Sang Tan / AP

Rupert Murdoch, right, and his son James Murdoch, left, have come under fire for their handling of the hacking affair last year that resulted in the closure of the News of the World.

News Corp.’s (NWS) board of directors said Wednesday it has “full confidence” in Rupert Murdoch’s fitness to continue to lead the international media company.

The statement, which came days after a British House of Commons committee report called Murdoch “not a fit person” to head a major international company, followed a meeting of News Corp.’s board of directors.

In its statement, the board said its decision was unanimous.

“The Board based its vote of confidence on Rupert Murdoch's vision and leadership in building News Corporation, his ongoing performance as Chairman and CEO, and his demonstrated resolve to address the mistakes of the Company identified in the Select Committee's report,” the statement said.

Rupert Murdoch and his son James have come under fire in recent months for their handling of the hacking affair last year that resulted in the closure of the News of the World tabloid.

© Stringer Mexico / Reuters

A Wal-Mart store in Mexico City is shown. An extensive investigation by The New York Times into an alleged bribery effort by top executives at Wal-Mart's Mexican subsidiary could be very costly for the discount retailer, legal and retail experts said Monday.

Revelations about an alleged bribery effort and cover-up by top executives at Wal-Mart’s Mexican subsidiary could be very costly for the world's biggest retailer, legal and retail experts said Monday.

A New York Times article published over the weekend said executives deliberately obstructed an internal probe into bribery at Wal-Mart de Mexico, the company's largest international division.

The allegations, if proven true, could badly hamper the company and its management for years. They could lead to a time-consuming global probe, substantial financial penalties imposed by U.S. authorities and the departure of some executives, experts said.

“We could easily see criminal prosecutions,” said Jacob Frenkel, a former official of the Securities and Exchange Commission.

“The fact that it’s a U.S. company working through a Mexican subsidiary does not give the U.S. company protection,” Frenkel told CNBC, adding that anyone who is found to have their fingerprints on the alleged wrongdoings “has potential liability, civilly and criminally.”

Frenkel said he wouldn’t rule out potential jail time for Wal-Mart executives and estimated that the financial consequences of the Times report, if accurate, could cost Wal-Mart $1 billion in settlements and internal investigations.

Wal-Mart shares (WMT) fell nearly 5 percent Monday.

Frenkel added that he expects regulators to pursue any case against Wal-Mart vigorously.

“The Department of Justice has placed a high premium on investigating and prosecuting violations of what is basically our bribery law,” he said.

The allegations could also cost Wal-Mart in terms of its future growth, said Deutsche Bank retail analyst Charles Grom.

“It would put a broadside in the growth engine of the company,” he said. “Unlike prior bad PR stories in recent years, this will be a material distraction for Wal-Mart on multiple fronts.”

BMO Capital Markets analyst Wayne Hood said in a research note that the allegations could hamper the discount chain’s future growth both domestically and abroad.

“Articles like this will be used against the company by activists and competitors when it attempts to open stores in the U.S. and abroad,” Hood wrote.

In a new twist in the story Monday, two Democratic lawmakers said they are launching an investigation into allegations of bribery at Wal-Mart Stores Inc's Mexican affiliate.

Representative Elijah Cummings, the top Democrat on the House Oversight and Government Reform Committee, and Representative Henry Waxman, the top Democrat on the House Energy and Commerce Committee, sent a letter to Wal-Mart Chief Executive Michael Duke, requesting an in-person meeting with company officials.

The lawmakers also said they are contacting former Wal-Mart executives who may have documents or information relevant to a congressional investigation.

If the Times report is true, it means the company is at risk of being charged under the 1977 Foreign Corrupt Practices Act (FCPA), which prohibits the bribing of foreign officials to get business abroad.

A number of big companies have disclosed potential liabilities under the act in their financial statements to investors, including Alcoa, Avon, Marathon Oil, Kraft Foods and Hewlett-Packard.

