Fox settles sexual harassment suit; Greta Van Susteren leaves network

Fox News' parent company spent $20 million on Tuesday to settle a lawsuit brought by former anchor Gretchen Carlson, whose allegations of sexual harassment toppled the network's powerful chairman, Roger Ailes, and engulfed the company in crisis.

But if the settlement was meant to signal the close of a damaging chapter for the network, it fell short. Fox's newsroom was hit minutes later by a new shock wave: Greta Van Susteren, one of the channel's best-known and longest-serving hosts, was leaving, effective immediately.

Network officials insisted that the timing was coincidental. But the settlement, combined with Van Susteren's abrupt departure, underscored the ongoing tumult inside Fox News, whose once proudly defiant newsroom has been besieged this summer by new allegations of harassment and persistent rumors about turnover in the on-air and executive ranks.

These days, it seems, the end of one Fox drama is only the start of another.

Stars like Megyn Kelly and Bill O'Reilly have contracts that expire next year, with Van Susteren's exit taken on Tuesday as an unsettling sign of change. And it is unclear whether Fox News, without Ailes at the helm, can maintain its political clout amid a disruptive election season.

The uproar is somewhat puzzling for Rupert Murdoch and his sons, James and Lachlan, who control Fox News's owner, 21st Century Fox. They say they have taken extraordinary steps to address problems at the network, which is still the highest-ranked cable news network in the country, beginning with their swift removal of Ailes.

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Specialists in employment law described the $20 million payout to Carlson — a figure confirmed by a person briefed on the agreement — as among the largest-known settlements for a single-plaintiff sexual harassment suit. (Ailes, who received $40 million from Fox as part of his exit agreement, is not paying any portion of the settlement.)

Fox has also settled with at least two other women who came forward with complaints about Ailes, the person said.

And the company issued a rare public apology to Carlson, "for the fact that Gretchen was not treated with the respect and dignity that she and all of our colleagues deserve."

But tensions remain among the network rank-and-file. Murdoch, who now presides over Fox News as executive chairman, kept in place several of Ailes' most loyal deputies and recently promoted them to leadership roles in the newsroom, troubling employees who had hoped for a clean slate.

The reasons behind Van Susteren's departure remained murky, but people on both sides of the negotiations pointed to an icy meeting in July between Van Susteren and Rupert Murdoch as a turning point in her tenure.

Days after Ailes' exit, Van Susteren met with Murdoch in his second-floor office inside Fox's Manhattan headquarters. The anchor, accompanied by her husband and agent, John P. Coale, requested more favorable terms to her contract — which was not immediately up for renewal — and cited an exit clause that allowed her to leave the network in the event that Ailes was no longer chairman.

Murdoch was not impressed, both sides say. "It was tense," Coale recalled in a telephone interview Tuesday.

Late last week, Van Susteren informed Fox that she planned to utilize her exit clause. But the anchor woke up Tuesday fully expecting to tape her prime-time show, "On the Record," that evening. Instead, Coale said, "someone came to our house and delivered two letters" from the network. The message: "She's out."

It was so abrupt that a large-scale poster of Van Susteren, who routinely beat the cable competition in her 7 p.m. time slot, was still displayed outside Fox's Manhattan building when the announcement went out. (The poster was removed later Tuesday.) Inside the channel's Washington bureau, newspapers sat untouched outside Van Susteren's still-full office.

Van Susteren had initially defended Ailes, calling Carlson "disgruntled" and saying that the timing of her lawsuit "is very suspicious." But on Tuesday, in a farewell post on Facebook, Van Susteren wrote: "Fox has not felt like home to me for a few years."

Coale, in the interview, echoed that sentiment. "There's so much chaos" at Fox, he said. "It's very hard to work there."

Asked why his wife had exercised the exit clause, Coale said, "There's more than meets the eye," adding that there "might be litigation in the future." But he provided no further details. Van Susteren, on Facebook, wrote that she had to leave the network now because of a time limit on her exit clause.

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Brit Hume, a veteran Fox political anchor, took over hosting duties for Van Susteren's show Tuesday and is expected to continue through the election. In a formal statement, Fox News' co-presidents Jack Abernethy and Bill Shine wrote: "We are grateful for Greta's many contributions over the years and wish her continued success."

Although she has been a Fox fixture since 2002, Van Susteren does not command the same star power as Kelly or O'Reilly. Her departure was viewed by Fox officials on Tuesday as a less consequential development than the company's settlement with Carlson, whose suit initially faced a legal challenge from Ailes.

The evidence that Carlson had against Ailes was damning, according to another person with knowledge of the settlement: For a year and a half, she had recorded her meetings with Ailes on her mobile phone. (In an interview with The New York Times in July, Carlson said she recalled "between six and 10" conversations with Ailes when the chairman made provocative comments.)

The vast majority of the remarks that she attributed to Ailes in her lawsuit — including lines like, "I think you and I should have had a sexual relationship a long time ago, and then you'd be good and better and I'd be good and better" — were taken straight from those recordings, the person said.

Officials at 21st Century Fox became aware of the recordings about three weeks after Carlson filed her lawsuit, the person said, after Carlson's lawyers spoke to investigators from Paul, Weiss, Rifkind, Wharton & Garrison, the law firm hired to look into the accusations against Ailes. (About 20 women at Fox have come forward during the firm's inquiry to describe inappropriate behavior by Ailes.)

Settlement talks started shortly thereafter, and a deal was reached in mid-August, the person said. Carlson sued Ailes alone, but 21st Century Fox, which acts as Ailes' corporate indemnifier, will pay the settlement. As part of the arrangement, which was first reported Tuesday by Vanity Fair, Carlson signed a confidentiality agreement.

In a sign that Carlson is not going to shrink from the public spotlight, she recently hired power publicist Cindi Berger of PMK BNC to represent her. She issued a statement Tuesday saying she was "ready to move on to the next chapter of my life, in which I will redouble my efforts to empower women in the workplace."