Business & Tech

Fox News facing federal probe over sex harassment payments, lawyer says

The Fox News set at the Wells Fargo Arena, on day three of the Democratic National Convention in Philadelphia, July 27, 2016. Even as Fox goes about broadcasting-as-usual, the organization is still grappling with the aftershocks of the abrupt exit of Roger Ailes, and relations between some key on-air talents are reportedly icy and tense. (Eric Thayer/The New York Times)

Eric Thayer/The New York Times/file 2016

The Fox News set at the Wells Fargo Arena during the Democratic National Convention in July.

The U.S. attorney’s office is looking into the way Fox News handled payments related to sexual harassment cases to determine whether the company misled investors, according to the lawyer for a woman who is suing the network.

At a hearing in New York State Supreme Court on Wednesday, the lawyer, Judd Burstein, who is representing the former Fox anchor Andrea Tantaros, said that another one of his clients had received a grand jury subpoena related to Fox News. He did not identify that client.

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Burstein said in a text message that he believed federal investigators were looking at whether Fox News structured sexual harassment settlement claims by paying them out in salaries, “so as not to have to report them.”

He added that the prosecutors had identified themselves as being from a securities fraud division of the U.S. attorney’s office in Manhattan.

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In a statement, Fox News said it had not received a subpoena but had “been in communication with the U.S. attorney’s office for months.” The statement added that Fox “will continue to cooperate on all inquiries with any interested authorities.”

The U.S. attorney’s office declined to comment.

The prospect of a criminal investigation is a surprising escalation of the sexual harassment scandal that engulfed Fox News over the summer and led to the departure of its chairman, Roger Ailes. After reaching a $20 million settlement with Gretchen Carlson, a former anchor who sued Ailes, and conducting an internal investigation into his conduct, the company tried hard to put the episode behind it.

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The scope of the investigation by the U.S. attorney’s office, which appeared to be in the early stages, was not immediately clear. Burstein made the remarks while he was arguing that Tantaros’ case — she sued the network in August, accusing Fox News of retaliation after she complained about sexual harassment — should go forward in an open court. A judge rejected that claim on Wednesday and ruled that her case would be resolved in arbitration.

In a statement, a spokeswoman for Fox News said, “The court granted Fox News’ motion to send Andrea Tantaros’ case to arbitration, where it always belonged, and rejected her counsel Judd Burstein’s histrionics.”

Asked whether Ailes had received a subpoena, Susan Estrich, his lawyer, declined to comment. Ailes has denied the sexual harassment allegations.

Tantaros’ suit asserts that the network’s newsroom resembled “a sex-fueled, Playboy Mansion-like cult.” The suit named a number of Fox News executives in addition to Ailes, accusing them of marginalizing her and removing her from the air after she complained.

Fox News denied the charges, saying that Tantaros was let go for violating her contract by writing a book without approval.

In July, Carlson sued Ailes for sexual harassment. Fox News’ parent company, 21st Century Fox, hired the law firm Paul, Weiss, Rifkind, Wharton & Garrison to conduct an investigation, and a number of other women stepped forward with similar accusations, including former Fox star Megyn Kelly.

Ben Protess contributed reporting.
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