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SPECIAL REPORT / CROSSING THE LINE

Crossing the Line

A Los Angeles Times Profit-Sharing Arrangement With Staples Center Fuels a Firestorm of Protest in the Newsroom--and a Debate About Journalistic Ethics

December 20, 1999|DAVID SHAW | Times Staff Writer

The next day, the Wall Street Journal published a story about the profit-sharing arrangement. In some ways, this story was even more devastating than the one in the New York Times. The second sentence of the Journal story said the profit-sharing had "raised questions about how far a paper can go without damaging its integrity."

"The Wall Street Journal piece was the first to mention integrity in the lead," says Managing Editor Leo Wolinsky. "I felt stained by this. The paper was, too . . . this paper I wanted to come to my whole journalistic life."

The Journal story also quoted John McKeon, The Times' top advertising executive, as saying, "What's the difference between paying hard cash for a sponsorship and saying, 'Why can't a promotional vehicle like the L.A. Times and Staples Center work on joint promotions with profit we can share?' "

McKeon later said he hadn't intended to imply that The Times is "a promotional vehicle," but with the New York Times story having already ignited the first flames of newsroom resentment, his quote--combined with the reference to The Times' integrity-- guaranteed an immediate and immense journalistic firestorm.

For the Record
Los Angeles Times Monday December 27, 1999 Home Edition Part A Page 3 Metro Desk 2 inches; 39 words Type of Material: Correction
Investment conference--Participants in the Philadelphia Inquirer investment conference are selected by members of the paper's newsroom staff but, contrary to what was reported in The Times last Monday, they are invited by Morningstar, the co-sponsor of the conference.

At two meetings with his top editors on the morning the Journal story ran, Parks for the first time faced what several participants characterized as tough, skeptical questions. Wolinsky says that he walked into the second of the meetings, attended by a small group known internally as "the Parks 8," carrying the Wall Street Journal. "By then," he says, "I was out of control. I was really angry that this had happened, that the newspaper was put on this spot."

A 'Horrific Cloud'

Wolinsky was not alone. By the end of that day, petitions had been circulated demanding that Downing apologize--and she would do so, in a story that was published in the next morning's Los Angeles Times. That afternoon, she had her meeting with reporters and editors in The Times cafeteria; she faced a barrage of angry, accusatory questions and apologized again "to each of you."

"To have the New York Times, the Wall Street Journal, or anyone for that matter, question our integrity is a horrendous place to be, and I am responsible for that," she said. She said that she had placed the staff under a "horrific cloud" and that it was "unacceptable" to have the staff feel "embarrassed, humiliated, impugned, trying to defend your reputation." She tried to explain how the Staples fiasco had come about, pledged never to do anything like it again and announced that she was asking Times attorneys to undertake "a systematic review of all our agreements" in search of any possible compromising arrangements. She also said she wanted the newsroom to develop specific and comprehensive guidelines, "written policies and procedures about independence and integrity and how the editorial side interacts with the business side."

As for the original founding partner agreement with Staples Center, Downing said she was canceling the profit-sharing clause and sending Staples a check, something she had yet to tell Staples Center. Tim Leiweke says he learned about it when he read The Times the next morning--and he says he still hasn't received the money.

The questioning of Downing was confrontational throughout the 90-minute meeting, so much so that in response to one question, she replied, "I'm not resigning."

Calls for Probe Rejected

Several people at the meeting asked that the paper launch and publish a full investigation of the profit-sharing issue, and five days later, at a management meeting, Downing gave her answer: No investigation. In response to a question from City Editor Bill Boyarsky, Parks agreed: No story.

A new petition was already being put together in the newsroom, telling Parks that The Times should "publish in its own pages a thorough examination of the events that led to the Staples deal." Boyarsky, who had initially been reluctant to sign another petition, says he was so outraged by what Downing and Parks said that he went straight from the meeting to the desk of Henry Weinstein, one of the organizers of the petition.

"I want my name on that petition," he said.

His was the first of 59. The petition was presented to Parks that day, and he agreed to meet with seven of the signatories at noon the next day, Nov. 2.

When the seven walked into Parks' office about noon, expecting to have to persuade him to their way of thinking, he told them he had already changed his mind. There would be an investigation and a story.

"I had mistakenly thought that we knew everything," Parks later said, "and that we should correct those things where we had gone wrong and move ahead. I misjudged the need that we had to know everything publicly and thus climb off this treacherous ground we were on." Parks said he was persuaded by "the quite intelligent, reasoned arguments of my colleagues here. . . . When they came in, I'd already seen the wisdom of their position."

A Change of Mind

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