Pulitzer-winning tax journalist David Cay Johnston has been forced to withdraw his first column for Reuters. Aptly named commenter OFF TOPIC notes in another thread that Johnston, whose unreliability and bullying style have put him in bad odor in various forums (including this one), has issued a rambling, self-dramatizing series of explanations for why he falsely claimed Rupert Murdoch's News Corp. was paying negative income taxes.
You may have gotten an alert about the shocking Murdoch news yesterday. As Johnston claimed in a column that has now been replaced with a humiliating 404:
Over the past four years Murdoch's U.S.-based News Corp. has made money on income taxes. Having earned $10.4 billion in profits, News Corp. would have been expected to pay $3.6 billion at the 35 percent corporate tax rate. Instead, it actually collected $4.8 billion in income tax refunds, all or nearly all from the U.S. government.
Please be advised that the David Cay Johnston column published on Tuesday stating that Rupert Murdoch's U.S.-based News Corp made money on income taxes is wrong and has been withdrawn. News Corp's filings show the company changed reporting conventions in its 2007 annual report when it reversed the way it showed positive and negative numbers. A new column correcting and explaining the error in more detail will be issued shortly.
Johnston expands on this (sort of) in his high-carb, low-protein retraction:
How did I miss the switch in convention for reporting positive and negative numbers? The company disclosed in its 2007 annual report that it was changing the way it reported some numbers. Here is the entire disclosure, from Note 2 on Page 87:
Certain fiscal 2006 and fiscal 2005 amounts have been reclassified to conform to the fiscal 2007 presentation.
Reuters commenter TinyOne notes the flimsiness of Johnston's excuse:
I think it needs to be made clear that in NO WAY was it necessary to know that the reporting convention had been changed in 2007 to catch this error. Cash interest paid, the line item directly below the tax numbers DCJ cited, was negative as well. Sale proceeds from investments, the next line, was positive. EVERY INDICATION suggested that negative numbers were outflows from the company, positive numbers were inflows to the company.
This is what happens what you have a dedicated ideologue reporting on technical topics. This is a case of serious and gross incompetence and stupidity by DCJ and the responsible editors. There should be terminations– truly an embarrassment.
Johnston's columns frequently get a lot of traction on the left, regardless of their factual bases. You may recall that a few months ago the husky newsman hit paydirt with this claim: "Out of every dollar that funds Wisconsin's pension and health insurance plans for state workers, 100 cents comes from the state workers."
My critique of that piece got a heavy response from Johnston (along with a correction of one of my own numbers, which I immediately updated with thanks). I also had a very tiresome email exchange with Johnston that supported many of the complaints you can hear about him around the web. There was at one point a davidcayjohnstonwatch.blogspot.com to keep track of his errors, and although it has disappeared, references to it can still be found, along with rave reviews like this one from commenter arbitrageur:
David Cay Johnston showed up here on the forum a couple of years ago and left with his tail between his legs. What a coward. Wanted to dictate, not debate.
Also recently, Johnston declared all Objectivists to be objectively terroristic.
In a 2007 interview, Johnston assured Reason Senior Editor Brian Doherty, "I'm not an ideologue; I'm a practical reporter. I don't think in those terms."
It's hard to imagine the practical reporter continuing at Reuters after a total retraction like this one, but I fear we'll be hearing more from David Cay Johnston, and I don't mean a postcard: