Reuters blog archive
from Alison Frankel:
For the Justice Department's Foreign Corrupt Practices prosecutors, last week was the best of times and the worst of times. A federal judge in Houston sentenced the former CEO of the Halliburton spin-off KBR Inc. to 30 months in prison for his role in a 10-year scheme to pay $182 million in bribes to Nigerian officials in order to secure $6 billion in military oil and gas contracts. Albert Stanley's sentencing marked the end of one of the DOJ's most successful FCPA prosecutions, in which KBR agreed to pay $579 million in criminal fines and disgorged profits -- the second-highest fine in an FCPA case at the time the guilty plea and Securities and Exchange Commission settlement was announced in 2009. The KBR case is an FCPA paradigm, a classic demonstration of the law's power to expose and punish corruption that would otherwise have stayed in the shadows.
The Stanley sentencing came a day after the end of the Justice Department's biggest FCPA blunder, the so-called Africa sting charges against more than 20 defendants accused of agreeing to pay bribes to Gabon officials who supposedly controlled military contract awards. U.S. District Judge Richard Leon in Washington granted the DOJ's motion to dismiss charges against all of the defendants who hadn't pleaded guilty, after prosecutors failed to obtain any convictions in the first two Africa sting trials. Leon took the opportunity to castigate prosecutors for a "very, very aggressive conspiracy theory" that turned out to be unsupported by "the necessary evidence to sustain it." I've written about the troubling backstory of the Africa sting prosecution, in which the government set up an operation center and deployed a highly compromised informant specifically to manufacture FCPA charges, with federal agents all the while texting one another about the attention they'd get when news of the case broke.
Leon is the second federal judge with harsh words for the government in an FCPA case. In December, U.S. District Judge Howard Matz in Los Angeles threw out the conviction of Lindsey Manufacturing and two Lindsey executives after concluding that the prosecution had "gone badly awry." In the Lindsey case, according to Matz, agents wrongfully obtained a warrant and misled the grand jury, and prosecutors compounded the errors by failing to turn over evidence to defense lawyers.
But don't assume that the Lindsey and Africa sting debacles will curb the Justice Department's enthusiasm for FCPA prosecution, particularly against corporations (as opposed to individuals). As Butler University law professor Mike Koehler told Brett Wolf of Reuters last week, the government still wields tremendous power against corporations accused of paying bribes -- none of which, except for Lindsey, have gone all the way to trial to fight FCPA charges. That's why the Chamber of Commerce and other business groups are agitating for amendments to the 1977 law, which doesn't define exactly who is a "foreign official" or whether state-owned businesses qualify as "instrumentalities" of foreign governments. In a Feb. 21 letter to Assistant Attorney General Lanny Breuer and SEC Enforcement Director Robert Khuzami, the Chamber's Institute for Legal Reform argued that "without a clear understanding of the parameters of 'instrumentality' and 'foreign official,' companies have no way of knowing whether the FCPA applies to a particular transaction or business relationship." The letter asks the Justice Department to clarify its interpretation of the law. In fact, the DOJ has made its view of foreign officials and state-owned businesses perfectly clear in cases against Lindsey Manufacturing and Controlled Components Inc.: Prosecutors will interpret the statute language broadly if that's what it takes to make a case.
Three new movies compete for filmgoers over the long President's Day weekend in the United States. Nicolas Cage is expected to lead the pack of newcomers with Sony's 3D action sequel "Ghost Rider: Spirit of Vengeance."
Box-office watchers project Friday-through-Monday sales in the United States and Canada could roar to $30 million for the follow-up to the original "Ghost Rider," released over the same weekend in 2007.
You can say what you like about Rupert Murdoch, and most people have, but he doesn't do things halfway. His decision to join Twitter on New Year's eve has set the Twitterati and blogosphere alight not just because the 80-year old media baron joined but because unlike every other CEO or executive who's joined Twitter, he's actually expressed some real opinions -- some of which are controversial given who he is. When Reuters asked CEOs at its Global Media Summit last fall most felt tweeting wasn't for them.
