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Gerry Donohue is a local freelance writer who’s been reporting on the building industry for 14 years. In October, he wrote a story in Big Builder magazine about a local “roll-up” firm—that is, a company that combines several competing firms in a given industry into one megafirm. The story was such a success that business editors at the Washington Post asked Donohue to write a broader version for their readers.
And so he did. “Fleeing From the Roll-Up” anchored the Nov. 11 “Washington Business” section, profiling the various roll-up conquests of local entrepreneur Jonathan Ledecky and the now-closed Fortress Group Inc. of McLean.
This version of Donohue’s roll-up story, though, wasn’t quite as successful as the first: The day after the piece hit the streets, a messenger appeared at Donohue’s doorstep with a half-inch-thick envelope. The missive came from Ledecky: There are multiple errors in your story, it said. If you don’t apologize and correct them, you’ll get sued.
“I’m just a little freelance writer who never did anything to anybody,” says Donohue. “Ledecky could buy and sell me 5,000 times over and not even notice.”
A jittery Donohue e-mailed his editors at the Post. “They said, ‘Don’t worry about it. [Ledecky] does this all the time,” recalls Donohue.
Indeed, one Post editor wrote to Donohue that threatening letters were “standard operating procedure” for Ledecky.
Standard or not, Ledecky’s gripes were legit. The story was riddled with errors. Rather than just reframing Donohue’s piece, the Post had tried to make it more timely, by tying it into then-current business events. In the process, the paper allowed its search for a news hook to shanghai the facts.
So the paper’s lawyers and business editors hunkered down and worked up one of the Post’s most embarrassing corrections in recent memory, a 350-word whopper that ran on Nov. 20 and impugned basically the entire story.
The correction opened with the boilerplate of an organization scared of losing a costly libel case: “An article and graphic in the Nov. 11 Business section misstated and omitted certain facts that may have created a false impression about the role of local businessman Jonathan Ledecky in the affairs of four companies.”
And how. The piece had screwed up in linking Ledecky to the financial difficulties of four companies (Ledecky had no involvement in the companies when they hit hard times, or ever), in characterizing U.S. Technologies as a roll-up firm (it’s a hi-tech incubator), in attributing $68 million in outstanding debt to the company (it’s an accumulated deficit), and in claiming that the company was “mired” in lawsuits alleging fraud (actual tally: zero).
“I accept full responsibility for it,” says Jill Dutt, the Post’s assistant managing editor for financial news.
Although the piece mentions Ledecky more than 10 times, characterizing him as the molder of a questionable business paradigm, it never once quotes him. “I should have seen that Jonathan Ledecky was not quoted and asked, ‘What does he say about this?’” Dutt says.
Ledecky wasn’t interviewed because he originally wasn’t the focus of the story. As first submitted, Donohue’s piece had focused on the Fortress Group, a business that had closed in July. To give the piece a fresher angle, the paper’s Business brain trust packed the lead with the story of U.S. Technologies, a company whose difficulties had helped precipitate the Nov. 5 resignation of Securities and Exchange Commission Chair Harvey L. Pitt.
Donohue protested in an e-mail to his editor that it was inaccurate to slant the story that way, that working U.S. Technologies into the story created an apples-and-oranges problem. “I thought they had the wrong article,” says Donohue. “I said, ‘This doesn’t apply—it’s not a roll-up, it’s not the same thing.’”
But the tyranny of the news hook prevailed. Donohue turned around the new version with U.S. Technologies writ large. That meant amping up Ledecky’s presence in the story, because he had sold a firm, E2E Net, to U.S. Technologies.
Under a pressing deadline, inserting error into the piece became a team endeavor. Donohue owns up to a couple of the screw-ups and attributes others to the Post. “On Thursday night, I had never heard of U.S. Technologies, and I’m turning in a story about it on Friday afternoon,” he says. “That doesn’t seem to me to be the way you produce copy at a nationally leading newspaper.”
If Donohue was on unfamiliar ground in writing about Ledecky, the Post shouldn’t have been. Every paper has a board of local figures who dominate its news coverage, and the swashbuckling Ledecky, who rolled millions into billions in the mid-’90s, could be chair of the Post’s. For Sports, he was the minority owner of the Washington Capitals; for Style, he’s one of the area’s most eligible bachelors; and for Business, he’s the roll-up guy.
And wherever he’s covered, say various Posties, Ledecky has fiercely contested his portrayal in the paper, inveighing against poor editorial judgment and carping about errors. According to Donohue, Ledecky mentioned in his letter that the Post had previously agreed that it wouldn’t write about roll-up firms without first contacting him.
Managing Editor Steve Coll confirms that he met previously with Ledecky. “I believe that he was unhappy with stories that we had written in the past, and I don’t recall the specific context that generated his complaints,” says Coll. Both parties agreed that the best way to avoid future “misunderstandings” would be “for Post reporters to make sure they had a chance to talk with [Ledecky] in detail,” says Coll.
Ledecky failed to return numerous calls from the Washington City Paper by press time.
The Post’s correction appears to have ended the threat of litigation from Ledecky & Co. “We haven’t heard back from them,” says Dutt.
It’s been a tough year for staffers at U.S. News & World Report.
* In the ad slowdown following Sept. 11, management cut salaries by 10 percent and laid off about 25 employees. The company held out the prospect of restoring the cuts sometime in 2002.
* This fall, management said it couldn’t yet rescind the salary cuts.
* In recent months, several veteran reporters have accepted the early retirement buyouts pushed aggressively by U.S. News higher-ups. Staffers have taken to calling the buyouts “get-outs.”
Then came the most striking blow yet, via a companywide Nov. 18 e-mail titled “Snack Vending Machine News”:
“Due to a lack of sales in our three snack vending machines, Custom Vending is removing two of our machines. Our vending machine in the third floor kitchen (Room 3115) will remain. The machines on the second and fourth floors will be removed this week.”
Snaps one staffer at the newsweekly: “I can’t even get a damn chocolate bar!”
Employees attribute the slack in snack sales to the gradual attrition at the magazine, whose ad sales lag behind those of competing publications. A reliable measure of staff shrinkage is hard to come by, however. When asked for an employee count, U.S. News Director of Media Relations Richard Folkers demurred, saying that such a tally would require some research, and did not deliver a figure by press time.
Perhaps the vending industry can provide better figures. Mike Finelli, manager of Custom Vending, declined to comment specifically on the snack situation at U.S. News but did say he needs at least 100 employees at a given location to support a vending machine.
And snack traffic has to get mighty slow before a vending firm actually pulls its machines from a location. According to Jennie Engle, bookkeeper at D.C. Vending Co. Inc., a vending machine needs to gather only about $300 per month to stay in business. At 65 cents per snack, that translates into just 23 chips purchases per workday.
In nonsnack U.S. News news: Editor Brian Duffy is reportedly reshuffling the newsweekly’s masthead to produce eight special issues in 2003. This year, the magazine produced four of the issues, which are sold only on newsstands and are proven revenue generators for the company.
Also, the magazine is planning six dark weeks for its 2003 schedule, according to Folkers. By the end of this year, U.S. News will have had five weeks in which it didn’t produce a magazine—double the tally of 2001. According to Duffy, savings from not printing a magazine are in the seven-figure range. —Erik Wemple