Lenfest and Katz Criticize Norcross in E-mail Appeals to Newspaper Journos

The battle over Philly’s newspapers has become a fight for the hearts and minds of the journalists themselves.

inquirer box

[Update 3:08 pm with comment from Howard Gensler]

It’s official: The newspaper war in Philadelphia has become — in part — a battle for the hearts and minds of journalists at the Inquirer, Daily News and Philly.com.




Those journalists on Friday received memos from Gerry Lenfest and Lewis Katz, members of the “minority faction” of owners challenging the firing of former Inquirer editor Bill Marimow. The emails were distributed two days after journalists received a letter from George Norcross and William P. Hankowsky describing the issues facing the company and how his group planned to address them.

It’s unusual for an ownership battle to play out in a company’s workforce — the Newspaper Guild has offered to broker peace, but has otherwise insisted it will remain neutral — and it has raised concerns about both workplace morale and the continuing credibility of the news organizations.

“I think it started with George Norcross suggesting he was going to meet with small groups to pitch his story,” said Christine Reimert, a spokeswoman for Katz and Lenfest. “That can’t be one-sided.”

“The reason why any of this is public is because Lewis Katz and Gerry Lenfest decided to sue the company,” said Daniel Fee, a spokesman for Norcross’s faction. Norcross’s group of owners “thought it was incredibly important that employees knew the truth, and to provide them with more information about the performance and direction of the company than they’ve had before.”

Howard Gensler, president of the Newspaper Guild, said Friday afternoon that "owners always have a right to speak to their employees" but added: "At this point, however, I wish all the owners would stop communicating with the Guild and/or its members and either solve this themselves or let the court figure something out."

"I find it constantly amusing that after years of trying to get ownership groups to listen to us to no avail, now suddenly our input is important," Gensler said via email. "It wasn't important when we argued against Saxotech, the online strategy, filed grievances against Marimow over newsroom job changes and questioned the elimination of one of the Inquirer editorial pages, or when these very same owners took $6 million out of our paychecks in February. ... This is a procedural battle for power based on an ownership agreement among industry titans accustomed to getting their own way - and it only divides our membership to pretend our opinion matters."

And, he added: "Every day this goes on it has an adverse affect on our membership because people are working under added fear and pressure and their credibility is questioned because of ownership claims from both sides that the owners are meddling in the news coverage."

It was clear the duel was creating some frustration among reporters, photographers and editors at the news organizations.

“When they write the book about the current situation, it should be done as satire,” Gar Joseph, assistant managing editor of the Daily News tweeted in an apparent reaction, moments after the Katz and Lenfest letters were distributed. “It will write itself.”

Dueling letters

In their letters (printed in full below) Katz and Lenfest accused Norcross’s group of, among other things, improperly interfering with the journalistic and editorial decisions of the news organizations; presiding over the bottoming-out of national advertising at the newspapers; and also presiding over a precipitous fall in traffic at Philly.com — though they pointed out that circulation at the papers had otherwise increased under Marimow’s stewardship.

“For any newspaper or media outlet to be credible, it must be viewed as truly independent and free of interference,” Lenfest wrote. “This integrity is what is at stake in our lawsuit.”

Insiders familiar with philly.com practices acknowledged the numbers had changed — but said that reflected a change in how visits were counted. Under the previous regime, a person viewing (say) a photo gallery of the Philly Naked Bike Ride could count as much as 20 or 30 visits, depending on how many photos they viewed. Under the new counting, one person looking at one photo gallery counts once. Such a change in counting helps shift editorial decisions for the website, it was explained, making the site less likely to rely on Lingerie Football photo galleries as a source of traffic.

Fee said that Lenfest and Katz had sat in meetings and had been made aware of those counting changes. “It raises real questions about whether they understand the business,” he said.

In their Wednesday letter, Norcross and Hankowsky pointed out that the newspapers had collectively lost substantial revenue and circulation over the previous decade. He denied meddling in the news/editorial affairs of the newspaper, saying publisher Robert Hall was empowered under the ownership structure to make the decision to fire Marimow.

Increasing revenues, they said, will help increase the amount of local journalism the papers and Philly.com are able to do.

“Let's figure out a way to have more people buy the Inquirer every day and on Sundays, buy the Daily News every day, advertise in both papers, monetize the websites and advertise on the websites,” the pair wrote. “That's all we’re trying to do.”

Even the act of sending the emails has become controversial. Katz and Lenfest intended their letters to be distributed in a single document, but journalists received them as two documents.

All parties are expected back in court on Wednesday for a hearing on whether Marimow will be restored to his old job.

The full memos below:

______

To: All IGM Employees

From: H. F. Gerry Lenfest

Dear IGM Employees:

Over the last few weeks you have read repeated accounts of the disagreements among the owners of this company. I know that this is difficult to witness because in the end it is your livelihood that is at stake. But I also believe that there is an important principle at stake – a principle that affects how you do your job every day and a principle that is at the heart and soul of a free press. This principle is independence. It is important not only to you but to every citizen of our community.

