It’s interesting to see speculation in the press that Rupert Murdoch and his son James may – and I stress may – face prosecution in the USA in connection with the alleged bribery carried out by employees of the News of the World in the UK. There’s been speculation that several pieces of US legislation could apply but the law most frequently mentioned is the FCPA – or Foreign Corrupt Practices Act, to use its proper name. This is a well-established piece of legislation, brought in during the 1970s, in the wake of the McDonnell Douglas bribery scandal. For those of you who are too young to remember the scandal (sadly, not including myself) it involved large bribes being paid to overseas government officials, to acquire weapons contracts (which may strike a chord with BAe). There was a public furore when word got out, and the FCPA came into being as a consequence.
You are no doubt wondering why a piece of US legislation could be used to prosecute people for bribes (allegedly) paid in the UK by British nationals, and the answer lies in the all-pervasive nature of the FCPA, which allows action to be taken in relation to bribes paid anywhere in the World so long as there is a link to the US. In the case of NewsCorp, they have a large US presence, and Rupert and James Murdoch both have US citizenship, so the ties are clear and, as senior NewsCorp executives, they could be in the firing line. In other cases in the past, it’s been suggested that the US link could be something quite tenuous. Was the bribe paid via the banking system in US dollars? It probably went through a US bank at some point to reach its destination. Was the recipient of the bribe a US Citizen, even if the money was paid and received overseas? The FCPA can be deemed to apply and individuals can be extradited to the US to face trial.
You can probably now see where the UK Bribery Act got some of its ideas from – particularly relating to firms with a “British Presence” and the extradition provisions in the new law. Whilst Ken Clarke has made it clear that companies and individuals won’t be faced with quite the tortured logic of the FCPA, it remains a fact that a bribe doesn’t have to be paid, or recieved in the UK to attract the attention of the UK Authorities and that, unless they live in a country with no extradition arrangements with the UK and US, individuals paying bribes shouldn’t feel that they are above the law in either of these places, just because they don’t live there.
Whether or not this will prove to be the case with Murdoch pere et fils remains to be seen; I can’t see them going to prison (though who knows?) but I suspect they may sleep uneasily until things are resolved.