Don’s early light not bright enough: There are certainly a host of ethical issues surrounding the Feb. 10 announcement that hedge-fund manager S. Donald Sussman, through a limited liability corporation formed on Feb. 2, is buying a portion of Maine’s largest daily newspaper company. But Sussman’s acquisition of five percent of MaineToday Media – publisher of the Portland Press Herald, Kennebec Journal, and Morning Sentinel – in return for a loan of three to four million dollars raises even more questions about MTM’s financial stability, its business plan, and its future viability.

To his credit, MaineToday staff writer Tux Turkel tried to address matters concerning Sussman’s conflicts of interest – he’s married to an incumbent Democratic congresswoman; he’s a major donor to liberal political causes; he’s engaged in a large housing rehab project in Portland and numerous other business enterprises; he serves on the boards of lots of non-profit organizations – but his story had some vague spots when it came to the details of the deal.

Turkel makes no mention of Robert C.S. Monks, a local developer and MaineToday minority owner. Although he reports that the Portland Newspaper Guild, the largest union at MTM, was instrumental in approaching Sussman and convincing him to get involved with the company, other sources say Monks played a pivotal role in closing the deal. They also say the Sussman-Monks alliance is well positioned to acquire a bigger stake in the company in the near future, possibly by the end of the year.

That assumes there’s still a company around by then. MaineToday has been bleeding money. An informed source said the shortfall for 2011 and early 2012 will total four million dollars, which is the maximum amount Sussman is said to be investing. The source said MTM could become “cash-positive” this spring, thanks to last fall’s layoffs and buyouts that eliminated sixty employees. But that black ink isn’t on the books yet, and may not be part of an enduring trend. One of the reasons the 2100 Trust, a previous suitor for MaineToday, could not convince the guild to renegotiate its contract and approve major concessions was that the union remained unconvinced the investors had a viable plan to make the company profitable. Since the Sussman deal appears to leave no cash left over after paying overdue bills, it’s difficult to see where the funds for promised investments in new technology and other improvements will come from.

Speaking of debt, it appears the new MTM will have more of it than before, since Sussman’s only investment is a loan. It might have been interesting to know if he’s foregoing all or part of the interest in return for the shaky value of the equity he receives in the company.

Besides these financial matter, there are real and serious ethical issues to be dealt with in regard to the Sussman acquisition. One wag suggested the paper publish a “daily disclosure page printed in agate type” listing all the new owner’s financial and personal connections to news stories. Considering that MTM has habitually avoided disclosing Monks’ involvement in events it’s covered, that seems unlikely.

As for Sussman’s statement that he would have no role in setting editorial or newsroom policy, that could be true, but he doesn't need a defined role because his influence in political, financial, and charitable circles is so widespread. It will be almost impossible for a reporter to avoid stories in which he has some involvement. As an experienced journalist put it in an email: “He will never need to utter a word to influence what's covered in the paper. They will just write what pleases him – and not write what doesn't please him – because he's the sugar daddy.”

That person added, “Money isn't everything. What those papers needed as badly as money was integrity restored to them. This does the opposite.”

Speaking of integrity: On Feb. 8, the Portland Press Herald posted an alleged news story on its website that began:

“If you’re looking for a Valentine’s Day gift, here’s an idea: Half-priced tickets to the upcoming “Stars on Ice” skating show at the Cumberland County Civic Center.

“In a promotion announced this week, people can buy two tickets for the price of one to the March 16 ice show. The offer is good on tickets priced at $55 or less, and it ends on Valentine’s Day, Feb. 14, at 11:59 p.m.”

That’s not journalism. That’s either reprinting a press release or neglecting to properly label the item as advertising.

Part-time journalist: If a hedge-fund manager can own a newspaper, it might not seem like that much of a stretch to call Dennis Bailey a journalist.

Bailey is a Portland public-relations and political consultant. He’s currently suing the state ethics commission for fining him two hundred dollars for his 2010 involvement with an anonymous
Web site attacking independent gubernatorial candidate Eliot Cutler. The commission determined that Bailey was not acting as a journalist when he posted material online that was critical of Cutler and therefore should have placed a disclaimer on the site noting that it wasn’t authorized by any candidate. Bailey is asking a federal judge to overturn that ruling, and as part of his case, he’s presented expert testimony arguing the website is protected by the First Amendment’s guarantee of freedom of the press because he was acting as a journalist.

I think just about everybody is wrong on this one.

Bailey isn’t a journalist, although he used to be one years ago. He was working for another candidate for governor when he posted the Cutler material and had a vested – and undisclosed – interest in convincing voters to cast their ballots in a certain way. That’s certainly protected by the Constitution’s free speech provision. It may also be subject to regulation under election laws. But it’s hardly journalism.

But that’s just my opinion. It’s not a matter of law. And it shouldn’t be. In this country, anyone can call themselves a journalist. It’s up to the public to decide if that’s credible.

What’s most disturbing here isn’t Bailey’s claim or his obscured ethics, but the way his actions have resulted in one government agency – and possibly a federal court – deciding what is and isn’t reporting. That the ethics commission, which has no legal authority over news organizations, could somehow conclude it has the power to confer or deny the mantle of journalistic protection is frightening enough. That a judge might attempt the same thing is even more chilling.

Nothing good can come of this.

Last message: The weekly Moosehead Messenger in Greenville called it quits on Feb. 9, ending over four decades of publication. According to reports by the Maine Press Association and the Bangor Daily News, the paper succumbed to the poor economy and competition from the five-year-old Moosehead Matters.

Some feature material from the defunct paper will be carried by the Hometown Newspapers’ Highlands Journal. Hometown, based in Bangor, had been managing the Messenger for the past year, although the paper was owned by Aggie Purinton.

Southern exposure: The Bangor Daily News continues to strengthen its presence in southern Maine. It already has a reporter covering Portland and two others based in the area, and now it has a full-time photographer, as well. Troy Bennett has jumped from The Times Record in Brunswick to the BDN to provide visuals for all that down-state copy.

Aired out: Bankrupt Nassau Broadcasting, which owns ten radio stations in Maine, is maneuvering in court to be allowed to auction off its forty-nine stations in New England and the Mid-Atlantic states. There’s informed speculation that Nassau CEO Lou Mercatani will be bidding for some of those properties under a new corporate name.

Digital update: Steve Galligan, the president of MaineToday Digital, sent an email disputing the posting here last week that the marketing company had removed all links to the MaineToday Media news sites from its website. Confirmation of the information in that report came from MTD’s director of advertising and marketing Barry Jackman, but Galligan says Jackman had it wrong.

“MaineToday Digital was set up as a stand-alone business and we never included a link to the newspaper sites or MaineToday Media,” he wrote.

In addition to heading the “stand-alone” marketing firm, Galligan is also the chief revenue officer for MaineToday Media.

Al Diamon can be emailed at aldiamon@herniahill.net.

The views expressed on this Web site are those of the authors alone and do not necessarily represent the views of Down East Enterprise or its employees.