Floorgraphics (FGI), was created to sell large advertising decals placed on the floors of grocery stores. In 1999, FGI's founders, Richard and George Rebh, met with Carlucci who at the time was CEO of News America Marketing, an in-store advertising division of News Corp. (In 2005, Carlucci added the title of Post publisher to his resume.) At the lunch, after the Rebhs rebuffed Carlucci's offer to buy the company, he allegedly threatened to destroy FGI.
Years later company executives discovered FGI's secure website had been broken into nearly a dozen times and confidential information had been obtained. They alleged Murdoch's company was spreading lies about FGI and using its proprietary information to steal away clients.