Feds Arrest Two for Newspaper Espionage p.10

By: KELVIN CHILDS Two circulation managers from rivals of the Atlanta Journal and Constitution were arrested by federal agents earlier this month after they offered to sell their company's marketing plans and subscription lists to the Atlanta daily for $150,000.
Carroll Lee Campbell, former circulation manager of the Gwinnett Daily Post, and Paul Edward Soucy, former district circulation manager of a sister paper, the Rockdale Citizen, were arrested by FBI agents on Feb. 6 in a shopping center parking lot. Charged with mail fraud and economic espionage, Campbell and Soucy were released on $50,000 bond.
When contacted by E&P last week, Campbell and his attorney, Brian Mendelsohn, declined to comment. Soucy did not return messages left on his answering machine.

FBI agent poses as attorney
According to federal authorities, the two men came to the parking lot on Feb. 6 for the second of what they believed to be meetings with a lawyer of the Journal-Constitution. But the go-between was actually an FBI agent. Journal-Constitution executives alerted the U.S. Attorney's office after they were initially contacted by Campbell. The FBI subsequently set up a sting-like operation with an agent posing as an employee of the Atlanta paper.
According to federal investigators, Campbell sent letters to the Journal-Constitution's publisher and attorneys, and to parent company Cox Enterprises in September 1997, offering to sell proprietary information from inside the Daily Post. Some of the data was relevant to a lawsuit filed by the Journal-Constitution against local county officials in an attempt to stop them from placing their legal advertising in the Daily Post.

FBI Charges
In an affidavit, the FBI charged that:
Campbell, who was also the Daily Post's classified advertising manager, promised to sell marketing strategies, expansion plans, and the paper's subscriber list to the Atlanta newspaper for $150,000. He also offered a copy of the Post's contract with Genesis Cable, days before it was announced.
Using the alias "Athena," Campbell corresponded with Journal-Constitution representatives by telephone and through personal ads in the paper. The FBI arranged a meeting with him on Jan. 23, and an agent posing as a lawyer gave Campbell $5,000 for some of his documents. They agreed to speak again to arrange another meeting to exchange the rest of the money and documents. After that, the FBI contacted Daily Post officials, who identified Campbell based on information provided by investigators.

Campbell and A lookout
Campbell was arrested at the subsequent shopping center meeting. Agents noticed Soucy observing the parking lot transaction, questioned him and later arrested him at Campbell's home as they searched the premises for the $5,000. Soucy said he was paid $500 to act as a lookout.
Campbell was hired in August 1996 as circulation manager of the Citizen before being transferred to the Daily Post, said Thomas J. Stultz, president of the publishing division of Gray Communications Systems Inc., parent company of both papers. Stultz said Campbell was fired in January for poor performance, and Soucy was fired the same month because he failed to return to work after a medical leave that had begun in September 1997.
Stultz said he commends the Journal-Constitution for cooperating in the investigation. "They did the right thing," he said.
He said that having an employee accused of selling inside information is jarring, but, "one of the things he planned to share with them was our plan to go metrowide, and that is absolutely, positively not true. We have set our course, and our course is to be a Gwinnett County daily." Stulz said the other documents, "while proprietary, didn't have any secrets of which they (the Journal-Constitution) were not aware." He said Journal-Constitution executives saw the cable TV contract during discovery proceedings of the recent lawsuit.
Stultz said there is no indication that other employees are involved, but noted that the investigation is continuing. The FBI indicated it believes Campbell and Soucy are the only persons involved. Federal authorities noted, however, that Campbell did offer another newspaper employee $300 for the Daily Post's subscriber list, but she refused and reported the matter to her supervisor.

borrowed mercedes
Stultz said Campbell also borrowed a Mercedes-Benz from another newspaper employee so he could make a better impression at the Feb. 6 meeting.
According to the FBI, Campbell offered some of the materials to help the Journal-Constitution prevail in its appeal of its lawsuit challenging the Daily Post's right to carry legal advertising for Gwinnett County. The Journal-Constitution contends that the Daily Post lost its eligibility to serve as county legal organ when it began an alliance May 1997 with Northeast Gwinnett CableVision. In that arrangement, the paper goes to 34,000 of the cable company's subscribers as part of their basic service. The Journal-Constitution argued that because of the deal, the Daily Post no longer has the 85% paid circulation as required by state law to qualify for legal advertising.
The Journal-Constitution sued the officials who chose to place legal ads in the Daily Post, demanding that it be awarded the $800,000 contract instead. A lower court rejected the Journal-Constitution's case in July, and it was under appeal before the Georgia Supreme Court when Campbell made his overture. On Feb. 2, the high court also ruled against the Journal-Constitution.
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?(copyright: February 21, 1998)