The Texas Tribune has been hailed as a new journalism model to save the craft from collapse after the success of the Internet. But can a news outlet take huge donations from lobbyists and corporations and not be influenced?
Appearances are Destiny
The complications were easily avoided. Instead, when Texas gubernatorial candidate Senator Wendy Davis came to Austin to speak to the Travis County Democrats, the event was mishandled by both her campaign and the party. The anger from reporters locked out of the Davis speech also revealed a simmering disdain that exists between the state's mainstream legacy media and the online political and government news site the Texas Tribune. The Davis event, in a microcosm, magnifies the presumptuousness of the Tribune and, in fact, the hypocrisies generally ignored by its editors in order to continue raising money from the people and institutions it purports to cover as a news agency.
Organizers of an annual fund raising dinner for Travis County Democrats barred reporters from the room for what turned out to be the most compelling and energetic speech thus far of the Davis Campaign. There was, however, one exception. Jay Root of the Texas Tribune was allowed in with camera gear to offer a "live stream" video of Davis talking to her supporters. Root, who had asked permission several weeks in advance, was not required, as would normally be the case with a pool reporter, to provide notes to his competitors on what transpired during the fund raiser.
The locked out reporters were a tad upset, and not without reason. Although the Tribune was making the live feed available, the outlet's logo was onscreen and unavoidable. Any rebroadcast would have been a promotion of one media operation by another. When Davis Campaign spokeswoman Rebecca Acuna was asked if she would inquire about making the Tribune offer a clean feed of the speech without the logo, she had no idea what was being requested. Consequently, Davis' appearance and quotes were disseminated far less than if the event had been opened. Further, print reporters were disinclined to write longer or analytical pieces on Davis because they were not present to get reactions or interviews with attendees. The stories were about a public relations blow up instead of Davis.
The party insisted there was no space for more people and that the fire code was being violated, but reporters suggested it was, instead, just another event where the Tribune was getting favoritism. When Root was questioned about not making an effort to see that his colleagues were accommodated, he began asking if he were supposed to not cover it because other reporters had been banned. Quickly, he turned a long Facebook discussion into a cheering section for the live streaming of political events and frequently pointed out how exciting he found the new technology.
Live streaming is little more than setting up a video camera and microphones that send a digital and electronically altered real time signal that can be plugged into the Internet to be dispersed over the web from a server. As exciting as it may be to Root and the Tribune, TV stations in Texas have been doing, essentially, the same thing for decades with the only difference being the way the signal was distributed. Audio and video were transmitted via wire to a multi-box on the outside of a room. Various outlets then were able to plug their satellites into that box and send it back to their broadcast centers before anyone's logo had been placed on the screen. We thought that was exciting, too, and if we had tried to place our logo over the screen shot, we would have caused a riot among engineers and editors.
The Texas Tribune's live streaming gear is the product of another one of its fundraising campaigns, which are many and manifest, and, in spite of the fact the Tribune's management is unaware, quite controversial. The live streaming fund raiser, possibly the most innocuous and innocent of all the Trib's money chases, was managed through Kickstarter, a web site that facilitates donations to startups and various causes in exchange for gifts or other considerations. The project was launched after the Tribune received significant national exposure by providing a feed of the Wendy Davis abortion filibuster in the Texas senate. Even this little endeavor, though, showed the flaw in the Tribune's non-profit, donations and fundraising business model to support journalism.
While seeking contributors for their live stream technology, Tribune editors and reporters ran Twitter campaigns. The arrival of one particular gift caught the attention of editor Emily Ramshaw. Jade Chang Sheppard tweeted that she had "just backed live streaming the 2014 race for governor." Although the amount was not mentioned, Ramshaw responded to Sheppard by saying, "Thank you for your unbelievably generous gift to our Kickstarter campaign." The amount of Sheppard's donation is not the only valuable information missing from their exchange, however. Neither Ramshaw nor Sheppard mentioned that the donor was a candidate in a special election for District 50 of the Texas House of Representatives. If she had won her race, Sheppard would have just given money to the news organization that would have been assigning reporters to write about her votes and policies as a state representative.
Which might have been the start of a sweet, cooperative relationship.
Ramshaw may not have known she was talking to a candidate in a district only seven miles from the Tribune's office, or she simply did not care. Either of those possibilities, however, is not acceptable to anyone who might believe the Tribune can do meaningful reporting on Texas politics and government. One suggests incompetence; the other points toward collusion. The Trib simply cannot be unbiased because it has become a part of the institutions it told the public it intended to scrutinize and hold responsible for good government. Regardless of the organization's intentions, there is no conclusion to reach other than the Texas Tribune has to be considered corrupted by its sources of funding.
In journalism, appearances are destiny.
The "non-profit" Tribune is the recipient of significant amounts of money from the same corporations and lobbyists that donate to legislators and other office holders to help them in their campaigns, and to influence the outcome of legislation related to those donor's special interests. In any context, this is a classic conflict of interest, and regardless of how much the Trib's editors might insist they are able to do their work without being affected by these funds, they have been in operation long enough to see there is no reason to take them seriously as a news organization, and the evidence to reach this conclusion is abundant.
It's also a kind of rank hypocrisy that is so grandiose as to be entertaining.
Sins of Omission and Commission
During the glory days of journalism at the Texas capitol in Austin, newspapers with large bureau staffs covered hearings and debates on legislation, almost every statewide campaign for office, and also held the governor and lawmakers accountable on a daily basis. TV stations from the four major cities maintained full time broadcast bureaus even when the legislature was not in session. We were expected to be on the air every evening with a new and important story. The hourly machinations of state government in the 80s and 90s were scrutinized by many sets of eyes. Big city newspapers circulated in Austin and reporters read and watched the competitions' stories to learn what had been missed, and so did the lobbyists and legislators.
