The BBC has admitted 15 breaches of its editorial guidelines and has bought documentaries for "nominal" fees aslittle as £1 from a company that was working to promote foreign governments such as the Egyptian regime of the now-deposed Hosni Mubarak.
The BBC Trust, which governs the BBC, said it was "deeply concerned" at the failings, which it said went "to the heart of the BBC's international reputation and risked undermining the editorial integrity of its output".
The broadcast regulator Ofcom has launched an investigation into the scandal, while the director general of the BBC, Mark Thompson, has ordered an end to the practice of acquiring news programmes for "low or nominal cost".
Earlier this year the BBC commissioned an outside company, FBC Media (UK), to make a documentary on the future of Egypt during the height of the Arab Spring – but the firm had a commercial relationship to promote Egypt as "liberal and open and business friendly". The programme warned of the threat of a takeover by hardline Muslims and aired shortly after the "Day of Rage" in Tahrir Square.
The BBC Trust has published its 66-page report into the BBC's failings in its use of funding and sponsorship for the making of current affairs programmes on its international channel, BBC World News. The report follows an investigation by The Independent into the practices of the London-based production company FBC (Fact Based Communications), which also worked for the government of Malaysia, led by Najib Razak, the dictatorship of Kazakhstan and numerous other countries and corporate giants including Microsoft and American Express.
FBC was commissioned by the BBC to make 20 current affairs documentaries, many of them on controversial political and environmental issues.
In its report, the BBC Trust's Editorial Standards Committee found "particularly serious" breaches of BBC editorial guidelines on conflict of interest in eight BBC programmes produced by FBC in the space of only two years, all of which featured Malaysia. The Independent has established that FBC was allocated £17m by Malaysia to conduct a "global strategic communications campaign". The Trust studied the FBC programming for the BBC and found that "the cumulative effect of much of the coverage seemed favourable to the Malaysian government and its interests".
Many of the shows dealt with Malaysia's controversial palm-oil industry. Studying one of the documentaries, the Trust said it "was concerned that there was an apparent acceptance of the palm-oil industry arguments, leaving them with the final word and without, on the face of the programme, challenging them or offering supporting evidence".
FBC told the BBC that it had not allowed its commercial operations to affect its programme-making. The BBC has ended its relationship with FBC, which went into administration in the UK last month.
Docu-drama: The Egyptian connections
In its report, the BBC Trust expresses concern over Third Eye: Egypt, a BBC documentary broadcast in March, which focused on Egypt's uncertain future at the height of the Arab Spring.
The Trust's Editorial Standards Committee noted the programme's ferocity towards the Muslim Brotherhood, which was gaining popular support. "Concerns focused on its attitude to women and how democratic it is," said the report. "The programme also examined the organisation's alleged links with the International Institute for Islamic Thought [and] reported that this Institute had been investigated, by the US government, for allegedly financing terrorism."
The committee's suspicions were aroused because FBC, the London production company behind the programme, went out of its way to link the Institute and the Brotherhood to Anwar Ibrahim, leader of the Malaysian opposition. FBC, which had made a number of other BBC documentaries about Malaysia, had been forced to admit to the BBC it had a financial relationship with Malaysia. "This critical reference to a Malaysian opposition politician in a programme focusing on Egypt did seem arbitrary and out of place," the committee reported. But it did not realise that FBC's roll call of clients also included the Egyptian investment ministry (Gafi) of President Hosni Mubarak. FBC documents obtained by The Independent include reports for Gafi in which it boasts of the work it did in presenting Mubarak's regime as progressive. It "co-ordinated with BBC World" to ensure coverage on the BBC's international channel of Mubarak's Finance Minister Youssef Boutros-Ghali, recently jailed for corruption. The company produced an "Egypt in Davos" report for its client in 2006. The report said FBC's work had been to "raise the profile of the messaging being delivered by the senior cabinet ministers – that Egypt is open for business and committed to political and economic reform". FBC also included an Egypt "bumper", featuring Boutros-Ghali in World Business, which it produced for the CNBC network.
Following The Independent's revelations about FBC's methods earlier this year, CNBC has suspended World Business and all other programming from FBC.
Further documents reveal that FBC made a 30-second commercial "promoting Egypt as an ideal investment location".
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