For any newspaper or media outlet to be credible, it must be viewed as truly independent and free of interference. This integrity is what is at stake in our lawsuit. Over the last several months, this principle has been seriously eroding at The Philadelphia Inquirer. My record will substantiate that I am not a litigious person, but in the end, I and Lewis Katz agreed to file a lawsuit at our expense to defend the integrity and independence of our Philadelphia newspapers.

Bill Marimow was fired because he resisted the interference of George Norcross in the editorial and journalistic decisions of the Inquirer. While there are countless examples of Mr. Norcross’ interference, among the most egregious was his pressuring of Bill Marimow to purge the Inquirer of opinion on the basis of research conducted by a polling firm with strong ties to his political organization. However, I believe and the recent daily circulation numbers (up by 8.9%) now prove that Bill Marimow is an outstanding editor and leader of The Philadelphia Inquirer. His wrongful termination was the result of his resistance to interference. He stood up for the principle of independent journalism and I fully support him.

Moreover, in the course of his aggressive campaign to seize exclusive control of the company, Mr. Norcross has engaged in a pattern of misrepresentations and distortions. For example, in repeatedly asserting the interests of the “majority” of shareholders, he ignores that the partnership agreement – an agreement that he entered into voluntarily - requires that Mr. Norcross and Mr. Katz agree on all major decisions affecting the company.

Now, how do we move ahead from here?

I believe that the best path to future success is to provide the resources to strengthen our core print products – The Philadelphia Inquirer and Daily News as well as philly.com. At the same time, it is critically important that we commit ourselves to mastering all the tools of the multimedia world so that our content flows to readers through the iPad, the iPhone and all other devices. Whether people get our news and information in print or online, this is what draws readers. Credible content will attract new readers which in turn attracts new advertisers. To that end, I am committed to finding the best new publisher available – one who can effectively increase our advertising revenue which is now at the bottom of our peers and our circulation online and in print while also supporting the principle of independent journalism.

Under Bob Hall’s failed leadership, we have dropped to last place among the nation’s top newspapers in overall and national advertising. I'm told that our philly.com page views have fallen from a high of 90 million page views per month in 2009-10 to between 50-60 million page views per month now. Clearly, we cannot continue to manage the company with a part-time publisher and a philly.com “president” who is a full-time resident of San Francisco.

I know that yesterday you received a communication from George Norcross. The misstatements in that email are too numerous to mention here but let me suggest to you that in my experience, if someone does not tell you the truth on small things then how can you trust him to tell you the truth on the big issues?

Finally, I ask you to look around and consider whether you think things are getting better given all the claims in Mr. Norcross’ email. If not, I hope that you will share your ideas with me on how we can improve this company. As a person who has chaired and invested in many of our successful civic institutions in Philadelphia, I look forward to working with you to do the same for these great Philadelphia newspapers and Philly.com.

Enough is enough. It is time to reshape the future of this company in a way that respects independent journalism, promotes the excellence of our newspapers and philly.com and advertising revenue and is supported by owners who live up to their pledge of non-interference.

I look forward to hearing from you. You can contact me at gerry@lenfestgroup.com

Thank you very much.

Sincerely,

H. F. Gerry Lenfest

__________

To: IGM employees

From: Lewis Katz

It’s time to tell the truth.

Over the past few weeks I have remained relatively quiet in the hope that our current management impasse would get resolved and that Bill Marimow would be restored as editor. But I cannot remain silent any more.

Let me first tell you why I entered into this partnership. I believe in strong, independent journalism, and I trusted that my partners did as well. Now, after just 19 months of ownership, I understand that not all of the partners entered into this agreement with the same motives.

I believe in an independent and free press, and that’s why I filed the current lawsuit to defend that freedom and to protect my right to participate in the management of the company, including the right to approve the hiring and firing of The Inquirer’s editor.

I also want to explain to you how our partnership agreement is structured, how my right to participate in the management of the company has been violated, and what I am trying to accomplish in court because there have been numerous misrepresentations. No one owner of the company has a majority share. In fact, the stock ownership is more or less irrelevant to the company’s governance.

George Norcross and I are the sole members of a two-person management committee and our agreement is structured so that both members of that committee must agree for action to be taken on all business and operational decisions. I entered into this agreement to be a co-manager of the company. Over the past 19 months, however, I have been elbowed out of its management and now Mr. Norcross is using company resources to hire lawyers to fight against me. I am simply asking the court to restore my rights to co-manage the company as our management agreement stipulates.

Saying that Mr. Hall had the authority to fire Mr. Marimow without consulting with the two of us is simply ridiculous. Mr. Hall knew my position on this subject and promised that he would give me advance notice before any action was to be taken. He fired Mr. Marimow early on the morning of Monday, Oct. 7 without notice to Gerry Lenfest or me.

Now, let me tell you how the business is really doing. As you know, advertising and circulation are the fuel of our business. We need both to be performing strongly if we are to be successful. No doubt, you saw last week’s circulation report, which stated that The Inquirer’s daily circulation was up by 8.9%. This is a major turnaround and one that I credit directly to Mr. Marimow and The Inquirer staff.

The advertising story is very grim and must change. We are currently ranked dead last among top U.S. newspapers in terms of overall and national advertising revenue. In fact, in a recent memo of corrective action by Mr. Hall, he pointedly omitted any reference to advertising sales for obvious reasons. There is no way to sugarcoat it. We must sell more advertising. I believe that a new, strong and experienced publisher can turn this situation around, particularly in light of our recent positive circulation increase. We must capitalize on this opportunity now.