After 22 years of being a part of that capitol press corps as a TV news correspondent, I joined a startup company that tried to launch a statewide network newscast and website. The Internet was just beginning its maturation process and we were hopeful. My final year in the business, however, ended with me traveling on the George W. Bush presidential campaign for that nascent news operation and, subsequently, I left journalism to begin work in public relations. In retrospect, my timing was excellent. The slow shutdown of every TV news bureau and reduction of newspaper staff sizes indicated editors and budget writers had made a decision about what interested their readers and viewers, and government did not make the cut.
Lamenting the loss of this type of news coverage became a popular Austin parlor game. John Thornton, however, saw a problem that needed a solution. A partner at Austin Ventures, a technology investment firm, Thornton thought that an alternative model of journalism was essential to meet a public need, even if legacy outlets no longer saw a demand.
"My latest fixation is the death of newspapers and sad state and trajectory of serious print journalism," Thornton wrote on his blog as he was launching the Tribune in 2009. "I believe that a vital press is critical to retail democracy, and I'm skeptical that market-based models alone will square that circle in the future."
Thornton's motives have always appeared honest but the means of ascent for the Trib have been infected by an unseemly symbiosis. I knew Thornton from my work with a few technology companies and we began a lively email exchange about the non-profit methodology of saving journalism. My argument against donations is that they require a belief in a non-profit and its missions, and that transforms the donors into partners, which means fairness is constantly at risk. The journalist can hardly be expected to focus their interests on a donor's bad business practices when there are so many other pressing issues, right?
The commercial model of journalism requires that quality reporting and writing attracts readers and viewers and advertisers pay money to get their business information in front of that audience. This is a clean, mercenary relationship, though it doesn't always work, either. In a reporting career that spanned three decades, I had one story killed because it was on the verge of pissing off a TV station's major advertiser. To assert, as the Tribune's management has from the outset, that donors will somehow not act to have their money promote their interests in a similar manner is disingenuous in the extreme. (I also worked at KPRC-TV in Houston where the news director issued an edict that no one from sales was to ever step into the newsroom.)
A partner-donor in most instances is a person who can expect to be able to put an arm around the editor's shoulder, in theory, and suggest, "We're all in this together so let's work something out. You need our money and we need you." In the traditional advertising model, either the news outlet or the advertiser blinks in any standoff. The story is killed and the money comes in the door or the advertiser takes their business to another broadcaster or publisher. The advertiser and the broadcaster do not share common goals like the donor and the publisher.
Advertisers do not write their checks for time or space with expectations of influence, but the same is not easily argued about contributors. Regardless, a few years after the Tribune had been in operation, Thornton seemed to almost champion what he referred to as "revenue promiscuity." Although he appears to have meant getting money wherever it might be acquired, the inferences to be drawn from the use of that phrase are still not as troubling as what has actually happened in the Texas Tribune's practice of "non-profit" journalism. The Tribune reports on lobbyists and businesses that provide it with sustaining money and politicians are turned into props for a finely tuned fundraising machine. This is also a model that has been lauded almost everywhere between the Back Bay in Boston to Santa Monica Pier in California.
Oh yeah, and there is journalism. But it's a weird new kind and it absolutely cannot be trusted.
Whether perceived or real, there is almost no reporting done by the Texas Tribune that does not come freighted with a conflict of interest. Executive Editor and CEO Evan Smith's idea of appropriately dealing with that conundrum is to post a disclaimer at the bottom of every story to alert readers that contributors or sponsors might have been used as sources, or even quoted. There often are also links to donor and sponsor lists, but readers have to be determined as hell and ridiculously diligent to make connections and find those conflicts. They ought to simply be disclosed within the body of the story, and they, generally, are not.
A 2013 Tribune story about a company called Fan Freedom is a perfect example of how the publisher fails at transparency and misleads readers. A lobby front group for Stub Hub, Fan Freedom was promoting a change in state law that would have removed limits on the re-selling of tickets to sports events and concerts. The Tribune failed to disclose anywhere in the story that Fan Freedom was one of its sponsors. A curious reader might find Fan Freedom listed on the corporate sponsor page but only the most determined was ever likely to learn the public relations firm handling Fan Freedom's issue before the legislature was also a Tribune corporate sponsor. The Trib, which also serves as a kind of wire service to other media in Texas, sent the story out for republication. When the Lubbock paper ran the Fan Freedom piece on its web site, the conflict of interest disclaimer used by the Tribune was nowhere to be found and there was no mention in the body of the report about any relationships between Fan Freedom, its PR firm, and the Tribune. Not exactly the day that fairness died in Lubbock, but a piss poor excuse for honest reporting.
There are numerous instances of reportage where the Tribune required its readers to play a conflict of interest version of "Where's Waldo." When the Sierra Club in Texas challenged the operation of coal fired power plants by an electric utility, which was owned by a company called Energy Future Holdings, the story appeared in the New York Times Texas edition on February 9, 2013 as part of a co-publishing partnership. The fifth paragraph offered a line that Energy Future Holdings was a corporate sponsor of the Texas Tribune. However, the disclosure was excised from the story the next day when it was published on the Trib's web site. A reader of the Times got important information about a special interest while a reader of the Trib had to play "find the conflict your own damned selves."
The Tribune has promoted itself as a source for longer stories about the complex issues confronting Texas, and, in fact, topics like immigration and water have gotten extensive coverage; except the information contained in those pieces is often delivered unscrupulously. One April 2013 report, which examined the notion of underground reservoirs in Texas, quoted James Dwyer in the first paragraph. He is an engineer with CH2M Hill, an Austin firm that is a reservoir consultancy, and, yep, (you've picked up on the trend by now), a Tribune donor, which was only knowable if you had searched the Trib's web site for that information because it was sure as hell not in the story. We might guess that he is in favor of the aforementioned reservoirs.
A water shortage is also what prompted a 2013 push for a constitutional amendment to spend $2 billion on water development projects after voters approved bonds. On the Energy and Environment page of the Tribune, a visitor would have seen ads from the Water Texas Political Action Committee, which was the baby of the Texas house speaker. The ads ran alongside news coverage of the debate on the bonds. In fact, the Tribune's marketing materials tell customers their ads can run on pages where their issues or topics of interest are reported.
