President Donald Trump’s decision to fire U.S. Attorney Preet Bharara happened as Bharara’s office was reportedly probing Fox News over its alleged failure to inform shareholders about repeated settlements for allegations of sexual harassment and assault by former Chairman and CEO Roger Ailes and other executives against female employees. Reports indicate Trump may pick one of Ailes’ former lawyers to replace Bharara.
Fox News Faced Numerous Sexual Assault And Harassment Allegations
Ailes Left Fox News Amid Flurry Of Sexual Harassment Allegations. In early July, former Fox News anchor Gretchen Carlson sued the network’s CEO and Chairman Roger Ailes for sexual harassment. Carlson’s attorney told The Washington Post that 25 women had “come forward with what they describe as similar harassment claims against Ailes that stretch across five decades back to his days in the 1960s as a young television producer.” 21st Century Fox tasked a law firm with conducting a review of Ailes' conduct and “the initial findings were damaging enough that the Murdochs decided they had to escort Ailes out,” according to CNN’s Brian Stelter. New York national affairs editor Gabriel Sherman reported that sources briefed on the investigation said former Fox News host Megyn Kelly told investigators that Ailes had also sexually harassed her. [The Washington Post, 7/22/16; CNN, The Lead with Jake Tapper, 7/21/16; New York, 7/19/16]
Fox’s Culture Of Sexual Harassment Extends Beyond Ailes. The New York Times reported on July 23 that Fox News may have “a broader problem in the workplace,” that extends beyond Ailes after at least “a dozen women” told the Times that “they had experienced some form of sexual harassment or intimidation at Fox News or the Fox Business Network, and half a dozen more who said they had witnessed it. Two of them cited Mr. Ailes and the rest cited other supervisors.” [The New York Times, 7/23/16]
Fox Recently Settled With Former Contributor Over Sexual Assault Allegation That Resulted In Executive’s Firing. The New York Times recently reported that Fox settled with former network contributor Tamara Holder in February for more than $2.5 million after the said she was sexually assaulted by an executive at the company’s headquarters two years ago. The Times reported that Fox “investigated her claims, and the executive, Francisco Cortés, the vice president for Fox News Latino, was terminated, according to two people familiar with the matter.” [The New York Times, 3/8/17]
Former U.S. Attorney Preet Bharara Was Investigating Fox Over Sexual Harassment Settlements
CNNMoney: “Fox News Under Federal Investigation Over Ailes Settlement Payments.” CNN senior media reporter Dylan Byers reported on February 15 that the Justice Department had for months been investigating Fox News over failing to inform shareholders about settlements with employees who had pressed charges against Ailes for sexual harassment:
The U.S. Justice Department is investigating whether Fox News failed to inform shareholders about settlements made with employees who charged former chairman and CEO Roger Ailes with sexual harassment, a source with knowledge of the matter told CNNMoney.
On Wednesday afternoon, a Fox News spokesperson acknowledged that Fox News had been in communication with the U.S. Attorney's office but did not specify if the network was the subject of the investigation.
“Neither FOX News nor 21CF has received a subpoena, but we have been in communication with the U.S. Attorney's office for months — we have and will continue to cooperate on all inquiries with any interested authorities,” the spokesperson said.
On Wednesday night, however, a source with knowledge of the matter confirmed that Fox News was the subject of the investigation. The settlements in question date back several years, the source said. [CNNMoney, 2/15/17]
ABC News: Preet Bharara’s “Office Is Conducting A Criminal Investigation Into Fox News.” ABC News reported that Preet Bharara’s office, the U.S. Attorney’s Office for the Southern District of New York, which includes much of New York City where 21st Century Fox is headquartered, was “conducting a criminal investigation into Fox News.” From the February 15 article:
The Manhattan U.S. Attorney’s Office is conducting a criminal investigation into Fox News, an attorney involved and other sources familiar with the matter told ABC News.
Judd Burstein, an attorney representing former Fox News personality Andrea Tantaros, said during a hearing today that one of his clients received a subpoena to testify before a federal grand jury investigating the use of corporate resources in connection with sexual harassment allegations against former Fox News CEO Roger Ailes and Fox News parent company 21st Century Fox.
Burstein said the subpoena didn't involve Tantaros but a different client, whom he did not name.
A spokeswoman for U.S. Attorney Preet Bharara declined to comment.
