Tax Deal Becomes A Political Issue p. 11

By: Dorothy Giobbe

Mayoral candidate, alternative weekly question two-year-old
settlement made by Philadelphia Newspapers Inc. and city sp.

A TWO-YEAR-old, out-of-court settlement between the City of Philadelphia and Philadelphia Newspapers Inc. (PNI) has become a hot-button issue in the city's upcoming mayoral election.
Critics charge that the settlement, signed April 29, 1993, is a sweetheart deal for PNI which has resulted in sugar-coated news coverage of city hall in the Inquirer and Daily News.
PNI is the parent company of the newspapers.
Joe Rocks, a Republican mayoral candidate, has repeatedly called the settlement overly generous to PNI. During the past few weeks, he has accused the Rendell administration of "buying" favorable coverage in the newspapers. PNI maintains it has done nothing improper.
According to the settlement document and legal papers filed by both sides, the city claimed that PNI owed almost $500,000 for unpaid wage taxes, penalties and interest for the years 1984 to 1992.
PNI disputed the claim, but arranged to settle. In addition to six full-page ads in the Inquirer and Daily News, PNI paid the city $15,917 in cash, and scaled the city's 1993 newspaper advertising bill back to 1992 rates.
The arrangement specified that the newspaper ads were to be used by July 1, 1995. A former revenue commissioner for the city told the Inquirer that the ads had been used to publish a warning to the public about outstanding taxes and also to promote tax seminars.
The settlement between the two parties originally was reported in 1993 by the Philadelphia Business Journal. A more detailed report ran late last month in the weekly City Paper.
In its coverage, the City Paper quoted journalism professors and media observers who suggested that, in 1993, the Inquirer or Daily News should have printed an accounting of the settlement in their news pages in order to avoid allegations of impropriety.
Jim Boylan, founding editor of the Columbia Journalism Review, told the City Paper, "it boils down to newspapers accepting a subsidy from government, dangerous ground for any newspaper. This sends a terrible message."
The City Paper also quoted Sharrie Mazingo, a journalism professor at the University of Southern California School of Journalism. Mazingo said, "At no time should a journalistic organization bargain, barter, or negotiate financial arrangements with any government."
Spokesmen for the city insisted that bartering services to settle tax debts isn't unusual. PNI has accused Rocks of using the tax dispute issue to divert attention from other issues in the campaign.
In a statement, PNI expressed "outrage" over Rocks' accusations. "To suggest that [the newspapers] have in any way been compromised as a result of a business arrangement involving the publishing company is insulting and entirely without merit."
In an interview, PNI spokesman Charles Fancher discounted the City Paper article. He said the newspaper "has a long history of attacking our company, so we're not surprised by this."
The Inquirer quoted Rocks as charging that Mayor Edward Rendell has "bought" favorable coverage from the Inquirer and Daily News.
"I mean, how many photographs of Ed Rendell can these newspapers run of him in a tennis tournament, eating a hoagie, jumping into a swimming pool?" Rocks asked a reporter from the newspaper.
Daily News editor Zack Stalberg told a reporter from his own newspaper that "Joe Rocks is full of shit, and what is worse, he knows it."