December 3, 2024

You are here: Home / Archives for bribery

Ex-JPMorgan Employee Arrested Over ‘London Whale’ Charges

August 27, 2013 by

The arrest came after the United States charged Spaniard Martin-Artajo and a junior colleague, Frenchman Julien Grout, with wire fraud and conspiracy to falsify books and records related to the trading losses, which were executed by Bruno Iksil.

Iksil, who was nicknamed the “London Whale” for his large bets on derivatives markets, is cooperating with U.S. prosecutors and has not been charged.

Martin-Artajo was released on condition he stays in Spain and checks in regularly with a court. A judicial source said on Tuesday he had told a Spanish court he is unwilling to be sent to the United States to face the charges.

Martin-Artajo, who handed himself in at a Madrid police station after being contacted by police, is accused of trying to inflate the value of trading positions held on his group’s books. The mismarking allegedly took place as the traders tried to hide mounting losses in an illiquid derivatives market, where they had made outsized bets.

Martin-Artajo was Iksil’s supervisor at JP Morgan’s Chief Investment Office in London.

JPMorgan is battling to salvage its corporate image amid a swirl of litigation and investigations in the wake of the financial crisis, including a federal bribery investigation into whether it hired the children of key Chinese officials to help it win business.

The bank’s boss Jamie Dimon attempted to dismiss the London Whale losses as a “tempest in a teapot” but this remark has come back to haunt him.

Martin-Artajo previously said through lawyers that he expects to be cleared of any wrongdoing and that he had cooperated with regulators.

His lawyer in London could not immediately be reached for further comment.

EXTRADITION

Meanwhile Spain’s High Court has taken on his case and will decide whether he should be extradited, although Spain’s cabinet has its say too. The United States has 40 days after his arrest to present its full extradition request to Spanish courts, according to the usual procedure.

Extraditions from Spain to the United States are rare and Madrid has tended to shun requests to send its citizens to be tried there.

“Spain does not extradite its citizens,” a police source said, explaining that it was one of the reasons Martin-Artajo was not directly arrested but asked to present himself to police, after he was found, identified and deemed not to be a flight risk.

But one extradition lawyer who declined to be named said Martin-Artajo’s alleged offence would in principle be considered extraditable, as it is punishable in both countries. Either way, administrative and judicial procedures can take many months.

Martin-Artajo handed himself in to police after they found him and got in touch with him, the authorities said, without detailing where they had tracked him down.

Former JPMorgan colleague Julien Grout, now living in his native France, has not yet been arrested, his lawyer said.

“No, they have not arrested Julien, nor would they because France does not extradite their own citizens,” said Grout’s U.S. lawyer Edward Little at Hughes Hubbard Reed. “We are in discussions with the U.S. prosecutors about how we will proceed, but no decision has been made yet.”

Grout, who reported to Iksil and is the lowest-ranked person so far targeted in the investigation, is in his mid-thirties and is married to an American. His lawyer previously said he had moved to France several months ago and was not fleeing anything.

A source with knowledge of the matter has said Grout would offer to face the charges in the United States on condition he is granted bail. Grout himself declined to answer questions from a Reuters reporter at his parent’s holiday home in southern France earlier this month.

(Additional reporting by Clare Hutchison in London, Catherine Bremer in Paris and Blanca Rodriguez in Madrid; Editing by Louise Heavens and David Holmes)

Article source: http://www.nytimes.com/reuters/2013/08/27/business/27reuters-jpmorgan-whale.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Wal-Mart Shareholders Meeting Sticks to a Narrow Script

June 7, 2013 by Leave a Comment

Wal-Mart, in what appeared to be an attempt to counter employee and union complaints about thin staffing and low wages, centered the meeting on extolling the value of its employees. That message was interspersed with the usual parade of celebrity and spectacle: Hugh Jackman, Tom Cruise, Kelly Clarkson, Jennifer Hudson, dancers and a giant puppet of a white elephant.

While Wal-Mart’s stock price remains close to an all-time high, its results in the most recent quarter missed analyst expectations. Sales at stores open at least a year, a key measure, declined in the United States for the first time since summer 2011, while costs in the international unit were higher than expected.

