Federal prosecutors are looking into whether Fox News Channel and its parent company tried to disguise a $3.15 million payment to a former employee who said she had a 20-year affair with the network’s former chairman, Roger Ailes, according to people involved with the investigation.
Investigators in the U.S. Attorney’s Office for the Southern District of New York have focused on a payment to Laurie Luhn, a former Fox booker and event planner who left the company in 2011 with the seven-figure severance package. Luhn later claimed that she had engaged in a consensual but a mentally abusive, relationship with Ailes and that several of his lieutenants facilitated the assignations and were aware of his alleged mistreatment of her.
.. A series of such payments could be considered material not because of their size but because they could raise concerns among investors about the stability of the company’s management or finances.
Scope of Federal Probe into Fox News Broadens
Federal investigators have interviewed network executives and on-air talent, asking about sexual-harassment settlements
.. In an interview with the Journal, Ms. Luhn said Mr. Ailes harassed her and subjected her to “psychological torture” for years. She said Mr. Shine took steps to keep her from talking to the press, moving her between hotel rooms and at one point calling her father to arrange her placement in a psychiatric-care facility in Texas against her wishes. Eventually her lawyer negotiated a settlement with Fox. Ms. Brandi signed it while Messrs. Ailes and Shine signed a general release of known and unknown claims that was part of the separation agreement... Mr. Kranz was given immunity by prosecutors for speaking to them, people familiar with the matter said. He left the network last year after an internal inquiry found that he was involved in making settlement payments to Mr. Ailes’s alleged victims without the parent company’s knowledge, the people said.