The ubiquitous Evan Smith of the Trib also hosted two video taped conversations on the water bond election and Water Texas PAC was one of the sponsors involved in both of those discussions. Unsurprisingly, Smith invited only supporters of the bonds to be interviewed. In its state ethics filing, Water Texas PAC reported paying the Texas Tribune $8500 for what is listed as a "campaign event and Internet advertising expense." The only conclusion available after learning of that expenditure is that Evan Smith and the Texas Tribune had hosted two promotional infomercials for the bonds and tried to dress them in the garments of journalism.
Nice try, though.
The Tribune did cover a news conference by opponents of the bonds and published a guest editorial by a critic, but the overall editorial content was overwhelmingly positive in favor of the bonds' passage; there was also never any attention paid to the politics of Gov. Rick Perry's choices of people to manage the water bank where the money was to be held, and Perry's appointees have been very adept at taking advantage of their positions on state boards and commissions. The Tribune, generally, lacked any healthy skepticism on the bond project and certainly did not exhibit the scrutiny delivered by the left-leaning Texas Observer's October 31 analysis: "Prop 6: Slush Fund or Solution to Texas' Water Woes?"
The sinning of the Tribune has gotten so bad that it is a mathematical challenge to tally both those of omission and commission. There are, however, readers that refuse to accept the Tribune's version of the facts. New York-based blogger Stephen Robert Morse criticized Tribune fundraising in 2012 for possible conflicts of interest between Christus Healthcare and the Tribune. CEO Smith tried a head fake on Morse and suggested he was off base because editor Emily Ramshaw had written a story critical of Christus in December 2010. In another sin of omission, Smith left out the fact that Christus, a major recipient of state Medicaid funding, had not become a Texas Tribune sponsor until 2011. There have been no critical stories of Christus since that time. Maybe there's no real reason to write about Christus, or maybe the Trib does not want to pick on a donor. How is anyone supposed to know?
Smith's email to Morse, which sounded like intimidation, angrily told him that he needed to compare the Tribune's finances against for-profit news organizations. "You haven't done the work required to rip us a new one," Smith went on to say, "None of this ever influences the work that we do. I pointed this out to Howard Kurtz in 2009: The money we got from advertisers at the for-profit publications where I previously worked is greater than what we get at The Tribune."
Well, if he pointed it out to Howard Kurtz, then hell, it must be true and has to matter, somehow, but it was patently untrue that the Trib's donors and their wallets do not influence their journalism.
Kurtz might have believed Smith's nonsense but the real truth is in the data. Between 2011 and the first half of 2013, there were 50 high net-worth individuals who donated $1 million to the Tribune operations while also giving $18.8 million in 2012 to the candidates for the 208 elected offices that the Tribune covers. During that same period, the Tribune raised at least $1.4 million from corporate sponsors, many of which also were political donors. Tribune corporate sponsors gave $20.3 million to candidates in 2012. When the legislative session began, the donors and sponsors made 698 lobby registrations valued at between $18 million and $33 million, all with an express, unspoken purpose of influencing the policy makers who provide the quotes and subject matter for Texas Tribune stories.
Smith and his Tribune team must have known they were quietly being accused of softness with regard to the powerful lobby at the Texas state house. They worked up a project entitled, Bidness as Usual, described as a series of "occasional reports" with the implied purpose of going after the people who spend millions to influence the outcome of legislation; except the Trib was careful not to provide names or give gastric distress to even one of its lobbyist benefactors. The narrative device for one of those reports was built around a party for members of the House Calendars Committee. Sixty-five unnamed lobbyists, yes, unnamed, had spent $22,000 on a party to entertain the legislators who decide what bills make it to the floor for debate. Under no circumstances is it possible to think the Tribune's reporter Ross Ramsey, who is also the editor, did not know at least one of the donor's names. He simply left that information out of the story.
Although none of the funders of the government gala were identified, the Tribune still had the promotional audacity to call their story "jaw dropping," and, in a way, it truly was because Ramsey, who had to know some of the money men, failed, nonetheless, to report their names, so the public might learn who is trying to influence their hometown lawmakers with good wine, good food, and good times. Of course, if you name lobbyists picking up the tab in the story they are less likely to ever donate to your news organization, which is a simple calculus.
At least from a monetary standpoint, legislators appear to have a lower price point than the Tribune. An entire committee might be influenced, as suggested by the Tribune, with $22,000 "jaw dropping" dollars, but lobbyist Rusty Kelley donated $30,000 to the Tribune at the start of the 2013 session, and yet the site remains, according to CEO Smith, not influenced. Kelley's firm also gave $627,152 to legislative campaigns in 2012, according to a report by Texans for Public Justice. Texas Ethics Commission records show he spent $18,678 dining lawmakers and their staffs, and another $3,385 handing out gifts on behalf of his 53 clients. The absurd inadequacies of Texas ethics laws required Kelley to report lawmakers he provided with floral arrangements but not those who received his financial largesse.
The Trib was nothing, if not observant, of the rules governing Kelley and other lobbyists. Consequently, (here comes another one of those sins of omission), in the Tribune's ethics pieces, Bidness as Usual, there was no mention of Kelley as one of the news site's lobby patrons. Kelley did nothing unethical or precluded by existing law but the Tribune insinuated in its special report that 65 lobbyists (did I mention they were unnamed?) could influence the Calendars Committee by spending $22,000 on a party. Perhaps, but how exactly does the Texas Tribune insist its journalism remains unsullied when it takes $30,000 from a solitary lobbyist who has 53 clients with issues in front of the legislature?