Its stock price got some help Friday from news that the company authorized a $15 billion stock buyback, replacing the 2011 authorization for a $15 billion buyback, of which about $712 million remained. Shares were up 1.2 percent.

As is common for Wal-Mart at these meetings, executives barely made mention of recent controversies, including issues of employee staffing and the Bangladesh factory collapse that killed more than 1,100 workers where Wal-Mart was shown to be producing garments. In addition, there is still the continuing investigation into potential violations of the Foreign Corrupt Practices Act in Mexico and other countries, after
The New York Times reported last year that company officials at Wal-Mart de Mexico bribed officials to ease expansion in that country, and executives at headquarters were told of the bribery and declined to take action.

But that did not mean those issues did not come up.

During the brief portion of the meeting where shareholders could present proposals, criticisms were strong.

One presenter asked why Wal-Mart had not joined European retailers in a pact to improve safety standards in Bangladesh.

“The last six months have seen two of the worst disasters in the entire history of the garment industry,” said Kalpona Akter, a union activist in Bangladesh, referring to the Rana Plaza collapse and the Tazreen fire. “Both occurred in buildings where Wal-Mart goods were produced.”

“Don’t you agree that the factories where Wal-Mart products are made should be safe for the workers?” she said.

Wal-Mart says it did not have any production in the Rana Plaza factory at the time of the collapse.

A shareholder and employee, Janet Sparks, who works at a Walmart in Baker, La., pushed the company on its pay and scheduling policies.

“Times are tough for many Walmart associates, too. We are stretching our paychecks to pay our bills and support our families,” said Ms. Sparks, a member of the union-affiliated employee group Our Walmart.

Referring to the chief executive Michael T. Duke’s $20.7 million in 2012 pay, she said that given the low wages store employees received, “with all due respect, I don’t think that’s right.” There were cheers and applause from the crowd, a response that could be considered significant because the employees selected to attend the annual meeting are generally big Wal-Mart supporters.

Other investors raised concerns about the financial and reputational fallout from the Mexico inquiry, and whether Wal-Mart had a good handle on its supply chain given what occurred in Bangladesh.

As expected, none of the shareholders’ proposals passed. The founding Walton family owns more than 50 percent of shares, making it impossible to pass any measures without their support. Likewise, despite opposition from some large pension funds and proxy-advisory firms, all 14 directors up for re-election were reinstated. Wal-Mart said it would release a detailed breakdown of the votes on Monday, which would signal how dissatisfied outside investors are with the company and board.

Yet the portion of the meeting where investors could speak amounted to about 15 minutes of an almost four-hour meeting.

The rest of it was devoted to Wal-Mart’s version of its story.

The head of human resources was one of the first to speak, telling employees, “We’re here to celebrate each and every one of you.” Later, another human-resources executive took the stage, along with William S. Simon, the chief executive of Wal-Mart U.S., as they promoted two employees to assistant managers in front of the crowd of about 14,000.

Mr. Simon reiterated earlier remarks telling employees that Wal-Mart was giving them more visibility into open shifts and into open supervisor roles. However, union members and activists have been complaining about unpredictable hours for employees, and Wal-Mart recently has “been hiring disproportionately” part-time workers who do not have fixed hours, Mr. Simon said in a separate meeting on Thursday.

Even the celebrities were on-message.

In one of the odder moments, Tom Cruise, looking dashing in a sharp suit and tie, took the stage not to entertain, but to rehash Wal-Mart talking points about sustainability and promoting women. (Mr. Cruise, like the other celebrities, were not paid for their appearances.) “Wal-Mart has served as a model for how business can address some of the biggest issues facing our world,” Mr. Cruise said.

Executives briefly nodded at the Mexico bribery inquiry, telling the crowd that Wal-Mart remained committed to acting with integrity.

And Mr. Duke, one of the executives who had been apprised of the bribery scheme after it occurred, according to reporting in The Times, had the crowd applaud a Chilean employee who had recently declined to take a bribe from a vendor.

The company is using more than 300 legal and accounting professionals to work on new compliance programs and Foreign Corrupt Practices Act investigations, the corporate secretary Jeffrey J. Gearhart told investors on Friday, and they have spent more than 100,000 hours on the efforts so far.

