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January 30, 2006 - New York, New York
In the opinion industry, pundits who present themselves as independent voices sometimes turn out to be quietly financed by powerful interests. The latest example BusinessWeek has unearthed: The Hill, a Washington newspaper read closely in Congress, published an opinion piece last June extolling "payday loans." Readers weren't told that the author, Tom Lehman, a professor at Indiana Wesleyan University, had taken money from the industry that pushes these controversial high-interest loans.
In other instances, BusinessWeek Online has recently identified Douglas Bandow and Michael Fumento, two prolific authors of newspaper opinion pieces who received undisclosed payments from business interests they wrote about. Both lost their nationally syndicated columns as a result. Fumento acknowledged just last week that in 1999 he benefited from payments totaling $60,000 from agribusiness giant Monsanto Co. (MON), a subject of praise in Fumento's opinion columns and a book. Scripps Howard News Service canceled his column. Bandow resigned last month from Copley News Service after he admitted writing as many as two dozen op-eds for which he was paid $1,000 to $2,000 each by embattled Washington lobbyist Jack Abramoff.
The phenomenon of pundit payola drew attention early last year when conservative commentator Armstrong Williams lost his weekly column with Tribune Media Services (TRB) and apologized publicly after media reports that he had accepted $240,000 from the Bush Administration to applaud White House education policies. Two other columnists also were found to have accepted government cash in the Williams affair.
More often, money flows from an industry or a lobbyist rather than a branch of government. The tradecraft for fixing media opinions varies and sometimes involves public relations firms, Washington front groups, or other intermediaries.
All this has editors at some of the country's most prestigious newspapers worried. "The value of a good op-ed page is that we are presenting, we hope, the best, most provocative, and most substantive unpurchased opinion," says Fred Hiatt, editor of The Washington Post's editorial page. The paper receives about 100 op-ed submissions a day, and Hiatt frets that a few undisclosed conflicts of interest might get past him.
In November, the Post published an "editor's note" concerning an op-ed that had run earlier that month under the byline of Newt Gingrich, the former Speaker of the House. Gingrich had criticized specialty hospitals that focus narrowly on select fields and "cherry-pick only the easy cases." Gingrich, the paper explained, hadn't disclosed that HCA Inc. (HCA ), a major hospital chain that competes with specialty hospitals, and an industry trade group had contributed financially to the Center for Health Transformation, an outgrowth of Gingrich's Washington consulting firm. A Gingrich aide, Rick Tyler, took the blame for the incident. Tyler said it was he, not Gingrich, who had failed to alert the paper to the potential conflict.
Sometimes stealth sponsorship of media opinions is more convoluted. Such was the case with economist Lehman's friendly column about payday loans published last June in The Hill, the thrice-weekly paper aimed at lawmakers and their staffs. Payday lenders offer high-interest loans secured by the borrower's next paycheck. Consumer advocates say the expensive loans exploit the working poor. "Although payday loans are often criticized for being too costly, my analysis suggests that they are actually less expensive than bank overdraft services for many consumers," Lehman wrote. He was identified only as a professor at Indiana Wesleyan in Marion, Ind.
But the article's origins weren't so simple. Lehman says he had been paid $1,000 to $2,000 by an outfit called the Consumer Credit Research Foundation to analyze payday loans. The foundation has neither offices nor employees. A phone number on its Web site leads to Washington PR man Robert Hoopes, who says the group is funded by the payday-loan industry. Hoopes, a former Democratic congressional staffer, says he repackaged Lehman's research as an op-ed for The Hill, but he sees nothing improper about it. "We are funded by the payday-loan industry, and we have always been very up front about that," he says. "Tom's work for the foundation is extremely well known, including in press releases and among his peers."
Lehman also insists there was no conflict. He says he disclosed his industry paycheck to his university, which, he adds, encourages professors to publish frequently. He says he was paid only for the initial research, not the op-ed piece.
The Hill's editor, Hugo Gurdon, says he can't recall whether he knew about the industry's role in Lehman's op-ed. But the editor says that if he had known, he probably would have rejected the piece or at least required that the potential conflict be disclosed.
In the Monsanto case, the company acknowledged after inquiries from BusinessWeek Online this month that it had indirectly paid $60,000 to columnist Fumento. The money went to the conservative Hudson Institute in Washington. Hudson passed along most of it as part of his salary as a senior fellow at the institute. Fumento says the rest was used for overhead at Hudson. He adds that the money supported his book BioEvolution: How Biotechnology Is Changing Our World, which was published in 2003 and lauded Monsanto and the biotech industry. Fumento says he didn't reveal the company's backing in the book at Monsanto's request. Company spokesman Chris Horner doesn't dispute this but says Monsanto records don't indicate that the money was for a book. Disclosing the payment "would be a credibility issue in terms of the book," Horner says.
Fumento says that he saw no conflict of interest in recent newspaper columns defending agribusiness and biotech crops because the Monsanto grant came several years ago. "If you're thinking quid pro quo," he says, "I think there's a statute of limitations on that." The money didn't influence his writing, he adds. His syndicate, Scripps Howard, felt differently. On Jan. 13 it canceled Fumento's weekly column.
BusinessWeek, Eamon Javers, Staff Writer
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