U-T political ad rates don’t add up

by Amita Sharma | KPBS
and Ryann Grochowski | inewsource

Campaign strategist Tom Shepard grew more suspicious by the day last fall as he flipped through the U-T San Diego and repeatedly saw full-page ads lambasting his client Bob Filner, a Democrat running for mayor.

“It made me wonder whether they were crazy,” Shepard said. “When I started seeing ads from the other side running as often as they did, it made me wonder — if they were paying $8,000 an ad, they were spending an enormous amount on newspaper advertising.”

The $8,000 per full page is what Shepard said the U-T quoted Filner’s campaign for advertising. Campaign finance disclosures, however, show the other side paid far less.

This discrepancy — and others discovered by the inewsource and KPBS Investigations Desk — could violate campaign laws.

“It’s clearly not appropriate for a news organization to make that kind of contribution without reporting it,” said Dan Schnur, former chairman of the California Fair Political Practices Commission, now director of the Jesse M. Unruh Institute of Politics at the USC.

inewsource and KPBS audited ads in the U-T every day between Labor Day and Election Day 2012 and compared the list with campaign finance records. The results show varied payments for ads, indicating the U-T may have offered bargains to the anti-Filner campaign and to other candidates and issues the newspaper endorsed.

U-T owner Doug Manchester did not respond to requests for an interview. Chief Executive Officer John Lynch said in an email that the UT offered a package to campaigns.

“All political ads were paid as part of a bundle option used to attract political advertising and consistent with how we sell generally. The bundle was available to all campaigns interested in advertising,” Lynch wrote. He declined to provide a copy of the offer or details of it.

The “bundle option” does not explain the variations in costs per ad revealed in the inewsource analysis.

According to local, state and federal campaign experts, discounting ads for certain political candidates can be against the law. In California and San Diego, rules require that discounts be reported as an in-kind contribution to a candidate or cause. These laws exist to to ensure transparency in political financing and other financial information involving public officials.

The newspaper ran front-page editorials last year endorsing Filner’s opponent, former San Diego Councilman Carl DeMaio, a Republican. It also endorsed Republican Congressman Brian Bilbray in his re-election race against Democrat Scott Peters. Both candidates lost.

DeMaio did not return a call for comment. His campaign consulting group Revolvis, who also represented Bilbray, also did not return calls.

Shepard, who has run campaigns in San Diego for decades, called the U-T discounts unprecedented.

“I’ve seen newspapers and television stations editorialize in favor and against my candidates, and I just kind of accept that as part of the game in political campaigns,” he said. “I’ve never seen advertising given away to one candidate in preference over another. And my understanding of the state and local campaign laws, it’s not legal to do that.”

At the very least, transparency is required, according to Schnur.

“If the news organization did not offer the same rates to each candidate, then that means they’re providing a financial level of support that they did not provide to the other,” Schnur said. “That’s perfectly allowable. But it’s something that needs to be reported.”

Campaign disclosure reports and the inewsource/KPBS audit of ads reveal the following:

• San Diegans for Reform in Opposition to Bob Filner paid $25,000 to the U-T. Sixteen full-page ads ran in the newspaper. That works out to about $1,560 per ad.

• Former Congressman Brian Bilbray’s campaign paid the U-T $25,000 for for 27 full-page ads that either supported Bilbray or opposed Scott Peters. That works out to about $926 per ad.

• Representatives of Filner’s campaign and Peters’ campaign said the U-T quoted each of them the equivalent of $8,000 for a full-page ad. Neither campaign could provide the quotes in writing. Neither placed ads.

• There is no public disclosure of in-kind contributions for advertising discounts from either Manchester or the newspaper to the anti-Filner committee or the pro-Bilbray effort. (Manchester did donate $50,000 to the Lincoln Club in August 2012. The Lincoln Club was the main financial sponsor of the anti-Filner committee, and a major sponsor of the anti-Filner ads in the newspaper.)

Peters’ campaign communications director MaryAnne Pintar said she suspected that the newspaper had given a deal to Bilbray.

“It just didn’t make sense to us to spend as much money as he would have had to have spent, based on the numbers that we were quoted,” she said. “We knew that the U-T was not our friend and that they were very strongly behind Mr. Bilbray on the editorial side.”

The U-T also appears to have offered a break to proponents of Proposition 32, which would have banned unions from using payroll dues for political purposes had it passed in November. The U-T endorsed the proposition in editorials, saying, “Of all the measures on the California ballot this fall, the most important is Proposition 32.”

The pro-32 campaign committee, called the Small Business Action Committee, ran at least 20 full-page ads in the U-T during the fall campaign. At times, two ads ran on the same day in different sections.

The committee reported paying $26,000 for print ads on its state disclosure forms, but did not specify newspapers that were paid. Despite repeated inquiries, a representative from the group did not provide details. No in-kind contributions are reported to the group from Manchester or the U-T.

Federal election rules are even stricter than the state’s. They don’t allow special pricing of ads even if the discount is disclosed.

“It’s not permissible under the federal election laws to offer a discount period to federal candidates,” former Federal Election Commission Chairman Trevor Potter said. “The federal rule is that candidates must pay the market rate. You have to treat candidates the same way you would treat other customers.”

Potter said most media outlets are familiar with that rule.

“I’ve not heard of a case in the past where a newspaper has intervened in a federal election by selling discounted space because most newspapers understand that they cannot make a contribution to federal candidates through their advertising,” Potter said.

Manchester, a hotel developer, entered the newspaper business in December 2011. He bought the North County Times last fall. But Potter, who was appointed to the FEC by George H.W. Bush and has taught elections law for 25 years, said Manchester’s relatively recent experience as a newspaper owner wouldn’t be an excuse. It’s unlikely that everyone in the newspaper’s advertising department is new, he said.

“They would have had a real problem if this had been a common practice over the years,” Potter said. “If it wasn’t done in the past, then the question is why change it now and why didn’t someone say something.”

inewsource investigative assistant Michele Pluss and KPBS intern Betsy Galchutt contributed to this report.

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