Article source: http://www.nytimes.com/2013/06/08/business/wal-marts-meeting-follows-the-script.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

U.S. Looked at Bribery Claims Involving Wall Street Journal

March 17, 2013 by Leave a Comment

The investigation, which was first reported on Sunday by The Wall Street Journal, coincides with a broader search the government is conducting into The Journal’s owner over a phone-hacking scandal that has plagued the company since 2011.

Paula Keve, a spokeswoman for The Wall Street Journal, said the paper had ordered its own investigation, which did not find any support for the claims made about its employees in China.

“After a thorough review of our operations in China conducted by outside lawyers and auditors, we have not found any evidence of impropriety at Dow Jones,” Ms. Keve said. “Nor has anyone taken issue with our findings.”

James M. Margolin, an F.B.I. spokesman in New York, declined to comment on the inquiry.

A Justice Department spokesman did not respond to a request for comment. It was unclear if the investigation remained open.

According to the Journal article, the bribery accusations came out of a broader investigation into News Corporation’s practices. In early 2012, American officials discovered claims that at least one Journal employee in China had given bribes in exchange for news. The paper said those gifts went well beyond the standard exchange of drinks and meals between sources and journalists and included more costly gifts of entertainment and travel.

If these charges were found to be true, they could violate the United States Foreign Corrupt Practices Act, which spurred the Justice Department’s original investigation into the company.

Ms. Keve suggested the claims had been made to discredit The Journal’s reporting in China. “We are extremely proud of our important and impactful coverage coming out of China,” she said, “and regret that some unknown source has sought to taint that work. We remain committed to vigorously covering news out of the region and will continue to support the excellent work of our journalists operating in that very challenging environment.”

The latest investigation caps two years of legal headaches for News Corporation, beginning with revelations of the use of widespread phone hacking at the company’s News of The World tabloid in Britain, which was shut down in July 2011. Dozens of journalists have been arrested in several overlapping investigations. Rebekah Brooks, former editor of News of the World and former chief executive of News Corporation’s British newspaper division, has been charged with conspiring to pervert the course of justice.

The hacking scandal and investor disapproval over News Corporation’s investments in newspapers led Rupert Murdoch to separate his print assets from his entertainment company assets into a new publishing company called News Corporation.

Starting this summer, the new company will include The Wall Street Journal along with other newspapers like The New York Post and The Times of London. It will also be folded into a company with the HarperCollins book publisher and Australian pay-television assets.

Despite the continuing government investigation and the latest charges, Mr. Murdoch seems hopeful about the new company’s future. According to a public filing, he plans to start the new company with a generous parting gift of $2.6 billion and no debt, which may allow it to add even more newspapers to its empire.

On Sunday, Mr. Murdoch seemed more preoccupied with news involving the controversy surrounding the new pope rather than the happenings at his own papers, and he did not mention the latest investigation. On his Twitter feed, he wrote: “Attacks everywhere on Pope Francis misguided. Jesuits were seriously split, but no evidence of being complicit in any persecutions.”

Michael Schmidt and William K. Rashbaum contributed reporting.

Article source: http://www.nytimes.com/2013/03/18/business/media/us-looked-at-bribery-claims-involving-wall-street-journal.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Larry Hagman, ‘Dallas’ Villain With a Sweetly Sinister Smile, Dies at 81

November 25, 2012 by Leave a Comment

The cause was complications of cancer, his family said in a statement. Mr. Hagman had been in Dallas filming an episode of the TNT cable channel’s reboot of that series, which had made him the man audiences loved to hate from 1978 to 1991.

In October 2011, shortly before filming began on the new “Dallas,” Mr. Hagman announced that he had a “treatable” form of cancer. It was the latest of several health problems he had experienced since learning that he had cirrhosis in 1992. (Mr. Hagman acknowledged at the time that he had been a heavy drinker.) In 1995, he received a liver transplant after doctors discovered a tumor on his liver.

“As J. R., I could get away with anything — bribery, blackmail and adultery,” Mr. Hagman said after receiving his diagnosis last year. “But I got caught by cancer.” Nonetheless, he said, he relished the opportunity to reprise his best-known role.

