A Pledge And A Couple Of Pulitzers

Katz

By Ralph Cipriano
for Bigtrial.net

The way Lewis Katz explained it on the witness stand, the men who wanted to buy the Inquirer had a credibility problem.

At the time, the proposed new ownership group included former Pennsylvania Gov. Ed Rendell, South Jersey political boss George Norcross, and Katz, himself a former Democratic party chairman from Cherry Hill.

The news media was raising lots of questions about the "strong political leanings" of the group, and whether those leanings would dictate editorial policy, Katz said. The reporters at the Inquirer were also uneasy over the prospect of becoming more of a house organ for the Democratic party than they already were. So what to do?

Katz divulged the winning formula, which he borrowed from  the playbook of former Inky publisher Brian Tierney. First, Katz said, they had to go get "the best editor they could find," somebody whose mere name [or trophy case] would "remove the stigma" that a bunch of political hacks had just bought the Inky. The goal was "to bring in somebody who was beyond repute," Katz said.

Next, they had to come up with a pledge for all the new owners to take, a solemn oath not to meddle with the sacred editorial operations of the Inky, Daily News and philly.com. The pledge and an editor with a couple of Pulitzers was just the ticket to "calm the storm in the news media," Katz said.

It all sounded very cynical from the witness stand today as the Inky's new owners sparred in court over a motion to grant a mandatory injunction that would reinstate fired Inky Editor Bill Marimow and terminate Inky Publisher Bob Hall.

Katz and H.F. "Gerry" Lenfest, two of the Inky's new owners, have filed suit in Philadelphia's Common Pleas Court seeking the mandatory injunction. The suit names as defendants Publisher Hall, and Interstate General Media [IGM], the company which purchased the two newspapers and the website for $55 million last year.

In their suit, Katz and Lenfest say Hall didn't have the authority to fire Marimow. They cite an operating agreement that specifies IGM is run by a two-member management committee overseeing "the day-today business operations of the company." The management committee "shall have the right, power, and authority to make decisions with respect to all business and operational matters," the agreement states.

The two members of the management committee are Katz and Norcross. Norcross approved the firing of Marimow by Hall; Katz said he wasn't consulted. So Katz and Lenfest are asking Judge Patricia McInerney to remedy the situation by bringing back Marimow and booting Hall.

In Courtroom 630 at City Hall, Katz and Lenfest were represented by five lawyers led by Richard A. Sprague. The Norcross faction was represented by eight lawyers led by Robert C. Heim and Michael Chertoff, former U.S. Secretary of Homeland Security, who strolled into the courtroom alongside Norcross.

Marimow

The first witness to take the stand was Marimow. The editor said he was a professor at the Walter Cronkite School of Journalism at Arizona State University when Katz flew out to talk to him "about the business of newspapers."

Katz told Marimow he was thinking about buying the Inquirer and wanted to hire Marimow to return as editor. Marimow, a two-time Pulitzer Prize winning reporter, had been editor of the Inky from 2006 to 2010.

Marimow visited Katz at his home for further discussions. Next, Marimow, Norcross, Katz and Nancy Phillips all had lunch at Rembrandt's in Fairmount on April 3, 2012. It was the first time he met Norcross, Marimow said.

In a subsequent telephone conference, Marimow said, he was hired after consulting with owners Katz and Norcross, as well as Phillips, an Inky reporter who was Katz's girlfriend.

Marimow said he was hired by the management committee, namely Katz and Norcross. "They were hiring me and they would be the ones to hire and fire me," Marimow testified.

Marimow went through the list of what he needed to take the job: his salary request, a two-year contract, and the authority to hire his own top editors.

The response on the phone was "done, done and done," Marimow said.

But there was one problem. The publisher and CEO of the Inky's parent company at the time was Greg Osberg, who had "demoted me from editor to reporter" in 2010, Marimow testified.

The new owners worked out a deal where Marimow would report to Osberg, at Osberg's insistence, even though the two didn't exactly get along.

Marimow's next problem was a phone call he received a few hours later from Bob Hall, then CEO of the Inky's parent company.

Hall told Marimow "he had strongly opposed my return" because only 60 to 70 percent of the staff supported him, Marimow testified. Hall claimed that Marimow had a "reputation for disliking women" and "a reputation for disliking minorities," Marimow said, his voice rising in anger. Finally, Hall told Marimow he would be keeping "watch over him."

"I'd wondered whether I'd made a mistake in taking the job," Marimow said.

On Oct. 7, Hall told Marimow to meet him in Hall's office at 11 a.m. The session was billed as "Catch up with Bob," Marimow said. At the meeting, after some small talk, Hall told Marimow he was fired.

