Investigative Post

This is from a recent edition of an email newsletter published by Investigative Post.

The Batavian has drawn a fair amount of attention over the years for being a successful online, for-profit news organization. What’s been left unsaid is its practice of writing favorable stories about its sponsors and advertisers, in particular, the Western Regional Off-Track Betting Corp. Owner Howard Owens was at it again the week before last, penning another story that echoed the OTB party line (sic on the link). 

The Post is a Buffalo-based startup news not-for-profit that doesn't attempt to offer its community complete and comprehensive coverage but rather to cherry-pick the stories it chooses to write.

The publication has been on my radar for a while for its sensationalistic, often incomplete reporting.

Now it is attacking me and my publication, and I think that deserves a public response.

Yes, we're for-profit (though, honestly, it's not that much profit, just enough to keep us in business). And I've known plenty in the nonprofit news sector who consider advertising-supported news to be unethical. Throughout my career, going back to 1986, I've come across no shortage of reporters and editors who thought news should be a charity case.

In 2010, I was in Chicago at the first gathering of small, independent online news publishers. Several of the publishers represented start-up nonprofits. At one session, somebody in the middle of the room stood up and said, "Can we all agree right now that advertising is evil."

I responded by saying essentially that advertising support is far superior to the nonprofit model because you have a greater diversity of revenue.  If you're doing it right, no one advertiser is going to be able to hold you hostage.  If the need arises to report something negative about a business, you can do so without fear or favor because if that advertiser cancels its promotions, it's not going to put you out of business.  It likely won't even mean significant cuts in expenditures.  No layoffs. No furloughs. Nobody is hurt.

That diversity of revenue gives us a lot of freedom to report what is factual and honest without succumbing to threats. 

I don't give in to blackmail.

For example, by a hard-and-fast policy, we run all arrest reports without favoritism.  I've written up arrests of good friends, people I know well and respect. I've had volunteer firefighters, who I have a soft spot for, call me and ask me not to run their arrests. There's no shortage of people calling and asking that we just make this one exception this one time.

But it would be unfair to all the people I don't know, the people who have no connections or advantages or even think to call, to play favorites.  We run all arrests we receive from local law enforcement. Period. No exceptions. That has cost us money and hard feelings, no doubt.

Over the past 15 years, three business owners have been arrested (that I know of).  In the first case, the advertiser had -- the week before he was arrested -- said he wanted to double his spending with us.  The day after we ran news of his arrest, he canceled his ad.  He's never advertised with us again.  In the second case, the business owner called a staff member and rudely and profanely canceled her ad.  In the third case, a friend of the advertiser called me and warned me about running his arrest report. This business owner was a top-tier advertiser.  We ran his arrest report the following week when we received it, and he canceled his ad and hasn't run with us since, nor will he again as long as I own The Batavian.

In another case, we ran a story about a local organization that mentioned a newsworthy faux pas by the director.  The next time we called for an ad, she said no, citing our previous story.  

Look, if an ad buyer has some business reason for not advertising with us and we can't convince that person about why they're wrong, it's the ad buyer's right not to buy an ad from us. But when a buyer tries to blackmail our coverage, that's a line ad buyers are not allowed to cross, as I made clear to this particular ad buyer. We don't change the course of an article to please an advertiser; that's what journalistic integrity is all about.

Batavia Downs
Yes, there's no hiding the fact that Batavia Downs is a major advertiser.  And yes, we put effort into covering most of the Downs' good news stories (Wiener Dog races, donations, concerts, etc.). Some of this stuff is just fun to cover.  And being a comprehensive local news publication, or at least trying, we cover positive events as well as news that is less than favorable to people and places.  A news outlet that isn't covering what is good in a community is not serving the community. It's a drain on the community if all the news is negative and sensational, something the folks at Investigative Post clearly don't understand.