One of the largest-ever Foreign Corrupt Practices Act case involved Siemens AG. In 2008, the electronics and electrical engineering company paid a $450 million fine over allegations its executives and agents made payments totaling approximately $1.4 billion to bribe overseas officials in turn for business.

“Wal-Mart has a squeaky-clean image when it comes to these sorts of things, so I’m quite surprised they would try to sweep in under the carpet,” Patrick McKeever, a senior equity analyst at MKM Partners, told CNBC.

McKeever noted that much of Wal-Mart’s recent growth has come from opening stores overseas, and so any increased regulatory scrutiny on its international operations could hinder the company's overall growth.

He also said Wal-Mart’s statement on the bribery allegations “didn’t do the company any favors,” as it didn’t refute the allegations against the company, and so allowed for the possibility that they are true.

In the 10 years he has covered Wal-Mart as a stock analyst, “this is by far the most damaging story,” he said. “It’s a big deal.”

One option Wal-Mart will have is to remove some executives involved in the alleged bribery or cover-up as this could make it easier to reach an out-of-court settlement with the Department of Justice.

“Among the remedial actions is ‘house cleaning’ of anyone involved in illegal conduct,” said Richard Cassin, a lawyer who is an expert on the FCPA and writes a blog about it.

“If a company can say those involved in the questionable conduct are already gone, the DOJ is likely to look more favorably on the company and current management.”

Wal-Mart said it had disclosed its probe to the DOJ and SEC. The company also said it had taken steps at the Mexico unit, known as Walmex, to boost internal controls to make sure it was compliant with the FCPA.

But, according to the Times, the disclosure came only after the newspaper informed Wal-Mart that it was looking into the bribery allegations, years after the bribes were said to first come to management's attention.

According to the Times, Wal-Mart Chief Executive Mike Duke and former CEO Lee Scott, who still sits on the company's board, were among senior executives allegedly aware of the situation. Duke was put in charge of Wal-Mart's international division in 2005.

Some retail experts said they thought that Wal-Mart would be unlikely to sacrifice Duke in the investigation and any related settlement talks with the government.

“I don’t get the sense that Mike Duke's going to lose his job over this,” said Joseph Feldman, senior retail analyst at Telsey Advisory Group. “I think that they'll try to put the spin on it that they have been putting on it -- that it happened years ago, they rooted it out and it doesn't happen anymore.”

The Wal-Mart allegations will undoubtedly leave a black mark on the company’s name, said Yale School of Management corporate governance expert Jeffrey Sonnenfeld.

“This is a great global company, and it didn’t have to cheat to win,” Sonnenfeld told CNBC.

“A company’s reputation is worth a lot,” he said. “Great companies in the past -- Johnson & Johnson, UPS -- they know there’s a great value in having this sense of cleanliness and a reputation that stands for something beyond what you think you can get away with.”

Wal-Mart reported consolidated net income of $16.4 billion for the year ended Jan. 31, 2012, down 3.6 percent from the same period the year before.

Reuters contributed to this report.

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Jean-Paul Pelissier / Reuters

Buddy can you spare a euro? France's President Nicolas Sarkozy, speaking at the Conservative European People's Party (EPP) congress in Marseille, warns that Europe's economy is facing huge risks.

As Europe's leaders gather for what some believe may be their last chance to preserve the continent's  monetary union, European central bankers slashed interest rates Thursday to ease a credit crunch that has sparked a euro zone recession.

Despite talk of bold new measures to tighten controls over members' spending and debt, though, there appears to be little chance that the eighth crisis summit this year, set to begin in Brussels late Thursday, will resolve the deep political divisions that have brought Europe to the brink of financial collapse. 

Just hours before leaders of the 17 nations joined by a common currency convene the summit, French President Nicolas Sarkozy echoed what many observers have been saying in the weeks leading up to the meeting.

"Never has the risk of Europe exploding been so big," he told a gathering of European Union leaders. "The diagnosis is that the euro, which should inspire confidence, is not inspiring this confidence. If there is no deal on Friday, there will be no second chance."

