On Thursday, May 10, The Washington Post Company held its annual meeting. AIM was there because of our ownership of company stock, enabling us to grill top brass about the condition of the newspaper and the company in general. The value of the company’s stock has fallen by 50 percent over the last five years.
But the worst may be yet to come. Kaplan, the Post subsidiary that has served as the cash cow for the paper that brought us the Watergate scandal that destroyed Republican Richard Nixon’s presidency, is going through scandal and financial turmoil.
In addition to growing concern over Kaplan, a for-profit educational institution, this year’s meeting featured questions about the paper’s controversial financial relationship with newspapers owned and controlled by the Russian and Chinese governments. Post Company chairman Donald E. Graham didn’t have any second thoughts over the paper being used, through paid advertisements, to promote Russian and Chinese propaganda to an American audience.
The meeting started at 9 a.m., before many people had probably seen what the Post was reporting in its print and online editions that day.
Copies of the paper were distributed for free to shareholders. But a story about Mitt Romney supposedly bullying a gay classmate was not in the print edition of that day’s paper. The story was published in the print edition the next day, Friday, and included an old photo of a young Romney playing around by pointing a toy gun to his chin under the caption, “Give a guy enough rope and he’ll hang himself.”
These pranks and jokes happened around 1965, and conservative commentators are having fun mocking the paper for devoting so much attention to these “troubling incidents,” as the paper puts it.
What is more troubling is what has happened to the Post, which does a good job of covering local news through such papers as The Calvert Recorder in Calvert County, Maryland, but which is suffering circulation and revenue declines because of its national newspaper product. The Calvert Recorder is part of the Southern Maryland Newspapers group, which is owned by the Post.
Dana Loesch of Big Journalism points out  that the Post has already corrected the Romney story, without acknowledging that a correction was made. The correction was of the paper’s report that a former Romney classmate had “long been bothered” by the Romney bullying incident, when in fact, he wasn’t witness to it and only recently heard about it. It is troubling that the Post would embellish the story and then retract the charge without comment or an apology.
Romney reportedly helped pin a boy down and cut his hair off. There is no evidence Romney knew the boy was a homosexual and Romney can’t remember the incident. Yet, this is being presented by the paper in the context of Obama standing up for the rights of the poor gays, while his Republican opponent has a history of intimidating and harassing them.
There can be no doubt that the Post intended to damage Romney’s candidacy with this “news” story. This is typical of a liberal paper that faithfully promotes most of the liberal policies of the Obama Administration—except when it comes to regulating for-profit educational companies such as Post subsidiary Kaplan.
In a story that AIM has covered  extensively, the paper itself is losing money and has been kept afloat by Kaplan, which is supposed to educate people at a profit. Those profits, however, have been hit by Kaplan educational practices that that have been exposed for taking advantage of poor students seeking good jobs but who end up with tens of thousands of dollars’ worth of federal loan debt for classes and degrees that didn’t adequately prepare them for the real world.
At the annual meeting, Post chairman Donald E. Graham did not dispute the claim that the company had spent $1 million lobbying against the regulations. He himself personally lobbied members of Congress and has no apologies for it.
In order to forestall the new federal regulations, the Post even hired a lobbying firm that included  former Obama aide Anita Dunn.
The additional federal regulation of Kaplan came after congressional hearings were held into its controversial practices. The scandal came to be known as The Washington Post’s Watergate .
But the Post, of course, didn’t cover this as a scandal. Instead, chairman Graham led an effort to defeat the proposed regulations. In the end, they were watered down, under the lobbying pressure, but have still taken a toll on Kaplan’s profit picture and future earnings.
Those who attended the annual meeting were lobbied themselves, as they were given a free copy of the book, Change.edu: Rebooting for the New Talent Economy, written by Kaplan chairman and CEO Andrew S. Rosen and published by Kaplan itself.
