AJR  Features
From AJR,   March 1997

The Lion's Share   

Rather than attacking courts for unfavorable outcomes like the one in the Food Lion case, journalists should face up to their own shortcomings and be more careful in their reporting.

By Marc Gunther
Marc Gunther, who has covered network news since 1983, is a senior writer at Fortune magazine.     

T HE REACTION WAS ALL too predictable.

When a Greensboro, North Carolina, jury found that ABC News' "PrimeTime Live" had broken the law in its hidden-camera investigation of the Food Lion supermarket chain, journalists, media lawyers and defenders of the First Amendment denounced the verdict. There were dire predictions about the "chilling effect" of the jury's decision and its subsequent $5.5 million award of punitive damages.

The initial Food Lion verdict came during the same week that a federal jury in Florida ordered ABC and one of its producers to pay $10 million to a Fort Lauderdale banker named Alan Levan who had sued for libel. The Levan decision, too, was seen more as a threat to the press than as an indictment of ABC's journalism.

Typical was Bruce Sanford, a Washington-based First Amendment lawyer, who told the Associated Press that the Food Lion jury was "punishing the messenger, plain and simple." Sandra Baron, executive director of the Libel Defense Resource Center, told the New York Times that such lawsuits could lead reporters to "exercise caution, perhaps undue caution" when pursuing investigative stories. It would be unfortunate, she later told AJR, "if, as a result of the cost of litigation, good stories are not done."

True enough. But a little caution--perhaps even undue caution--might not be a bad idea. Because the evidence brought to light by the Food Lion and the Levan lawsuits suggests that, in these two instances, ABC's prime time newsmagazines didn't exercise much caution at all. To the contrary, the plaintiffs in both lawsuits made strong cases that "PrimeTime Live" and "20/20" acted recklessly in gathering the news and irresponsibly in presenting it. An examination of the cases suggests that's the fundamental reason ABC lost in court.

Nor are these entirely isolated incidents. "PrimeTime" has lost two other hidden-camera lawsuits, and ABC had to apologize and pay a reported $15 million in legal fees to settle a $10 billion lawsuit filed by Philip Morris over a "Day One" program on tobacco (see "Up in Smoke," November 1995). Each loss puts at risk the credibility of a network and damages the cause of serious journalism everywhere.

But in the wake of such setbacks, journalists often focus not on the shortcomings of the stories themselves, but rather on the pernicious implications of the court decisions. Reporters and media organizations tend to close ranks when a major network is sued by a big corporation like Food Lion or Philip Morris.

Groups like the Libel Defense Resource Center and the Reporters Committee for Freedom of the Press, which are largely funded by news organizations and their lawyers, argue that the courts are not the proper place to settle complaints against news organizations, and they may be right (see "The Press and the Law," page 48). Says Baron, "The First Amendment, if it does anything, should protect reporters from having to defend themselves in court against the accusation that they are unfair."

The problem for those who believe they have been victimized by unfair reporting is that there's really nowhere else to go. In theory, offended parties could take their grievances to a competing news outlet but, as a practical matter, few reporters have the time or inclination to delve into the details of a complaint against ABC News, "Dateline NBC" or "60 Minutes." With a few exceptions--the Washington Post and Wall Street Journal come to mind--newspapers, magazines and the networks have provided only superficial coverage of complaints, including the lawsuits against ABC. What's more, only the courts have the power to force the networks to open up their newsgathering process to scrutiny--to answer questions about how and why they pursue stories and, especially, to give outsiders a look at the editing process.

That's why these lawsuits are worth a closer look, because they provide a peek behind the scenes of the network newsmagazines. The picture, alas, isn't always pretty. In fact, the closer I've looked at how the newsmagazines work--and I've covered them for many years--the more disturbed I've become. My view has emerged gradually, after reading thousands of pages of court documents and interviewing dozens of people, not just those who have sued the networks but also people inside the industry who are troubled by the way journalism is practiced on the prime time shows.

A prominent network executive told me recently, "Television investigative reporting has a lot to answer for. Much of it is very good, but a lot of times it's produced for impact rather than illumination." Another said, "I worry that the magazines bring the business down. Once you get into this business of competing for prime time ratings, it's a downward spiral."

That's the heart of the problem. The prime time magazines must compete for ratings with entertainment shows, so they are under enormous pressure to tell clear, simple stories, with victims and villains, preferably illustrated with eye-catching video (see "Money Changes Everything," April 1993). It's rare that the networks portray a good person or company as bad; more often, the desire to entertain and simplify can overwhelm nuance and balance.

Not everyone agrees. Roone Arledge, president of ABC News, says--rightly--that some of the best journalism anywhere is done by programs like "PrimeTime Live," "20/20" and "60 Minutes." He vigorously defends the Food Lion story in particular, saying, "This story was important. This story was true. And this story was about as close to 100 percent perfect as any story we have ever done."