Another important measure of success is philly.com page views and our digital strategy. Unfortunately, you have not gotten the full truth on this one either. In addition to a part-time publisher, we also have a part-time president of philly.com who is not an employee of the company. Our philly.com “president” is a consultant and a full-time resident of San Francisco, and our page views have fallen from 90 million per month in 2009-10 to 50 to 60 million per month today. Clearly, philly.comneeds a full-time president who works in Philadelphia.

I believe that the current strategy of giving away Inquirer and Daily News content on philly.com undermines and cannibalizes the two newspapers’ paywall-protected sites. Who wants to pay for content that they can get for free onphilly.com? I also believe that readers come to philly.com for news and information primarily and that we need to be investing more in news content than in pure entertainment.

My management philosophy has always been to hire great people and let them do their jobs. I note with sadness the recent resignation letter of Mike Lorenca, which speaks to the lack of his ability to do his job independent of interference. When the facts come out, you will see who in fact interfered with his ability to do his job.

I would be remiss if I also didn’t comment on the scurrilous charges leveled against Mr. Lenfest yesterday. It is unfathomable that a man of his stature who has given away a billion dollars to philanthropic institutions would be accused of fabricating a story for his own self-interest. I sincerely regret that this legal battle has devolved into these tactics.

I have enormous respect for each of you and the job that you do every day. I am relying on the court to restore my right to co-manage the company so that Mr. Marimow can return as editor and we can find a dynamic new publisher who can lead the company into the future – a future characterized by independent journalism, growing advertising revenue and continued increases in readership, online and in print.

Sincerely,

Lewis Katz

__________________

From: Block, Mark

To: All IGM Employees; All Philly.com Employees

Subject: F.Y.I. Message from George E. Norcross, III & William P. Hankowsky

 

To All IGM Employees:

 

Over the past few weeks you've been reading a good deal about what has

been going on with the ownership of the paper. Let us take a few

minutes and give you our take.

 

In fiscal year 2000, Philadelphia Newspapers Inc. (PNI) was a business

that grossed $604 million. We’re not telling you any secret. At that

point the company was owned by Knight Ridder and you can look up the

figure. In 2012 this company grossed a little more than $220 million.

You can do the math as well as we can but that is a drop of almost 2/3

in revenue.

 

A little more than ten years ago this company had over 3,700 full time

employees. Today that number is approximately 1,700.

And more than ten years ago, 1,050,000 Sunday Inquirers were sold each

week. The Inquirer daily circulation was over 500,000. And the Daily

News was selling 200,000 copies per day. You're probably even more

aware of what the numbers are at this moment - a devastating drop in

each of these three editions.

 

When our group bought the papers and the website, the first question

we asked when we saw all these numbers was ... why? Certainly if you

own a business or if you are an employee of a business, or - in the

case of public companies - a shareholder of a business, and the

revenue of that business dropped every year for 13 straight years

(with one exception) you would be very curious and would be anxious to

find out the answers.

 

We know many of these answers ... newspaper readership around the

country is declining, people are getting their information from other

sources, etc. But that still left the question about why people in the

Delaware Valley were not purchasing the Daily News and Inquirer with

the same frequency they used to even though philly.com was growing

significantly.

 

We suggested to our co-owners and the senior management of the papers

that we undertake some significant market studies to try to find out

some answers about our situation here. Over the past year and half

we've done that. We've surveyed thousands of people in the Delaware

Valley and we've conducted scores of focus groups.

 

And while there's no magic bullet in what the survey results and the

focus groups showed, one thing clearly came through: what people want

from the Philadelphia Daily News, The Philadelphia Inquirer and

philly.com is an emphasis on coverage of local news. Of course that

doesn't mean that you completely exclude national and international

coverage from the papers. But, unfortunately, many people we surveyed

are turning to other outlets, a problem journalism outlets across the

country face. For those whose emphasis is business, they're buying The

Wall Street Journal. For those who want international coverage,

they're buying The New York Times. But if you want local coverage of

Philadelphia and the suburbs on both sides of the Delaware River you

turn to us.

 

The research was pretty conclusive - both quantitatively and qualitatively.

Unfortunately, we've lost some readers to publications outside the

Delaware Valley. Stand at a Wawa on a Sunday in Lower Merion, Abington

or Ocean City, and watch people come out with just the Sunday New York

Times... not the Times and the Inquirer. We have also lost a lot of

readers to the local papers in the region. The Delaware County Daily

Times covers high school sports in that county in a much more in-depth

way than we can. The same holds for lots of other areas around Philly.

And even though the circulation of those papers has decreased, you can

stand at a Wawa in Cherry Hill or Media and watch people walk out with

the Camden Courier Post or Daily Times on a Sunday but without an

Inquirer. (In a great profile of Donald Graham in the New Yorker a

number of years ago, he said whenever a local beats a metro, it's very

hard for the metro to get the readers back.)

 

What's happened among the owners is that some of us have pushed for

change to try and do something to stop the bleeding in advertising,

circulation and revenue because the business model is not sustainable.