The current quandary has been building for more than a year, as have fears that one or more Europe’s most heavily debt-laden governments will default. Despite three bailouts, a cobbled patchwork of backstop funds, and multiple failed summits and proposed solutions, the crisis continues to envelop the European financial system and economy.

Investors are demanding ever–higher interest rates on government bonds to offset the risk they wont get their money back. European bankers are having a harder time raising capital, even as regulators have ordered them to build up bigger cash reserves. That’s made it harder, and more costly, for European businesses and consumers to borrow money.

The European Central Bank tried to douse the flames Thursday by cutting interest rates a quarter point to a record low one percent. But at a news conference following the rate cut announcement, ECB President Mario Draghi dashed hopes that the move signaled the opening round of a wider effort to to ease rising market pressure on interest rates with massive bond purchases.

Draghi's comments sent financial markets lower and further eroded confidence that Friday’s meeting will generate a meaningful solution to the crisis.

"One step forward, two steps back," said Alan Clarke, U.K. and euro zone economist at Scotia Capital. "The euro zone leaders might as well not bother. Pack their bags, go home, enjoy the weekend and do their Christmas shopping."

The latest plan being floated by Sarkozy and German Chancellor Angela Merkel would create a mechanism for automatic penalties on countries that don’t meet budget deficit targets. Euro zone countries would also be forced to include a balanced budget requirement in their constitutions.

Even if the 17 leaders agree to such a plan on Friday, it remains to be seen whether voters in member countries will go along.

Proposals for tough budget-balancing measures have been warmly received by investors. But they have generated violent protests in countries such as Greece that have enacted them. Deep spending cuts have also accelerated the euro zone's economic contraction. 

No matter what measures those leaders agree to, they will have little long-term impact without popular support.

“Because of the bumps in the road that will inevitably occur along the way, it will be too easy for politicians down the road, when it's not Merkel or Sarkozy, to blame it on the people who agreed to it at the time,” said  Steve Crawford, an investment banker with Centerview Partners. “I think some democratic process needs to occur because of the consequences that are likely to happen down the road.”

That process will take time, something many investors believe Europe has run out of. 

European voters, meanwhile, remain deeply divided over how to get the continent back on a sound financial footing. French voters are loathe to dilute their national independence by turning over control of budgetary decisions to a central European agency with the veto power over spending decisions. With a presidential election looming, Sarkozy faces rivals who are warning voters that he wants to sacrifice French sovereignty to unelected EU officials.

German voters, on the other hand, are opposed to any measure that would divert their taxes to the cause of bailing out weaker, free-spending countries. Merkel has also steadfastly opposed calls for the ECB to print euros to underwrite massive bond purchases; that’s largely due to the German public’s deep-seated fears of a recurrence of hyperinflation that sank the Weimar Republic in the 1920s. 

Consumer and business confidence has been sapped by the crisis, tipping the euro zone into a mild recession that threatens to deepen the longer leaders fail to arrive at a solution.

The ECB’s official forecast calls for euro zone gross domestic product to shrink by as much as a full percentage point next year. Some private forecasters, including IHS Global Insight’s chief European economist Howard Archer, think that assessment may not be pessimistic enough.

The ECB's rate cut follows a concerted move on Nov. 30 by central banks areound the world to supply the global capital markets with more cash and avert a wider credit crunch. The Federal Reserve has been working to put out the fire with a series of so-called “swap lines” that supply the ECB with dollars, which it then lends to European banks in exchange for dollar-denominated bonds. As other sources of dollar funding have dried up, European bankers have leaned heavily on those swaps, borrowing $50 billion this week. That’s up from $500 million in November.

Bond rating agency Standard & Poor's put more pressure on European leaders to solve the debt crisis by threatening to downgrade its risk assessment for all 17 countries that use the euro.  The warning Wednesday includes the European Union itself, along with large euro zone banks.