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Columnist: Error About News Corp. Was 'Big Screw-Up On My Part'

Steve Inskeep speaks with David Cay Johnston

While he can explain how it happened, Reuters columnist David Cay Johnston says "there's no excuse" for the huge mistake he made Tuesday when he wrote that Rupert Murdoch's News Corp. had received billions of dollars in tax refunds from the U.S. government in recent years — when in fact it had paid billions of dollars in federal taxes.

"This is a big screw-up on my part," he told Morning Edition host Steve Inskeep earlier today.

According to Johnston, "News Corp. reported numbers as positive numbers for cash paid for taxes for three years and then [in 2007] switched to reporting them as negative numbers — that is, as numbers in parentheses. ... And I didn't catch that those were negative numbers."

The company did disclose the accounting change it had made. Johnston said he does not recall if he read the note in its financial reports, and says that the way it was written would not have made him realize what News Corp. had done.

Before his original column was posted on Reuters.com, Johnston called News Corp. for comment on his (erroneous) conclusion that the company had gotten billions in refunds. Neither of the officials he spoke to, Johnston said today, "so much as coughed." And the company declined to comment for his original column.

To be fair, he added, News Corp. spokesmen are "under siege right now" because of the scandal in the U.K. over how some of its tabloids have collected information about thousands of people, from the royal family to victims of crime.

And, as he said, "there's no excuse" for an error of this magnitude.

The Pulitizer Prize-winning columnist has posted a long piece that explains in more detail "how I misread News Corp.'s taxes." It begins with this:

"Readers, I apologize. The premise of my debut column for Reuters, on News Corp's taxes, was wrong, 100 percent dead wrong.

"Rupert Murdoch's News Corp did not get a $4.8 billion tax refund for the past four years, as I reported. Instead, it paid that much in cash for corporate income taxes for the years 2007 through 2010 while earning pre-tax profits of $10.4 billion."

Johnston was on Morning Edition today in part because on Wednesday he had been on the show, also speaking with Steve, about the original column. You can hear that conversation, and read an editor's note from NPR, here. A transcript is posted here.

As Steve said this morning, since Johnston had "discussed his inaccurate findings yesterday in an interview with me on Morning Edition, so it is our obligation to make a correction that is as prominent as the original mistake."

Johnston only recently joined Reuters and Tuesday's column was his first for the wire service. A long-time correspondent for The New York Times, he won his Pulitzer in 2001 "for his penetrating and enterprising reporting that exposed loopholes and inequities in the U.S. tax code, which was instrumental in bringing about reforms."

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