Accuracy in Media

 

The Associated Press, the world’s oldest and largest newsgathering organization, fell for a fake press release today hook, line and sinker.

The release, titled, “GE Responds to Public Outcry – Will Donate Entire $3.2 Billion Tax Refund to Help Offset Cuts and Save American Jobs,” was posted at the http://www.genewscenters.com website which is identical to the real GE news site’s web address except for the s at the end.

Here is the original AP story:

Facing criticism over the amount of taxes it pays, General Electric announced it will repay its entire $3.2 billion tax refund to the US Treasury on April 18.

GE uses a series of foreign tax havens that the company says are legal and that led to an enormous refund for the 2010 tax year.

The company earned $11 billion in 2010 on revenue of $150 billion.

The company, based in Fairfield, Conn., plans to phase out tax havens over 5 years and said it will create one job in the US for each new job it creates overseas.

And here is the fake press release:

Fairfield, CT, 13th April, 2011– GE CEO Jeffrey Immelt has informed the Obama administration that the company will be gifting its entire 2010 tax refund, worth $3.2 Billion, to the US Treasury on April 18, Tax Day, and will furthermore adopt a host of new policies that secure its position as a leader in corporate social responsibility.

“We want the public to know that we’ve heard them, and that we know many Americans are going through tough times,” said GE CEO Jeffrey Immelt. “GE will therefore give our 2010 tax refund back to the public and allow the public to decide how to spend it.”

Immelt acknowledged no wrongdoing. “All seven of our foreign tax havens are entirely legal,” Immelt noted. “But Americans have made it clear that they deplore laws that enable tax avoidance. While we owe it to our shareholders to use every legal loophole to maximize returns – we also owe something to the American people. We didn’t write the laws that let us legally avoid paying taxes. Congress did. But we benefit from those laws, and now we’d like to share those benefits. We are proud to be giving something back to America, and we are proud to set an example for all industry to follow.”

Over the coming weeks, GE will conduct a nationwide survey to determine how the company’s $3.2 billion returned refund is to be allocated. The survey will be conducted both online and offline, and will permit the public to weigh in on which of the recently-enacted budget cuts they would like to see reversed.

In tandem with the gift, the company is also announcing a host of new policies to restore public faith in the GE brand, including a commitment to keep American jobs in America, and to create one U.S. job for each new job created abroad. The ambitious plan will overhaul accounting systems to allow public transparency and phase out the use of tax havens in five years. “Given my recent appointment as President Obama’s Chairman of the Council on Jobs and Competitiveness, it is no longer appropriate for GE to engage in practices that, whether by fact or perception, are at odds with the greater good of the nation,” Immelt said.

Immelt outlined several concrete steps he would take to push for modernized tax policies that reflect the realities of the global economy. “I will personally ask President Obama to work with Congress to require country-by-country reporting by multi-national corporations of the sales made, profits earned and taxes paid in every jurisdiction where an entity operates. Instead of moving money via “transfer pricing,” corporations ought to pay taxes in the jurisdictions where profits are actually made. If Congress is able to establish standard industry-wide solutions, GE will close our tax haven operations abroad, including our subsidiaries in Bermuda, Singapore and Luxembourg.”

Further details on GE’s new policy will be released in the coming weeks.

About GE
GE (NYSE: GE) is an advanced technology, services and finance company taking on the world’s toughest challenges. Dedicated to innovation in energy, health, transportation and infrastructure, GE operates in more than 100 countries and employs about 300,000 people worldwide. For more information, visit the company’s Web site at www.ge.com.

PRESS CONTACTS

Samuel Winnacker
GE Corporate, Assistant Director
Communications & Public Affairs
+1 615 375 6658
samuel.winnacker@ge.com

As soon as the AP realized they had been had, they withdrew the story and issued a kill order that Poynter picked up:

Date: 4/13/2011 10:21 AM
Kill – BC-US–GE Tax Refund,KILL/46
Eds: BULLETIN KILL. Do NOT use BC-US–GE Tax Refund. A kill is mandatory. The story was based on a press release that GE says was a hoax.
STORY REMOVED: BC-US–GE Tax Refund
The Associated Press has withdrawn its story about General Electric repaying its entire $3.2 billion tax refund to the US Treasury on April 18. The story was based on a press release that GE says was a hoax.
The AP

Needless to say the AP is pretty embarrassed about the whole affair.

It’s unclear what prompted the AP to jump on this story so quickly but it probably has less to do with helping improve GE’s image in the wake of the revelation that they paid no corporate taxes last year than it does with helping President Obama who is buddy-buddy with GE chairman Jeff Immelt.

This episode only underscores why the public has such a low opinion of the mainstream media, and with good reason.

The AP might be better served if they adopted the words of Ronald Reagan to “Trust but verify.”

h/t Business Insider

 

 

 





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