For a time in the late ’70s and early ’80s, Mr. Hagman could lay claim to the title of most famous actor in the world. “Dallas,” a soapy saga of a ranch-owning Texas oil family, was a hit in 57 countries. The rich villainy of J. R. revived Mr. Hagman’s career after his co-starring role in the hit 1960s sitcom “I Dream of Jeannie” had typecast him as a lightweight comic actor.

The celebrated signature episode of “Dallas,” which resolved the question “Who shot J. R.?” — a mystery masterfully marketed by the network and the show’s producers — set viewing records, with an estimated 350 million people all over the world tuning in for the answer. (The shooter turned out to be Kristin Shepard, played by Mary Crosby, the scheming adulterous sister of J. R.’s wife, Sue Ellen, played by Linda Gray.)

The episode became the second-highest-rated television program ever (after the final episode of “M*A*S*H”) with a rating of 53.3 percent and an average audience of 41,470,000 households.

Few actors enjoyed their fame as much as Mr. Hagman, who portrayed the oilman-robber baron J. R. as, in one critic’s words, “an overstuffed Iago in a Stetson hat.” At the height of the show’s popularity, he handed out fake $100 bills with his face on them.

When TNT remounted “Dallas” with a new generation of Ewings, it invited Mr. Hagman to return as J. R. He won praise for his performance, with some critics saying that he remained the best thing about “Dallas.” The new version, which made its debut this year, was a success and TNT ordered a second season.

Larry Martin Hagman was born in Fort Worth on Sept. 21, 1931. His mother was the actress Mary Martin, who would become famous for her performances in “South Pacific,” “Peter Pan,” “The Sound of Music” and other Broadway shows. His father, Benjamin Hagman, was a lawyer whose clients included a number of wealthy Texas oil men; Larry Hagman’s memory of those tycoons would later help shape his portrayal of J. R. Ewing. (“They had such a nice, sweet smile,” he recalled. “But when you finished the meeting, your socks were missing, and you hadn’t even noticed they’d taken your boots.”)

His parents were divorced when he was 5. He was brought up in Los Angeles by his maternal grandmother, and after she died in 1943, he spent time with his father in Fort Worth and with his mother and his stepfather, Richard Halliday, a producer, manager and agent.

“I never resented her; she was never around,” he said of his mother in an interview with Playboy magazine at the height of his fame. “As far as I was concerned, I enjoyed my youth very much.”

Mr. Hagman attended a series of private and military schools, leaving most of them, he admitted, with little distinction and occasionally at their request. After returning to Texas to live with his father, he graduated from Weatherford High School and later attended Bard College, which also proved to be an academically unsuccessful experience.

He returned to Texas, this time to his first theater job, at the Margo Jones theater in the round in Dallas. He later served apprenticeships in stock companies. In 1951, his mother arranged a small role for him in the London company of “South Pacific,” in which she was starring. He remained in Europe for five years, four of them in the Air Force as a director of U.S.O. shows.

Bill Carter and Marc Santora contributed reporting.

This article has been revised to reflect the following correction:

Correction: November 24, 2012

An earlier version of this article misidentified a 1973 sitcom that Larry Hagman starred in. It was “Here We Go Again,” not “You Again.”

Article source: http://www.nytimes.com/2012/11/25/arts/television/larry-hagman-who-played-jr-ewing-on-dallas-dies-at-81.html?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,

Wal-Mart Expands Foreign Bribery Investigation

November 15, 2012 by Leave a Comment

The company acknowledged the expanded inquiry in a Securities and Exchange Commission filing that accompanied its third-quarter financial results, which showed lower sales than analysts had expected.

Wal-Mart had previously reported that the audit committee of its board was examining possible violations of the Foreign Corrupt Practices Act in Mexico.

“Inquiries or investigations regarding allegations of potential F.C.P.A. violations have been commenced in a number of foreign markets where we operate, including but not limited to Brazil, China and India,” the company said in its regulatory filing.

Wal-Mart’s shares ended the day at $68.72, down $2.59, or 3.6 percent.

