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Why the Las Vegas Newspaper Scandal Matters to Arkansas and America (Gwen Moritz Editor’s Note)

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(A correction has been made to this column. See end for details.)

When I first heard that a newly formed company with anonymous financial backing had bought the Las Vegas Review-Journal on Dec. 10, I popped off an email to Frank Thomas, spokesman for Stephens Inc. Was his boss, Warren Stephens, in on that?

Thomas promptly replied that Stephens was not.

The next day I saw a story that revealed the price paid for the Review-Journal$140 million — and I knew that my question had been beyond silly. You see, Warren Stephens and his cousins, Witt Stephens Jr. and Elizabeth Stephens Campbell, had just sold the Review-Journal along with the rest of Stephens Media back in March for $102.5 million

Their buyer, the GateHouse Media subsidiary of publicly traded New Media Investment Group, had resold what had been Stephens Media’s flagship property to News + Media Capital Group for a mind-blowing profit that was as suspicious as the new owner’s anonymity. My husband worked for Stephens Media for 14 years and my opinion of the day-to-day management was not high, but there’s no way the Stephenses left that much money on the table. Just no way.

Obvious conclusion: This deal doesn’t pass the smell test. Nowhere was the stench more noticeable than in the Review-Journal newsroom, led until very recently by another name familiar to many Arkansans: Mike Hengel. Hengel had worked for Stephens Media and its predecessor, Donrey Media, on and off for decades. We were both a lot younger when he promoted me to city editor of the Pine Bluff Commercial after Donrey bought it in 1986, and he has also worked for the Southwest Times Record in Fort Smith and the Log Cabin Democrat in Conway. Mike’s son, Mark Hengel, was a reporter for Arkansas Business a few years back. 

Hengel, in quotes that his publisher literally stopped the presses to remove, publicly criticized the attempt at anonymity, and he ordered his reporters to find out who they were working for. Within days, the Review-Journal reported that a son-in-law of billionaire casino mogul and Republican megadonor Sheldon Adelson has been involved in the deal and discovered a connection between Adelson and the face of News + Media, Michael Schroeder

Rich guys — Stephens, Walton, Bezos, Buffett — have bought and sold newspapers since memory of man runneth not to the contrary, but they don’t do it anonymously. There can be no honorable reason for a newspaper’s owner to be a mystery.

Then things got weirder and smellier. In fact, I can’t remember a more disturbing story about mainstream media because it reveals systemic corruption rather than individual transgressions like the fabrications of Jayson Blair at the New York Times or the all-too-common cases of plagiarism.

The Review-Journal revealed that in November, just weeks before the sale, a GateHouse executive had ordered the newspaper to assign reporters to monitor three local judges for two weeks. Two of the judges were selected by reporters. The third target was dictated from outside the newsroom: District Judge Elizabeth Gonzalez, who specializes in hearing business disputes, including an ongoing case in which she had personally clashed with Sheldon Adelson — the guy who would soon pay tens of millions above market price for the Review-Journal.

Hengel didn’t know exactly why he was being ordered to use newsroom resources that way, and he didn’t know about the impending sale. He didn’t know that GateHouse, which has been contracted to continue managing the Review-Journal, had also tried to get reporters from its Sarasota, Florida, paper to investigate Las Vegas judges. (GateHouse acquired the Sarasota Herald-Tribune 13 months ago when it bought Halifax Media, a short-lived chain of newspapers of which Warren Stephens was the majority owner.)

Hengel never published any of the 15,000 words the reporters produced, but he turned their notes over to his publisher and the newspaper’s attorney. 

Curiously, however, a story critical of Judge Gonzalez was published — just not anywhere near Las Vegas. On Nov. 30, the tiny newspaper in New Britain, Connecticut, published an article about courts that specialize in business disputes — and it used Gonzalez’s performance in Adelson’s case as Exhibit A. 

The New Britain Herald is not affiliated with GateHouse or Stephens Media or Halifax. But its owner/publisher is a name I’ve already mentioned in this column: Michael Schroeder, the “manager” of the new Adelson company that just bought the Review-Journal

The byline on the 1,900-word article was “Edward Clarkin,” a journalist who apparently doesn’t exist. His byline has appeared a few times in publications with which Schroeder has been associated, but no one seems to know him. Coincidentally — I jest — Schroeder’s middle name is Edward, and the Review-Journal reported that his mother’s maiden name was Clarkin.

Whoever Clarkin is, he should be fired. The Hartford (Connecticut) Courant reported that several chunks of his article on judicial performance were plagiarized from other publications, and people he quoted said they never talked to him.

While Schroeder’s journalistic fortunes improve — he just bought a fifth newspaper, the Block Island Times in Rhode Island — real journalists are being forced out. Mike Hengel has taken a “voluntary” buyout. He told the Los Angeles Times that he learned he had taken the buyout from an editorial that the new Adelson management team wrote for the front page of the Review-Journal after Hengel’s staff identified the new owner. 

In Connecticut, a reporter for another of Schroeder’s newspapers, the Bristol Press, resigned on Christmas Day after two decades because even his family’s only paycheck wasn’t worth working for Schroeder anymore. Steve Collins had held on even after his wife — a fellow reporter, as is often the case — quit in disgust in 2011 after Schroeder “cut a deal with a major advertiser, the local hospital, to keep a damaging news story under wraps.” But the “Edward Clarkin” subterfuge, which also appeared in the Bristol paper, sent him over the edge. 

“In sum,” Collins wrote on Facebook, “the owner of my paper is guilty of journalistic misconduct of epic proportions.”

And this matters because what has happened in Las Vegas hasn’t stayed in Las Vegas. And it hasn’t just sent one lowly Connecticut reporter out into an uncertain job market. And Sheldon Adelson isn’t just a billionaire willing to overpay for a newspaper if the contract managers are willing to use reporters as unwitting operatives to put pressure on an unfriendly judge. Adelson is willing and able to spend so many millions on presidential politics that gaining his endorsement is known in GOP circles as the “Adelson primary.” Is this the ring you want your president to kiss?

And GateHouse isn’t just the company that is willing to do Adelson’s dirty work in Las Vegas in exchange for an obscene amount of money. It’s a company that owns scores of newspapers all across the country. GateHouse owns dozens of newspapers in Arkansas: Pine Bluff Commercial, Southwest Times Record, Daily Siftings Herald in Arkadelphia, Hope Star, Stuttgart Daily Leader, The Daily World at Helena and weeklies and semi-weeklies all over the state — Charleston, North Little Rock, Heber Springs, White Hall, Gurdon and many more.

GateHouse has owned properties in Arkansas for many years, and it had a well-deserved reputation for protecting its profits and executive bonuses at the expense of news. But until this month, we didn’t know just how low a mainstream news organization could go, and there is no reason to believe that GateHouse’s journalistic ethics aren’t for sale everywhere.

(Correction, Dec. 29, 2015: The newspaper at Pea Ridge, The Times of Northeast Benton County, has been removed from the list of newspapers owned by GateHouse. It is owned by a joint venture of Wehco Media, owner of the Arkansas Democrat-Gazette, and the Stephens family and was not part of the Stephens Media sale to GateHouse.)

Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com, but don’t expect a reply until Jan. 4.
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