The new owners of The Philadelphia Inquirer have made a public pledge not to interfere in the editorial operations of the newspaper.
Last week, however, owners, editors, and publishers of the Inquirer were placed under oath in Courtroom 630 at City Hall, and asked to explain what that pledge really meant.
To editor Bill Marimow, it meant that although Publisher Bob Hall had basically accused him of being a racist and a sexist, there was no need to worry, because under the new regime, the two principal owners had to be in agreement to fire him.
To Nancy Phillips, the Inquirer city editor and girlfriend of owner Lewis Katz, the pledge was carefully constructed so that it didn't apply to important decisions -- like hiring the editor of the Inquirer-- because that was a business decision rather than an editorial decision.
To owner Lew Katz, that non-interference pledge didn't put a wall up around the newsroom; instead the pledge amounted to an open door. Katz explained on the witness stand that he had the right to show up in the newsroom whenever he wanted to. And when it came to hiring and firing any editor in the newsroom, Katz had a "blocking right."
Welcome to Courtroom 630, where the Inky's much-publicized non-interference pledge was revealed to be a license to meddle. And where we learned that two award-winning journalists conspired to spin a story to conceal that meddling.
"Perched On My Shoulder"
On Nov. 13, Bill Marimow, editor of The Philadelphia Inquirer, was the first witness to take the stand in Philadelphia Common Pleas Court. Marimow described a conference call on Tuesday, April 3, 2012, when he was on the phone with Lewis Katz and George Norcross, the new owners of the newspaper, and Nancy Phillips, an Inquirer reporter was also Katz's girlfriend.
"There were five or six proposals that I made as a prerequisite to the possibility of coming back as an editor," said Marimow, who was about to sign on for his second tour of duty as Inky editor. "And they were things such as my salary, transportation across the country, a temporary residence, journalistic autonomy, the right to hire a certain number of editors."
"And in my conversations with Mr. Katz and Mr. Norcross, we went through each of those bullet items," Marimow testified. "And as we proceeded, the two gentlemen said, done, done, done ... And at the end of that conversation, we had an agreement."
"And I was concerned about one issue, and that was that the publisher, Mr. Greg Osberg, had in October 2010 demoted me from editor of the newspaper to reporter," Marimow said. "So I wanted to ask Mr. Katz and Mr. Norcross about how I could be assured that if I was giving up this job in Arizona and bringing my family and my possessions back across the country, I wouldn't have conflicts with Mr. Osberg."
Marimow was leaving a safe job as a professor in the Walter Cronkite School of Journalism at Arizona State University to return to the Inquirer, where he'd been editor from 2006 to 2010.
What Marimow wanted to know was, if he took the job as Inky editor, could Publisher Osberg screw with him again?
"And the answer from Mr. Katz and Mr. Norcross was they were hiring me, they were the -- in effect, the management committee of the company, and they would be the ones to hire me or fire me," Marimow said. "When the conversation was completed, it was agreed that I would become the editor, and the only issues remaining were how we would announce this to the public and work it out with Mr. Osberg."
How the owners and editor decided to "announce this to the public" is not a pretty story that we'll get to in a moment.
Not everybody was happy about the return of Bill Marimow to the Inquirer. Two days after he accepted the job in a conference call, Marimow got a call from Bob Hall, then chief operating officer.
"He [Hall] told me that he had strongly opposed my return," Marimow testified. "He told me that most of the newsroom staff, his guesstimate, I believe, was about 60 or 70 percent, was opposed to my return."
Hall had more bad news for the new editor.
Hall told Marimow that "as the editor I caused a myriad of management problems, that I had a reputation for disliking women, disliking minorities, and that he was very distressed by the fact that I'd been hired," Marimow testified.
Welcome back, Bill.
"That said, Mr. Hall told me that he was going to be perched on my shoulder to make sure that I did an excellent job, and that he would be watching over me and making sure that I was effective," Marimow said.
"Did that conversation give you any concern with regard to the security of your job? asked Richard A. Sprague, lead counsel for the minority ownership faction headed by Lewis Katz and H.F. "Gerry" Lenfest.
