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Ex-Fox News CFO offered immunity from prosecution

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The former chief financial officer of Rupert Murdoch’s Fox News Channel has been offered immunity from prosecution by government lawyers investigating payments to women allegedly harassed by Roger Ailes, the network’s former chairman, according to people briefed on the case.

Mark Kranz was CFO of Fox News from 2004 until last year, leaving the channel shortly after Mr Ailes was pushed out by its parent company, 21st Century Fox.

Mr Ailes, the former Richard Nixon aide who turned Fox News into a force in political media, was fired following an internal investigation into claims that he had sexually harassed Gretchen Carlson, a former presenter. During that investigation several other female employees — including the network’s former star Megyn Kelly — came forward with similar allegations.

The full scope of the government probe is unclear but authorities are looking into whether Fox News allegedly misled investors by concealing multiple financial settlements with former employees.

One of them was Laurie Luhn, a former Fox News guest booker, who revealed last year that she had received a $3.1m settlement in 2011 related to allegations Mr Ailes had sexually harassed her.

As CFO, Mr Kranz was intimately involved in preparing the company’s financial statements so his co-operation will be key for prosecutors trying to understand how the Luhn payment and other alleged settlements were accounted for.

The Luhn payment was not disclosed to 21st Century Fox investors and federal prosecutors have offered Mr Kranz and at least one other former executive immunity from prosecution in return for their co-operation, people briefed on the case said. Mr Kranz did not respond to calls seeking comment; his lawyer declined to comment.

Mr Kranz is among multiple witnesses who have been subpoenaed by federal prosecutors investigating whether other alleged financial settlements with former Fox News employees were disclosed or accounted for properly. Under US securities law such payments must be disclosed to investors if they are deemed material or important. Fox News generates annual profits of more than $1.5bn and is among 21st Century Fox’s most profitable businesses.

21st Century Fox has previously said it had not received a subpoena but had “been in communication with the US attorney’s office for months”. A spokesman for the US attorney’s office, which is conducting the investigation, declined to comment.

The federal probe comes at a sensitive time for 21st Century Fox, Mr Murdoch and his sons, Lachlan and James, who run the media company alongside their father. It recently bid £11.7bn for the 61 per cent it does own of Sky, the European pay-TV group: the offer has been referred to Ofcom, the UK communications regulator, which will assess the bid on media plurality and broadcasting standards grounds.

Ofcom is also conducting a separate but simultaneous review into whether Sky and its chairman James Murdoch are “fit and proper” to hold and operate a UK broadcasting licence.

It is not clear whether a US federal investigation would fall into the scope of the fit and proper person test although Ofcom’s guidelines are sufficiently wide to allow it to consider foreign investigations. The regulator declined to comment.

However, politicians opposed to the Fox takeover have been arguing that the watchdog should include the federal investigation as part of their assessment in coming weeks.

A previous bid for Sky by Mr Murdoch’s News Corp group was pulled in 2011 following the political outcry over the phone-hacking scandal at his News of the World newspaper.

Via FT

/the netizen report

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