Fox News responded, saying in a statement, “Neither Fox News nor 21st Century Fox has received a subpoena, but we have been in communication with the U.S. Attorney’s Office for months — we have and will continue to cooperate on all inquiries with interested authorities.” [ABC News, 2/15/17]
The Hollywood Reporter: Former Fox Host Andrea Tantaros’ Attorney Suggested Fox Settled Multiple Harassment Lawsuits Without Reporting Them In SEC Filings. According to The Hollywood Reporter, a lawyer representing former Outnumbered host Andrea Tantaros, one of the Fox employees suing over sexual harassment, said he received a subpoena from federal investigators requesting testimony from another Fox client, which he said meant Fox had settled multiple lawsuits without reporting them in its SEC filings. From the February 15 article:
On Wednesday, during a hearing regarding former Fox News personality Andrea Tantaros’ lawsuit against network executives before New York Supreme Court Judge David Benjamin Cohen, an attorney for Tantaros said he’d been served with a subpoena by federal prosecutors investigating sexual harassment allegations directed at Ailes. Tantaros, who once served as a co-host of the afternoon show The Five, alleges in her lawsuit that Fox News “operated like a sex-fueled, Playboy Mansion-like cult.”
Tantaros’ attorney Judd Burstein said he received the subpoena from federal investigators at the Department of Justice’s New York Southern District, which is run by Preet Bharara, who with much fanfare was asked by President Donald Trump to stay on as a U.S. Attorney after aggressively prosecuting top government officials in New York as well as Wall Street veterans for insider trading.
The subpoena, he said, arrived two days ago. It apparently requests testimony from his client before a grand jury. (Burstein didn't identify the client. Burstein previously represented Ailes' former right-hand man, Brian Lewis, who, before coming to a settlement of his own, raised the specter of explosive revelations.)
“Once I saw that it was the securities prosecutors I understood immediately what was going on here, which is that what Fox has done is enter into agreement, after agreement, after agreement, with victims of sexual harassment, not reported them in any of their SEC filings,” Burstein said.
Burstein appears to believe that the issue is related to the way Fox has been structuring settlements and keeping recipients as employees to avoid reporting obligations under securities law.
An attorney for Fox News, Andrew J. Levander, told the judge that his client hasn't received a subpoena and characterized Burstein’s impromptu comments in open court as “beyond the pale.” A later statement from a Fox News spokesperson (see below) acknowledged, however, that the company has been “in communication with the U.S. Attorney's office for months.”
The company's spokesperson has released the following statement: “The court granted Fox News’ motion to send Andrea Tantaros’ case to arbitration, where it always belonged, and rejected her counsel Judd Burstein’s histrionics. Apparently one of Mr. Burstein’s other clients has received a subpoena. Neither Fox News nor 21CF has received a subpoena, but we have been in communication with the U.S. Attorney’s office for months — we have and will continue to cooperate on all inquiries with any interested authorities.” [The Hollywood Reporter, 2/15/17]
Bharara Was Fired By Trump After Being Asked To Stay On
Bharara Agreed To Remain As U.S. Attorney After Meeting Trump In November. As The Washington Times reported, Bharara met with President Donald Trump in late November and “confirmed he accepted Mr. Trump’s offer to stay on the job.” Then Sen. Jeff Sessions, whom Trump had nominated to serve as his attorney general, also asked Bharara to stay in the job. From the November 30 article:
Mr. Bharara, who was appointed by President Obama, confirmed that he accepted Mr. Trump’s offer to stay on the job after a meeting at Trump Tower in Manhattan.
“The president-elect asked — presumably because he’s a New Yorker and is aware of the great work that our office has done over the past seven years — asked to meet with me to discuss whether or not I’d be prepared to stay on as the United States attorney to do the work we have done, independently, without fear or favor for the last seven years,” he told reporters in the lobby of Trump Tower.
He said that he has already spoken to Sen. Jeff Sessions, whom Mr. Trump nominated for attorney general, about continuing to serve as U.S. attorney.