"I wondered whether I'd made a mistake in accepting the job," Marimow said. "And I believe that I called Mr. Katz or Miss Phillips, I'm not sure whom, and said I think Mr. Hall is wrong. And I then gathered all the laudatory emails that I received, both from members of the Inquirer staff, from members of the public, from people I covered, and I sent them all to Miss Phillips with the intention of showing Mr. Norcross that, contrary to Mr. Hall's assertions, the Inquirer staff was supportive of me, as were members of the public."
Sprague asked Marimow if he ever received a contract from the Inquirer. Marimow referred to an April 10, 2012 letter from then-publisher Greg Osberg. The letter was labeled exhibit P-5.
"That's the letter I received from Mr. Osberg ... which outlines the specific points that Mr. Norcross and Mr. Katz and I agreed to in the phone conversation I described," Marimow said. "At the beginning of the letter, it says: 'I am very pleased to extend a job offer to you."
"Catch up with Bob"
Marimow's job as editor of the Inquirer came to an end on Monday, Oct. 7, 2013. That morning, Marimow received an email inviting him to an 11 o-clock meeting with Hall in the publisher's office. Hall had succeeded Osberg as publisher of the Inquirer. The session was billed as "Catch up with Bob."
"At first, we discussed an article about Boyd's Men's Clothing Store, which appeared in the paper Saturday, which I enjoyed and ... Mr. Hall had tipped me off to," Marimow said. "And then Mr. Hall said, 'We have a very serious matter to discuss today ... We're terminating your employment with the Inquirer.' "
"I said to Mr. Hall, 'Have you talked to all the owners?' ", Marimow testified. "He said he talked to all but one. I asked if he'd spoken to Mr. Lenfest and Mr. Katz and I believe he said we put in a call to Mr. Katz over the weekend. I don't believe I ever had a clear answer whether he'd spoken to Mr. Lenfest."
"I then said to Mr. Hall: 'I don't think what what you're doing is legal or proper," Marimow said. "And we talked for a moment after that and he said words to the effect that, well, I have my legal opinion and you have your legal opinion, and the conversation ended very quickly after that."
"With your dismissal?" Sprague asked.
"Yes, sir," Marimow replied.
"Mr. Marimow," Sprague asked. "If the court were to order that you be put back in your position, in your opinion would you be able to achieve harmony and a workable workplace free from hostility back at the Inquirer?"
"The answer is, I know that if I returned to the Inquirer," Marimow said, "it would alleviate a lot of the tension that has existed over the last month. I know that I'm a good editor who knows ... the city, the suburbs, and South Jersey inside out. I care deeply about the community. I believe that people at the newspaper know that."
"I worked with Bob Hall for more than 30 years," Marimow said, "and I think that Mr. Hall and I, despite the tension, have a good personal rapport and I believe that the excellent journalism would yield good journalism results. And that, in turn, would provide good business results. And I know I could be effective in returning."
We'll find out if Hall and Marimow can co-exist.
The Katz-Lenfest minority owners had gone to court seeking to have Marimow reinstated and Hall fired. The Norcross majority faction wanted Marimow to remain fired, and Hall to stay on as publisher.
"Diminishing The Role Of Publisher"
In Courtroom 630, former Inky CEO and publisher Greg Osberg was under a subpoena when he showed up to testify.
"Did you hire Mr. Marimow in 2012," asked Joseph R. Podraza Jr., on behalf of the Katz-Lenfest minority ownership faction.
"It was not my decision to hire Bill Marimow," Osberg said. "It was Mr. Katz's and Mr. Norcross's decision to hire Mr. Marimow as the new editor."
"Did you agree with the decision by Mr. Katz and Mr. Norcross to hire Mr. Marimow in 2012?"
"At the time, I did not agree," Osberg said.
Podraza showed Osberg the letter from Osberg to Marimow extending a job offer.
"Did you write this document?" Podraza asked.
