| WASHINGTON/MOSCOW, March 9
WASHINGTON/MOSCOW, March 9 An FBI
investigation into possible criminal violations by Rupert
Murdoch's News Corp of a U.S. law banning bribery of
foreign officials has expanded to include an examination of the
activities of former company holdings in Russia, according to a
source close to the investigation.
As part of their inquiry, the FBI will seek to consult with
Russian authorities, the source said.
While at this point it is not expected that a special FBI
team will go to Russia to pursue the probe, the FBI's
representative at the U.S. Embassy in Moscow, known as the
"legal attache," is likely to be involved, the source said.
The company's activities in Russia are being looked at as
part of a broader FBI investigation into possible violations by
News Corp of the U.S. Foreign Corrupt Practices Act - an inquiry
fueled by allegations that journalists for Murdoch newspapers in
Britain for years systematically made questionable payments to
public servants, including police and military officials, in
return for story tipoffs.
The goal of the FBI's inquiry in Russia is to see if there
is evidence of a "pattern and practice" of legally-questionably
activity across multiple News Corp properties "in more than one
venue," said the source close to the inquiry.
A second source familiar with the inquiry said that just
because the FBI was investigating FCPA issues did not mean U.S.
charges will ever be brought. The source said the outcome of
U.S. investigations is likely to be heavily influenced by the
results of Scotland Yard investigations in Britain.
A spokesman for Murdoch's News Corp in New York declined to
In a written statement, News Outdoor Russia, the country's
largest billboard company, in which Murdoch held a controlling
interest until last summer, said that it had no first hand
information about any FBI investigation.
"With reference to recent reports appearing in the media
that within the scope of the investigation into News Corp.
operations, the FBI is inquiring about cases of corruption in
News Outdoor Russia, the Company states that it has received
neither verbal nor written communications from the FBI. Neither
has the Company received inquiries from Russian law enforcement
agencies," the company said.
News Outdoor added that it "has and continues to operate in
accordance with the laws of jurisdictions relevant to its
operation, including those applicable to Russian operating
companies and subsidiaries of U.S. listed publicly-traded
Information that the FBI investigation had expanded to
Russia first surfaced earlier this week in a story published by
the Wall Street Journal, now part of Murdoch's global empire.
The paper said the inquiry was focused on whether on News
Outdoor Russia, had paid bribes to local officials in return for
permission to install billboards at choice locations.
FORMER RUSSIAN EXEC
Sergei Zheleznyak, a former News Outdoor executive who now
serves as member of the Russian state Duma from President-elect
Vladimir Putin's United Russia party, said that when he was with
the firm, he was not aware of any corrupt schemes.
"We perfectly understood that we were under scrutiny by
both Russian law enforcement agencies and those of our partners.
In that sense we could not allow any deviation from legal
practices. It would not have been acceptable," Zheleznyak, who
held senior management positions at News Outdoor from 2001-2007,
"We had informed all our staff about anti-corruption
practices. The company had no interest in using corrupt schemes
because it would have damaged our business reputation. Since the
company received international loans and was part of an
international firm it (using corrupt schemes) would have been
plain stupid," he said.
Zheleznyak's background as a former News Outdoor executive
who became an elected representative of Putin's party was noted
in a December 2007 U.S. State Department cable released by the
WikiLeaks website describing how the party's roster of
newly-elected members had a reduced number of business people
than in the previous parliament because Putin had publicly
warned that the Duma "is not a place for oligarchs."
At a local level, News Outdoor had friendly relations with
other elements of Putin's political party. A press release
posted on the News Outdoor website in January 2010 described how
News Outdoor and a regional office of the United Russia party
jointly organized a contest in which students in the towns of
Ryazan, Saratov and Saransk were invited to produce posters on
Russian historical themes. Winning posters were then displayed
on billboards at bus stops.
Zheleznyak insisted there was "no special relationship"
between United Russia and News Outdoor, insisting that during
elections, "the party chose suppliers based on their price to
Dimitry Tikhonov, a spokesman for News Outdoor, described
dealings between Putin's party and the billboard company as "a
commercial relationship. We have never provided advertising on
concessionary terms. I can say with confidence that our
advertising is placed on commercial terms, except for charity
STAKE SOLD LAST YEAR
The Wall Street Journal said News Corp had a majority
ownership stake in News Outdoor for a decade until it sold its
holdings last July.
According to the paper, the Russian firm had a colorful
history. Its chief, Maxim Tkachev, was shot outside his office
ten years ago. Time Magazine reported that Tkachev survived
because the assailant's gun jammed when he tried to fire a
A few months earlier, Vladimir Kanevsky, an executive at a
rival firm, was shot dead in his car by a man wearing a black
ski mask. The Journal said the FBI was looking into the killing
of Kanevsky. Nobody was convicted in either shooting. News
Outdoor later acquired some assets of the murdered man's
Time also reported that News Outdoor had a close
relationship with Moscow billboard entrepreneur Alexander
Luzhkov, whose father, Yuri, served as mayor of the Russian
capital from 1992 to last year. The magazine said that at one
point, News Outdoor and Alexander Luzhkov's firm won joint
contracts for prime billboard locations. Tkachev denied to Time
that the Luzhkov/News Outdoor relationship brought any favors
from local authorities.
Tikhonov, the News outdoor spokesman, would not be drawn on
the circumstances under which News Outdoor acquired assets
previously owned by the company of the murdered executive
Kanevsky, saying that News Outdoor was one of several businesses
who bought the firm's assets. He also declined to comment on why
Murdoch last July sold his entire stake in News Outdoor for what
most experts described as a knock-down price.