Propublica: Investigative Journalism Or Liberal Spin?

ProPublica: Investigative Journalism or Liberal Spin?

By Cheryl K. Chumley Summary: The press is fi lled with sad stories about venerable for-profi t newspapers that have been forced to declare bankruptcy and shut down. So it’s striking that the bil- lionaire liberals Herb and Marion Sandler have decided now is the time to fund a new nonprofi t group called ProPublica whose mission is to serve the public interest by funding independent investigative journalism. Too bad Pro Publica churns out little more than left-wing hit pieces about Sarah Palin and blames the U.S. government for giving out too little foreign aid.

uestion: What’s a liberal to do? QWith the burgeoning popularity of Fox News, the Drudge Report website, the dominance of conservatives on talk radio The king and queen of toxic mortgages: Herb and Marion Sandler sold their S&L and (Rush Limbaugh, Sean Hannity, Mark Levin its doomed loan portfolio to Wachovia for $24 billion, a transaction that sealed the et al) and the rising tide of conservative bank’s fate. Generous funders of left-wing groups such as ProPublica, the Sandlers political bloggers, it’s no wonder old-line are members of George Soros’s Democracy Alliance, a billionaires’ club determined left-liberal journalists are growing anxious to push America to the left. about promoting their message to the media. As daily newspaper circulation plummets to generate hard-hitting investigative jour- Investigative journalism is at risk. Many and the audience of ABC, CBS, NBC, and nalism by pursuing stories that have “moral news organizations have increasingly CNN ages and shrinks, liberals are watching force.” Paul E. Steiger, a former managing come to see it as a luxury. Today’s investi- their authority fade. They can no longer set editor at the Wall Street Journal, was an- gative reporters lack resources: Time and the public agenda without being challenged nounced as the organization’s president and budget constraints are curbing the ability by conservative media voices. editor-in-chief. May 2009 Answer: Create a media outlet that will pro- Steiger said ProPublica would “shine a light duce left-wing “investigative” hit pieces that on exploitation of the weak by the strong CONTENTS can be given to cash-strapped newspapers and on the failures of those with power to at no cost. vindicate the trust placed in them. We will be non-partisan and non-ideological, adher- ProPublica In October 2007 the world of journalism ing to the strictest standards of journalistic Page 1 was informed that a fl edging nonprofi t outfi t impartiality and fairness.” called Pro Publica, Inc. was about to come to Philanthropy Notes its rescue. The stated mission of the group, ProPublica’s website ominously declares Page 6 which goes by the trade name ProPublica, is that: FoundationWatch