"To the best of my recollection, I don't," Osberg began, before saying. "The details of this offer letter were give to me by Nancy Phillips, and I believe I talked to [associate publisher] Mike Lorenca about this, and this is, you know, sort of a standard offer letter. I looked at is as more of an offer letter than a contract. But, No, I did not -- I wrote the letter, it is under my signature, but I didn't author the entire letter."
"They had asked me to talk to Nancy [Phillips] to get the specific details," Osberg testified.
But the former publisher said he had issues about the proposed chain of command. Norcross and Katz wanted editor Marimow to report directly to the board of directors, but Osberg objected.
"They first mentioned to me that they saw him reporting to the board [of directors] rather than directly to me, and I disputed that," Osberg said. "And I said that if I'm going to continue here, that I felt strongly that the editor should report to the publisher."
"Mr. Osberg, why did you leave the Inquirer?" Podraza asked.
"This was the start of a pattern of decisions made by the owners that I felt were diminishing the role of the publisher," Osberg said. "I was told, I believe, the next day, that Steve Hamerlin was going to become the general counsel of the company, and that was a decision that Mr. Norcross and Mr. Katz had made in isolation, and just told me about, but that he would report to me."
"And then there were some other decisions to engage consultants, or to consider engaging consultants in the company that I was not a part of," Osberg said. "I was told about it after the fact, for the most part. I argued aggressively against it."
One of those consultants was former Publisher Brian Tierney, who was coming back as a sales consultant. Osberg was opposed to Tierney's return, but his vote didn't count. Phillips, acting as a head hunter, had already begun negotiating a deal with Tierney.
So publisher Osberg was told who the editor of the Inky was going to be, who was going his general counsel, and who was going to be employed as a consultant.
"And after that started I decided that this was probably not the right place for me going forward," Osberg said. "We had a -- what I thought was a very profesional decision and amicable decision to part ways."
"They owned the company," Osberg said of his new bosses. "They could run it any way they wanted it, and it didn't mean that I had to stay there and operate that way."
So Osberg resigned after less than six weeks on the job.
"The Official Story"
Nancy Phillips was the next witness. On cross-examination, she was asked by Robert C. Heim, the lead lawyer for the Norcross team of majority owners, about the hiring of Bill Marimow to return as editor of the Inquirer.
"Now, there came a time when after the terms had pretty much been agreed to with Mr. Marimow that you had to respond to a question from Mr. Marimow which was, who shall I say hired me, right?" asked Heim.
"Yes," Phillips said.
"And that [question] gave you some concern, did it not, because by that time there was a non-interefence clause?" Heim asked.
"No that was not the reason," Phillips replied.
"And didn't you write an email, Miss Phillips, that said, in effect, here's the official story so that there wouldn't be a concern about violating the non-interference pledge?" Heim asked.
"I had no concern about the non-interference pledge, no," Phillips testified. "The concern was how Mr. Osberg would feel in all of this and that his feelings would be spared because a decision had not been made by him, but, rather by Mr. Katz and Mr. Norcross."
Heim gave Phillips a copy of two emails she sent to Katz and Norcross on April 4, 2012.
In the first email, Phillips had written, "Bill asks the question what does he say if a reporter asks him who offered him the job. Something to mull. Not sure you guys get hurt over suggesting an editor, but need to think/talk about that."
"And the reason you said not sure you get hurt meant it looks like I'm not sure whether you were being hurt because it looks like the two of you were hiring the editor, and not the publisher, right?" Heim asked.
"Oh no," Phillips replied. "You misunderstand. The worry over the publisher was merely that it would be -- that he would somehow be diminished in the public announcing of this. We had discussed the pledge in depth and had conversations about the structure and wording of the pledge, and when it was initially crafted, we spoke a lot about the importance of configuring it narrowly so that certain important decisions such as the hiring and firing of the editor, would not be affected by it."
"And the conversations focused around the notion that that is a business decision and, thus, hiring -- the hiring of Bill Marimow would not be a violation of the pledge in any way," Phillips said. The so-called "official story" was "merely a response to public information -- the public relations person's concern that perhaps this would make things look -- make things difficult for Mr. Osberg." Phillips said.
