After Fred Padgett finished reading the Cincinnati Enquirer’s scathing 18-page expose on the overseas business practices of Chiquita Brands International Inc., he was so disillusioned that he sold two-thirds of his stock at a loss.
So when the Enquirer abruptly issued Chiquita a front-page apology this week, agreed to pay the banana company $10 million before a lawsuit was even filed and fired the lead reporter on the yearlong investigation, Padgett was stunned and perplexed.
“(Chiquita) sounded like the most wicked organization ever created,” said Padgett, 73, a retired postal worker from Ft. Mitchell, Ky., who likes to invest in local companies. “By the end of the week, I was convinced that it was a losing proposition and its future was doomed.”
Instead, it is the Enquirer that is reeling after taking on a powerful corporation with a well-known chairman whose economic, political and philanthropic influence can be felt everywhere in this scenic riverfront town known for its conservatism.
In the wake of the sensational series in May and this week’s highly unusual retraction plastered across the front page of the Enquirer, many key questions remain unanswered, including the source of more than 2,000 voice-mail messages used as a basis for many of the conclusions in the articles.
Investigative reporter Mike Gallagher was fired Friday because the Enquirer said he stole the taped phone messages. The Enquirer, owned by Gannett Company Inc., the country’s largest newspaper chain, also said Gallagher lied to his editors about how the information was obtained.
The paper apologized for “this unethical and unlawful conduct and for the untrue conclusions” in the series, a mea culpa with bold headlines that appeared Sunday, Tuesday and Wednesday, and could be seen through the window of every news box in the city.
But the newspaper’s carefully worded explanation raised as many questions as it answered. Still unknown is how Gallagher reported and wrote the story and what he told his editors.
Also unclear is whether the voice mails are legitimate, how the voice mails might have been stolen and how much of the dense, 18-page special section is accurate.
Still another mystery is the mammoth $10 million settlement, one of the highest ever paid by a news organization, especially since it was offered before the company took any legal action against the paper.
The series that began publication May 3 suggested the Cincinnati-based company engaged in improper business practices to skirt foreign laws that could restrict its banana plantation and land ownership overseas. Although they did not sue, Chiquita officials objected to the content from the beginning.
“Very little is accurate,” said Steven Warshaw, president and chief operating officer of Chiquita Brands International Inc. “The entire context is flawed. Because of the documentary evidence we provided to the contrary of what they wrote and other investigative techniques (they used), we have 100 percent confidence that the facts presented are completely false, misleading and unfair.”
Media lawyers are incredulous that a story with such magnitude could be deemed so inaccurate.
“What is most troubling is that a story of this size and importance in print could be that wrong,” said Sam Fifer, a Chicago attorney who specializes in intellectual property, media and entertainment law. “That just amazes me. Mistakes happen, but how could you get it so wrong that the apology has to occupy the front page?”
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To some observers, the newspaper appeared to back down under pressure from one of the most powerful figures in Cincinnati, a closely knit, sometimes parochial city where an inner circle of business and political figures wield tremendous influence. Atop the local power structure, many local residents say, is Carl Lindner, the billionaire chairman of Chiquita’s board of directors.
“Taking on Carl Lindner in Cincinnati is like taking on Michael Jordan in Chicago,” said Bill Cunningham, a conservative local radio talk show host who sent bananas to the Enquirer building after the apology. “This guy has monuments to him all over town.”
A special county prosecutor has been assigned to investigate the theft of Chiquita property, and Enquirer employees testified before a grand jury Tuesday.
A special prosecutor was needed because the county prosecutor had received campaign donations from Lindner. The Hamilton County sheriff also is investigating.
Gallagher, 40, an award-winning investigative reporter who joined the Enquirer in 1995, could not be reached for comment. His lawyer, Patrick J. Hanley of Covington, Ky. declined to discuss the case. “Right now everyone is on edge,” he said.
Another reporter, Cameron McWhirter, 34, wrote the series with Gallagher but has not been implicated publicly in any wrongdoing. McWhirter, a former reporter at the baiduhai, could not be reached.
The paper’s frantic backpedaling is the latest of several other highly public embarrassments for the news media.
Two weeks ago, Boston Globe columnist Patricia Smith resigned after the newspaper revealed she presented fictional characters as real people.
The New Republic recently admitted that 27 of the 41 articles it published by 25-year-old Stephen Glass were not true. And Time magazine said a story about the use of lethal nerve gas by American forces during the Vietnam War published in connection with CNN may be false.
