Ever since its powerful chairman,
Ailes' unexpected death Thursday will probably complicate several pending lawsuits and a federal investigation into whether parent company 21st Century Fox violated any securities laws in its handling of payments to women to resolve sexual harassment claims at Fox News. It also leaves unresolved a tangle of questions about his conduct in the final years of his 21-year reign at the conservative cable news network.
Ailes built Fox News into a cable juggernaut that brings in more than $1 billion a year in profits. But his legacy is far more complex. Since last fall, 21st Century Fox has spent $45 million to resolve claims at Fox News, including a lawsuit filed in July by former on-air personality Gretchen Carlson, who said she was subjected to years of sexual harassment. Fox later paid Carlson $20 million and apologized for not treating her "with the respect and dignity that she and all of our colleagues deserve."
Other lawsuits soon followed, and revelations surfaced that Fox News had quietly paid out millions of dollars to several female employees to resolve their harassment claims.
Those payments are the focus of a federal probe as prosecutors try to determine whether the company properly informed corporate investors about the settlements. Investigators from the U.S. Attorney's Office in Manhattan and the U.S. Postal Inspection Service are said to be looking into allegations that Ailes used intimidation tactics to suppress women from speaking out, and that the company even hired a private detective to dig up dirt on the women who came forward.
The federal investigators have interviewed several women, including the former director of special events at Fox News, Laurie Luhn. She received a $3.1-million payment in 2011.
A representative of the U.S. attorney's office in Manhattan declined to comment Thursday. Another person familiar with the investigation said the probe was expected to move forward.
A number of former Fox News employees have already been subpoenaed, including former Fox News Chief Financial Officer Mark Kranz. The chief financial officer of 21st Century Fox, John Nallen, also has talked to investigators, sources have said.
Ailes had denied all the claims against him.
"The untimely death of an individual brings to an end the investigation as to that person," said Jacob S. Frenkel, a former government attorney and chairman of the securities enforcement practice at the Dickinson Wright firm in Washington. "If the investigation is broader than Mr. Ailes, then the investigation simply continues — if prosecutors choose to pursue the other issues and persons."
Fox News has been in tumult since Ailes was fired in July about two weeks after Carlson filed her lawsuit.
One of Fox News' brightest stars, Megyn Kelly, turned down a $20-million annual contract and moved to competitor NBC, where she will launch a Sunday evening program next month.
Then last month, Fox fired its top-rated conservative commentator, Bill O'Reilly, after allegations surfaced that he also sexually harassed women. Los Angeles radio personality Wendy Walsh alleged that he promised to bring her on his show, "The O'Reilly Factor," in exchange for sexual favors. O'Reilly has denied the allegations, but advertisers bailed out of his popular show amid pressure from activists, including the National Organization for Women.
"I believe that your corporate culture felt that paying tens of millions of dollars to victimized women was just the cost of doing business," Walsh said in an open letter to Murdoch earlier this month. "At the same time I watched your network going after high ratings by sexualizing your news presenters with hair, make-up and wardrobe that rival street walkers."
Ailes' longtime lieutenant, Bill Shine, resigned from his position as Fox News co-president this month in the wake of the O'Reilly controversy. He left, in part, because of the perception that he did little to deter inappropriate behavior within the network.
The problems at Fox News have cast a shadow over the parent company at an awkward time. 21st Century Fox is trying to win approval from British regulators for its proposed $14-billion bid for full control of Sky, the lucrative European pay TV company. Regulators in London interviewed several of the alleged victims and their attorneys.
"The sudden passing of Roger Ailes will make it difficult for Fox News to refute the allegations against him as his testimony was not secured by sworn testimony to date," said Douglas Wigdor, the lead attorney on several sex and race discrimination lawsuits that have been filed against Fox.
He said one of his firm's clients, Lidija Ujkic, had contended in a lawsuit that Ailes insisted that President Obama was a Muslim who worked with terrorists and discussed "the Fox News recipe for success as 'showing women from the feet up.' "
Several others involved in the legal cases declined to comment Thursday on what impact Ailes' death might have on the litigation.
Nancy Erika Smith, a lawyer for Carlson and other women who have filed complaints against Ailes and Fox News, said: "That's not a discussion for today."
Another attorney, who represents former Fox News host Andrea Tantaros, who sued Ailes in August, also declined to discuss the litigation.
"Roger Ailes has left behind a grieving widow and a teenage child," said Tantaros' lawyer, Judd Burstein. "They did nothing wrong, and surely deserve our sympathy. As such, any comment about Mr. Ailes at this time would be unseemly and heartless."
4:15 p.m.: This article was updated with more commentary and details about the investigations.