I don't think positive stories about local businesses are a bad thing. They are not unethical. Investigative Post seems to disagree, based on the statement above.  We cover a lot of business openings.  We celebrate significant business anniversaries and expansions.  We make it to as many ribbon cuttings as we can.  I think successful small businesses are critical to a healthy local community (one of my major complaints about not-for-profit news outlets is they often ignore their locally owned shops, which ill-serves their communities). You will never see positive coverage of locally owned businesses in the Post because, you know, "advertising is evil," which means small business owners don't matter to the "serious journalist."

As for Batavia Downs and what it means to The Batavian: If Western OTB canceled all spending with us, yes, it would hurt. It would hurt a lot. I'd probably cry. But it wouldn't put us out of business, not with our diversified revenue streams (something Early Access Pass is slowly helping with, as well, so please join). If that happened, we would cut back on some spending but nothing that would hurt our employees.

Our main reporter for Western OTB is Mike Pettinella.  He's a freelancer, which is ideal in this circumstance because, in accordance with state employment law, I have limited ability to direct his work.  He chooses his own stories for the most part (I can suggest stories), and he chooses how to cover them. Investigative Post is making it sound like I cover Western OTB, but I've only ever been to two meetings of the board, and I've done only one significant story about the organization's legal issues. This is by design. I recognize that Batavia Downs is a major advertiser.  When Mike is available to cover OTB, his coverage provides a degree of separation between me and that business interest.

Mike is an experienced and professional reporter.  He does something that the folks at Investigative Post often fail to do -- he makes sure all sides are represented.  He doesn't cherry-pick. He doesn't sensationalize.  He just reports the story straight.

It seems the folks at IP think we toe the "OTB party line" (itself a loaded phrase that betrays the Post's bias).  No, we just ask Henry Wojtaszek questions and are careful not to misquote him or misrepresent him. Apparently, the folks at IP equate telling a balanced story, letting both sides have their say, with biased coverage. That tells us something about their mindset. Being fair is biased when your view is already made up about a person or entity. 

It's almost like they want to try and cower another publication from calling into question their shoddy reporting.

Take, for example, their latest report on Western OTB's legal fees.

OTB shells out millions for lawyers and lobbyists

The basic presumption of the article is biased, that Western OTB isn't entitled to respond to legal challenges.

Legal challenges that were largely created by the past sensationalistic reporting by IP on Batavia Downs, a fact IP pretty much admits to:

Investigative Post used 2018 as a benchmark for spending on lawyers and lobbyists because OTB operated in relative obscurity until Investigative Post began reporting on its problems that December.

Investigative Post considers mistakes and oversights to be "problems," implying misdeeds in the context of the story.  More bias.

An old journalist's trick to justify reporting on something you think should be scandalous is to find somebody to criticize it without full transparency about the source's agenda or finding a way to balance his or her opinion.  IP has those sources, an Erie County elected official with a political agenda and a former disgruntled OTB executive.  Not that there is anything wrong with giving those people a platform to speak their minds, but knowing up front that they are biased against the target of a story, a fair so-called investigative reporter would seek out sources who might have a different point of view, particularly the chief spokesperson for the agency in question, in this case, Henry Wojtaszek.  Of course, Wojtaszek refused to comment on this particular story, but who can blame him, given the IP's history of sensationalizing its coverage of OTB?  But surely, the reporter, J. Dale Shoemaker, could have found another legal expert to address the issue that would balance the story, perhaps noting that these expenses are not out of line given what OTB has had to deal with since December 2018.

We now know that Shoemaker could have called City of Rochester OTB representative Dennis Basset for a less sensationalistic take on the legal expenditures, though one suspects that Shoemaker didn't much like Bassett's response to his questions following Thursday's OTB meeting. There are surely other board members who support Wojtaszek who would have shared their views on the matter.

Then there is this quote from Mike Nolan, the former OTB employee, that is presented naked of any meaningful context. 

“As a former chief operating officer, the costs that you’re speaking to seem to be extraordinarily high from what they were in years past,” he said.