These might be cold numbers on a ledger sheet: $604 million gross

revenue in 2000. $510 million gross revenue in 2003. $443 million

gross revenue in 2007. $291 million gross revenue in 2010. $220

million gross revenue last year. What those numbers mean is that

people have lost their jobs. Not just in the newsroom, but people who

deliver and print the papers, administrative staff, and people who answer

phones.

 

That's the tragedy of this Philadelphia business. It's the loss of

jobs - both white collar and blue collar. Some have discussed the

papers and philly.com as part of a “public trust”. We agree. But it

is also a business and must be thought of as one or else it will go

out of business as it was in danger of doing before we purchased it.

So our fight is this. Let's try something different. Let's try to make

some changes. Let's see if any changes work and we can stop the

revenue decline and job losses here at this company. Let's figure out

a way to have more people buy the Inquirer every day and on Sundays,

buy the Daily News every day, advertise in both papers, monetize the

websites and advertise on the websites.

 

That's all we’re trying to do.

 

W’e’re not trying to interfere with the journalism in the newsroom. We

still believe the Daily News and Inquirer can win Pulitzer Prizes in

the future covering Harrisburg and City Hall and Atlantic City and the

County Courthouses and everything in between. There's plenty of stuff

going on here for great journalists to continue doing what you've been

doing and producing great journalism.

 

But it won't matter if this company keeps losing revenue because that

means we lose jobs.

 

That's the nature of this dispute among the owners.

Let us also make this clear: we respect Lew Katz and Gerry Lenfest,

but we have very different ideas of how best to ensure the company’s

survival going forward and what it will take.

 

We don't want to interfere with the newsroom. We made that pledge

along with the other owners when we bought the papers. We have one

main job which the majority owners have tried to focus on - to improve

the operations of the company and increase revenue, including bringing

advertising into this company. And we have made a pretty good start.

The great thing about our situation right now is that we don't have a

$500 million bank loan we have to pay back and some banker breathing

down our necks every month for their payment. We don't have hedge

fund people screaming at us because they want their 20 percent return.

We have local investors who are willing to continue to grow the paper

without having to worry about some monthly bill that has to be paid.

But not withstanding that, we can't keep going down the same path.

Thanks for hearing us out.

 

We have provided our responses below to frequently asked questions.

George E. Norcross, III & William P. Hankowsky

 

Frequently Asked Questions About Interstate General Media, the

Inquirer, the Daily News, and philly.com

 

Q. What is the status of Interstate General Media and the journalism

outlets it owns?

A. After more than a decade of turmoil, Interstate General Media, the

new owner of the Inquirer, the Daily News, and philly.com, has put the

company on the path to profitability. When IGM purchased the three

journalism outlets in early 2012, the company was losing almost

$50,000 a day, every day. While many were asked to make sacrifices in

recent years, the improving condition of the company could not have

been achieved without those sacrifices and the hard work, commitment

and talent of the employees of the company. But we all must recognize

there is more work to done as the company continues to transition to

the new age of print and digital media, a process that will take the

ongoing commitment, hard work and talent of staff and leadership.

 

Q. How is/are the Inquirer/Daily News/philly.com doing?

A. The combined reach of the three entities continues to far outpace

other media properties in the region and market research reveals they

do not compete for readership. Together, the Inquirer, the Daily News

and philly.com reach an average of 1.95 million readers each week,

more than double the next closest media property. The Inquirer is the

largest newspaper – by far – in the region, with the Daily News at

number two.

While print publications continue to struggle everywhere, we have

focused on rebuilding single issues sales for both papers and believe

we have turned a corner, with subscriber and readership loss leveling

off. Since substantial changes were made at the end of last year, home

delivery revenue has been increasing in a fairly substantial way. We

are investing resources and believe we have the appropriate leadership

to do what needs to be done: guaranteed delivery every day, on time,

without interruption.

Unfortunately, as other print publications have seen, the marketplace

continues to decline for advertising for the papers. We’ve rebuilt

the entire advertising apparatus and recruited new leadership and

talent. It’s been a difficult process, but we are beginning to see

positive results, obtaining and growing in some case new or expanded

contracts with, among others Comcast, Independence Blue Cross and

Susquehanna Bank.

We also recognize that how people consume news continues to change.

The new websites for the Inquirer and Daily News are finding an

audience and an amazing 105,000 of our 270,000 daily subscribers are

enrolled and receive daily via email the Inquirer or Daily News. That

is a huge percentage enrollment in less than a year.

And philly.com is and will remain the largest – by far – media website

in the region and continues to see massive growth of unique users, up

over a million in just the last two years (from 2.6 million in 2011,

to as many as 4.1 million visitors monthly in 2013 according to

ComScore). The website is one of the 10 largest newspaper affiliated

websites in the country.

 

Q. What changes or improvements are responsible for the turn-around of

the company, and what will be done going forward?

A. In addition to the ongoing improvements listed above – the focus on

single issue sales and home delivery, with a rebuilt advertising

apparatus – we have implemented a disciplined pricing model that

values the journalism our company produces. In essence, if you want

to buy the Inquirer or the Daily News, you are going to pay a fair

price.