Maybe the best approach is to do stories on lobbyists and keep the focus off of the Trib. Editor Emily Ramshaw had a piece in February 2013 about lobbyists' gifts to legislators. The story quoted Hillco Partners owner and spokesman Bill Miller who claimed the firm did not believe in giving "grand gifts" to legislators. "If you have to go to great lengths to remind someone that you're out there, you're probably not doing much of a job the rest of the time," he said. The quote, dropped into a story on gift giving to legislators, amounted to nothing more than a soft kiss on the cheek for a Tribune sponsor.
Ramshaw's work failed to point out that Miller has provided a few "grand gifts" that contradict his honorable sounding linguistics. In fact, in fairly grand fashion, Miller had once arranged for a former House speaker, a devout Catholic, to have a private audience with the Pope at the Vatican. Hillco is also a major donor to the political campaigns of Texas officials. A report by the independent third party group, Texans for Public Justice, showed Miller's organization gave political donations totaling $972,000 in 2012. Is it not fair to call that a touch of grandness? Ramshaw must have known but did not report that Hillco Partners is a financial supporter of the Texas Tribune or that Bill Miller was the liaison between the media and the late Houston homebuilder Bob Perry, whom she did not mention gave $110,000 to the Tribune in 2012.
In any case, Miller simply was not being honest or was having semantic joust with Ramshaw. What might be grand to her is lunch money to Hillco Partners. By the time Ramshaw had published her story, one of the firm's lobbyists already had handed out $1,518 in gifts to legislators and their staff members, and when the gavel fell on sine die to mark the end of the legislative session, Hillco's seven lobbyists had spent $39,319 wining and dining lawmakers and had given out $3,900 in gifts during a period of 150 days. These facts were conspicuously absent from Ms. Ramshaw's reporting, perhaps, because Miller had convinced her they simply were not "grand."
Hillco lobbyists, of course, operating under Texas law, did not have to name a single recipient of its donations, unless they exceeded a certain dollar amount per individual, and if Ramshaw bothered to ask who they were, she failed to identify them in her report. The Tribune does not practice complete transparency, either. Consequently, we have no idea how much money the news organization received from Hillco Partners over the years or whether Hillco was an active participant in raising money for the Tribune. We do know they appear frequently as sponsors of events and in banner ads on the Trib's web site.
The Tribune has published at least one article critical of a donor. The Bidness as Usual series reported on a pricey party for legislators put together by multi-million dollar lobbyists Andrea and Dean McWilliams. Not much was new in the Trib's report, however, since the story had first appeared on KVUE-TV in Austin.
The donations of Rusty Kelley and Hillco Partners to the Tribune can prompt a few wistful notions to those of us looking over our shoulders at the pre Internet journalism landscape. If the legacy media had simply agreed to take money from registered lobbyists to pay the rent and utilities and maybe purchase a little equipment, we might have been able to keep our jobs and continue reporting. Of course, journalism ethicists would have written dissertations on how we were prostituting ourselves and destroying a proud craft and important public service.
But the Texas Tribune is praised for innovative financing.
The Deadly Cure
The Texas Tribune launched in 2009 and was immediately hailed as the future of non-profit journalism. Supporters of the project failed to note that non-profits such as Consumer Reports and the Center for Investigative Journalism had been delivering great reporting for years, and ProPublica had established itself with hefty work on the potential problems of hydraulic fracturing, or fracking, in the exploration for natural gas.
The Trib drew attention, though, with more than $1 million pledged by the Austin venture capitalist John Thornton, and a combined $750,000 in grants from the Houston Endowment and the Knight Foundation. The fact that Thornton invested some of his personal wealth might have prompted the giddiness. His financial success has been the product of exacting due diligence before investing in technology startups, and waving his golden hand over the Texas Tribune concept gave it a deep, sturdy heartbeat at launch. Plus, he committed to keep it alive for several years out of his pocket, if necessary.
Thornton had recruited Evan Smith to be CEO and executive editor and promoted him as a "rock star" of journalism. Smith, who had been the editor of the glossy and successful Texas Monthly for 18 years, did not have experience in non-profit work. Nonetheless, he knew the importance of appearances of conflict of interest in journalism (before he started ignoring them) and understood innately that large corporate donations were anathema to unbridled reporting, and just plain looked bad. Smith told Washington Post media columnist Howard Kurtz "corporate backers were limited to $2,500 to avoid the appearance of undue influence."
The Tribune's expenses, though, had quickly exceeded its revenues by $610,000 through 2010 and the monetary foundation provided by Thornton was in danger of eroding into oblivion if a major change did not occur. The cap on corporations and fretting about the appearance of undue influence were suddenly no longer all that important as a standard. Smith conjured up a new concept called the Texas Tribune Festival, an annual policy weekend designed to put his operations back into the black. TribFest is underwritten by policy junkies and sponsors with vital interests in the topics of the program, which, bluntly, means corporations and lobbyists.
Money quickly stopped being a problem when Smith opened his loving arms to unrestrained corporate givers. The first festival was launched with $132,500 from the American Natural Gas Alliance (ANGA), an association of the biggest natural gas companies. ANGA's membership includes Devon Energy, a company conducting the most hydraulic fracturing in North Texas. ANGA had served often as a news source for Tribune stories and it seemed appropriate that they opened the first policy weekend with a party for reporters covering the event. Smith and the Tribune disclosed ANGA as a sponsor of TribFest but never revealed what had been given. The figure only became public through ANGA's filings with the Internal Revenue Service.
ANGA's cozying up to the Tribune might have simply been a pragmatic business decision for CEO Smith but for writer and activist Sharon Wilson the relationship delivered a reality check whack to the head. Wilson is a hydraulic fracturing opponent who has been blogging a long time and quite reputably under the name Texas Sharon. TribFest planners invited her to participate in a 2011 discussion on fracking but she made the observation that the panel was clearly biased toward the industry, and she was summarily uninvited.
"Maybe there is an explanation of the Tribune's behavior that isn't explained by financial influence of the natural gas industry," she wrote on her blog in 2011. "But if there is, it is past time for them to make their case. And from where I sit, it better be a doozy." The title of her article containing the criticism was, "The Texas Tribune Fracks the First Amendment." She has concluded there is no doubt the Texas Tribune is "corrupt."
