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A New Documentary About the National Enquirer Aims to Serve as a Cautionary Tale

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Filmmaker and director of Scandalous: The Untold Story of the National Enquirer Mark Landsman had never paid much attention to the tabloid subject of his documentary—at least not outside of the “hilarious” TV commercials for it that ran while he was growing up.

That changed in 2015.

“I started to realize, at any checkout line that I was in, the intense bias of the messaging that was happening on the cover of these papers that I was used to seeing featuring Burt Reynolds and Loni Anderson, or Liz Taylor, or aliens,” he said. “It just felt bizarre to me.”

Leading up to the 2016 presidential election, the National Enquirer published numerous favorable cover stories about Republican candidate Donald Trump. Meanwhile, it depicted Hillary Clinton as ill, addicted to drugs, or headed for jail.

In 2015, most people had never heard the name David Pecker. Pecker was the chairman and CEO of American Media, Inc., the Enquirer’s publisher up until the company sold the publication to James Cohen, CEO of Hudson News Distributors, for roughly $100 million in April 2019. (Neither AMI nor Hudson News responded to Fortune’s requests for comment.)

Now, Pecker may not be a household name, but he’s a known entity. He’s made the news for receiving immunity after testifying in a federal investigation that the Enquirer “caught and killed” the story of Karen McDougal’s alleged affair with Trump—“catch and kill” refers to news organizations securing the rights to often scandalous stories only to purposefully bury them. This came right on the heels of Trump’s former lawyer and fixer Michael Cohen’s testimony that he’d arranged to pay both McDougal and Stephanie Clifford, a.k.a. Stormy Daniels, for staying quiet about their alleged affairs with Trump. One former Enquirer reporter in Scandalous went so far as to call Trump the tabloid’s “silent editor.” 

Pecker has also appeared in pieces about how the Enquirer sought to expose personally invasive stories. The publication under Pecker blackmailed Amazon founder Jeff Bezos, threatening to publish embarrassing photos and text messages detailing his affair with former news anchor Lauren Sanchez.

As detailed in Scandalous, the National Enquirer has gotten close to pretty much every major American scandal since its tabloid makeover in the 1950s, when Generoso Pope Jr. bought the then-struggling outlet. Tailored to tantalize the average American—described in Scandalous by Enquirer staff as “Missy Smith from Kansas City”—the publication used shock and awe tactics to enthrall readers. Those tactics, the documentary suggests, have since trickled down to other publications today.

Scandalous aims to draw attention to the role the Enquirer played in shaping current American culture, politics, and media. “We wanted the viewer to walk away feeling complicit in this type of journalism,” says Courtney Sexton, SVP of CNN Films and Scandalous executive producer. “The National Enquirer only exists because we demand it. TMZ only exists because we demand it. … I would have to imagine that [the Enquirer] has influenced every publication to pay attention to what people want to consume.”

‘Straight out of Ocean’s 11’

In 2017, after Landsman started noticing the Enquirer’s newfound political bent, his wife’s best friend invited him and his wife to dinner with her father, who turned out to be Malcolm Balfour, a former Enquirer reporter. Hired in 1972 as an article editor, Balfour said that his job was to “come up with the far out kind of stories [the Enquirer] had in those days.”

“His stories were unbelievable,” Landsman said. “He talked about things like espionage and disguises and checkbook journalism, bribes.” Balfour told a story of Jacqueline Kennedy and Aristotle Onassis arriving in a yacht at Palm Beach only for the Enquirer to attempt attaching a recording device underneath the yacht to eavesdrop on the pair. “It didn’t work, and we wound up not doing it,” Balfour said. “But there were so many of these stories.”

“It was straight out of an Ocean’s 11 movie,” said Landsman. This is when it clicked for him that the Enquirer’s activities would make for a great film.

Malcolm Balfour, a former National Enquirer reporter, is featured in the documentary, “Scandalous.”
Magnolia Pictures

Balfour introduced Landsman to other former Enquirer reporters, many who had “cut their teeth on Fleet Street,” the U.K.’s former journalism hub. Landsman was “absolutely fascinated” with them, Balfour said. Then, in April 2018, Ronan Farrow published a story in The New Yorker about the Enquirer and AMI suppressing stories that would have been damaging to Trump while he was running for president. 

Landsman pitched the documentary to CNN Films, and they went for it. Sexton thought the film had a “great mix of being entertaining but also having an important message grounded in something that is culturally relevant.”