The New York Times reported in April that seven years ago, Wal-Mart had found credible evidence that its Mexican subsidiary had paid bribes, a violation of the Foreign Corrupt Practices Act, and that an internal investigation into the matter had been suppressed by executives at the company’s Arkansas headquarters.

The company has had teams of lawyers looking into the Mexico issue and potential violations of the law elsewhere. In the filing, the company said it had “identified or been made aware of” other potential violations. “When such allegations are reported or identified, the Audit Committee and the company, together with their third party advisers, conduct inquiries and when warranted based on those inquiries, open investigations,” it said.

Wal-Mart suggested in May that the investigation had broadened, but Thursday’s filing with the S.E.C. was the first time it has specified the other countries it is looking into.

The S.E.C. and the Justice Department have opened investigations into the Mexico matter, and Wal-Mart said it is cooperating with them. Charles M. Holley Jr., Wal-Mart’s chief financial officer, declined to comment Thursday on whether the agencies are looking into countries other than Mexico.

“As you would expect with these matters, because they’re under review, it would be inappropriate for me to comment on specific matters until the investigation is concluded,” he said.

The company spent $99 million in the first nine months of the year in expenses related to the matter, like complying with subpoenas, defending itself against shareholder lawsuits and conducting the review.

The company exceeded third-quarter earnings expectations by a penny a share, reporting profit of $3.63 billion, or $1.08 a share, compared with $3.33 billion, or 96 cents a share, in the period a year earlier.

But its revenue missed analysts’ predictions. It rose 3.4 percent, to $113.2 billion, compared with expectations of $114.96 billion. The company said that without currency fluctuation, sales would have been $114.9 billion. Sales at stores open at least a year in the United States grew 1.5 percent, a little less than analysts had projected.

In recorded statements, Wal-Mart executives indicated even middle-income consumers were under increasing pressure. At the company’s Sam’s Club division, a warehouse club that attracts a higher-income shopper than Walmart stores, shoppers are starting to swap out steak for pork, for instance, because it is cheaper.

The company said Hurricane Sandy had cost it about $35 million in damaged inventory and cleanup costs but had not significantly affected its ability to get merchandise to stores.

Article source: http://www.nytimes.com/2012/11/16/business/wal-mart-expands-foreign-bribery-investigation.html?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,

You’re the Boss Blog: Fraud and Loopholes Deliver Small-Business Contracts to Big Firms

November 2, 2011 by Leave a Comment

The Agenda

How small-business issues are shaping politics and policy.

It’s been a busy season for combating fraud in government contracts for small business, for prosecutors enforcing the law as well as the legislators trying to improve it. But for both, it appears to be an uphill battle.

In June, the federal government charged two men with creating a fake small business to win a $100 million Defense Department contract. Two months later, a businessman pleaded guilty to obtaining to false citizenship papers, which he used to get a security clearance from the Department of Defense so that he could receive preferential small-business contracts.

In October, one man pleaded guilty to a scheme in which he and a partner vouched for the small-business status of each other’s company. That, in turn, led the Justice Department to uncover an alleged ring of bribery and kickbacks centered at Eyak Technology, or EyakTek, nominally a small business based in Virginia with a $1 billion contract to provide information and security technology to government agencies. An indictment announced on Oct. 4 claims that the company’s contracting director conspired with officials in the Army Corps of Engineers to steer federal purchases to an unnamed subcontractor. That subcontractor then inflated its bills — by $20 million, according to the indictment — and used part of the proceeds to pay off the Eyak and Army Corps officials.

The federal government is the world’s largest buyer of goods and service, and it is supposed to make sure that 23 percent of those purchases go to small businesses. In the case of economically disadvantaged businesses, government agencies can often set aside contracts and award them without putting them up for a competitive bid. The government perennially misses those goals, but most observers believe that the amount of small-business contracts the government does report masks a share that have in fact been diverted to larger companies. Fraud is an important, though unquantified, culprit.

