Unions

Mouse politics

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› annalee@techsploitation.com

TECHSPLOITATION My apartment has been invaded by mice, and my biggest worry is not that I will catch some strange disease but that they’ll stage a revolution. I’m like some kind of Beatrix Potter Marxist, worried that the distribution of rice in my house is indeed unfair and that there is a kind of injustice in the fact that I won’t share my stale caramel popcorn with the mice who want it.

This ridiculous philosophical and pestilential situation started when I heard really loud squeaking from behind my bookcase — the one full of books on leftist activism and Marxist criticism. I discovered a family of five mice, fighting over a stash of rice that they’d hidden behind the books. They’d also been eating part of a book on cultural studies and left tiny mouse turds between the pages of another, by Greil Marcus, about punk rock. They’d stolen my rice in improbably large amounts, hauling it up from a bag in my cupboard to the top of my bookshelf for storage. I’m sure they figured that it wasn’t stolen — they’d liberated it.

At first, I didn’t react to this situation with the brute animalistic feeling of "kill the invader" that evolutionary biology would predict. I’ve been so well-trained by blogs like I Can Has Cheezburger? and Cute Overload that at first all I could think, upon discovering this gang of mice in my bookshelf, was that they were adorable. One of them kept running up the wall and jumping down to the floor with an awkward splat. Cute!

I also had a hard time adjusting to the idea that these whiskery little guys might be spreading disease. Apparently mice can spread hantavirus, a very rare and deadly virus that attacks the respiratory system. I’m not sure what else they spread, but all the mouse-control Web sites I looked at had these paranoid instructions on how to dispose of mouse poop in double bags and how anything touched by mice should be rigorously disinfected.

Despite this, my first reaction to the mouse party on my bookshelf was to block the mouse hole that I found near my stove, sweep up the rice and poop, and go to bed. Two nights later, having gotten no sleep due to mouse-related shenanigans, I began to feel the interspecies hate. All the squeaking and scratching and pooping and sneaking in through teeny cracks had worked my last nerve. I’d put all my grains and sugar into sealed containers, and now I needed traps. But of course they should be humane traps. I kept worrying about what the most ethical way to deal with the mice would be. What would animal liberation ethicist Peter Singer do?

Actually, I’m pretty sure Singer would say, "Kill them." But I was still feeling the Cute Overload, so I bought these traps that lock the mouse in a tiny cage so you can release them. I’m not sure what I was thinking: that I would reintroduce them into the wilds of Golden Gate Park? That I would establish some sort of bilateral agreement with them to acknowledge their right to collective bargaining, then raise wages and offer health care so they would stop doing squeak-ins all night in my kitchen? Dear reader, there is really nothing worse than a leftist with anthropomorphizing tendencies. This is exactly why people join PETA instead of unions and protest animal experimentation instead of how humans are treated in jail.

Even my scientific know-how somehow managed to enhance my magical thinking. I kept recalling how similar the human genome is to the mouse genome. Lisa Stubbs of Lawrence Livermore National Laboratory has written that mouse genomes are, on average, about 85 percent similar to human. Doesn’t that make mice my genetic cousins? Shouldn’t I learn to share my house with them somehow?

No. On day four of the mouse invasion, I finally went into predator mode. I put out deadly traps that kill mice instantly — no torturing them in tiny boxes before releasing them into a park to be eaten by local cats. I know it sounds awful, but mice are not people. It’s true that they have emotions and share many genetic traits with humans, but unfortunately I can’t negotiate with them about living arrangements. I comfort myself by saying that I’m doing the only thing mice can understand: acting like the predator I am.<\!s>*

Annalee Newitz is a surly media nerd whose geriatric cat is the only creature in her apartment that can sleep through the nightly mousefest.

Importing injustice

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› news@sfbg.com

More than 100 tractor trailers were lined up at 6:30 a.m., inching toward the Port of Oakland’s Terminal 7, waiting for their next load. Against the backdrop of the San Francisco skyline, a mammoth freight ship emblazoned with the name Hyundai glided toward the port, pregnant with multicolor shipping containers.

A driver told the Guardian that he expected to be in line for at least two hours waiting to drop off the empty container attached to his big rig. His 1989 truck lacks air-conditioning, so the windows were rolled down, allowing diesel exhaust to pollute the air he was breathing.

It’s the same scene at many of the port’s other terminals: long lines of ancient trucks slowly snaking toward their destinations, their primarily immigrant drivers performing the essential and thankless task of transporting cheap clothes from Asia to the nation’s big-box retailers or helping to export California’s agricultural goods to Hawaii.

The fourth-busiest container port in the nation, the Port of Oakland is the economic engine of the region, providing thousands of jobs and more than $1 billion in revenue. But activists say that the port system has also led to sweatshoplike conditions for truckers and created a health crisis for the surrounding community.

On their poverty-level wages, truckers are usually able to buy only the oldest, most polluting trucks. Their diesel pollution is a major factor driving asthma rates through the roof in the neighboring, primarily African American neighborhood of West Oakland, where, the American Lung Association says, one in every five kids has asthma.

A new national coalition of labor, environmental, and community activists has advanced a proposal that would make all drivers employees with benefits, radically changing the way work is done on the waterfront and possibly heralding the return of the Teamsters to the ports for the first time in more than 20 years. In the process, the proposal would make the port’s biggest customers responsible for its environmental problems.

The coalition places the blame for the current situation squarely on giant retail shippers such as Wal-Mart and Target and is calling for them to be held accountable for the full environmental and labor costs of the cheap goods they sell — a call the corporations are strenuously resisting. The American Trucking Association, whose members contract directly with the corporation, has threatened a lawsuit if the change is adopted. But port officials have voiced a willingness to seriously consider implementing the proposal.

Having long claimed that the trucking industry is outside its control, the Port of Oakland could embrace the proposal as a means of satisfying community, environmental, political, and business concerns. With impending directives to clean the air coming from Sacramento, trade planned to almost double by 2020, two new Port Commission appointees representing labor and environmental concerns, and a federal antiterrorism tracking plan slated for this fall, the port is poised to play a leadership role that could reverberate up and down the West Coast and across the country.

THE TRUCKER’S LIFE


The Port of Oakland’s estimated 1,500 to 2,500 drivers are a far cry from the middle-class, long-haul Teamsters and the Smokey and the Bandit–<\d>style freewheeling rebels who have long been engrained in the American imagination. Instead, they are at the bottom of the port’s food chain and are the most exploited trucking sector in the country, consisting primarily of recent immigrants struggling to make ends meet.

Dawit Fre, 39, immigrated to Oakland from the small nation of Eritrea two years ago. "I wanted to see a better life," he told us. Fre was a driver in Africa and went to work for the Port of Oakland after his cousin told him people start their trucking careers there. He said he works up to 60 hours a week for one company, making the equivalent of about $8 an hour after expenses.

Fre arrives at work every day no later than 6:30 a.m., waits for dispatches from his company, and spends a minimum of two hours in line for each container he picks up or drops off. He is paid $42 for each load by the company. He doesn’t know how much the trucking companies make but has heard that some get $200 per load. He returns home around 6:30 at night.

"The whole time I’m at the port, I’m thinking about my family," he said. "I got children. The only thing I’m thinking inside the terminal is, how many moves am I going to do? Am I going to do four or five or three or two?"

On a good day he can get four, on a bad day as few as one, depending on the length of the lines and the generosity of the dispatcher. Then there are his expenses. As an independent operator, Fre is solely responsible for a tankful of diesel that costs him up to $250 a pop. DMV registration is $178 a month, and 12 percent of his weekly earnings goes to his boss for insurance on his truck, not to mention annual federal income tax.

He receives no benefits, no overtime pay, and no health care coverage at a time when his wife, a diabetic, is suffering from severe stomach complications. "I’m taking her to Highland Hospital," he told us. "If it’s easy for them to fix, they can do it. But if she has a big problem, they can’t do it."

Fre has his own health problems. "Most of the drivers, we have old trucks," he said. "You don’t have AC, your windows are down, and you get sick in the truck" from the diesel. Fre’s remedy for his persistent coughing and the burning in his throat is several glasses of milk after each day of work.

A 1998 study published in the Journal of Independent Medicine found that truck drivers face a risk of cancer 10 times greater than Occupational Safety and Health Administration–acceptable levels, and a 1990 study published in the American Journal of Public Health showed that truckers face nearly double the average lifetime lung cancer risk.

Fre has little money to invest in his truck, a ragged 1987 model that he said needs $5,000 in repairs. He doesn’t trust it on the freeway, so he’s asked his dispatcher to send him only from pier to pier, not outside the port, further dipping into his earnings. "I came here to see a better life," he said. "When I got here, I found it is different. Here we don’t get paid for the overtime. We don’t get benefits. When I get into the terminal, there is no respect."

His experience is typical of those of port truckers across the country. A study by the East Bay Alliance for a Sustainable Economy, a labor-affiliated think tank, found that the average Port of Oakland trucker makes as little as $8 an hour after expenses, works 11 hours a day, and spends two and a half hours in line per load. Almost none of the truckers reported receiving benefits on the job, and 66 percent don’t have health insurance.

This is consistent with data from a 2004 survey of port truckers in Los Angeles and Long Beach, conducted by a professor of economics at California State University Long Beach. That report found they had a median income of $25,000 a year after expenses and an average workday of 11.2 hours, with up to 33 percent of their time spent waiting in line.

Port truckers generally drive only the oldest, most polluting trucks because that’s all they can afford. An industry adage is that ports are "the place trucks go to die," a reality that has dire impacts on the surrounding communities.

POLLUTING THE COMMUNITY


West Oakland has long been a dumping ground for the Bay Area’s toxic waste. The community has one of the five highest asthma hospitalization rates in California, with an estimated 20 percent of its K–<\d>12 students suffering from the disorder, according to the ALA. Researchers at the University of Southern California have found that children living within a few hundred meters of freeways leading out of ports not only are more likely to suffer from asthma but also actually develop smaller lungs.

Margaret Gordon, a 60-year-old community health activist who has lived just blocks from the Port of Oakland for 15 years, told us that she and four of her grandchildren living with her all suffer from asthma. When one grandchild was born with severe asthma and her own asthma worsened after she moved to West Oakland, Gordon, then a housekeeper, started reading about the causes of asthma and made the connection to the port. Like many in the low-income neighborhood, she cannot afford to move elsewhere in the Bay Area.

Gordon has been fighting for clean air for more than a decade, and in April she was inducted into the Alameda County Women’s Hall of Fame for her work. In 2001, Gordon formed the West Oakland Environmental Indicators Project, which she now cochairs. The project has released more than half a dozen studies related to air quality. A 2003 report showed that trucks traveling through West Oakland in one day produce the same amount of toxic soot as 127,677 cars, leading to indoor air in some neighborhood homes that is five times more toxic than that in other parts of the city.

Still, Gordon told us that port officials are "only starting paying attention." Last year the California Air Resources Board passed a resolution related to air quality at ports and announced that it was developing a regulatory mechanism. A 2006 CARB report found that truck diesel exhaust accounts for the majority of the estimated 2,400 deaths related to freight transport each year and 70 percent of the state’s air pollution–<\d>related cancer risk. Freight transport will cost California residents $200 billion in health costs over the next 15 years. Most of this is borne by low-income communities of color near freight transport hubs.

The combination of state mandates and local community concerns is starting to spark a change. "They would sit down and talk with us before that, but there was not anything concrete done," Gordon told us. The port is now in the early planning stages of an air-quality-improvement program, working with Gordon and other activists.

That movement is getting vigorous new support from the Coalition for Clean and Safe Ports, a national partnership of labor, environmental, and community activists organizing at the country’s major container ports: Los Angeles, Long Beach, Miami, Oakland, New York–New Jersey, and Seattle.

"Every one of those ports has the same environmental and labor problems we have in Oakland," Doug Bloch, the coordinator for the coalition in Oakland, told us during a tour of the port’s heavy industrial landscape. Virtually all of its 900 maritime acres are covered by concrete and asphalt, monster cranes that inspired Star Wars‘ Imperial Walkers, and 20-foot steel containers stacked up like Legos behind chain-link fences.

The Port of Oakland has no direct relationship with its truckers at the present. Shippers take price bids from among roughly 100 trucking companies at the port, then contract the work to the independent-contractor truckers. The CCSP says bidding wars lead to poverty wages for truckers, older trucks and more pollution, and a chaotic port full of inefficiencies like long pickup waits.

Under the proposed system, ports would call on their ability as landlords to set standards for the trucking and shipping companies. They would require trucking companies to hire drivers as employees, shifting maintenance costs from the drivers to the companies, which would retrofit or replace all port trucks with more environmentally friendly rigs. The ports would allow only new, cleaner trucks to enter. The companies could then, in theory, pass the costs on to shippers and end users.

If drivers were paid as employees by the hour instead of by the trip, the coalition expects the market would reduce inefficient truck wait times and air pollution.

"When you rent an apartment you sign a lease," Bloch told us. "If you trash the place, you get evicted. Corporations are trashing this community, but they’re not being evicted."

A test case could soon be under way at the ports of Los Angeles and Long Beach, the two largest in the United States, and the situation is being closely watched by ports and industries across the country. Port commissioners there had hoped by the end of this month to approve the coalition’s program, which they expect to reduce diesel truck emissions by as much as 80 percent over the next five years. But growing opposition and the threat of lawsuits by groups like the California Trucking Association, which represents the owners of truck companies, and the Waterfront Coalition, a consortium of major retailers, led the ports to delay their decision. The commissioners now expect to vote in September after completing an economic impact survey.

At the center of the storm is the fact that as employees, truckers would be able to organize and form a union. As independent contractors, they are barred from doing so because of antitrust laws originally created to oppose vast enterprises that dominated industries. (A further irony is that giant retail steamship companies have experienced incredible consolidation and enjoy a limited antitrust immunity.)

If passed by LA port officials, the plan would be implemented there starting Jan. 1, 2008, and could result in a domino effect at the other, smaller ports across the country. "The industry is fighting like hell in LA," Bloch told us. "They know that if they’re going to have to pay, the party’s over."

Meanwhile, Bloch told us that more than 1,000 truckers have signed a petition asking the Port of Oakland to pass a version of the coalition’s proposal, and it will be presented to the Port Commission, the seven-member body that would eventually vote on the proposal. Spokesperson Libby Schaff told us that the port "agrees with the coalition that the port can and should have a more direct relationship with its truckers" and is "very seriously considering the coalition’s proposal."

Because the proposal "constitutes a major overhaul of the way trucking is done today," Schaff said the port is currently holding stakeholder meetings with residents, truckers, terminal operators, elected officials, the business community, and labor to consider it in the context of a more comprehensive port plan. Schaff said a comprehensive plan could be crafted in less than a year.

The port has not taken a position on granting truckers employee status. It is also looking into other funding mechanisms for a clean-truck program, including money from a pending state bill that would impose a $30 fee on every 20-foot-equivalent unit passing through the Los Angeles, Long Beach, and Oakland port complexes, to be used for improvements in road and rail infrastructure and for clean-air programs.

The legislation, Senate Bill 974, by Alan Lowenthal (D–Long Beach), would generate more than $525 million annually. But it faces tough opposition from some very powerful interests.

RESISTING CHANGE


Bill Aboudi, president of Oakland’s AB Trucking and a member of the CTA, told us truckers are "treated like second-class citizens," and he believes long lines and trucker asthma are serious problems. But he strongly opposes the coalition’s proposal. Instead, he told us, state regulations like those forthcoming from CARB and other piecemeal reforms are the answer.

