The Reporter Who Hired Her Own Editor

By Ralph Cipriano
for Bigtrial.net

On April 1, 2012, ace reporter Nancy Phillips was writing about what it would take to bring Bill Marimow back as editor of The Philadelphia Inquirer.

"His proposed terms," Phillips wrote, are "a salary comparable to what he was being paid when he left: $257,000. He says he is prepared to immediately announce that he was volunteering to cut his pay by 20 percent as a gesture to set the tone for concessions and cutbacks from others in management as well as the unions ..."

Phillips, however, wasn't writing for the news columns of Philadelphia's paper of record. On this assignment, she was reporting directly by email to Lewis Katz and George Norcross, the new owners of the Inquirer, on her negotiations to bring back Marimow.

When Phillips got through arranging the rehiring of Marimow, she went to work on bringing back Brian Tierney, the Inky's former publisher, as a sales consultant, and Mark Frisby, a former Tierney lieutenant, as a senior vice president in charge of production. She did all this while she was just a reporter in the Inky newsroom, and a member of the Newspaper Guild, rather than management.

Last year, however, all of these folks were playing on the same team. Now, Katz and Norcross are in court fighting each other over the firing of Marimow. Tierney has been fired; Frisby is no longer around. And Phillips's extraordinary role as a head hunter may be recast by Norcross's lawyers as meddling on behalf of her longtime companion, Lewis Katz.

Meddling is what the lawsuits in the dispute over the Inky are all about.

Inky Publisher Bob Hall fired Bill Marimow for not making changes Hall wanted to make, namely canning some old "Friends of Bill" who were high-paid editors, and using that money to hire young reporters to cover local news.

Katz and another Inky owner, H.F. "Gerry" Lenfest, sued in Philadelphia's Common Pleas Court, claiming that Hall didn't have the right to fire Marimow, and that Norcross was using Hall to meddle in the affairs of the newsroom. The Katz and Lenfest lawsuit seeks to fire Hall and reinstate Marimow.

All six new owners at Interstate General Media [IGM] have taken a no-meddling pledge. They signed a promise not to "influence or interfere with editorial policies or news decisions." When it comes to the editorial operations of the Inky, Daily News and philly.com, the new owners were supposed to be as pure as Caesar's wife.

But what about Caesar's girlfriend?

Norcross countersued in the Delaware Courts, where IGM was incorporated, claiming that it was Katz and Lenfest who were meddling in the affairs of the newsroom. In his emails, publisher Bob Hall repeatedly accused Katz and Phillips of newsroom meddling, as well as encouraging Marimow to oppose changes Hall wanted to make.

In an Oct. 7 email, Hall wrote that his plans for progress "have been frustrated by the direct interference of Lewis Katz (and by extension through his longtime companion Nancy Phillips) in the editorial process and management of the newsroom and preventing us from implementing what we believe are the appropriate changes. The Katz/Phillips interference, unfortunately, continues to this day."

Philadelphia Judge Patricia McInerney ruled that the legal dispute over IGM belongs in Philadelphia. This morning, beginning at 10 a.m., she'll preside over a hearing that may decide, at least in round one, who was doing the meddling at the Inquirer.

For this morning's hearing, Nancy Phillips is on the witness list for both the Norcross and Katz legal teams.

In recent days, a public relations consultant for Katz, Lenfest and Marimow has charged that Norcross was meddling in the newsroom when he supposedly "pressured" Marimow for months to follow the recommendations of a readership study, and whack the Inky's editorial pages from two to one. The reasoning was, the readers just didn't care.

But team Norcross claims Katz was employing Phillips to meddle in the newsroom from day one. She could not be reached for comment.

Neither could Norcross. A source close to the situation, however, said that when Norcross got involved in the purchase of the Inquirer, he didn't know anything about the newspaper business, so he deferred to Katz and Phillips.

"Unfortunately, it only became clear later that Nancy's involvement was a way for Lewis to try and influence the newsroom," the source said. "Everyone sort of thought that all the owners would abide by the non-interference pledge. Hindsight is 20-20, but this will be part of any hearing."

When did the alleged Katz/Phillips meddling begin?

"The very first day," the source said, "when they [Katz and Phillips] both felt it was OK to try to change the content of a story."

That story at issue concerned a profile of the new IGM owners, and an outing of the Katz-Phillips relationship.

Documents leaked to Big Trial show that Phillips's stint as IGM's top head hunter was fully in operation on March 27, 2012, when Marimow sent her his list of terms for returning to the Inquirer.

