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News Corp. Loses NY State Contract Over Phone Hacking Scandal

Reported by Ellen - August 30, 2011 -

The Murdochs' phone hacking scandal has reverberated across the Atlantic again, this time with regard to a no-bid contract between New York State and News Corp.’s educational technology company, Wireless Generation. The company won the $27 million contract to develop software to track students’ test scores in a deal that, as the Gotham Gazette put it, “did not meet the smell test for many.” Now, NY’s State Comptroller Thomas DiNapoli has rejected the contracts. He specifically cited the phone hacking scandal as one of the reasons.

New York's Daily News reported:

"In light of the significant ongoing investigations and continuing revelations with respect to News Corp., we are returning the contract with Wireless Generation unapproved," DiNapoli's office wrote to the Education Department.

As the Gotham Gazette noted, New York City Schools Chancellor Joel Klein – who had signed a number of previous contracts with Wireless Generation - announced last November he was leaving his post for a multimillion dollar job with News Corp “to oversee investments in digital learning.” Two weeks later, News Corp. bought Wireless Generation. The $27 million contract with the City might have earned Klein even more money in bonuses.

Klein is also heading News Corporation’s internal investigation into the phone hacking scandal.

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