"The coalition’s main goal is to unionize the drivers," Aboudi said. He was wearing a baseball cap emblazoned with two American flags and the words "Oakland Trucker." An immigrant from Israel, he has been at the Port of Oakland since 1992. "If these guys choose to be owner-operators, why are you rocking the boat? You can’t be playing with my livelihood just because you want to get union dues," Aboudi said. "Truckers want to own a piece of the American dream. They want to own their own truck."

It’s an appealing image to many. Kevin Leonard, an owner-operator trucker who contracts with Aboudi and others, told us he doesn’t want to give up his independent status. "I have the freedom to work when I want," he said. "I don’t see how the Teamsters can represent me better than I can."

The trucking industry as a whole says the coalition plan will force away trade and drive out small trucking companies, which will have to maintain the trucks and start paying benefits such as health insurance and workers’ compensation.

Yet Assemblymember Sandré Swanson (D–Oakland) brushed aside those arguments. "I’ve been involved in Bay Area politics for more than 30 years," he told us. "I’ve seen these same claims made against farmworkers as they were organizing for better conditions. I’ve seen these arguments made when we were raising the minimum wage. I think the opposite is true. If you have a workforce with a livable wage, it’s a more productive workforce, and I think everyone benefits. Truckers deserve more, and we’re going to do what we can to help them."

Oakland City Council president Ignacio de la Fuente, who drafted and helped pass a minimum-wage law for port employees, told us he supports the right of truckers to unionize but labor and environmental concerns must be balanced with economic growth. "You can’t ignore the fact that you have the port of Oakland competing with other ports," he said. "I support the fact that the Teamsters are going to bargain collectively on a national level. This port competes with other ports, and you cannot be put at a disadvantage."

Bloch says the coalition’s target is the shipping companies, not the trucking companies. "The shippers are hiding behind the trucking companies," he told us. "On the one side there are the giant shipping companies, like Wal-Mart and Target, huge global companies that demand low prices from trucking companies. On the other side are tiny trucking companies, immigrant truckers, and communities of color. Wal-Mart’s slogan is ‘always low prices,’ but ‘always low prices’ means one out of five children in West Oakland with asthma and drivers making $8 an hour who can’t support their families."

Oakland mayor Ron Dellums may be signaling his support for reform with two new appointees to the Port Commission. Even before he took office, Dellums was working to influence the Port Commission; as mayor-elect, he requested that outgoing mayor Jerry Brown hold off on appointing a new nominee so Dellums could appoint someone working on environmental and community impacts. He lost this battle when a majority of the city council voted to appoint Mark McClure, the director of marketing at a business technology company focused on security.

Dellums’s latest appointees, announced earlier this month, are a marked contrast to the business-oriented appointees of the Brown era: Victor Uno, a financial secretary with the International Brotherhood of Electrical Workers, and Gordon, the longtime resident and environmental activist in West Oakland.

"The port’s policy has been all about business and not about the people," Gordon told us. "The mayor really wants someone there to talk about health issues. I have never known a mayor to put someone on the commission and one of their engagements is to talk about health." She would also like to see a public participatory-process policy built into the port. "This is about sharing the power," Gordon said. "I don’t think West Oakland residents know they have power." She has "no problem" with truckers unionizing but also wants to find a way for drivers to remain independent contractors if they prefer.

Uno told the Guardian that he is highly supportive of the proposal. "I think that if the whole commission takes the lead of Mayor Dellums that this proposal will be very seriously considered," he said. "I’m very optimistic." Asked if he thought a proposal could succeed without requiring trucking companies to hire truckers as employees, he said, "I do not see how that is possible, given the lack of regulations in the trucking industry. It’s a dog-eat-dog world among independent truckers."

DEREGULATION HISTORY


The ports were not always structured as they are now. Before the 1980s the Interstate Commerce Commission regulated trucking, and most truckers at California ports were members of the Teamsters. They had health care, pensions, and workers’ compensation insurance and were paid a middle-class wage.

As part of a national push toward deregulation in the late 1970s, Congress, spurred by President Jimmy Carter, deregulated the trucking industry in 1980. In the following few years, a flood of new trucking companies entered the ports, with shippers choosing between a growing number of companies for each job. As small trucking companies undercut one another in bidding wars, the falling rates translated into declining driver pay, the bankruptcy of Teamster-organized companies, and increasing reliance on independent contractors whom companies could hire without spending money on payroll taxes, health care costs, or other benefits that unions might try to extract.

Trucking expert Michael Belzer, an economics professor at Wayne State University, has shown that long-haul truckers now earn less than half of prederegulation wages and work an average of more than 60 hours a week, while retailers like Wal-Mart have thrived. "The low rates paid to truckers in this global-trade game acts as a subsidy for increasing the amount of trade," Belzer told us. "Pollution and safety hazards are the negative externalities." If all ports on the West Coast required employee drivers, he said, "the market result would be that cost and safety would go up, and pollution would go down."

There have been a handful of Teamsters-related or trucker-led rallies and work stoppages at the Port of Oakland since deregulation, including a technically illegal strike in 2004 protesting the soaring price of diesel fuel, which virtually shut down the port for eight days. Many of the same complaints of today’s port truckers were aired at that time — long waits in lines, poor pay, long hours, and no benefits.

"This business is like the Mafia," Lorenzo Fernandez, 36, said, standing in front of two metal taco trucks glinting in the noon sun, along with about a half dozen other truckers on their lunch break. "They’re doing whatever they want with us, between the [truck companies] and the shippers. There is so much competition between the companies, and they know that we need the job. They know that our kids will go hungry."

Muhammad Khan, 33, said he’s sometimes forced to make up for long wait times by driving dangerously fast on the freeways. "We have our families. We have to take care of them. We all risk our lives because we have to. We don’t make enough money if we don’t make a load," Khan told us.

"We’re all immigrants here," Fernandez said. "We make it possible for the economy to grow up, but they’re stepping on our faces…. We have to work together. Otherwise we are going to be slaves for life."

A sign on a chain-link fence near the taco trucks reads, "Got an old truck? The Port of Oakland can help! Replace your old truck today!" Call the number at the bottom of the sign, and a recorded message issues an invitation to an informational barbecue that took place four months ago. The message explains that the port will provide qualifying owners with up to $40,000 to replace trucks dating from 1993 or before with a 1999-model truck. But Schaff told us, "Due to overwhelming demand, new applicants are currently not being accepted."

Money for the program came from a $9 million settlement of a lawsuit West Oakland residents filed against the Port of Oakland in 1998, alleging that their health was being harmed by port operations. The port says it will replace a total of 80 of the estimated 2,500 port trucks with those funds. When asked if the port had a responsibility to truckers, Schaff said it was "consistent with the port’s commitment to social responsibility…. We’ve done a lot, and we’re going to do more."

But the only specific programs the port could point to were the truck replacement program, a trucker access committee and working group started after the 2004 strike, and new GPS cell phone technology that is being touted as a solution for bottlenecks. Chuck Mack, the Teamsters’ Western Region vice president, isn’t impressed. "They’re a joke," he said of the programs. "Very few independent contractors have utilized them."

The recent purchase of the GPS system particularly irritates Mack. "Here is a quasi-governmental agency supplying services to the trucking companies," he told us. "It’s bizarre that we’re using taxpayer money for this. Any other industry would buy the devices themselves."

"We don’t disagree with using this money" for truck replacement, Mack said, "but what you’re doing is blowing $2 million in taxpayer money. Years down the road they’re going to need a new truck and another million in taxpayer money. For Wal-Mart and Target it’s great because they can have the taxpayer pick up the bill. Without changing the model, it’s just a short-term fix at the expense of the taxpayer."

EMPLOYEE BENEFITS


Beyond the environmental and economic benefits of making truckers employees of the companies, the change also might improve port security. The federal Transportation Worker Identification Credential program, expected to be implemented in the fall, will check the identities of the nation’s 750,000 port employees, 110,000 of whom work as truckers. Under the present system, there is no way to track the independent port truckers.

Employees are easier to track, and they are also better for port security in other ways. Among low-paid port truckers, turnover rate is extremely high, according to the ATA. "We all know that having a stable, well-trained, reliable workforce only leads to more security," Bloch said. "If they’re trained, they can be the eyes and ears of the port."

Well-paid truckers also would lead to safer ports. In a 2005 report, Belzer showed that "a substantial fraction" of independent operators actually loses money each year, resulting in "a high risk of unsafe operations among those earning the least money." The low compensation also "presents a national security risk," his report read, "since those who desperately work to break even might be at risk to engage in activities that put the nation at risk, whether intentionally or unintentionally, just trying to find a way from not going under."

Driving past another long line of trucks idling outside a gate after lunch break, Bloch pointed out one truck. A placard on the back of the rig read, "End sweatshops on wheels."

The current port system "just heaps abuse and abuse on these truck drivers and this community," Bloch told us. "The big businesses like Wal-Mart don’t pay the cost of polluting Oakland. It’s the truck drivers and the community that pay the cost. People pay with their lives."

"You can’t fix the environmental problems without fixing the problems of the driver," he said. "And now you have labor and the community coming together, and that’s powerful."*

Needed: a campaign against privatization

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EDITORIAL Of all the cities in the United States, San Francisco ought to be most aware of the perils of privatization. Much of the city burned down in 1906 in part because the private Spring Valley Water Co. hadn’t kept up its lines and thus was unable to provide enough water for firefighting. A few years later, in one of the greatest privatization scandals in American history, Pacific Gas and Electric Co. stole what was supposed to be the city’s publicly owned electricity, costing the local coffers untold hundreds of millions over the past 80 years.

This is a city that votes 80 percent Democratic and has always opposed the Ronald Reagan–George H.W. Bush–George W. Bush agenda. A large part of the local economy depends on public employment (the city, the state, the federal government, and the University of California are by far the largest employers in town, dwarfing any of the biggest private-sector companies).

And yet Mayor Gavin Newsom, who likes to say he’s a progressive, is pushing an astonishing package of privatization measures that would shift public property, resources, and infrastructure into the hands of for-profit businesses. He’s talking about privatizing the golf courses, some city parks, and even Camp Mather. He’s promoting a tidal-energy deal that would give PG&E control of the power generated in a public waterway. He hasn’t lifted a finger to stop the ongoing PG&E–Raker Act scandal. And he’s determined to hand over a key part of the city’s future infrastructure to Google and EarthLink (see Editor’s Notes, p. 1).

This nonsense has to stop.

It’s hard to fight privatization battle by battle. Every single effort is a tough campaign in itself; the companies that want to make money off San Francisco’s public assets typically have plenty of cash to throw around. They’re slick and sophisticated, hire good lobbyists, and generally get excellent press from the local dailies. And it works: even board president Aaron Peskin, who generally knows better, is now talking about accepting the private wi-fi deal.

So what this city needs is a unified, organized campaign against privatization.

When Reagan arrived in the White House in 1981, the single biggest item on the agenda of his political backers was an attack on the public sector. The way the right-wingers saw it, government took money from the rich and gave it to the less well-off. Government regulated business activity, costing major corporations a lot of money. Government — "the beast," they called it — had to be beaten back, demonized, and starved.

So the Reaganites used their top-rate public relations machine to make the public sector appear riddled with waste and fraud. They cut taxes, ran up record (for the time) deficits, and forced Congress to eliminate a lot of social programs. More and more of what the government once did was turned over to the private sector — the way the radical right liked it.

That political agenda still rules Washington, D.C., where even a fair amount of the war in Iraq has been privatized, turned over to contractors who are making huge profits while Iraqi and American kids die.

The attack on government has worked so well that even a very modest plan by Bill Clinton to create a national health care system was killed by the insurance industry.

But privatization doesn’t work. Private-sector companies and even nonprofits don’t have to comply with open-records laws and can spend money (including taxpayers’) with only limited accountability. Most private companies are about making money first and serving the public second; that means when private operators take over public services, the prices go up, worker pay goes down (and unions are often booted out), and the quality of the delivery tanks. Look at the real estate development nightmare that has become the privatized Presidio. Look at the disgrace and disaster that the privatized Edison School brought to the San Francisco Unified School District. Look at the glitzy café and the pricey parking lot that have replaced good animal care at the privatized San Francisco Zoo. Look at what has happened around the world when Bechtel Corp. has taken over public water systems — rates have gone up so high that some people can’t afford this basic life necessity.

Look what’s happened to the American health system. Look what’s happened in Iraq.

Government isn’t perfect, and the public sector has lot of management, efficiency, and accountability issues. But at least the public has some hope of correcting those problems. San Francisco ought to be a place where a major movement to take back the public sector is born and thrives.

Almost everyone in town ought to have an interest. Labor, obviously, opposes privatization. So should neighborhood advocates (who care about public parks and open space), environmentalists (because the entire notion of environmentalism depends on a healthy public sector), progressive community groups, and politicians. Even more conservative groups like the cops and firefighters ought to see the need to prevent their jobs from being outsourced to a private vendor.

A campaign against privatization could link wi-fi, PG&E, tidal power, and the golf courses. The campaign could force anyone running for office to address a no-privatization pledge. It could appear any time one of these rotten schemes pops up in town — and send a message that San Francisco doesn’t accept the economic agenda of the radical right.

Who’s going to call the first meeting? 2

Fiona Ma and the cops

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By Tim Redmond

Thanks in part to a San Francisco legislator, a bill to reform police secrecy is dead in the water. SB 1019, by state Sen. Gloria Romero of Los Angeles, did in the Assembly Public Safety Committee when not a single committee member would move to consider the bill. Assembly member FIona Ma, who represents San Francisco, sits on the committee; she as among those who killed the bill.

BeyondChron has a pretty good summary of this, including the astonishing information that one of the police unions threatened to scutle the Legislature’s attempt to amend term limits if this bill passes.

The bill is still (barely) alive, and could come back for reconsideration — if Ma would stip kowtowing to the cops and agree to at least bring it up for a vote.

Calling in the feds

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› news@sfbg.com

An upscale Emeryville hotel embroiled in a nasty, yearlong labor dispute appears to have called on the owner’s conservative political connections to bring about an immigration audit of the hotel. Worker advocates say the move was an effort to intimidate immigrant workers involved in a campaign to enforce a living-wage law.

Kurt Bardella, a spokesperson for US Rep. Brian Bilbray (R–San Diego), told the Guardian that a representative of the Emeryville Woodfin Suites contacted Bilbray’s office for assistance Feb. 1.

The request came within weeks of Alameda County Superior Court and Emeryville City Council rulings requiring the Woodfin to rehire the 21 workers it fired just before Christmas, allegedly due to worker Social Security numbers not matching federal records. That injunction was in effect pending an investigation of workers’ claims that the hotel had retaliated against them for organizing to enforce Measure C, a living-wage law passed by Emeryville voters in 2005.

"We were contacted by one of the HR people at the Woodfin Suites," Bardella told us. "They told us about the situation" and explained that they "had no mechanism" to deal with it, he said.

Bilbray, who chairs the House Immigration Reform Caucus and is one of the most vocal opponents of the recent immigration bill, wrote directly to the head of Immigration and Customs Enforcement (ICE) in February to request that it investigate the immigration status of Emeryville Woodfin Suites employees in order to "to create a mechanism for the employer to address this issue."

Bilbray represents the suburban San Diego district in which Woodfin Suites president Samuel Hardage lives. "We treated this as a constituent issue," Bardella told us.

Hardage is not only a constituent; he has consistently contributed to Bilbray’s campaigns for at least the past 13 years, donating $4,200 in 2006. A George W. Bush Pioneer, having raised $100,000 for the 2004 election, Hardage is also a major player in California and San Diego Republican politics.