Before we purchased the papers and philly.com, the company was giving

away, for in some cases, pennies, or a dollar a week, our

publications. That is a foolish strategy that devalues our journalism.

A year ago we implemented a pricing structure that was based on full

price for our product with a modest offer of 50 percent off for 8

weeks. That has, of course, caused some subscribers to leave because

they didn’t want to pay for the journalism we produce. Overall, it

has been met with little resistance.

The desire – or more accurately, the need – to properly value our

journalism is a key reason why we established paywalls for the two

papers. As mentioned above, the two sites are finding an audience and

we will continue to work to build them.

Finally, and not to diminish its importance, the redesign and

re-launch of the Inquirer, along with a new advertising campaign “More

You”, has been met with strongly positive impressions by our readers

and advertisers. Although it took too long, it is something of which

we are all very proud.

 

Q. What does the improving condition of the company mean for readers

and IGM staff?

A. For readers, it means a continued focus on the local coverage they

need and want as well as improved customer service and delivery. For

our employees, there are numerous ways they will benefit, beginning

with a better work environment when the company reaches profitability.

We have already invested millions of dollars in capital investments

at the production plant and the company’s new headquarters at 801

Market Street. As soon as feasible, we anticipate that the Inquirer,

Daily News and philly.com will, for the first time in years, add – not

replace, but add – reporters in the field specifically focused on

local coverage.

 

Q. In the last month, there have been two lawsuits filed by the owners

of IGM against each the company and each other. What are those

lawsuits about?

A. As you know, on October 7, 2013, Publisher Bob Hall removed Bill

Marimow as editor-in-chief of the Inquirer. The decision to remove

Mr. Marimow was one made by Mr. Hall and Mike Lorenca, the Associate

Publisher, after months of discussion with Mr. Marimow and the

ownership of the company about the direction of the paper. The

publisher has traditionally had the ability to remove an editor,

something Mr. Marimow publicly recognized when he was removed by a

previous publisher at the Inquirer and one at the Baltimore Sun.

That same week, two of the minority shareholders, Lewis Katz and Gerry

Lenfest, filed suit against the company and Publisher Hall alleging

that Mr. Marimow’s termination was not allowed under the terms of the

IGM operating agreement. Their suit alleges that Mr. Marimow’s

dismissal required the approval of two members of the Board of

Directors (specifically Managing Members Lewis Katz and George

Norcross). Their suit asks that Mr. Marimow be reinstated and that Mr.

Hall be terminated.

On October 17th, Managing Member George Norcross, through his holding

company, General American Holdings, Inc, filed a complaint in the

Court of Chancery of the State of Delaware against Intertrust GCN, LP

(Lewis Katz’ company) and Mr. Katz. The suit was filed in Delaware

because both IGM and Intertrust GCN are Delaware companies. In his

suit, Mr. Norcross asked the Court for three things:

- "Declare that Katz cannot prevent IGM’s Board from taking the action

necessary to enable IGM respond to the litigation he himself

instigated against it."

- "… a declaration that under the LLC Agreement controlling IGM’s

governance and management, Hall had every right to terminate Marimow’s

employment and Katz cannot meddle further with that decision."

- "end all other efforts by Katz both to exercise his rights under the

LLC Agreement to the detriment of IGM while encumbered with an

unavoidable conflict of interest.”

On Thursday, October 31st, Philadelphia Judge McInerney issued a

ruling keeping the jurisdiction of the case in Philadelphia.

Bill Ross, the Guild president, has offered to mediate any

negotiations if both sides are willing. All cases are pending.

 

Q. Didn’t the owners pledge to not interfere in the journalistic and

editorial operations of the paper(s)/philly.com?

A. Yes. Shortly before the owners of IGM purchased the papers and

philly.com, more than 200 current and past employees of the three

outlets signed a petition stating that any new owners “must guarantee

that the integrity of our reporting will never be sacrificed….”. The

owners of IGM pledged – publicly, in writing, and in their operating

agreement – to remove themselves from editorial and journalistic

decisions of the company. At its heart, this case will hinge on the

interpretation of the non-interference clause in IGM’s operating

agreement. We believe this language is clear that the owners were to

separate themselves from the journalistic and editorial operations of

the papers and philly.com.

 

Q. One of the allegations the lawsuit makes is that Bob Hall did not

have the authority to fire Marimow because he does not have a

contract. Does he?

A. Bob Hall is the Publisher and CEO of Interstate General Media, with

all the responsibilities that entails. His name appears on the

masthead of the papers every day, as it has been for more than a year.

All owners have recognized Mr. Hall’s role repeatedly.

 

Q. Another of the allegations in the Katz lawsuit is that there was

not sufficient notice given to Board members before Marimow was

removed. Is that correct?

A. No. There were emails written to Board members and meetings held

months before Mr. Marimow’s termination that made it clear that

Messrs. Hall, as publisher, and Lorenca, as associate publisher, were

not satisfied with Marimow’s performance and his failure to follow the

path planned for the Inquirer. It has been documented that Mr.

Lenfest told Mr. Marimow that he would be dismissed if he didn’t

follow the Hall/Lorenca plan. The majority owners, who together

control 58 percent of the company and 4 of 6 directorships, have stood

firmly behind the work of both Hall and Lorenca.