Observers say government officials in charge of procurement are often too busy to look closely at a company’s small-business credentials. But the Small Business Administration’s inspector general, Peggy E. Gustafson, testifying in a Congressional hearing last week, said that her agency often did not effectively oversee the contracting programs and did not aggressively pursue companies that misrepresented themselves as small. The S.B.A., Ms. Gustafson said in her prepared statement, “needs to change its culture so that employees understand that their mission includes not only assisting small businesses but also ensuring accountability and integrity to prevent fraudulent and improper actions from depriving procurement opportunities for legitimate firms.”

Ms. Gustafson also said that despite the recent legal victories, seeking justice in a courtroom was difficult because a company that fraudulently identifies itself as small in order to win a federal contract usually fulfills the contract. “Without an associated and definable loss to the government, criminal prosecutors are sometimes reluctant to pursue action against these companies, or if they do pursue them, may only be able to obtain limited sentences,” she said.

That is not the case in the EyakTek case, where the government allegedly paid for the conspirators’ BMWs, first-class airfares and Cartier watches. But while the company itself was not implicated in wrongdoing — charges were only brought against its head of contracting — the allegations surrounding EyakTek raised other troubling questions about small-business contracting, because the company had a legally sanctioned leg up in the competition for small-business contracts. Eyak is what’s known as an Alaska Native Corporation, and with that designation, it is able to compete for contracts set aside for companies that participate in the S.B.A.’s 8(a) program. This is a program intended to help small, disadvantaged businesses — particularly those owned by minorities — by providing business training coupled with opportunities for no-bid contracts set aside just for them.

In the 1970s, Congress made Alaska Native Corporations a special class of 8(a) business. Unlike most businesses in the program, the Alaskan companies are not subject to a limit to the size of a no-bid contract. And while a typical 8(a) business must be managed by someone who meets the program’s definition of disadvantaged, that’s not the case with Alaska Native Corporations, which  tend to recruit executives with broad and deep ties across government agencies and pay handsomely for their experience.

These features have made Alaska Native Corporations very popular with government bureaucrats because they offer an easy way to meet small-business quotas. In 2009, according to the S.B.A.’s inspector general, Alaskan firms took in 26 percent of total 8(a) contract dollars. EyakTek and other subsidiaries of the Eyak Corporation together took in at least $338 million, according to a search of the federal contracting records performed by the American Small Business League, which lobbies for integrity in small-business contracting. (If a native company gets too big to participate in the program, the parent corporation can simply create a new company — another advantage not afforded other program participants.)

Any effort to change the rules for Alaskan companies is likely to meet stiff resistance in Congress. (Alaska’s representative, Don Young, is the second-ranked Republican in the House in terms of seniority and the sixth most senior of all representatives.)

Surprisingly, even trying to pass legislation to curb fraud is more difficult than one might expect. In her testimony, Ms. Gustafson proposed measures to make it easier to prosecute fraud and stiffen penalties for conviction, in part by defining a loss to the government as equal to the size of the contract.

A bill containing these provisions has passed the Senate, but Rep. Sam Graves, the chairman of the House Small Business Committee, faulted the Senate bill for, among other things, not including an exemption for honest errors. “The small-business affiliation rules are complex and are not intuitive, so I’m hesitant to potentially trigger jail time for companies that make a mistake,” he said in an interview with VetLikeMe, a newsletter for business owners who are wounded veterans, “although I agree that we need to more vigorously enforce the certification rules.” The House has not yet taken up the Senate bill.

Mr. Graves also expressed skepticism about a separate House bill, introduced last month, that would exclude the subsidiaries of publicly traded companies from the definition of a small-business contractor. The law already requires that recipients of small-business contracts must be independently owned and operated, but a American Small Business League spokesman, Brian Reeder, said a clarification was necessary. “Common sense says that independently owned means not publicly traded,” he said, “yet publicly traded companies and their subsidiaries receive contracts that government agencies put towards their small business goals.”

The bill was introduced by Rep. Hank Johnson, a Georgia Democrat, with support from 16 other Democrats. No Republicans sponsored the legislation, and Mr. Graves, the Small Business Committee chairman, opposes the bill “because it places further restrictions on how a small business can be organized and the source of its investment,” said a spokesman, Darrell Jordan. “At a time of record unemployment, Chairman Graves wants to support measures that help small businesses grow.”

