Circulation Scam Alleged at the Wall Street Journal Europe
On Tuesday the publisher of the Wall Street Journal Europe and one of Rupert Murdoch's senior executives, Andrew Langhoff resigned in an obscure "advertiser vs. editorial" kerfuffle of ethics. Today, though, The Guardian is reporting that there was more to Langhoff's departure. "The Guardian found evidence that The Journal had been channelling money through European companies in order to secretly buy thousands of copies of its own paper at a knock-down rate, misleading readers and advertisers about The Journal's true circulation," wrote Nick Davies today. Citing internal emails and documents, The Guardian claims that Langhoff helped promote these this plan--a plan which represented "41% of the European edition's daily sales – 31,000 copies out of a total of 75,000" in 2010. "The bizarre scheme included a formal, written contract in which The Journal persuaded one company to co-operate by agreeing to publish articles that promoted its activities, a move which led some staff to accuse the paper's management of violating journalistic ethics and jeopardising its treasured reputation for editorial quality." Davies adds:
In what appears to have been a damage limitation exercise following The Guardian's inquiries, Langhoff resigned on Tuesday, citing only the complaints of unethical interference in editorial coverage. Neither he nor an article published last night in The Wall Street Journal made any reference to the circulation scam nor to the fact that the senior management of Dow Jones in New York failed to act when they were alerted last year.
That's a bit more insight than The Wall Street Journal's own account of Langhoff's abrupt resignation. "According to people familiar with the matter, an internal investigation at Dow Jones showed that Mr. Langhoff personally pressured two reporters into writing articles featuring ELP [Executive Learning Partnership]," wrote Paul Sonne and Bruce Orwall . "People familiar with the matter said the contract included language suggesting ELP could receive some coverage in the pages of The Wall Street Journal Europe. A paragraph in the agreement gave the paper's news department final control over any article, including the possibility that no story at all would appear, one of the people said."
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