Workers say the ICE audit was an intimidation tactic that should not have been used against them while they were trying to assert their rights, and ICE’s internal policies raise questions about whether the agency should have gotten involved in this labor dispute.

For months the Woodfin Suites has tried to justify firing workers who organized for better labor conditions by alluding to fears of reprisal by ICE. In a May 8 San Francisco Chronicle op-ed, General Manager Hugh MacIntosh castigated the East Bay Alliance for a Sustainable Economy (EBASE), a labor-affiliated think tank that supports the hotel’s workers, for "resorting to well-worn intimidation schemes to secure workers’ support for their organization drives."

The "fact that our hotel has been asked by the U.S. Immigration and Customs Enforcement to provide employment records, coupled with the agency’s raids in the Bay Area, suggests that our actions are anything but voluntary," he wrote.

The Bilbray connection significantly undermines this claim and could be significant in a pending state lawsuit by the workers. It is against the law for an employer to fire workers for organizing for better working conditions, regardless of immigration status. Under current immigration laws, however, it is also common.

"Employers often contact immigration authorities … in order to avoid liability," Monica Guizar, an attorney with the National Immigration Law Center, told us. "It is a well-known and documented tactic that employers use to stymie union organizing campaigns [and] escape liability for vioutf8g workers’ rights."

In recognition of this abuse, memorandums from the Department of Labor and internal ICE regulations have been established to dissuade worksite interventions when a labor dispute is occurring. Advocates have successfully invoked these guidelines to terminate deportation proceedings and prevent raids in the past, but immigrant workers are still incredibly vulnerable.

ICE Special Agent’s Field Manual section 33.14(h) requires that agents use restraint where a labor dispute is in progress and the complaint about employees’ immigration status "is being provided to interfere with the rights of employees to … be paid minimum wages and overtime; to have safe work places … or to retaliate against employees for seeking to vindicate those rights."

Additionally, a 1998 memorandum of understanding between the Department of Labor and ICE (then known as the INS) directs immigration agents to "avoid inappropriate worksite interventions where it is known or reasonably suspected that a labor dispute is occurring and the intervention may, or may be sought so as to, interfere in the dispute."

Guizar confirmed that these regulations are still in place under ICE. Monica Virginia Kites, a spokesperson for ICE, declined to comment on these internal regulations.

At a noisy Saturday-morning picket in front of the Emeryville Woodfin Suites, Luz, a 42-year-old from Mexico City, told the Guardian that managers never questioned her immigration status during the three years she was a housekeeper at the hotel — until she started working with EBASE to enforce Measure C.

One day, Luz told us, her manager rushed her and other workers into the hotel’s attic, because "ICE was driving around outside and could come." According to Luz, the manager told them that "this could be a result of us supporting Measure C or working with EBASE."

The measure mandates a $9 per hour minimum wage for hotel workers and requires overtime pay for employees who clean more than 5,000 square feet of floor space during a shift. The Woodfin contributed $27,500 to an anti–Measure C campaign committee, filed two unsuccessful lawsuits that challenged its constitutionality, and then simply failed to comply with the law.

"They said we weren’t entitled to rights because we were immigrants," Luz recalled. "They started to say that our Social Security numbers didn’t match and that we would have to leave. This problem never came up until we asked for our rights."

In September 2006, Woodfin workers filed a class-action lawsuit seeking back pay. The Woodfin finally agreed to come into compliance with Measure C the following month, but it also told almost 30 workers that it had found problems with their Social Security numbers. On Dec. 15, the Woodfin suspended 21 workers and gave them two weeks’ notice that they were to be fired.

On the extensive Web site the Woodfin has devoted to the dispute, the hotel claims it was "forced to move to terminate their [workers’] employment" after receiving Social Security Administration "no-match" letters for them. "Today," it claims, "failure to act appropriately on a no-match letter may be considered evidence of an employer’s conscious disregard for the law."

This is false, according to Social Security Administration spokesperson Lowell Kepke. It is in fact "illegal for a company to fire an employee based solely on a no-match letter," he told us.

Because it has been so often abused, the letter itself states that employers "should not use this letter to take any adverse action against an employee…. Doing so could, in fact, violate State or Federal law and subject you to legal consequences."

An emergency ordinance returned workers to the Woodfin while the city investigated their retaliation claims, but on April 27 the hotel defied the ordinance by firing 12 immigrant workers, again citing problems with Social Security numbers.

The city issued a notice of violation; even probusiness city council member Dick Kassis, who opposed Measure C, called the Woodfin’s behavior "morally reprehensible" at a May 1 council meeting. On May 3 police arrested 38 people at a civil disobedience protest supporting the workers in front of the hotel, including Assemblyperson Loni Hancock and Berkeley city council member Kriss Worthington.

The almost maddeningly soft-spoken and reasoned Emeryville city council member John Fricke, who in February was the target of an unsuccessful restraining order filed by the hotel over his alleged "threatening" behavior, posed the following conundrum to us: why would a successful business continue to pursue litigation that is not cost-effective?

"I’m assuming their success is based on their business acumen," he said. Yet as a lawyer, he estimates that attorney fees are well above $100,000, on top of another $100,000 in fees borne by the city and at least that much in worker back pay. "You would think the wise business decision would be to cut one’s losses," he said.

One possible answer: EBASE organizer Brooke Anderson said this is actually an "ideological battle."

The Woodfin’s Hardage has spent more than $230,000 since 2000 to fund conservative politicians and ballot measures, including political committees that have taken antiunion and antitax positions on state and local ballot propositions, according to EBASE. He chaired the San Diego County Republican Party from 1995 to 1997 and has served as a fundraiser in several Republican campaigns.

Hardage cofounded the Project for California’s Future in 2001, which the Heritage Foundation describes as "a multi-year, multi-million dollar project" to prepare Republican candidates for California office and "represents a first-ever program to rebuild the conservative bench from the water board level on up."

The project’s cofounder is Ron Nehring, the passionately antilabor vice chairman of the California Republican Party and senior consultant to Grover Norquist’s Americans for Tax Reform. Nehring was also once director of government affairs for the Woodfin Suites.

A 2005 report by the Center on Policy Initiatives, a progressive think tank, names Nehring, Hardage, and Norquist among those who have helped the Republicans target San Diego as a model for their plan to radically cut government funding, permanently weaken labor unions, and privatize public services.

The ideological battle manifested itself at the Saturday-morning picket, which pitted roughly 15 College Republicans from Bay Area schools against 25 laid-off workers and supporters, each group with a bullhorn, separated by barricades and cops.

The Woodfin provided free rooms for the student counterdemonstrators, Ryan Clumpner, a UC Davis senior and chair of the California College Republicans, told us. Surrounded by signs such as "Quit ‘Stalin’: Get Back to Work," and "Respect the Law," Clumpner said he was "here supporting the Woodfin, which is being unfairly targeted by unions."

"I’ve actually done housecleaning," he said. Between semesters one summer, he said, he made $7 an hour cleaning rooms at UC Davis; immigrants supporting families in the Bay Area should also be content with this wage, he said. "If they want to make more, they can move up to supervisor positions," he said. "They’re here for a reason. This country is offering economic opportunities. The economic benefit is the reason they’re here, not the problem."

On the other side of the barricades, Luz said, "My idea is that you have to work hard and give a lot to the company so that they give something back to you in return. We gave them the best service, so they should give us reasonable salaries."

Retaliatory actions against immigrants organizing to improve their work situations have increased across the country in the past few years, just as high-profile raids have resulted in the detentions, arrests, and removals from the United States of thousands of immigrant workers.

The Woodfin is "an example of the need for just and fair immigration reform, coupling the legalization of undocumented workers in this country with strong labor- and employment-law enforcement," Guizar told us.

City Manager Pat O’Keefe told us that in the coming few weeks the city will be announcing a decision about its investigation into worker complaints and the Woodfin’s operating permit. *

Love is in the air

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By Beth Gilomen
carnaval.jpg
I’m new to the city and don’t know many people yet, so I must admit, I’ve been browsing the craigslist missed connections for the last two weeks, passively hoping that someone out there wants to meet me. So far, no luck. But here’s what I have found: there are a lot of you in San Francisco looking for some love in your lives. I feel for you, and apparently, so do the people running this year’s Carnaval San Francisco . The 29th annual bash kicks off this Saturday with the theme Love Happens.

In addition to the usual activities, such as a parade, music, and dancing, this year’s celebration of Latin American and Caribbean cultures will feature speed dating (for those of you ready to get off the computer and reconnect with the real world) and weddings/ commitment (or re-commitment) ceremonies. The ceremonies take place right before the parade on Sunday – and, really, what better way is there to celebrate new unions than a community reception like Carnaval?

So, as cliché as this sounds, give your laptop a rest, go outside, and let a little love happen to you this weekend. I’ll be out there with you.

P.S. If you’re not quite ready to escape the Internet dating circuit, Carnaval SF offers an online dating service as well at www.carnavalsf.com/love .

Dem Con 5 pm: Chris Dodd interview

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By Tim Redmond

My first headline for this entry was “Angelides bores small crowd.” Poor guy — almost nobody is paying attention as the former candidate for governor makes an utterly uninspiring speech. Then it’s time for Chris Dodd, the senator from Connnecticut who has about as much support now in the polls (that is, very little) as Bill Clinton did at this point in his first presidential bid. (Dodd likes to point this out.)

No giant mobs with Dodd! signs, but he makes a decent speech, focusing perhaps a bit too much on his history and reminding everyone how long he’s been around. A few not-so-subtle Kennedy references, and a paen to the civic spirit of the 1960s (“that’s where we want to get back to.”)

He holds a press conference afterward, takes a question from me and says that he thinks the death penalty should be “reformed, not abandoned.” Then he tells a woman from an LA queer publication that he supports civil unions but not same-sex marriage. Why? “I’m not prepared to use the word ‘marriage’ as something for people of the same sex.'”

My brief private interview after the jump.

Up against the police secrecy lobby

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EDITORIAL On April 17 the full weight of the state’s secrecy lobby and police unions descended on Sacramento to prevent the public from having any access to the records of peace officers who have faced disciplinary charges. The tactics were brutal: Everett Bobbitt, a police lawyer, testified to the Assembly Public Safety Committee that allowing any sunshine whatsoever would instantly threaten the lives of hardworking cops and their families.

His argument was bizarre, reminiscent of some of the tortured claims that the Bush administration made in seeking support for the war in Iraq and the civil liberties fiasco called the USA PATRIOT Act. He suggested that criminal gangs might find out something that would allow them to threaten police officers (despite the fact that until a recent court decision these records had been open for more than 20 years in San Francisco and 30 in Berkeley, and not a single cop had been in any way physically harmed by the information). He claimed that peace officers have an extraordinary right to privacy (despite the fact that as public employees who are given guns and badges and extraordinary powers, they need at least some degree of public accountability).

And the committee, despite being dominated by Democrats, was utterly cowed. It was a disgrace, and public officials and law enforcement leaders in San Francisco and the East Bay need to make a point of joining the fight to ensure that police secrecy doesn’t continue to carry the day.

At issue was a bill by Assemblymember Mark Leno (D-San Francisco) that would overturn an odious 2006 court decision known as Copley. In that ruling, the California Supreme Court concluded that all files and hearings reutf8g to police discipline must be kept entirely secret. The ruling "has effectively shut down virtually every forum in which the public previously had access to the police discipline process," Tom Newton, general counsel to the California Newspaper Publishers Association, wrote in a letter supporting Leno’s bill, AB 1648.

Newton added, "Copley represents nothing less than complete and total victory for the secrecy lobby in this state. In the ultimate perversion of legislative intent, the most powerful forces in government and their exceptionally creative and effective lobbyists have achieved a perfect storm of official secrecy – making it illegal to inform the public about official corruption…. These aren’t just any public employees that have achieved the holy grail of KGB-like official secrecy – they are the only public officials given the right by the public to affect the personal liberty of citizens and even take life, if necessary to protect the public peace."

Leno’s bill – which would simply restore the law to what it was for decades – had the support of the American Civil Liberties Union and a long list of grassroots organizations, including the Asian Law Caucus, Chinese for Affirmative Action, La Raza Centro Legal, the NAACP, and the National Black Police Association.

And yet Leno didn’t have the votes in the committee to even move the bill to the floor. Not one of his four Democratic colleagues (Jose Solorio of Anaheim, Hector de la Torre of South Gate, Anthony J. Portantino of Pasadena, and San Francisco’s Fiona Ma) was willing to move the bill forward. Ma, apparently, was among those who bought the police line: she told the Guardian she was "not prepared to vote for Leno’s bill as it was" but would be willing to accept a compromise that "also protects the rights of family members." Remember, nothing in Leno’s bill in any way endangers or provides any information on any member of a police officer’s family.

The only good news is that a similar, slightly weaker bill, SB 1019, by state senator Gloria Romero (D-Los Angeles), has cleared the Senate’s Public Safety Committee and will go to the Senate floor – and if it passes, it will come before the Assembly. So there’s still a chance to pass some version of a police accountability and sunshine bill this year.

It’s crucial that public officials and particularly law enforcement leaders speak out in favor of this legislation. The city of Berkeley has formally endorsed the bill, but Mayor Gavin Newsom and Oakland mayor Ron Dellums have been silent and need to speak up. So should San Francisco sheriff Mike Hennessey (who told us he supports the idea in principle but thinks Leno’s proposal goes too far) and District Attorney Kamala Harris.

And Fiona Ma needs to hear, loudly, from her constituents: police accountability is a priority, and she can’t get away with ducking it. *

Dean and Phil, are you tough enough for Trounstine and Grade the News?

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By Bruce B. Brugmann
To: Dean Singleton, vice-chairman and CEO of the MediaNews Group in Denver, immediate past chairman of the board of directors of the Newspaper Association of America, chairman of the board of directors of the Associated Press, and publisher of a flood of newspapers in California and elsewhere
To: Phil Bronstein, editor of the San Francisco Chronicle/Hearst who once claimed that, despite everything, the Chronicle would be aggressively competitive with the San Jose Mercury News and other Singleton papers in the Bay Area

To: all other editors and publishers of the big chain publishers who are collaborating in secret to kill competition and monopolize the newspaper market in the Bay Area and much of California (MediaNews Group/Singleton, Hearst, Gannett, Stephens)

Repeating my blog question of yesterday: Will you run the piece by Phil Trounstine, former political reporter for the San Jose Mercury News,
and comments from John McManus, director of Grade the News.org, a Bay Area consumer report on news quality.
(Grade the News posted the Trounstine piece on its website on Monday April l6 and I posted it yesterday on the Bruce blog.)Next question: If you won’t run Trounstine or McManus, will you run a comparable analysis and commentary from comparable experts or any of your unions or staff members in any of your chain papers? If not, why not?

I asked Trounstine if he had had any response to his piece, which was posted on the Romenesko newsletter yesterday and on many other sites. “As of today, I have received very positive feed/back from some reporters and editors inside both Hearst and MediaNews outlets and from several news media watchers around the Bay Area and some other parts of the country. But I’ve heard nothing from any official at Hearst or any MediaNews outlet, although they are likely aware of the piece since it was linked to (at least) Editor and Publisher, Romenesko and Rough and Tumble.”

I also asked McManus if he had any comment. “The codes of ethics of journalism demand that journalists cover the exercize of power in a community, explicitly including the exercise of their own enormous power over what becomes part of the public consciousness and what does not. I’m very disappointed at how little coverage and initiative the Chronicle and MediaNews papers in the Bay Area have shown in the important issue of newspaper consolidation here.

