Even More Circ Scams at 'Newsday,' the Paper Reveals

By: E&P Staff Even as auditors were probing the budding circulation scandal at Newsday in Melville, N.Y., last spring, officials at the newspaper were continuing a scam in which they secretly reimbursed outside contractors to falsely inflate sales numbers.

This revelation and others came Newsday?s own news pages today, continuing the paper?s policy of often withering self-exposure.

Today?s story, by Mark Harrington, focused on former Newsday employees paying contractors for tens of thousands of newspapers they bought to distribute as ?samples,? in violation of ABC rules.

?The bogus sampling program took place last spring even as industry auditors were examining Newsday's records, according to one person who participated and has been interviewed by federal investigators,? Harrington wrote. ?He said he was approached by a mid-level Newsday manager, who has since been dismissed, to purchase some 5,000 copies of the paper a day during March and April, for which he was required to pay more than $25,000. The paper later fully reimbursed him through a series of credits and a check for around $10,000.

?In another instance, Newsday contracted with a catering company whose principal is related to a mid-level Newsday manager who was also dismissed last year. More than 7,000 daily papers were said to have been ?purchased? by the caterer. The papers were then passed along to Newsday carriers to deliver as free samples, according to a person who distributed them.?

Harrington said that Newsday spokesman Stu Vincent acknowledged that the paper conducted the bogus sampling programs, including one with a caterer, Forest & Brook Food Corp. of Hauppauge, N.Y.

"The program referred to lasted for only six weeks -- March 14, 2004 through April 25, 2004 -- before it was uncovered and stopped," Vincent said in a statement.

Vincent added that Newsday's new management "did not sanction the program and has instituted procedures and safeguards to ensure that this type of program will not be repeated."

It's not clear, Harrington observed, how much circulation these bulk programs accounted for. In 2003, Newsday reported third-party bulk sales of 12,165 copies on weekdays. ABC auditors subsequently disallowed 10,457 of the weekday copies.