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Ethics Are Troubling for Sacramento Bee Editor With Dual Role at Union-Backed Voice of Orange County

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OVERLAP: (top) The Bee’s Editor of the Editorial page Dan Morain, union-funded Voice of Orange County (VOC) founders (l-r, top to bottom) former State Senator Joe Dunn, UCI Law professor and former L.A. Times reporter Henry Weinstein, Orange County Employees Association President Nick Bernardino, and VOC editor-in-chief Norberto Santana, Jr. All four ignored the editorial overlap between Morain, his position at the Bee and his role as an executive board member at the VOC. Photos from savingca.org, Law.UCI.edu, liberaloc.com and abubblimgcauldren.blogspot.com.

 

By Brian Hews

A Hews Media Group-Community News investigation has found that Dan Morain’s editorial tenure as Editorial Page Editor for McClatchy’s flagship newspaper, the Sacramento Bee, apparently overlapped his stint as an executive board member of the union-funded Voice of Orange County (VOC), raising a number of journalistic ethical questions that go beyond the reasons given publicly for NBC’s recent suspension of Nightly News anchor Brian Williams.

VOC is heavily funded by the powerful Orange County Employees Association (OCEA), and is known to be extremely biased regarding unions and Democrats.

Morain has continually backed government-related labor and public employee pensions during his tenure on the editorial board of the Bee.

Credit for part of this story goes to Leslie Brodie, publisher of the Leslie Brodie Report, and Katy Grimes, an independent investigative journalist.

In late 2011, Brodie obtained detailed financial and organizational information about the VOC after she filed a complaint against the entity with the Internal Revenue Service.

Brodie’s investigation revealed questionable funding links between VOC, its founders, CaliforniaAll, the UC-Irvine Foundation, the California Bar Foundation, and a number of public utilities.

As a result of her complaint and exposé, the complete tax returns of VOC found their way into the public and the funding intermediary, non-profit CaliforniaAll, dissolved.

CaliforniaAll’s remaining assets were returned to Pacific Gas and Electric Company, an action that normally is illegal for a 501(c)(3) non-profit.

See story click here.

Katy Grimes, writing for the FlashReport and the Sacramento Citizen, authored an update about VOC’s questionable reliance on the OCEA in June 2014.

Like Brodie, Grimes focused on the bias in VOC’s coverage in recent elections, its key leadership, and detailed the sources of its funds.

See story click here.

Brodie also wrote that Dan Morain had become an editor at the Sacramento Bee, but missed his promotion to Editorial Page Editor.

And neither Brodie nor Grimes noticed the overlap of Morain’s conflicting journalistic roles at VOC and the Bee.

HMG-CN, acting on a tip about CaliforniaAll and the illegal donation to PG&E, subsequently uncovered the Morain conflict.

VOC Launch

VOC started in September 2009 with 100% funding by the OCEA.

According to media accounts, the founders of VOC were former state senator Joe Dunn (D-34), former Los Angeles Times reporter and now UC-Irvine law professor Henry Weinstein, and OCEA President Nick Bernardino.

Former Orange County Register and San Diego Union-Tribune investigative reporter Norberto Santana Jr. was hired as the blog’s editor-in-chief.

The Overlap of VOC and the Sacramento Bee

Media accounts written about the launch of VOC in September 2009 by several newspapers and blogs described Morain’s role there as “a board member with the startup from its earliest beginnings.”

According to VOC’s 2010 and 2011 tax returns, Morain served on the executive board, exerting influence on the VOC’s Web blog, radio service and news bureau that was, and still is, deeply intertwined with the large and powerful OCEA, along with several prominent Democratic operatives.

 

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VOC tax filings suggest he stepped down from the executive board sometime before the close of VOC’s 2012 tax year, which, given VOC’s late tax filings, could have been as late as October 2013.

Morain was a former reporter for the Los Angeles Herald Examiner and Los Angeles Times from 1979–2009. At the time he was recruited for VOC’s executive board in 2009, he was a publicity officer for Consumer Attorneys of California. Former Sen. Dunn was a past president of that organization.

He joined the Bee as Senior Editor/Opinion in February 2010 and served in that role until December 2013, when he was named editor of its Editorial Page.

In his role, he manages the editorial position for the newspaper’s editorial board and, by extension, influences 29 other daily newspapers in 28 U.S. Markets owned by the Bee’s parent company, The McClatchy Company (NYSE: MNI).

