JPosters Stung by Hollinger Woes

By Nathaniel Popper

Published September 10, 2004, issue of September 10, 2004.
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When a report about the “corporate kleptocracy” at the publishing company Hollinger International was released last week, it carried a special sting for employees at the Hollinger-owned Jerusalem Post, who have endured a series of extreme budgetary cutbacks during the past decade.

The report, written by a special committee of Hollinger’s board, alleges that Hollinger CEO Conrad Black and his chief operating officer, F. David Radler — who also was the chairman of The Jerusalem Post — spent company dollars lavishly on private pursuits. Yet at the Radler-run Post, employees were taking pay cuts on their already miniscule salaries and were forced to use Disney notebooks instead of reporter’s notebooks because management found they were cheaper.

“It was infuriating to read that report,” said Calev Ben-David, managing editor of The Jerusalem Post. “We’ve had to experience draconian cutbacks, and now we see that Conrad Black and Radler were draining the company’s profits for personal benefit.”

Black and Radler controlled dozens of papers worldwide through Hollinger, including the Chicago Sun-Times and The Daily Telegraph of London, but the story of parsimony at The Jerusalem Post provides a particularly egregious instance of the way news interests and employee welfare were subordinated to the economic interests of a few executives at Hollinger.

Black, Radler and other top executives personally received 95.2% of Hollinger’s net income during the last seven years, according to the report filed August 30 with the Securities and Exchange Commission. Among the other extravagances for which the report said there was “no legitimate corporate purpose,” Hollinger paid $42,000 for Radler’s country club dues and $11.6 million for a jet the special committee found that Radler used frequently for personal flights to his vacation home in Palm Beach, Fla.

Both Radler and Black stepped down from their positions at Hollinger last November, when the first sign of these improprieties came out. The process of selling off Hollinger’s assets has been ongoing since then (see sidebar), but a number of insiders said it has been difficult to find a buyer for The Post because of paper’s sharply decreased value after the Radler era.

“Radler denuded the paper of its assets, one by one,” said Hirsch Goodman, former editor of the Hollinger-owned Jerusalem Report. “To get it back into working order, you’re going to need to put a hell of a lot of money into it.”

In an interview with the Chicago Sun-Times on Sunday, Radler said the report was “full of mistaken facts” and “smelled” of anti-Jewish sentiment. But now, many of his sharpest critics are Jewish employees — current and former — at The Post.

When Hollinger bought The Post in 1989, the English-language paper was one of the most respected brand names in the Jewish world. With Radler at the helm, the changes began immediately with the hiring of a new editor, who shifted the paper’s political position to the right. For most employees, though, the more immediately felt changes occurred in their weekly paychecks.

The Post’s management reduced the size of the staff to a point that made it hard to cover all the necessary beats, and the salaries of the remaining employees were trimmed repeatedly. On December 31, 2002, all employees were required to sign a letter agreeing to an 8% to 10% decrease in their wages, when most of them were only earning between $18,000 and $30,000.

“The Post was known for being one of the lowest wage organizations that one could work for in the public or private sector,” said Joel Leyden, who was a senior Internet editor at the paper from 2002 to September 2003. “It was almost like working for charity.”

Employees had previously been protected by a strong union, but Radler’s appointed publisher, Tom Rose, negotiated an effective end to that in 2000. In addition to the larger changes, the management took smaller steps, like cutting holiday bonuses and forcing every employee to pay for a subscription to The Post out of his or her own salary.

Radler’s long career in the newspaper business had earned him a reputation for holding his eye to the bottom line. Radler himself was not known to be ostentatious with his wealth, but last week’s report suggests that he did not extend his eye for careful cost-cutting to the expenses of his family.

At the Hollinger-owned Chicago Sun-Times, Radler’s wife, Rona, was paid $126,000 to direct the paper’s charitable trust. And after Radler’s daughter, Melissa, was hired to be The Post’s New York correspondent, the paper paid her moving costs, a rent stipend and a salary of $38,000. (Melissa Radler is a former staff reporter at the Forward.) Her salary was raised to $62,000 at roughly the same time that every other employee at The Post was forced to take the December 31, 2002, pay cut.

Former employees said their lives were made difficult by more than just reduced salaries. Freelance writers and maintenance workers were paid late, if ever. And aside from the story about management buying discounted school notebooks with cartoon characters on the front, numerous employees recounted the time when the bathrooms were no longer stocked with paper towels in an effort to cut costs.

“Because of the lack of maintenance, environmentally the building was a horrible, nasty, unhealthy place to work in,” said Miriam Shaviv, who was the paper’s literary editor until February of this year.

This all had a predictable effect on the ability of the employees to put out a decent product.

Jeff Barak, the paper’s editor from 2000 to 2002, said that cutbacks were inevitable during the years after the current intifada began, when the entire Israeli economy was shrinking. Barak said that Radler “looked to make savings wherever possible,” but he always operated with the goal of making The Post a “profitable paper” in a difficult environment.

But some Israeli media insiders point to a section of the SEC report that raises a less obvious reason for Radler’s constant liquidation of assets from The Post. Black and Radler owned a secondary company called Horizon, which purchased undervalued newspapers from Hollinger and then sold them again for a profit.

“Now it begins to make sense,” said Goodman, the former Jerusalem Report editor. “They ran Hollinger assets into the ground, and then Horizon picked them up on the cheap.”

In one instance detailed by the report, Radler instructed Hollinger to sell Mammoth Times — a small weekly paper in eastern California — to Horizon for $1, just two years after Hollinger had purchased the paper for $1.75 million. The sale went through “based on Radler’s false and misleading information,” in the words of the special committee, even though another publishing company had offered Hollinger $1.25 million for Mammoth Times six months earlier.

With Radler now gone from The Post, employees say there is a palpable sense of relief, but the thicket has not been completely cleared. When Rose was fired in May, Bret Stephens, the editor-in-chief of the paper, wrote in an e-mail to his staff: “It will be some time before we can undo the damage he wrought: to our finances, to our reputation, to our business relationships, to our morale, to the quality of our editorial product.”

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