Marimow told Phillips he wanted the "autonomy" to "play a significant role in improving our web site in terms of both content and news judgment."

"Ideally, the editor of The Inquirer would have the authority to be the decision-maker on how to display major stories on philly.com," Marimow wrote.

Marimow requested "a guarantee of job security for a reasonable number of years," moving expenses, a payment for "temporary housing for up to six months," and an agreement that he could hire "two or three key editors like Vernon Loeb to accelerate the expected improvements in content and the web site."

Loeb, a former Inky reporter, became a top editor under Marimow during his first stint as Inky editor from 2006 to 2010. Then, Marimow got fired for the first time and Loeb left for the Washington Post.

Marimow told Phillips he was available to start his second stint as Inky editor on May 21, 2012. "Thanks very much, Nancy, for everything, and please tell Lewis that I say thank you very much to him," Marimow wrote.

Phillips said the decision on whether to accept Marimow's offer to take an immediate 20 percent salary cut was up to Katz and Norcross, "if you think that would be helpful," she wrote in an April 1, 2012 email to the new owners. "You should talk about whether that makes sense."

Marimow was also seeking "the ability to put in place two or three excellent editors who are trusted lieutenants and share his vision and his demands of journalistic excellence," Phillips wrote Katz and Norcross on April 1. She suggested there might be "considerable savings that could be achieved from dispensing with managers who do not have union protection who are mediocre at best."

Phillips told Katz and Norcross that bringing back Marimow would be "so exciting for the staff."

"He would attract the best people and immediately improve morale in the newsroom," Phillips wrote.

Hall, however, disagreed in an Oct. 7 email about the popularity of Marimow.

"Marimow does not have the support of most of the newsroom in spite of what Nancy Phillips says," Hall wrote IGM owners. "The informal nickname (from the rank and file) for several staffers is FOB, Friends of Bill. The Guild constantly gets complaints about favoritisms and operations in the newsroom from their members."

On April 3, 2012, Phillips sent along a statement from Marimow to Katz, Norcross and Kevin Feeley, a public relations consultant. "Let me know what you think," Phillips wrote. "I thought he made all the right points in the initial draft he sent me, and I made only minor edits."

"I'm tremendously excited about returning, once again, to my home town and to The Inquirer," Marimow said in the statement. "My goal is to make sure that we're producing indispensable content -- in print and online -- that our audience in Philadelphia, South Jersey and the Pennsylvania suburbs will have to read. We have to be excellent in every nook and cranny of our coverage -- whether it's scrutinizing our schools, the quality of the Eagles draft choices, or the Van Gogh exhibition at The Philadelphia Art Museum."

The rollout of the new owners and the old editor went off without a hitch.

"Everybody' a suck-up," Phillips emailed Norcross on April 2, 2012. "Response in the newsroom has been mostly positive, so I would say you guys did a good job."

But there was one glitch.

Stan Wischnowski, who was being replaced as the top editor by Marimow, insisted that the Inquirer had to disclose the Katz-Phillips relationship in its news columns.

In a series of emails to Norcross, Phillips talked about her efforts to lobby editor Wischnowski to keep her relationship with Katz out of the Inquirer. Meanwhile, she simultaneously discussed the non-interference pledge regarding editorial.

Her relationship with Katz is "wholly irrelevant," she told Norcross on March 30, 2012. "We should talk about the pledge at some point and decide. And we need to be sure that some time between now and Monday, Lenfest is up to speed on the plans and is reading out of the same playbook in case reporters call him on Monday."

"Lewis, meanwhile, is really troubled, as am I, about the paper's looming decision to include our relationship in its biography of him," Phillips wrote Norcross on March 31, 2012. "Stan told me he thought it was newsworthy because he considers me one of the "top reporters" at the paper and because my stories 'have attracted national attention.' "

Phillips is the reporter who coaxed a tearful confession out of the guy who had arranged the murder of Carol Neulander, at the request of her husband, Cherry Hill Rabbi Fred Neulander. Phillips is also the reporter who outed former Daily News sports columnist Bill Conlin as a child molester.

"She's the antithesis of a rough-hewn, monomaniacal investigative reporter," Bill Marimow told American Journalism Review about Nancy Phillips in 2001. "She's a very civilized, very cultured, very decent person."

"Although Phillips has an almost Victorian demeanor, she goes after the grittier stories,"Alicia C. Shephard wrote for AJR. Stories about a mayor who was linked to a drug-related murder, Camden's drug network and questionable patronage deals at the Delaware River Port Authority.

But Phillips was so upset about her paper's plans to disclose her relationship with Katz that she talked about resigning.

