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Will Murdoch case, and the FCPA, get Supreme scrutiny?

As the fallout from the voicemail-tapping and police collusion allegations against Rupert Murdoch’s News Corp. grows, legal experts say the case could land before the U.S. Supreme Court.

The issue: the breadth of the Foreign Corrupt Practices Act.

The case could give the highest American court a chance to decide the reach of the federal law, which is designed to prevent companies doing business in America from engaging in bribery and money laundering abroad.

In addition to allegations that British reporters at News Corp. paper tapped the phones of celebrities and crime victims, the company faces allegations that police officials were bribed to look the other way. The Justice Department has also opened investigations into whether phones were hacked on American soil, or if victims of the Sept. 11 attacks were targets.

But if FCPA charges are filed against the company’s officials, UPI reports, the penalties could be steep – with fines of as much as $2 million per violation, individual fines of up to $250,000 per violation, and prison time of up to 5 years on each count. And the penalties go up the chain of command – so even Murdoch could be on the hook.

The Court passed up a chance ot consider the breadth of the law in 2008, but with the number of FCPA enforcement actions rising, the Court could be given more chances to look at the law’s application.

If the case does work its way to the top of the judicial chain, it would not be the first time the Supreme Court weighed in on the breadth of a law in a highly-publicized case. In a case involving former Enron CEO Jeffrey Skilling, the Court ruled last year that the federal “honest services” fraud statute applied only to bribery and kickbacks.

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