Sarbanes-Oxley vs. the Free Press

How the government used business regulations to strong-arm the media.

John Berlau from the January 2006 issue

(Page 2 of 2)

Corporate Reform vs. a Free Press

Spokespeople for Fitzgerald and Time Inc. declined to say what role, if any, Sarbanes-Oxley played in the events leading to Time Inc.'s surrender of Cooper's documents. But even if Fitzgerald did not directly threaten Time with Sarbanes-Oxley, it's not a stretch to say that good lawyers would take the law and its sentencing provisions into consideration. "You have a risk that a vigorous prosecutor will think of that act as obstruction of justice, and you don't know what a jury will do," says Ronald Rotunda, a professor at the George Mason University School of Law who specializes in legal ethics.

And for the press, the "obstruction of justice" provision may cover more than just withholding notes from the government once an investigation has begun. It may also endanger the common practice of routinely destroying notes to protect anonymous sources. For decades, newsrooms have shredded or thrown away notes some time after using them both to save space and to prevent prosecutors like Fitzgerald from demanding them as part of an investigation. This "routine expungement is a longstanding practice in many news organizations," says Sandra Davidson, a professor of communications law at the University of Missouri School of Journalism. Sarbanes-Oxley, because it covers document destruction even "in contemplation" of a federal investigation, could apply to the press's "routine expungement" practices, scholars say. "If you're destroying documents to prevent them from being subpoenaed," says Rotunda, "you have a risk that a vigorous prosecutor will think of that as obstruction of justice."

Because it's hard for journalists to analyze the changing legal environment, Plamegate coverage has tended toward character-driven treacle about journalism's fall from grace. In the October Vanity Fair, the legendary Watergate reporter Carl Bernstein never mentions Fitzgerald by name. He does devote a couple sentences to arguing that Fitzgerald's prosecution is out of control, but he saves most of his venom for Time Inc. He smugly compares the actions of The Washington Post's late publisher Katharine Graham to those of Time Inc. officials.

"In 1972, Katharine Graham did the opposite of what Time editor in chief Norman Pearlstine did in 2005," Bernstein writes. "She took formal control of our notes and unequivocally declared she would go to jail rather than give them up or reveal their contents--as would we....Pearlstine's actions suggested that he had a responsibility to protect the profits and corporate interests of Time Warner first--and journalistic principle second."

Others have charged that Time made the decision only to further its bottom line. The Brussels-based International Federation of Journalists issued a statement saying it was "impossible not to conclude that commercial interests have taken priority over a principled defense of professional secrecy."

To Bernstein and others, the erosion of journalistic standards is the only significant change since 1972. But to focus on the rise of big media corporations and ignore the new prosecutorial powers the state can use against them is to miss an important part of the story. At their best, big media corporations are still an important part of the investigative journalistic landscape, because they have the resources to probe wrongdoing by government and business. (Indeed, Time Inc.'s Fortune was one of the first publications to raise questions about Enron before the scandal broke.)

To be effective at restraining prosecutorial power, any proposed shield law should specifically protect media entities, as well as "journalists" broadly defined, from subpoenas related to news gathering. Like the free market, the free press may allow behavior that some consider unethical, such as excessively cozy relationships between reporters and their sources. But criminalizing the anonymous source relationship would make society less informed and less free.

Reporters and commentators in the establishment media need to rethink their cheerleading for Sarbanes-Oxley and so-called corporate reform. From their privileged perch, journalists frequently have advocated giving prosecutors and grand juries more power over their fellow citizens, especially those who work for big corporations. But prosecutors like Fitzgerald see a media company as just another corporation. Now that the media are under the government's thumb, they may be a bit more skeptical in covering the crusade against corporate crime.�

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