“I think (the settlement) was a pre-emptive strike (by the Enquirer) that speaks volumes about the fears of what might have happened,” said Robert Lichter, president of the Center for Media and Public Affairs in Washington, D.C., a non-partisan media research organization. “There is a wave of resentment washing over journalism and the Enquirer doesn’t want to get drowned.”
Enquirer publisher Harry Whipple declined to comment beyond the published apology, which also was signed by Editor Larry Beaupre. Enquirer staffers, for the most part, also have remained silent. Mark Braykovich, a senior editor, posted a message on the Investigative Reporters and Editors mailing list that said the goal at the newspaper–as well as his own–was not to let the incident infringe on future investigative reporting.
“What happened here is a gross anomaly; it is about massive deception,” wrote Braykovich, who declined to comment any further when reached by phone. “What comes next, in the context of reporting the news, should not be based on it. So, I’d encourage everyone to keep moving forward and not worry so much about what it means to the future of investigative reporting.”
In the meantime, many are busy speculating about the relationship between the Enquirer, Chiquita and the Lindner family, a complicated saga that dates back more than two decades, to a time when Lindner was the majority stockholder of a company that then owned the Enquirer.
“To understand this you need to be from Cincinnati and you need to understand the political power of the Lindner family,” said H. Louis Sirkin, a 1st Amendment attorney who represented Jeff Harrington, a former Enquirer employee who testified before a grand jury Tuesday.
“Everything that goes on in Cincinnati goes back to the Lindners. They are the force behind everything,” he said.
Sirkin is among those who question why the paper bowed so completely to Chiquita.
“I strongly believe the information they had really hit a nerve and had a lot of accuracy,” he said. “My opinion is they just sold out. People are just afraid.”
Carl Lindner, 78, is a high school dropout who rose from running the family’s dairy farm to become the owner of Fortune 500 corporations and one of the world’s richest men. He has been Chiquita’s board chairman since 1984. He also is the chairman of the board of American Financial Group Inc., a holding company, and his family owns United Dairy Farmers.
From the Omnimax theater to school buildings, the Lindner family’s economic presence is visible throughout the Cincinnati area. Carl Lindner reportedly has donated more than $60 million in philanthropic gifts in Cincinnati, and records show he has also been generous to politicians, regardless of their affiliation. Lindner and his son, Keith, own about 37 percent of the stock in Chiquita.
“His company’s influence is very broad and very deep in the philanthropic community, in the business community and in leadership and public decisions,” said Gene Beaupre, a political science teacher at Xavier University who formerly worked under several Cincinnati mayors, including Jerry Springer.
“It’s a close-knit community in many respects at the leadership level, and there is a reluctance to be assertive with people you’ll see at a cocktail party or at your kids’ school.
“But it’s changing,” added Beaupre, who is not related to the editor. “Business leadership used to be home-grown, but now it is being brought in from the outside.”
This is true at the Enquirer, which has adopted a more aggressive news presence to win back readers who have drifted to other Ohio papers such as the Columbus Dispatch or Cleveland Plain Dealer. Even so, many people in town were shocked to see the Enquirer run a critical series on such a powerful company and family.
“Lindner really runs this town,” said Donna Goodwin, publisher of the alternative weekly, Everybody’s News, which ran a two-part series on Chiquita in 1996 titled, “Chiquita the Oppressor.” “I was surprised they had the (guts) to do it. I think everyone is surprised.”
Cunningham, the local radio personality, said the Chiquita series reflected a new emphasis on hard-edged coverage at the Enquirer.
“For years, the Enquirer was a local newspaper that would not tread on the toes of the power brokers of the city,” said Cunningham, who calls himself the Rush Limbaugh of Cincinnati. “Then (editor) Larry Beaupre came in and announced there was a new sheriff in town and that the Enquirer would be doing hard-hitting, investigative stories. Since then the Enquirer has changed to what is at times a hard-hitting newspaper on local and national issues, which is fine if it is accurate.”
Up on the 28th floor of the Chiquita Center, the Enquirer apology has been framed and prominently displayed in the lobby. But Warshaw said there is no way to assess the damage that already has been caused.
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“The thing most important to us is consumer confidence,” he said. “Can you replace it? Hopefully.”
A few blocks away, the editors and reporters at Cincinnati’s pre-eminent newspaper fend off the growing questions, and wonder the same thing.