Quantcast
Connect with us

Murdoch reporters’ bribes to British cops violates U.S. law

Published

on

Imagine you’re a Fleet Street reporter at a British tabloid with a pocketful of cash. You meet a trusted source at a pub, a police officer who tells you about the royal family’s confidential schedule in exchange for a small gratuity. You hand over a few quid and rush off with a photographer to stake out a health club where Camilla Parker-Bowles is toning her abs.

Guess what: If you work for Rupert Murdoch, you may have violated U.S. law. What the government nails you for could depend on how you and your bosses account for the sketchy deal with the cop.

If you’re entirely honest in the company’s internal books and enter the payment as a “bribe,” you’ve just created an irrefutable piece of evidence that can be used against you and your company in a prosecution by the Justice Department for violating U.S. statutes against overseas bribery. If, as is more likely, you file an expense account which refers to the cash payment as “taxis” or “office supplies,” you stand a chance of being pursued by the Securities and Exchange Commission for keeping fake records.

News International Limited, the British arm of the Murdoch empire, is a subsidiary of News Corp., a publicly traded American company which also owns The Wall Street Journal and Fox News (not to mention the Sunday Times of London, The Times of London, and the British tabloid The Sun.) Because of this, experts say, News Corp. and all of its subsidiaries come under the Foreign Corrupt Practices Act, a Watergate-era law which makes it a crime for U.S. companies to participate in bribery abroad.

The scope and number of payments remains unclear. British press reports say more than $160,000 was paid by News of the World reporters to police officers. The issue came to light last week after News International turned over a trove of internal emails to authorities.

“A small number of officers may have taken illegal payments. That is fundamentally corrupt,” Met Commissioner Sir Paul Stephenson told the BBC. “If true, I will be determined to root them out, find them and put them in front of the criminal court.”

ADVERTISEMENT

After years of relative quiet, the United States has substantially stepped up the resources to prosecute companies for violating the bribery law. There are 150 open investigations of American companies, according to the law firm Gibson Dunn & Crutcher. In 2005, the Securities and Exchange Commission and the Department of Justice combined for a total of just 12 FCPA enforcement actions. By 2010 that number had jumped to 54, the law firm reports. We’ve written previously on this subject when it involved payments by Albert Jack Stanley, a former executive at KBR.

Unless information emerges that News Corp. executives in the United States were aware and condoned illegal behavior, it is doubtful whether the company or individual executives would face criminal prosecution in the United States, several defense lawyers said.

A prominent academic, Michael Koehler, who tracks prosecutions on his blog the FCPA Professor, is not as sure the global news giant will escape criminal prosecution.

“Look at the 2011 enforcement actions on my blog,” he says. “None of these involved high level officers or board members.”

ADVERTISEMENT

But lack of evidence of executive complicity in bribery doesn’t protect the parent company from civil actions. Where News Corp. may be most vulnerable is under the “Books and Records” and “Internal Controls” provisions of the FCPA, according to lawyers who practice in this field.

Even if News Corp. subsidiaries recorded the bribes accurately in their books, it could land the company in difficulty with the SEC. Since the bribery was permitted in the first place, the charges would also open up the company to questions about its internal controls.

Fines for these violations can be steep. In 2009 and 2010 combined the Justice Department charged over 50 individuals and collected nearly $2 billion in criminal fines, said Assistant Attorney General Lanny Breuer in a recent speech. In 2010, the SEC brought in almost $530 million in corporate FCPA settlements, according to Koehler’s blog. Part of what makes it so lucrative for the government is that the SEC often requires the companies “disgorge” the gains they made from illicit activities and pay interest on them.

How the SEC would calculate the value of a scoop or a racy headline that resulted from a police bribe is an open question. Does one include a bump in weekly circulation? The long-time loyalty of readers? Until it was abruptly closed last week, The News of the World, the Sunday paper most closely linked to phone hacking, had Britain’s largest daily circulation, with 2.7 million readers.

