Murdoch Nemesis #2: the US Foreign Corrupt Practices Act (1977)

Given that News Corp is a US company, the Foreign Corrupt Practices Act (FCPA) applies to it– and to its executives and Directors.

The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. ("FCPA"), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.

How to regulate a free press

The FT’s (and Oxford’s) John Lloyd is a thoughtful commentator on media issues. He is also an early entrant into the debate about what should succeed the Press Complaints Commission with a modest proposal published in today’s FT. The nub of it is:

So we have a dilemma. State-backed regulation is seen as illiberal, and would be opposed (on liberal grounds) by all of the press. Yet self-regulation – paid for by the newspapers, dominated by News International and Associated Newspapers – has proved self-serving and supine.

The answer to this dilemma is not to create a new regulator with statutory backing. Instead it is to increase the group’s base of stakeholders – and to include in the number of institutions making up that base the government itself, as a representative of the public interest.

How would this work? When the PCC is replaced, a new organisation should be established, which I would call the Journalism Society, in a similar vein to the Law Society, the representative body for solicitors in England and Wales. This body should be open to being as global as the media are fast becoming. And it should be independent.

The Journalism Society’s stakeholders should include representatives of the government; the educational establishment; civil society (for instance relevant non-government organisations and policy institutes); industry and finance; and the news media. All of these would be committed, under its charter, to pluralist, independent, opinionated news media, working within the law.

All of which is fine and dandy, but avoids at least two thorny problems.

1. The most important is the question of sanctions. As I understand it, the Law Society (through its Solicitors Regulation Authority) can suspend a lawyer’s right to practise, just as the BMA General Medical Council (GMC)* can ‘strike off’ a medical practitioner.

Would the Journalism Society have similar powers? If so, how would it define a ‘journalist’ — always a tricky problem and one that has become insuperable in a networked age? Legal regulation works because, in the end, the state delegates the right to license legal practitioners. John Lloyd’s idea would only work if the state did likewise with journalists. I’d be very surprised if this is what he has in mind.

He claims that a Journalism Society would do a lot of good. For example,

It would allow journalism to take itself seriously as a trade claiming a democratic mandate. It could set and patrol ethical standards, monitor training and qualifications and above all be a forum within which journalists could map out the nature and future of their craft at a time of rapid change.

Agreed. But in the end effective self-regulation requires formidable sanctions that can be applied as a last resort. And that’s where the real problem lies. Regulation works in broadcasting because the state has a monopoly control of a scarce resource (electromagnetic spectrum). But — at least in democracies — the state doesn’t have monopoly control over the intellectual or ideological spectrum, which is why the very idea of regulation is so problematic.

2. The Law Society (and the BMA GMC) models work because they are tied to specific legal jurisdictions. John Lloyd’s vision of a Journalism Society that is “open to being as global as the media are fast becoming” means that it wouldn’t be confined to a particular jurisdiction, which in turn means that it would be totally ineffective.

*Correction: Thanks to Jonathan Rees for pointing out that it is the GMC and not the BMA which is supposed to regulate medical practitioners. But its difficulties and limitations merely serves to reinforce my argument.

And what about the Feds?

Wow! This is interesting.

Meanwhile, US law may enter the fray. A former Labour cabinet minister has alerted attention to the US Foreign Corrupt Practices Act, which makes an American company (News Corp) liable for colossal fines if any employee bribes a foreign official (the Met police) even if no one at head office knew. What's more, any whistleblower inside the company (sacked News of the World reporters), stands to win a percentage of that fine if they report acts of bribery.

The Blair-Murdoch axis

Another excellent Telegraph piece by Peter Oborne, which contains this interesting (but not surprising) revelation.

Though many were appalled, Murdoch himself was protected by his potent political contacts. Tony Blair, for example, would do anything to help out his close friend and ally. I can even disclose that, before the last election, Tony Blair rang Gordon Brown to try to persuade the Labour Prime Minister to stop the Labour MP Tom Watson raising the issue of phone hacking.

Quote of the Day

Now that the Liberal Democrats are more assertively opposed, I cannot see how the Coalition can stand aside and let the BSkyB deal go ahead. But the potential significance of what has happened is bigger than one deal, and can be conveyed in a single question: If there were an election tomorrow which party leaders would want the endorsement of Rebekah Brooks? A week ago they would have died for it.

Steve Richards, writing in today’s Independent.

The tipping point

There’s an interesting parallel between the phone-hacking scandal and the MPs’ expenses scandal. In both cases, the general public paid little attention to the story in its early stages: it was seen as some kind of kerfuffle in particular circles. Nothing to do with anything serious. The phone-hacking story, for example, was perceived as being just about celebs and footballers. But then there came a moment when everything changed. In the expenses scandal it was the revelation that MPs were claiming for duck-houses and having their moats cleared. In the phone-hacking story it was the discovery that the phone of Milly Dowler had been hacked — and that some messages had been deleted because her voicemail inbox was full — which misled her family into thinking that she might have been deleting messages and might therefore still be alive. At this point, public anger erupted and the game was up.

Now the case of the deleted emails begins

From today’s Guardian.

Police are investigating evidence that a News International executive may have deleted millions of emails from an internal archive, in an apparent attempt to obstruct Scotland Yard’s inquiry into the phone-hacking scandal.

The archive is believed to have reached back to January 2005 revealing daily contact between News of the World editors, reporters and outsiders, including private investigators. The messages are potentially highly valuable both for the police and for the numerous public figures who are suing News International.

According to legal sources close to the police inquiry, a senior executive is believed to have deleted “massive quantities” of the archive on two separate occasions, leaving only a small fraction to be disclosed. One of the alleged deletions is said to have been made at the end of January this year, just as Scotland Yard was launching Operation Weeting, its new inquiry into the affair.

The allegation directly contradicts repeated claims from News International that it is co-operating fully with police in order to expose its history of illegal news-gathering. It is likely to be seen as evidence that the company could not pass a “fit and proper person” test for its proposed purchase of BSkyB.