"Have you talked with all the owners?" Marimow said he responded to Hall. "I don't think what you're doing is legal or proper."

Marimow said if he was reinstated as editor, "It would alleviate a lot of the tension" in the Inky newsroom. Marimow testified he wants to return.

"I care deeply about the newspaper and the community," he said. "I know I can be effective."

And one group of new owners says the staff needs Marimow.

The hiring of Marimow "by the Management Committee was meant to bolster the newspaper staff's confidence after it had been drastically shaken by cost-cutting measures, a bankruptcy filing in 2009, and constant changes in management," says the lawsuit filed by Katz and Lenfest.

The next witness was Greg Osberg, former publisher and CEO, who was summoned by a subpoena. Osberg said details of the offer to hire Marimow were "given to me by Nancy Phillips."

"It was not my decision to hire Bill," Osberg said. "They [Katz and Norcross] had asked me to talk to Nancy to get the specifics."

Osberg said he realized the new owners seemed intent on "diminishing the role of the publisher." He said he not only was opposed to the hiring of Marimow, but he also didn't agree with the hiring of Brian Tierney and Mark Frisby as consultants. So he quit less than six weeks after the new ownership group took over, and was replaced by Hall.

Nancy Phillips was the next witness. On cross-examination, she was asked about emails sent to Norcross, where Phillips described Marimow's uneasiness about having to report to Osberg, the guy who had busted Marimow from editor to reporter. Phillips said that Marimow was concerned about being "overruled on editorial decisions and hires by Osberg."

In an email to Norcross, Phillips said she thought Marimow and Osberg would be able to get along, work out their differences, and "play nice in the sandbox."

When it came time to announce the hiring of the new editor at a press conference, Marimow asked Phillips in an email, "who shall I say hired me?"

In an email response, Phillips wrote Marimow, "Here's the official story." According to emails read in court by one of Norcross's lawyers, the "official story" was that publisher Osberg had hired Marmow. The lawyer asked Phillips, who had negotiated the deal with Marimow, if the "official story" was just a way to "get around the non-interference clause."

The implication was Phillips and Katz were using Osberg as a cover to hide their starring roles in hiring Marimow.

Phillips denied it, saying the pledge didn't apply to the hiring of a new editor; that was a business decision, not an editorial decision. As such, according to the IGM operating agreement, it was under the purview of the management committee, namely Katz and Norcross.

"We had discussed the pledge in depth," Phillips testified. "The hiring and firing of an editor would not be affected by it."

She was more concerned about Osberg's feelings rather than breaking the non-interference pledge.

"We wanted to be certain that he was not embarrassed," she said of Osberg.

On cross-examination, Phillips denied a defense lawyer's suggestion that the "official story" was a "fabrication" she invented to get around the non-interference pledge.

"Selection of an editor is an important business decision," she said. She denied she was spinning a phony story for the benefit of the press.

At this point, the no-meddling pledge sounded like a public relations gimmick. If hiring and firing an editor isn't an editorial decision, what is? And what about the spectacle of an Inky reporter cooking up a phony story with the editor she had just hired to deliberately mislead other reporters?

On April 5, 2012, the Inquirer reported that IGM had rehired Marimow to return as editor.

"Bill Marimow is one of the most respected journalists in the nation, and his return reinforces the company's commitment to aggressive investigative reporting," Osberg, CEO of Philadelphia Media Network, was quoted as saying in the Inquirer.

"Marimow said he had been in discussions with Osberg and several members of the new ownership group in recent weeks," the story said. "I believe the local owners may have suggested it would be great if I could return," Marimow was quoted as saying. "Now, I'm coming back."

 Back in court today, Gerry Lenfest testified that the Inky still needed Marimow.

"I know Bill," he said. "I know his value to the Inquirer."

Lenfest said he was the chairman of IGM's board of directors, but that the board never meets. "Everything's done under the direction of Mr. Norcross," Lenfest griped.

Lenfest agreed it was "a business decision to terminate an editor," not an editorial decision. "That's a business decision," he insisted.

When Lewis Katz took the stand, he testified that he had put up "the same amount of money as Mr. Norcross," $16 million, so he wanted to have "equal powers." That was the logic behind the management committee. In dealing with Norcross, Katz said he wanted "blocking rights."

The no-meddling pledge, Katz said, applied to "news decisions or news operations."

"We never said we were never gonna not hire the editor."

Katz disagreed with Hall over Marimow's support among the troops. Katz estimated that Marimow had the confidence of 90 percent of the newsroom. The other 10 percent was upset because "he works them so hard," Katz said.

Testimony in this sorry spectacle is expected to resume tomorrow and wind up before lunch time.