Panama Papers Put FIFA In the Spotlight for Bribery and Corruption Risk

Remember when Michael Corleone said, “Just when I thought I was out, they pull me back in,” in The Godfather Part III?  Executives at FIFA and UEFA can probably relate to his frustration after the recent Panama Papers leak put the spotlight of the media and possibly enforcement agencies back on the organizations governing World and European soccer respectively.

 In 2015 FIFA suffered major reputational damage with an investigation into bribery and corruption allegations against many of its senior officials, culminating in its president Sepp Blatter stepping down. The election of his successor Gianni Infantino in February was seen as a chance for FIFA to move on from the scandal with a clean slate.

 But documents in the Panama files allege that the Swiss-Italian co-signed a TV contract in 2006 with two businessmen who have since been accused of bribery. These men, Hugo and Mariano Jinkis, are currently fighting extradition to the United States.

 US prosecutors allege that, as the owners of an offshore company on the Pacific island of Niue called Cross Trading, the Jinkis’ paid millions of dollars in bribes to South American football officials over several years in return for lucrative TV rights for regional football tournaments. They immediately sold these contracts to Ecuadorian broadcaster Teleamazonas for three to four times the amount they paid for them.

 The recent Panama leak alleges that a few years before these deals in South America took place; Infantino co-signed a contract with Hugo Jinkis while the former was director of legal affairs at UEFA. Under the deal, Cross Trading paid $159,571 for exclusive rights to broadcast Champions League football in Ecuador between 2006-07 and 2008-09, then sold these on to Teleamazonas for $447,330.

 UEFA insists this deal was above board and that it could not have known that Jinkis would be involved in a separate scandal a decade after it was signed. Infantino also denies any wrongdoing and says he welcomes an investigation into the matter. The Swiss police have started an investigation into the scandal and raided UEFA’s headquarters in Nyon last week to seize details of the contract.

 Anti-Bribery and Corruption Compliance – World Soccer’s Yellow Card?

 The world soccer authorities had hoped to keep their noses out of trouble after a torrid 2015 in which Sepp Blatter was investigated by the Swiss authorities in relation to a payment of $1.94 million made to then UEFA president Michel Platini in 2011. Both deny the payments were improper, but FIFA’s ethics committee has banned them from football for eight years (since reduced to six after an appeal).

 Although they are not accountable to shareholders in the same way that a business is, UEFA and FIFA should not be complacent about their commitment to fighting corruption. A poll by Transparency International and Forza Football in February this year showed 69% of fans have no confidence in FIFA. Perhaps more worryingly for FIFA, 43% of the 25,000 fans in 28 countries polled said the scandals were affecting how they enjoy soccer. Clearly, without maintaining high standards of integrity, world soccer risks losing the very fans that not only create the exciting atmosphere in the stadiums, but also provide much of the money that keeps professional sport going.

 Offshore Action Shows Compliance Risks

 UEFA is one of many institutions, individuals and companies implicated in the Panama files, a leak of 11.5 million documents from the files of offshore financial law firm Mossack Fonseca.

 The Panama allegations reflect the practice of setting up shell companies in offshore tax havens and hiding the real owners behind nominee directors. Depending on how much a client pays, more than one secret jurisdiction and anonymous company can be involved. Cross Trading, the offshore company owned by the Jinkis’, is an example of how such companies have allegedly been used to conceal who really owns a firm’s assets.

 The leaked documents suggest that Mossack Fonseca supplied anonymous offshore companies with nominee directors: stand-in names enabling the real owners of organizations to operate in complete secrecy. This can make it difficult for investigators to identify who really benefits from a company’s income.

 Although individual countries have different rules on ultimate beneficial ownership, members of the G20 committed to working together to implement tougher principles on beneficial ownership transparency in 2014. With investigations underway in many G20 countries following the Panama files leak, the effectiveness of these principles will be tested in the coming months.

 3 Ways to Apply This Information Now

1. Sign up to receive email notifications when new stories are posted on the blog.
2. Learn more about our solutions for helping you manage compliance and third-party risk.   
3. Share this blog on LinkedIn to keep the dialogue going with your colleagues and contacts. 

Media Mentions for Prince Eclipse Presidential Coverage

Americans were shocked and saddened by the news of recording artist Prince’s death at the age of 57 on Thursday. The legendary singer-songwriter’s death hit airwaves and news outlets faster than you can say, “Diamonds and Pearls.” Media and social media hashtags immediately started trending for Prince. 

LexisNexis Newsdesk reports more than 8,400 articles were published about Prince in the three-and-a-half hours after news of his death broke, almost double the number of articles written about this year’s media darling, the 2016 Presidential Election, in the same time period.

