The relationship between one of The News & Observer’s subsidiary publications and a Raleigh lobbyist has raised questions about independence of news coverage.
The N&O last month launched an e-mail newsletter called N.C. Legislative HealthWatch to cover health-related legislation in the General Assembly. The newsletter is written by Harrison J. Kaplan, a lawyer with the firm of McGuire Woods in Raleigh.
It is produced in partnership with The Insider, a state government affairs newsletter owned by The N&O. The Insider does the production, distribution and marketing of the health care newsletter, for which a subscription costs $399 a year.
Kaplan is an experienced and respected lobbyist in the General Assembly whose list of clients includes some large health care organizations. Among them are drug companies Novartis and Purdue Pharma, radiology firm MedSolutions, the American Heart Association and others. Those ties to health care interests prompted questions from Adam Searing, project director of the N.C. Justice Center’s Health Access Coalition.
“(T)his new partnership raises questions about whether a health industry lobbyist should be joining with one of the largest media companies in the state to report on health issues,” Searing wrote in a blog for N.C. Policy Watch, a liberal public policy advocacy group. “What gets reported on in this sort of newsletter may well end up in the more mainstream media. And, even with good will and the best of intentions all around, Kaplan’s business provides an appearance of a conflict of interest regarding how and what he chooses to cover.”
(Full disclosure: N&O publisher Orage Quarles III is on the Justice Center board.)
Kaplan said that criticism reflects a fundamental misunderstanding of the nature of the newsletter. It is intended not as a traditional news coverage medium, he said, but as an insider tip sheet for health care attorneys and other professionals following bills in the legislature. “The purpose is not to report the news like the newspaper does,” he told me. “It was to let people know what is happening down at the legislature from someone who is down there all the time.”
Kaplan noted that he produced the same newsletter on his own for eight years, until 2006, when he gave it up because of the administrative headaches associated with production and marketing. Partnership with the Insider gives him the opportunity to resume his reporting without the backshop work.
Clifton Dowell, general manager of the Insider, said he saw the relationship as a way to expand the company’s legislative newsletter franchise without having to staff it internally. Such a publication covering covering bill summaries and legislative process requires specialized legal training and familiarly with the legislature, he said. “We knew we would have to contract with someone to drive it because we just can’t employ someone who has the expertise.”
Dowell said Kaplan is compensated based on the success of subscription sales.
Kaplan and Dowell both said they saw no conflict between Kaplan’s reporting product and his representation of clients who might be affected by the material he covers. His lobbying work is known by potential subscribers, who would be buying his expertise, and if anyone perceived slanted coverage they wouldn’t buy the newsletter, they said. “It’s a valid question, but when you investigate it, it’s just a misunderstanding,” Kaplan said. “My track record is pretty good. People can decide for themselves. If it doesn’t serve the purpose I say it does, they’re not going to buy it.”
John Drescher, executive editor of The News & Observer, said he doesn’t see any conflict with The N&O’s news coverage mission because the Insider and HealthWatch are separate entities not associated with his newsroom. “We’re completely independent from them. I have no control over them, and they have no control over me. So it’s not anything that would compromise the independence of the newsroom.”
Drescher said material from Kaplan’s newsletter would not end up in The N&O. He said the important thing is that there be full disclosure to potential subscribers who Kaplan is and what he does for a living.
The Insider’s promotional material for HealthWatch discloses that Kaplan follows health care and related issues for McGuireWoods Consulting, but it does not specify that he represents clients in the industry or who they are.
This is a tricky issue for The N&O, which is trying to find new opportunities in the information marketplace as it deals with declining advertising revenues for the traditional newspaper. The decline is related to the growth of the Internet and the miserable economy.
To be successful, the company has to be more entrepreneurial, but that places it in unfamiliar territory. The newspaper itself would never have gone into partnership with a lobbyist whose clients’ interests he may be writing about.
As Drescher indicates, there are information firewalls between the newspaper and the newsletters, intended to secure the independence of the newspaper reporting. But it’s apparent, from questions that have been raised by Searing and others, that even fairly sophisticated observers don’t automatically grasp the distinction. People are going to associate the product of the subsidiary publications with The News & Observer brand.
HealthWatch is a subsidiary, arms-length publication that, no doubt, offers value to health care professionals that derives in large part from Kaplan’s expertise. People, after all, pay him for his knowledge and experience. Still, I think The N&O has to be careful about the relationship. At the least, the Insider and HealthWatch need to disclose more fully Kaplan’s lobbying interests.