Heim wasn't having any of the let's spare Greg Osberg's feelings cover story.
"So your concern was that the public relations hit on this might be somebody saying, wait a minute, these guys just said they weren't going to interfere and they are interfering already, so you were worried about, that the outside world might say that, right?" Heim asked.
"I think there were two concerns," Phillips replied. "One was for Mr. Osberg, and the other was that [we] would be very clear that this [hiring editor Marimow] was not something that violated the language of the non-interference agreement."
Heim read the second email from Phillips to Katz and Norcross that said, "official version is this ... Several of the owners, the two of you and Lenfest as well, had the idea and suggested it to Greg. You spoke to Greg who endorsed the idea and then the offer was made."
"Now you knew that Greg didn't endorse the idea, correct?" Heim asked.
"Right," Phillips said. She explained there had been a series of emails between the owners and Kevin Feeley, a public relations consultant. Phillips said it was Norcross who suggested that "the public announcement ... should not do anything that would undercut, and I agreed with this, undercut Mr. Osberg, as he was going to be the publisher and work carefully and closely with Bill. So we wanted to be certain that he [Osberg] was not embarrassed."
"But this statement by you, which was -- which you labeled the official version ... was a fabrication, right?" Heim asked.
"This is, as I explained, yes," Phillips replied.
"A fabrication," Heim repeated. "You agree, don't you?"
"It was not how this happened," Phillips said, "but as I explained, the reason it was being spun this way for PR reasons was so as not to ..."
"But you don't say that," Heim said, who then read the rest of the email:
"On the issue of editorial interference [a] you went through Greg; [b] you pledged ... not to interfere with news gathering and editorial integrity [but] the selection of an editor is an important business decision, one that effects the enterprise ... in important ways, and it's appropriate for owners to have a say."
The email concluded with: "Bottom line official story: This is something Greg wants and something we want. We agree that this is the right move for the Inquirer and for the overall company."
Heim wasn't buying it.
"Miss Phillips," he began, isn't it correct to say and it's it truthful that when the owners got to the point of hiring Mr. Marimow and Mr. Marimow asked the question, who shall I say hired me, that the concern about the pledge, about editorial interference, was something they worried about, you worried about, so you came up with this story and you figured what difference does it make if these guys are on the same page? We can come up with this story, we can sell this story; isn't that really what happened?"
"No," Phillips said.'''
To get the "official story" out, the Inky used its news columns.
On April 5, 2012, the Inquirer reported that the new owners had rehired Marimow to return as editor.
"Bill Marimow is one of the most respected journalists in the nation, and his return reinforces the company's commitment to aggressive investigative reporting," Greg Osberg, CEO of Philadelphia Media Network, was quoted as saying in the Inquirer.
"Marimow said he had been in discussions with Osberg and several members of the new ownership group in recent weeks," the story said. "I believe the local owners may have suggested it would be great if I could return," Marimow was quoted as saying. "Now, I'm coming back."
When Lewis Katz took the stand, he was asked what was the purpose of the limited liability agreement that called for the creation of a two-member management team composed of Katz and Norcross to oversee the day to day business operations of the two newspapers and the philly.com website.
"I wanted to make sure, since I was putting up the same amount of money as Mr. Norcross," namely $16 million, "That we had equal powers under the agreement," Katz said. "Since we had never been partners in a venture before, I had the thought that if either one required the other to vote unanimity for action to be taken, that [it] would force us to sit down and reason and come up with a solution if one or the other felt that the action discussed was inappropriate."
"So I insisted to have, for want of a better expression, blocking rights not only with the management committee, but also within the board of directors of the company," Katz said, "which that other section provides that if either one of us do not vote for a resolution of the board, the resolution is ineffective."
"And did Mr. Norcross agree with those provisions," Sprague asked.
"He did," Katz said.
Sprague asked about the non-interference pledge, and what was the purpose of putting it in the agreement.