"I can't tell you how much I worry about the potential consequences of such a story," Phillips wrote Norcross, because of concern over "hurting a frail and profoundly ill woman," namely Katz's wife. "I have tried to dissuade Stan from this, and I might yet succeed," Phillips wrote. "But maybe not. If not, that may be too high a cost. Part of me wants to kill the whole deal over this."

"The relationship poses no conflict for the newspaper," Phillips wrote Norcross on March 31, 2012. "I have always stayed out of stories involving Lewis. Also argued that there was really no relevance to this, beyond gossip appeal."

Wischnowski "has not replied to my message, but in fairness, he is at a newspaper editors convention," Phillips wrote Norcross. "And it's also possible that he doesn't want an email trail. Still, I think he's scared and might come down on the side of disclosure lest he or anyone else there be accused of holding back 'the news.' So upsetting."

On April 2, 2012, Phillips wrote Norcross that her lobbying attempts had been unsuccessful.

"I offered to resign, she wrote. "It changed nothing. They're printing it ... Am thinking current position untenable under circumstances, which is sad because -- forgive me for saying so myself -- I am really good at what I do."

The Inquirer made no mention of the Katz-Phillips relationship in the main story on April 3, 2012, announcing the new ownership group's purchase of the two newspapers and philly.com website. But in a sidebar about Katz, near the bottom of the story, the paper wrote, "Katz and his wife, Marjorie, have two children. The couple have lived apart for many years. Katz is in a long-term relationship with Nancy Phillips, an award-winning Inquirer investigative reporter."

Talk about burying a story.

On May 24, 2012, Steve Volk of Philadelphia magazine wrote an online blog post headlined "Philly Journalism's New Power Couple."

"On one level, this passage is remarkably French --- identifying both Katz's wife and his mistress without so much as the literary equivalent of a raised eyebrow,"Volk wrote. "On another, it raises a host of questions, from exactly how these relationships work to what the heck will be going on at the Inquirer when one of its reporters is also a de facto owner."

But Phillips stayed on in her position as corporate head hunter. In an April 23, 2012 email, Phillips told then-CEO and Inky publisher Greg Osberg she was sending Tierney a "non-disclosure agreement" so he could "be available to help."

Tierney eventually negotiated a $25,000 a-month gig as a sales consultant that started in April 2013. He was fired earlier this month for sales results that were "considerably below expectations," according to a confidential IGM management analysis. 

The pursuit of Tierney coincided with the return of Mark Frisby, former executive vice president for production, labor and purchasing under Tierney. On April 22, 2012, Phillips sent Osberg an email, saying she had retained Frisby, who returned as a senior vice president in charge of production. He has since left his job for health reasons.

Phillips is now city editor of the Inquirer, but she hasn't been seen at the office this week.

Norcross and Hall aren't her only critics. On Nov. 6, Bill Ross, the executive director of the Newspaper Guild, took a swipe at Phillips, as well as Katz and Marimow, in an open letter to Lenfest.

"Through conversations with Lewis, it has become clear that his only plan for the company was to waste money on legal fees to bring his friend Bill Marimow back to a position in which many of my members, as well as industry observers, feel he is not equipped for," Ross told Lenfest.

Katz was also working "to bring back Brian Tierney who drove the company into bankruptcy and has nothing but distrust from my members," Ross wrote. Katz's other goal, Ross wrote, was to "make sure that his [Katz's] companion returns to a Guild job in the Inquirer newsroom."

This was amusing, Ross said, because Phillips "once conducted a byline count of her colleagues, breaking down how much each earned per story written and told the owners that her fellow journalists were paid too much."

Katz, in an interview with the Inquirer, called Ross's statement "a significant lapse of judgment riddled with inaccuracies." He accused the union official of "carrying George Norcross's water."

Today, the combatants will face off against each other in open court.

If Team Norcross is going after Nancy Phillips for alleged meddling, will Team Katz retaliate by going after Lexie Norcross?

If Phillips was meddling in the Inky newsroom on behalf of Katz, couldn't Katz's lawyers contend that George Norcross was meddling when he installed his daughter as a corporate executive overseeing philly.com?

Norcross was active last week in an attempt to close that door, at least on the public relations front.

Lexie, Norcross's 26-year-old daughter, serves as a VP of digital operations and corporate services. In a Nov. 6 letter to all IGM employees, Norcross stated that while Lexie has oversight over the budget, and coordinates "large digital advertising pitches," she "does not control the editorial decisions of the website."

Lexie Norcross, according to a source close to the situation, is not named on either witness list for today's hearing.