 

Q. Didn’t Katz and Lenfest file a separate injunction against the

company after the Norcross suit?

A. Yes. They sued to get a court injunction prohibiting the company

from moving forward with the investigations into Mr. Katz’ efforts to

influence the journalistic and editorial operations of the papers and

philly.com.

 

Q. What do these lawsuits mean for the future of the papers/philly.com?

A. The lawsuits are not expected to impact the operations of the

papers and philly.com, although they will, at a minimum, cost the

company hundreds of thousands of dollars that could be put to better

use improving our services and coverage. The majority shareholders of

Interstate General Media are committed to the continued production of

the quality journalism our readers expect and rely on from the

Inquirer, Daily News and philly.com. In fact, the termination of Mr.

Marimow as Inquirer editor, from which the lawsuit resulted, was a

journalistic and editorial decision Publisher Hall and Associate

Publisher Lorenca made in large part in the pursuit of strengthening

the journalism produced by the Inquirer.

 

Q. There is a great deal concern about whether philly.com is using

content from the Inquirer and Daily News while also competing with

them. How can that be?

A. Upon its purchase, the company began a substantial survey and

planning process to learn more about who our readers are and what they

want. It identified challenges for each entity, but it also revealed

one piece of extremely good news: we discovered that the three

journalistic entities, they appeal to different audiences and do not

materially complete with each other for readership. Their readership

is largely different, and therefore so too can be their focus be

different. Moreover, we have learned that philly.com is a key outlet

for re-engaging readers who left reading our papers years ago.

It is true that in addition to material from its own news gathering

division and partners across the Internet, philly.com publishes

content from the Inquirer and Daily News. As organizations under the

same parent company – IGM -- the newspapers and philly.com have long

been able to utilize content from one another. Just like philly.com

will use content from the newspapers, there are occasions that the

Daily News or Inquirer will utilize something that may have first

appeared on philly.com. More than 85 percent of philly.com’s page

views are either from their own original content or non-Inquirer/Daily

News partner content.

 

Q. One of the issues that Katz and Marimow supporters raise is the

involvement of Lexie Norcross, the daughter of George Norcross, in the

operation of Philly.com. What is her role there?

A. The leader of philly.com and digital strategy is Robert Cauthorn.

Currently the position of editor in chief is open, and the company

needs to hire one.

Lexie Norcross serves as a VP of Digital Operations and Corporate

Services. She does not control the editorial decisions of the

website.

In Lexie’s role as VP of Digital Operations and Corporate Services,

she not only works with the executive staff of IGM, but serves as the

liaison between advertising and the product and content groups, making

sure the correct people are looped in as we implement ad positions or

develop proposals for new advertisers. She is a coordinator of large

digital advertising pitches and/or sponsored content (i.e. the Shore

guide) to make sure the people and departments with responsibility of

each piece are moving along on schedule and that any collateral

elements are in place. Lexie has daily oversight of the budget and is

responsible for keeping tabs on the expense budget. As most know,

Lexie coordinated the entire move from Broad Street to 801 Market

Street and continues to be involved with corporate services, which

includes the management of the facilities at 801 Market Street.

Be respectful of our online community and contribute to an engaging conversation. We reserve the right to ban impersonators and remove comments that contain personal attacks, threats, or profanity, or are flat-out offensive. By posting here, you are permitting Philadelphia magazine and Metro Corp. to edit and republish your comment in all media.

  • Pat

    Norcross can’t stop h

  • Pat

    Norcross has been up to no good again. He wants to control dictate meddle and Fire people who have integrity. He’s been doing this in South Jersey and throughout the state. He thinks he’s bigger than G

  • Tonya

    George Norcross is a Professional Liar. He is a manipulator and his is highly misleading. Don’t believe a word out that CROOKS mouth or his daughter lexie who is using techology recklessly and illegally. Norcross want to control comments and thing said about him and his friends, but he as no problem having negative things said about those who are not with him. He control aol patch and that is an online compromised illegal internet site that should be under federal investigation. ONE SIDED BIASED NEWS REPORTING. Before my friend died, he told me everything about aol patch and it isn’t good. It’s illegal and Norcross is in the midst of it all.

    I bet norcross has already made a deal to buy this and link it up so he can continue to damage and reckless destroy people digitally. We have the full scoop on his dirty intentions and we can prove it on how he used bribes and money to invest in advertising for a failing patch that he uses as a vehicle to write biased one sided stories and has reckless reporters and editors write stories the way George Norcross tells them to. They have damaged and destroy innocent people because George told them to. These people stood for what was right just like Bill MARIMOW.

    http://www.usnews.com/news/articles/2013/11/05/aol-may-sell-patch-or-deepen-cuts

  • Paul

    George Norcross has no integrity and is one of the most unethical persons I’ve known. He’s had a long run at breaking the law and getting away with it. The problem in NJ may lie in the leadership and the Federal Government making deals on winning elections rather then enforcing the laws. We are all scratching our heads to why Christie never had Norcross convicted. Norcross thrives on placing fear in those he wants to harm by threats and sicking his powerful lawyers on you to instill pain and frustration. George wants to rally and manipulate those at the inky to participate in his criminal activity. He’s a political crook ed spin master. Norcross was the Snake that Manipulated Eve. We are so glad people are seeing the Demon George Norcross for what he really is, a snake.

