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Cowles Conflict-of-Interest Draws Censure

	5/15/2003

In Senate hearing, Seattle Times
publisher criticizes Spokane family

THE ROLE OF COWLES media ownership in the River Park Square controversy was unexpectedly thrust into the national spotlight Tuesday during a Senate hearing. The subject of the commerce committee hearing on media ownership rules was whether government should loosen restrictions that prevent a single company from owning newspapers and TV stations in the same community.

The law is intended to prevent excessive concentration of media ownership in America. In Spokane, ownership by the Cowles family of KHQ-TV, the Spokesman-Review newspaper and several other print media enjoys a "grandfather" exemption to the law because the family's cross ownership existed before the 1975 law was passed.

During Tuesday's senate testimony one of the most eloquent warnings about the dangers of concentrated media ownership came from Seattle Times publisher Frank Blethen.

In a brief story that served as an ironic reminder of how Cowles media has covered the family's ill-fated River Park Square shopping center, yesterday's Spokesman-Review quoted Mr. Blethen: "I don't want to be overly dramatic, but I think we would see the beginning of the end of our democracy."

The paper also reported: "Blethen, in his testimony, did not mention an effort by the Times to dissolve a publishing agreement it shares with its cross-town competitor, the Seattle Post-Intelligencer. If successful, the effort could lead to the P-I's closure."

But the Cowles newspaper skimmed over Mr. Blethen's response to a pointed question by committee member John Sununu (R-NH) and the lively exchange that followed.

"Can you give an example of where there's a partnership or a consolidation between TV and a newspaper and that the quality of service has degraded and the local interests haven't been served?" asked Mr. Sununu.

"Spokane, Washington," answered Mr. Blethen without hesitating.

"Thank you," said Mr. Sununu.

"Would you like to elaborate?" asked committee chairman John McCain (R-AZ).

"Well, I'm already at risk of losing one friend, and I'd kinda hate to -- I'm trying to save a few friends," demurred Mr. Blethen. "So I'd rather not elaborate."

Mr. McCain pressed the matter. "In the committee, we try to stay with the time clock, but we also think it's most important to make the record complete. And I appreciate Senator Sununu's questions, and perhaps for the record you could elaborate on your answer to Senator Sununu's-I think it's an important question."

"It is a very good question," agreed Mr. Blethen, "but let me elaborate in a little different fashion."

Mr. Blethen then launched into a rambling discussion of studies showing that the 40 grandfathered stations in the country often do a good job of serving their communities.

That didn't satisfy Mr. McCain. "What happened in Spokane, Washington?" he demanded.

"You're going to make me lose more friends, aren't you?" said Mr. Blethen. "Ah, Spokane, Washington is a grandfathered -- it's a family-owned paper -- it's a grandfathered situation. The family that owns the newspaper and the TV station has been involved in a major city redevelopment that has become very controversial. Even Editor & Publisher magazine, which never criticizes the industry, criticized them for not covering it. The only coverage that has come out of this controversy -- and there's lots of legal action around it now -- has been by a struggling weekly that has been trying to get their story out."

The Spokesman-Review version of that exchange omitted Mr. Blethen's elaboration, deleted reference to Editor & Publisher's criticism of the Cowles family, and ended its account by quoting Spokesman-Review editor Steve Smith that the paper's River Park Square coverage "has been consistently comprehensive and ethical."

Ironically, the prepared comments Mr. Blethen read into the commerce committee's hearing contained a stark warning of Spokane's current imbroglio.

"More than 200 years ago, Thomas Jefferson said he foresaw battles 'between rapacious capitalism and democracy,'" said Mr. Blethen. "Jefferson understood that power and size, left unchecked, would invite abuse and would crowd out civic values and would overwhelm the public interest... It has always been that the most serious problem in American journalism is not what we cover, but what we don't cover. When the watchdog stops barking, we're all in trouble."

With a June 2 vote scheduled on the Federal Communications Commission's proposed relaxation of media ownership rules, the Cowles family's misadventures at River Park Square could serve as a textbook example of what's at stake.

The Editor & Publisher commentary blasted the Cowleses for bringing "a lawsuit against public officials and businesspeople who have been critical of the public-private financing of the River Park Square mall, a Cowles family business built in downtown Spokane...

"In addition to demanding details of discussions with public officials, the subpoena of Metropolitan Mortgage & Securities Co. Inc., an advertiser in The Local Planet Weekly, asks for records, going back six years, of 'payments of any kind' to the paper, to the online 'Camas Magazine,' and to journalists Larry Shook -- who won this year's Association of Alternative Newsweeklies award for media reporting for his two-part article on how The Spokesman-Review covered River Park Square -- and Tim Connor, author of a book about the mall project."

Among the important details left out of Spokesman-Review coverage of the River Park Square controversy:

* The newspaper has never reported that the Cowles family refused to abide by federal guidelines to fully secure its $22.65 million federally backed loan from the City of Spokane for River Park Square. In order to qualify for the loan, the city was forced to essentially double-pledge its federal block grant money for low-income communities. The city now forecasts that between $6 million and $13.6 million of these funds will be used in lieu of Cowles assets to pay back the family's loan.

* Suppression by Cowles reporters of a critical city attorney memo warning of the deal's dangers to the city. (See "All In The Family.")

* The role of Betsy Cowles, president of the family's KHQ-TV and a director of the Spokesman-Review, and Cowles First Amendment attorney Duane Swinton, in covering up the last-minute crisis with AMC theaters that is an important element of the securities fraud litigation. (See "Under The Influence.")

As discovery in the federal RPS securities fraud litigation continues, documents continue to come to light about Cowles efforts to quell dissent and manufacture support for its controversial downtown development.

Future Camas reporting will focus on these recently discovered records.

THE END

Related links and downloads:

"Slapp-Happy Spokane," Editor & Publisher, July 15, 2002

Larry Shook's prize-winning article, "All In The Family."

Spokesman-Review coverage of Blethen's testimony, "Publisher fights easing media rules," May 15, 2003

Tim Connor's "Secret Deal" series, which won first-place in the online investigative reporting category in the 2001 competition of the National Society of Professional Journalists.

Camas articles are researched, written and edited by the Camas staff: Tim Connor, Larry Shook and Judy Laddon.