of journalists not specifi cally designated The ProPublica manifesto sounds reasonable ProPublica’s president is also on the Knight “investigative” to do this kind of reporting enough, but what’s left unsaid is the fact that Foundation board.) in addition to their regular beats. This is this particular nonprofi t 501(c)(3) organiza- therefore a moment when new models tion gets its money from donors who want Also on the ProPublica board is former Rep. are necessary to carry forward some of to promote radical left-leaning change in James A. Leach (R-Iowa) whose transforma- the great work of journalism in the public American society. tion from milquetoast moderate Republican interest that is such an integral part of to fl aming leftist was completed last summer self-government, and thus an important The white knights are the billionaires Herb when he endorsed Barack Obama for presi- bulwark of our democracy. and Marion Sandler, a married couple who dent and addressed the national Democratic have committed a reported $10 million to convention. Herb Sandler is the board’s The business crisis in publishing and — the cause of strengthening the left’s shaky chairman. not unrelated — the revolution in publish- grip on the media. ing technology are having a number of ProPublica also has an advisory board that wide-ranging effects. Among these are In unveiling his new organization, Herb lists to port. On it are Jill Abramson, a manag- that the creation of original journalism Sandler boasted that ProPublica would be ing editor of the New York Times, perennial in the public interest, and particularly the “devoted entirely to the creation of journal- pundit David Gergen, and Cynthia A. Tucker, form that has come to be known as “in- ism in the public interest.” who manages the editorial page of the Atlanta vestigative reporting,” is being squeezed Journal-Constitution. down, and in some cases out. ProPublica currently employs 28 journalists who are supposed to fi ll the nation’s gap in Subprime Sandlers ProPublica acknowledges that “the num- investigative reporting by providing budget- Herbert and Marion Sandler made their ber and variety of publishing platforms is conscious media with in-depth prepackaged fortune by purchasing a humble California exploding in the Internet age,” but it warns news stories. Headquartered in Manhattan, savings and loan called World Savings for $4 that “very few of these entities are engaged the group’s newsroom was up and running million in 1963 and building it into mighty in original reporting.” Sources of opinion in June 2008, as the presidential campaign Golden West Financial Corp., one of the may be proliferating, “but sources of facts on was in moving into high gear. largest home mortgage lenders in the coun- which those opinions are based are shrink- try. In 2006, they lost Golden West, which ing.” While the fl ourishing of many opinions ProPublica does not publish its own reports. had over $125 billion in assets, to Wachovia is good for society, ProPublica laments that Instead, like a traditional news wire service it for $24 billion. Wachovia, which made the any lack of interest in reporting actual facts tries to place its stories in established media terrible decision to purchase the company’s is harmful. outlets. However, unlike a for-profi t wire portfolio of subprime loans, teetered on the service like AP, it makes its work available edge of bankruptcy when the housing market no cost. To date ProPublica has worked collapsed. It reported losing $24 billion in the Editor: Matthew Vadum with, among others, the Washington Post, third quarter of 2008 and was subsequently Chicago Tribune, Dallas Morning News, acquired by Wells Fargo at the end of 2008 Publisher: Terrence Scanlon and WNYC Radio. for a paltry $12.7 billion. Foundation Watch is published by Capital Research In addition to the Sandlers, the group has Having gotten out of the market at precisely Center, a non-partisan education and received funding from the John D. and the right time, the Sandlers are fl ush with research organization, classifi ed by Catherine T. MacArthur Foundation, the cash, and they are throwing mountains of the IRS as a 501(c)(3) public charity. Atlantic Philanthropies (whose CEO is Gara money around in an effort to make America LaMarche, a former U.S. program director more liberal. In May 2006, Herb Sandler Address: 1513 16th Street, N.W. at George Soros’s Open Society Institute) rejected the criticism that he was selling out Washington, DC 20036-1480 and the now-defunct JEHT Foundation. at the top of the market: “The situation is JEHT closed its doors recently after liberal fantastic. The expectations are fantastic, and Phone: (202) 483-6900 philanthropist and fi nancier Bernard Madoff, the prognosis is fantastic,” he told the Wall Long-Distance: (800) 459-3950 who managed the charity’s funds, siphoned Street Journal. Holding 10.24% of Golden E-mail Address: away its endowment. West’s shares, the Sandlers were in line to [email protected] receive a reported $2.6 billion windfall from ProPublica’s board of directors is packed with the Wachovia sale. They cashed in about Web Site: garden-variety liberals, including Harvard half of it when they contributed $1.3 billion http://www.capitalresearch.org professor Henry Louis Gates, Jr., Rebecca in cash to their Sandler Family Supporting Organization Trends welcomes let- Rimel, who heads the Pew Charitable Trusts, Foundation (assets: $1.5 billion) in 2006. ters to the editor. and Alberto Ibargüen, former publisher of the Miami Herald who heads the journalism- In 2004 the Sandlers had contributed $13 Reprints are available for $2.50 pre- paid to Capital Research Center. focused John S. and James L. Knight Founda- million to pro-John Kerry 527 organizations– tion (2007 assets: $2.3 billion). (Paul Steiger, including $2.5 million to the MoveOn.org 2 May 2009 FoundationWatch

