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Epic #NewsCorpFail

February 25th, 2011

Ms. Regan had once been involved in an affair with Mr. Kerik, the former New York City police commissioner whose mentor and supporter, former Mayor Rudolph W. Giuliani, was in the nascent stages of a presidential campaign. The News Corporation executive, whom she did not name, wanted to protect Mr. Giuliani and conceal the affair, she said.

Now, court documents filed in a lawsuit make clear whom Ms. Regan was accusing of urging her to lie: Roger E. Ailes, the powerful chairman of Fox News and a longtime friend of Mr. Giuliani. What is more, the documents say that Ms. Regan taped the telephone call from Mr. Ailes in which Mr. Ailes discussed her relationship with Mr. Kerik.

It is unclear whether the existence of the tape played a role in News Corporation’s decision to move quickly to settle a wrongful termination suit filed by Ms. Regan, paying her $10.75 million in a confidential settlement reached two months after she filed it in 2007.

Depending on the specifics, the taped conversation could possibly rise to the level of conspiring to lie to federal officials, a federal crime, but prosecutors rarely pursue such cases, said Daniel C. Richman, a Columbia University law professor and a former federal prosecutor.

Of course, if it were to be released, the tape could be highly embarrassing to Mr. Ailes, a onetime adviser to Richard M. Nixon whom critics deride as a partisan who engineers Fox News coverage to advance Republicans and damage Democrats, something Fox has long denied. Mr. Ailes also had close ties with Mr. Giuliani, whom he advised in his first mayoral race. Mr. Giuliani officiated at Mr. Ailes’s wedding and intervened on his behalf when Fox News Channel was blocked from securing a cable station in the city.

In a statement released on Wednesday, a News Corporation spokeswoman did not deny that Mr. Ailes was the executive on the recording. But the spokeswoman, Teri Everett, said News Corporation had a letter from Ms. Regan “stating that Mr. Ailes did not intend to influence her with respect to a government investigation.” Ms. Everett added, “The matter is closed.”

Ms. Everett declined to release the letter, and Ms. Regan’s lawyer, Robert E. Brown, said the News Corporation’s description of the letter did not represent Ms. Regan’s complete statement.

The new documents emerged as part of a lawsuit filed in 2008 in which Ms. Regan’s former lawyers in the News Corporation case accused her of firing them on the eve of the settlement to avoid paying them a 25 percent contingency fee. The parties in that case signed an agreement to keep the records confidential, but it does not appear that an order sealing them was ever sent to the clerk at State Supreme Court in Manhattan, and the records were placed in the public case file.

Discussion of the recorded conversation with Mr. Ailes emerges in affidavits from Ms. Regan’s former lawyers who are seeking to document the work they did on her case and for which they argue they deserve the contingency fee. They describe consulting with a forensic audio expert about the tape.

No transcript of the conversation is in the court records.

But Brian C. Kerr, one of Ms. Regan’s former lawyers, describes in an affidavit the physical evidence he reviewed as “including a tape recording of a conversation between her and Roger Ailes, which is alluded to throughout the complaint” that Mr. Kerr and another lawyer, Seth Redniss, drafted for Ms. Regan. That complaint said News Corporation executives “were well aware that Regan had a personal relationship with Kerik.”

“In fact,” the complaint said, “a senior executive in the News Corporation organization told Regan that he believed she had information about Kerik that, if disclosed, would harm Giuliani’s presidential campaign. This executive advised Regan to lie to, and to withhold information from, investigators concerning Kerik.”

Mr. Redniss, in his affidavit, referred to “a recorded telephone call between Roger Ailes, the chairman of Fox News (a News Corp. company) and Regan, in which Mr. Ailes discussed with Regan her responses to questions regarding her personal relationship with Bernard Kerik.”

“The ‘Ailes’ matter became a focal point of our work,” Mr. Redniss continued.

The dispute involves a cast of well-known and outsize personalities; it also includes some New Yorkers who have had spectacular career meltdowns.

Mr. Kerik was sent to prison last year after pleading guilty to federal charges including tax fraud and lying to White House officials.

The law firm Ms. Regan hired to draft her complaint against News Corporation was headed by Marc S. Dreier, whose firm was cast into bankruptcy in 2008 when he was charged with a $100 million fraud scheme. The firm’s suit seeking the contingency fee from Ms. Regan is being led by the bankruptcy trustee handling the dissolution of the firm. Mr. Redniss was a co-counsel to the Dreier firm.

Ms. Regan’s own crash was remarkable in itself. While often controversial for her book choices, which ranged from literary novels to sex advice from a pornography star, her imprint at HarperCollins had become one of the more financially successful in the business.

The end came quickly in late 2006. Rupert Murdoch, the News Corporation chairman, was quoted saying it had been “ill advised” for her to pursue “If I Did It,” a hypothetical murder confession by O. J. Simpson. A novel that included imagined drunken escapades by Mickey Mantle drew another round of outrage.

Then News Corporation said Ms. Regan had been fired because she made an anti-Semitic remark to a Jewish HarperCollins lawyer, Mark H. Jackson, in describing the internal campaign to fire her as a “Jewish cabal.”