  • Paul

    UNTOUCHABLES GROUP SENDS LETTER TO U.S. ATTORNEY GENERAL
    August 8, 2005

    Attorney General Alberto R. Gonzales
    U.S. Department of Justice
    Office of the Attorney General
    950 Pennsylvania Avenue, NW
    Washington, D.C. 20530-0001
    Phone: 202-353-1555

    Dear Mr. Attorney General:

    We write as attorneys, elected officials, former elected officials, law professors and former prosecutors to ask that you take specific and critical measures to investigate and prosecute wide-spread criminal political corruption in the State of New Jersey.

    We need not recount the massive violations of federal law that have already occurred in New Jersey. The efforts by lobbyists and contractors to bribe politicians at all levels of New Jersey government in return for government favors — in violation of several federal statutes — have been the subject of numerous investigative series in virtually every publication in the state as well as in national media outlets like the New York Times, Sixty Minutes and The Philadelphia Inquirer. Academic political scientists of national repute routinely opine that New Jersey is the most politically corrupt state in the nation.

    The U.S. Attorney for New Jersey openly admits that when he attends meetings with U.S. Attorneys from around the country, that he is approached by his fellow prosecutors who express disbelief and outrage by what they read occurring in New Jersey. Dozens of low-level New Jersey officials and lobbyists have gone to jail.

    Most incredibly, as detailed below, a United States District Court Judge, sua sponte, after the conviction of executives of the New Jersey-based Commerce bank in a federal trial in Philadelphia, exhorted federal prosecutors to pursue Commerce Bank and other lobbyists for federal racketeering violations.

    Extraordinary corruption requires extraordinary measures. Despite low-level convictions, pay-to-play business-as-usual is still the order of the day in New Jersey. Many of the same actors involved in illegal schemes still participate in New Jersey governance. Only your office can provide the resources and tools needed to end criminal political corruption in New Jersey.

    Therefore, we ask that you take the following measures:

    1.Appoint an Outside Prosecutor to investigate possible criminal political corruption in the state of New Jersey in violation of federal law.

    Since the lapse of the Independent Counsel statute, the Attorney General still retains the right to appoint an Outside Prosecutor or Special Counsel under Justice Department guidelines.

    2. Impanel a Special Grand Jury that will sit and hear evidence regarding a broad pattern of possible criminal conduct in New Jersey politics in violation of the federal Hobbs Act 18 U.S.C. § 1951 and the Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS §§ 1961 et seq.)

    As provided in 18 U.S.C. § 3331(a) “the district court must also impanel a special grand jury when the Attorney General, Deputy Attorney General, or a designated Assistant Attorney General certifies in writing to the chief judge of the district that in his/her judgment, a special grand jury is necessary ‘because of criminal activity in the district.’”
    The Special Grand Jury has a duty under 18 U.S.C. § 3332(a) “to inquire into offenses against the criminal laws of the United States alleged to have been committed within that district.”

    There is important precedent for a special grand jury in New Jersey. In the late 1960s a special grand jury was impaneled by Essex County prosecutor Joseph Lordi to investigate allegations of corruption in Newark; working with the U.S. Attorney for New Jersey, the criminal activities of Newark Mayor Hugh Adonezio’s ring were ended.

    We are not the first to suggest broad prosecutions for racketeering involving those businesses and politicians that make private deals at the public expense. In May of this year, two Commerce Bank executives were convicted of conspiracy to commit honest services fraud, in violation of 18 U.S.C. § 371 and honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346 and honest services mail fraud, in violation of 18 U.S.C. §§ 1341 and 1346 for their roles in bribing public officials in the City of Philadelphia in return for City contracts.

    After the jury rendered its verdict, on May 9, 2005, U.S. District Judge Michael M. Baylson suggested, sua sponte, that the U.S. Attorneys office bring a RICO case against Commerce Bank and the many other bankers, lawyers and public officials that defraud the public by selling government contracts to the highest bidder. This so called “pay to play” system of criminal corruption is, in fact, more endemic throughout the State of New Jersey than it is in Philadelphia.
    The U.S. Attorney for the Eastern District of Pennsylvania, in response to Judge Baylson’s suggestion, claimed that a lack of resources would be an obstacle to a RICO case against Commerce Bank and other institutions engaged in plying politicians with bribes. These comments echo those of the U.S. Attorney for New Jersey, who told the Newark Star Ledger on January 12, 2003: “I’m sure if I had another FBI squad, I’d have even more cases; so many of these people [New Jersey politicians taking bribes] are just so stupid.”
    The Justice Department ought to make a commitment to end racketeering in New Jersey by taking the steps requested in this letter. We recognize that we, like Judge Baylson, are making serious charges. But we and other whistleblowers have provided crucial information that has allowed the U.S. Attorney in New Jersey to prosecute dozens of local elected officials and lobbyists. It is time to take the advice of whistleblowers and broaden these prosecutions and devote the public resources necessary to stop, once and for all time, these manifest abuses of the public trust.