ANGA, however, must have seen some kind of return on its donation, oh hell, let's call it what it was, investment in Texas Tribune. ANGA very soon afterward dropped $250,000 into funding a Conservative Roundtable of Texas. The money moved through the Washington offices of ANGA to the Austin offices of Chesapeake Energy as seed money for the roundtable. Does it even need to be mentioned that Chesapeake is also a major gas producer?
Ross Ramsey, an executive editor of the Texas Tribune, wrote a story about the Conservative Roundtable for the New York Times in February 2012. As talented a political reporter as any that have ever worked in Austin, Ramsey noted that a few businesses formed the roundtable as "an advocacy organization trying to apply business answers to legislative problems." Money, historically, tends to be that answer, but Ramsey did not say what businesses were behind the new group. These roundtable constructs, though not very artful, are useful to advance the political interests of big business because they can look like a grass roots effort, and they are never required to disclose donors. Ramsey suggested in his reporting that this particular roundtable was designed to offset the sentiments of the Tea Party.
Texas Tea Party enforcer Michael Quinn Sullivan took offense with the roundtable and Ramsey's characterizations. Sullivan's right wing website Agenda Wise accused the Tribune of being part of the "world of paid-for news." He offered no specifics but it wasn't exactly a wild-assed theory based upon the Tribune's incestuous relationship with businesses. If Sullivan had known about ANGA's financial ties to the Tribune and the roundtable, Ramsey's credibility on the story would have been shattered and his integrity on future pieces called into question. Ramsey and his publisher, however, were, presumably, unaware of the ANGA donation to the roundtable when he wrote his piece for the New York Times. When ANGA's IRS filing was made public in January of 2013, though, the Tribune didn't exactly revisit the issue and disclose its conflict of interest.
The Tribune appeared to have established an almost fiduciary relationship with the natural gas advocate ANGA. The Trib put out its hand for another $165,000 from ANGA in 2012. The gas association also donated $60,000 to the Texas Association of Business and $25,000 to the House Republican Caucus. The Tribune regularly reported on both of those groups, but, as CEO Smith would continue to insist, almost comically, it did not affect their journalism.
ANGA was certainly not unknown by the Tribune prior to its financial relationship with the site. Energy writer Kate Galbraith had frequently quoted an ANGA spokesman before the 2011 donation. She did a final time in December 2011, with a special disclosure at the bottom that ANGA was a "major donor" to the Tribune. She did not again use ANGA reps for quotes in her work. When a different reporter wrote about a study on the positive economic impact of gas drilling in South Texas, that journalist noted the Texas A&M International University study, which detailed the rosy findings, was underwritten by ANGA. No reader would have any clue that ANGA had given the Tribune large cash donations unless they looked at the boilerplate disclosure at the bottom of the story and then went searching on the Trib's site for information about ANGA's generosity and investment in balanced journalism.
Because the Internet has mugged the traditional journalism business model in broad daylight, these policy proms like the one funded by ANGA for the Tribune, have become a major source of income for news organizations. They do not, however, tend to generate news and are usually a vehicle for the sponsoring businesses and associations to deliver their messages under the banner of an allegedly unbiased news outlet, and they appear to work, quite well, actually. According to the environmental DeSmogblog, ANGA in 2012 also gave $100,000 to Bloomberg Businessweek, and $50,000 to the National Journal.
Watchdog groups are taking note and are likely to be kept busy by the development. The liberal Fairness and Accuracy in Media criticized The Washington Post in 2012 for allegedly stacking a policy conference with spokesmen for Big Oil over environmentalists. The Post ombudsman defended the conference by noting one panelist was a congressman who is "a strong environmentalist." A solitary strong environmentalist is hardly worth a hallelujah so the ombudsman turned to the "everyone-does-it" defense and mentioned similar programs by the National Journal, the Wall Street Journal and Politico.
Don't you feel better now?
"With the economic model for the news business broken, the pressure to get more revenue from these corporate-sponsored events is considerable. But they almost always come close to the line of looking like pay-for-a-point-of-view. It's important that the rules on these events be clear to readers and that participants come from a wide spectrum of views," wrote Post ombudsman Patrick B. Pexton. "Journalists are in the business of transparency; it's incumbent that we bend over backward to behave that way."
Instead, it appears there is a different sort of "bending over" taking place, and the Texas Tribune is a leading and learned practitioner of the art.
The New York Times in October 2013, however, appeared to give a wink-wink, nudge-nudge approval of the new journalism model, in which its reporting partner the Texas Tribune may have found some squishy moral ground. The paper noted that numerous media companies were sponsoring such events, "and concerns over conflict of interest, though still a delicate issue at some media companies, are largely bygone relics at others." The story quoted the executive director of the American Press Institute as saying: "What is the fundamental purpose the news organization plays for its community?' And the modern answer is that news organizations create knowledge for their communities, and you can do that in a lot of different ways. Events are another way of bringing people together."
They are also another way of making a community think fracking never harms ground water or causes mini earthquakes or that the guy talking about underground reservoirs is just an unbiased expert and would never, ever, under any circumstances, make a lot of money if the water bonds were approved. That's actually what the policy proms are all about. Plus, they are instrumental in transforming journalists from healthy skeptics into starry-eyed sycophants.
Nonetheless, when Forbes reported last year that the Texas Tribune had received a $1.5 million grant from the Knight Foundation, the magazine said the Tribune, "against all apparent odds, has hit on a sustainable model for funding important accountability journalism on a large scale and an ongoing basis; encouragement of other would-be news innovators to learn everything they can from the experiment and reproduce its results in their own communities."
"In Harry Potter terms, we're the boy who lived," said Evan Smith, the Tribune's CEO and editor in chief. "We have managed, for whatever reason, to make it work in a way that others have not."
