By Bruce B. Brugmann
In Friday’s San Francisco Chronicle, below the fold in the business section, there was a tantalizing head with a tantalizing lead that raised a tantalizing question: how can Hearst say one thing in Santa Clara Superior Court and another in federal court in San Francisco in a similar public records case?
The head: “Media seeking backdating info, Mercury Interactive documents provide details on practice.” The lead:
“A Santa Clara County Court judge will hear arguments today from media companies, including the Chronicle, seeking to unseal documents related to stock options backdating at Mercury Interactive Corp.”
The story: Chronicle reporter Carolyn Said wrote that the Chronicle and the Recorder and Bloomberg News went into court “requesting access to court filings related to widespread manipulation of stock options at Mountain View’s Mercury, which makes business software.” At the end of the story, Said reported that “the three media outlets are seeking to unseal documents Mercury provided in the shareholder lawsuit under a confidentiality order. They say the documents might reveal the inside story on how backdating occurred.”
Good for Hearst, the Recorder, and Bloomberg News and Karl Olson, the Hearst media attorney who made a strong case to open the records. He even told the judge that as he was driving from San Francisco to Santa Clara for the hearing he realized what a beautiful sunny day it was. “Sunshine is the best bet,” he said. We hope they win. The judge said he would consider arguments in hte case.
Meanwhile, in federal court in San Francisco, Hearst is taking the opposite side of the issue in a similar records sealing case. Significantly, this case involves Hearst itself and Singleton (and their chain newspaper allies McClatchy, Gannett, Stephens) in the Reilly vs. Hearst antitrust case. The chain gang is stonewalling so hard and so high that the Guardian and the Media Alliance were forced to go into federal court to try to unseal the records and shed sunlight on this major national story: the deal that would destroy newspaper competition in the Bay Area and impose regional monopoly. The First Amendment Project in Oakland is handling the suit.
Ironically, Reilly and the Guardian are using the same argument Hearst used in Santa Clara to unseal the Hearst records in San Francisco: that they will “reveal the inside story” of how Hearst and Singleton secretly cooked up the monopolizing deal. As our Dec. 27 editorial put it, “The way the big chains have set things up, there’s no way for the public to find out much of anything–except what Hearst and MediaNews want us to know. Under the terms of a court order the chains wrote and got approved anything–evidence, briefs, depositions, even legal motions–the newspaper barons want to mark secret is automatically sealed…In other words, the newspapers–which, after all, are accused of trying to violate antitrust laws and create a media monopoly in the region–have complete control of what information does and doesn’t come out of the trial. That’s exactly how they want it–and that’s exactly how things will go if they get their way.”
And so the questions still tantalize: how can Hearst be for sunshine in Santa Clara Superior Court and for darkness in San Francisco federal court? How can Hearst report these stories with obvious contradictory positions without comment and without blushing? Don’t the contradictory positions hurt not just the Hearst case in Santa Clara but the journalistic and public interest arguments in all open records court cases? I am posing these questions by email to Hearst corporate in New York via Chronicle Publisher Frank Vega and Editor Phil Bronstein.” Check our Wednesday Guardian paper and website for a bigger story on the backdating scandal and Hearst ironies by reporter G.W. Schutz. He covered the hearing for the Guardian. B3