“You can bet that if one company owned all of the grocery stores in the region, or there was a secret agreement between Costco and Safeway to cooperate rather than compete, news coverage would be intense. Media monopoly has even greater implications because news has the unique power to define reality, especially when one company owns almost every daily in the Bay Area.”

Looks to me like front page stuff for any legitimate competitive newspaper! Or at least good op eds! Dean? Phil? Anybody else at any Hearst, Singleton, Gannett, or Stephens papers? B3

For more on Singleton check G.W. Schulz on the politics blog Newspaper execs pose uncomfortably for camera.

Unions intervene in GGRA lawsuit

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By Sarah Phelan
Last week, a judge granted four unions–The S.F. Labor Council, SEIU Local 1021, SEIU United Healthcare Workers West and Unite Here Local 2—an intervention in the suit that Golden Gate Restaurant Association, a non-profit trade association, has brought against the City and County in the matter of the soon-to-be implemented San Francisco Health Care Security Ordinance.
GGRA is arguing that the mandatory aspect of this local ordinance is preempted by federal law.
Specifically, GGRA’s beef is with the part of the ordinance that requires employers with 20 employees or more to spend a minimum amount per hour worked to provide health care benefits. Employers would also have to maintain records of health care benefit spending, record and report such spending and make records available for inspection. These mandatory requirements won’t be implemented until January 2008, but the City and County will start coverage of unemployed (and therefore uninsured) San Francisco residents, as of July 1, 2007.

Canadians politely begin invasion of Bay Area

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By G.W. Schulz

Word arrived today that Transcontinental, the Canadian company hired by the San Francisco Chronicle to build a shiny, new billion-dollar press, has been scouting locations in the East Bay city of Fremont for the facility. The Chronicle signed a 15-year outsourcing contract with Transcontinental, which also publishes La Presse, the Globe and Mail and the New York Times in Canada, last November.

trans1.jpg

Fremont development manager Lori Taylor confirmed they’d received calls from the company, but they haven’t heard from Transcontinental since last month. She said Newark was also a rumored location for the plant.

The Chronicle‘s deal with Transcontinental served a crushing blow to the Web Pressmen and Prepress Workers’ Union Local 4, one of the nation’s oldest such unions. Local 4’s current contract with the Chronicle, reluctantly signed by the rank-and-file last year, expires in three years and there are no assurances Transcontinental will hire any of the union’s over 200 workers meaning a possible end to its tumultuous relationship with the Chronicle and its parent, the Hearst Corp.

Josh Wolf vs. Howard Kurtz, the Washington Post, and the inside-the-beltway gang

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By Bruce B. Brugmann

Marvelous. Simply marvelous. While ten of the l9 witnesses testifying in the Libby trial were singing journalists, and three of them were central to securing Libby’s conviction, Howard Kurtz, the media critic of the Washington Post and the voice of the inside-the-beltway media establishment, did not raise any of the obvious issues and questions in this unprecedented mass outing of sources by journalists in federal court in Washington, D.C. It was a “spectacle that would have been unthinkable only a few years ago,” as Adam Liptak put it rightly in the New York Times March 8.

Instead, one day after the Libby guilty verdict, Kurtz went after Josh Wolf, the longest jailed journalist in U.S. history for contempt of court, in his March 8 column headlined “Jailed Man Is A Videographer And a Blogger but Is He a Journalist?” Kurtz, who tosses softballs about every Sunday morning in his media show on CNN, hit Josh hard with a lead that said, “He is being cast by some journalists as a young champion of the First Amendment, jailed for taking a lonely stand heavy-handed federal prosecutors.”

Then: “But Wolf’s rationale for withholding the video, and refusing to testify, is less than crystal clear. There are no confidential sources involved in the case. He sold part of the tape to local television stations and posted another portion on his blog. Why, then, is he willing to give up his freedom over the remaining footage?”

And then he quoted, not a media lawyer nor a journalist with knowledge of
California law, but a professor who ought to be flunked out of law school (Eugene Volokh, a law professor at the University of California Los Angeles). Kurtz quoted Volokh as saying without blushing, “It’s one thing to say journalists must respect promises of confidentiality they made to their sources. It would be quite another to say journalists have a right to refuse to testify even about non-confidential sources. When something is videotaped in a public place, it’s hard to see even an implied agreement of confidentiality.”

Tom Newton, general counsel of the California Newspaper Publishers Association, had the appropriate polite response in an email to Kurtz: “Huh?”

“That, as they say, would be a settled right in California. In California, the people have flatly rejected the idea that police and prosecutors ought to be able to deputize journalists whenever they can’t figure out how to do their job themselves.”

“Moreover,” Newton continued, “the test for whether Josh is a journalist or not should not be based on who the U.S. attorney says he is, (“simply a person with a video camera”), or even who Josh says he is (an “artist, an activist, an anarachist and an archivist”), but on what he does and what he was doing when gathering the information at issue (i.e., creating videotape of a public and newsworthy event and actually selling portions of it for a profit to a news organization which made it part of the local evening TV news).” Read Newton’s full comment below.

So, when the chips are down and the question is raised in time of war, who stood the test of being a real journalist? Josh Wolf, who went to jail on principle, and is still there, and may be there until a new federal jury is impaneled in July? Josh Wolf, who was put in jail in my view by the Bush administration to send a don’t-mess-with-us message to anti-war protestors inside and outside of San Francisco and to journalists at large. Or the l0 journalists warbling away in federal court and thereby avoiding jail (excepting Judith Miller from the New York Times, who did jail time but still ended up testifying)?

I stand with Josh Wolf. I think he is not only a real journalist in the best sense of the word, but a journalistic Hero and a First Amendment Hero who is paying his dues and more every day he serves in federal prison in Dublin, California. As for Howard Kurtz and the Washington Post and the inside-the-Beltway gang, well, they helped George Bush march us into Iraq, no real questions asked, and they are now helping keep us there with this kind of logic and reporting.

There are lots of real questions for Howard Kurtz of the Washington Post/inside the beltway gang who asked the is-Josh-a-journalist question the day after the verdict and to some extent for Debra Saunders of the San Francisco Chronicle who asked the same question a few days before the verdict. The questions do not involve whether whether Josh Wolf is a journalist or not. The questions are, how in the world did those hotshot inside-the-beltway journalists with access and those hotshot inside-the-beltway media organizations with access so screw up the story of the biggest foreign policy mistake in U.S. history? And how did they so screw it up when millions of us without access, in San Francisco and around the world, figured out the real story, knew it was a terrible mistake to go to war with Iraq, and went into the streets to protest the decision? And when will they start reporting the real story behind the Libby trial: that Bush and Cheney lied us into war, that Libby was key to the much larger story of the cover up of the campaign of lies, that the war is now lost but the lies go on, and that our only option left is to get out as quickly as possible? Kurtz and the inside-the-beltway gang are the journalists who have the explaining to do, not Josh Wolf.


<http://www.washingtonpost.com/wp-dyn/content/article/2007/03/07/AR2007030702454.html>


http://www.nytimes.com/2007/03/08/washington/08fitzgerald.html?n=Top%2fReference%2fTimes%20Topics%2fPeople%2fL%2fLiptak%2c%20Adam

Newton’s email to Kurtz:

“While the national attention on shield law issues has focused almost entirely on the protection of confidential sources, out here in California we have for many years granted journalists the ability to protect both their confidential sources and unpublished information associated with newsgathering. Had the San Francisco situation not rather bizarrely become a federal case (it was, after all, an incident involving a San Francisco crowd, a San Francisco peace officer and a San Francisco police car), there would be no question that Josh, assuming for a moment he is a journalist covered by California law, would be immune from a contempt order for his steadfast refusal to disclose his unpublished information to a state prosecutor. This immunity is squarely set by popular vote in the state’s constitution (Article I. Sec. 2).

“I am totally puzzled by this quote in your column from an esteemed constitutional scholar: “It’s one thing to say journalists must respect promises of confidentiality they made to their sources,” says Eugene Volokh, a law professor at the University of California at Los Angeles. “It would be quite another to say journalists have a right to refuse to testify even about non-confidential sources.” Huh? That, as they say, would be a settled right in California. In California, the people have flatly rejected the idea police and prosecutors ought to be able to deputize journalists whenever they can’t figure out how to do their job themselves.

“Moreover, the test for whether Josh is a journalist or not should not be based on who the U.S. Attorney says he is, (“simply a person with a video camera”), or even who Josh says he is (an “artist, an activist, an anarchist and an archivist”), but on what he does and what he was doing when gathering the information at issue (i.e., creating videotape of a public and newsworthy event and actually selling portions of it for a profit to a news organization which made it a part of the local evening TV news). Based on a recent California case involving a blogger’s attempt to quash a subpoena pursued by Apple in an attempt to identify an internal leak, it’s clear to me Josh would be found to be a journalist for purposes of California’s Shield Law and would be a free man right now, but for this becoming a federal case.”

Full disclosure: I asked CNPA, as a member publisher, to support Wolf, his cause, and a federal shield law. To its immense credit, the CNPA board and staff rose to the occasion and has supported Wolf, a member of no media organization, with skill and passion. From CNPA to the Society of Professional Journalists to the California First Amendment Coalition to the International Free Press Institute in Vienna to other international free press groups to labor unions to the grassroots movement of Andy Blue and Julian Davis in San Francisco and beyond, this is quite a massive and growing coalition of the willing for Josh Wolf. Keep it rolling till Josh is out of jail and the U.S. is out of Iraq. B3

The Wild, Wild West

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› amanda@sfbg.com

As a production assistant for a visual effects studio, Robert Seeley had a job at the Orphanage that was nuts and bolts for the movie industry — handling paperwork, overseeing schedules, arranging deliveries, and making sure folks were fed, clients were happy, and many of the million little logistics for a film project were coordinated.

His days began with an hour-long commute from Pleasant Hill to the Presidio, where the Orphanage is based. Mornings started around 9, and the typical workday ran about 10 hours. Or it did when he started there, in July 2006.

"There was a snowball effect. It started out as a regular 10-hour workday. It slowly built to 12, then 16," Seeley told the Guardian.

At one point, Seeley charges, he was asked to work a 20-hour shift — and return to work two and a half hours later. When he didn’t come in, he was fired.

Seeley sued, and the case was eventually settled. But along the way, the lawyers for the Orphanage raised a startling argument: since the Presidio is a federal enclave, they said, California labor law, which restricts the length of shifts, doesn’t apply.

"This was a really straightforward, meat and potatoes case," Seeley’s lawyer, Steve Sommers, told the Guardian. "And if he worked across the street, it would have been a slam dunk."

If the legal argument advanced by the studio as a response to Seeley’s lawsuit is right — and some labor experts say it may very well be — then none of the private companies that lease space at the Presidio have to follow any state or local labor laws. That means no California or San Francisco minimum wage, no workplace safety statutes, nothing. And since state law is generally far tougher than federal law, the difference could be profound.

There are hundreds of people working for private companies in the Presidio, which operates under a unique arrangement that allows private, commercial development in a national park.

Federal regulations are almost always weaker than California’s — and not necessarily improving. "Federal laws are evolving backwards for the most part," said Katie Quan, associate chair for Labor Research and Education at UC Berkeley. "There have been attempts to weaken benefits, Social Security, who can and can’t join unions. Even the new minimum wage that’s been passed — there’s a big question as to whether or not [George W.] Bush will sign it."

While California’s minimum wage is $7.50 and San Francisco’s is $9.14, the federal hourly rate is currently $5.15 — and arguably the only one that applies in the Presidio.

Several employment lawyers contacted by us initially suggested that California’s labor statutes would have to apply in the Presidio, but Chris Cannon, a lawyer familiar with the situation, did not.

"I’ve gotten a lot of people acquitted on a criminal basis applying that same validity," he said of the cases the Orphanage’s lawyers used to back up their argument. "It’s like a little piece of Nevada here in California."

Cannon has litigated several cases in the Presidio, most notably on the controversial issue of where and when dogs can be off leash. "Given the history of the Presidio, I think there’s a very good argument that California laws don’t apply."

It’s easy to extrapolate that nothing that’s been passed in Sacramento or at City Hall would apply to the Presidio, including the recent universal health care plan passed by the Board of Supervisors and the paid sick-leave that voters approved.

The upshot: the author of the bill establishing the Presidio park, House Speaker Nancy Pelosi, who is a big favorite of organized labor, may have created a place where private employers can freely flout state and local laws designed to protect workers.

Lieutenant Jeff Wasserman of the US Park Police, which has exclusive jurisdiction over the Presidio, said, "We only have to follow federal laws. However, the US attorney has in the past asked us to adhere to state laws simply because they think it’s the right thing to do."

One of Wasserman’s examples involved a California law that speed limits may only be adjusted based on recommendations from a traffic engineer, which was established to prevent cops from setting speed traps. To Wasserman’s knowledge, California is the only state with this restriction, and it’s been extended to the Presidio. "The US Attorney felt that it was fair that if the surrounding streets followed it, we should too." He added that juvenile arrests in the Presidio have also stood up in local courts because the federal laws are so weak in that regard.

Two dozen companies contacted by us were asked questions regarding employment protocol, and all said they paid San Francisco’s minimum wage or better and insisted they followed both federal and state labor laws. The largest employer in the Presidio, LucasFilm, did not respond to the questions.

Carsten Sorensen, CEO of the Orphanage, said, "We follow the letter of the law. We were told by our attorneys, being in the Presidio, we fall under the federal labor law."

He did say, "Of course we want our employees to be safe and do whatever we can to make sure that happens. There’s no chronic issue of people who are dissatisfied with the working conditions."

But in responding to the lawsuit, his company didn’t even try to defend its practices. Instead, Judith Droz Keyes, a lawyer with the firm Davis Wright Tremaine, argued in a Jan. 24 letter that "California has no jurisdiction either to legislate or enforce its laws within the federal enclave. The fact that the Orphanage is a private company leasing space within the Presidio makes no difference."

The Presidio Trust — the semiprivate agency that manages the park — did not respond to requests for comment, and it’s unclear how the outfit treats its own workers. Discrimination based on sexual orientation, for example, is not a part of the federal Equal Employment Opportunity laws, but it is a part of California’s, and even the Presidio Trust’s own personnel manual mandates it.

To require anything definitive and absolute would take an act of Congress to mandate the Presidio adhere to state or local ordinances. We tried to reach Pelosi’s office to ask about it, but she didn’t return our calls.

In the meantime, Sommers said, "The Presidio Trust could insist that all vendors abide by California state labor laws. Then large employers in the Presidio would have to treat their workers like citizens of California." *

The McClatchy Strib: RIP? WTF? Pruitt’s Folly, big-daily blues, and the invasion of the stripper-flippers

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By Bruce B. Brugmann

The above head was on the best analysis so far of the McClatchy sale of the Minneapololis Star Tribune to an unknown New York private equity firm with no newspaper holdings nor experience.
It was written by Steve Perry, longtime editor of City Pages, the alternative paper in Minneapolis, and ran in Monday’s edition.

It is a classic alternative press story by an editor who is also good reporter and it shows once again the indispensable value of an alternative paper that is fulfilling its real mission to be alternative to and competitive with the local monopoly daily. No other daily or magazine, in Minnesota or probably anywhere else, will do this kind of excellent media criticism and local power structure reporting and analysis. And nobody will follow the story as City Pages will undoubtedly do.