“He also asked that I stay on, and so I expect that I will be continuing to work at the southern district,” Mr. Bharara said. [The Washington Times, 11/30/16]
Attorney General Sessions Then Asked All Obama-Era U.S. Attorneys, Including Bharara, To Resign. On March 10, Attorney General Jeff Sessions asked all 46 U.S. attorneys remaining from the Obama administration to resign. [Los Angeles Times, 3/10/17]
Bharara Was Fired After Refusing To Resign. The Associated Press reported that after refusing to resign at the request of Sessions, Bharara was instead fired from his position as a U.S. attorney. [The Associated Press, 3/11/17; Twitter, 3/11/17]
NY Times: A “Pending Investigation” Of Bharara’s Appears To Focus On How Fox News Structured Settlements Of Claims Brought By Network Employees.” The New York Times reported on March 10 that it was “unclear what effect [Bharara’s] departure might have” on his office's ongoing investigations g, including a “pending investigation [that] appears to focus on how Fox News structured settlements of claims brought by network employees.” [The New York Times, 3/10/17]
Trump May Replace Bharara With Former Ailes Lawyer Who Helped Him With Harassment Damage Control
Bloomberg: New York Lawyers Speculate Marc Mukasey Will Be Nominated To Replace Bharara. Bloomberg reported on March 11 that “speculation is already building for who will be nominated by Trump as a permanent replacement” for Bharara and that “Many suggest it will be Marc Mukasey, a lawyer at Greenberg Traurig LLP with close ties to former New York Mayor and sometime Trump adviser Rudy Giuliani.” [Bloomberg, 3/11/17]
New York Magazine’s Gabriel Sherman: Bharara’s Firing “Ignited Speculation That It Was Designed To Blunt Investigations Like The Fox News Probe.” In a March 12 article, Gabriel Sherman, who has reported extensively about Ailes and Fox News, wrote that Bharara’s firing could be a “win” for Fox News executive chairman Rupert Murdoch because “the prospect of indictments” in Bharara’s investigation of Fox was “a serious problem” for the network. From the report:
Trump’s decision to fire Bharara ignited speculation that it was designed to blunt investigations like the Fox News probe. In November, Trump had promised Bharara he could remain in the job. But on Friday, he reversed course and requested Bharara’s resignation along with 45 other Obama-appointed U.S. attorneys. (Adding to the intrigue, Trump’s prosecutor purge came less than 24 hours after Sean Hannity said on Fox News that Trump should “purge” the Justice Department of Obama-appointed officials.)
Given that Fox News is Murdoch’s most profitable division, the prospect of indictments is a serious problem. “They’re really worried,” one source close to the network said. Another insider said that Fox News executives considered the investigation “political” because Bharara had been appointed by Barack Obama. Which is why, for Murdoch, it must be a relief that Bharara’s replacement could be an ally. According to the Times, Trump’s shortlist to replace Bharara includes Marc Mukasey — who just happens to be former Fox News chief Roger Ailes’s personal lawyer.
Considering Mukasey’s close relationship with Ailes, he would surely come under pressure to recuse himself from the Fox News probe if he was appointed by Trump to succeed Bharara. “I have no comment,” Mukasey said when I reached him Sunday evening and asked if he planned to do so, should he get the job. [New York magazine, 3/12/17]
Sherman: Mukasey Was Part Of Ailes’ Legal Team. Sherman tweeted on March 11 that Mukasey previously worked as part of Ailes’ legal team and that he had labeled Sherman as a “virus” for his work in uncovering sexual harassment and assault allegations at Fox:
Shortlist to replace Bharara includes Ailes's onetime lawyer Marc Mukasey. Wonder what happens to that Fox probe?https://t.co/T0JdvGh5LL
— Gabriel Sherman (@gabrielsherman) March 11, 2017
Also, if Mukasey takes over, the Southern District will be run by a man who called a journalist reporting on sexual harassment a “virus”
— Gabriel Sherman (@gabrielsherman) March 11, 2017
Mukasey Reportedly Met With Ailes To Advise Him On Handling Harassment Allegations. Sherman reported that a few hours after his July 9 article revealing that six more women beyond Gretchen Carlson had accused Ailes of harassment, “Ailes held an emergency meeting with longtime friend Rudy Giuliani and lawyer Marc Mukasey at his home in Garrison, New York.” Vanity Fair quoted Mukasey as saying that he and Giuliani “provided personal, private legal counsel to Roger, whom we’ve known for years,” and detailed how Mukasey and Giuliani went to Fox’s headquarters to assist Ailes. [New York, 9/2/16; Vanity Fair, November 2016]
This item has been updated with additional information.