Jack Shafer

Wall Street Journal Europe Publisher Andrew Langhoff resigned yesterday, but why?

A hard-to-comprehend story in today’s Wall Street Journal alleges that Langhoff transgressed by pressuring Wall Street Journal Europe reporters into covering an advertiser, consulting firm ELP, and by contractually promising that WSJE reporters would cover ELP in “special report” sections. (The tainted stories in question now carry a disclaimer.)

There’s a third dimension to the scandal, which the Wall Street Journal article soft-pedals. It turns out that bulk-sold, discounted copies of WSJE were sold to the same advertiser, ELP, to boost circulation. I defy any reader to cull the salient passages and find any evidence or hint of circulatory wrong-doing by the publication.

For that sort of coverage, see today’s piece in the Guardian by Nick Davies, “Wall Street Journal circulation scam claims senior Murdoch executive.” Davies exploits the circulation angle, alleging that the WSJE publisher “set up a complex scheme to channel money to ELP to pay for the papers it had agreed to buy—effectively buying the papers with the Journal‘s own cash.” The Guardian also calls Langhoff’s resignation a “damage limitation exercise” prompted by its inquiries into the scandal. The Wall Street Journal calls the resignation a result of an “internal probe” into the special-report articles and a circulation agreement with ELP.

Will the scandal go bigger or will it burn itself out in a couple of days? Rupert Murdoch’s News Corp., which owns the Wall Street Journal Europe, has already copped to the journalistic sins of having a publisher promise an advertiser coverage and of leaning on reporters to produce it. This behavior is considered very, very, unclean in the world of publishing when conducted covertly. But when the advertiser-pleasing copy is produced overtly in special sections, the worst publishers are accused of is opportunism. Today, most quality newspapers assemble special sections themed to energy, transportation, education, philanthropy, investing, health, et al. These sections, which contain soft or backgrounderish copy, are propped up by lucrative ads from the major industries doing business in the theme area. So great is the publisher’s appetite for special sections that if the New York Times could persuade Eukanuba, Purina, and Hartz Ultraguard Plus Rid Worm tablets to take out gigantic ads, it would gladly print a “Your Dog’s Retirement” section. Twice a year.

The Financial Times, for example, hammers together special sections with laughable regularity. Yesterday’s FT special section, “Canadian Energy,” contains big-ass ads from Chevron, Shell, and the American Petroleum Institute. Are you dying to read “Oil shifts country’s centre of gravity”? Does “Technology opens far-flung possibilities” float your boat? Then grab a copy before they all disappear.

The articles in most special sections aren’t embarrassing or unethical as much as they’re useless. You’ll rarely find a critical article in a special section, so why bother reading? The intended audience for special sections isn’t readers, it’s advertisers. As a rule, special sections are two steps up from supplements titled “Advertising Supplement,” which are written by outside writers, and two steps down from a newspaper’s regular coverage. There are good special sections out there—I’m thinking of the ones that run in the Economist—but most of them suck.

As for the Wall Street Journal Europe‘s circulation problems, that scandal could grow, too, especially if Murdoch’s minions don’t force others to walk the plank. (The best way to stanch a scandal is to feed it human flesh.) But again, the standard newspaper circulation scandal isn’t what’s illegal, it’s what’s legal, to cite Michael Kinsley. For decades, publishers and advertisers have used their captive, the Audit Bureau of Circulation, to expand the definition of what constitutes paid circulation. The definition has grown so broad that it wouldn’t surprise me if it started including monarch butterflies and fallen autumn leaves in its official counts of newspaper circulation. For more about the ABC and how the organization’s blind-eye generosity contributed to the last decade’s circ scandals at Newsday, the Dallas Morning News, Hoy, and the Chicago Sun-Times, see my 2004 piece from Slate.

Still, even by the low standards of the industry, the Wall Street Journal Europe circ shenanigans seem pretty wild. According to the Guardian, the Wall Street Journal Europe had a circulation of 75,000 in 2010 of which 31,000 of which were sold at a steep discount for distribution to students, who “may or may not have read them.”

What’s the bigger scandal? That the WSJE had a pitiful circulation of 75,000 in 2010? Or that 41 percent of that circulation was ginned up in an arrangement that the Audit Bureau of Circulation deemed “legitimate,” as Davies puts it? I think the former.