B Y NOW, EVEN IF YOU DIDN'T see the program, you've surely heard about the 1992 ABC "PrimeTime" broadcast that accused Food Lion of selling rotting meat, fish dipped in bleach to disguise its putrid smell, cheese nibbled on by rats, even produce removed from fly-infested dumpsters.

You've probably also heard about the way ABC News producers Lynne Dale and Susan Barnett lied and induced others to lie to get hired at Food Lion supermarkets in North and South Carolina. Dale, in particular, laid it on thick, writing on her job application, "I love meat wrapping. I have heard Food Lion is a great company. I would like to make a career with the company." She even persuaded her dentist to give her a false reference. This enabled Food Lion lawyer Andrew Copenhaver to tell the jury: "Can anyone really trust ABC?... Lying is part of the very fabric of 'PrimeTime Live.' "

You may also have heard that Food Lion, despite its claims that the program was false and unfair, didn't sue for libel--a point made repeatedly by ABC. "They didn't attack the story because they knew it was true," Arledge says. Instead, the supermarket chain sued for fraud, trespass and breach of fiduciary duty--meaning that the ABC producers, once hired, owed their loyalty to Food Lion. These newsgathering issues, and not the program itself, were the focus of the trial and verdict.

Most news accounts of the Food Lion trial, however, haven't gone beyond the issue of hidden cameras to examine other problems with ABC's reporting and editing. Documents show, for example, that the ABC producers applied for work at Food Lion as soon as their story was approved--in apparent violation of the network's own guidelines, which say hidden cameras should be used only after other means of getting the story have been tried. In the Food Lion case, ABC could have checked state or federal health inspection reports to learn about Food Lion's food safety record. Or the producers could have purchased food at Food Lion and had it tested at a laboratory for contamination, the most effective way of proving that the public's health was at risk. Neither was done or even considered, court documents show.

In effect, ABC opted to shoot first and ask questions later.

What's more, the ABC producers worked closely for months with the United Food and Commercial Workers Union, which has waged a bitter campaign against non-union Food Lion. The union proposed the story to ABC; provided disgruntled workers to testify about alleged food-handling problems; arranged for Dale and Barnett to observe the operations of a deli and meat market so they could pass themselves off as experienced workers; and obtained false job references for the producers and for an ABC photographer from friendly supermarket owners.

Of course, reporters seek information all the time from foes of companies they are investigating, and legitimate news stories often result. The difference here is that the union was intimately involved in the newsgathering process.

Finally, and most troubling, is the fact that ABC did not present to viewers evidence that would have undercut its indictment of Food Lion. Start with state health reports: In 1992 in Virginia, for example, Food Lion ranked third in food sanitation practices among eight major supermarket chains, according to the Richmond Times-Dispatch. Then ponder a common sense argument--that Food Lion, then the nation's fastest growing supermarket chain, would have to have the world's dumbest customers to sell so much tainted food. Most important, consider the outtakes from the undercover tapes, which Food Lion lawyers obtained after a long, hard-fought battle with ABC. Transcripts of the tapes submitted to the court, which include more than 50 hours of unaired material, show that some of the broadcast material was taken out of context.

There's a moment in the show, for example, when a Food Lion worker sniffs a tray of rice pudding and agrees that it doesn't smell good. While the implication is that the pudding is for sale, Food Lion contends that outtakes show the tray was in a work area, awaiting disposal, after being removed from the sales counter.

And there's no doubt that unaired footage shows Dale and Barnett trying to coax Food Lion workers into discussing rotten food and not always getting the answers they wanted. One Food Lion worker says, "Man, I could feed the dorm at [college] where I live with all the food I throw away." Another worker--who at one point is shown complaining about a spoiled chicken marinade--later says the store manager told her to dump food anytime she thought it was no good and that she does so.

No comment favorable to Food Lion was shown by ABC.

Robert Lissit, a Syracuse University journalism professor and former network television producer who was hired as an expert witness by Food Lion, charges, " 'PrimeTime' was guilty of flagrant violations of journalistic ethics by deceptively editing its hidden-camera footage." (Lissit wrote AJR's March 1995 cover story on the debate over hidden cameras.)

David Westin, president of ABC and its former corporate counsel, who has followed the Food Lion case carefully, concedes that the producers could have checked public inspection reports and that the program could have been more carefully balanced. But he says of the editing, "We never made a claim that every piece of meat was mishandled. So the fact that there were instances where things were done properly--or even a lot of times--was really not the point."

As for the suggestion that ABC could have submitted Food Lion products to laboratory tests, network executives say that Food Lion surely would have disputed the results. Only visual images could prove their case, they say.