Smith, once more omitting the most valuable data, failed to explain that the boy "lived" with a great deal of sustenance from the Dark Lord. Smith's operation has transitioned from $2500 limits on corporate donors to taking big checks from the big guys, and then pretending they have no influence, which is, for a journalist, as dishonest and unethical an act that there is to be performed; especially for a publisher. Under CEO Smith's leadership, the Tribune has developed a hybridized "promiscuous" revenue model that mixes donations with advertising and event sponsorships. Money flows in abundance from the corporations and lobbyists and special interests that also finance the campaigns for the 208 legislators and statewide officeholders covered by the Texas Tribune.
But remember, that has no impact on coverage. Just keep saying it. Eventually, you shall believe.
The unavoidable question is whether the new business model has gotten in the way of honest journalism. The answer by now is obvious: Hell yes. The Tribune has run numerous panels with sponsors sitting at the front table and conducting the discourse. A March 2012 Trib panel in Houston, focusing on energy and the environment, and sponsored by NRG, a nuclear power plant operator, included an NRG executive, and despite some previous negative stories by the Tribune's Emily Ramshaw, the stem cell firm involved in Gov. Rick Perry's treatment for back problems, Celltex, was a Tribune sponsor in 2012 and had an executive on a panel about stem cell therapy in Texas. Had Celltex gotten the idea that the best way to turn down the heat was to invest a little money in the Tribune?
A Code of ethics published by the Tribune in January 2014, stated, "sponsors do not determine the panelists, the subject matter or the line of questioning," and yet the history of many of the Tribune panels are, at the very least, tailored to topics of the sponsor's interest, and include sponsor representatives among members of the panel. Why else would they sponsor?
And what in the hell does any of that have to do with journalism?
R.G. Ratcliffe, who covered the Texas Capitol for almost 30 years for three major state dailies, has made ethics central to his work as a reporter. His coverage of ethics issues was referenced in The New York Times, the Washington Post and Atlantic magazine. Ratcliffe also appeared on a Bill Moyers special about the dubious fundraising of former U.S. House Majority Leader Tom Delay.
"When the Texas Tribune people first told me in 2009 that their financing plan would include corporate sponsors, I envisioned the kind of sponsorship you see for the cancer race or the music festival or public broadcasting," Ratcliffe said. "Instead, what we've gotten is a fundraising scheme that is more like that of a political action committee."
Ratcliffe, for almost a year, has talked to Tribune editors behind the scenes trying to get them to rethink their fundraising, urging them to be more transparent by reporting the actual dollars received by specific sponsors and directly disclosing potential conflicts of interest within their stories, not forcing readers to search a database for the conflicts. He said the Tribune staff has repeatedly rebuffed him. They consistently describe the money they receive as being exactly like advertising in the legacy media. Tribune editors have told Ratcliffe that the news organization should not be measured by the donors and sponsors but by the integrity of the individual journalists.
"Even if you have journalists with steel integrity, their credibility is undermined just as it is in the cash for coverage systems of media payments in third world countries. If they are not compromised, the system itself is still corruptible," Ratcliffe said. "Like the young couple in the song 'Wake up little Suzie,' what does it matter if your virtue is intact if your reputation is ruined?
CEO Smith and his team do not appear overly anxious about virtue, though. A whopping two-thirds of the Tribune's corporate sponsors are groups that directly lobby the legislature or hire lobbyists; are public relations firms that seek to influence public opinion on legislation; or are government entities that fall under legislative oversight. More than a third of all the money raised by the Texas Tribune in 2011 and 2012 was from special interests, and one dollar out of every five raised by candidates in the 2012 state elections came from donors and sponsors of the Texas Tribune. This is not sponsorship of the local cancer run or music festival. This is sponsorship seeking to determine how government affects business and citizens in their everyday lives, and who gets good tax deals.
The Tribune, however, just spent a year calling for greater transparency in legislative ethics, yet does not reveal how much money comes from each of its own corporate sponsors. A state university that provides space for a conference, for example, is treated the same as a special interest group that gives the Tribune more than $100,000. The grab the money and run attitude is so blatant at the Tribune that a lobby benefactor, the Texas Land Title Association, paid event sponsorships in 2011 and 2012 out of its political campaign fund at the same time it was financing candidates for the Texas House and Senate.
Really, though, there's not much difference between those two, if any.
CEO Smith and the rest of the Tribune's staff try to sound like they are walking the high road, making history, and salvaging real journalism from history's dumpster. They often draw attention to the venues for their festivals and panels and their magic money engine. Editors refer to spots like the "historic Austin Club," which sounds like a civic venue. The Austin Club, though, is housed in the old Millett Opera House and is a private group comprised mostly of registered lobbyists. They hold two-thirds of the positions on the Austin Club's 30-member board of directors.
The Austin Club's history is a result of being a prime location for lobbyists to meet with politicians. "Lobbying begins at dawn in Austin," read a 1957 Dallas Morning News Article, while a 1983 story included the club in a list of watering holes where, "a legislator can almost always count on a lobbyist to pick up his tab." Nothing much has changed. In the 1960s, the Austin Club barred lobbyists from entertaining African-American legislators, and when former Lt. Gov. Bill Hobby hosted a reception in 1992 for the capitol press corps to meet his candidate for president, U.S. Sen. Bob Kerrey, reporters attending the event were required to enter through a back door and ride a service elevator up to the reception.
The Austin Club has dropped racial exclusions and became more open to guests but remains the spot where lobbyists fete and feed so many legislators that it has become known as the "lobby cafeteria." During 2012 elections, lobbyists paid the club $54,607 to host fundraising receptions for legislators. Texas Tribune events, usually conducted over breakfast, are open to the public, but the real audience is the business lobby and its insatiable appetite for political intelligence. A registered lobbyist serves as the "promotional sponsor" of the Tribune events, which are also underwritten by corporations with a vested interest in the outcome of legislative policy. Oh, and just to make certain the venue is available when needed, the Texas Tribune pays for CEO Evan Smith to have a membership in the private club. He needs to mix with the right people, too.