Located in the state capital, the Bee is a prominent voice in California’s political and legislative debates. Four Bee opinion editors and one political cartoonist report to Morain.

Yet his publisher at the Bee, Cheryl Dell, apparently did not feel the VOC overlap was a matter of concern to the newspaper.

Other key players that reviewed VOC’s tax filings but failed to question Morain’s overlapping roles included several legal heavyweights on VOC’s Board.

Joe Dunn, the former state senator, class-action attorney, and past executive director of the California State Bar; Erwin Chemerinsky, Dean of the University of California, Irvine School of Law; Tom Girardi, the lawyer that represented Erin Brokovich and other high-profile clients; Wylie Aitken, another high-profile attorney and uber successful OC personal injury attorney; James Brosnahan, president of the Bar Association of San Francisco; and Henry Weinstein, a former prize-winning legal affairs reporter with the Los Angeles Times and professor at U.C.-Irvine School of Law.

Even VOC’s investigative editor-in-chief Noberto Santana Jr. somehow never probed the overlap or whether a conflict of interest existed for Morain between VOC and the Bee.

Santana signed all tax filings after 2009 that VOC submitted to the State of California and the IRS.

From the beginning, VOC played a prominent role in statewide and local political campaigns praising Democratic candidates and campaigns while slamming their Republican opponents.

It got even more powerful and edgy during Morain’s tenure.

While tax returns say Morain was on the VOC’s executive committee, the blog ran a continuous stream of negative articles about San Diego City Council member and mayoral candidate Carl DiMaio and Orange County Supervisor Janet Nguyen.

According to Katy Grimes, there were more than 300 negative blog posts in all, compared to a handful of positive articles about their opponents and issues.

Republican DiMaio lost to Democratic opponent Bob Fillner, in part because of a series of high profile exposes by VOC alleging indecent acts.

The DiMaio exposes were later discredited.

See letter discrediting DiMaio story, click here.

DiMaio more recently lost a Congressional race to Democrat Scott Peters, with VOC reissuing its claims again in what appeared to be a renewed attempt to confuse voters.

See story 1 click here.

See story 2 click here.

Nguyen overcame the VOC-led campaign to win her supervisor seat. She also recently won a highly watched and closely contested state senate race despite strong VOC and OCEA support for her opponent, Jose Solario.

Union Ties

The VOC also regularly featured interviews with OCEA President Nick Bernardino during Morain’s stint on the board.

Bernardino was constantly allowed to use all VOC platforms to talk about the union’s positions on candidates and various political matters.

OCEA brazenly features a link to VOC on its own member website under the title “OCEA Links.”

Click here to see link, the VOC is on the left side, near bottom, in box labeled OCEA Links.

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While none of these facts were secret, their details mainly rested with well-connected influential insiders in Orange County political and union circles.

Those influential individuals may have been consumed with Orange County issues but unfamiliar with the path Morain’s career had taken.

They were ignorant of the scepter of power Morain gained over one of California’s most prominent newspaper’s editorial board.

The conflict fuels speculation about the potential he may have had—or still holds—to exert influence over McClatchy’s public position on a variety of issues benefitting the union or political parties.

Money Flowed in From OCEA After Morain Joined Board

According to the entity’s tax returns, OCEA contributed $56,265 in 2009 to launch VOC’s operations. OCEA’s contribution was the only funding source for VOC in its maiden year.

In 2010—the first in which Morain is listed as an executive board member—VOC’s total contributions jumped 800% to $450,707, with $269,500 or 60% of that coming from OCEA.

The remaining $182,207 came from The California Endowment at $131,207, with the United Food & Commercial Workers Union and Wylie Aitken, then Chair of the Democratic Foundation of Orange County contributing $25,000 each, along with several smaller contributions by VOC insiders.

OCEA gave VOC $230,000 in 2011, two-thirds of its total gross receipts of $348,333.

In 2012, the last year for which tax returns of VOC are available, the organization had gross receipts of $543,345.

That year, VOC received $240,000 from OCEA, $213,972 from The California Endowment, $60,000 from Aitken, and $12,000 from Tel-Phil Enterprises in Newport Beach, owner of the Orange County Marketplace.

HMG-CN called VOC’s accounting firm and confirmed the 2013 tax returns were completed.

