After Investigation, No Evidence 'Wall Street Journal' Bribed Chinese Officials

The Wall Street Journal's China bureau was the subject of a Department of Justice inquiry into allegations that the bureau had been bribing Chinese officials in exchange for information. Investigation by the parent company turned up no evidence to uphold the claim.

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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

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And I'm Melissa Block. The Wall Street Journal reported a remarkable story yesterday about itself. It revealed that over the past year the Justice Department has been looking into whether employees at the Journal's China bureau bribed Chinese officials to get information for their stories. No evidence has turned up to support the claims first made by an unidentified whistleblower, but as NPR's David Folkenflik reports, those claims carry powerful echoes at the Journal and its parent company, NewsCorp.

DAVID FOLKENFLIK, BYLINE: The Journal first learned of the accusations in the past week and disclosed them in an article posted yesterday.

JIM MCGREGOR: That's just not how the Wall Street Journal operates and, you know, they've got a very ethical newspaper and I just don't see it. None of it rings true to me.

FOLKENFLIK: Jim McGregor is the former China bureau chief for the Wall Street Journal and the former CEO of Dow Jones China.

MCGREGOR: I think if a file was offered to a reporter they would probably turn it down even if they got it for free because you'd figure it was setup. That's happened before. The state security guys will give a reporter a file and then they'll go grab them and say, hey, you've have secret documents and, you know, kick them out of China.

FOLKENFLIK: Local Chinese journalists are awash in payments going in both directions, says Kent Kedl, the Shanghai-based managing director of a corporate integrity firm called Control Risks.

KENT KEDL: The local media environment in China is kind of a dodgy area. Very often companies find they have to - if they want to get media coverage for something, they have to pay journalists. There's also the environment in China where government officials are routinely bribed for things.

FOLKENFLIK: But Kedl said in his experience, Western journalists do not participate in such behavior, yet the nature of the allegations seems painfully familiar. More than 60 people, including the former CEO of Newscorp's British newspaper division have been arrested on corruption charges in a scandal involving the company's UK papers. Bribes to foreign government officials by American corporations are violations of federal law and Newscorp has been cooperating with both British and U.S. prosecutors since the summer of 2011 about its possibly illegal activities in the U.K.

Investigators on that inquiry received the informant's tip alleging bribes by the Wall Street Journal in China.

RITA GLAVEN: If a company's already under investigation and then an allegation comes in that seems to relate or be part of what may be a pattern of conduct they're looking at, it certainly may get more attention from the Justice Department.

FOLKENFLIK: Rita Glaven is former acting assistant U.S. attorney general who oversaw the criminal division, including prosecution of foreign corrupt practices act cases. Outside auditors for the company reviewed emails going back five years and shared them with prosecutors.

GLAVEN: Yes, DOJ relies on companies outside council to investigate them, but then DOJ wants to see the fruits of the investigation, not just in terms of what the lawyers say they found, but they want to go and see the documentary evidence themselves and talk and hear the witnesses themselves.

FOLKENFLIK: For Newscorp, it is of urgent concern to convince the Justice Department that illegal practices were limited to the U.K. Journal and Newscorp officials would not be interviewed for this story, however, they said privately that they believe the allegations were payback by the Chinese for the paper's aggressive reporting.

UNIDENTIFIED MAN: It's a scandal that has rocked China. Bo Xilai, one of the Communist Party's rising political stars, is forced from power.

FOLKENFLIK: This, taken from a documentary posted on the paper's website last June.

UNIDENTIFIED MAN: Bo's wife is detained as a suspect in the murder of a British businessman.

UNIDENTIFIED MAN #2: We have allegations of corruption involving potentially hundreds of millions of dollars.

FOLKENFLIK: The newspaper's top news executive, managing editor Gerard Baker, released a statement. He said, our journalists often working in the most difficult circumstances will never be deterred from shining light on the darker recesses of Chinese society and politics. Privately, Journal officials say they believe Chinese authorities commissioned hackers to penetrate its computers and to block access to news articles on its website in retribution for that reporting and that this accusation of bribery represents the latest chapter in that harassment by the government.

David Folkenflik, NPR News.

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