Thursday, June 30, 2005

The Plame game

So why is Time Inc. deciding to make the unprecedented move of handing over to a grand jury information about the confidential sources of one of its reporters, Matt Cooper?

If you've got the sentimental idea that this is because Time doesn't like the idea of Cooper going to jail, think again: the Wall Street Journal suggests that this decision is in fact fall-out from mass media consolidation and the financial leverage the government can therefore bring to bear against news agencies:

Time Warner's precise worries about continuing to defy the subpoenas weren't clear, but the company deals frequently with the federal government and may want to avoid a standoff that could involve possible criminal prosecution, such as obstruction of justice. Another concern: other Time Warner employees who might have seen the documents the government seeks could themselves face subpoenas.

Time Warner depends on government approval for a number of matters. It is, for example, awaiting antitrust approval for its acquisition -- with Comcast Corp. -- of Adelphia Communications' cable assets. It depends on the government's largesse to issue securities. And though it is a cable operator and holds no broadcast licenses from the Federal Communications Commission, the company is vulnerable to FCC pressures on issues of media content.

One other potential issue is a deferred-prosecution agreement struck last year between the Justice Department and Time Warner relating to America Online. A deferred prosecution contemplates cooperating with the government in its ongoing investigation into specific wrongdoing, in this case alleged accounting fraud.

"Time Warner has got to be inclined to be as cooperative with the government as they can on all fronts," says Washington attorney Hank Asbill, who is representing a former America Online executive charged with securities fraud.

1 comment:

rmockler said...

Fair enough to note the variety of ways Time and its various affiliates need government approval and how this might influence Time (all you need to do is watch CNN's coverage of the latest Warner Bros. release to see the various incentives consolidation creates). But it's not in any way clear that consolidation would have an impact on Time's position in the Plame matter. They did take the case as far as it could go legally, and it's hard to believe that the FCC or FTC would really alter their rulings based on Time's decision to resist a subpoena. What comes out of that article is that Time doesn't want its people to go to jail, which is an understandable position. As a general matter, it may be equally likely that a media behemoth would have greater resources to hold out against the government and therefore be MORE likely to stand on principle than a smaller company (the key Supreme Court cases involved the New York Times, not some small paper). Also, while I agree that Time has not resisted the subpoena to be nice to its reporter, it has probably done so because protecting confidential sources leads to more interesting journalism and therefore more sales. Not sentimental, but also not insidious.