"At the time we were buying the paper," Katz said, "there were suggestions and concerns that the new ownership had strong political allegiances. Mr. Norcross was the leader of the Democratic Party in New Jersey. Mr. Rendell was former governor, former mayor, former district attorney. I had been at one time the chairman of the Democratic party in Cherry Hill."
"And there was a strong feeling within the community and the editorial [department], the newspaper reporters, that they were concerned that we would try to influence the news," Katz said. "That being said, what stories should be written, how they should be written, who we would support."
"And so, as a result of that concern, I thought there were two ways to deal with it," Katz testified. "One was to hire the best editor that we could find that would remove the stigma of that concern. And the second way was to take a pledge, a pledge we gave to the newsroom."
"There were several hundred reporters when we stood up and made our pledge, and our pledge was straight and simple," Katz testified. "Our pledge was we will not interfere. In fact, George ... Norcross and I summarized it together. We said as follows: Each of us pledged not to interfere in news decisions or news operations at either newspaper or philly.com. We never, ever said we weren't going to hire the editor."
"Now with regard to the powers of the managing committee that you referred to, what was your intent with their position with regard to hiring and firing the editor," Sprague asked.
"It seemed to me that the hiring of the editor was the most important decision that we were going to make taking over this newspaper," Katz said. "And one of the ways we could deal with calming the storm that erupted in the newsroom because of the coverage of the auction to sell the paper was to bring in somebody who was beyond repute, [of] the highest integrity, the strongest individual of character, so that the reporters, in my judgement, would realize that we dealt with the issue."
"Nobody was going to tell Marimow what to do, how to write a story, who to assign," Katz said. "He had, in my judgement, the confidence of not 40 percent, as Hall said, but 90 percent. And the people that he didn't have the confidence of were upset because he worked them so hard."
Sprague asked Katz if, when he hired Marimow, if he knew how then-publisher Osberg felt about it.
"He was vehemently opposed," Katz replied.
And did you and Norcross know the opinion of Bob Hall when it came to hiring Marimow?
"He was more vehemently opposed," Katz replied.
"And the fact that Mr. Osberg was opposed and Mr. Hall was opposed, did that in any way cause you or Mr. Norcross to have any problem with the hiring of Mr. Marimow?"
"None, sir," Katz replied.
"An Open Door"
On cross-examination, Katz was asked by Heim about the non-interference policy covered in section 5.6 of the limited liability agreement.
"Is it not correct and isn't it your understanding, Mr. Katz, that 5.6 places a wall around the newsroom and tells the owners to stay out of the newsroom?" Heim asked.
"No, there's no wall, it's an open door," Katz replied. "You can walk in there as owners and talk to reporters and editors."
"I wasn't referring to a physical wall," Heim said.
"... Well, I think if you have a policy that you could have coffee from 9 to 2 and the owner went in and said you could have coffee from 9 to 5, that would be permissible," Katz said. "I think owners have the ability to go in, talk to reporters, editors [about] general matters. Anything business, not news, but did you see a good movie? And the movie critic and I talk all the time about recommendations of what he thinks I should see."
Heim asked if he could "probe this a little father."
"If the publisher and CEO decide that the sports editor is doing a bad job ... not covering the Eagles well enough or whatever and replaces the sports editor with someone else, is it your view that you can block it?" Heim asked.
"Yes," Katz replied. "The editor is in charge of the newsroom. The publisher is not to go into the newsroom and fire the sports editor. If the publisher has a problem with the sports editor, I would assume he would talk to the person in charge of the newsroom since that's his area of expertise and he would seek information from that person, rather than go in and say, fire these three people ..."
"So I gather your testimony would be the same with regard to your understanding if I asked you about the publisher wanting to replace the city desk editor," Heim said. "Do you think you have the right to block that?"
Yes, Katz said.
"It's ordinary hiring and firing in the ordinary course of business," Katz explained, so that "is not within the control day to day of the publisher; it's in the control of the management committee and it was put that way for a specific purpose."
