EDITOR’S NOTE: During the preparation of this article, suit was filed in Common Pleas Court by reporter Harry Karafin against the publisher of Philadelphia Magazine and the authors of this article. Through his attorney Albert Gerber, Karafin charged, among other things, that the defendants illegally obtained copies of his Federal income tax returns and were preparing an article that would include information "illegally obtained" from his tax returns. He asked that the defendants be enjoined from printing the article. The defendants opposed the suit. Shortly after the filing of the suit, Karafin was questioned by his superiors at the Philadelphia Inquirer. The next day, the Newspaper Guild of Philadelphia, of which he was not a member but under which he worked through a contract arrangement, was notified that his employment had been terminated. It was not the purpose of this article to bring about Karafin’s disassociation with the Inquirer, but merely to reveal some aspects of his career that might have a bearing on a major newspaper’s responsibility as a dynamic force within an open society. Philadelphia Magazine will stand by its right to reveal such information to the public.
A FEW YEARS ago an organized ring of local racketeers was raking millions of dollars from a series of fraudulent business bankruptcies. The fantastic complexity of the ring’s operations — controlled by top underworld kingpins thorough several echelons of fast-moving con men — had long kept it immune from criminal prosecution. In fact, When PHILADELPHIA MAGAZINE began its own investigation in April of 1964, the ring’s existence was still considered classified information and very few people, outside of certain Federal and local law enforcement officials, the details of its illegal manipulations.
Among those who did know was the Philadelphia Inquirer’s award-winning veteran reporter, Harry J. Karafin.
Karafin had been a regular visitor to the bankruptcy courts during hearings for the firms involved in the frauds. Federal officials recall that he questioned them frequently and appeared anxious to keep abreast of any new developments in their frustrating efforts to pin down the ring’s illicit operations. In fact, one insider even suggested, innocently enough, that PHILADELPHIA MAGAZINE abandon its investigation because, he said, he knew that Karafin had been working on the story for some time and was probably going to scoop the magazine with an expose in his daily newspaper.
But PHILADELPHIA MAGAZINE continued digging and rushed the article on the fraudulent bankruptcy schemers into the May, 1964 issue. That prodded the U.S. Attorney’s office into stepping up its own investigation and subsequently prosecuting the ring’s key operators, including the brainy organizer, a 600-pound hillock of a man named Sylvan Scolnick.
Although they did not know it at the time, the editors of PHILADELPHIA MAGAZINE need not have worried about being scooped by the Philadelphia Inquirer. Its ace reporter Harry Karafin never did write an expose about the bankruptcy fraud ring.
Perhaps it had something to do with his journalistic integrity. Perhaps he thought he was much too close to it to be objective.