CPB Office of the Ombudsman

WNET, PBS and "Secret Corruption"

Joel Kaplan

February 15, 2014

PandoDaily is a blog designed to examine start-ups. The blog's founder and editor is Sarah Lacy, a former senior editor at TechCrunch.

But PandoDaily made big news this past week when it published an investigative report, not on a startup, but on PBS and its New York City flagship station, WNET. The story, written and reported by staff writer David Sirota, examined what Mr. Sirota called a secret financing deal between WNET and the Laura and John Arnold Foundation.

The story centered on a $3.5 million grant from the Arnold foundation to WNET to fund a series titled, “The Pension Peril.”

Mr. Sirota argued that “'The Pension Peril” is secretly funded by former Enron trader John Arnold, a billionaire political powerbroker who is actively trying to shape the very pension policy that the series claims to be dispassionately covering.”

Mr. Sirota concludes, “PBS's own very clear rules prohibit such blatant conflicts.”

The article was immediately picked up by a number of news outlets and Ted Ellis contacted the CPB ombudsman. He wrote:

“As a taxpayer and citizen - I am extremely concerned about the information in this article.

“If true - it would seem to violate the very standards of journalistic integrity and standards that CPB is supposed to uphold.

“I will also be contacting my state representatives to question about the level of funding with this obvious conflict of interest.”

WNET at first defended both the series and the grant, saying that the Arnold Foundation was listed as one of the contributors. But late on Friday, WNET announced that it was giving the $3.5 million grant back to the foundation.

Michael Getler, the PBS ombudsman, has now weighed in on the controversy. It is a thorough analysis of what happened. Mr. Getler says the decision to accept the grant “flunks PBS's own ‘perception test,’” and calls the decision to return the money an “important, surprising, costly and, in my view, a very positive development.”

I agree with Mr. Getler that WNET and PBS had a conflict of interest here and were correct in returning the money.

I will, however, add one aspect of this situation that troubles me, and that is the lack of transparency by both WNET and PBS.

First, it seemingly glossed over the conflict of interest by saying that the Arnold Foundation is listed as a funder of PBS NewsHour Weekend. The problem, as was pointed out in the Pando story, is that the grant was actually specifically funding the Pension Peril series.

But even more troubling was the refusal of WNET officials to release the agreement between the Arnold Foundation and the public broadcaster. What did the agreement say? Were there any conditions about how the money was to be used? Was there any editorial influence? WNET officials say there was not, but without actually being able to examine the grant agreement, there is no way to know.

WNET officials told Pando that they would not release the contract because “such agreements are always confidential.”

If that is the case, it is past time to change that.

In the interest of objectivity, balance and transparency, such agreements should never be confidential.

Furthermore, I hope that the decision to return the money was not done to avoid disclosing the original contract between the foundation and WNET. That agreement still needs to be disclosed.

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