WSJ Backs Up The Guardian on European Scandal

Its reporting disputes its parent company's denials

Last night, Dow Jones slammed The Guardian’s report on wrongdoing at The Wall Street Journal Europe, calling it “replete with untruths and malign interpretations” and claiming that someone The Guardian called a whistleblower wasn’t one because “that employee was first investigated by the company because of concerns around his business dealings.”

This morning, The Wall Street Journal’s news side redeems itself after yesterday’s piece with an excellent story essentially confirming The Guardian’s scoop yesterday, naming and interviewing the whistleblower, and making its parent company look really bad.

The Journal reports that “last fall (the Journal Europe) executed several side deals in which the paper directed thousands of euros to the Dutch firm through third-party companies for services ELP said it provided at events.”

And it digs into those arrangements, reporting that ELP thought the billing process was “unusual” and “surprising.”

Then there’s this (emphasis mine)

One of the events in question is a London party held at the posh Grosvenor House hotel for the launch of a book written by a top executive of HCL Technologies, an Indian IT firm. A lawyer for the firm in London didn’t respond to a request for comment.

According to people familiar with the matter, Mr. Van Mol initially arranged for The Wall Street Journal Europe to be paid thousands of pounds to sponsor the event. However, these people say, Mr. Langhoff was uncomfortable with the Journal sponsoring the book launch. For reasons that aren’t clear, the event proceeded, and ELP said it provided a moderator. But some of the payment for the event from HCL went through a Belgian magazine called Banking & Finance, its publisher, Michel Klompmaker, said.

The magazine in turn sent on thousands of euros to ELP in an arrangement created by Wall Street Journal Europe officials. Mr. Van Mol said ELP shouldn’t have received payment for that event.

The Journal doesn’t remember who HCL Technologies is (adding: and neither did The Guardian for that matter in its scoop), but I do. It happens to be the firm that News Corporation had delete News International emails nine times during the investigation into the hacking scandal proceeded. Here’s a Reuters story from last month:

HCL told the committee in its letter that it had been involved in nine separate episodes of email deletion but did not know of anything untoward behind the deletion requests.

HCL says it is not the company responsible for emails on the News International system that are older than a couple of weeks. It says another unnamed vendor is responsible, but confirms it has co-operated with this vendor in deleting material.

Probably a coincidence, but it’s worth looking at.

Meantime, the Journal also talks to the whistleblower, Gert van Mol, and quotes him disputing Dow Jones’s claim that he was fired. He says Dow Jones began investigating him only after he complained about WSJE publisher Andrew Langhoff’s dealings. He was fired the next month.

Then there’s this passage, which quotes its parent company seeming to contradict itself while its former partner says it’s not telling the truth:

In a statement, Dow Jones said the payments were “admittedly complex but nevertheless legitimate.” The company said it grew uncomfortable with the arrangements and terminated them. ELP said that account was “contrary to the facts. ELP stopped and ELP is not pleased that our name appears in this context.”

The kicker, quoting a middleman involved in the circulation scheme, is the sound of a newsroom tired of being dragged down by its parent’s misdeeds:

“I was not involved, I was a facilitator,” Mr. Klompmaker said. “I also received from The Wall Street Journal assurances that this would not be made public.”

Great work by the Journal (news side!).

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,