Making the movie proved a sort of balancing act. Landsman and CNN Films had to respect that their subjects who used to report at the Enquirer sometimes got the story right, while also showing how damaging and unethical a lot of the methods were. For instance, the Enquirer helped police with the O.J. Simpson case by finding pictures of him wearing the shoes that left prints at the scene where Simpson’s ex-wife, Nicole Simpson, and Ron Goldman were found murdered. On the other hand, according to former Enquirer staff interviewed in Scandalous, the publication’s reporters essentially fed a murder confession to the woman who sold drugs to John Belushi before he died. The documentary also shows how the tabloid was widely seen as complicit in the exploitative paparazzi culture that the public blamed for Princess Diana’s death.

More recent scandals involving the Enquirer under Pecker required a sort of write-around in the documentary. “No one from the current AMI universe would talk to us,” Landsman said, including Pecker and former Enquirer editor-in-chief Dylan Howard. About five former Enquirer employees said they “wished” they could talk for the film, according to Landsman, but couldn’t because they had signed nondisclosure agreements.

Other former Enquirer reporters asked to be paid for participating in the film, according to Landsman, which he and his team refused to do. “The only thing we paid for was archival,” he said. The film used footage from more than 100 different archive houses, Landsman estimated.

Landsman wasn’t surprised that “old school” Enquirer reporters asked for payment in exchange for their information. Paying sources was—and apparently remains—a regular practice at the Enquirer. What did surprise Landsman as he made Scandalous was “the kinds of bargains people strike with themselves.” Some of the former Enquirer reporters interviewed in the film had previously worked at news organizations like Reuters and the Chicago Sun-Times, where activities like bribing sources would have been considered a highly unethical practice. They decided to leave those publications for the Enquirer, where they got to fly on private jets at a moment’s notice to get the story, bags of cash to bribe sources in hand.

“It’s pretty shocking, and makes you hopefully, as a viewer, feel a little bit icky about what it takes to get these stories that we can’t turn our eyes away from,” Sexton said. One example in the documentary is how the Enquirer handsomely paid Elvis Presley’s cousin to snap a picture of the rock star in his coffin.

An impact on journalism and more

“The most interesting thing,” said Landsman, “is that some of those guys, to this day, will say, ‘I am absolutely a journalist.’” Even though many former Enquirer reporters engaged in journalistically unethical practices, as they recounted in Scandalous, they felt they were doing their jobs. The documentary also features interviews with non-tabloid journalists like Watergate reporter Carl Bernstein, the New York Times’s Maggie Haberman, and Ken Auletta, a longtime New Yorker writer. In the film, each addresses the tabloid’s massive influence on American culture and media, while also pointing out some of its more damaging practices. Bernstein called the publication’s relationship with Trump “the ultimate corruption,” while Haberman said the Enquirer’s practice of “silencing women with hush payments” is something she “had never heard of before.”

Watch clips from Scandalous here:

Scandalous illustrates Pecker’s social-climbing friendship with Trump (he’s a “short guy who wants to be taller,” Auletta says of the former CEO in the film), and the president’s long-term influence on the paper. Decades ago, the documentary states, Trump would send the Enquirer celebrity story tips under false names, before he became a subject of the tabloid himself, and, eventually, the tabloid’s so-called “silent editor.” (Where Landsman’s documentary leaves off, Farrow’s new book Catch and Kill picks right up, delving even deeper into the tabloid’s practices and its April sale, which some suggest may have left the Enquirer in the hands of more than just known purchaser Cohen.)

Landsman hopes Scandalous will get people thinking more about the value of their media consumption. The film—which Magnolia Pictures is releasing Nov. 15—is not just a documentary about an influential tabloid. It’s a cautionary tale about the future of media, and how it can affect a country’s culture and politics.

More must-read stories from Fortune:

The Man in the High Castle team on its final season
Wrongful Conviction podcast visits Rodney Reed on death row
—A new documentary on “The Preppy Murder” examines victim blaming and privilege
—Inside the Oscars’ self-inflicted Best Foreign-Language Film headache
The Kingmaker tackles the truths and “horrors” surrounding Imelda Marcos
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.



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Elon Musk Soars Past Warren Buffett on Billionaires Ranking