ProPublica founders Herb and Marion Sandler were brutally lampooned on the Oct. 4 “Saturday Night Live” for their role in the subprime mortgage crisis. They sold their S&L, which was weighted down by risky mortgages, to Wachovia. When the housing market went into a tailspin, Wachovia found itself in serious fi nancial trouble. (screen grab above from the show) Voter Fund. After the Kerry defeat, they socially-aware donors. But instead, they are Feeding the Liberal Narrative joined George Soros’s Democracy Alliance fi nding themselves vilifi ed in the mainstream In October 2007 Slate magazine’s Jack Sha- (of fellow billionaires), a group whose mis- media. fer wrote a report on the Sandlers’ political sion was to avoid future political defeats by contributions and theorized that the decision building an organizational infrastructure of But by early this year, the couple found their by the husband-wife team to fund ProPublica liberal think-tanks, leadership schools and way onto Time magazine’s list of “25 People signaled an attempt to use their money and media outlets to rival the imagined “vast to Blame for the Financial Crisis.” Golden infl uence “to return us to the days of the right wing conspiracy.” (See Foundation West had been a pioneer in the creation of partisan press.” Watch, December 2008.) exotic mortgage products such as the option adjustable-rate mortgages, known as ARMs. The duo has spent “millions on politics,” The Sandler Foundation has given more than The Sandlers’ company “offered several Shafer wrote “The Federal Election Com- $247 million to various charities and nonprof- ways to back-load your loan and thereby mission database shows the two of them it advocacy groups since 2003. Grants have reduce your early payments, with increasing giving hundreds of thousands of dollars to gone to a constellation of left-liberal public zeal and misleading advertisements over the Democratic Party campaigns. In 2004, Her- interest groups and foundations, including next two decades,” said Time. bert Sandler gave the MoveOn.org Voter Fund Media Matters for America, John Podesta’s $2.5 million … The Center for Responsive Center for American Progress, the William Last fall NBC’s late-night “Saturday Night Politics Web site reports donations of $8.5 J. Clinton Foundation, Tides Foundation, Live” program lampooned the Sandlers, ac- million from Herbert and Marion to the 527 Center for Community Change, Center on cusing them in a comedy skit of pushing bad group Citizens for a Strong Senate in the Budget and Policy Priorities, Drum Major loans onto Wachovia. Under the faces of the 2004 cycle. CSS was formed by a group of Institute for Public Policy, Center for Respon- actors playing the real-life couple was the strategists with close ties to former North sible Lending, Natural Resources Defense caption, “People who should be shot.” Carolina Sen. John Edwards.” Council, Environmental Defense Fund, Pew Charitable Trusts, and two ACORN affi liates, Mr. Sandler did not like it. “I have been As Slate’s Shafer posits in his expose of the Project Vote and the American Institute for listening to this crap for two years,” Sandler Sandlers: “If I were a newspaper editor con- Social Justice. told USA Today. “We are being unfairly sidering ProPublica copy for a future issue, tarred. People have been telling us to speak the fi rst thing I’d want is proof of the fi rewall No doubt the Sandlers expected to be cham- out for some time, but we didn’t think it was preventing the Sandlers and other funders pioned as magnanimous philanthropists and appropriate. That was clearly a mistake.” from picking – or nixing – the targets of its May 2009 3 FoundationWatch probes … [and] I’d call upon Herbert Sandler group that for years has received large grants By contrast, when there was a fl urry of news … to provide ProPublica with 10 years of from the Sandlers. stories about Barack Obama’s ties to Bill funding, $100 million, and then resign from Ayers, the former terrorist-turned-professor, his post as the organization’s chairman so On Oct. 16, ProPublica’s website linked ProPublica conducted no investigation of its he’ll never be tempted to bollix up what to an ABC News story entitled, “Experts: own but linked to a single Wall Street Jour- might turn out to be a good thing.” McCain ACORN Fears Overblown.” The nal opinion piece at http://online.wsj.com/ lead sentence of the story began, “Charges article/SB122212856075765367.html. Pro- Not surprisingly, ProPublica’s coverage thus of potential voter fraud volleyed by Repub- Publica completely ignored Rev. Jeremiah far has had a distinctly liberal bent. licans, including Sen. John McCain himself, Wright whose videotaped denunciations of are out of proportion to reality, according to America fi gured in much speculation over For example, last October ProPublica tried to election experts.” his 20-year personal history with the Obama undermine critics of the radical leftist group family. Search the ProPublica site for varia- ACORN, the Association of Community On Oct. 29, a ProPublica reporter ignored tions of Wright’s name and title and the only Organizations for Reform Now. ACORN the ACORN voter fraud reports and wrote a piece this researcher could turn up was a bills itself as a community advocate for the story instead about the background of a public single story by reporter Richard Tofel who poor and politically disenfranchised, but it affairs group that had attacked ACORN in wrote, on Jan. 20, 2009, “Obama Speech is frequently caught up in accusations