Newsweek publishes critical piece on company after staffers threaten to resign

Turmoil at major media outlets
Turmoil at major media outlets

Late Monday night Newsweek's acting editor-in-chief, four senior editors and two reporters were ready to quit. After months of drama at the magazine, including a raid by the Manhattan District Attorney's office, the abrupt firings of their executive editor and editor-in-chief and questions about their website traffic and ad revenue, they were ready to take a stand.

Their bosses at Newsweek Media Group were, sources familiar with the situation told CNN, trying to block a story they were working on looking into NMG's connection to Olivet University, a Christian school founded by a church run by a Korean-American pastor named David Jang.

The connections between Jang, Olivet and Newsweek Media Group, have been the source of intense speculation and several investigative reports from other outlets over the years. Though staffers would make often make jokes about working for "the church" or a "cult," multiple current and former staffers told CNN that, though they knew five of the company's executives were part of the church and were directly connected to Olivet University, they never felt their direct influence on their work -- only a constant pressure to hit higher and higher traffic goals.

But that changed in January with a Manhattan District Attorney raid at NMG's office and investigators' removal of 18 servers as part of, according to the New York Post, an investigation into the financial connections between the company and Olivet University. Newsweek reported it was related to loans used to procure the servers.

Multiple staffers said they felt they had to report on their parent company, especially if it was under a criminal investigation. To them, it was a question of journalistic ethics -- and of proving that they worked in an independent newsroom. But in the course of reporting on the story, editor-in-chief Bob Roe and executive editor Ken Li and reporter Celeste Katz were fired for trying to report on their own company. NMG co-founder Jonathan Davis told editors in a meeting that the reporting had harmed potential business deals, according to a source with knowledge of the meeting. More than a dozen staffers resigned as a result of the firings and their aftermath.

Related: Chaos at Newsweek: Top editors suddenly out

The remaining reporters and editors managed, after working on it quietly outside the office, to ultimately publish the piece by Katz, Josh Keefe and Josh Saul on Newsweek's website on Tuesday night after what one source with knowledge of the situation called "a bloody battle" with executives who tried to slow down and neuter its publication. Ultimately the company's CEO, Dev Pragad, convinced those involved they could publish their story freely.

The article says that NMG offered around $149,000 in free advertising in Newsweek to Hudson Valley Regional Airport and Dutchess County tourism near the town of Dover in upstate New York as Olivet University sought tax breaks and construction permits from the town to build a satellite campus. Newsweek ran 10 full-page ads promoting the region, according to the article, "all free of charge at a time when the magazine's parent company was in financial distress."

The piece includes an admission from Davis, whose wife is the president of Olivet, about the relationship between Olivet and NMG being deeper than he had previously acknowledged.

A stunning editor's note tops the article, detailing how executives tried to stop the story from being published:

"As we were reporting this story, Newsweek Media Group fired Newsweek Editor Bob Roe, Executive Editor Ken Li and Senior Politics Reporter Celeste Katz for doing their jobs. Reporters Josh Keefe and Josh Saul were targeted for firing before an editor persuaded the company to reverse its decision. As we continued working on the story, we were asked to take part in a review process which, we ultimately learned, involved egregious breaches of confidentiality and journalism ethics. We believe that subjects of the story were shown parts of the draft, if not the entire piece, prior to publication by a company executive who should not have been involved in the process. At an on-the-record interview with the subjects of this story, a company official asked editors to identify confidential sources. On-the-record sources were contacted and questioned about their discussions with Newsweek Media Group reporters. We resisted their efforts to influence the story and, after learning of the review's ethical failings, the reporters and editors involved in this story felt they would be forced to resign. At that point, a senior Newsweek Media Group executive said the company's owners would ensure independent review and newsroom autonomy going forward. This story was written and edited Tuesday, free of interference from company executives."

An NMG spokesperson did not immediately respond to a request for further comment regarding the article.

Scrutiny of NMG's connection with Olivet University is not new. A lengthy 2014 investigation by Mother Jones magazine reported on the various connections between Newsweek's parent company, then known as International Business Times before it changed its name to NMG in 2017, its founders, Olivet University and Jang's church. Mother Jones reported at the time that "Jang sees Community-affiliated media organizations, including IBT, as an essential part of his mission to build the kingdom of God on Earth. He has said that media companies affiliated with the Community are part of a new Noah's ark designed to save the world from a biblical flood of information." Jang did not respond for the Mother Jones article. IBT responded in a statement at the time. "Any claims that we are engaged in activities with organizations that go beyond what is commonly recognized as appropriate and ethical behavior are categorically false," the statement reads. "Furthermore, our conduct with partners is compliant with all applicable laws."

Staffers at Newsweek don't know how executives will react to the piece published Tuesday night, and at least some are not sure they believe the company will now actually ensure an independent newsroom. Several staffers who had not already resigned in the wake of the editor-in-chief and executive editor's firings have already been preparing to leave the company.

Plus, Newsweek has been in difficult straits for several years now. When selling it in 2013, IAC Chairman Barry Diller called his purchase of the magazine a "mistake."

Since then the company has roiled through several editors-in-chief as it faces the pressures of a new digital media environment. Current and former staff complain about ever-increasing reliance on traffic and "click bait," which brought them widespread criticism and ridicule.

Despite some legitimately good reporting, multiple staffers felt that the company had changed from "anything resembling integrity journalism to just totally shameless, irresponsible," as one former writer told CNN last month.

Staffers are hoping that with the publication of Tuesday's article a real change will come. But they know it's not guaranteed.

"[Tuesday's article] is a blip of hope and pride despite how tainted the process was," said one source with knowledge of the situation. "The staff are not confident, though, this place will be around much longer. But they're determined to write the best stories as long as they can."

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