As ProPublica’s Jake Bernstein told On the Media last weekend:

If you pay off the policeman and you don’t write it down in your company ledger as ‘bribe to policeman,’ then this can be a problem because you haven’t accurately kept your books and records.

Koehner explains further at his blog:

Thus, if other payments part of News Corp.’s wide-ranging scandal—such as “hush” settlement payments to phone hacking victims are misrecorded on the company’s books and records, such entries would provide the basis for independent FCPA books and records violations—even if such conduct does not directly implicate the FCPA’s anti-bribery provisions.
Koehler explains the Justice Department has a great deal of discretion in FCPA cases, which in all but two cases in the history of the law have been settled through negotiated agreements. The agency determines their enforcement action based on the cooperativeness of the offending company and the degree to which company leadership knew about the corrupt practices. The more cooperative and less knowing company executives are, the better the offending company tends to fare.

The financial consequences for companies charged with violations of the FCPA can be enormous. Siemens paid $800 million in a 2008 settlement. If an FCPA case is raised against News Corp., it will be a lengthy and costly process for the company, but it’s unlikely to bring down the whole enterprise.

For this reason, Richard L. Cassin, a lawyer who specializes in FCPA and started “The FCPA Blog,” wrote last week that it would be a shrewd move for News Corp. to disclose everything up front to the feds. He says these investigations inevitably lead investigators to ask “Where else?”

But Cassin is less convinced than Koehner that News Corp will need to disclose anything, or that the DOJ will press the case against News Corp.

Though he acknowledges the FCPA could be applied here, and that there is mounting political pressure to do so, he says there is no reason for the United States to take on a local case that is already getting legal attention from British authorities.

On this point, he and Koehler disagree. Koehler says the UK lacks the laws to seriously pursue a bribery case against News Corp. Until July 1, 2011, he says the UK’s bribery laws were weak; though the current law is airtight and even stronger than America’s FCPA, it only applies to cases that have taken place after the law’s implementation—meaning not News Corporation. Reuters columnist (and CJR Audit contributor) Felix Salmon has also made this point.

Many commentators—that Washington Post editorial for one—have also argued that using the FCPA to go after News Corp. would be an example of American overreach, butting into matters the United Kingdom is completely capable of adjudicating itself.

Koehler calls this a “valid point,” but not one that is unique to News Corp. The same argument could be made against every case involving the FCPA; to be overreaching and extraterritorial is the very spirit of the law. The FCPA was established to hold US corporations (like News Corp.) accountable for their activities abroad. Koehler says it is common for parent companies to be charged under the FCPA for activities of its subsidiaries.

There is another possible wrinkle to any potential FCPA case against News Corp: it may be that the alleged payments to police—at least the five that Scotland Yard has fessed up to—were reported to have taken place in 2003, before the US incorporation of News Corp.

Amid last week’s speculation about possible FCPA investigations, another story—conspiratorial, but inevitable under the circumstances—emerged in British and America’s left-leaning blogosphere. The stories, with only coincidence to go on, linked a $1 million donation News Corp. made to the US Chamber of Commerce last summer to a campaign to amend the FCPA law the Chamber launched last fall. Just another big bribe—albeit not one to a foreign official—was the implication.

But there’s no proof of this and indeed, and until there is, caution would be warranted. Lots of big businesses give money to the Chamber of Commerce, the business lobby, for lots of things. And at least one of the Chamber’s proposed FCPA amendments, which has the endorsement of lawyers—Koehler and Cassin among them—and some bipartisan support, is widely favored.

It’s also hard to imagine News Corp could have seen this one coming.

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Erika Fry is a former assistant editor at CJR.