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Wed October 12, 2011
Amid Fresh Controversy, Dow Jones European Executive Steps Down
The hits keep coming for Rupert Murdoch's News Corporation: While the company is still dealing with the consequences of its phone hacking scandal in the U.K., yesterday the publisher of The Wall Street Journal's European edition stepped down.
The paper ran a story asserting Andrew Langhoff, managing director of Dow Jones & Co. in Europe, Africa and the Middle East, had resigned after "internal probe showed two articles in the paper's Special Reports section had been prompted by an agreement the circulation department struck with Executive Learning Partnership, or ELP, a Netherlands-based consulting firm."
But today, The Guardian, which has played a lead role in the phone hacking investigation, published a report that alleges Langhoff resigned in response to a Guardian investigation that uncovered a "bizarre" circulation scheme.
In short, what The Guardian says it found is that News Corp. was funneling money through European companies — ELP among them — to buy thousands of copies of the European edition of The Wall Street Journal.
At the scheme's height in 2010, The Guardian reports the arrangement was responsible for 41 percent of the European edition's daily circulation. The content deal was part of the larger circulation scheme, reports The Guardian.
For its part Dow Jones issued a statement saying the circulation scheme was legitimate and approved by the Audit Board of Circulation UK. Here's part of that statement via The New York Times:
"Dow Jones initiated the original investigation into the deals in question and the employees involved in late 2010. The circulation programs and the copies associated with ELP were legitimate and appropriate, and the agreement was shared with ABC UK before the deal was signed."
"At this point, we no longer have relationships with the employees or third parties directly involved in these agreements, and we continue to believe that these deals were valid."