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Murdoch empire faces another challenge - back home in Australia.

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By Noel Young, Correspondent

November 23, 2011 | 3 min read

It never rains but it pours. Rupert Murdoch's empire is facing another scandal - back in Australia. But it has nothing to do with phone hacking.

Murdoch: Trouble in Oz

It has been alleged that Malcolm Colless, an executive of Murdoch's Australian company News Ltd offered a senator a ''special relationship'' if he crossed the floor on a vote of financial interest to the company. Colless was not named in the original story in the Melbourne Age - but in refuting the story, News Ltd chose to name him.

Former senator Bill O’Chee has claimed that 13 years ago - in 1998 - Colless attempted to persuade him to vote against government legislation on digital TV.

O’Chee reportedly told police that in return for his vote, the News Limited executive promised him a “special relationship” with the company as well as “editorial support from News Corp's newspapers, not only with respect to the … legislation but for ‘any other issues’ too.”

But when O’Chee decided to vote for the legislation, he claimed, “it became almost impossible for me to get anything published in the Queensland newspapers which News Corp. controlled, even though I had been able to do so before the lunch meeting.”

The allegations were contained in a nine-page police statement made by O'Chee, and seen by The Age, the leading Melbourne newspaper and a rival of News Ltd.

The allegations, it has now been revealed, have also been included in a US lawsuit being run by News shareholders against the company's New York parent organisation.

News Limited released a statement in Australia categorically denying O’Chee’s claims,

Outgoing News Ltd chairman John Hartigan refuted the allegations of improper conduct by any executive.

''The executive referred to in today's report, Malcolm Colless, has confirmed that no improper conversation took place during the 1998 lunch with former senator O'Chee,'' he said.

Hartigan noted neither of the other two people at the table during the meeting, at Pier Nine restaurant in Brisbane in June of that year, recalled any improper offer.

He also said neither News Ltd nor Malcolm Colless had been contacted by federal police, who have been investigating the matter since November 4.

Colless worked with News Ltd for almost 50 years, as a journalist and then as an executive. He was director of corporate development when he met Mr O'Chee in 1998.

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