Graham urged people at the annual meeting to read the book as well as a favorable review  of the book by Microsoft co-founder and chairman Bill Gates. A copy of that review, included with the book given to stockholders, was—not surprisingly—published in The Washington Post.
It was a clear-cut example of how the paper intends to use its resources on its own behalf. These are desperate times and the company is fighting for its survival.
I was tempted to ask Graham that if Gates had submitted a review that panned the Rosen book, would it have been published in the Post. I think we know the answer to that one.
It is a sensitive subject. Melinda Gates, the wife of Bill Gates, was a member of the board of The Washington Post Company from 2004 to 2010. She resigned after the release of a report  from The Education Trust, funded partly by her foundation , highly critical of for-profit educational institutions such as Kaplan.
The website for the Rosen book  features smiling students who have presumably benefitted from Kaplan. But as Rusty Weiss pointed out in a special report  from the AIM Center for Investigative Journalism, students and especially veterans targeted by Kaplan have been making some of the most important complaints against it.
Weiss noted that one review said that many students are finding that the grandiose promises of careers and large salaries from Kaplan recruiters “were merely a sales ploy—and in fact, the product offered by Kaplan has substantially less value than that offered by traditional public and private colleges.”
Now, in order to make up for declining revenues, the Post has been engaging in some more controversial financial dealings that may constitute a scandal in their own right. The Post is running paid ads  from the Russian and Chinese governments that are made to look like news sections of the paper. The ads, some of them six pages long, even carry a facsimile of The Washington Post masthead.
In relatively small print it says they are paid supplements and have nothing to do with the paper’s news or editorial departments. But The Washington Post masthead or logo is more prominently featured.
In a conversation after the annual meeting, Eric Lieberman, vice president and counsel for the Post, agreed that allowing foreign regimes to use the Post masthead in their advertising might present a problem. But no promise was made to alter the practice.
The ads online  are even more questionable, for the Russian ad shows The Washington Post masthead even more prominently featured above the Russia Now title of the section.
Technically, this section, or “pull-out,” from the paper is produced and published by Rossiyskaya Gazeta, an official Russian government paper.
The online China Watch advertising supplement  is not as blatant. Still, it shows The Washington Post masthead on one side and China Watch on the other. China Watch is “presented” by China Daily, a state-controlled newspaper.
Readers are thus given the impression that the propaganda has the approval of the Post.
Graham wasn’t concerned about carrying the ads and even indicated he was open to more paid advertisements from questionable regimes. For him, it was a matter of revenue.
Asked if he would take an ad from al-Qaeda, he didn’t rule it out, although he said he thought that would be extremely unlikely. He pointed out that the paper had run a long column by the Unabomber and that it had helped the FBI nab the terrorist. The Unabomber’s “manifesto” was run after the FBI was consulted and agreed that it would help uncover his identity. It was not a paid ad.
The notion that the Post is getting too close to odious regimes is buttressed by the February 13 report from the paper’s ombudsman, Patrick Pexton, in an extraordinary column headlined, “Caving to China’s Demands .” Pexton noted that the Post had published the transcript of an interview with China’s vice president, Xi Jinping, which included questions and answers submitted by the Chinese regime, as if they had come from the paper.
After publishing the “interview,” Pexton said, Post Executive Editor Marcus Brauchli came to the conclusion that the transcript “could have misled readers into thinking it was a real interview” and so he published a correction explaining how it was manipulated by the regime.
Pexton went on to note, “It is also good to remember that The Post is tied to China through advertising revenue. Once a month The Post prints ‘China Watch,’ an advertising supplement in English that consists of stories aimed at a U.S. audience but written by China Daily, the house organ of the Chinese government. And The Post’s Web site hosts a regularly updated version of China Watch.”
This matter-of-fact statement doesn’t emphasize the questionable nature of this disturbing financial relationship, which also includes the Russian government.
It is time for the Post ombudsman, Watergate reporter Bob Woodward, and other Post reporters and editors to protest the curious financial relationships that are casting a pall over the paper’s journalistic reputation and integrity.