That ABC News worked with the union isn't unusual, Westin says, since reporters frequently seek information from people with vested interests and then test it against other evidence. ABC, he adds, has 70 employees confirming on-the-record accounts of poor sanitation. (Food Lion disputes this.) And, Westin says, ABC "bent over backwards" to get Food Lion's side of the story as the broadcast neared, even submitting to the chain a detailed summary of the charges to be aired.

"Their position was that they would not talk to us until we agreed not to use any undercover footage," he says. By the time of the program, ABC News and Food Lion, which had sued to try to block the broadcast, were bitter antagonists.

Westin, who is known for his fairness and integrity, remains convinced that ABC's Food Lion story was truthful and accurate. Perhaps it was, but the fact that the story was built on a foundation of deception that was bound to be challenged means that "PrimeTime" could and should have worked harder to be scrupulously fair.

F OR A MAN WHO HAS JUST won a $10-million libel judgment, Alan Levan doesn't seem very happy. Levan, 52, chairman and CEO of BankAtlantic Bancorp., convened a press conference at the National Press Building in Washington, D.C., in January, a few weeks after winning his case against ABC. But only three reporters showed up, none from a major newspaper, magazine or network, and none from a news outlet with the impact of "20/20," the program that broadcast a segment highly critical of Levan in 1991. Levan wants his reputation back, and he can't figure out how to make that happen.

Every time he watches the "20/20" expos*, Levan says, "I get this uneasy feeling in the pit of my stomach which makes me feel really defensive and helpless."

The Levan story is complicated, although it didn't come across that way on "20/20." Correspondent John Stossel and producer William Willson portrayed him as a wealthy wheeler-dealer who made a bundle of money at the expense of small investors and then refused to answer to them or to ABC. The story, declared Stossel, was "a small investor's nightmare," and the man behind it "wouldn't talk to us." The latter statement wasn't true.

Levan was a businessman who put together a transaction known as a "roll-up" that was at the heart of the "20/20" report. Originally, Levan had sold thousands of small investors limited partnerships in real estate. When the real estate plummeted in value, he persuaded investors to accept his "roll-up"--taking back their real estate partnerships in exchange for bonds backed by his bank. The bonds were trading far below their face value at the time. Levan's "roll-up" was cancelled in 1994, three years after the "20/20" story ran, and after disgruntled investors sued Levan. These facts would seem to justify Stossel's report, but it's not that simple.

For one thing, although the investors won their suit against Levan, he appealed and then settled the case. The judge in the investors' suit said "the evidence offered in support of the verdict [against Levan] did not persuade the court." What's more, BankAtlantic, which backed his bonds, has since enjoyed five years of rising revenues and profits. In a nutshell: The swap doesn't look so bad with "20/20" hindsight. Reasonable people could disagree about whether the "roll-up" was a fair deal.

But any reasonable person who watched "20/20" would have come away with the impression that Levan was the heartless villain in the tale--mostly because he was shown, repeatedly, trying to avoid Stossel and his unhappy investors. The truth, again, was more complex. He'd actually talked for six hours off the record with producer Willson, and then had agreed to an on-camera interview, under certain conditions. Only after Willson told him that ABC wanted to ask about his divorce did the agreement break down. Subsequently, Levan offered to appear unedited or live. ABC declined, saying they could not give up control of their air time. (There are, of course, exceptions to this particular rule--recall that ABC permitted Michael Jackson to appear live on "PrimeTime" and set aside time to show his video, unedited.) Levan offered to talk further on background. This became "the man who wouldn't talk to us."

The impression that Levan was hiding became a major theme of the story, reinforced by images of a door shutting on a bank vault and by the accusation that ABC was shut out of a meeting of his partners. Stossel even took his cameras to Wall Street, where a proxy solicitation firm that worked for Levan (and for ABC) wouldn't let him take pictures. The image of Stossel outside the building, complaining, remained in the segment over the objections of Walter Porges, then ABC's executive for news standards, who wrote in a pre-broadcast memo: "They wouldn't let us inside to take pictures. Why the hell should they? Makes us sound like petulant fools."

(Stossel has been advised by ABC lawyers not to talk to reporters about the Levan verdict, which is being appealed by ABC.)

"20/20" also made much of the fact that Levan had installed expensive security gates outside his mansion, implying that he was running from the small investors he'd ripped off. Stossel and his producer knew that Levan had installed the gates after his wife and son had been abducted a few years earlier. (In fairness, Levan had asked them not to talk about this.) Levan also claimed that ABC unfairly edited footage of a congressional hearing at which he testified. His arguments not only impressed the jury that gave him his $10 million victory, but also a judge who had heard testimony in the case several years earlier.