Well, of course, costs have gone up since Nolan left.  He's one of the reasons for higher legal costs since he filed a lawsuit against Western OTB alleging wrongful termination.  And since he's left, there have been other questionable attacks on Western OTB that officials there feel the need to defend.  Why is it surprising that the agency's legal costs have gone up? And isn't it the right of OTB leadership to defend themselves against what they see as unfair and legally misguided attacks?

Here's their most significant 2018 story reported by IP:

OTB’s part-time board enjoys gold-plated perks

This started the ball rolling on the accusation that the OTB board has illegally or improperly provided itself health care insurance.  In the one story I've written on this topic because Mike Pettinella wasn't available, Wojtaszek explained how this issue has been misrepresented. The interview was in response to a now-dismissed lawsuit by George Maziarz (who was represented by another Erie County Democratic politician, Nate McMurray). (It's worth mentioning that this story gave Maziarz his say and allowed Wojtaszek space to respond -- fair and balanced reporting, as it should be done).

As for health insurance for board members, Western OTB has attorneys working on the issue.  The agency does not agree that board members can't receive health insurance coverage.  

While Maziarz says that the Comptroller's Office and a legal firm hired by Western OTB say the practice is illegal, the issue doesn't appear to be that cut and dry. There is an older Comptroller's opinion that says the practice is permissible.  The memo on the topic, prepared by attorneys Gabriel M. Nugent and Robert J. Thorpe for the board, cites the 1978 opinion as well as the later opinion and suggests board members no longer accept health insurance.  It doesn't, as Maziarz claims, call the practice illegal.  

Health insurance, Wojtaszek said, is justified because pretty much every other public benefit corporation in the state offers it, and Batavia Downs operates in a very competitive environment and needs to attract and retain the most qualified board members. 

The other issue addressed by Wojtaszek is the allegations first raised by IP and echoed in the Maziarz suit is the use of free tickets to sporting events.

Batavia Downs acquires tickets as perks for high rollers and special guests, Wojtaszek said.  A host from Batavia Downs typically accompanies these guests to the events. The role of the host is to ensure things go smoothly that people get their tickets, get into the venue, receive the service expected for the event, and that the host takes care of any issues that arise.

"Previously, if you were host, we provided a ticket to the host and then the host was allowed to bring a guest with them," Wojtaszek said. "At that point, they may have brought somebody from a wife, a husband, a son, or a daughter with them. We have since corrected that. Subsequent to the recommendation from the compliance company, it's just a host who takes care of whatever event, hockey game, football game, concert, and I think we're doing it properly now."

He said that the accusation that board members could just casually ask for tickets to Bills or Sabres games at board meetings and receive them misrepresents what actually took place. He said anybody, including board members, could ask for tickets on behalf of patrons of Batavia Downs.  They were not, he said, asking for themselves and friends and family.  However, to help improve the procedure, all requests must now be in writing and clearly state who is receiving the tickets. 

There were about 100 tickets unaccounted for, not the thousands previously alleged.

Balanced Coverage
These are just two examples where the Investigative Post has sensationalized stories and misrepresented the truth. If you search the Post's website for "Batavia Downs," you will find four pages of sensationalized headlines and stories, a regular drum beat of negative story angles. What you won't find are stories about record revenue, about Democratic board members backing Wojtaszek's leadership, record distributions to counties, in-depth interviews with Wojtaszek addressing the allegations against him and the board, the Downs' support of area charities, any of its concerts, or its successful Night of Champions.  It seems that anything positive about Batavia Downs would disrupt the flow of IP's "corruption" narrative.

Shoemaker was so eager to push the corruption narrative that he used that loaded word with Bassett in an interview after the board meeting on Thursday.

Clearly, Shoemaker didn't like Bassett's full response to his question because he truncated the key portion of Bassett's quote in his report on the meeting. 

"I think corruption is a very strong term," he said. "I've been on this board, as I said, 14 years, and I don't see corruption."

