Wednesday, September 3, 2008

Crime Pays for Newsday Nine

A federal court in New York sentenced the nine individuals convicted of mail fraud in the Newsday/Hoy circulation scandal to five years' probation and fines of up to $125,000. The judge defended the sentencing, saying he couldn't punish these goodfellas knowing that higher ups had to be involved, including former Newsday publisher Raymond Jansen. But there was this little thing called insufficient evidence on which to base charges against the honchos.

If I robbed the 7-11 down the street, I would serve hard time. But the Enrons, WorldComs and the Adelphia Cables of the world notwithstanding, white collar crime still pays in the United States. These Newsday guys are held harmless for the enormous damage they inflicted on the company.

These nine fat cats significantly inflated circulation figures for Newsday and its Spanish-language offshoot Hoy in order to milk more dollars out of advertisers. When the truth came out, Tribune had to make restitution to advertisers to the tune of nearly $100 million. And that is nothing compared with the loss of its credibility.

One by one each Tribune newspaper was ordered to go over their circulation figures. A few others also reported inflated numbers -- but not like the thievery that took place at Newsday/Hoy.

Over a period of four years, between 2000 and 2004, Newsday miraculously added 100,000 copies to its daily circulation. That's the equivalent of the city of Gainesville. For Hoy, the figure was 45,000 per day -- merely a Titusville.

Louis Sito, who was former senior vice president of sales at Newsday, publisher of Hoy and vice president of Hispanic Media for Tribune, was judged "the most culpable." Still, he will pay only a $15,000 fine. Sito used to issue press releases boasting that Hoy had a daily circulation of 90,000, and was well on its way to 100,000. It was the biggest! The best!

Later, the former publisher of Orlando's El Sentinel, Anibal Torres, was sent to New York to mop up after Sito at Hoy.

The inflated Hoy circulation figures were nearly double that of its rival, El Diario La Prensa, the oldest Spanish daily in New York with a long history of covering New York's Latino community. Folks at El Diario complained about the circulation figures for years, saying the numbers didn't hold up. Finally, attention was paid.

Sito also is responsible for souring the relationship between Tribune and La Opinion in Los Angeles, which was 50 percent owned by Tribune. Once the folks at La Opinion got a whiff of Tribune's plan -- or I should say Sito's plan -- to start a Spanish-language daily in Los Angeles and create a national paper, they bought back Tribune's half ownership. Can't blame them. But it was a loss for Tribune, because in my opinion La Opinion is the best Spanish-language daily in the country. In a delicious bit of irony, La Opinion's parent company ImpreMedia later bought what was left of Hoy.

As for the Newsday Nine, so much for justice served. Not only was justice not served in this case, it was subverted.

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