of a prepared advertisement in the New York Analysis: The Oratory and the Promises.” voter fraud, and over the last year it’s been Times. In this piece, “‘Rotten’ ACORN Ad The story contains nothing about the issue the subject of many voter fraud reports. Funded by Anti-Minimum Wage Group,” the but only names Wright in passing. (www.pro- (See the November 2008 issues of CRC’s reporter highlighted a “Washington lobby- publica.org/article/obama-speech-analysis- Foundation Watch and Labor Watch for ist, who for several years has been fi ghting the-oratory-and-the-promises-090120) more on ACORN.) ACORN’s efforts to increase the minimum wage at the state and federal levels” and In the months since Barack Obama took Let’s recap some of ACORN’s news cover- who had placed an ad “directing readers to offi ce, ProPublica has focused plenty of at- age last year. the Web site www.rottenacorn.com.” The tention on past government failings it thinks ProPublica story accused the anti-ACORN the Obama administration should fi x. But it * On Oct. 22, CNN.com ran a story, “Ex- group of abusive labor practices. shows little curiosity about mistakes or mal- ACORN worker: ‘I paid the price’ for feasance in the Obama administration. For voter registration fraud,” reporting on former ProPublica’s response to persistent news sto- instance, an article by Sheri Fink, “Global ACORN worker Clifton Mitchell who falsi- ries about ACORN voter fraud seem geared Aid and the New President,” posted on Jan. fi ed the registrations of nearly 2,000 voters to ignore the news and debunk ACORN’s 23, 2009 seems to work from the premise and spent three months in jail for his crime. critics. In fairness, at the bottom of the “Rot- that America does not provide its fair share in “Clifton Mitchell … said ACORN threatened ten ACORN” piece, the reporter discloses monetary contributions for overseas poverty to close the offi ce if he and his team didn’t that “[t]he Sandler Foundation, the primary eradication and health care. meet their quota to register 13 to 20 voters funder of ProPublica, has given money to a day,” CNN reported. ACORN,” including “a $300,000 contribu- Fink writes: “The U.S. currently contributes tion in fi scal 2007 to expand ACORN fi eld about 0.2 percent of its GDP for aid, well * On Oct. 27, CNN.com followed with operations.” below the 0.7 percent target set by the Eu- publication of commentary by Tara Wall of ropean Union and United Nations.” the Washington Times. Wall wrote, “Under Other ProPublica stories raise questions (www.propublica.org/article/global-aid- FBI investigation, with about a dozen active about its agenda. The group went after and-the-new-president-090123) and open state investigations for accusa- vice presidential candidate Sarah Palin in a tions of voter registration fraud, ACORN lengthy series of reports. On Sept. 3, 2008, the Put aside for the moment the fact that the has got some explaining to do. And now story was “Palin’s Pork History,” followed United States doesn’t take its marching even The New York Times has chastised the on Sept. 5 by “Palin’s Pork History, Part orders from the EU or the UN. Measured in 2.” ProPublica continued with more stories organization for ’vastly overstating’ its voter dollars, America’s 0.2% is well above the on Palin infrastructure policies as Alaska’s registration numbers.” amount other nations give. Moreover, U.S. governor. On Sept. 13 the headline was “Palin foreign aid fi gures only report on govern- Administration Still Pursuing ‘Nowhere’ * Other reports tied ACORN to then- ment funding and do not include private Project,” about the now-infamous Alaskan presidential candidate, Barack Obama. contributions. The Hudson Institute’s Carol bridge development. On Sept. 17, ProPublica Reporter Amanda Carpenter wrote Oct. 13 Adelman has demonstrated the extensive aid at Townhall.com that the Obama campaign followed with “Palin Admin. Oversaw $26 supplied by American voluntary organiza- was forced to “revise statements about their Million ROAD to Nowhere.” (block capitals tions, religious congregations, foundations, candidate’s work for ACORN and admit the in original) On Sept. 24 it was: “Palin De- universities, corporations, and largest of all, campaign paid the group $800,000 for “get- fended ‘Bridge to Nowhere’ Spinmeisters.” personal remittances of money sent by indi- out-the-vote activities.” On Sept. 25 came “Palin Defends Construc- tion of ‘Road to Nowhere.’” viduals in the U.S. back to their homelands. In other words, American global assistance ProPublica leapt to the defense of ACORN, a 4 May 2009 FoundationWatch transcends government program funding by ProPublica reporters should receive high staff reporters and freelance writers.” As the a wide margin, but the reporters for nonprofi t praise for their stories on Obama’s stimulus newspaper industry continues to contract, ProPublica don’t seem to get it. The ProPub- package and banking bailouts, on recent Huffi ngton voices a common fear that seri- lica article gives voice only to those who business and fi nancial scandals, and on ous investigative journalism will be a victim want to see the U.S. government failing to other issues related to open records and of the cutbacks. make payments to other world governments open government. But on embarrassments and international agencies. closer to the liberal policy agenda the group Too many newspapers are “drastically reduc- tends to link its website to outside media ing their investigative teams,” Huffi ngton Obama appointments ought to be