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WSJ denies 'foreign corrupt practices'

By Dan McCrum, FT.com
Employees at the Wall Street Journal's China bureau have been cleared of accusations they bribed Chinese officials
Employees at the Wall Street Journal's China bureau have been cleared of accusations they bribed Chinese officials
STORY HIGHLIGHTS
  • Employees at WSJ's China bureau were accused of bribing Chinese officials for information
  • An investigation by auditors and lawyers found no evidence to support the claims
  • The US Department of Justice is conducting a separate investigation into News Corp

(Financial Times) -- News Corp has revealed that employees at the Wall Street Journal's Chinese news bureau were accused of bribing Chinese officials for information but that an investigation by auditors and lawyers found no evidence to support the claims.

The announcement comes as the US Department of Justice conducts a separate investigation into potential criminal conduct at News Corp related to the phone hacking scandal at UK newspapers.

According to the Wall Street Journal, the justice department opened a foreign corrupt practices investigation into the Chinese allegations last year. The US newspaper first reported the case on Sunday.

Its report says the justice department informed News Corp in early 2012 that it had received information from an unidentified person it described as a whistleblower, who accused one or more employees of the Wall Street Journal of providing gifts to Chinese government officials.

The company was not told the identity of the accuser, or whether the person had worked inside the newspaper.

US foreign corrupt practices investigations are unusual in that the accused company typically conducts its own investigation, which is then presented to the justice department.

News Corp's Dow Jones subsidiary said that "after a thorough review of our operations in China conducted by outside lawyers and auditors, we have not found any evidence of impropriety".

It added that Dow Jones was "proud of our important and impactful coverage coming out of China and regret that some unknown source has sought to taint that work".

The accusations concerned stories relating to Chongqing, the power base of Bo Xilai, the disgraced Chinese official. Mr Bo was a charismatic and ambitious Communist politician who was purged in March before the party's once-in-a-decade leadership transition.

Subsequent coverage of the Bo scandal, and a growing wave of revelations about the financial dealings and power struggles of the Communist party's ruling elite, have resulted in an increasingly difficult relationship between foreign media groups and the government in Beijing.

In January a correspondent for the New York Times, which has reported on business dealings and financial assets of family members of Wen Jiabao, China's outgoing premier, was forced to leave the mainland because authorities had not renewed his journalist visa.

News Corp still faces a US investigation related to possible criminal conduct at its UK subsidiaries, including phone hacking and bribery.

News Corp said: "In regards to UK matters, we've delivered on our commitment to uncover wrongdoing and feel confident about the work we've done to put us on the right path, including sweeping changes to our global internal controls, compliance programmes and ethics requirements."

The justice department did not respond to requests for comment.

© The Financial Times Limited 2014

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