In Murdoch's first 24 hours he started off relatively gently praising an op-ed on Ron Paul in his Wall Street Journal, extolled the benefits of vacation, praised the founder of original founder of his New York Post and championed two of his Fox studios' movies 'The Descendants' and 'We bought a Zoo'.
News Corp Chief Executive and Chairman Rupert Murdoch sold off the bulk of his common shareholding according to a regulatory filing but, have no fear the 80 year-old mogul is still very much in charge both in terms of management and financial control.
According to the filings with the Securities and Exchange Commission, from Nov 16 to Nov 17 Murdoch sold a total of 3.6 million News Corp A shares for between $16.76 and and $17.07 each for a total value of some $62 million. This means Murdoch''s A shares holding went down to just 381,000 from around 4 million. The elder Murdoch had made the disposals for "financial planning" reasons, according to a source. Back in February Murdoch had bought 2.8 million A shares for between $17.19 to $17.53.
News Corp Chief Executive Rupert Murdoch on Thursday said the United States should work harder at making itself a more attractive country for people to emigrate to, as an important route back to enabling economic growth.
Murdoch, 80, who was born in Melbourne, Australia, became a naturalized a U.S. citizen in 1985.
"We have in our DNA the most entrepreneurship," said Murdoch speaking at a conference on immigration sponsored by the Partnership for New York City and Partnership for a New American Economy. "It's no accident that people over all over Europe want to come here…and from China. This is a great country."
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Rupert Murdoch still gets a kick out of the “fair and balanced” slogan used by his Fox News channel. He had a good laugh about it only last week at News Corp’s annual shareholder meeting. The results of a vote conducted at that gathering, released Monday, show that everyone’s now equally in on the joke about the company’s shameful corporate governance as they are the conservative bias of his TV news operation.
from Jack Shafer:
New York Times reporter Jeremy W. Peters invests 2,400 words today in a Page One story delineating the "rift" between News Corp. CEO Rupert Murdoch and his son and heir apparent, News Corp. Chief Operating Officer James Murdoch.
If News Corp. were a normal company and Rupert Murdoch a normal father, readers might glean from this report that a real power struggle is going on for the future of the company. But News Corp. is not your normal company, Rupert is not your normal dad, and there really is no struggle going on for the future of the company, only a replay of the previous "rifts" that have opened between Rupert Murdoch and his two other children by his second wife Anna—Elisabeth and Lachlan. You see, Rupert sets his adult children up to smack them down.
If we were at Rupert Murdoch's daily UK tabloid The Sun we'd probably have a headline today that reads: Will the last person to leave News International please turn off the lights?
Oh wait, The Sun already did that -- but with Britain as its subject.
But we can't help ourselves as News International executives drop like flies following the terrible phone voicemail hacking scandal which has rocked its parent company News Corp right to its core. Nearly 20 executives or journalists have either resigned, been fired or arrested since the hacking scandal escalated.
from Jack Shafer:
By Jack Shafer
The views expressed are his own.
What were the London police thinking when they invoked the Official Secrets Act last week to compel Guardian reporters Amelia Hill and Nick Davies to disclose the confidential source for their July 4 Milly Dowler phone-hacking story? Did they think the Guardian would roll over when they arrived in court on Friday to contest the order? That Hill and Davies would submit? That free-speech advocates, members of Parliament, and journalists around the world would pay no mind to the prosecutorial over-reach?
Whatever the Metropolitan Police thought, they've rethought it today, announcing that they're dropping for the time-being their request for a court order that the Guardian give up its sources.
Updated with official News Corp response below.
We don't know what quite to make of this but CtW Investment Group, a union-affiliated shareholder lobbyist, is raising a stink about News Corp's new independent director appointment, Accel Partners' Jim Breyer.
CtW, which claims its affiliations represent pension funds of some 5.5 million Americans or some $200 billion in assets, says Breyer, a venture capitalist best known as an early investor in Facebook, isn't as independent as the board claims.