Let me cite one paragraph of Perry’s report to make the point. Perry sets Pruitt up with some self-immolating quotes and asks the question: “So again: How exactly does selling off this paper at this moment, for considerably less than prevailing industry standards would have dictated, constitute prudent fiscal management?”

Perry provides some answers: “Mike Meyers thinks he knows the answer: It makes no sense at all. The paper’s 57-year-old economics reporter is a figure legendary around the newsroom for his gruffness, acuity, and anti-sentimentality. (‘Don’t ask me how I feel about the sale,’ he growled by way of a howdy=do when I phoned him.
‘I don’t deal in feelings. What matters is the set of facts surronding the sale, which are very clear.’) He has no compunction about sharing his theory of events (‘no, on the record. I hate people who go off the record’), which is simple and to the point: McClatchy management fucked up and put itself in a position where it had to sell something to pay its tax bill.”

And then Meyers and Perry lay out their answer to the question headline that led the story: “PRUITT’S FOLLY: IS THERE A SMOKING GUN IN THE STRIB FIRE SALE?”

Note: Why is the silence out here so deafening–owners, managers, staff, unions– in commenting publicly on the capers of the Galloping Conglomerati (Hearst, Singleton, McClatchy, Gannett, Stephens) who are moving as quietly as they can, sealing key documents in a critical federal court case, to set up a regional monopoly? If anybody knows anybody who wants to talk publicly, let us know at the Guardian. Meanwhile, I am getting no comment from Hearst corporate via Chronicle Publisher Frank Vega and Chronicle Editor Phil Bronstein. Soon, I will tell you why. B3

City Pages: The McClatchy Strib: RIP. WTF?

Nick Coleman of the Minneapolis Star Tribune is mad as hell and won’t take it any more. He writes, McClatchy’s profit-and-loss statement: They profit, we lose

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By Bruce B. Brugmann

For months now, as the Knight-Ridder/McClatchy/Hearst/Singleton/Gannett/Stephens debacle has unfolded, I have been looking in vain to see if a staff member on any of the papers of the nation’s biggest chains (reporter, columnist, editorial writer, editor, union spokesperson, ad salesman, letter writer, blogger, anybody) would beallowed to blast away at this deal of ultimate toxicity in their papers, on their websites, or in their blogs. (Note my postscript to the newspaper unions to this effect in my previous blog.)

The closest I have seen is an excellent First Amendment column by Thomas Peele in the Contra Costa Times/Singleton, raising the right issues about why his owner/publisher had moved to seal the court records in the Reilly vs. Hearst antitrust case in federal court. (See my earlier blog.) James Naughton, former editor of the Philadelphia Inquirer and a K-R stockholder, and a gang of former Knight-Ridder staffers, mostly retired or off staff, also published online a sharp letter rebuke to K-R Chairman Tony Ridder and the K-R board for rolling over and refusing to fight it out with the dissident private equity stockholders.

Now, two days after McClatchy tossed the Star Tribune into the snow banks of Northern Minnesota, columnist Nick Coleman on Thursday wrote a classic column that ought to go into the journalist textbooks at the University of Minnesota and everywhere else. He lays out in a snapshot of what happens to the Twin Cities when McClatchy and Knight-Ridder conspire in a misbegotten deal that leaves St. Paul with Singleton and Minneapolis with, gulp, a one-year-old New York private equity group firm with no newspaper holdings nor experience. Ironically, perhaps the reason the Star Tribune ran his column was because McClatchy was beating it out of town, fast, at full gallop, and the paper was suddenly thrust under the new ownership of Avista Capital Partners, which hadn’t gotten the knack of monopoly press control and censorship. Chalk up one good mark for the new owner.

Coleman flashed his sword in his lead paragraphs: “When the McClatchy Co. got the keys to the Star Tribune in l998, McClatchy’s patriarch hailed the merger. James McClatchy called it a wedding of two newspaper traditions that shared “‘a deep-rooted commitment to building a just society.’

“You are now permitted to laugh derisively.

“Eight years later, hardly anyone in the newspaper business talks about anything other than building profit margins that would choke a robber baron.

“Mercifully, McClatchy passed away in May and did not live to see the Sacrmento-based company that bore his name disgrace his legacy by dumping its largest newspaper–the most important one between Chicago and the West Coast, the one that serves 5 million Minnesotans and that can be a conscience, a scold, a cheerleader and an interpreter of life on the tundra.”

Coleman ended with a scathing flourish: “McClatchy CEO Gary Pruitt did not bother to come to Minnesota on Tuesday to say he surreptitously had sold the paper and to kiss us goodbye.

“But McClatchy brass gave us some nice parting shots from afar, complaining that the Star Tribune had lost value (and proving it in a secret auction at fire-sale prices), calling the flagship a drag on profits and sayiong McClatchy would have shown a one-percent increase in ad sales if the Star Tribune weren’t included. One per cent Huzzah!
Sound the trumpets!

“There’s the market for you: the Star Tribune held down ad sales one percent. So One-Percent Pruitt axed his best newspaper. Brilliant.

“‘The Star Tribune is one fo the best newspapers in this country,'” Pruitt said in l998. “‘The Twin Cities is one of the most attractive newspaper markets in the country. And it was a near perfect fit in terms of values and traditions.’

“We didn’t change. But you, Mr. Pruitt? We don’t recognize you anymore. So long.

“Don’t bother to write.”

I like that, and I’ll bet a lot of Minnesotans will like that. I can speak with authority because, as a native of Rock Rapids, Iowa, situated five miles from the Minnesota state line just south of Luverne, Minnesota, I grew up with the Star Tribune and its sister paper, the Des Moines Register, both highly respected papers who looked upon the entire states of Minnesota and Iowa as their beats. They were owned at that time by the Cowles family, who lived in Minneapolis and Des Moines, and cared deeply about journalism and Minnesota and Iowa. I spent many a Sunday morning back in the late l940s riding about town proudly delivering the Sunday Register. Everybody, it seemed, in Minnesota and Iowa, read and lived by the Star Tribune and Register. They were our friendly hometown papers.

Coleman has set the standard: The least newspaper owners can do these days of monopoly mayhem is to allow their staff members and readers to write openly and honestly as appropriate in their papers and websites about the way they and their communities are being treated by their owners and publishers. In the meantime, I toast with a Potrero Hill martini Nick Coleman and his editors who passed his story into print. Bravo! keep it up!

Lingering question: Why didn’t Tony Ridder fight like hell to keep his family heritage chain of papers? And why didn’t the Knight-Ridder board, or his key executives, push him privately or publicly to put up a fight. Every Knight-Ridder executive I run into, I ask the question: how in the world did this happen and why didn’t Tony and Knight-Riddger put up a fight? I have yet to get a satisfactory answer. I kept reading Tony’s comments at the time to the effect that he had no choice and that a sale would keep the peace and minimize the tumult in his chain papers.

How could there be more tumult and more damage than there is now? Did Tony and his board really think that McClatchy could swallow their entire chain of papers and not peddle any of them off in fire sales? Why didn’t they get solid pledges from McClatchy that would at minimum save their best papers (Philadelphia Inquirer, San Jose Mercury-News, Contra Costa Times, St. Paul Pioneer Press, the Minneapolis Star Tribune et al)? I believed then, and i believe now, that Tony and the Knight-Ridder people made a bad mistake by not putting up a big public fight and talking publicly, not just about its respectable 20 per cent profit margins, but also about its reputation for quality journalism, community involvement, the prestigious Knight Foundation, and major First Amendment and public access advocacy.

Moreover, while much of the mainstream press was marching us into Iraq and practicing stenographic reporting of the Bush administration, Knight-Ridder and its Washington bureau regularly did some of the most critical news reporting and editorial writing on Bush and the war of any of the major media. I assure you, Dean Singleton and Avista Capital partners aren’t about to pick up the slack, hit hard on Bush and the war, or even try to develop much original Washington and foreign news coverage. Alas. I hope I’m wrong. I refer you to Brugmann’s Law: once you damage quality papers like these, it’s tough as hell to bring them back. Alas. I hope I’m wrong.

Stay alert–we will keep running the major stories that the Hearst/Singleton monopoly papers refuse to print. B3

Nick Coleman: McClatchy’s profit-and-loss statement: They profit, we lose

McClatchy sells the Minneapolis Star-Tribune to a New York venture capital firm with no newspaper experience. It’s sad for the staff, for the state of Minnesota, and for the newspaper business

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Bu Bruce B. Brugmann

It’s yet another WLSB, another wimpy little story in the business section of the Hearst/Singleton papers, except this time it was not even in the business section of the San Francisco Chronicle/Hearst.
And it was just a couple of paragraphs boiled out of an Associated Press story in the business digest of the Oakland Tribune, Contra Costa Times, and the San Jose Mercury News (all Singleton papers).

Why? This was probably because the latest McClatchy sale was the most embarrassing media monopoly story of them all: it showed yet again how the nation’s big chains were tossing newspapers around like drunks toss cards in a monopoly game in a waterfront saloon. This time, in a most unexpected development, McClatchy announced that it was selling the Minneapolis Star-Tribune, one of the great newspapers of the country, for less than half of the original purchase price of $l.2 billion that McClatchy paid in l998 to buy the Star-Tribune and its local Cowles Media parent company.

And it sold its largest paper to a one year old NewYork venture capital firm named Avista Capital Partners with no newspaper holdings and no newspaper experience.

Word came as a shock to the newsroom in Minneapolis, reported the New York Times Thursday. Employees received an e-mail message aet 3:5l p.m. saying that there would be an important announcement at 4:00.

“You should have seen the look on our faces,” said Nick Coleman, a metropolitan editor for the paper. “It was like, who? Everyone knows the whole industry is in play and that just about anything could happen, but nobody thought we could get sold. There’s a real sense of betrayal.”

Coleman said the paper was sold in a “fire sale.” He continued, “At a fire sale, people get discounted so we’re very concerned, worried and anxious.” On the other hand, he said, “maybe it takes someone from outside the newspaper business to see the way forward.”

Dean Singleton, the new owner of the competing St. Paul Pioneer Press, was astounded and was quoted in his own paper as saying he would never have expected McClatchy to sell the paper at such a large loss. “How often does a newspaper company sell its largest paper,” he said. “It doesn’t happen.”

For those of us who grew up with the Minneapolis Star-Tribune and the Des Moines Register (both owned by the Cowles family), this is a terrible shock. It was bad enough when the Gannett Company took over the Register and turned a splendid statewide paper into a mediocre Des Moines metropolitan paper. I remember the precise moment when I knew that Gannett was ruining the Register. I was back visiting my parents in Rock Rapids, Iowa, and I stopped in to the Rexall store, as I always did when I was in town, to buy the Register from Jim Roeman, a high school classmate who ran the store. He didn’t have any and explained why: the Register had hiked the price so that the more papers he sold, the more money he lost and so he (and many other outlets outstate) stopped carrying the Register. And that was the Gannett strategy, to gradually cut back circulation and coverage to outer Des Moines and ruin a proud state paper.

It was worrying when McClatchy, a California paper, bought the Minneapolis Star but at least it was strong editorially and had solid management. But now, McClatchy sold to an unknown venture capital firm with no credentials and no track record and it did so even though McClatchy’s chainwide profit margin through September of this year was 25.2 per cent, according to Gary Pruitt, McClatchy CEO. Then Pruit coyly added without giving specifics, “Without Minneapolis, the profit margin would be higher.” Higher? That’s higher than most U.S. corporations are doing.

Even newspaper analyst John Morton, who rarely sees a newspaper sale or a merger he doesn’t like, told the Sacramento Bee that the sale was “a disappointment.” He said McClatchy is known as an operator of high quality newspapers and is giving up on a paper with a good reputation. “This is a shock,” he said.

Colby Atwood, an analyst at Borrell Associates, a media research firm, gave a chilling financial analysis to the New York Times. “The turbulence of equity holders trying to rebalance their portfolios and newspapers are properties to be bought and sold,” he said. “They’re buying cash flow and tax benefits. It’s not the sort of religious commitment that you hope to get from newspaper owners.”

The Star Tribune laid out this new form of “religious commitment” in its Wednesday story by Matt McKinney and Susan Feyder, who were assigned that uneviable job in journalism of covering the transgressions of their own paper. Here is their snapshot lead of how the nation’s second largest chain unloads its biggest newspaper:

“The Star Tribune’s new chairman is a Wall Street investor who says he’s driven by public service. Chis Harte is also a resident of Texas and Maine and a former newspaper executive who’ll be advising an investment group that has never owned a daily newspaper.

“A day after McClatchy announced the sale of the Star Tribune to a New York private equity group, there are more questions than answers about how the deal will reshape the newspaper and its community, and whether it will serve as a template for an industry in transition.

“Harte says he’s still trying to figure it all out himself.

“‘This whole transaction came together so fast, really in just the last week or so,'” Harte said. “‘At this point we just don’t know about things like my schedule.'”

The heads on the story synopsize the point about reshaping the newspaper and the community: “Twin Cities will lose Star Tribune Foundation” and “Sale could reset the bar for newspaper deals–lower.”

Well, we can get a little idea right here in the Bay Area about this kind of “reshaping” and “religious commitment.”
Only by reading the New York Times, the Wall Street Journal, the LA Times, and the many stories on Chain Links, the online network of the Newspaper Guild, (some links below), can you find out much of anything about this sorry deal. Not by reading the WLSBs in the local Hearst/Singleton press. And so once again we urge you to sign up for Chain Links and get the stories the local monopoly papers won’t print.

Full disclosure: we want to get the documents of collaboration of Hearst and Singleton and the other chains in the Bay Area monopoly deai (McClatchy, Gannertt, Stephens), and shed as much light as possible on the march of the Galloping Conglomerati. That’s why the Guardian and the Media Alliance, represented by the First Amendment Project, went into federal court last week to try to unseal the documents in Reilly vs. Hearst et al, the only real impediment remaining to unraveling the Hearst/Singleton deal and the fallout from the Knight-Ridder sale to McClatchy. Wish us luck. B3

P.S. I sent an email over to Ken Howe, editor of the Chronicle business section, asking him why the Chronicle did not run a story on the McClatchy sale. He had not responded by blogtime. I am sending a copy of this story (and the Nick Coleman column) to Hearst corporate in New York via Chronicle publisher Frank Vega and Editor Phil Bronstein. Will they comment? Will Hearst ever allow a Nick Coleman-type column in its paper or website SF Gate or its blogs? Will they allow David Lazarus to get to the bottom of it all in his excellent business column? Or Phil Matier aand Andy Ross…Or?…Or?…

P.S. 2: Note to the newspaper unions: the stories you are running on Chain Links are owner oriented stories, with almost no quotes from people from the community or journalism or law professors or union spokespeople. Do the unions have any comment or stories of its own that it can pass along? Any more Nick Coleman type columns?

ChainLINKS
The Star Tribune
The Minneapolis Star Tribune
The New York Times
Editor & Publisher

Troubled ferry

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For more than three months, captains, deckhands, and union sympathizers have been protesting on the Embarcadero in front of Alcatraz Cruises’ new operations at Pier 33.


But a few blocks away on Market Street, the battling companies have been wrangling inside the offices of the National Labor Relations Board. In early October, Alcatraz Cruises filed a complaint against the protesters for "visitor harassment."


"Nobody was getting hurt, but there was behavior that wasn’t necessarily appropriate," Alcatraz Cruises spokesperson Tegan Firth told the Guardian. She said protesters have used foul language around the tourists and the complaint included a compilation of video footage gathered over several weeks as evidence.

