Oct. 19 (Bloomberg) -- News Corp., the media
company facing an investor uprising over its business practices, was
alerted to a plan to inflate circulation at the Wall Street Journal
Europe almost a year before the newspaper’s publisher resigned,
according to a former employee and internal documents.
Les Hinton, the former chief executive officer at
the News Corp. unit that publishes the Wall Street Journal Europe, was
contacted with details of the payment practice in November 2010,
according to former circulation manager Gert Van Mol and e-mails he
provided to Bloomberg News. Todd Larsen, president of the Dow Jones
& Co. unit, was also notified.
Van Mol said in the correspondence that a Dow
Jones business partner was being compensated at the same time that
partner was buying thousands of copies of the Wall Street Journal
Europe, effectively boosting the publication’s circulation. Andrew
Langhoff, the newspaper’s publisher who stepped down last week, had
approved the payments, the circulation manager said in the e-mails.
“It was a non-ethical practice,” Van Mol said in
an interview. “I didn’t want to be part of it, so I contacted Hinton and
Larsen.”
Bethany Sherman, a Dow Jones spokeswoman,
declined to comment on whether Hinton and Larsen had been alerted to the
payments last year. She said Dow Jones had been investigating Van Mol
for his “business dealings” for several months before November 2010.
Already Under Fire
Sherman said Langhoff, 49, resigned because of
the perception the newspaper’s agreement with the Executive Learning
Partnership could have compromised editorial integrity. She said his
departure had nothing to do with the payments to ELP, a
Netherlands-based strategy and consulting firm, or with ELP’s bulk
newspaper purchases, which the company said are legitimate.
Hinton, who resigned in July after allegations of
phone hacking by journalists at a different News Corp. unit he ran for
12 years, didn’t respond to calls for comment. Langhoff also didn’t
return calls for comment.
London’s Guardian newspaper reported the payments to ELP and the company’s bulk purchases last week.http://www.businessweek.com/news/2011-10-19/news-corp-ignored-wall-street-journal-aberrant-circulation.html
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