How will Murdoch get out of this one? The last time one of his newspapers got him into ethical trouble, he had it exterminated. But killing News of the World didn’t stop the bleeding. For such an ethically compromised businessman, this has got to be a sideshow.

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PHOTO: News Corp Chief Executive and Chairman Rupert Murdoch arrives, sitting next to a copy of the Wall Street Journal, to attend a parliamentary committee hearing at Portcullis House in London July 19, 2011. REUTERS/Andrew Winning

By Jack Shafer
The views expressed are his own.

What were the London police thinking when they invoked the Official Secrets Act last week to compel Guardian reporters Amelia Hill and Nick Davies to disclose the confidential source for their July 4 Milly Dowler phone-hacking story? Did they think the Guardian would roll over when they arrived in court on Friday to contest the order? That Hill and Davies would submit? That free-speech advocates, members of Parliament, and journalists around the world would pay no mind to the prosecutorial over-reach?

Whatever the Metropolitan Police thought, they’ve rethought it today, announcing that they’re dropping for the time-being their request for a court order that the Guardian give up its sources.

With the perfect vision that comes with hindsight, it now appears that the court order was a bluff. As the Guardian reported yesterday, the Met did not consult the director of public prosecutions before wielding the Official Secrets Act, as the 1989 law requires. He was only consulted on Monday. In other words, the London police went rogue. If that’s the case, perhaps the goal of the cops was to give the Guardian and its journalists a fright and deter other reporters from investigating the pile-up of journalistic malfeasance, crimes by private detectives, corporate malfeasance at Rupert Murdoch’s News Corps., and, of course, bribe-taking by the Metropolitan Police.

But as all game theory enthusiasts know, a bluff—even an empty bluff such as the Met’s—can disturb the existing equilibrium and leave one’s opponent unsettled. The police may have calculated that the psychological damage done to journalists by requesting a court order would be worth the black eye the police might suffer for making it. But that’s giving the police too much credit for thinking ahead. If they had the skill to think ahead they would have prosecuted the phone-hacking cases back in 2007 when the evidence was fresh.

The Metropolitan police’s targeting of the press—like Rupert Murdoch’s decision to pay out $4.7 million in News Corp. guilt money to Dowler’s family and charity—indicates a frantic turn in the phone-hacking story. The police are now conceding they don’t really understand the law. And Murdoch is conceding that his now-dead newspaper, News of the World, committed the very crimes at the center of the scandal.

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If you’ve got a spare $4.7 million, send it in bitcoins to Shafer.Reuters@gmail.com. For confirmation of delivery, see my Twitter feed. (This RSS feed rings every time a new Shafer column goes live. This hand-built one rings every time a correction is filed.)

By Jack Shafer
The views expressed are his own.

London’s Metropolitan Police, who helped cover up the U.K.’s phone-hacking scandal for the better part of a decade, have finally figured out how to crack the case. Attack the press.

The Guardian, which kept the story alive after Rupert Murdoch’s News of the World minions, top politicians, and the cops throttled it, reports that the Metropolitan Police have requested a court order to force two of its reporters, Amelia Hill and Nick Davies, to surrender their confidential sources from their July 4 Milly Dowler phone-hacking story. Hill has already been questioned by police.

The Met is making its demand under the  Official Secrets Act, which is usually invoked in national security cases. In 1985, Ministry of Defence employee Clive Ponting was prosecuted under the act for divulging information about the sinking of an Argentinean ship during the Falklands War. In 2002, counter-intelligence officer David Shayler was convicted of giving secret documents to a newspaper. In 2003, U.K. government employee Katharine Gun was charged under the act with leaking to a reporter email from the National Security Agency requesting help in bugging the United Nations offices of six countries.

But the act’s fine print also criminalizes leaks of “damaging” information by government officials that could impede the prosecution of criminal suspects. It’s through this window that the police hope to push their court order.

Although I’m appalled by the Met’s assault on the freedom of the press (as we ACLU sympathizers like to say), I’m mollified by the fact that after years of dilly-dallying, the Metropolitan Police are finally taking the phone-hacking case seriously—even if they are punishing a pair of reporters whose only crime is having uncovered long-term wrong-doing that the police previously entombed. The real criminals in the phone-hacking scandal are, of course, the newspaper editors and reporters who hacked phones or ordered them hacked; the private investigators who did the journalists’ illegal bidding; the newspaper executives (Rebekah Brooks? James Murdoch? Les Hinton?) who facilitated the crimes; and the police who, for reasons of self-preservation, pushed the scandal under the carpet.

