Reuters Columnist Admits Error In News. Corp. Story

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Reuters columnist David Cay Johnston says he made a mistake. The Pulitzer Prize-winning economics reporter wrote about Rupert Murdoch's News Corp. The company faces a scandal in Britain but Johnston focused on something else. He wrote News Corp. paid no taxes for years, instead collecting billions of dollars in refunds. Johnston tells Steve Inskeep his story was wrong.


INSKEEP: Reuters' columnist, David Cay Johnston, says he made a mistake. The Pulitzer Prize-winning economics reporter wrote about Rupert Murdoch's News Corporation. The company faces a big scandal in Britain, but Mister Johnston focused on something else. He wrote that News Corp. paid no taxes for years, instead collecting billions of dollars in refunds. Johnston now says his story was utterly wrong. News Corp. did pay taxes.

And he discussed his inaccurate findings yesterday in an interview with me on MORNING EDITION, so it our obligation to make a correction that is as prominent as the original mistake, you get the best information that we can get you, which is why we have invited David Cay Johnston back on to the same program. Mister Johnston, thanks for coming back.

Mr. DAVID CAY JOHNSTON (Columnist): Well, thank you and for you policy.

INSKEEP: What happened?

Mr. JOHNSTON: Well, News Corp. reported numbers as positive numbers for cash paid for taxes for three years and then switched to reporting them as negative numbers - that is numbers in parenthesis. And I didn't catch that those were negative numbers. And, you know, like when an airplane falls out of the sky, it's not one mechanical failure of a system, it's a whole escalading series of little things that they're wrong.

INSKEEP: Let's clarify for people. You...

Mr. JOHNSTON: I spoke...

INSKEEP: Let's clarify for people. You were reading the financial disclosures that News Corp. has to make to the federal government, and you were confused about whether the - there were $4.8 billion - this a big number here - $4.8 billion over a number of years in taxes paid or whether they were actually tax refunds. That was the confusion here.

Mr. JOHNSTON: That's exactly correct. And it turns out that the News Corporation makes inconsistent use, sometimes within the same table, of positive and negative numbers in its reports. Now News Corp. did disclose, on page 87 of its - the disclosure report for 2007, that it had made some changes. And let me read you the exact disclosure that they say points you to the fact that they went from positive numbers to negative numbers for the same thing. Certain fiscal 2006 and fiscal 2005 amounts have been reclassified to conform to the fiscal 2007 presentation.

INSKEEP: That was the clarification that you missed in the paperwork itself and so you were confused by the chart.

Mr. JOHNSTON: Yeah. Even if I read it, and I don't recall if I read that line or not, I usually read the note that falls in, that would not have led me to think that they had switched the numbers from positive to negative. Now I also - by the way, there's no excuse for all of this. I am trying to explain it. I have always followed that practice. I did call the News Corp., spoke to two representatives, neither of whom so much as coughed when I said what I had found. And so...

INSKEEP: You're saying - wait a minute. You're saying you spoke with News Corp. before making this mistake, and they didn't correct you about the mistake?

Mr. JOHNSTON: Absolutely. You know, I've never written a story in my life that anybody who is being criticized didn't know exactly what was coming.

INSKEEP: Although in the end, they said no comment. In a situation where the company is not helpful, did you have an extra...

Mr. JOHNSTON: Well, they didn't comment. I didn't say they said no comment, they did not comment.

INSKEEP: In a situation where you don't get help from the company, did you have a greater obligation to try even harder to get the story right, really?

Mr. JOHNSTON: Oh sure. Listen, when you're due - I write very critical notes about other journalists not doing a good job, and I absolutely want to walk my talk. This is a big screw up on my part. We have written a new column at that lays out what happened, so that readers will understand the mistake and straightening it out.

But, yes, I was surprised that the company had - you know, they were just nonplused when I said this. Usually, when you have something, if it's off, in even a small detail, companies jump right on that. On the other hand, to be fair to them, remember, they're under siege right now from journalists from all these other issues facing Mr. Murdoch.

INSKEEP: Just to clarify the bottom line here. Rather than getting $4.8 billion over a number of years in tax refunds, News Corporation has paid $4.8 billion in taxes, by their accounting. And so they're paying quite a fair amount of taxes, aren't they?

Mr. JOHNSTON: Absolutely. And that's exactly what the top of my new column says.

INSKEEP: You know, as word of these mistakes spread yesterday, I got a Twitter message from a man named Michael Arnold, who said that your initial claim was, quote, "obviously absurd." He suggested it should not have been made unchallenged by me. Was this an absurd idea that a giant corporation could get billions of dollars in refunds? We just got a few seconds left here.

Mr. JOHNSTON: Oh no, not at all. Many companies run, for periods of years, negative taxes, and I have written about these and have documented them repeatedly, so that's not surprising at all. Companies also get to defer taxes. They get to reach back, unlike you and me, to the past and take losses today...

INSKEEP: Right. Right.

Mr. JOHNSTON: ...offset profits.

INSKEEP: OK. Well, David Cay Johnston, thanks very much for coming back to apologize and to explain the mistake.

Mr. JOHNSTON: Thank you, Steve.

INSKEEP: He's a columnist for Reuters. Now, before yesterday's interview, NPR did contact News Corp. for information about its taxes, didn't hear back. After the mistake, a News Corp. spokesman did write us to say they would have no comment.

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