The Trouble with the Trib (part 3)

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.”

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‘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.