Paradise Lost: If You Can't Beat 'Em, Buy 'Em   

When the Virgin Islands Daily News won a Pulitzer Prize in 1995, its proud parent Gannett placed splashy ads in trade publications, singing the praises of the plucky 16,000-circulation daily.

On September 9, Gannett announced something else — after two decades of ownership, it was selling the Daily News.

And that worries many staffers and community members. Particularly troublesome, they say, is the buyer: Virgin Islands media magnate Jeffrey Prosser, the majority shareholder in the local telephone company, the owner of a local cable television system and the beneficiary of a huge tax break from his ally Gov. Roy L. Schneider's administration.

"I believe the public will see the sale for what it is — an attempt to gain power," says Adlah Donastorg, a senator in the U.S. territory.

In the Caribbean, where Puerto Rico's governor angrily pulled government ads from a newspaper critical of him and a crony of Antigua's prime minister started a newspaper to drive a harshly critical paper out of business, attempts to strong-arm the press are nothing new.

"The responsibility of a newspaper is to serve the public as its primary stakeholder," says Bob Steele, director of the ethics program at the Poynter Institute for Media Studies in St. Petersburg. "If you have fewer voices, there is the possibility that no one is watching the watchdog, or that ownership is interested in serving itself."

In the past the Daily News has intensely scrutinized the local government, including Schneider, and the territory's other players, including Prosser. But many Virgin Islanders think Prosser's ownership will jeopardize the paper's independence.

Though told of the deal, which will be finalized by year's end, just hours before staffers, some managers were heartened by Prosser's no-quick-changes speech and will stay on for now. But they're concerned.

"It will be very difficult to cover objectively and aggressively the many companies that he owns and the public issues in which he is involved," says Executive Editor Penny Feuerzeig. "I worry about some of the reporters self-censoring about reporting on the man who pays their paychecks. Sometimes it's just subconscious."

Melvin Claxton, whose series on the territory's woeful crime-fighting efforts won the Pulitzer, questions Gannett more than Prosser. "The reason the paper became such a target for purchase was because it was as aggressive as it was," says Claxton, now an investigative reporter for the Chicago Tribune. "People really feel betrayed by Gannett, simply because the people at the Daily News made it so attractive for purchase by someone like Prosser. I think many people feel Gannett put dollars ahead of journalistic integrity and principle."

Gannett spokeswoman Donna Faulk says Gannett did not put out a news release on the sale and would not comment on it. But newspaper analyst John Morton suggests the Daily News was the victim of a trend. "The wave today is to cluster newspapers in regions, and that's a stand-alone operation," he says.

Morton expects the sale to go through. "I don't think Gannett is particularly sentimental about the newspapers they dispose of," he adds.

Schneider bristled when the Daily News reported early in 1995 that he and his wife took free rides on Prosser's private jet for getaways. By the summer of 1996 he cut government subscriptions and curtailed advertising in the paper. In a huff, he complained that the newspaper runs his picture too small and even suggested that one reporter seek psychiatric help.

Some of the paper's 82 full time employees are circulating resumés, but the paper's brass seems to take Prosser's hands-off promise seriously. In late September, the Daily News reported that Prosser's telephone company salary jumped from $252,000 last year to $600,000 this year — while the company obtained new tax exemptions amounting to about $18 million from the financially strapped Schneider government.

That figure is close to the reported $17 million Daily News price tag. "To some people, it [the tax exemption] seems blatantly political," says Daily News CEO Ronald Dillman. "The governor is taking care of his friends."

Speaking to Daily News staffers, Prosser acknow-ledged his ties to Schneider, but said he and the governor would not interfere with coverage. "If we touch the editorial integrity of the newspaper, we will destroy it," Prosser said.

But for Claxton the real test will come when the deal is done. Then Prosser won't be hamstrung by promises to keep newspaper management intact and to stay out of day-to-day affairs.

"Next year is an election year," Claxton says, "and Prosser has so much at stake in keeping the current governor, I can't see him sitting back and letting the paper endorse some other candidate."

St. Thomas businesswoman Teri Golden, among those urging Gannett to reconsider the sale, puts it another way: "The future of the U.S.V.I. depends upon an independent voice questioning the corruption and financial mismanagement of our government," she says. "That voice is the Daily News."