Heim had another example. Suppose the publisher tells the editor of the newspaper that he wants more local coverage, and the editor says he wants less, and an owner agrees with him. And the publisher says to the editor, "well, then, I'm going to get rid of you, can you block that too, right?"
Senior management reports to the management committee on day-to-day operations and business, Katz testified.
"So I would say if the publisher thought that the city desk wasn't doing its job and they weren't having enough local news, he could come to the management committee," Katz said, because under the limited liability agreement, "all business affairs are under the direction day to day of the management committee, and not the publisher."
"So, yes," Katz said. "I believe that that decision would come from the management committee, sir."
So when Publisher Hall wanted to fire several of Marimow's top editors, Katz emailed Hall, saying, "I'm against this action and I'm invoking my co-manging partnership agreement to block this attempt."
To Katz, the non-meddling pledge also meant that Publisher Hall couldn't meddle in the newsroom by firing Marimow's top editors.
"We promised to keep our hands off editorial," Katz wrote. "This seems to me to be getting closer to that line."
Katz, explained, however, that he didn't think it was Hall who was behind the proposed firings. Katz said he thought Norcross had targeted those editors for because they had crossed his daughter. Lexie Norcross is the 26-year-old VP in charge of digital operations, including philly.com.
"I didn't believe it was Mr. Hall's decision to go pick out these people who had had some experiences that were negative with members of the co-managing partner's family,"Katz said, referring to Norcross's daughter.
"And they came back and said the columnists and the editorial page are basically not important to the newspaper," Katz said. "And he [Norcross] said this at a meeting attended by Mr. Lenfest and I. And then he went further and said, I want to cut out $20,000 of a travel budget of a columnist by the name of Trudy Rubin because we don't need her."
Marimow agreed to reducing the editorial page from two pages to one because he thought Publisher Hall wanted to do that, Katz said. But the guy behind the move was Norcross, Katz testified.
"It was Mr. Norcross that sat in a room and said, we should kill this column, we should kill this editorial page," Katz testified. "He [Norcross] didn't go to Mr. Marimow, because that's not his style. He had Bob Hall go to Marimow."
Then the meddling really got going. Norcross proposed hiring a new president for philly.com, but Katz objected. Then Katz proposed hiring in succession three new presidents for philly.com, and Norcross objected to all three.
Katz said he believed as a member of the management commitee, "I could block any firing. It was ordinary business day-to-day and operations that was run by the Management committe. So I believe hiring and firing would fall within the scope of operational and business activity on a day-to-day basis."
"I had made it real clear that I had let a lot of things go with Mr. Hall," Katz testified. So Katz said he told Hall that if he fired Marimow, "This was the last straw. If he reached out to get rid of Marimow, I was going to contest it, knowing what a mess this would produce for the structure."
"The Traditional Role Of A Publisher"
When he took the witness stand, Hall said he had wanted to make changes in the newsroom that Marimow was resisting. Marimow had been warned that if he didn't make those changes, such as canning high-priced editors who were friends of his, and replacing them with cheaper reporters who would go out and cover local news, Marimow would be terminated.
But Marimow kept resisting the changes Hall wanted to make.
"Now, Sir," asked lawyer David Pittinsky on behalf of team Norcross, "did you believe you had the right to terminate Mr. Marimow on your own?"
"I did," Hall testified.
He also had a legal opinion that backed him up.
The "traditional role of the publisher is hiring and firing the editor" and also being "responsible for the news content of the paper," Hall testified. That's the way he's done it in his 15 years as publisher.
"And how many editors did you hire in that time, approximately?"Pittinsky asked.
"Half a dozen," Hall replied.
"And how many did you fire?" Pittinsky asked.
"If you include this current one, two."
When asked about the non-interference pledge, Hall said he thought it was a good thing, as he hoped it would prevent the owners from meddling with his duties as publisher.
"It [the pledge] was an important part of being a publisher, because that's part of the traditional role I was used to," Hall said.
But at the new Inky, under the new owners, that traditional publisher's role was out the window.
The judge's ruling affirms it.
And now that they've left the courtroom, both sides at the Inky are free to do more meddling.