Chafee’s Ownership in the ProJo - Should They Disclose?

Monday, October 25, 2010


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The battle between the candidates has spilled into the very media covering them. A GoLocalProv investigation has found significant ownership interest by one candidate for Governor in the parent company of the Providence Journal.

“Of course you're concerned when politicians own majority interest in the main print media monopoly player in your market,” said state GOP Chairman Giovanni Cicione. “I think it would probably be fair for Senator Chafee to disclose those interests.” The Chafees do not have a majority ownership interest in A.H. Belo, parent company of the Providence Journal, but have stock ownership.

According to Lincoln Chafee’s U.S. Senate disclosure report, his immediate family owned at the time the disclosure form was filed in 2007 (for the 2006 Congressional year) a minimum of $3 million in ownership of Belo stock, the Dallas-based media company. Stephanie Chafee, wife of Lincoln Chafee is listed in the report as required by federal law.  What other ownership Mrs. Chafee's family now owns in A. H. Belo has not been disclosed. Calls to the Chafee campaign were not returned.

The Providence Journal has not formally disclosed to its readers this potential conflict of interest during the current election cycle, according to a GoLocalProv review of its online archives.

On Aug. 12 and Sept. 3, the Journal did report on Chafee’s filings with the Rhode Island Ethics Commission, in which he disclosed that his wife has stock in A.H. Belo. But the Journal never published a formal disclosure to readers, informing them of this potential conflict of interest, nor has it run disclaimers with its stories on the race for governor. Executive Editor Thomas Heslin did not respond to several requests for comment.

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Other media organizations confronted with conflicts of interest

In the 1990s, the Washington Post was forced to apologize to its readers for failing to disclose that one of its subsidiary companies would benefit from the General Agreement on Tariffs and Trade, which it had endorsed in its editorials. At the time, the newspaper’s ombudsman described the flap as “a heavy blow to the newspaper’s credibility.”

A columnist for the American Journalism Review said the incident was a lesson that newspapers should disclose their corporate holdings to their readers—even in news stories:

Every newspaper newsroom probably should post an updated list of corporate holdings, because there are so many possibilities for conflict in legislation, court decisions, administrative rulings, policy statements and the like. As ownership complexity grows, one can envision editorials and even some news stories awkwardly potholed with conflict confessions.

Is all this really necessary? … [Y]es, it is necessary. Our sensitivity about such things is one of the reasons our newspapers do a better job, in my opinion, than newspapers elsewhere in informing the citizenry about the complexities of public life.

In the current election, other media organizations have disclosed such conflicts. For example, in West Virginia, GOP Senate candidate John Raese owns radio stations in the state. Those stations run disclaimers when discussing the race on air. Colorado Senator Michael Bennet’s brother is an editor of The Atlantic, which the magazine discloses when it writes about the race.

In Rhode Island, a series of recent news reports on the Rocky Point Foundation, the Warwick Beacon ran disclaimers with its stories informing readers that its publisher was president of the foundation (click here and here for the stories.)

Likewise, in an investigative article about General Treasurer candidate Gina Raimondo and her firm, Point Judith Capital Partners, GoLocalProv published a disclaimer informing readers that before its launch it had met with representatives of the firm to discuss the future of media.

No disclosure from the Journal

The Journal has yet to publish any such disclosures or disclaimers since Chafee launched his run for governor. Nor has Chafee released his tax returns, which could show how much income he and his wife are collecting from her stock in A.H. Belo if anything.  

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Jennifer Duffy, a senior editor for The Cook Political Report, said it’s a “moot issue” since the stock is owned only by Chafee’s wife. If Chafee personally owned stock, she says it would complicate the issue. “I suspect some media organizations might feel that a disclaimer is necessary, but it’s really a gray area,” Duffy told GoLocalProv.

However, Stanley Baran, a communications professor at Bryant University, said the paper would have to make such a disclosure if Lincoln Chafee held the stock. “If such a situation does exist, the paper has no ethical choice,” Baran said. “It must disclose.”

Impact on the Journal’s reporting

“In our mind there has been a clear bias in the paper (Providence Journal) for Chafee,” said Gio Cicione, Chairman of the Republican State Committee. He added that the Journal has been “attempting to marginalize” Republican candidate John Robitaille by portraying the race for governor as a two-man contest between Chafee and Democrat Frank Caprio.

However, Darrell West, a former professor of political science at Brown University and now a vice president at the Brookings Institution, did not think the Providence Journal should have to disclose its relationship with the Chafees. “I haven’t seen any biases in the coverage,” West added. “It seems like the coverage has been typical campaign coverage. Some people complain about it. I personally have not seen issues in that regard.”

Linda Levin, a professor of journalism at the University of Rhode Island, also defended the paper’s coverage of the governor’s race. “I think they’ve been reasonably objective about it,” Levin said. “I think they've tried to balance out all the stories.”

The campaigns for Caprio and Robitaille declined comment.

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Value of $69 million at time of Projo’s sale

At the time of the Providence Journal’s sale to A.H. Belo, Lincoln Chafee’s father-in-law, Murray S. Danforth, III, owned 5.2 percent of the Providence-Journal Corporation according to SEC filed documents.

The sale of the Providence Journal totaled $1.5 billion for the newspaper and a group of television stations. Danforth’s stock had an estimated valued at $69,397,000 at the time of the sale to Dallas-based Belo, according to SEC documents. The stock sold for $32.53 per share, according to published reports in the Providence Journal.

How much stock Chafee’s family and in-laws own in A.H. Belo has not been disclosed nor is their any legal requirement for them to do so.

Boston Globe reported at the time of the sale, on September 27, 1996: “Providence Journal Co. has agreed to be bought by Dallas Morning News owner A.H. Belo Corp. for $1.5 billion in cash and stock, ending 167 years of local and family ownership of Rhode Island's dominant newspaper.”

Since the sale of the Providence Journal, the industry and the Providence Journal’s circulation and sales have fallen dramatically. According to the newspaper industry’s measurement organization, the Audit Bureau of Circulation, the Providence Journal’s circulation has fallen to less than 10 percent of the population, just 99,573. In 1999, the Providence Journal’s circulation was in excess of 199,000.

“Repeatedly, has been contacted by the campaigns of the other candidates for Governor raising concerns about the fairness of news coverage by the Providence Journal regarding the Governor’s race. Our news team had started to look into the matter both from a financial and a media fairness perspective,” said Josh Fenton, one of the founders of GoLocalProv, a Providence-based news and information digital platform.

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Professional standards

According to the Society of Professional Journalists, reporters and editorial writers should:

• Act Independently
• Be free of obligation to any interest other than the public's right to know.
• Avoid conflicts of interest, real or perceived.
• Remain free of associations and activities that may compromise integrity or damage credibility.
• Refuse gifts, favors, fees, free travel and special treatment, and shun secondary employment, political involvement, public office and service in community organizations if they compromise journalistic integrity.
• Disclose unavoidable conflicts.
• Be vigilant and courageous about holding those with power accountable.
• Deny favored treatment to advertisers and special interests and resist their pressure to influence news coverage.
• Be wary of sources offering information for favors or money; avoid bidding for news.



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