WSJ Europe disputes circulation scam report
* WSJ Europe parent News Corp embroiled in ethics scandalOct 12 (Reuters) - The publisher of the Wall Street Journal
Europe was forced to resign over a scam used by the paper to
boost its circulation, Britain’s Guardian newspaper reported,
citing documents and e-mails it said it had obtained.The Journal responded by saying the report on Wednesday was
“replete with untruths and malign interpretations”.WSJ Europe parent Dow Jones had said the previous day that
Andrew Langhoff had quit over ethical issues raised by the
paper’s commercial relationship with Dutch consulting firm
Executive Learning Partnership (ELP).It did not disclose the nature of the relationship.Rupert Murdoch’s News Corp , parent of Dow Jones,
has been fighting accusations of ethical missteps related to
phone hacking at its now defunct News of the World newspaper in
London.Much of the reporting on the phone-hacking scandal has been
led by the Guardian.On Wednesday, it reported that the WSJ Europe had been
channeling money through European companies to secretly buy
thousands of copies of its own paper for as little as 5 cents
per copy.This had the effect of inflating its circulation and
misleading advertisers about the Journal’s true circulation,
the Guardian said.Both the Guardian and WSJ Europe said the UK Audit Bureau
of Circulation had signed off on the program.The partnership also involved a contract in which the
Journal promised to publish articles that promoted ELP’s
activities, the Guardian said.”The Guardian’s inflammatory characterization of WSJE’s
former ELP circulation program is replete with untruths and
malign interpretations,” the Journal said in an e-mailed
statement. “Andrew Langhoff resigned because of a perceived
breach of editorial integrity, not because of circulation
programs, whose copies were certified by the ABC UK.”The Guardian said that a former employee, who was not
identified, was a whistleblower who helped to reveal the
circulation-boosting effort.The whistleblower’s position was made redundant in January
after he raised concerns about the circulation
circulation-boosing effort, the Guardian said.”In fact, that employee was first investigated by the
company because of concerns around his business dealings,” the
Journal said in its statement.”REPORTERS PRESSURED”The Guardian said former Dow Jones Chief Executive Les
Hinton, a close ally of Murdoch, had been aware of the
circulation effort. A Dow Jones spokeswoman declined to comment
on Hinton’s involvement.In an article on its website on Tuesday, the Journal said
an internal investigation had found that Langhoff had
personally pressured two reporters into writing articles
featuring ELP.The agreement between the paper’s circulation department
and the Dutch firm, now expired, was not disclosed to readers
of the articles, the Journal said in a note attached to the
articles on its website.ELP did not respond to e-mailed requests for comment.”There is — and should be — an inviolable boundary
between our commercial relationships and the content we
produce,” Langhoff said in an internal memo on Tuesday.”The perception that this boundary was crossed via a broad
agreement between the WSJE Circulation department and a company
called Executive Learning Partnership has been of great concern
to me,” he said.The phone-hacking allegations, which have led to a number
of arrests, have prompted critics to demand the resignation of
Murdoch and other executives, including his son James.News Corp has fiercely defended Murdoch and other directors
saying it “vehemently disagrees” with critics of the company’s
practices.Dow Jones competes with Thomson Reuters Corp .