In response, Masters, Mates, and Pilots and the Inland Boatmen’s Union filed their own complaint with the board based on hiring discrimination. "We countered their charges with our own charges of discrimination," captain Ray Shipway told us. "They interviewed a lot of people, but they didn’t hire them. They hired junior crewmembers over the experienced ones."


The unions also filed suit earlier in the year and won an injunction from the Department of Labor, forcing Alcatraz Cruises to pay prevailing wages to their crews. The company has appealed that decision.


"It wasn’t clear in the original decision if it applied to this concession contract or all future contracts with the National Park Service," Firth explained.


She said the other reason was the company would like more flexibility. "The Department of Labor set down the wages and benefits, but we want to explore a wide variety of benefits and offer employee incentives."


She said some of that might include a cafeteria plan for health care, but as far as incentives were concerned, "I don’t think we have anything specific in mind, but we want to be able to be flexible."


When asked if part of that flexibility was an opportunity to offer lower wages to employees, she said, "No, it is not. It is partially clarification and partially so all our employees have the best options for total compensation."


"Terry MacRae, like the owners of Whole Foods and Wal-Mart, is virulently antiunion," said deckhand Steve Ongerth, criticizing the owner of Alcatraz Cruises. "He made sure he hired only enough crew to train their replacements. He knows what he’s doing. He hired people who weren’t in the union so there wouldn’t have to be a union."


Union members are concerned this could be the start of an unwelcome trend on San Francisco’s waterfront, which has traditionally been powered by strong unions.


Firth said the company wasn’t ruling out the possibility of seeking future service contracts with the National Park Service or taking ferries to other ports in the bay. "We’re not exploring any actively, but I wouldn’t rule it out in the future," she said.


"Hornblower [Alcatraz Cruises’ parent company] is one of the fastest-growing businesses on the bay," she said, "and it obviously didn’t get that way waiting for business to come to it."

The bigger picture

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Considering the potential impacts of the First DataBank litigation, which easily reach the billions of dollars, and the evidence that two companies with big footprints in San Francisco (Hearst, which owns the Chronicle, and McKesson, one of the city’s biggest corporations) may have conspired to cheat consumers, this story has gotten very little press coverage.

And the news reports that have run have missed some major points.

The suit, brought by a group of unions scattered over the northeastern United States, charges that McKesson Corp, and First DataBank, a publication owned by Hearst, conspired to artificially and arbitrarily raise prescription drug prices costing health plans (such as the ones maintained by the plaintiffs’ unions), private insurers and state Medicaid offices approximately $7 billion between 2001 and 2005.

Pharmaceutical industry publications have covered the news, but otherwise, it has been relegated to the business press (the Hearst-owned Chronicle caught up to the story weeks after the plaintiffs proposed a settlement deal with First DataBank and dumped it in the business section).

When such stories are assigned to a business reporter, they can take a different dimension. The business press has a tendency to focus on how this type of litigation might negatively impact Wall Street — rather than emphasizing how class-action suits are a tool for consumers to pursue relief when they believe Big Pharma (or any major corporation for that matter) has broken the law.

Some flaws in the coverage and facts that the press hasn’t played up are listed below:

* A McKesson spokesperson told the Chronicle that the company “would certainly support a move away from [average wholesale price] that created a more logical and stable reimbursement structure for all parties in the health-care system.” But the plaintiffs contend, relying on an untold number of internal e-mails and memos obtained by their attorneys, that McKesson and First DataBank both knew exactly what was going on and actively worked to keep it a secret. McKesson flat-out denies it knew anything about what was happening to First DataBank’s published average wholesale price. But according to one e-mail cited in legal papers, the alleged scheme was so controversial that the two companies scorned drug producers who smelled legal trouble after becoming aware of it and attempted to back away.

* McKesson today is still working to recover from a $9 billion accounting scandal that in 1999 led four executives from a subsidiary to plead guilty to conspiracy and securities fraud and nearly landed two more behind bars before a federal jury deadlocked on three charges with a single holdout vote. U.S. Attorney Kevin Ryan has not yet announced whether his office will attempt to retry the two men.

* In 1998, the Federal Trade Commission blocked attempted mergers by the nation’s four largest drug wholesalers, which would have reduced the number to two. McKesson wanted to acquire the company AmeriSource Health Corp., and a company called Cardinal Health attempted to acquire Bergen Brunswig Corp. AmeriSource and Bergen did, however, ultimately merge with one another bringing the number of major wholesalers to just three. Even though the original deal was stopped, McKesson quietly revealed in 2005 through a Securities and Exchange Commission filing that the FTC had requested documents from the company and was investigating whether it had engaged in anticompetitive practices with other major wholesalers in order to limit competition. At the time that McKesson and Amerisource’s proposed merger was halted in 1998, then FTC-director William Baer expressed serious concerns about two corporations dominating a substantial portion of the drug wholesale market. “If allowed to merge into two firms, the two surviving companies would control over 80 percent of the prescription drugs sold through wholesalers in the country,” he said at the time. “That means higher prices for prescription drugs and a reduction in the timely delivery of these drugs to hospitals, nursing homes and drugstores, which could affect patient care.”

* First DataBank has had its own problems with the FTC. The company was founded in 1977, and Hearst purchased it in 1980. Federal records show that in 1998, Hearst bought another $38 million company that owned one of First DataBank’s only real competitors, Medi-Span. A later investigation by the FTC revealed that Hearst had failed to turn over key documents to the Justice Department’s antitrust division during the sale. As a result, the feds slapped Hearst with a $4 million fine in 2001, at that time the largest pre-merger antitrust penalty in U.S. history. The FTC also belatedly concluded that Hearst’s ownership of Medi-Span gave it a monopoly over the drug database market and not only required that Hearst give up Medi-Span but forced the company to disgorge $19 million in profits generated from the acquisition.

* Anthony Wright, executive director of Health Access California, a health-care reform non-profit based in Oakland, told us that in past years, the state legislature has been more likely to cut the Medi-Cal budget than to look seriously at how the pharmaceutical industry might be manipuutf8g drug prices. He said only after a tough battle in Sacramento this year were Medi-Cal cuts originally supported by both Democrats and Republicans stopped. “From a state perspective, when faced with a budget shortfall, it is easier to look first at simply providing less services than the politically and operationally tougher job of trying to find savings from drug companies or others,” he said. In recent years at least, several state attorneys general, including California’s Bill Lockyer, began probing evidence that the average wholesale price was not only known to be an inaccurate benchmark by industry insiders for drug reimbursements, but that manufacturers, too, had participated in infutf8g those prices in a method similar to what McKesson is alleged to have done. Health-care policy wonks say the average wholesale price has been a problem for decades.

Schemes such as the one alleged in the First DataBank litigation are highly complex, making it difficult for laypersons to identify them. Unfortunately reporters and editors have also been known to avoid such stories like the plague, because they’re seemingly too difficult to summarize and not as sexy as local crime and celebrity gossip — even though billions of dollars could be at stake.