ADVERTISEMENT

“What was the increased revenue because of this sensational headline is more art than science,” says Koehler. “You could come up with some ballpark number.”

Another cost to News Corp. would be the company-wide review the SEC or DOJ would likely demand. The company would have to satisfy the Feds that similar payments weren’t made to government officials in other countries. These company reviews are part of the reason why FCPA inquiries can last for years, according to Koehler.

The statute of limitations on civil FCPA charges is five years. Reports about the illegal bribes seem to date back to 2006 so regulators would likely be mindful of the calendar. Companies are often rewarded for cooperating with the inquiries. “Raising a statute of limitations defense is not exactly cooperation mode,” says Koehler.

News Corp also depends on the government for its broadcast licenses. Fox Television Stations Inc. has 269 active licenses with the Federal Communications Commission, according to the agency’s website. An agency spokesman would not comment on whether FCPA violations might put those licenses in jeopardy as well.

ADVERTISEMENT

By Jake Bernstein

Report typos and corrections to [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Breaking Banner

Republican lawmakers ask judge to destroy smoking gun documents proving GOP’s white supremacy

Published

on

Republicans on Monday sought a court order to block damning documents from being used against them in a lawsuit.

"North Carolina Republican lawmakers on Monday asked a court to make sure the files of the now-deceased GOP strategist Tom Hofeller are destroyed, or at least kept secret, instead of being used in a high-profile gerrymandering lawsuit," the Raleigh News & Observer reported.

"The filing comes after the groups behind the lawsuit, including Common Cause, accused Republican lawmakers of making false statements in court in a previous gerrymandering case, when the state’s 2011 maps were ruled unconstitutional," the newspaper noted. "That blockbuster accusation made national headlines and was, it said, based on Hofeller’s files which had been secret until recently."

Continue Reading

Breaking Banner

Trump angrily demands newspaper reveal unnamed sources behind bombshell report on his Russia policy

Published

on

President Donald Trump on Monday evening again lashed out at The New York Times for reporting on his Russia policy.

"The story in The New York Times about the U.S. escalating attacks on Russia’s power grid is fake news, and the failing New York Times knows it," Trump argued in a tweet sent after 10 p.m.

"They should immediately release their sources which, if they exist at all, which I doubt, are phony," he continued.

"Times must be held fully accountable," he demanded.

https://twitter.com/realDonaldTrump/status/1140804748423118848

Continue Reading
 

Breaking Banner

Trump seethes and calls Fox ‘fake news’ after seeing a story that made him mad

Published

on

Trouble appears to be brewing between President Donald Trump and the cable news station he loves: Fox News.

In a tweet Monday night, the president lashed out at the network over its polling and called it “fake news’ — an epithet he usually reserves for mainstream outlets:

https://twitter.com/realDonaldTrump/status/1140768516288782336?ref_src=twsrc%5Etfw

Media Matters for America Senior Fellow Matthew Gertz, who has previously noted that Trump appears to record news segments and watch them a few hours later, suggested that the president appeared to be reacting to an earlier segment from Special Report with Bret Baier. The segment showed that, even according to Fox News’ polling, Trump trails every single leading candidate in the Democratic field in head-to-head matchups.

Continue Reading
 
 

Copyright © 2019 Raw Story Media, Inc. PO Box 21050, Washington, D.C. 20009 | Masthead | Privacy Policy | For corrections or concerns, please email [email protected]

I need your help.

Investigating Trump's henchmen is a full time job, and I'm trying to bring in new team members to do more exclusive reports. We have more stories coming you'll love. Join me and help restore the power of hard-hitting progressive journalism.

TAKE A LOOK
close-link

Investigating Trump is a full-time job, and I want to add new team members to do more exclusive reports. We have stories coming you'll love. Join me and go ad-free, while restoring the power of hard-hitting progressive journalism.

TAKE A LOOK
close-link