fodder reports rather than conduct independent notes. “We’ve had too many autopsies and for any sharp investigative reporter. But investigations. Compare ProPublica’s heavy not enough biopsies. The HuffFund is our ProPublica has only gone easy on the admin- election coverage of pork spending by Sarah attempt to change this. It will also provide istration so far. For instance, ProPublica has Palin to its lax reporting of Barack Obama’s new opportunities for seasoned journalists shown relatively little interest in investigat- personal associations and it is apparent that who have been laid off or forced into early ing Obama’s cabinet selections. There was the group’s reporters have little interest in retirement. [...]” no independent coverage of New Mexico offending ProPublica’s founders, funders Gov. Bill Richardson’s withdrawal from and board members. The program’s startup budget will be $1.75 consideration for the post of Commerce million. The money will be provided by the secretary. The nonprofi t referred readers to The Left Fights On Huffi ngton Post and the Bermuda-based a New York Times article if they wanted Taking control of the media is a key element Atlantic Philanthropies headed by Gara to learn more about the controversial New for “progressive” organizations that want to LaMarche, the former Open Society Institute Mexico procurement process that forced his shape public opinion to promote a left-wing vice president. withdrawal. policy agenda. More investigative journalism: Who could ProPublica did do its own reporting on the Activists are pushing punitive media mea- be against it? Unfortunately, what used to tax troubles of Treasury Secretary Timothy sures such as the Fairness Doctrine and be called “muckraking” is likely to produce Geithner and prospective Health and Human other proposals to “hush Rush” and give little more than left-wing ranting and conser- Services nominee Tom Daschle, but it failed local community groups the power to pres- vative bashing. On the basis of what’s been to report on Nancy Killefer and General sure broadcasters to cover stories they want produced so far, ProPublica would be better Anthony Zinni, individuals who would seem covered. Left-wing watchdog groups such known as ProLiberal. ripe for investigative stories. as Media Matters for America are zealous in their efforts to intimidate journalists to Cheryl Chumley is a 2008-09 Phillips Foun- Killefer was selected as the White House toe the liberal line. (See Foundation Watch dation journalism fellow. chief performance offi cer, but withdrew after (FW), July 2007 on Media Matters and FW FW it became known she once had a $900 lien January 2009 on the Fairness Doctrine.) on her home for not paying unemployment taxes on household help. Iraq war critic Increasingly, liberal foundations and com- Please consider contributing Zinni was “the guy President Barack Obama mentators are urging newspapers to reinvent early in this calendar year to telephoned the other day to congratulate him themselves as nonprofi t organizations. One on his nomination for Iraq ambassador,” member of Congress, Maryland Democratic the Capital Research Center. Britain’s Telegraph reported on Feb. 5, 2009. Senator Ben Cardin has even introduced a But nobody in the White House bothered “Newspaper Revitalization Act,” that would We need your help in the to tell Zinni that the Obama administration exempt newspaper advertising and subscrip- current diffi cult economic later “had changed its mind.” Zinni publicly tion revenue from taxation and give news- complained about the way he was treated papers a nonprofi t status similar to National climate to continue our im- and the Telegraph story characterized the Public Radio or the Public Broadcasting portant research. faux pas as “another indication of a chaotic System. “This may not be the optimal choice appointment process.” The juicy story ought for some major newspapers or corporate Your contribution to advance to have inspired some investigation but you media chains but it should be an option for didn’t read it in ProPublica. many newspapers that are struggling to stay our watchdog work is deeply afl oat,” Cardin said. appreciated. ProPublica also failed to describe what happened with Annette Nazareth, who with- Arianna Huffi ngton recently announced that drew her nomination for a deputy slot at the her left-wing gossip website, the Huffi ngton Many thanks. Treasury Department, or Sanjay Gupta, the Post, is launching its own Huffi ngton Post CNN medical correspondent who changed Investigative Fund. Like ProPublica, her Terrence Scanlon his mind about an appointment as Surgeon nonprofi t fund “will produce a wide-range President General. of investigative journalism created by both May 2009 5 FoundationWatch PhilanthropyNotes After seeking $11 billion in taxpayer funds for retooling and a $9 billion credit line from the U.S. government, Ford Motor Co. decided to contribute to community organizer Al Sharpton’s National Action Network 2009 National Convention that started on April Fool’s Day in New York City. NAN didn’t say how much Ford gave but National Legal and Policy Center reports that a “sponsor” designation for last year’s event cost $50,000. Ford lost $14.6 billion last year, and recently shuttered 17 plants and laid off more than 50,000 workers. Other bailout recipients, GM, Chrysler, and Citigroup sponsored the 2008 meeting but not the 2009 meeting. NLPC fi led a complaint about Ford squandering tax dollars with bailout Inspector General Neil M. Barofsky.