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(Bloomberg) — Elon Musk is now richer than Warren Buffett.The fortune of Tesla Inc.’s chief executive officer rose $6.1 billion on Friday, according to the Bloomberg Billionaires Index, after the carmaker’s stock surged 11%. Musk is now the world’s seventh-richest person, also ahead of tech titans Larry Ellison and Sergey Brin.The 49-year-old owns about a fifth of Tesla’s outstanding stock, which comprises the bulk of his $70.5 billion fortune. His majority ownership of closely held SpaceX accounts for about $15 billion.Shares of the electric-car maker have risen 269% this year. The company’s booming valuation helped Musk land a $595 million payday, making him the highest-paid CEO in the U.S.Musk is the latest tech entrepreneur to rise above Buffett in the ranks of the world’s richest. Steve Ballmer, the former Microsoft Corp. CEO, and Google’s co-founders Larry Page and Brin also have leapfrogged the Oracle of Omaha. And Indian tycoon Mukesh Ambani surpassed Buffett this week.Mike Novogratz, the longtime money manager who now runs digital currency investor Galaxy Digital Holdings Ltd., warned that valuations of technology companies are getting way too high and that small investors should get out of the market before it crashes.“We are in irrational exuberance — this is a bubble,” he said Friday in a Bloomberg Television interview. “The economy is grinding, slowing down, we’re lurching in and out of Covid, yet the tech market makes new highs every day. That’s a classic speculative bubble.”Surpassing Buffett may be especially sweet for Musk. In an interview in May, he told comedian Joe Rogan that he wasn’t “the biggest fan” of his fellow billionaire. “He’s trying to find out does Coke or Pepsi deserve more capital? I mean that’s kind of a boring job, if you ask me,” Musk said.Buffett has also criticized Musk, saying last year that although Musk was “a remarkable guy,” he had “room for improvement” in behaving like a CEO, singling out his tweeting habits.Buffett’s fortune dropped earlier this week when he donated $2.9 billion to charity. The 89-year-old has given away more than $37 billion of Berkshire Hathaway shares since 2006. The company’s stock performance has also underwhelmed recently.(Adds Musk comments on Buffett in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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The real problem with accounting firms: They don’t reward auditors that challenge clients

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Britain’s audit regulator, the Financial Reporting Council, put out new rules July 6 intended to boost auditors’ independence. The rules focus on how audit partners are paid—so that fees from consulting, which requires a certain degree of obsequiousness toward clients, do not overly slacken auditors’ skepticism toward those clients. 

These new rules are well-meaning. But they are not enough. Auditors could easily use the new rules to raise audit fees on their clients, but that does not mean they will be more challenging toward their clients. Indeed, it is easy to see how the audit firms comply with the letter of these new rules without honoring their intent. The very fact that the audit firms have come out broadly supportive of the new rules should give the regulators some pause as to whether they have been had. 

The new rules are seemingly catalyzed by the Wirecard accounting scandal. A DAX 30 company, and one of Europe’s embarrassingly few tech success stories, Wirecard has collapsed under what appears to be a simple cash fraud. The auditors apparently relied on third-party representations of their client’s cash balances. This is absurd. Even my landlord, who is not an auditor and who knows of my professorial role at Oxford, demands a higher standard of proof to verify my income. 

It is not that the auditors don’t know how to do their job—most audit partners I have met are hugely competent. It is because the culture in their own firms does not sufficiently reward challenge. To have gone back to Wirecard to chase after more evidence on cash balances would have been unpleasant for the auditors—it suggests to the client that the auditor does not trust them. And to be so aggressive with clients is anathema, even for partners in the firms. Not surprisingly, the juniors also learn how to sing in this choir. 

Bethany McLean is a hero among financial journalists. In 2001, the then 30-year-old Fortune magazine reporter authored a critical piece questioning one of the world’s most valuable and feared companies: Enron. Her article helped unravel the massive accounting fraud upon which Enron was built, and it helped bring down both the company and its auditor, Arthur Andersen, which was at the time one of the world’s most revered audit firms. 

The story of Bethany McLean’s chutzpah is legend in business school and journalism classrooms—the story of a David who brought down Goliath. I haven’t met a serious financial journalist who doesn’t yearn for a “hit” like McLean’s Enron piece. 

What are the McLean-like watercooler stories within audit firms? What are the hero narratives on which novice auditors are initiated and reared into the partnership? These narratives exist—every organization has culture-building stories, even if they are not the ones the CEO likes to tell—but within audit firms today these narratives have little to do with challenging clients’ management. 

Rather they are narratives about whistleblowers who get shunted out and troublemakers who get denied promotions. The junior auditors know what is best for them if they want to stay and draw partner-level salaries—and rocking the client’s boat is not advised.

The Wirecard fraud has again brought to public attention the invidious negligence of some auditors. The crisis in auditing is at the heart of the current crisis in capitalism—many people don’t trust capitalism because they see it as an inside job; auditors are supposed to safeguard against expropriation, but they are too often caught asleep at the wheel. 

What we need to see from the audit firms is a genuine commitment to getting their internal culture right—a culture of intense challenge and skepticism of clients’ management practices. Many clients will not like this; but that is precisely why we need auditors and why we made audits statutory. Until we know that audit rookies are being inducted with watercooler tales of how their firms’ most respected partners felled duplicitous CFOs through dogged investigation, no amount of new rules will matter. 

Karthik Ramanna is professor of business and public policy at the University of Oxford’s Blavatnik School of Government. 