Deals are cut at the Austin Club, benefits offered, advantages inferred and implied, and money goes where it is most conducive to achieving desired effects. For Smith to move comfortably in this environment, he needed to not be squeamish when offers appeared that assisted the Texas Tribune. One of the first came from Dallas energy tycoon T. Boone Pickens. Spending mightily on media in an effort to convince Congress to pass financial incentives for wind and gas energy projects, Pickens also saw value in offering the Trib a pledge of $150,000. He was right because Smith, in return, had one of his lame and tame "conversations" with Pickens, who pitched his plans to the audience.
T. Boone's commitment to quality journalism has not been a hallmark of his professional endeavors. In 1987, he played the Great and Powerful Oz and hid behind a curtain while pulling strings to drive out the publisher of the Amarillo Globe-News. The paper had printed an investigative series on a disproportionate number of drug convictions of Hispanic youth in neighboring Hereford, and that supposedly prompted a boycott by businesses. The publisher, though, knew the real reason no one was buying advertising for his paper and it was because it had printed a story about financial mismanagement at a university where Pickens was the chairman of the board. Morris Communications ended the boycott by replacing the publisher, and investigative reporting vanished from the Texas Panhandle.
Pickens and Evan Smith, though, are not really that strange of bedfellows when the Texas Tribune's major donor list is scrutinized.
Trial lawyer Steve Mostyn gave $100,000 in 2010, the same year he and his wife Amber poured $400,000 in the gubernatorial campaign of Democrat Bill White, and $1.36 million into the campaigns of Democratic candidates for the legislature.
Houston homebuilder Bob Perry in 2012 wrote the Trib a check for $110,000 while he also put $6.9 million into Texas political races. Perry, who died in 2013, was known for financing politicians who helped him limit lawsuits brought against his company for shoddy construction.
San Antonio grocery chain owner Charles Butt donated $100,000 in 2010 and 2012 and $200,000 in 2013.Politically, Butt is the founding force behind Raise Your Hand Texas; a group dedicated to fighting against public school vouchers and increased state expenditures for education. Butt donated $1.2 million to candidates and political committees affecting Texas policy in 2012.
The Texas Tribune appears to happily take whatever money is proffered for its benefit and financial survival as the institution's self-preservation becomes more relevant than the journalism it is supposed to produce. The Cynthia and George P. Mitchell Foundation of the Woodlands, as another example, which has had numerous energy matters before lawmakers, has also directly or indirectly put $650,000 into the Tribune's operating funds since 2010. The late George P. Mitchell is known as the father of hydraulic fracturing, a process using water to extract natural gas, and a frequent subject covered by reporters.
He was also a promoter of environmentally clean and sustainable energy. This was not simply about eco-altruism for Mitchell, though. Sustainable energy resources served the family fortune. A 2010 Credit Suisse whitepaper noted a connection between the non-profit's giving and the family's business interests: "Environmental sustainability was not only a central concern of George's, but also closely connected to the business interest of oil and natural gas through which the family's wealth had been generated."
Mitchell became a billionaire in 2002 when he sold his company and its interest in hydraulic fracturing of the Barnet Shale in north Texas to Devon Energy of Oklahoma. Stock in Devon is the primary source of income for the Mitchell Family Foundation. In 2008, Mitchell was Devon's second largest shareholder, and his son Todd was on the board of directors. Father and son also were investing heavily in producing gas from the Marcellus Shale of Pennsylvania, and Todd was placing capital in companies developing solar energy.
The Mitchell Family Foundation in 2008 created a $6 million partnership with the Energy Foundation of San Francisco to essentially create a climate change public relations campaign in Texas, which was not completely about saving the environment. The stated goal was to "support technical and economic analysis, model policy development and policy-maker education to spur big new clean energy markets."
Which could be turned into more money for the Mitchell Family.
The Energy Foundation's first major grants for Texas activities were made in 2009 and included $364,000 to Environmental Defense; $363,000 to Public Citizen; $318,000 to the Texas Seed Coalition; and $40,000 to the Environment Texas Research and Policy Center. The cash was earmarked to oppose new coal-fired power plants in Texas or promote energy efficiencies in buildings, which was clearly a policy with the potential of helping Todd Mitchell's solar energy firm.
The second round of grants came in 2010, and the Energy Foundation also provided $55,000 to the Texas Tribune "to fund an energy journalism fellow to cover clean energy issues in Texas." The Tribune, in this case, was practically taking editorial orders from the Mitchell family because the money was designated to hire an environmentalist to push issues that just naturally accrued to the benefit of the Mitchells' finances. A story later that year, predictably, put the Tribune on the side of natural gas over coal gasification, which is where the Mitchell Foundation wanted the Tribune. The reporter later wrote: "So what if coal, the dirtiest of the fossil fuels, faces tightening air-pollution standards from federal regulators? Texas, probably more than any other state, is aggressively building new coal plants."
A year later in 2011, the Mitchell foundation completely took over funding of environmental reporting at the Tribune. The disclosure, however, explained that the money was for the energy and environment reporting budget, which sounds much nicer than saying it was to pay a reporter's salary to write about topics that helped the Mitchells. The same year the foundation also donated $239,100 to the Texas Clean Energy Coalition, with the money handled by the public relations firm Vianovo, which also serves as the coalition spokesman. Heading the coalition was former state Senator Kip Averitt. He was a featured speaker at the Texas Tribune Festivals of 2012 and 2013. The energy reporter, whose budget had been financed by the Mitchell foundation, had moderated one of the festival panels in 2013, and, even though the Tribune noted the panel was sponsored by the Mitchell foundation, no one in the audience was likely to know that both the moderator and a panelist had money in their bank accounts from the Mitchell Family Foundation.
