March 28, 2024

Glaxo Used Travel Firms in Bribery, China Says

What they uncovered, they said Monday, was a conspiracy involving tens of millions of dollars and directed by senior executives at the British drug giant GlaxoSmithKline.

Investigators said that for years, senior executives at the company joined with travel agencies and consulting firms in China to funnel bribes to doctors, hospitals, medical associations, foundations and government officials.

The payoffs, investigators said, helped bolster drug sales and allowed GlaxoSmithKline, also known as GSK, to sell its products for higher prices in China.

At a news conference in Beijing, the authorities accused senior executives at GSK of organizing fictitious conferences, overbilling for training sessions and accepting kickbacks in the form of cash and luxury travel.

In some cases, the authorities said, travel companies eager to sign long-term deals with GSK hired young women to engage in what officials called “sexual bribery” with managers at the drug maker.

“It’s like a criminal organization — there’s always a boss,” Gao Feng, head of the economic crime unit of the Chinese Ministry of Public Security, said at the news conference. “And in this case, GSK is the boss.”

The revelations come just days after the police announced that GSK managers had confessed to engaging in bribery and tax fraud.

On Monday, the government said four senior executives at GSK were being detained, including the head of the drug maker’s legal department and two vice presidents and the head of business development in China. The four named are all Chinese nationals, the police said.

Mark Reilly, the head of GSK’s operations in China, a British national, recently left the country, the police said. The departure took place shortly after investigators raided the company’s offices.

“This is a very serious allegation, and the chief of China has left China,” Mr. Gao said.

The investigation is a huge embarrassment for GSK, which recently fired the head of its research and development department in Shanghai for misrepresenting data in a paper he co-wrote in 2010.

The company also said earlier that it had conducted an internal investigation into its China operations this year after a whistle-blower said bribery had been used to bolster drug sales. The company said it had found no evidence of wrongdoing or bribery in its China operation.

But on Monday, GSK issued a statement from London indicating grave worry: “We are deeply concerned and disappointed by these serious allegations of fraudulent behavior and ethical misconduct by certain individuals at the company and third-party agencies. Such behavior would be a clear breach of GSK’s systems, governance procedures, values and standards. GSK has zero tolerance for any behavior of this nature.”

The statement went on: “GSK shares the desire of the Chinese authorities to root out corruption. These allegations are shameful and we regret this has occurred.” The company said it would cooperate with the authorities in China and take immediate action to stop dealings with travel agencies that may have committed fraud.

At the news conference Monday in Beijing, the authorities said that the investigation was continuing and that the case involved scores of travel agencies as well as other multinational corporations that also may have fabricated travel bookings.

By detailing what they called GSK’s fraud, the investigators suggested it was a common business tactic that effectively cheats the purchasers of drugs.

“From our investigation, we found that bribery was part of the strategy of the company,” Mr. Gao said of GSK.

The investigation is certain to heighten concerns among other global drug makers, some of which are under growing scrutiny from regulators in the United States and elsewhere over the incentives they give to doctors or clients.

Some of the toughest penalties could come in the United States, because most major drug makers are subject to the U.S. Foreign Corrupt Practices Act, which bars companies from making payoffs to government officials in foreign countries in exchange for business.

Kim Nemirow, a Hong Kong-based attorney at the U.S. law firm Ropes Gray, said global drug companies face stiff challenges in China: their sales agents deal mostly with Chinese government officials because much of the health care sector is controlled by the state.

“The government is pervasive in all aspects of this industry — the doctors, the pharmacies, the distributors, the state-owned hospitals. And that means what they do could come under the U.S. F.C.P.A.,” Ms. Nemirow said, referring to the corrupt practices act.

Article source: http://www.nytimes.com/2013/07/16/business/global/glaxo-used-travel-firms-in-bribery-china-says.html?partner=rss&emc=rss

American Al Jazeera Channel Shifs Focus to U.S. News

While it has a foreign name, the forthcoming Al Jazeera cable channel in the United States wants to be American through and through.

When Al Jazeera’s owners in Qatar acquired Al Gore’s Current TV in January, they said that Current would be replaced by Al Jazeera America, an international news channel with 60 percent new programming from the United States. The remaining 40 percent, they said, would come from Al Jazeera English, their existing English-language news channel in Doha, Qatar, that is already available in much of the rest of the world.

That plan is no more. Now Al Jazeera America is aiming to have virtually all of its programming originate from the United States, according to staff members and others associated with the channel who were interviewed in recent weeks. It will look inward, covering domestic affairs more often than foreign affairs. It will, in other words, operate much like CNN (though the employees say they won’t be as sensational) and Fox News (though they say they won’t be opinion-driven).

The programming strategy, more ambitious than previously understood, is partly a bid to gain acceptance and give Americans a reason to tune in. It may help explain why Al Jazeera America’s start date has been delayed once already, to August from July, and why some employees predict it will be delayed again.

Al Jazeera also has yet to hire a president or a slate of vice presidents to run the channel on a day-to-day basis, which has spurred uncomfortable questions about whether earlier controversies involving the pan-Arab news giant are creating difficulties for the new channel.

The Arabic-language Al Jazeera was condemned by the American government a decade ago for broadcasting videotapes from Osama bin Laden and other materials deemed to be terrorist propaganda. Others have criticized the Arabic and English channels for being a mouthpiece for Qatar, though the channel’s representatives insist that is not the case. Other questions about bias persist; as recently as last week, the Al Jazeera Web site was accused of publishing an anti-Semitic article by a guest columnist.

But some Al Jazeera America staff members are already rehearsing with mock newscasts. Others are fanning out to report news stories from parts of the country rarely visited by camera crews. Still others are setting up new studios in New York, where the channel will have a home inside the New Yorker Hotel, and in Washington, where it will take over space previously occupied by ABC at the Newseum on Pennsylvania Avenue.

New employees are being added to the rolls every weekday from places like CNN, “Frontline” and Time magazine. “We expect to have approximately 800 employees when we launch,” said Ehab Al Shihabi, the Al Jazeera executive in charge of international operations, including the American channel. He declined to comment on the delays, but said the channel would start “later this summer.”

Since January, he and his colleagues’ overarching message to lawmakers, mayors, cable operators, and potential viewers has been that Al Jazeera is coming to America to supply old-fashioned, boots-on-the-ground news coverage to a country that doesn’t have enough of it.

A series of announcements about new hires like Ed Pound, an experienced investigative reporter, and new bureaus in cities like Detroit have bolstered that message. Public relations and marketing firms retained by Al Jazeera, like Qorvis Communications and Siegel Gale, have worked to limit opposition to the channel and increase support for its arrival.

Al Jazeera representatives seem aware that they are confronting an enormous marketing challenge. But they benefit from the public perception that they have boundlessly deep pockets, thanks to the oil and gas wealth of Qatar. Al Jazeera America has been portrayed by some as a giant stimulus project for American journalism at a time when other news organizations are suffering cutbacks. “This is the first big journalism hiring binge that anyone’s been on for a long time,” said the business reporter and anchor Ali Velshi when he left CNN in April for a prime time spot on Al Jazeera America.

Article source: http://www.nytimes.com/2013/05/27/business/media/american-al-jazeera-channel-shifs-focus-to-us-news.html?partner=rss&emc=rss