The morning after

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› gwschulz@sfbg.com
The plight of newspapers is a popular news story these days, from a late-August cover package in the Economist (“Who Killed the Newspaper?”) to National Public Radio’s On the Media last week (“Best of Times, Worst of Times”).
It’s usually told as the story of an industry on its deathbed, bleeding from self-inflicted wounds and those delivered by Wall Street, Main Street, Craigslist, and the blogger’s laptop. Ad revenues have nose-dived in recent years. Circulation is down nationwide. Journalism scandals and shortcomings have damaged the whole profession’s credibility.
And staff newspaper blogs alone won’t be enough to bring a new generation of tech-savvy Americans back to hard-copy publications that even smell stodgy and old.
Yet the bottom line is still the bottom line. The truth of the matter is that many publicly traded newspaper companies have healthy profit margins ranging between 15 and 20 percent. But the tendency of the doom and gloom business press to sensationalize bad news may actually make things easier for William “Lean” Dean Singleton, the cost-cutting king of Denver-based MediaNews Group, which recently announced a round of staff reductions at its Bay Area newspapers. The cuts came amid claims of a massive dip in ad income just a few months after Singleton promised that his company’s buyout of local newspapers wouldn’t diminish the quality or quantity of journalism here.
“Given continued declines in revenue, we need to reduce expenses significantly, and thus have no alternative but to implement a reduction in [the] work force,” George Riggs, who was recently appointed to lead the company’s Northern California operations, told employees in a memo Oct. 20. Several such memos have now been posted on the Internet.
If this is how quickly the news biz can turn ugly, it’s a wonder MediaNews was attracted to print journalism in the first place. Who knows what newspapers around here will look like in another few months? How much fat can they trim before they start hitting bone?
They aren’t just cutting staff. The Bay Area’s newspaper establishment is now outsourcing work to circumvent those pesky labor unions. The press operators’ union at the San Francisco Chronicle — which was the sole union holdout against management’s demand for expanded control and decreased benefits — could disappear in three years as a result of a new printing contract with a Canadian company. MediaNews recently announced plans to outsource ad production positions to India.
Consolidation already has amounted to fewer reporters covering individual stories that are distributed to several publications, including at least one story about the latest layoffs. That means fewer editorial perspectives on key public policies (and possibly fewer editorial positions) for readers in a market that’s notorious for its high intellectual demand and robust political participation.
Only an ongoing federal Justice Department investigation and a civil lawsuit threaten to slow down big changes going on at the Bay Area dailies. A federal judge ruled just before deadline in real estate mogul Clint Reilly’s antitrust claim against the Hearst Corp., publisher of the Chronicle, and MediaNews that for now, at least, the two could not combine circulation and advertising operations to save money.
The companies had secured a court order sealing key records unearthed during discovery, including depositions and exhibits, citing the right to protect confidential trade secrets. It’s an ironic move for a group of papers that have regularly sued government agencies for public records and made a great show of their First Amendment pieties.
Federal Judge Susan Illston on Nov. 28 blocked the two companies from merging some advertising and distribution operations, a consolidation she said was probably illegal under antitrust laws. And she sounded her concern that Hearst isn’t the “passive equity investor” it had represented itself in court to be. She also revealed the contents of letters written in March and April by company executives: “Hearst and MediaNews will enter into agreements to offer national advertising and internet advertising sales for their Bay Area newspapers on a joint basis, and to consolidate the Bay Area distribution networks of such newspapers, all on mutually satisfactory terms and conditions, and in each case subject to any limitation required to ensure compliance with applicable law.” (For more extensive information on the ruling and related coverage, see www.sfbg.com.)
For those who regard newspapers as more of a public trust than an engine for deep profits, the future is starting to look a bit unsettling.
When Singleton expanded his control over the Bay Area threefold last summer, he temporarily quelled some discontent by assuring skeptics that there were no planned changes in staffing and salaries as a result of the transactions.
“We’re looking forward to doing a lot of good things here in Northern California,” Singleton told San Jose Mercury News staffers, according to the paper’s story on the buyout.
But employees at the papers still had every reason to be nervous about Singleton’s $1 billion takeover of the Contra Costa Times, the Mercury News, and other papers from the Sacramento-based McClatchy Co.
MediaNews already owned the Oakland Tribune, the San Mateo County Times, and the Marin Independent Journal among others in California before it carved excess properties out of McClatchy, which had grown too large following its purchase of the Knight Ridder chain earlier this year.
The purchases allowed Singleton to seize almost complete control of 14 metropolitan and suburban media markets. The only remaining daily print competitor in the Bay Area was the Chronicle and its parent company, the Hearst Corp., which subsequently purchased $300 million in MediaNews stock, a deal the feds are still investigating. When the transaction with Hearst was finalized, top executives at MediaNews were collectively awarded about $2 million in bonuses.
Some profiles of Singleton have depicted him as a good old-fashioned newspaper journalist, but knowing his cost-cutting reputation, only a fool would assume there were no plans to consolidate major operating functions to save money regardless of any promises made. Singleton has always been more about business than news.
Clustered ownership and shared management were prominent features of the company that MediaNews presented to investors at a Deutsche Bank “Global High Yield” conference in October. An April letter that reappeared in federal court last week during a hearing in Reilly’s suit confirmed that MediaNews and Hearst hoped to shed costs by possibly combining circulation and advertising operations.
Layoffs are also a big part of Singleton’s MO. Respected but tough Contra Costa Times editor Chris Lopez was let go in October because he’d become “redundant,” according to a memo company executive John Armstrong sent to employees.
“That came as a shock to a lot of people in the newsroom,” one source at the paper told the Guardian. Known for handing cash rewards out of his wallet to reporters who nailed concise stories for the front page, Lopez had attempted to play down Singleton’s reputation when the purchases were announced. Lopez had been at the paper for more than six years and had helped earn Singleton a Pulitzer Prize during a six-year stint at the company’s flagship Denver Post, received for its coverage of the Columbine shootings.
“In better times, we might have found a way to ignore an extra position or two or even three,” Armstrong wrote in the memo.
Lopez insisted to the Guardian in a phone interview that he had proposed his own termination to ease anticipated cuts elsewhere.
“My layoff from the paper was not unexpected,” Lopez said. “It caught the staff off guard, but I saw it coming. I made the recommendation. I was trying to save some jobs in the newsroom.”
The loss of an experienced editor may have saved some jobs … for now. But maybe not for long. Reporters have been asked to summarize their beats for managers to determine how they can cover single subjects for a number of papers. The idea seems to be maximizing staff output rather than ensuring broad coverage of the communities.
A story about Lopez’s departure written by a Times reporter also appeared on the Merc’s Web site. MediaNews is also looking into multimedia deals with local TV stations and arming reporters with cameras for podcasts, one source told us.
Armstrong told the Guardian in a phone interview that opinion columnists, for instance, could still cover the same stories. “But we had found some situations where reporters were sent to the same events like Oakland [Raiders] away games.” He said offering buyouts to staffers has been “successful,” but it wasn’t enough to stem declining revenue, triggering the need for “involuntary” layoffs.
All of this may make sense from a strictly economic perspective. After all, doing more with less is a widely accepted imperative for profit-driven corporations. But there is a public price that will be paid for this reality: Bay Area citizens will get less original reporting and fewer perspectives on the news.
A former senior staffer at a major Bay Area daily wrote an open missive outlining recent major stories covered by fewer reporters: “Three months after MediaNews Group added two major Knight Ridder dailies to its far-flung Northern California newspaper group, news coverage is well on its way to being homogenized in this formerly competitive market.”
The observation is borne out by a Guardian survey of three major MediaNews papers. Out of 10 top recent cultural and political stories in the Bay Area, nine were covered by the same reporter, who wrote the same article for all three papers. (For details, visit www.sfbg.com.)
Under the recent layoff announcement, the Merc could lose up to 101 employees, half from its newsroom, while more than 100 business-side positions will be reportedly moved to a new, nonunionized San Ramon office of the California Newspapers Partnership (CNP), a consortium of companies including Gannet Co. and Stephens Group that helped MediaNews fund its recent purchases. The centralized San Ramon space could continue to fill up with employees from the business side of the papers who have been forced to reapply for their jobs under the CNP corporate moniker. They would presumably fall out from under union protection.
The company’s Peninsula and East Bay papers saw cuts across their operations from Walnut Creek to San Mateo. Armstrong told the Times the layoffs were “broad but not deep.” East Bay Express writer Robert Gammon, a former Tribune reporter and union organizer, revealed in early November that MediaNews planned to leave behind the Tribune’s historic downtown tower and move many of its staffers to the San Ramon office. News-side functions could be moved to a cheaper spot across from the Oakland Coliseum.
“The question is how do we continue to put out a paper people want to read if we continue to cut further?” Luther Jackson, executive officer for the San Jose Newspaper Guild, which represents almost 500 workers at the Merc, asked the Guardian. “I have a concern that when newspapers face increased competition for advertising, why are we cutting service? Does it work for readers? Does it work for advertisers?”
The Bay Area isn’t alone. In the complex transactions that took place over the summer, Hearst bought the St. Paul Pioneer Press from McClatchy and shifted it to MediaNews in exchange for stock in the company. At the Pi Press, as it’s known in Minnesota, 40 positions were cut in November. A MediaNews paper in Los Angeles, the Daily News, recently axed its publisher and 20 other workers.
MediaNews enraged union workers at the Merc when it offered them a contract during September negotiations that was unlike anything they’d seen at the paper before. The company has since toned down some of its harsher demands but asserted that if a tentative agreement were accepted by Nov. 30, the Merc might see fewer layoffs, Jackson told the Guardian.
The proposal would grant management the right to modify insurance coverage without telling the union, freeze the paper’s pension plan and replace it with a 401(k), and change the types of work that could be assigned to nonunion employees. It would also allow the paper to hire new workers at “market-rate” salaries, which means their pay increases could be capped at lower rates.
The company may choose to simply not replace costly veterans who are retiring or accepting buyouts, meaning cub reporters could find themselves with fewer seasoned mentors around to help teach them government and private sector watchdogging.
The guild foresees losing nearly 200 members if the full number of layoffs and worker transfers are carried out. And many guild members fear it may also mean the beginning of the end of newspapers as we know them.
Corporations have the right to see to their bottom lines. But communities and individuals also have a right to the fruits that independent, competitive journalism bestows. And that’s the right being asserted now in civil court by Clint Reilly.
While federal and state investigators have largely been idling, Reilly sued Hearst, MediaNews, and its other business partners last summer. He asked Judge Illston to temporarily halt the transactions until the trial begins in his antitrust claim against the companies. She denied Reilly’s initial request for a preliminary injunction, in part because the Hearst investment had not been officially inked, even though the trial isn’t expected to start until this spring.
In her opinion, however, she suggested parts of the deal were troubling and has not ruled out forcing MediaNews to give up some of its newly acquired assets. Earlier this month Reilly’s attorney, Joe Alioto, again asked the judge for an injunction. The renewed appeal was inspired in part by the recently announced job cuts.
The plaintiffs are arguing Hearst and MediaNews previously withheld a letter from the court that the two companies had signed agreeing to discuss the possibility of combining some circulation and advertising functions to save money. In his request Alioto told the judge the companies were “rapidly consolidating, commingling, and irrevocably altering their San Francisco Bay Area newspapers so as to frustrate this Court’s ability to provide an effective remedy for their antitrust violations.”
During a tense hearing last week on the matter, Alioto asked that top Hearst and MediaNews executives be ordered to testify immediately. He suggested Hearst’s board of directors would never have agreed to invest $300 million in MediaNews if it couldn’t also merge distribution and ad sales with its competitor.
“I don’t think there is any doubt that they intend to end up with newspapers that are very different than they are today,” Alioto said. He wants any such discussions stopped by the court, adding, “We believe they intend to wipe out the possibility of any of these papers to remain freestanding. These papers will not be the same within a very short amount of time.”
Hearst attorney Daniel Wall angrily fired back that no one was trying to deceive the court with a price-fixing agreement and that the companies were merely discussing the possibility of “pro-competition collaboration,” which Wall described as a business partnership lawfully permitted by the Justice Department. He disclosed that the Chronicle was bleeding millions of dollars annually, partially because of lost revenue to the Web, and exclaimed that drastic cost reductions were necessary to keep the paper alive.
“These are tough times for newspapers, and they need to take cost out of the system,” Wall told the judge. “They need to find new revenue streams.”
Hearst has already faced something akin to all of this before. Reilly sued it in 2000 when the company bought the Chron and attempted to nix competition by shutting down its long-held San Francisco Examiner. Reilly didn’t block the deal, but the Justice Department forced Hearst to keep open the reliably conservative Examiner, today owned by another Denver-based company.
This week Illston ruled that Hearst and MediaNews must temporarily stop any agreements to combine advertising sales and distribution networks until Dec. 6, when she’ll decide whether to extend her prohibition on merging business operations.
Reilly has emerged over the last decade as a serious pain for corporate media executives and unshakable critic of concentrated newspaper ownership in the Bay Area. His most recent lawsuit charges that the Hearst and MediaNews partnership would dilute fair competition and limit alternatives for both readers and advertisers.
“They started the blood flow with the firings,” Alioto told reporters after the hearing. “We think when they’re done with this they’re going to have entirely different newspapers.”
Recent job losses don’t stop at just MediaNews. The Chronicle is getting in on the action too.
Divisive contract negotiations between the Chronicle and the Web Pressman and Prepress Workers Union Local 4 over the last two years ended recently when the union “reluctantly approved” an agreement, union treasurer Paul Kolter told us. The union was the last holdout at the paper to accept drastically reduced workers’ rights.
By successfully pushing its will on the unions, Hearst has virtually ensured that the press operators won’t pose much of a threat to the company anymore, because around the same time it signed a $1 billion outsourcing deal with the Canadian printing company Transcontinental.
The union’s new contract is up in about three years, and there are no assurances Local 4 will have any workers in the new plant Transcontinental has promised to build. That could mean the end of its relationship with the Chronicle and about 225 workers from the paper that it represents.
The previous contract ended in the summer of 2005, and under the paper’s new publisher, Frank “Darth” Vega, management called for drastic cuts in salaries and benefits. The two groups spent several intervening months battling over the proposed changes.
In July, Vega prepared the paper for a strike, issuing a memo that outlined exactly how to keep the paper operating throughout a work stoppage, and hired a notorious security firm that specializes in handling labor disputes.
The union points out that while the Chronicle complains of massive financial bloodletting, its parent company, Hearst, has somehow scraped together enough money for a brand-new $500 million office building in midtown Manhattan, the construction of which was completed over the summer. The company also sold the sprawling 82,000-acre ranch that surrounds Hearst Castle to the state early last year for nearly $100 million. It was once home to the notoriously belligerent and imperialistic newspaper magnate William Randolph Hearst.
Union members say there are wide ramifications to what’s happening here. In July the World Association of Newspapers published a report describing how more news services globally, including the New York Times, were outsourcing major tasks, even news reporting, to save money.
“There are a lot of labor unions that have an interest in what is happening with us,” Local 4 organizer and press operator Bruce Carlton told members at a meeting in late October. “If this flies, it will be a blueprint on how to break unions. We will be sent back into the ’30s.”
The mood is dark for many employees working under MediaNews and Hearst. The scrappy feel and hard-driving reportage of the CoCo Times under Lopez and Knight Ridder are believed by some to be at risk following the purchases. “No one thinks we’re going to be a better newspaper because of this,” one source at the paper told us.
In another memo MediaNews executive Armstrong wrote to Bay Area staffers last week, he stated that the company, in fact, predicted its “advertising revenue challenges.”
“We have no additional job reductions planned due to economic conditions, but we cannot guarantee that additional reductions might not be necessary in the future,” he wrote. “Our job level is dependent on our revenue performance.”
The memo also shows that the company plans to sell an office in Danville and two parking lots in downtown Oakland.
News accounts depicted third-quarter earnings for MediaNews based on Securities and Exchange Commission filings as a windfall profit caused by its purchases of the Times and the Merc. But the company’s ad revenue and circulation are actually down a few percentage points, and it made $16 million from the July sale of an office building in Long Beach, which offsets a simple analysis of its financial standing.
It’s still a company that topped $1 billion in revenue last year, a figure that has increased steadily since 2002, but Singleton has never feared doing business with loads of debt on the books, which he’s always used to fuel new purchases. For the Bay Area papers, MediaNews took on a $350 million bank loan in August.
MediaNews has still managed to take recent dire economic forecasts to a fever pitch despite its confidently large debt burden, enabling the company to implement a business model that’s hardly new for Singleton. He knows how to make money. Interestingly, for an industry that’s supposedly on the ropes, several billionaires (who didn’t become wealthy by investing poorly) have in the last few weeks publicly expressed interest in purchasing some of the nation’s largest dailies.
The Boston Globe noted earlier this month that rock industry tycoon David Geffen and grocery chain investor Ron Burkle were considering a bid for the Tribune Co., which owns the Los Angeles Times. That paper recently endured a major shakeup when a top editor was fired for refusing to execute job cuts demanded by the company. Former General Electric CEO Jack Welch has considered a run for the Globe, and more buyout rumors have floated around the Baltimore Sun and the Hartford Courant. Such deals could signal a fundamental shift in how newspapers are regarded with respect to their newsgathering responsibilities.
“Geffen has reportedly told associates that he’d be happy with returns comparable to the 3 or 4 percent he might get from municipal bonds,” the Globe wrote. Others have discussed turning individual newspapers into nonprofits.
But Singleton probably isn’t going anywhere, and a lot of people are going to have to learn how to get along with him around here, Texas drawl and all, unless the feds shut down his party.
Knight Ridder was a respected newspaper chain before investors grew restless and demanded greater short-term profit margins. It was sold earlier this year to McClatchy (begrudgingly for some top execs and Pulitzer-wielding journalists who openly fought with Knight Ridder’s financial backers prior to the sale). Knight Ridder posted a profit margin of nearly 20 percent in 2004.
Employees of the chain wrote a chilling open letter shortly before it was sold: “Knight Ridder is not merely a public company. It is a public trust. It must balance corporate profitability with civic purpose. We oppose those who would cripple the purpose by coercing more profit. We abhor those for whom good business is insufficient and excellent journalism is irrelevant.” SFBG

Journalists need to fight back

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EDITORIAL At the annual awards dinner Nov. 9 of the Northern California Society of Professional Journalists, the mood was somber. One of the winners of the Journalist of the Year award, Josh Wolf, was behind bars for refusing to give unpublished material to the authorities. Two others, Lance Williams and Mark Fainaru-Wada of the San Francisco Chronicle, were only free pending appeal of a judge’s order that they go to jail unless they reveal the names of confidential sources.
On the eve of the dinner, the editor of the Los Angeles Times, Dean Baquet, had been fired for refusing to go along with drastic newsroom job cuts ordered by an out-of-town corporate headquarters. The event’s keynote speaker, Jerry Roberts, had been forced to leave his job as editor of the Santa Barbara News-Press after the multimillionaire publisher demanded that basic news reporting be squelched.
The buzz around the room was that more layoffs were coming at the Contra Costa Times and San Jose Mercury News, papers just recently purchased by Dean Singleton, who now owns every major daily in the Bay Area except for the San Francisco Chronicle (which is owned by Hearst, one of his business partners). And indeed, the CoCo Times announced the day after the dinner that it had cut jobs across the board and was outsourcing some production work to a firm with facilities in India.
Linda Jue, the president of the SPJ chapter, made a point in her opening remarks about the need for journalists to take a more active stance, to fight against the assault on freedom of the press and journalistic standards that’s happening across the country. She had exactly the right point — and local and national journalism groups need to wake up and start paying attention.
These are particularly ugly times — the amount of government secrecy, particularly at the federal level, is almost unprecedented. But there’s something else just as bad going on: consolidation of media ownership is destroying the profession of journalism. And that’s something that groups made of working journalists have to start addressing.
There are all sorts of ways to get started. The SPJ, both local and national, ought to formally request the federal Justice Department to overturn the deal that gave Singleton hegemony over the Bay Area market and should press for a full investigation into Hearst’s role in the deal. These organizations (including the big unions that represent newspaper workers) ought to be working with the likes of Media Alliance in demanding that the Federal Communications Commission tighten the rules on ownership of broadcast media. Publicly traded companies that own newspapers should face organized shareholder-resolution campaigns opposing debilitating newsroom cuts. They should look at ways to support San Francisco investor Clint Reilly in his lawsuit against the Singleton deal and should at the very least issue statements on it. They should send regular delegations to see Wolf in jail and should press Rep. Nancy Pelosi to demand a federal shield law — an end to the federalizaton of law enforcement investigations (which can land people like Wolf in jail).
Sure, the Internet is changing the face of the media industry, and there are all kinds of other challenges — but in the end, no matter what the publishing platform, there will always be a need in a democratic society for qualified professional reporters and editors. And those of us in that line of work need to stand up to make sure that big media chains demanding obscene corporate profits don’t suck the life out of American journalism. SFBG

Two drug execs escape jail … for now

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By G.W. Schulz

Two former executives at the San Francisco-based McKesson Corp. escaped prison sentences by the skin of their teeth late last week in this ongoing era of blind fury over corporate corruption. And McKesson’s former blue suits have the indecisiveness of just one juror out of 12 to thank.

The two were acquitted on one count of securities fraud stemming from a $9 billion accounting scandal, but a mistrial was declared after the jury deadlocked 11-1 on three of the remaining counts. Four other executives were previously convicted in a scheme by which the company allegedly overstated revenue to the tune of $300 million during its merger with an Atlanta-based outfit called HBO & Co.

McKesson is one of the nation’s largest prescription-drug wholesalers with revenue of $88 billion annually. It’s current CEO, John Hammergren, makes more each year than even the head of Bay Area-based ChevronTexaco.

One juror told the Associated Press that the rebel holdout “got to the point where he didn’t want to be talked to anymore.” U.S. Attorney Kevin Ryan’s office is determining whether to retry, which could still land the two men, Charles McCall and Jay Lapine, in jail for 10 years each.

The Guardian reported in late October that McKesson is in no small amount of trouble these days. The company, along with the New York-based Hearst Corp., which owns the San Francisco Chronicle, was charged by a group of unions in a civil suit filed in a Boston federal court last year of conspiring to inflate drug prices. Hearst owns a drug info publishing company based in San Bruno called First DataBank. The suit alleges that the effort caused consumers to overpay $7 billion for prescription drugs between 2001 and 2005. First DataBank has since settled, as we reported, but McKesson is still a major target of the lawsuit.

Big Pharma is nearly as profitable as Big Oil these days. The state of California pays out over $3 billion each year for prescription drugs through programs that benefit children and the indigent, while Santa Clara County alone — as a smaller-scale example — pays out nearly $35 million. (Santa Clara County sued a bunch of manufacturers and wholesalers a couple of years ago for allegedly rigging prices, but the case was recently tossed out of federal court in San Francisco.)

Defense attorneys for the former McKesson execs are calling last week’s ruling a victory, but Wall Street didn’t appear to see it that way. Value of the company’s shares dropped by nearly a half following announcement of the news to $35. The company quickly informed the business press just a few days later of its $1.1 billion purchase of Georgia-based Per-Se Technologies and just as soon recovered $15 per share of the drop. Guess corporate ethics don’t have to be much of a pain in the monetary ass after all.

Dan Savage comes through in the clutch. The gay sex columnist endorses in his pre-election column in the Voice and other New Times papers, but the Voice and New Times papers do not endorse. Hurray for Dan Savage!!!

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By Bruce B. Brugmann

Hurray for Dan Savage, the gay sex columnist for the l7 Village Voice/New Times papers in major markets with major battleground races for the election.

Savage performed heroically under fire and managed to get some key election endorsements into the second to last paragraph of his syndicated sex column in the crucial issue before one of the most important elections in modern history, a plebescite on Bush, the war, and the occupation. (New Times papers historically don’t do endorsments and don’t allow their writers to endorse.) He ran a letter in his column from a Wisconsin male who wrote, “Wisconsin needs your help!. On Tuesday, Nov. 7 we’re voting on an amendment banning gay marriage. As a married heterosexual male I’m supposed to feel threatened by gays getting married, but I’m smart enough to realize it doesn’t affect me at all. I also realize that I got to marry whomever I wanted, and everyone should have that right. Urge your readers in Wisconsin to vote NO on the marriage amendment. Thanks!”