Being complicit with industries that can benefit from the Tribune's work almost appears to be a key element of the news organization's business model. One of the board members, Jeff Eller, is the chairman of Public Strategies, a communications group that helps corporations affect public policy. Public Strategies, which the Tribune blithely calls a "business advisory firm," is a part of WPP, the largest public relations conglomerate on the planet. Although Public Strategies does not have a lobby operation in Texas, clients are advised on how to sway public opinion on issues covered by the Tribune, and, in fact, brags in promotional materials that it has "been given the opportunity to develop strong relationships with both the media and decision-makers." Regardless of Jeff Eller's integrity on the Tribune's board and in public fundraising, his mere presence offers an image of journalists being guided by and consorting with the very companies that make money influencing what they write.
If the readership of the Texas Tribune were to ever put together all of the relationships and fundraising and money making functionalities of the operation, they could be forgiven for their skepticism about the credibility of the journalism. The Trib is, by almost any definition, a pay for play operation, a digital protection racket where donations and sponsorships will prevent scrutiny of your issues and operations. And readers will never know what's missing.
Ironies, of course, abound in the Trib's business. Board member Rosental Alves, a professor and the Knight Chair in Journalism at the University of Texas at Austin, is an expert in online and foreign affairs journalism. In 2010, he was quoted in "Cash for Coverage," a study of payments made by governments and politicians to journalists and news organizations in Africa, Russia and China, which were primarily bribes for specific coverage. Alves called payments "the dark part" of journalism. "It's not an issue that's much covered," Alves said in the report. "We have been so much engaged in defending journalists, that we become shy sometimes in uncovering or exposing this side of our craft." What makes journalism unique, he said, "is the ethics."
And in terms of ethics, the Texas Tribune is an epic failure.
There are other inequities related to the Trib that have never even been mentioned by the legislative and political community. While CEO Smith and his staff of about 30 journalists and an army of interns are scouring the capitol for all the news that doesn't offend, they are getting a huge tax break as a non-profit. Tax considerations are also an inducement for corporate giving to the Tribune. Unfortunately, tax laws are screwing the small, for-profit businesses engaging in reporting at the Texas capitol and competing against the Tribune.
Harvey Kronberg, who publishes the insightful "Quorum Report" on Texas politics and legislation, has only a couple of people on his staff to compete with the leviathan Tribune, but his daily newsletter has remained viable and popular. Kronberg, however, has to pay salaries along with operational costs, and then taxes on any profits. The owner and publisher of "Capitol Inside," Mike Hailey, is also competing with Kronberg and the Tribune, and functions as an independent business attempting to build revenue and profit margins. In effect, when Kronberg and Hailey send their checks to the IRS, they are also underwriting the operations of the Texas Tribune, a competitor who threatens the very existence of their political newsletters.
The Business Coalition for Fair Competition (BCFC), a national lobby organization, describes the situation above as "unfair government sponsored competition with private business." John Palatiello, who is president of the BCFC, testified before the House Committee on Ways and Means in February 2013 and asked Congress to address the "unfair advantages of non-profits" in the commercial marketplace.
"The effect of these special privileges," Palatiello said, "is that government policy not only reduces the costs of non-profit organizations, but it also raises the costs of doing business for their for-profit competitors. Profit seeking firms must pay higher taxes and postal rates to offset the subsidies accorded non-profits. Thus, because of this preferential treatment, competition between non-profits and for-profits is inherently unfair."
In an historic report by Ways and Means more than a half century ago, Congress laid the predicate for non-profit tax benefits, and by any reading, the Texas Tribune is a business, and does not deserve to be exempt from the same taxes paid by Kronberg and Hailey.
"The exemption from taxation of money or property devoted to charitable and other purposes is based upon the theory that government is compensated for the loss of revenue by its relief from financial burden which would otherwise have to be met by appropriations from public funds and by the benefits resulting from promotion of the general welfare," the committee wrote.
The unmistakable interpretation of those words is that unless the non-profit is providing a service not available through commercial businesses, it ought not to be tax exempt. John Thornton and his CEO Evan Smith might argue that there was not sufficient government and political news at the capitol but adequacy is not the IRS' metric. News is being provided by commercial, for-profit businesses, and if the Texas Tribune wants to do a better job at that endeavor they ought to compete fairly and pay their taxes. There is no basis in logic for the Trib to receive a tax exemption that disadvantages small business people like Kronberg and Hailey, and all the legacy mainstream media facing shrinking margins and making budget cuts that affect their ability to compete with the untaxed Smith Squad.
The IRS needs to conduct a full audit of the Texas Tribune. If it is shown the publication is operating as a business and generating revenue by selling ads and sponsorships, the exemption ought to be removed and the Trib made to compete with the rest of the capitol media on the basis of fairness. Tax exemption rules need to be more strictly interpreted. Current estimates are that they cost the U.S. Treasury about $40 billion annually. The Texas Tribune needs to contribute its share, and stop being provided a competitive advantage against other media companies.
No one has written about the Tribune's hypocrisies and contradictions with any detail simply because they feared sounding petty or self-serving. Texas newspapers, some of which use the Tribune's stories, can hardly be expected to criticize an editorial service they use or to publicly whine about unfair competition. The Quorum Report and Capitol Inside could expect its lobby and legislative information sources to go quiet because they, too, must function in a culture of cooperation that is implicit in the way business is conducted by the Texas Tribune.
Politics is a cruel game. Journalism is not supposed to play it, though. Reporters are expected to cast little lights into dark corners and illuminate the way government works and who has influenced its decisions. The Texas Tribune rarely lives up to that mandate and, instead, takes big cash from the people and institutions it is supposed to hold accountable. Money is coming in the door as fast as integrity and credibility are running out.
In less than five years, the Texas Tribune has gone from being an exciting startup to a hypocritical, money-grubbing promotional operation wearing a coat of many colors that it wants desperately to convince everyone is actual journalism. But it is not. There is no reason to any longer take the Tribune seriously as a news organization. They simply cannot be trusted.
The big brains of the Texas Tribune were supposed to save journalism. Instead, they are busily speeding up its extinction.
And they ought to be ashamed.
Also at: http://www.dontgrowtexas.com