What is the FCPA? Enacted after the scandals of the 1970s in which American corporations were bribing overseas officials in order to secure business deals, the FCPA was an effort to bring some baseline of ethics to international business. It prohibits any American company or citizen from paying or offering to pay—directly or indirectly—a foreign official, foreign political figure, or candidate for the purpose of influencing that person in any decision relating to his official duties, including inducing that person to act in violation of his or her lawful duty. Very importantly, even if all such acts occur overseas, the American company and citizen will still be held liable here. So acts in Britain by British citizens working on behalf of News Corp. creates liability for News Corp., an American business incorporated in Delaware and listed on American financial exchanges.
The rampant violations of British law alleged—payments to cops to influence ongoing investigations and the hacking of phones—are sufficient predicates for the Justice Department to investigate. Indeed, the facts as they are emerging are a case study for why the FCPA was enacted. We do not want companies whose headquarters are here—as News Corp.’s is—or that are listed on our financial exchanges—as News Corp. is—polluting the waters of international commerce with illegal behavior. (News Corp. shareholders are also rising against the company, with a huge lawsuit filed Monday in Delaware by three institutional investors claiming that company executives failed to act quickly enough to stop the phone hacking.)
The other reason to investigate here is that there is serious doubt that this matter can be investigated properly in Great Britain. Scotland Yard is already implicated, as is Cameron’s government. DoJ can and should fill the void.
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