Luis A. Ubiñas, head of the left-wing Ford Foundation, announced it will streamline its far-ﬂ ung operations over the next two years. The foundation, with $11 billion in assets, is the second-wealthiest foundation in the America. It intends to focus on several issues, including access to education, natural resources, and so-called sustainable development.

The taxman is watching. In light of recent controversies over corporate executive pay at companies that have taken federal aid, the IRS warns that nonprofi t organizations better be careful when setting salaries. Lois G. Lerner, who oversees the tax-exempt organizations division of the IRS, said nonprofi ts will have to justify how much they pay their executives. “If you’re not looking, we’re looking,” Lerner said. The tax agency has upped oversight of charities recently, through disclosure changes and an overhaul of Form 990, the annual tax return fi led by nonprofi ts.

Former eBay president Jeff Skoll has endowed his new foundation, the Skoll Urgent Threats Fund, with $100 million, the New York Times reports. The new charity, which will be headed for Larry Brilliant, former head of Google’s philanthropic arm, Google.org, will focus on international problems such as the Middle East conﬂ ict, water short- ages, and pandemics.

Several former Seattle Post-Intelligencer reporters and photographers have launched a new online daily called the Seattle PostGlobe. The nonproﬁ t website site went live April 13, weeks after the 146-year-old Post-Intelligencer switched to an online-only format and laid off more than 130 workers.

Philanthropist Dorothy Cullman, who gave to New York City arts, science, and educational institutions, died last month in Manhattan, the New York Times reports. Cullman and her ﬁ nancier husband, Lewis, have donated more than $250 million to organizations including the New York Public Library and Human Rights Watch. Mr. Cullman is a member of George Soros’s Democracy Alliance group, which funds liberal think tanks, activists, and community organizers. According to his personal website Cullman and “a colleague engineered the very ﬁ rst leveraged buyout (LBO) — with $1,000 cash, they bought Orkin Exterminating Company for $62.4 million.”

Goldman has hired legal thugs to shut down a vocal critic of the international mega-bank. The bank claims that the offending website’s name, www.goldmansachs666.com, constitutes an infringement of its intel- lectual property rights. The (UK) Telegraph reports that the website is owned by blogger Mike Morgan, an investment adviser who has posted entries such as, “Does Goldman Sachs run the world?” It seems like a fair question.

The liberal New Republic magazine wonders if the strings attached to the bailout money that Goldman took in are hindering its ability to attract new talent. The caps that apply on bonuses to the 25 highest earners at the bank may be driving skilled employees away. This “is a real constraint for Goldman as it minted 953 millionaires last year. In fact, the restriction theoretically creates a weird situation in which Goldman’s 25 highest-ranking employees could make a lot less than more junior employees,” writes Noam Scheiber.

6 May 2009