The circular logic behind the Met’s request for a court order delivers more torque than a spinning Ferris Wheel: The police want the Guardian‘s reporters to surrender the confidential sources who blabbed about the illegal phone-hacking, arguing that the stories are impeding an investigation. But the police had for years deliberately ignored the information that was ultimately leaked to the Guardian! There was no police investigation for the Guardian to “impede” until the Guardian brought the facts to the public’s attention and the public demanded that the police do their job!

Had the Guardian reporters not “impeded” the police investigation, News of the World journalists and their like-minded colleagues in the press would have remained undeterred in their efforts to break the law to break news. Likewise, we probably would have never learned that News of the World hacked a dead girl’s phone, simultaneously interfering with a police investigation and giving the girl’s parents false hope that she was alive.

That the police have a grudge to settle with the Guardian and the press goes without saying. The press has been making life miserable for the cops. Earlier this summer, the Guardian‘s Davies reported that police have collected thousands of pounds of bribes from a detective employed by journalists. Reuters’ Mark Hosenball also reported the existence of e-mail traffic okaying the payment of a “four figure sum” by News of the World to a police contact. (Cops hate it when you reveal the source of their donut money.) In 2007, Andy Hayman, the lead police investigator in the phone-hacking case, left the force in the wake of questions about his professional conduct. His destination: a post as columnist for Murdoch’s Times of London. Over the summer, Police Commissioner Sir Paul Stephenson was forced to resign when his personal links to a News of the World editor arrested in the hacking investigation were revealed. Assistant Commissioner John Yates, who neglected to reopen the phone-hacking investigation after he reviewed it in 2009, also resigned this summer following assertions that he had mucked up the probe.

How badly did Yates neglect the investigation? Between 2006 and autumn 2010, nobody in Scotland Yard “bothered to sort through” the “11,000 pages of handwritten notes listing nearly 4,000 celebrities, politicians, sports stars, police officials and crime victims whose phones may have been hacked by the News of the World,” as the New York Times‘ Don Van Natta Jr. reported in July. Said Yates in defense of his investigative priorities, “I’m not going to go down and look at bin bags.”

Stephenson, Yates, and Hayman have recently been cleared of misconduct in the case, but it’s a rare police force that doesn’t hassle the press for exposing its transgressions and embarrassments. The best way to grade a news organization is to ask when the government last subpoenaed its reporters. If it’s been longer than two years, the news organization hasn’t been doing its job.

The Guardian provides a perfect example of no good deed going unpunished. The explicit target of the court order is the Guardian journalists, but the unsubtle message to leakers of police misbehavior everywhere is this: Do the right thing and we will smoke you out and send you—and your sources—to jail.

The Guardian‘s Dan Sabbagh asked an excellent question on Twitter this afternoon: Why didn’t the Met police go after the Telegraph with the Official Secrets Act after it published—in defiance of Parliament—its 2009 investigation of the misuse of expense budgets by members of Parliament? Sabbagh’s analysis is dead-on: If airing evidence of Parliament’s wrong-doing before the authorities have sanitized it isn’t “impeding” an investigation, nothing is.

This isn’t the first time the police have tried to shut down the Guardian‘s phone-hacking investigation, as it reports today. In December 2009, Commissioner Stephenson tried—unsuccessfully—to convince the paper that its coverage of the affair was overblown. But last summer in testimony to the select committee investigating the scandal, he reversed himself and conceded the Guardian had been right to pursue the story.

When police botch a case, as the Metropolitan Police have, usually nobody but the press will investigate. When the police go crooked, as bribe-taking members of the Metropolitan Police are believed to have, you can’t always depend on the internal affairs department to set them straight. Your better bet is an unfettered press. Instead of harassing the Guardian with court orders, the cops should be buying Davies and Hill drinks.

That’s something even former Police Commissioner Stephenson might salute now.

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By my own yardstick, I am a failed journalist. Never has any police force subpoenaed me. If the Met has any spare court orders, won’t someone please e-mail one of them to Shafer.Reuters@gmail.com. For faster delivery, send them to my Twitter feed. (This RSS feed rings every time a new Shafer column goes live. This hand-built one rings every time a correction is filed.)

PHOTO: A traditional lamp stands outside a Metropolitan Police station in central London February 1, 2011. REUTERS/Luke MacGregor