Among News Corp.’s Foreign Corrupt Practices Act troubles is a reported FBI investigation into whether the company bribed local officials in Russia to secure prime placements of billboards it owned under a subsidiary, News Outdoor Russia.
It strikes me that any investigation would need to go to the very top – to Russian President Vladimir Putin.
News Outdoor Russia reportedly put Putin’s images free of charge on its billboards – providing an obvious political benefit to Putin and perhaps crossing the line into an FCPA violation.
The New York Times reported that in 2008, News Outdoor Russia was under pressure for a claim of back taxes in Russia that was eventually resolved. That same year, the company reportedly put a large banner on a building near Red Square with Putin’s face on it without charge, the Times said, citing the RBK business newspaper as its source.
And News Corp.-owned space in St. Petersburg was used last year to display advertisements for the People’s Front, a Putin-backed political group.
Yet, none of the reports on the matter seem to connect the free publicity for Putin to the reported FCPA probe. While I don’t have any inside information, it seems logical to assume the connection is under scrutiny.
The Russia investigation reportedly grew out of the FBI’s scrutiny of bribes paid by News Corp. journalists to police in Britain for stories. The FCPA prohibits payments to foreign officials to advance business purposes.
The News Outdoor Russia business was sold last year to a consortium of investors led by a Kremlin-controlled bank. News Corp. last year declined to comment to the New York Times about its freebies to Putin.
In written responses to questions from the Wall Street Journal in March, News Outdoor Russia said it hadn’t been contacted by the FBI, wasn’t aware of any bribery investigation and that it has always conducted its activities within Russian law.