If you watched Rupert Murdoch’s weak-sauce testimony in front of the British Parliament Tuesday, you might have felt just a teensy bit sorry for former New York City schools chancellor Joel Klein, who sat directly behind Murdoch the entire afternoon, pouting.

Sure, Klein is probably earning more money than God in his new role as executive vice president at News Corp. But the Justice Department attorney turned data-and-accountability school reformer signed up with Murdoch to get out of the harsh political limelight and help News Corp. make a mint selling educational technology products to school districts. Instead, Klein now finds himself heading up the company’s internal response to the explosive phone-hacking scandal, which has tainted nearly every august institution in British society, from Fleet Street to the Cameron government to Scotland Yard.

The FBI is currently investigating News Corp. to learn if its illegal and unethical activities victimized any American citizens, or penetrated the company’s US holdings, which include Fox News, the Wall Street Journal and the New York Post.

But what’s been less well understood is the impact the scandal might have on Murdoch’s attempt to make a profit off the American public sector, most notably through seeking to provide technology services, such as data-tracking systems and video lessons, to public school districts. 

Last November, shortly after hiring Klein, News Corp. acquired Wireless Generation, an education technology firm that had worked closely with Klein during his tenure as chancellor on two projects: ARIS, a controversial (and buggy) data system that warehouses students’ standardized test scores and demographic profiles; and School of One, a more radical attempt to use technology to personalize instruction, reorganize classrooms, and reduce the size of the teaching force.

The acquisition put Klein, who was set to supervise Wireless Generation, in an awkward position vis à vis city ethics regulations. The Times reported:

Conflict-of-interest rules set strict limits for city employees, both during and after their tenure, which could make Mr. Klein’s transition a tricky one. City employees are never allowed to disclose confidential information about the city’s business dealings or future strategy, and they cannot communicate with the agency for which they worked for one year after they leave. The rules also bar them from ever working on matters they had substantial involvement in as city employees.

It seemed unlikely Klein would be able to fully follow those mandates when, in May, the city Department of Education renewed its contract with Wireless Generation, asking the company to provide testing materials and software. Last month, New York State moved to award Wireless Generation a $27 million no-bid contact to create a state student data-tracking system similar to ARIS—despite the fact that many New York City principals have decided not to use the $80 million software, which doesn’t track helpful day-to-day information on attendance, behavior or homework completion.

So far, only the teachers’ union and a few New York progressive organizations—including the Working Families Party, Common Cause/New York and New York City Public School Parents—are using the hacking scandal to call attention to what they see as a series of sweetheart deals between New York and News Corp. Wireless Generation Senior Vice President Zachary Silverstein told Education Week that drawing any connection between Murdoch’s UK troubles and his American education business is “is really a stretch and frankly unfair.”

But scrutiny on Murdoch’s school agenda is growing. Aware of the media titan’s relationship with former DC schools chancellor Michelle Rhee, education reporter Alexander Russo tried to find out if Murdoch had donated to StudentsFirst, Rhee’s PAC. The group’s goal is to act as a political counterweight to teachers’ unions.

“After two days of emails and phone calls—they must have been freaking out behind the scenes trying to figure out what to do—a Rhee spokesperson would neither confirm nor deny the Murdoch money,” Russo wrote.

“Our policy doesn’t allow me to reveal who our donors are or aren’t,” the spokesman said.