"Chaos at Newsweek": Execs given the boot after DA raid

The stakes could not be higher: Bad news for those who monitor trollery for blogging gold. One of the largest producers of embarrassing hot takes, operating under the guise of a formerly respected media brand, might be shutting its doors for good. According to CNN, Newsweek’s top brass got canned today, and everyone else has been told to take the day off:

Employees at Newsweek have been told that editor-in-chief Bob Roe and executive editor Ken Li have been fired, sources with knowledge of the situation told CNN.

A reporter, Celeste Katz, who had written articles about financial issues at the magazine as well as an investigation by the Manhattan District Attorney’s office into its parent company, Newsweek Media Group, was also let go, the sources said.

Staff in Newsweek’s New York offices were told to stop working and go home for the day on Monday afternoon, a source close to the newsroom told CNN. Katz was seen cleaning out her desk, the source said.

If the end is nigh for Newsweek — and it certainly looks that way — one has to wonder whether it was a quality issue or a criminal issue. The raid that took place apparently focused on Newsweek’s finances, and might have involved misrepresentations about traffic at both that platform and at the International Business Times. Buzzfeed reported last week about suspicions of fraud involving ad rates:

The publisher of Newsweek and the International Business Times has been engaging in fraudulent online traffic practices that helped it secure a major ad buy from a US government agency, according to a new report released today by independent ad fraud researchers.

IBTimes.com, the publisher’s US business site, last year won a significant portion of a large video and display advertising campaign for the Consumer Financial Protection Bureau, a federal agency. Social Puncher, a consulting firm that investigates online ad fraud, alleges in its report that the ads were displayed to an audience on IBTimes.com that includes a significant amount of “cheap junk traffic with a share of bots.”

The CFPB’s ad budget was the subject of criticism from Republican lawmakers after the Daily Caller reported last year that it had awarded more than $40 million in contracts to a single ad agency, GMMB, which is one of the top Democratic media strategists. (A portion of money in those contracts was used to pay media outlets for advertising space, and was not kept by GMMB.)

That seems more like a federal case, but the state of New York would also have jurisdiction for fraud occurring within the state. The Daily News noted at the time that the DA raid was part of a major-crimes unit investigation. Thus far nothing much has been said about the findings in the raid, but Newsweek said it was cooperating.

Or is it a business collapse at all? The NYDN reported this afternoon that Newsweek staff have another take. Employees believe firings are not a prelude to closure, but potentially revenge on the staff for their reporting on the raid and on a sexual harassment scandal involving chief content officer Dayan Candappa:

Chaos roiled the Newsweek offices Monday with the firings of the editor-in-chief, his number two and three reporters — possibly in retaliation for their unfavorable coverage of the company. …

Katz, Saul and Keefe had been writing about an ongoing investigation of the company by the Manhattan District Attorney’s office, the source said.

In addition to that investigation, Newsweek had to place Chief Content Officer Dayan Candappa on leave following allegations that he repeatedly sexually harassed a woman while a top official at Reuters. The reporters had written stories on that scandal as well.

According to the NYDN’s sources, CEO Jonathan Davis was angry over the reporting on these scandals. Roe and Li had told staffers that Davis would have to can them in order to fire the reporters, especially since they had edited and approved the stories. Well … Davis apparently took them at their word, if that’s the case. “This whole entire staff feels it’s clearly retaliatory,” the NYDN source told them.

On the other hand:

In addition, staffers at the International Business Times were not paid Monday as expected.

That sounds like an impending business failure, not an editorial housecleaning. It might just be a confluence of events crashing into each other, too — a business failure triggering a final paroxysm of vengeance before the end arrives.

If so, it’s a shame on several levels. Newsweek has earned a reputation for regurgitated trollery, even out-Saloning Salon at times, but occasionally featured decent journalism, including on the stories which allegedly got Davis’ goat. International Business Times did quite a bit better, offering a leftward slant but also breaking tough news stories on Hillary Clinton and other stars on the port side of politics. The best in both camps will eventually wind up on other platforms and bringing their journalistic impulses with them.

As for the rest, we may lose their trollery for good, alas. Where else will bloggers go to find out who rules “America’s Garden of D***s”? It’s looking bleak, my friends.