The denial of corruption by a Democrat completely upsets the narrative being pushed by the Post, so of course, Shoemaker didn't include it.  Shoemaker's article on the whole overlays and misrepresents Bassett's discussion of "reform."  Overall, Bassett concentrated on how well Western OTB is doing and that it is important to stay focused on the business of the operation and its success and not be distracted by politics.

Shoemaker also left out Bassett's statements about changes and reforms already undertaken, instead focusing on potential further "reforms."  Again, it would disturb the narrative to report that Wojtaszek and the board have actively responded to criticism and made changes.

If your news business model is to always attack and criticize without ever recognizing the good in people or institutions, then that's a flawed business model. As long as Investigative Post maintains that business model, all it will do is hurt its credibility with fair-minded people while partisans cheer them on, giving them the illusion that they're doing everything right.

It's worth noting that nobody yet, not even the Post, has turned up any evidence of corruption.  Mistakes, yes, as Wojtaszek has owned up to, which IP hasn't reported. Throughout five years of constant badgering by IP and others, no illegal activity has been identified.  Yes, there is an FBI investigation (which is helping drive up OTB's legal costs), but that has been ongoing for years -- apparently, but the FBI never confirms anything -- and an investigation is not proof of illegal activity. Yet IP throws around the word "corruption" often enough to convince me that the folks there clearly believe OTB is corrupt.  In old-school journalism, we call that kind of belief "bias." 

GCEDC
Based on a prior email conversation with Shoemaker, the folks at Investigative Post also seem to think we pander to GCEDC because GCEDC bought some ads from us.  Yes, GCEDC this year -- for the first time -- placed some ads with The Batavian.  The entire expenditure is less than one percent of this year's revenue. Yet Shoemaker called into question my ethics. He was ticked that I wouldn't grant him an interview about the ad buy.  Why? Because I don't trust the Investigative Post, which I made clear to him.

We've had no issue in the past reporting stories that are unfavorable to GCEDC's agenda. Most notably, we brought attention to GCEDC's plans to use tax incentives for remodeling at Batavia Towne Center. Those design changes would eventually, as expected, lure Dick's Sporting Goods to Batavia. Tax incentives to support retail businesses are a questionable use of an IDA's power since locally owned businesses can be damaged.  In fact, both businesses mentioned in the story above are now out of business.  I know for a fact that our stories did not please, to put it mildly, the folks over at GCEDC.

Tainted Money
So let's return to the for-profit vs. not-for-profit debate.  

I've encountered the arrogance of nonprofit publishers many times over the past 15 years. They think that because they are not driven by profit in capitalist terms, their motivations are pristine.  And that is their blind spot.  All news organizations need to bring in more revenue than they spend and set some aside for inevitable revenue shortfalls when business cycles take a dive, as financial disclosures show Investigative Post does.

Here's the thing though: All money is tainted in some way. The need to raise money to fund journalism doesn't isolate the publication's leaders from pressure to shade coverage. It doesn't matter if you operate with a profit motive or without.  As Bob Dylan sang, "You've got to serve somebody."  

If you rely on advertising, you might be tempted to bend to an advertiser's will (though, as I explain above, this is less likely, but I have seen it happen).  If all of your revenue comes from readers, either through subscriptions or memberships, then you will be more likely to cater to the will of the readers, who don't always see the full picture or have a balanced view of the world. For example, if you're a publisher in a largely progressive Democratic community, you're going to be hard-pressed to publish stories that run against that orthodoxy.  If nothing else, you'll be less welcome at swank cocktail parties. And, finally, if all your revenue comes from donors, you're going to be beholden to your largest donors.  

If most of your donors are institutional -- meaning big annual grants -- you're only going to get grants if your operations conform to the foundation's political ideology if they have one, and in my experience, many do, either left or right, because that's why they get into the business of handing out money -- to push agendas.

