New Arrests in Murdoch Bribery Scandal Raise Question of U.S. Charges
The U.S. bans companies from bribing foreign officials. As a U.K. bribery investigation expands, will News Corp. ultimately face charges here?
This weekend, five more journalists from a Rupert Murdoch-owned British tabloid were arrested as part of an ongoing bribery investigation.
The arrested journalists, all from The Sun, were later released, and have yet to be charged with any crimes. (As The Wall Street Journal explained last summer, arrests in the U.K. are often made early in a criminal investigation, and may not be followed by any charges.)
But the arrests have once again raised questions about whether Murdoch's News Corp. might face prosecution for bribery in the U.S. under the Foreign Corrupt Practices Act.
Reuters reported last week that U.S. authorities are "stepping up investigations" of the possible bribery by Murdoch employees. An FBI spokeswoman told ProPublica, "We're aware of the allegations, and we're looking into it."
As we noted during the unfolding of the phone hacking scandal last summer, the U.S. has stepped up prosecutions of companies for bribery of foreign officials in recent years, and the fines for these violations can be steep. Companies can face prosecution by the Justice Department if they record bribery payments, or be pursued by the Securities and Exchange Commission for fake record-keeping if they falsify documents to conceal the bribes.
The statute of limitations on civil Foreign Corrupt Practices Act charges is five years. The New York Times reported Saturday that it was not clear when the allegations that led to the Sun arrests had taken place, "though some of those arrested have told friends that they were questioned on events from almost a decade ago."
Those arrested at The Sun included the paper's chief reporter, chief foreign correspondent and deputy editor. Last month, four other current and former Sun journalists were arrested, including the paper's crime editor and former managing editor. A police officer, a member of the armed services and an employee of the Ministry of Defense were also arrested this weekend "on suspicion of corruption," broadening the scope of the investigation from its original focus, bribery of police officers by journalists, to bribery of other officials as well.
The arrests were based on information provided by News Corp.'s Management and Standards Committee, an internal unit created in response to the phone hacking scandal last summer. The committee reports to Joel Klein, a former U.S. assistant attorney general and New York City schools chancellor who is now a News Corp. executive.
Our request for comment from News Corp. this morning was not immediately answered. In a January news release following the earlier arrests, the company reiterated its pledge "that unacceptable news gathering practices by individuals in the past would not be repeated."
The latest arrests, which were accompanied by police searches of the journalists' homes, have prompted anger and frustration from some British journalists, directed at the police and politicians driving the investigation, and at News Corp. executives.
"Once again, Rupert Murdoch is trying to pin the blame on individual journalists, hoping that a few scalps will salvage his corporate reputation," the general secretary of the National Union of Journalists told The Guardian.
The Sun's associate editor, Trevor Kavanagh, called the investigation "a witch-hunt" that threatens press freedom, and said there was "nothing disreputable" about paying for stories.
"Sometimes money changes hands," Kavanagh wrote in The Sun. "This has been standard procedure as long as newspapers have existed, here and abroad."
Last summer, the phone-hacking scandal resulted in the closure of another Murdoch-owned publication, the 168-year-old British tabloid News of the World, but News International executive Tom Mockridge reassured staff this weekend that Murdoch had pledged his "total commitment" to continuing to own and publish The Sun.
Murdoch will reportedly fly to London this week.
The publisher of the shuttered News of the World has paid hundreds of thousands of pounds in phone-hacking settlements to celebrities, celebrity employees and politicians, including at least $200,000 to actor Jude Law and at least $63,000 to Guy Pelly, a friend of Prince Harry's, according to the Guardian.