    3.Take the position that federal Grand Juries may, on their own initiative, and independent of federal prosecutors, deliver indictments and hear testimony from whistleblowers possessing evidence of criminal political corruption.

    This practice, know as “presentment” was prevalent throughout much of the nation’s history and is specifically protected under the Fifth Amendment to the United States Constitution. The literal meaning and language of the Constitution must be respected and the Justice Department should encourage citizen “presentment” around the country as an important supplementary mechanism for fighting corruption.

    We are submitting to you today evidence of RICO and Hobbs Act violations by Commerce Bank and South Jersey “Boss” George Norcross; the same information is being transmitted to U.S. District Court Judge Stanley Chesler and to the sitting federal Grand Jury in Trenton, New Jersey. In essence, this evidence suggests that Nocross and Commerce Bank sought to bribe and extort the Mayor of Palmyra, New Jersey in a scheme to remove the Town Attorney of Palmyra and appoint another attorney for the financial benefit of Norcross and Commerce Bank. See Exhibit A and Exhibit B.

    4. Instruct the U.S. Attorneys for the Eastern District of Pennsylvania and the Southern District of New York to join the U.S. Attorney for New Jersey in his investigation of political corruption in New Jersey and take over the investigation of persons that might pose a conflict for the U.S. Attorney for New Jersey.

    While the U.S. Attorney for New Jersey, Chris Christie, has done an admirable job of prosecuting lower-level elected officials, we have direct and indirect evidence that some of the most influential politicians and corporations in New Jersey may have committed federal crimes and U.S. Attorney Christie may have conflicts regarding some of these actors.

    Our immediate concern is that the U.S. Attorney for New Jersey admitted, after widespread reports in the Philadelphia Inquirer and the Newark Star Ledger in 2003, that he had a private lunch with George Norcross in New Brunswick, New Jersey in 2003. The lunch occurred while Mr. Christie was said to be exploring a run for Governor of the State; Mr. Norcross himself has bragged in conversations recorded on tape by the New Jersey Attorney General’s office, that his support is critical for anyone seeking statewide office in New Jersey. Furthermore, in 2003, companies affiliated with George Norcross were under investigation by the Securities and Exchange Commission and the FBI.

    Mr. Christie has made no secret of his intense involvement in partisan politics. He was listed as a Pioneer in the Bush campaign of 2000: one of only 241 Pioneers in the country that raised over $100,000 for the President. As late as June of 2003, Mr. Christie, while serving as U.S. Attorney, contributed to the 2004 Bush re-election campaign .

    Since Mr. Christie became U.S. Attorney, Mr. Christie’s brother has undergone scrutiny because he has contributed over $400,000 to various New Jersey state GOP coffers; in comparison, he gave less than $12,000 prior to the time that his brother applied to become U.S. Attorney for New Jersey. Many of these state and county organizations also receive contributions from Commerce Bank.

    While we suggest nothing untoward involving U.S. Attorney Christie or his brother, even the appearance of impropriety or conflict of interest would be avoided if the Attorney General were to appoint an Outside Prosecutor and if the U.S. Attorneys for the Southern District of New York and Eastern District of Pennsylvania would be charged with broadening the investigation of criminal political corruption in New Jersey.

    5. Commit to a policy of no more deals for those who violate federal law in the process of committing criminal political corruption in New Jersey.

    6. Bring in for questioning the dozen so-called “bosses” that all major media outlets, judges, prosecutors and the public now recognize control the daily machinery of New Jersey politics.

    The contention that these men have no knowledge of the criminal activity that so many have been prosecuted for over the last ten years strains credulity. One of those “bosses” is George Norcross.

    The notion that a quid pro quo is commonplace in political transactions in New Jersey is now received wisdom. Consider New Jersey lobbyist Alan Marcus’ recent description of political business in this state, as told to New York magazine: “In New Jersey, you contribute money not for access but results. Anybody who doesn’t admit that is lying.” Numerous convicted politicians and business contributors in this state have made similar admissions in entering pleas in New Jersey. A quid pro quo is the essence of bribery, Hobbs Act and RICO crimes and these admissions should play a prominent role in investigations and convictions.

    Now is not the time to stop at individual low-level convictions. Only by taking the measures outlined in this letter, can those who are running by all accounts the most criminally corrupt political system in the country be brought to justice.

    We hereby request a meeting with you to discuss these issues.

    Sincerely,

    Hon. Carl J. Mayer, Esq., Former Committeeman, Princeton Township
    Hon. John Gural, Mayor, Palmyra Borough
    Ted Rosenberg, Esq., Solicitor, Palmyra Borough

    cc:

    Patrick L. Meehan
    U.S. Attorney
    Eastern District of Pennsylvania
    615 Chestnut Street, Suite 1250.
    Philadelphia, PA 19106-4476.

    David Kelley
    U.S. Attorney
    Southern District of New York
    1 St. Andrews Plaza
    New York City, NY 10007

    Christopher Christie
    United States Attorney, District of New Jersey
    970 Broad Street, 7th Floor
    Newark, NJ 07102

    Honorable Stanley R.Chesler
    United States Courthouse
    402 E. State St.
    Trenton, NJ 08608
    The Untouchables at 1:55 PM
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