Investigative Post reported $434,875 in donations in 2022. Jim Heaney, the founder, editor and executive director, was paid more than $70,000. That isn't exorbitant for his leadership position, but clearly, he needs the Investigative Post to be successful if he wants to continue earning that salary in an era when good-paying journalism jobs are hard to come by.

The Post lists among its major donors some fairly progressive, left-leaning funders, such as the Wallace Global Fund, the Rowboat Family Foundation, and the Knight Foundation (this might surprise some, but I have personal experience dealing with that foundation's agenda-driven contributions in another organization where I served on the board).

These potential ties to Democratic donors, and the need to pander to mostly Democratic Erie County, are important to think about because the reporting of the Post has helped lead the the disenfranchisement of the rural counties that are members of the OTB board of directors.  Earlier this year, Democratic State Sen. Tim Kennedy of Buffalo pushed through legislation that weighted the OTB board voting in favor of the Democratic-dominated counties of Monroe, Niagara and Erie. 

For the Investigative Post, mission accomplished, perhaps. The problem is the current board seems to favor Monroe County's Bassett, who seems to support Wojtaszek, as its new chair, with one notable exception. Erie County's board member Jennifer Hibit blocked Bassett's appointment to chair. 

Isn't it interesting that an Erie County Democrat, Sen. Kennedy, wrote legislation to put enough power in the hands of Erie County's Democrats that one OTB member can thwart the will of the rest of the board, including non-Erie County Democrats? A more cynical and conspiracy-minded person (and I hate conspiracy theories) would suspect that Erie County Democrats, aided and abetted by the Investigative Post, are trying to angle to gobble up more of the revenue generated by Batavia Downs.  Legally that might be difficult, but way less difficult for Erie County Democrats to pull off is selling Batavia Downs to the Seneca Nation or the politically connected Delaware North (where Gov. Kathy Hochul's husband works UPDATE: A couple of days after publication I was informed Bill Hochul recently left Delaware North). Don't be surprised if there is pressure from the governor's office on Monroe County to remove Bassett from the OTB board. Would Heany and Shoemaker call that corruption? 

And don't expect the Investigative Post to question the motives of the Democratic Party when it comes to Western OTB.

Savarino and Elliott Station
If the Post isn't just about pushing a political agenda and really, truly, about investigating questionable conduct, why hasn't it written anything about Sam Savarino and Savarino Companies? 

Savarino is one of Buffalo's most prominent developers and has been involved in multiple projects supported by taxpayer dollars, which is normally just the kind of target the Post likes.

As The Batavian has pretty much exclusively reported -- Ellicott Station was sold to the community first as market-rate housing, then as workforce housing, only to find out it was really intended to be very low-income housing with subsidized rents. The Investigative Post has called into question our relationship with GCEDC, but that reporting by Joanne Beck led to a less-than-pleasant phone call from a GCEDC official.  Of course, we knew our reporting would upset some people locally, but we did it anyway because it was the right thing to do.

Since then, Savarino Companies has gone out of business. The result, apparently, of questionable dealings with Alfred State and New York State, leaving, we're told, multiple projects incomplete, including Ellicott Station.

This is surely a situation that begs for more investigative reporting. We're doing our best to push hard on the Ellicott Station issue, the only news organization to do so, even though we must rock some boats in the process, but we don't have the resources to commit to a major investigative project. A developer of Savarino's history certainly has a deep and long paper trail an investigative reporter could explore. I would love to do it, but I wouldn't be able to cover soccer and basketball games, school board meetings, planning board meetings, town board meetings, community events, and other such news that I'm sure Heany finds beneath his dignity.  All my time would be taken up by digging through Savarino documents and ferreting out sources.

Meanwhile, the Investigative Post is generating substantially more revenue than we are, has a much larger staff with only one charge -- digging up dirt -- and they're letting Sam Savarino off the hook.  Why?

My only guess is it has something to do with Savarino being a major contributor to Investigative Post and sitting on the board of directors.

Talk about a conflict of interest for Heaney. He's living in quite the glass house, but he wants to throw stones at me.