Wall Street Journal faces inquiry into sales 'scam'
Auditor acts over claims that European sales of Murdoch title were artificially inflated
Nick Clark is the arts correspondent of The Independent. He joined the newspaper in June 2007, initially reporting on the stock markets. He has covered beats including the City, and technology, media and telecoms and made the switch to arts in December 2011. He has also contributed articles to the sports section.
Friday 14 October 2011
Britain's newspaper auditor may investigate circulation figures for the European edition of Rupert Murdoch's Wall Street Journal following claims that they were artificially inflated by the company effectively buying up its own papers.
The Wall Street Journal Europe's publisher, Andrew Langhoff, has already resigned over its links to a Dutch consultancy which allegedly received payments and favourable press coverage in return for bulk-buying copies of the paper each day at reduced prices and giving them to students.
The WSJ's parent company, Dow Jones, pointed out that its deal with Executive Learning Partnerships (ELP) had been approved by the Audit Bureau of Circulations UK. But the auditor said yesterday there may now be "grounds for further investigation".
Gert Van Mol, the man at the heart of the bulk-buying scheme, had bragged that he was responsible for a large part of the paper's sales. A source close to Dow Jones, which was bought by Mr Murdoch's News Corporation for $5bn in 2007, said Mr Van Mol had no concerns about the ELP deal.
"He used to boast that he was responsible for 40 per cent of the paper's circulation," the source said.
Mr Van Mol worked for five years in the WSJE's international distribution operations before moving to its circulation marketing department. There he set up the WSJE Future Leadership Institute, which he claimed in an online posting was "responsible for up to 43 per cent of total Wall Street Journal newspaper sales in Europe, the Middle East, Africa and Russia". His role was "eliminated" by Dow Jones this year.
It emerged this week that the WSJE wrote favourable articles about ELP in return for its commercial partner buying 12,000 copies a day at low prices to boost circulation. Two stories about ELP have since been amended to highlight the partnership.
Jerry Wright, chief executive of the ABC UK, said yesterday that it had indeed deemed the WSJE deal "to be compliant with the rules" governing multi-copy subscription sales of international publications. Its audit of the sales figures for July to December 2010 "also found the scheme to be in order". But he added: "More recently, we have re-examined the scheme based on some new evidence available. There now appears to be additional new information which may give grounds for further investigation."
He declined to answer further questions or give more details. The results of any inquiry will be published only if a complaint is upheld, the ABC added.
It is understood that the WSJE's former editor Patience Wheatcroft, who took over in June 2009 and stayed until she was elevated to the Lords as a Tory peer, was aware of the ELP deal.
The Dow Jones source said: "She was definitely aware of the arrangement, it was flagged up. At the very least she did nothing to prevent it."
Baroness Wheatcroft did not return calls seeking comment last night.
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