Sunday, February 27, 2011

Will Roger Ailes be indicted this week? Doubt it.

Fox News President Roger Ailes may be indicted as soon as Monday for allegedly telling employees to lie to federal investigators, according to a financial commentator who claims to have inside knowledge of the situation.

On Thursday, the New York Times reported that Ailes in 2006 told publisher Judith Regan, who then worked for Fox's parent company, News Corporation, to lie to investigators about a public official with whom she had had an affair.
Ms. Regan had once been involved in an affair with [Bernard] Kerik, the former New York City police commissioner whose mentor and supporter, former Mayor Rudolph W. Giuliani, was in the nascent stages of a presidential campaign. The News Corporation executive, whom she did not name, wanted to protect Mr. Giuliani and conceal the affair, she said.

Now, court documents filed in a lawsuit make clear whom Ms. Regan was accusing of urging her to lie: Roger E. Ailes, the powerful chairman of Fox News and a longtime friend of Mr. Giuliani. What is more, the documents say that Ms. Regan taped the telephone call from Mr. Ailes in which Mr. Ailes ... "discussed with Regan her responses to questions regarding her personal relationship with Kerik."
Kerik eventually pleaded guilty to eight counts of mail fraud, wire fraud and lying to the IRS, so it makes sense that Ailes, who worked on Giuliani's first mayoral campaign, would want to protect Giuliani from Kerik's fallout. The Times speculates whether the recording contributed to News Corp's willingness to settle a wrongful termination lawsuit for nearly $11 million after Regan was fired in 2006.

Ailes' name was left out of the original lawsuit, but the new accusation and existence of the recording exposes him to the possibility of being charged with conspiring to lie to federal government agents. According to financial commentator Barry Ritholtz, that indictment could come very soon:
Someone I spoke with claimed that Ailes was scheduled to speak at their event in March, but canceled. It appears that Roger’s people, ostensibly using a clause in his contract, said he "cannot appear for legal reasons." I asked "What, precisely, does that mean?" The response: "Roger Ailes will be indicted — probably this week, maybe even Monday."
However, I wouldn't start planning any parties just yet. Salon's Justin Elliott asked Ritholtz to elaborate on his source, who turns out to be a stranger Ritholtz was chatting with in a Barbados airport -- not exactly Deep Throat, as tipsters go.
Here's what happened, according to Ritholtz, who just got back from a vacation on the tropical island: He was sitting in the Barbados airport waiting for a plane to arrive and he struck up a conversation with an older man sitting next to him. "We started chatting and next thing I know, we're waiting to leave the gate, his phone rings and he tells his wife, 'yeah Ailes just canceled the event,' Ritholtz says, describing the man as "obviously annoyed and frustrated." The man runs an annual event in March at which Ailes was scheduled to speak, according to Ritholtz, who declined to specify the event.
Canceling an event is flimsy evidence at best of a pending federal indictment, and Ritholz's source, an "Upper East Side Democrat," is too far removed to be considered reliable. After all, it's not for nothing that the first sentence of Ritholtz's curriculum vitae states that he is not a journalist. In addition, a Columbia law professor and former federal prosecutor told the New York Times such cases are rarely pursued. Er, why is that, exactly?

If Ailes is indicted, however, Fox News' coverage of the story will undoubtedly be priceless. Unsurprisingly, the News Corp-owned Wall Street Journal has so far limited their coverage to a short Associated Press write-through. I was going to say I'm waiting for the first lame "What Ailes Fox News?" headline, but it looks like the New York Daily News took care of that quite a while ago.

In any case, we'll see in the coming days how accurate Ritholtz's 'scoop' is. For now, perhaps Roger Ailes should pick up some recommended reading.

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