The iconic artist was beloved by many for his funktified and risqué songs like “Little Red Corvette,” “Raspberry Beret,” “When Doves Cry,” and “Kiss.” Even journalists, whose responsibility it is to maintain their objectivity, allowed their admiration of the pop star to shine through in their stories. (One witness from the scene outside Prince’s Paisley Park estate was quoted as saying, “even the journalists are hugging each other.”) 

Almost one-third of the coverage published about Prince in the hours after his death expressed positive sentiment. Even coverage of Election 2016 has maintained a modicum of objectivity, with approximately 78 percent of articles remaining neutral in their coverage.

 

Is Prince more important than POTUS? If media coverage is any indication, today the answer is yes...encapsulating an important moment in time in both American pop culture and politics.

 

I never meant to cause you any sorrow

I never meant to cause you any pain

I only wanted to one time to see you laughing

I only wanted to see you

Laughing in the purple rain.

– “Purple Rain” (1984)

3 Ways to Apply This Information Now

1. Explore more media analysis of the presidential campaign. 
2. Learn more about LexisNexis Newsdesk™ and the power of media monitoring for yourself.
3. Share this blog on LinkedIn to keep the dialogue going with your colleagues and contacts. 

Are You Violating Copyright Laws with Your News Sharing?

Tomorrow marks the anniversary of William Shakespeare’s death in 1616. While not a cause for celebration, this anniversary has served as the inspiration for the United Nation’s Educational, Scientific and Cultural Organization (UNESCO) to designate April 23 as World Book and Copyright Day. While UNESCO’s primary focus, according to Director-General Irina Bokova, is “the power of books to nurture creativity and advance dialogue between women and men of all cultures,” we thought the copyright aspect of the observance is an interesting one, given how easy content sharing is in today’s digital world. When does sharing news or photos or videos, for example, cross the line to copyright violations? And how do you ensure you’re not doing just that when you distribute the results of your news and business research with colleagues or customers?

Copyright Violations Run Rampant in Businesses 

A study conducted in 2013 found that business professionals share published content more than 30 times a week on average, with 40 percent of the shared content coming from outside sources. Just think back on your own week: Did you send an email about a great article to colleagues, upload a news item to a collaboration platform or give a presentation with some photos that you found on Google™?  If so, you may have violated some copyright laws. Of course, we’re not suggesting that you do it with malicious intent. In fact, these days it can be a little confusing because—let’s face it—the rise of content marketing, which values and promotes sharing, leaves people with the impression that almost anything you discover on the Internet falls under a rather fuzzy concept called “fair use.”  Unfortunately, that’s not the case.

To Share or Not to Share – Understanding Fair Use

According to an article in Plagiarism Today, fair use “refers to exceptions in the rights of copyright holders and allows for limited use of copyrighted material, even without permission,” but, of course, with a few caveats:

• Fair use applies to non-commercial use. If the use is for non-profit or educational purposes, it’s okay. If the use is for (or by) commercial enterprises, it’s a copyright violation. That’s why people can upload a cute video of a toddler dancing to the latest chart-topper, but a brand needs permission to use the same song.
• Fair use also depends on the nature of the copyrighted work.
• Fair use extends to only a portion of a copyrighted work. You can quote an article, but can’t print it in its entirety.
• Fair use cannot negatively impact the value or potential market for the copyrighted work. For instance, you can share a snippet from an article, properly attributed, but you can’t reprint the entire article because you diminish the copyright holder’s ability to profit from the work.

Admittedly, even the above definition still leaves many feeling unsure about what can and can’t be used.

 Staying Copyright Compliant

What can you do to stay on the right side of copyright law—especially if your job description includes conducting news and business research and sharing your insights to fuel better decision making? Sometimes a snippet lacks the context needed for colleagues to get a complete picture. And you can’t just provide a list of links to your C-suite, leaving them to search out every original source for themselves. Use of a content aggregation and sharing tool—one that that licenses its content from the original copyright holders makes it easier to provide valuable information, legally. That’s particularly important if you’re sharing—via an intranet, newsletter or some other platform—articles of interest to paying customers. Sure, you might not get in trouble for that picture you “borrowed” for your PowerPoint presentation to the sales team; but if you upload the presentation for a wider audience, you could face some serious repercussions. The right tools can help you avoid missteps in an age where a copyright violation could be just a click away. 

