Will Rupert Murdoch's Children Use the Judith Regan Scandal Against Fox News' Roger Ailes?

Roger Ailes could have a big mess on his hands based on court documents made available today, which allege that the Fox News chairman encouraged a former employee to mislead federal investigators. The exclusive New York Times report quotes court documents indicating a taped phone call exists, in which Ailes tells Judith Regan, a high-powered publisher at HarperCollins, which is also owned by Fox's parent company News Corporation, to lie to investigators about her affair with former New York City police commissioner Bernard B. Kerik. It gets more interesting because Regan walked away from News Corp. with a settlement of almost $11 million. Find out what Rudy Giuliani had to do with it all, and what it could mean for Ailes and Fox News, inside Press Clips, our daily media column.

The End For Ailes?: Regan was fired from HarperCollins in 2006, leading her to pursue a wrongful termination suit against the publishing superpower and News Corp. In the scandal that followed, Regan tossed around the serious claim that a News Corp. boss had told her to lie to investigators about her affair with the since-embattled Kerik, who was known as a protege of then-New York City mayor Rudy Giuliani, already a favorite for the Republican presidential nomination in 2008.

Ailes' name is only coming out now in connection with a separate lawsuit, which not only fingers him as Regan's mystery executive, but brings up the possibility of an audio recording. Regan never came out and said it was Ailes at the time, but she did settle her termination lawsuit for $10.75 million only two months after it was filed. Of this, the Times writes, "It is unclear whether the existence of the tape played a role in News Corporation's decision to move quickly to settle Ms. Regan's lawsuit," meaning it probably did, but they don't have the proof to tell us so. But here's the circumstantial evidence:

Of course, if it were to become public, the tape could be highly embarrassing to Mr. Ailes, a onetime adviser to Richard 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 the Fox News Channel was blocked from securing a cable station in the city.

A News Corp. spokesperson did not deny the Ailes tape, but immediately positioned their defense by telling that Times "that News Corporation has a letter from Ms. Regan 'stating that Mr. Ailes did not intend to influence her with respect to a government investigation.'"

Connecting a few dots here, though it's a bit conspiratorial, one could venture a guess that when Ailes found out about the tape of him breaking the law, he could have maybe moved the process of Regan's settlement along if -- and only if -- she agreed to sign a letter clearing Ailes of any criminal culpability. (Maybe!)

At this point, the Times writes, "the conversation could possibly rise to the level of conspiring to lie to federal officials, a federal crime, but prosecutors rarely pursue such cases," according to one expert. "The matter is closed," said the News Corp. spokesperson.

Except that maybe it's not.

See, Fox News -- the super important and profitable wing of Rupert Murdoch's News Corp. -- has long been a battleground for Murdoch's own family, who are constantly jockeying for position in the company.

Last year, when a New York Times profile pointed to Ailes as a reason for Fox News' successes, Murdoch's son-in-law disagreed vehemently: "I am by no means alone within the family or the company in being ashamed and sickened by Roger Ailes' horrendous and sustained disregard of... journalistic standards," said Matthew Freud, who is married to Murdoch's 41-year-old daughter Elisabeth, who once worked for News Corp. as an executive, and has just recently been brought back into the fold by her father.

"Matthew Freud's opinions are his own, and in no way reflect the views of Rupert Murdoch, who is proud of Roger Ailes and Fox News," a News Corp. spokesperson assured everyone at the time.

But in the aftermath of that quote, The Daily Beast went so far as to say that Ailes' days at Fox News were numbered, not just because of the ire from Murdoch's family, but because Ailes was taking too much credit for Rupert's successes.

"Rupert picked up his Times at the breakfast table, saw the story above the fold with the big photo of Roger, and probably choked on his coffee," said one insider.

In the year since, Ailes has seemed both safe and successful, scoring another extensive profile, this time in Esquire, befuddled about how he could possibly win so often with Fox News. But don't put it past the Murdoch kids, probably raised with ice in their veins, to use Ailes' scandalous missteps, even sans criminal charges, against him.

In a profile of James Murdoch, Rupert's 38-year-old son who many assume will one day run News Corp., just last weekend in the New York Times, the heir apparent is painted as:

...an aggressive, ambitious executive who has cemented his stellar reputation in the pay-television business in Asia and Europe, who at times has made assertive plays for expanding his power base within the company, who has nurtured a brand of conservative politics that often puts him at odds with the profit center that is Fox News, and who has shown an eagerness to play in the corridors of power in ways noisier than his father's more subtle maneuverings.

It's not about arguing that Ailes doesn't know what he's doing -- Fox News has yet to be stopped or even really stutter. But a federal investigation, and thus an embarrassment for the company, could be just the window the Murdoch kids were waiting for.

Ailes should watch his back, that's all, and probably be more careful on the telephone.

[jcoscarelli@villagevoice.com / @joecoscarelli]


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