A former Australian senator said Friday that Rupert Murdoch's eldest son was present when a News Corp. executive allegedly offered him favorable newspaper coverage and "a special relationship" in return for voting against government legislation.
The Australian Federal Police are investigating former Sen. Bill O'Chee's allegations about Murdoch's media empire, which has been shaken for months by a separate British scandal over hacked cellphone messages.
O'Chee told The Associated Press on Friday that Lachlan Murdoch, then a senior News Corp. executive, was at the table during crucial parts of his discussion with Malcolm Colless, then director of corporate development for News Ltd., News Corp.'s Australian subsidiary.
O'Chee alleges that Colless offered him inducements during a lunch on June 13, 1998, to vote against his conservative government's legislation on the creation of digital TV in Australia. News Corp. stood to profit from the legislation failing.
Lachlan Murdoch, now a board member of an Australian television network, had no recollection of the lunch, his spokesman John Connolly said Friday.
John Hartigan, chairman and chief executive of News Ltd., denied allegations of improper conduct.
Details of O'Chee's allegations, in the form of a nine-page sworn statement, were first published Wednesday by Fairfax Media newspapers, rivals of News Corp.
"This is a very, very serious matter that goes right to the heart of government and something that I'm sure would concern every thinking person," O'Chee told the AP.
"I'm glad that the AFP is going to investigate it and I hope they investigate it extremely thoroughly," he said.
"It would just be helpful to all concerned if Lachlan Murdoch now admitted the fact that he was present during that lunch, or portions of that lunch, when pay TV was discussed," he said.
Offering a senator a bribe or inducement to influence a vote is an offense punishable by up to seven years in prison.
O'Chee's allegations were reported to police by Rob Oakeshott, an independent federal lawmaker whose support is crucial to Prime Minister Julia Gillard's minority government's survival.
"I emphasize that this is not passing judgment on the veracity of the allegations," Oakeshott told the AP in a statement. The allegations were reported "to make sure the right people could test the truth or otherwise of the serious allegations being made," Oakeshott said.
News Ltd. newspaper The Australian reported Thursday that its editor-in-chief, Chris Mitchell, had by coincidence had lunch that day with Lachlan Murdoch in the same restaurant in Brisbane city, but at a separate table from O'Chee and Colless.
Mitchell spoke briefly to Colless and his party as he was leaving the restaurant, but was unaware of any attempts to lobby for O'Chee's vote, the newspaper reported.
O'Chee, a former senator for Queensland state with a track record of voting against his National Party's wishes, alleged that Colless told him that while voting against the legislation would be criticized, "we will take care of you."
Colless "also told me we would have a 'special relationship,' where I would have editorial support from News Corp.'s newspapers, not only with respect to the ... legislation, but for 'any other issues' too," O'Chee alleged in his statement.
O'Chee said that a week after the lunch, he called Colless to say he had decided to vote for the legislation. It then became "almost impossible" to attract News Corp. coverage, O'Chee said in his statement.
He lost his Senate seat at elections four months after the lunch.
Hartigan's statement said Colless "has confirmed that no improper conversation took place during the 1998 lunch."
"Two other guests at the lunch with Mr. Colless and Mr. O'Chee have said they did not hear any improper conversations," he said.
The allegations are embarrassing for News Corp., whose ownership of 70 percent of Australia's newspapers has raised criticism from within the government that Murdoch's empire has too much control over Australian media.
The government has opened an inquiry into potentially increasing newspaper regulation in Australia after News Corp. closed its top-selling British tabloid News of the World in July over illegal phone hacking allegations.