karlpejera: News Corp may face US inquiry after Sun arrests at News International

Alleged bribery in Britain could fall foul of US law as editor Dominic Mohan tries to rally staff at embattled tabloid

Rupert Murdoch's News Corporation faces the increased prospect of a full-blown inquiry by US authorities as part of the continuing investigation into alleged bribery of public officials under America's foreign corrupt practices act, after the latest round of arrests of senior journalists at the Sun this weekend.

Murdoch flies into London later this week on a scheduled visit at a time of turmoil for Britain's best-selling newspaper, with journalists on the title angry at News Corp's powerful management and standards committee (MSC), whose reconstruction and trawl of the company's email archive produced the evidence that led to the arrests.

It was reported on Sunday night that the solicitor representing the family of Milly Dowler and other alleged victims of phone hacking is to take his battle against Murdoch to America. Mark Lewis, one of several lawyers representing clients pursuing claims against the News of the World for phone hacking, is expected to travel to the US within the next few weeks to meet American lawyers to discuss legal action there. Lewis was reported to be in the "advanced stages" of bringing at least one case against Murdoch's company in the US. He said he was "not prepared to deny" the reports.

The threat of prosecution under the US foreign corrupt practices act, which criminalises the payment of bribes to public officials by American companies overseas, exposes the company to tens of millions of dollars in fines and the risk of imprisonment of its executive officers ? and brings the fallout from the phone-hacking scandal to the US.

Mike Koehler, an expert in FCPA law at Butler University, said the arrests on Saturday marked an escalation in the risk of an FCPA prosecution for the New York-based News Corp. "This spreads the alleged bribery to a completely different newspaper, to a different segment of the company and to other public officials," he said.

Eric Holder, the US attorney general, launched a preliminary investigation into News Corp's activities last July. The FBI is known to be involved in the investigation, but its activities have so far remained at an early stage, and News Corp sources in London say the investigators have not yet been in direct contact with the MSC.

Meanwhile, over at a battered Sun the editor, Dominic Mohan, addressed staff on Sunday in an effort to rally journalists. Those not on duty came into work to show solidarity with a title whose future is uncertain after the arrest of the 10 journalists on suspicion of making corrupt payments to public officials.

Those arrested on Saturday include Geoff Webster, the deputy editor; John Kay, chief reporter; Nick Parker, chief foreign correspondent; Mike Sturgis, reporter; and John Edwards, picture editor. It is understood that the evidence giving rise to their arrests by police from Operation Elveden dates back a number of years; it also prompted the arrest the same day of a Surrey police officer, a Ministry of Defence official, and a member of the armed forces.

Anger and frustration in the Sun's newsroom is in part directed at the MSC ? with one Sun reporter, Jen Blackburn, the girlfriend of Chris Pharo, the news editor arrested as part of the same inquiry last month, tweeting quotes from media lawyer Mark Stephens. The lawyer had said, according to Blackburn, that "the police are effectively working towards criminalising the relationship between ? the media and their sources, and that is a bad thing for democracy".

However, those close to the MSC, which ultimately reports to Rupert Murdoch, believe the body had acted in the only way it could if there was evidence of possible crime. "What are we supposed to do? Payments to public officials are illegal," said one person close to the body, noting that after allegations that News Corp had participated in a cover-up of phone hacking, now the company was being accused of being too helpful to the police.

It is also understood that the US Securities and Exchange Commission (SEC) is conducting its own inquiries. The SEC takes an interest in cases where false financial information has been provided ? in the case of News International, the use of false names in company records and accounts to disguise the recipients of bribes from journalists could fall into that category.

Koehler said the FCPA inquiry was likely to consider whether any News Corp executives were culpable. "The Department of Justice and SEC wouldn't be doing their job if they didn't ask what the executive officers of the company knew about corruption and whether they authorised it, or did anything to stop it."

The scale of any penalties that flow from the FCPA investigation would be based on a calculation of how much benefit the company derived from any corruption. Against that, mitigating factors would be taken into account such as the extent of co-operation given to the investigating authorities by the company.

That helps explain why News Corp has bent over backwards in recent months to assist the police by handing over evidence of possible wrongdoing, to the dismay of some of its own journalists. British law also states that the police cannot serve warrants on News Corp for evidence if the company is co-operating with inquiries.

The costs of an FCPA prosecution can be severe. The largest fine in FCPA history was imposed in 2008 against Siemens for $800m (�508m), while the heaviest prison term was handed out last October to Joel Esquenazi, who is now serving 15 years in jail for bribery of telecoms officials in Haiti.

Meanwhile, interviewed on BBC1's Andrew Marr Show and Radio 4's The World This Weekend, culture secretary Jeremy Hunt said that since the Leveson inquiry started he had been "shocked" to learn that misconduct in the newspaper industry was "a lot more widespread than I initially thought". Commenting on the role played by News International, he said: "I think it's greatly to their credit that News Corporation are co-operating fully [with the police investigation]. I wish they had done so a bit earlier."

He added that there was more agreement than he expected on the "tougher" form of newspaper regulation that will emerge in the light of the phone-hacking scandal, a system that the minister said he wanted in place before 2015. "We've come much closer to a consensus on the way forward than I would perhaps have predicted," he added.

While stressing that he wanted to put off any decisions until Leveson has published his recommendations, Hunt indicated that he agreed with the broad thrust of the consensus that was emerging.

"I think everyone recognises that we don't want politicians telling people what to write, so no statutory regulation of press content," Hunt said.

"But we do need a much tougher system to deal with newspapers who step out of line. Basically, the body that decides on whatever the punishments are for newspapers who step out of line needs to be fully independent from newspaper proprietors and current newspaper editors."