Could Paramount Global and Shari Redstone find themselves facing bribery charges if they settle a $20 billion lawsuit with President Donald Trump, as three U.S. senators have suggested?
As pressure mounts on the Paramount chairwoman, legal experts dismissed the notion of bribery charges as a “non-case” — but that doesn’t mean Paramount would not face other legal actions if the company settles, they said.
“There is no real possibility that she’s charged with bribery first, just on the substance litigation,” former federal prosecutor Neama Rahmani told TheWrap. “There’s always uncertainty, so settling a lawsuit, I don’t think any judge anywhere would consider that a bribe.”
Entertainment and media lawyer Tre Lovell agreed. “There’s no bribery here because there’s actual litigation. There’s threats of damages of $20 billion and as a litigant you’re entitled to settle it,” he told TheWrap.
In order for the settlement to be seen as bribery, the alleged action must meet the bribery statutes, which would be giving a public official something of value with a corrupt intent to influence an official act. The experts were not convinced an action of settling a lawsuit by Paramount fits the bribery bill.
“It’s a little bit far-fetched,” said Dan O’Neil, a veteran telecom attorney. “Clearly there’s a lot written between the lines. But Trump has not said, ‘We won’t approve the sale if you don’t pay us.’ And the FCC says its approval of the sale has nothing to do with the lawsuit.”
“This is just political posturing,” said Rahmani, also the president of West Coast Trial Lawyers. “There’s no way the Department of Justice, any U.S. attorney in this country, is going to investigate or prosecute this case, both in terms of the weakness of the case [and] the political climate.”
Still, in a letter last week, three Democratic senators – Bernie Sanders (VT), Elizabeth Warren (D-Mass) and Ron Wyden (D-Ore) – warned Redstone that catering to Trump’s whims may be bribery.
And on Friday, media advocacy group Freedom of the Press Foundation sent the Paramount mogul a warning letter, outlining plans to file a lawsuit if the media company settles the Trump suit against CBS. That suit would be a shareholders derivatives lawsuit, which legal experts say are common.
The nonprofit itself is able to seek damages in this case because it owns shares of Paramount. It plans to act on behalf of itself and other shareholders, alleging that the settlement would waste corporate assets by “engaging in conduct that U.S. senators and others believe could amount to unlawful bribery.”
Last October, the then-Republican presidential candidate sued CBS News and Paramount for $10 billion over allegations of election interference by editing a “60 Minutes” interview with then-vice president and Democratic presidential candidate Kamala Harris that aired weeks before the election. That amount has since jumped to $20 billion.
Trump accused the news program of deceptively editing that interview. Legal experts have since called the lawsuit frivolous.
Since taking office, Trump’s FCC has also opened an investigation into news practices at CBS News. The FCC led by Commissioner Brendan Carr has to approve the media company’s Skydance merger, valued at $8 billion.
Still, Paramount is facing even more blowback that may land it in court.
Press group poised to sue
Rahmani said the derivatives lawsuit is typically filed when shareholders believe a company has done something illegal.
“The legal standard is: Did the directors, did the officers of the corporation, did they do something that hurt the corporation such that it affected the shareholder stock price?” he said. The Freedom of the Press Foundation and the senators are arguing that the settlement could have greater implications on the Paramount brand.
But the “business judgment rule” protects executives, like Redstone, from shareholder suits like this one, according to Lovell.
“The business judgment rule says as long as you act in good faith and as long as you have properly reviewed and considered all the relevant information and data to make a decision, even if your decision turns out bad or turns out to hurt the company, you can’t be sued,” Lovell explained.
Redstone would be protected under this ruling, he said, because it intentionally gives business owners greater freedom in decision making, as long as they act with good intent.
Despite the tumult at the company, Paramount shares are up 14% since the start of the year.
But veteran telecom attorney O’Neill said that Redstone still doesn’t know if settling the lawsuit will satisfy the FCC enough to approve her $8 billion merger. “Either way she’s roadkill. It’s a bad look,” he said.
State AGs or local DAs could lead the charge
As far as who would bring the bribery case forward, legal experts said it must be an attorney general or district attorney. Senators do not have this power. Typically the injured party brings a bribery case forward. In this case, O’Neill said the lines of who is hurt by the settlement are murky.
“Arguably, it could be any other broadcast network. It could be any consumer of news. I mean, you would have to show that you are an injured party,” O’Neill said. “It could be a state attorney general who could argue on behalf of the citizens of California.”
Rahmani argued, though, that because the blame lies on a federal official – Trump – it would make sense for a state official to bring the case forward. But the bribery crime would be considered a federal crime. He stood firm that “there’s no world where this would be investigated.”
Lovell agreed that if Trump was not involved in the bribery case, his DOJ could bring the case forward, but as it stands, it remains unlikely.
“Could it be brought by some state attorney general? Possibly, if people affected could have been part of that state that has bribery laws,” Lovell said. “But I honestly think it’s more of a shot across the bow.”
“It’s a successful way to draw attention to the argument that she may settle in order to curry favor with the administration,” a former FCC official who declined to be identified told TheWrap.
“It’s bad to have the president bully the media and reporters into getting his way,” Rahmani added. “It’s more of a First Amendment free speech issue, independent news court issue, as opposed to this being a bribe that should be prosecuted.”
Paramount faces additional pressure as they await the approval of their Skydance merger, which still needs to be pushed through by Carr. Redstone has a tough decision: settle to appease Trump but risk seeming politically compromised.
Critics also warn this legal action may set a dangerous precedent for media outlets being pressured into legal settlements in the future.
“People who care about journalistic freedom might want her to notice that people are paying attention, as a political act,” the former FCC official and lawyer told TheWrap.
O’Neill argued that if the case was brought forward, Redstone would be a pawn in a larger political scheme to expose Trump.
“I don’t think anybody cares about embarrassing Shari Redstone, per se. They care about embarrassing Trump for extortion,” he said.
Redstone’s lawyers are currently in negotiations with Trump’s, but there has been no word of any settlement.
The deadline for the FCC to approve the Paramount-Skydance merger has been extended to July 9 as the commission reviews how the company’s DEI policies comply with the Trump administration’s insistence on their removal. Legal experts say the company could get a second extension.
The lawyers agreed that Redstone is in a rare double-bind. Each decision she makes is under a microscope and has implications for future actions between Trump and the media.
“She’s caught up in a thing where her transaction is just bad timing, bad luck and bad timing,” O’Neill said. “It gives Trump leverage not just to screw around with Paramount and CBS, but also to indirectly intimidate everybody else.”
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