News Corp's Latest Hire Reveals More FCPA Entanglement

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The News Corp. phone-hacking and bribery scandal has developed quickly, every day bringing more stories of investigations, arrests, or pie-wielding British comics. It’s easy to get overwhelmed by the tide of details and lose track of the big issues. In the United States, the investigation has taken an interesting turn, casting a foul light on lobbying efforts to undermine American anti-bribery legislation.

On July 15, the Department of Justice confirmed an investigation into the News Corp. scandal. In addition to investigating up to 4,000 alleged incidents of phone hacking, it appears that News Corp. bribed British police officers. If the FBI or SEC can confirm that this bribery occurred, and that corporate executives were complicit, willfully ignorant, or attempted to hide the extent of the problem, they can file charges on violations of the Foreign Corrupt Practices Act (FCPA).

As the investigation has continued, the ties between News Corp. and efforts to weaken the FCPA have become apparent. The U.S. Chamber of Commerce began a major initiative to strip the FCPA of many key provisions in October 2010, shortly after receiving a donation of over $1 million from News Corp.

Now, Bloomberg is reporting that former Attorney General Michael Mukasey has been hired to help defend News Corp. Mukasey has been a key lobbyist for the Chamber in their assault on the FCPA, recently testifying on their behalf in Congress, receiving over $120,000 in the past four months for his efforts.

Global Financial Integrity’s Director of Government Affairs, Heather Lowe, had this to say on the issue:

The recent press reports linking News Corp.’s donations to the U.S. Chamber to the U.S. Chamber’s proposals to amend the FCPA by limiting corporate liability under the Act might have been described as fairly speculative before today. But News Corp.’s decision to hire Michael Mukasey, the US Chamber’s leading lobbyist pushing those amendments, as defense counsel for its board members certainly goes a long way toward shoring up that allegation. I am very surprised that News Corp. isn’t making more of an effort to distance itself from those allegations.

One of the Chamber’s strongest allies in Congress on the issue, Representative Jim Sensenbrenner of Wisconsin, has also received tens of thousands of dollars in campaign contributions from News Corp’s Political Action Committee over the past decade. These efforts suggest that the Murdoch empire’s involvement in anti-FCPA campaigns may have been an attempt to remove key legal tools necessary to prosecute those liable for an extensive series of illicit behavior at News of the World.