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House rejects ABS-CBN plea to extend franchise

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Philippine lawmakers on Friday rejected the franchise application of ABS-CBN Corp. — a broadcast network critical of President Rodrigo R. Duterte — in what critics see as a grievous assault on press freedom.

Voting 70 to 11, the House of Representatives committee on legislative franchises denied the 25-year extension plea, saying the media giant was “undeserving” of the privilege.

“Not since the dictator Ferdinand Marcos shut down ABS-CBN and other media outlets in 1972 has a single government act caused so much damage to media freedom,” Phil Robertson, deputy Asia director at Human Rights Watch, said in an e-mailed statement.

“This move solidifies the tyranny of President Rodrigo Duterte who accused ABS-CBN of slights against him and politically targeted it for refusing to toe the government’s line and criticizing his so-called ‘war on drugs,’” he added.

Mr. Robertson said the House vote was “an astounding display of obsequious behavior by congressional representatives, kowtowing to Duterte by agreeing to seriously limit media freedom in the Philippines.”
“This is a black day for media freedom in a country previously regarded as a bastion of press freedom and democracy in the region,” he added.

The tough-talking Mr. Duterte had on numerous occasions unleashed a stream of profanity against dissenting journalists whom he accused of bias and unfair reporting. Journalists have also been targeted by Mr. Duterte’s Facebook supporters — known bloggers with huge followings and who have fiercely defended him and his policies.

Mr. Duterte has slammed media outlets such as the Philippine Daily Inquirer, ABS-CBN and Rappler for criticizing his government, particularly his war on drugs that has killed thousands of suspected pushers.

‘DEEPLY HURT’

ABS-CBN President and Chief Executive Officer Carlo Katigbak said they were “deeply hurt” by the House decision.”We have been rendering service that is meaningful and valuable to the Filipino public,” he said in an e-mailed statement. “We remain committed to public service, and we hope to find other ways to achieve our mission.”

The House vote puts in jeopardy the jobs of more than 11,000 workers of the media network, which claims to reach more than 80 million Filipinos here and overseas.

“I am deeply saddened by this episode in the history of our nation,” Senate Minority Leader Franklin M. Drilon said in a statement. “It is reminiscent of the dark pages in the history of Philippine press in 1972.

Presidential spokesman Harry Roque said the palace was neutral about the franchise issue.”Much as we want to work with the aforesaid media network, we have to abide by the resolution of the House committee,” he said in a statement.

Speaker Alan Peter S. Cayetano urged the public to “understand why the decision had to be so.”

A technical working group composed of Cebu Rep. Pablo John F. Garcia, Camiguin Rep. Xavier Jesus D. Romualdo and Marikina Stella Luz A. Quimbo endorsed the rejection of the franchise application in a report. Ms. Quimbo dissented.

Quezon City Rep. Franz E. Alvarez, who heads the committee, said ABS-CBN Corp. had 24 hours to appeal the House decision.

Critics have said the issue of ABS-CBN’s franchise has become both personal and political. Mr. Duterte had openly harbored a grudge against the broadcaster.

In 2017, he accused ABS-CBN of swindling after it refused to run political ads he had paid for during the 2016 presidential campaign.

Mr. Duterte had also criticized the broadcaster for airing news stories about his alleged secret bank accounts. He said he would block the renewal of the company’s franchise if he had his way.

“I will not let it pass,” he said in 2018. “Your franchise will end. You know why? Because you are thieves.”
The Center for Media Freedom and Responsibility on Feb. 11 called the case against the network a “dangerous attempt to control and silence free press.”

RAPPLER

A Philippine trial court last month convicted Maria Ressa, chief executive officer of news website Rappler, Inc. and former researcher Reynaldo Santos, Jr. guilty for violating a law against cyber-libel.

Critics also viewed the verdict as a major setback for democratic rights in the country. Judge Rainelda H. Estacio-Montesa sentenced the two to six months to six years in prison.

The Justice department in February last year indicted Ms. Ressa, a former CNN investigative reporter, for cyber-libel based on a complaint by a businessman over an article published in 2012, months before the cyber-crime law was passed. The journalist has said the allegations were unfounded.

A month later, she got arrested again for allegedly violating the ban on foreign ownership in media.

Local and international media watchdogs and human rights groups have condemned her arrest. New York-based Committee to Protect Journalists has called on Mr. Duterte’s government “to cease and desist this campaign of intimidation aimed at silencing Rappler.”

Rappler, which Mr. Duterte has called a “fake news outlet,” is also appealing last year’s order by the Securities and Exchange Commission to close its operations for violating foreign-equity restrictions in mass media. Ms. Ressa is also facing tax evasion cases.

The presidential palace said Mr. Duterte did not have a hand in the court ruling. — Patricia S. Gajitos



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