Savage gave the writer the ultimate Savage compliment: “You put it better than I could, JIW. I would add: The amendment in Wisconsin bans gay marriage and civil unions. Vote no.”

Then Savage continued his endorsement: “And to my readers in Colorado, Idaho,
South Carolina, Tennessee, Virignia, Arizona, and South Dakota: Please vote against the gay marriage bans in your states, too. And in South Dakota, please vote to overturn your state’s idiotic abortion ban. And to my readers in Canada: Be glad you don’t have to put up with any of this shit.”

In the presidential race two years ago, Savage snuck his Kerry for President endorsement in the last line of his pre-election column. This time, he slipped his endorsements into the second to last paragraphs, with a neatly disguised ending to his column with a diverting letter from a woman who claimed she couldn’t have an orgasm until age l8. She then took some pot with a “cooperative boy friend and–bam! –six orgasms in five minutes.” And he signed off, “Thanks for sharing.” And sent his readers off to a Savage website to learn more about pot and sex. Well done, Dan. A masterful job.

Meanwhile, Savage’s endorsements were the only real endorsements to be run in the pre-election issue of the Voice, probably one of the first times in Voice history, if not the first, that this bastion of New York liberalism has been Voiceless and neutered and has not endorsed candidates or run serious political coverage in an election. (Why? I put the questions by email to Voice/New Times CEO and chief executive officer Jim Larkin, Executive Editor Michael Lacey, and David Blum, the new Voice editor in chief, but got no reply by blogtime.)

Instead, the Voice this week ran a gripping “report from the trenches of ‘Saturday Night Live’–dress rehearsals, wrap parties, last-minute sketch changes, a l a.m. phone call from Lorne Michaels (and yes, Andy Samberg!”) with a front page illustration of a smiling comedian doing the Bronx shrug. I kid you not. Check the link below and the Voice website and see what has happened to the mighty Voice in the short nine months since Larkin, Lacey,and the Arizona Gang got ahold of it. Meanwhile a quick check showed that none of the other l6 Voice/New Times papers ran any endorsements in their pre-election issues, with the possible exception of the OC Weekly in Orange County. An editor sent me an email saying they were doing endorsements but I could not find them at blogtime.

Well, Nathan Blumberg, my first journalism professor at the University of Nebraska in Lincoln in l953, used to say that a paper that didn’t run endorsements didn’t have any balls. He used the word testicles, because this was Nebraska in l953, but the class all got the point. So: does this mean that Dan Savage has balls, and Jim Larkin and Mike Lacey don’t have balls? Let us let the readers decide.

P.S.1 It’s hard for the staff members of a Village Voice/New Times paper to say much inhouse or publicly about the management style and editorial policies of Larkin and Lacey. For example, note what happened to poor David Schneiderman, the former Village Voice top guy since l978, who they sacked unceremoniously last week. VOICE BOSS GAGGED,” chided the New York Post head. The Post noted Larkin’s subtle style when it quoted an insider as saying about Schneiderman: “The new guys held him in complete disregard. It got so bad that one source said that while Schneiderman was in New Orleans recently delivering a presentation on the company’s web progress, Larkin made a point of taking out a newspaper and reading it while Schneiderman spoke.” Schneiderman will go down in journalism history as the guy who sold the Voice to New Times, and pocketed $500,000 for his work on the deal, but even he probably didn’t deserve the Larkin/Lacey treatment.

P.S 2: Meanwhile, back in San Francisco, the SF Weekly/
Village Voice/New Times ran a front page page illustration of two gay comic figures I can’t quite characterize, but sported the head, “DRAWN TOGETHER, Graphic Homosexual comics and the young women who love them.”
Smith came the closest to a political endorsement when he meandered around with the two major candidates in District 6, Sup. Chris Daly and challenger Rob Black, and wrote a self-immolating piece titled, “Vulgar posing, How our columnist was seduced into watching the World’s Largest Female Bodybuilder beat up on Rob Black.” After missing, mangling, mushing, and making fun of the issues, Smith came up with two summary questions but no clear endorsement: “Isn’t Daly the vulgar jerk who threatened the democratic process? What about the gentility-in-public-life rap Black’s been giving SOMA condo dwellers? Black is gone. I don’t feel like chasing after him with my facile questions.” Well, Smith concludes, “Alone, in SF Weekly’s offices, beer on my breath, an awful sort-porn video on the VCR, I realize I’ve beens seduced by the poses of two political hacks.”

News flash to Smith: There are real major issues in this district. For example, Calvin Welsh lays out a big one in a Guardian op ed this week, “Don’t for a minute believe that he (Daly) is in the fight of his political life because he’s rude, because he doesn’t care about lw and order, or because he prefers dirty streets upon which to raise his son. These petty and silly charges mask a far more serious objection: the way his opponents see it, Daly has been too slow in adopting the massive wave of market rate housing slated for this district and is far too protective of lower income residents in District 6.” He concludes: “There’s a working majority of the Board of Supervisors willing to fight for current neighborhoods and residents and a future that includes them. The battle in District 6 shows that the fight is not without risk. Do the rest of us realize it? Smith, Larkin, Lacey, Voice/New Times folks, do you realize it?

P.S.3: At blogtime, Jonny Diamond, the editor in chief of L magazine in New York, replied to my query about Voice endorsements with this quote: “Yes, the Savage stuff is in, but it’s the only thing remotely related to the election in the entire issue. This is the cover story (and he gave me the link). Remarkable stuff from the country’s formerly foremost alt-weekly on the eve of the most important midterm elections in a long, long time. I’d say this is the final, no-doubt-about-it end of the Voice. As for our own coverage, we’re working on something for Friday.”

So, to get election endorsements and coverage in New York, forget the Voice and
go to the website of the L magazine, a zippy New York arts and entertainment biweekly under the direction of the Steadman brothers.

And with that, ladies and gentlemen, we may have heard the final word on the eve of the election from the Larkin/Lacey/VillageVoice/NewTimes/SF Weekly crew in San Francisco and New York. Maybe Larkin will stop reading the paper long enough to send me comments or explain to the readers of his l7 papers why they don’;t endorse or do serious election coverage. I’ll let you know. If anybody spots a political endorsement in a Voice/New Times paper, flash me the word. B3, hoping good news is on the way on the way Nov. 7th

VOICE BOSS GAGGED: SCHNEIDERMAN IS OUSTED BY NEW OUT-OF-TOWN OWNERS:
By KEITH J. KELLY

October 27, 2006 — DAVID Schneiderman is out as president of Village Voice Media nine months after Phoenix-based New Times took over the alternative weekly newspaper chain.

Following the takeover of the Voice by New Times CEO James Larkin and Editorial Director Michael Lacey, Schneiderman stayed on as president of the combined company, which took on the Village Voice Media name. He split his time between the company’s headquarters and Seattle, where his wife Dana Faust, a New York Times ad executive handling the Pacific northwest, is based.

However, few expected him to stay for long as he was clearly a man without a power base. He was given the job of exploring Web opportunities for the company, an area in which he had scant expertise. Even after he immersed himself in the new role, it didn’t impress the new cowboys from Phoenix.

“The new guys held him in complete disregard,” said one insider. It got so bad that one source said that while Schneiderman was in New Orleans recently delivering a presentation on the company’s Web progress, Larkin made a point of taking out a newspaper and reading it while Schneiderman spoke.

Reached yesterday, Larkin said of Schneiderman, “He resigned.”

Asked if there would be a replacement, Larkin said, “We are going to restructure.” He declined further comment, saying, “We don’t comment on personnel matters,” he said.

When reached by Media Ink, Schneiderman, said, “I’ve been approached by people in the venture capital and private equity world. I just felt the time to move on was now.”

He insisted that his deal as Voice president was “open ended” and that he could have stayed longer.

But making frequent trips between New York, Phoenix and Seattle “was wearing on me.”

“Waking up in my own bed for awhile is important to me,” he said.

The Boston Phoenix was reporting yesterday that its editor Bill Jensen had resigned to accept a job running Web operations for Village Voice Media, its parent company.

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Who’s attacking Daly?

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By Tim Redmond

When we last checked in with SFSOS, Ryan Chamberlain, the field director, was insisting that District 6 candidate Rob Black was about to be attacked by Sup. Chris Daly’s big union backers. Poor Rob had been running such an honest, grassroots campaign. I finally heard from Chamberlain about this utterly hypocritical lie; he said he has “no comment,” but went on to press the point that Black was the underdog up against Daly’s dirty machine politics.

So just for the record, I would like to remind everyone just who is on what side in District 6.

For starters, the attack mailers against Daly are plentiful. There’s a partial collection here. Who’s paying for this wave of negative ads?

Well, there’s the Golden Gate Restaurant Association, which is mad at Daly for supporting a living wage for local workers.

There’s the Building Owners and Managers Association, which is mad that Daly supports downtown parking taxes, limits on parking in the most congested areas and overall requirements that the biggest property owners pay their fair share of the tax burden.

There’s SFSOS itself,which is funded by Republican Don Fisher and is against every progressive program in the city.

And “Citizens for Reform Leadership,” which put out a huge, slick attack piece earlier this fall. This is a Fisher-funded group put together by political lawyer and fixer Jim Sutton.

Oh, and the Board of Realtors, the Police Officers Association … all sorts of powerful interests that don’t want someone on the board who can’t be cowed by them.

So don’t buy this crap that Rob Black is just a grassroots candidate up against the “machine.” If the city employee unions come in a the end, it will only be because they see one of their friends under a savage attack and they have no choice but to respond.

A tough pill to swallow

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The furor over escautf8g prescription drug prices has inspired dozens of state investigations and civil lawsuits in recent years across the United States, most of them targeting manufacturers.
But another factor in the increases quietly surfaced Oct. 6 in a Boston federal courthouse. Two major Bay Area companies were accused in court documents of infutf8g the cost of prescription drugs to the tune of an estimated $7 billion between 2001 and 2005.
The Wall Street Journal first reported in early October that a drug data publishing company based in San Bruno called First DataBank had reached a settlement with a group of unions in Massachusetts and Pennsylvania over how the company gathered and presented prices in the pharmaceutical catalog that it’s maintained for years.
First DataBank is a subsidiary of the New York–based media empire Hearst Corp., owner of the San Francisco Chronicle, Esquire, and dozens of other publications across the country. Another company still being targeted by the plaintiffs is the San Francisco–based drug wholesaler McKesson Corp., which earned $88 billion in revenue last year and is ranked 16th among Fortune 500 companies.
First DataBank’s price listings play an enormous role in determining what Americans pay for medications. When you receive a bottle of antibiotics to treat an infection, for instance, your private health insurer or state Medicaid program (known as Medi-Cal here) will refer to First DataBank’s listed drug prices as a benchmark to determine what it’ll pay the pharmacy as a reimbursement. That means if the benchmark goes up, so too can your insurance premiums and the cost to state governments.
The settlement, according to federal records, forces First DataBank to adjust the formula it uses to determine those prices. An economist hired by the plaintiffs testified that the savings in 2007 alone for consumers could amount to a staggering $4 billion. First DataBank has also agreed to cease publishing the prices in their drug guides within two years.
Physicians, hospitals, pharmacists, and all manner of other health care professionals pay First DataBank a subscription rate for access to a digital clearinghouse of information on drug dosages and allergies, among other things.
More importantly, First DataBank publishes what’s known as an “average wholesale price” for more than 290,000 pharmaceuticals. There are three major drug wholesalers in the United States, including McKesson, that buy drugs directly from manufacturers and then mark up the price before selling the drugs to pharmacies. The average wholesale price — widely used around the country to determine what pharmacies will get as a reimbursement — is supposed to be a reasonable reflection of what the pharmacies pay the wholesalers for drugs.
First DataBank claimed to survey these wholesalers to come up with an average price that includes the markup, which it then lists in its drug-pricing database. But in recent years, the Journal reported, such surveys have been few and far between, and sometime around 2002, First DataBank inexplicably froze the markup at 25 percent, even though the prices pharmacies were actually paying fluctuated dramatically due to competition.
Citing testimony from one employee, the Journal notes that First DataBank began surveying only one company to come up with its average: McKesson. The cost to pharmacies still varied, but McKesson had reportedly standardized its markups on paper at 25 percent. That meant insurers and state health care administrators relying on First DataBank were making reimbursements that translated to higher profits for the pharmacies.
The employee’s testimony and documents in the case indicated that McKesson knew exactly what was happening. What remained unclear at press time was why First DataBank would choose to survey only McKesson or how it might have benefited from the decision.
The Journal notes the pharmacies were the only ones that stood to profit from the standardized markups, not McKesson directly. But internal McKesson e-mails show the company not only was aware of its impact on First DataBank’s published figures but hoped pharmacies would see McKesson working in their best interests — a marketing scheme, if you will.
An e-mail from one McKesson product manager gleefully exclaims that the profit for pharmacies dispensing a bottle of the cholesterol drug Lipitor leaped from $6.86 to $17.18.
First DataBank admitted no wrongdoing and is not paying money to the plaintiffs of the Boston settlement. The company was founded in 1977, and Hearst purchased it in 1980. Federal records show that in 1998, Hearst bought a $38 million company that owned one of First DataBank’s only real competitors, Medi-Span.
A later investigation by the Federal Trade Commission revealed that Hearst had failed to turn over key documents to the Justice Department’s antitrust division during the sale. As a result the feds slapped Hearst with a $4 million fine in 2001, at that time the largest premerger antitrust penalty in US history. The FTC also belatedly concluded that Hearst’s ownership of Medi-Span gave it a monopoly over the drug database market and not only required that Hearst give up Medi-Span but forced the company to disgorge $19 million in profits generated from the acquisition.
Hearst spokesperson Paul Luthringer directed us to a bare-bones statement when the Guardian called with questions about the Boston suit. “The allegations made in these actions have raised concerns with respect to the integrity of the pricing information that is provided to First DataBank for purposes of publishing [the average wholesale price],” the release states. “In light of these concerns, First DataBank has determined to make certain changes in its drug pricing reporting practices.”
Climbing drug costs can’t be attributed mainly to First DataBank or McKesson, of course. In fact, recent investigations and civil suits spearheaded to find out why prices have skyrocketed have focused on the manufacturers. During those inquiries First DataBank has been hit with dozens of subpoenas nationwide requesting company records and testimony, according to San Mateo Superior Court records. Many of those cases are still ongoing.
Attorneys for the plaintiffs in Boston who made McKesson and First DataBank defendants in the summer of 2005 declined to comment. McKesson also has remained tight-lipped since the Journal story was published. Spokesperson James Larkin said the company would not answer questions beyond a prepared statement.
“If First DataBank decided to survey McKesson only, it did so without telling McKesson,” the statement reads. “In fact, First DataBank has affirmed in an earlier lawsuit involving other parties that it never told McKesson that at times McKesson was the only wholesaler being surveyed.” SFBG
Here are links to key documents, including federal court records of the Oct. 6 Boston settlement with the Hearst-owned First DataBank (www.hagens-berman.com/first_data_bank_settlement.htm), the Justice Department’s antitrust fine of Hearst in 200l (www.usdoj.gov/atr/cases/indx330.htm), and the Federal Trade Commission decision requiring Hearst to give up its monopolistic subsidiary, Medi-Span (www.ftc.gov/bc/healthcare/antitrust/commissionactions.htm).