Because Levan had lost the suit to his investors, Magistrate Judge William Turnoff decided that Levan would be unable to prove that "the gist of the '20/20' story is false" and recommended that his case be dismissed. Later, after the investor suit was settled and the judgment vacated, Turnoff reversed himself and said that Levan deserved a hearing.

"It is clear that '20/20' took license with presenting the facts," Turnoff wrote. "Many of the individual statements in the story were misleading, if not completely false."

Citing the misleading edits and loaded language, Turnoff went on to say that "these examples indicate that the practices of '20/20' in producing this story were shamefully irresponsible. The undersigned is left with the impression that ABC cared more about telling a good story than an accurate one. While the piece as a whole may have been true in the strict legal sense, ethical journalism it was not."

Floyd Abrams, the distinguished libel lawyer who represented ABC, says that Turnoff hadn't heard ABC's evidence when he made his comments. He concedes that a few details in the story--such as the claim that Levan wouldn't talk to ABC--could have been presented differently. "There's no doubt that this was a tough broadcast with a point of view, and that the point of view was extremely critical of Mr. Levan and his roll-up," Abrams says.

But, he adds, the thrust of the story was well-supported. "There was unanimity among everyone [ABC] talked to who was unconnected with the transaction that the deal was terribly unfair to the limited partners," Abrams says.

The problem, though, is that getting the big picture right does not justify small distortions or deceptions. As Turnoff wrote, "If the press disregards the truth of the details, how can the public trust the truth of the substance?"

T HE BIG QUESTION IS WHETHER the Food Lion and Levan cases represent aberrations or reflect deeper problems with the newsmagazines.

Certainly the networks do dozens of valuable, hard-hitting investigative stories every year, some using hidden cameras. But my experience suggests that the Food Lion and Levan cases tell us something about the pressures of prime time investigative reporting, which drive some producers and correspondents to act more like prosecutors and judges than dispassionate reporters. It's not purely an ABC problem, clearly. The most extreme example of unfairness was the 1993 "Dateline NBC" report on General Motors pickup trucks, in which an explosion was staged.

But ABC News has suffered more than its share of prime time news woes. In 1995, the network issued an embarrassing public apology to Philip Morris over its "Day One" broadcast on tobacco. A 1993 "PrimeTime" hidden-camera segment that went after an easy target, psychic hotlines, led to a $1 million invasion of privacy verdict against ABC News. That decision was recently reversed by a California appeals court, but the fact remains that the story was marred by misleading editing. (What's more, psychic hotlines hardly seem to rise to the level of importance that would justify hidden cameras.) In 1994, an Alexandria, Virginia, jury found "PrimeTime" guilty of defaming an appliance repair shop in a hidden-camera story. The jury awarded a token $1 in damages, but issued an unusual warning to ABC News: "Take another look at 'PrimeTime's' goals and objectives. Be sure that the kind of reporting coming from this show is what you, as an outstanding news organization, want to put your name to."

Read that admonition again, and you'll see a strong argument for the magazine programs to clean up their acts.

These shows have become successful, in part, because they benefit from the trustworthiness and credibility of the networks. Their brand names have great value that has been built up as viewers have come to trust programs like the "CBS Evening News" and "Nightline."

By applying the ABC News brand name to, say, "PrimeTime" or "20/20," the network is, in effect, giving those programs its seal of approval. The danger is that these shows won't protect the value of the brand name as vigorously as "Nightline" or "World News Tonight." And as a result, ABC News as a whole could be tarnished.

Former NBC News President Reuven Frank says, "There's a risk of losing whatever credibility is left for network news." He adds, "They have this franchise and it'll last forever if they're careful, but they're not being careful."

So far, though, the problem with newsmagazines doesn't seem to have harmed the networks. After the Food Lion and Levan verdicts, ABC conducted a poll that found network magazine shows get very high ratings for "ethics and honesty," higher than local newspapers and the news media overall and much higher than the Clinton administration or politicians in general. Seventy-two percent of respondents said they thought TV investigative reporters are "careful and fair" and more than half approve of the use of undercover reporters.

ABC's Arledge says viewers are able to distinguish between a magazine show and a hard news broadcast. "I don't think," he says, "the reputation of the New York Times, for example, is harmed because they have crossword puzzles and recipes in their Sunday magazine. People know what that's all about."

Still, the Food Lion and Levan verdicts should serve as reminders that there are limits to what the media can and should do--even when going after the so-called bad guys. What's more, it's arguable that the credibility of all reporters is hurt when a major media organization like ABC is shown to have acted unethically or unfairly. That's why journalists shouldn't be so quick to condemn every verdict against the press--if they have a chilling effect on irresponsible reporting, they'll be doing all of us, and our readers and viewers, a service.