Even though they were filed in Nov. 2014, VOC’s 2013 tax reports are not yet publicly available.

VOC’s other major Democratic donors include Sen. Joe Dunn, Anne Andrews of the Irvine law firm of Andrews & Thornton, Stephen Garcia, MRV Communications out of Chatsworth, Carl Mosen of Sober Living, and Stan Tkaczyk.

Tkaczyk retired as President of Rainbow Disposal Company and is the husband to Orange County Register columnist Barbara Venezia. He was recently appointed to serve on the OC Fair Board where he serves with OCEA General Manager Nick Berardino. Both were appointed by Governor Jerry Brown.

This week, HMG-CN sent questions to Morain via email about the editorial overlap. Morain stated, “I was on the [VOC] board for a brief time at the end of 2009. The Bee’s editor at the time, Melanie Sill, was aware that I had been on the board. When I came to work for Bee in February 2010, she suggested that I resign from the board, which I promptly did.”

HMG-CN called Sill, who is now the Vice President of Content with Southern California Public Radio-KPCC. Sill said, “I don’t have any specific recollection of Dan Morain resigning from the VOC board, I dealt with a lot of ethical issues while I was at the Bee.”

When told that he was listed on VOC’s 2010 and 2011 tax returns as a board member and asked if he submitted a letter of resignation, Morain suddenly cut off communication with HMG-CN.

A written letter of resignation is a requirement and holds board members accountable. The signed letter must be submitted and ‘placed’ in the corporate minutes, or it isn’t a valid resignation.

Following its communications with Morain, HMG-CN sent questions to Norberto Santana, Jr., editor-in-chief of VOC. Contradicting Morain, Santana stated, “Dan Morain was on our board for a very short interval during late 2009 and early 2010 as it was being formed.”

When informed that Morain was listed on VOC’s 2010 and 2011 tax returns as a board member and asked if he knew of a letter of resignation from Morain, Santana said in a later email, “Dan verbally resigned from our board very early, like Jan. of 2010…his listing on the 2011 tax form is a clerical error on our part.”

Santana made no mention that Morain was also listed on the 2010 VOC returns.

Of note here is that Santana also answered ‘no’ to the HMG-CN question of whether he had any direct communications with Morain while he was on VOC’s board.

HMG-CN subsequently called and emailed Morain’s boss Joyce Terhaar, Editor and Senior Vice President at the Bee for a comment on Morain.

Pam Dinsmore, Community Affairs Director for the Bee told HMG-CN, “When the Bee hired Dan Morain he was, among other things, on the board of a journalism start up in Southern California called the Voice of Orange County. After the Bee hired Morain, we asked him to step down from the board as his role had the potential to be a competitive conflict. He did so verbally and we now understand that the organization did not remove him from the organization’s masthead immediately. Nonetheless, it has posed no problems for us in his role here.”

Dinsmore has not responded when told that Morain was listed on VOC’s 2010 and 2011 tax returns as a board member and that he did not submit a written letter of resignation.

Why is this important?

Patric Hedlund, editor of Colorado’s Mountain Enterprise newspaper, said in a July 13, 2012 editorial, “Print newspaper editors tend to live by very strict rules if we are serious about our profession and about what our work means to the public which we serve. …The importance of professional ethics and how we must live in order to avoid even the perception of a conflict of interest is based on the need to keep our reporting credible. This is rigorously taught and then reinforced in newspaper newsrooms.”

Morain’s apparent conflict of interest with OCEA was allowed to persist for nearly three years during his tenure and promotions at the Bee. McClatchy company’s top management at the Bee, Dan Morain, the board of VOC, and its editor-in chief known for his investigative skills seem to have missed the lessons espoused by Hedlund.


 

Brian_Hews

Brian Hews is Publisher and Owner of Los Cerritos Community Newspaper, based out of Cerritos, Ca. The newspaper, (delivered to 74,000 homes, 150,000 readers published every Friday) has won four Los Angeles Press Club Awards for investigative journalism in 2012 and 2013, including the 2012 award for Best Investigative Newspaper in Los Angeles for breaking and subsequently uncovering Assessor John Noguez’ bribery and corruption scheme. Former LA District Attorney Steve Cooley called the scheme “the biggest financial scandal in Los Angeles history.” Noguez, who faces over 70 corruption counts, and two others were arrested and are awaiting trial.

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