Opposition to Mr. Johnson’s measure isn’t strictly partisan. The Georgia congressman introduced an identical bill last year, while Democrats were in charge. It died in committee.

Article source: http://feeds.nytimes.com/click.phdo?i=76f36b6cf33087176ebd9bce5c8eb29a

Filed Under: Small Business Tagged With: , ,

Armor Settles Claims Over Bribery

July 14, 2011 by Leave a Comment
Opinion »

Townies: Phantoms of the East River

What started out as a birding tour on the East River becomes a journey into New York’s dark history.

Article source: http://feeds.nytimes.com/click.phdo?i=382916bb9d556eb88d194c3cface1a76

Filed Under: Business News Tagged With: , ,

Victim’s Family Appears Amid Rage at Tabloids

July 14, 2011 by Leave a Comment

It had taken less than 10 days for the anger that swept Britain over the story of Milly Dowler’s cellphone to build into the political earthquake that forced Mr. Murdoch, the 80-year-old tycoon, to abandon the latest, and what could be the last, of his great business coups — an attempt to acquire the rest of British Sky Broadcasting for the News Corporation, the corporate giant that makes Mr. Murdoch one of the world’s most powerful news media figures.

The Dowlers had been shielded, until Wednesday, by their lawyer, Mark Lewis. He has fielded a frenzy of media questions since the news broke last week that, according to the police, a Murdoch-owned tabloid, The News of the World, had hacked into the voice-mail messages of the 13-year-old Milly after she was abducted in 2002 and while her family waited for some sign that she was still alive.

That sign came, the family thought, when the police told them that some of the messages they had left on the cellphone that Milly was carrying had been deleted. In reality, the police said, the messages were erased at the newspaper’s behest, to make room for more messages that could be hacked to embellish articles on her disappearance. Ms. Dowler was later found murdered.

In the years since, a faltering police investigation pointed to the Dowler case as only one of scores, possibly thousands, of cases in which ruthless newspapers, mainly The News of the World, have been accused of engaging in phone hacking in their relentless pursuit of scoops — as well as other covert newsroom tactics that may have included identity theft and bribery of police officers.

But now, the Dowlers were in the eye of the nation, greeted at 10 Downing Street by Prime Minister David Cameron.

They had been invited earlier for a meeting with the opposition leader, Ed Miliband, and welcomed as honored guests in the visitors’ gallery at the House of Commons. They became witnesses to the day when the cascading accusations about wrongdoing by newspapers in Mr. Murdoch’s British stable brought not only the withdrawal of his $12 billion bid for British Sky Broadcasting, but also what many politicians hailed, perhaps without too much overstatement, as the day when the country’s long-skewed democratic balance began to be restored.

On the Downing Street pavement, Mr. Lewis, speaking to a news media throng, said that after what had been “an earth-shattering week for everybody,” the family was pleased with the withdrawal of the British Sky Broadcasting bid. It demonstrated, the family’s lawyer said, that “however big an organization is,” it could be held to account in a society under law. “Politicians and the public,” he said, “are saying, ‘Enough is enough.’ ”

The words could have been the theme for what was happening 500 yards away in the House of Commons, where something not witnessed in decades was happening. In recent times, the 700-year-old chamber has been mired in conflict and embarrassment over an expenses scandal that ended the careers of dozens of lawmakers in the prelude to last year’s general election.

But Mr. Murdoch’s abandonment of the takeover in the face of political pressure — in particular, the united will of an outraged House of Commons — generated a sense of something like a liberation from Britain’s rampaging tabloids. The lawmakers were celebrating having curbed, at least for now, the influence of editors and reporters who had become something of a parallel power with little accountability — even if the lawmakers themselves sometimes empowered the tabloids by seeking their support.

Mr. Cameron described the end of the BSkyB bid as “a victory for the good, decent people of Britain.” But he also sought to halt the slump in his own fortunes by trying to explain, once again, why he had hired as his chief spokesman Andy Coulson, who was the editor of The News of the World when, the police say, much of the phone hacking and at least some of the bribery appears to have taken place.

Article source: http://www.nytimes.com/2011/07/14/world/europe/14hacking.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,