In her 2007 suit, Ms. Regan said the book controversies had been trumped up and the anti-Semitic remark invented to discredit her, should she ever speak out about Mr. Kerik in ways that would harm Mr. Giuliani’s image. The new court documents expand upon that charge and link it to Mr. Ailes. Mr. Redniss wrote in an affidavit that Ms. Regan told him that Mr. Ailes sought to brand her as promiscuous and crazy.

“Regan believed that Ailes and News Corp. subsidiary Fox News had an interest in protecting Giuliani’s bid for the U.S. presidency,” he wrote.

In addition to serving as chairman of Fox News, Mr. Ailes has taken a broader role at News Corporation, including oversight of Fox’s local television stations and Fox Business Network.

As part of the settlement in January 2008, News Corporation publicly retracted the allegation that Ms. Regan had made an anti-Semitic remark to Mr. Jackson.

The court records examined by The New York Times this week, which have subsequently been taken out of the public case file, also reveal another interesting footnote. After Ms. Regan fired her lawyers, a seemingly unlikely figure came forward to help settle the case: Susan Estrich, a law professor and a regular Fox commentator whose book Ms. Regan had published, according to Ms. Regan’s affidavit.

William K. Rashbaum contributed reporting.

Posted via email from John’s posterous

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  1. Andrew c
    February 25th, 2011 at 22:00 | #1

    I wonder if Lachlan will be as loony and malicious as his old man. Can’t imagine he will subsidize right-wing rags like the Oz as he doesn’t seem to need the ego boost. Mind you, as a counterfactual, we have the younger Kochs who are as weird as their father.

    How will we survive the next 20 years until the power of the robber barons is broken again? If it is broken.

  2. Donald Oats
    February 25th, 2011 at 22:44 | #2

    I don’t think Lachlan is at the helm; James (?) Murdoch is the more interested one. Could be wrong though.

    As for the story above, my first reaction is informed by what I’ve learnt from this blog, deltoid, tamino, realclimate, the guardian, my past life of reading the nOz regularly, etc: given the protagonists and their employers / circle of peers, I wouldn’t rely on any of the accounts being accurate, sworn affidavits or not. I mean that the basic theme throughout the article sounds plausible and correct; it is just that the individuals are possibly being economical with their dichotomies. T or F, Y or N, that is the question posed.

    All of the above just goes to show that possessing information is power, while having knowledge is sh!t.

  3. Freelander
    February 26th, 2011 at 02:23 | #3

    Yes. I think Lachlan is lacking the low animal cunning that making and holding money requires, something that Kerry Packer and Rupert both had, have (that talent for banking the work of others). Young James Packer has managed to lose billions from his legacy in a very short time. If there was a way, Kerry probably would have taken it with him. But then, when he came back, after his first departure, he said there was no one there.

    Media not only boosts the ego of its owner, lawmakers and enforcers are only to willing to give that owner a far better than ‘fair and balanced’ treatment.

  4. Jill Rush
    February 26th, 2011 at 07:56 | #4

    In newsworld it looks as if it is impossible to know who or what to believe as they hustle their way around the political/news world. What the above does seem to illustrate is that bankruptcy in ethics is a given.

  5. Alice
    February 26th, 2011 at 13:02 | #5

    @Andrew c
    Andrew – have faith. While the robber barons and their supportive media mouthpieces try to rattle the inflation scabre noisily in front of us all and impose austerity measures (Fox is currently on the Wisconsin unions case day in day out – “these teachers and policemen have to pull in their belts” to “get back to normal??”)

    There is no normal. There wasnt before the GFC. The bubble isnt going to inflate any time soon just to keep Fox News happy.

    It is not inflation the Murdoch media needs to concern itself with. Deflation will become the new normal (bubbles must deflate – especially big ones). In this case Friedman is wrong no matter how much money the US govt throw at their banks. Sooner or later banks, large and small will be forced to acknowledge their much more massive speculative losses (particularly in the US but of course globally now) whether they are regulated to or not, whether its on the balance sheet or off or whether they have had a short term liquidity injection or not. Those losses were so huge they wont just disappear with austerity measures or bailouts and will worsen with every house that a person cant afford to pay a mortgage on, with every job loss and every price fall….and with it the wealth share of the asset/stock/ endowed elite will also fall as it must for the economy to recover.

    Agreed, the hustle of the same old media lines is tiring now. Boeing probably got the contract because the US obviously needs some construction jobs but I question the usefulness and purpose of planes that refuel in midair. The US hasnt learnt its lesson.

  6. February 27th, 2011 at 15:05 | #6

    Lobby your federal member.

    Tell them you demand that they make foreign ownership or effective control of our news-media illegal.

    Easy!

  7. Alice
    February 28th, 2011 at 18:20 | #7

    @Megan
    Not so easy when only lobby groups with dollars and donations get a real hearing Megan..

  8. February 28th, 2011 at 21:44 | #8

    Well let’s just go Egyptian on the major parties AND news ltd!

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