3 Ways to Apply This Information Now

1. See how services like Nexis® or LexisNexis Newsdesk™ help you share critical news and business intelligence with confidence.
2. Read a good book this weekend in honor of World Book and Copyright Day – and let us know what you’re reading.
3. Share this blog on LinkedIn to keep the dialogue going with your colleagues and contacts. 

News & Business Research Reveals Energy Industry Influences

What market-driven influences are likely to shape the energy industry in 2016? We did some research using Nexis® to see what we could learn.

Political developments always hold the potential to impact the energy sector—and election years tend to have the most pronounced effect.  But there are also some intriguing technology-fueled and market-driven influences that are likely to shape the direction of the energy industry in the year ahead.

Brief descriptions of the seven predictions noted from industry experts in our 2016 Energy Industry Report are listed below.  Download a copy of the report today.

1.)    Heightened Cybersecurity Defense—Cyberattacks are now ubiquitous in every sector of the economy, and corporate executives are making major investments to increase their defenses. 

2.)    Oil Prices Stay Low—Analysts surveyed by Fortune expect prices will stay low for a while, due to a variety of factors such as declining demand from China and the implementation of the Paris climate agreement, which suggests countries are committed to reducing the reliance on fossil fuel energy.

3.)    Digital Transformation—Due to changing customer expectations, digital transformation will be another key trend in 2016.  Examples of these practices include outage notifications and assisting customers in regard to energy’s role in a connected home.

4.)    Renewables Gain Ground—The extension of the solar investment tax credit will lead to an escalation of wind and solar installations in the U.S. which now routinely capture most of the new electricity generation capacity.

5.)    Workforce Skills Gap—Look for many energy companies to accelerate retirements and use technology to do more with less.  This is in response to the generational “crew change” between retiring veteran workers and the next crop of skilled workers.

6.)    Energy Storage will be Hot—Experts note that utilities are using batteries for the power grid as an alternative to traditional power plants.  Electric car makers (e.g., Tesla) are also increasingly using cheaper batteries to lower the overall costs of electric cars, making them more affordable for mainstream consumers.

7.)    Natural Gas Cools—With storage levels of natural gas rapidly filling up, prices have dropped precipitously forcing some wells to close and causing a re-think of the massive shale production facilities that saw record growth in recent years.

In the energy industry, change can be slow to come—but when it arrives, the implications are often broad and far-reaching.  The combination of geopolitical forces, technology innovations and economic developments are likely to spark some of these changes in the year ahead.

 3 Ways to Apply This Information Now

1. Download the PDF of our report to read at your convenience or share with colleagues.
2. Check out our solution for finding the news, public records and business information you need.
3. Share this blog on LinkedIn to keep the dialogue going with your colleagues and contacts. 

Lawmakers Mull Raising Legal Smoking Age

Sometime in the next week – maybe by the time you are reading this – California Gov. Jerry Brown (D) will weigh in on legislation to raise his state’s legal smoking age from 18 to 21. If he signs it, the Golden State would become only the second to adopt such a standard. But with similar bills pending now in several statehouses, it might not be the last.

 

Although over 100 cities and other municipalities across the country have raised their smoking age to 21, no such statewide standard existed until Hawaii Gov. David Ige (D) signed SB 1030 into law last June. The law, which also applies to electronic tobacco vaping products, went into effect on January 1. Days later, New Jersey lawmakers followed suit with their own measure (AB 3254/SB 602). But Gov. Chris Christie (R) pocket vetoed the bill without comment, leaving Hawaii as the only one with a statewide age-21 standard.

 

But that is likely to soon change. In addition to California, similar proposals are currently under consideration in several states, including New Jersey, where Sen. Richard Codey (D) has reintroduced the proposal vetoed by Gov. Christie last year. (See Bird’s eye view.)

 

But will raising the smoking age actually prevent more teens from taking up tobacco?

 

Supporters point to studies like one released in 2015 from the Institute of Medicine that show 90 percent of smokers take up the habit before age 19. Dave Dobbins, COO of the Truth Initiative, a Washington D.C.-based non-profit working to eradicate tobacco use, says that often occurs when a younger teen gets cigarettes or other tobacco products from an older teen who obtained them legally. In theory that happens because it is not overly unusual for a 17-year-old to run in the same social circles as an 18-year-old. Raising the legal purchasing age, the studies say, can go a long way toward preventing that. 

 

“From a policy point of view, if you increase the smoking age to 21, the young underage smokers won’t have relationships with the older up-to-21 age,” University of California San Francisco tobacco policy researcher Rachel Barry told California Healthline last month.

 

Dobbins says nobody thinks the age restriction alone will stop such things from happening, but he says it is a necessary component of a wide reaching plan to keep kids away from tobacco.

