N&O’s Interest Conflict In Lobbyist Newsletter Deal

The McClatchy Company’s liberal/leftist Raleigh News & Observer claims to be “a “watchdog” that looks out for the public’s interest.

Last December N&O public editor Ted Vaden, self-described “ readers’ advocate,” penned a column - “The watchdog still barks -- and bites” – in which he gushed about he N&O’s “continuing commitment to performing the watchdog function.”

But just this past Sunday Vaden's column was a justification of “the public’s watchdog's” entering into what’s meant to be a moneymaking deal for both a lobbyist whose clients include pharmaceutical and other health care companies and the N&O.

Here, in italics, is some of what Vaden said, with my comments interspersed in plain - - -

The "readers' advocate" began - - -

The relationship between one of The News & Observer's subsidiary publications and a Raleigh lobbyist has raised questions about independence of news coverage.

The N&O last month launched an e-mail newsletter called N.C. Legislative HealthWatch to cover health-related legislation in the General Assembly. The newsletter is written by Harrison J. Kaplan, a lawyer with the firm of McGuire Woods in Raleigh.

It is produced in partnership with The Insider, a state government affairs newsletter owned by The N&O. The Insider does the production, distribution and marketing of the health care newsletter, for which a subscription costs $399 a year.

Kaplan’s ties to health care interests prompted questions from Adam Searing, project director of the N.C. Justice Center's Health Access Coalition.

"(T)his new partnership raises questions about whether a health industry lobbyist should be joining with one of the largest media companies in the state to report on health issues," Searing wrote in a blog for N.C. Policy Watch, a liberal public policy advocacy group. "What gets reported on in this sort of newsletter may well end up in the more mainstream media. And, even with good will and the best of intentions all around, Kaplan's business provides an appearance of a conflict of interest regarding how and what he chooses to cover."

. . .

Folks, I can't see any problem with Kaplan writing a newsletter, covering whatever he wants and charging what the market will bear. His clients can decide if they’re OK with what he does.

The serious interest conflict involves the N&O, which is supposed to report the news, and its readers who expect the paper to do that.

If the N&O reports what’s newsworthy in Kaplan’s newsletter, than who’s going to pay $399 for it when they can read Kaplan’s news in the N&O which anyone can buy now at close to giveaway subscription prices?

The N&O knows that. So why would it do anything which would hurt the subscription sales of Kaplan’s $399 newsletter and the profit the N&O will make from The Insider's producing and distributing it?

Kaplan said that criticism reflects a fundamental misunderstanding of the nature of the newsletter. It is intended not as a traditional news coverage medium, he said, but as an insider tip sheet for health care attorneys and other professionals following bills in the legislature.

Don’t insider tip sheets often contain important news? Isn’t that why “attorneys and other professionals following bills in the legislature” pay big bucks for them? Do you think Kaplan, Vaden, and everyone else at the N&O don’t know that?

"The purpose is not to report the news like the newspaper does," he told me. "It was to let people know what is happening down at the legislature from someone who is down there all the time."

But isn’t that what the N&O assures readers it does?

Dowell said Kaplan is compensated based on the success of subscription sales. (Well of course.)

Kaplan and Dowell both said they saw no conflict between Kaplan's reporting product and his representation of clients who might be affected by the material he covers.

Once again, the very serious conflict here does not involve Kaplan and his clients who can cut him loose anytime.

The conflict involves the N&O, which if it reports the newsworthy material in Kaplan’s newsletter will take away people’s motivation to pay $399 for its tip sheet information and the N&O's readers who count on it to report that information in the paper.

With that in mind, look at what Vadan tells readers next.

John Drescher, executive editor of The News & Observer, said he doesn't see any conflict with The N&O's news coverage mission because the Insider and HealthWatch are separate entities not associated with his newsroom. "We're completely independent from them. I have no control over them, and they have no control over me. So it's not anything that would compromise the independence of the newsroom."

Drescher and Vaden really want you to believe that. That's why throughout his column Vaden shills the red herring of a possible lobbyist-newsletter conflict while ignoring the N&O's very serious news reporting conflict.

Drescher said material from Kaplan's newsletter would not end up in The N&O.

Of course not. As I've already said if the N&O did that, it would be killing what it hopes will be a nice moneymaking arrangement. Without making some money, how can the N&O pay Drescher, Vadan and its other employees salaries?

Can you believe there are N&O readers who swallow the N&O's baloney about its "public watchdog" role?

There’s a lot more in Vaden’s column, all of it meant to justify the Kaplan-N&O moneymaking partnership and to leave readers ignorant of the N&O's serious conflict of interest.

You can read it all here in Vaden's column with the misleading headline:"Looking at a lobbyist-newsletter relationship"