 

“We know that no age restriction will stop a kid who really wants something from getting it,” he says. “But we think stopping that first try of a kid getting it from a friend who got it legally could reduce youth tobacco uptake by as much as 20 percent.”

 

That’s more optimistic than the Institute of Medicine report, which estimated only a 12 percent decline in teen smoking rates if the legal age is raised to 21. Even so, the anti-smoking advocacy group Campaign for Tobacco Free Kids says such a decline would result in a 10 percent decrease in tobacco-related deaths - approximately 223,000 people – each year.

 

James Ross, a longtime LexisNexis employee who has smoked since his freshman year in college, isn’t so sure about all this. He got his first cigarette from an older colleague where he worked at the time, starting a habit that has lasted for decades. Like many of us, he remembers how easy it was as a young person to get alcohol or other illicit things regardless of the laws of the day. And while he supports efforts to prevent young people from starting, he wonders if this particular tack could do more harm than good.

 

“It could turn into a case of the forbidden fruit,” he says. “The more you try to keep something from someone the more they want it. Maybe it actually convinces someone to try it, just to see what it’s about.”

 

Critics also point to the record-low levels of teens smoking, begging the question of whether more anti-tobacco legislation is necessary, particularly as many states are already struggling with a significant loss of annual tax revenue resulting from decreased tobacco sales.

 

Loss of tax revenue is at the heart of opposition to a bill in Massachusetts (SB 2234) that would not only raise the smoking age to 21, but also bar the sale of tobacco and nicotine products in health-related outlets like retail pharmacies and stores with optical departments. The measure would also prohibit e-cigarettes in places where smoking is already barred, such as schools and workplaces. In a statement, the Retailers Association of Massachusetts said the measure will only drive smokers to purchase tobacco products in other states or online, thus “depriving the Commonwealth of tobacco excise tax revenue used to address problems associated with smoking which will endure.

 

Taxes were also the key element of debate in the Washington legislature. A measure there that would have barred both standards and electronic tobacco products for those under 21 (HB 2313) stalled in the House Committee on Appropriations in February. It was reintroduced in special session in March, but several lawmakers remained opposed, particularly after the state Office of Financial Management issued a report saying that raising the smoking age to 21 would cost the Evergreen State more than $10 million a year in lost tax revenue. That resistance sparked a strong response from Washington Attorney General Bob Ferguson (D), who told the Columbian on March 22, “If you raise the smoking age, fewer teenagers will be buying cigarettes, [which is a] good thing. Is the Legislature really balancing their budget on the backs of teenage smokers? Look, the candid answer is yes.” Even so, not action was taken during the special session, which ended on March 29.

 

But that hasn’t discouraged advocates for raising the age, who contend that the rate of decrease in teen smoking has flattened out in recent years, due in part to the growing popularity of e-cigarettes, or “vaping.” Those products have proven to be particularly popular among young people, which is why age-hike advocates have pushed so hard to ensure they are included in the restriction bills under consideration.

 

Gubernatorial support for current measures has also bounced all over the map. Massachusetts Gov. Charlie Baker (R) said last week he supports the idea of raising the smoking age, but will need to see what the final legislation looks like before knowing if he’ll sign it. That chance could come soon as the Senate approved SB 2234 last Thursday, sending it to the House. Meanwhile, Vermont Gov. Pete Shumlin (D) has indicated he doesn’t support HB 93, which would raise both the legal smoking age and the per-pack tax on cigarettes by 13 cents a year through 2019.

 

Other measures Brown must act on in California include expanding the places where e-cigarettes are banned, broadening workplace smoking prohibitions and raising the licensing fee for tobacco retailers. Another measure that would ban smoking and the use of tobacco and vaping products on all of the California State University and community college campuses (AB 1594) cleared the Assembly last week and is expected to meet similar approval in the Senate. The governor has stuck to his general policy of not commenting on bills before he acts on them. But in a statehouse dominated by Democrats who are normally lined up to oppose Big Tobacco, getting the six-bill package passed was surprisingly difficult. Originally passed in March, lawmakers held back from sending them to Brown after the tobacco lobby threatened to undertake a referendum campaign to harm other ballot measures Democrats favor: one that would impose a $2-a-pack cigarette tax and another to extend higher taxes on the state’s wealthiest residents. Neither has yet qualified for the November ballot.

 

Whatever the results, Truth Initiative’s Dobbins vowed that organizations like his will continue to push a wide suite of both state and Congressional efforts to curb teen smoking.

 

“Raising the age limit is just one of many tools to stop kids before they start,” he says.