AZ Policy Wonk

The feud has worsened between Sen. John McCain and Arizona Republican Party Chairman Randy Pullen, now that Pullen has withdrawn his endorsement of McCain and both sides are fighting over campaign fundraising.

McCain and Arizona Republicans in the U.S. House of Representatives have agreed to divert money from the Arizona Republican Party for get-out-the-vote efforts, according to a story by the National Journal’s Hotline OnCall. McCain’s camp says Pullen can’t be trusted to spend the money wisely.

State party officials, on the other hand, say McCain wanted control over staffing and consulting decisions. They also said the McCain camp was continuing efforts to force Pullen from his position after years of disagreement between the two factions.

Check out the full story at: http://hotlineoncall.nationaljournal.com/archives/2010/02/mccain_camp_pla.php

The Arizona Capitol Times made a mistake last week that caused confusion for many readers and minimized the life work of a tireless leader of the labor movement.

A story that referred to Dolores Huerta should have contained a fairer and more accurate description of her work as a community organizer who has spent decades fighting for the rights of farm workers and immigrants. Instead, the story relied upon an unverified statement by Tom Horne.

Horne, the state superintendent of public instruction, was testifying to the House Education Committee on Feb. 15 when he made a comment that reduced the life work of Delores Huerta into a trivial sound bite.

The Capitol Times repeated Horne’s comment on page 8 of the Feb. 19 edition. The mistake was regrettable, and it’s not worth repeating here. It’s more important to set the record straight.

Huerta’s work with the late Cesar Chávez to form the National Farm Workers Association in 1962 provides a glimpse at her life as a labor-rights activist, but she has been involved in numerous causes in addition to her work to organize farm workers.

Her political successes go back to 1960, when she worked to help pass a law in California that permitted people to take the driver’s examination in Spanish. She later worked to pass a law that ended the Bracero program, which brought contract laborers to the U.S. from Mexico.

Huerta is credited with coining the phrase “Si, se puede,” which means “Yes, we can.”

Huerta runs the Dolores Huerta Foundation, a nonprofit organization that focuses on community organizing and fighting for policies that benefit workers, immigrants, families, women and youth.

The 79-year-old has been arrested numerous times for participating in civil disobedience activities, and she was beaten with police batons in 1988 during a protest in San Francisco. The beating caused five broken ribs, the loss of her spleen and other injuries. When Huerta won a settlement with the San Francisco Police Department, she reportedly gave the money to organizations that assist farm workers.

Huerta is married to Cesar Chávez’ brother, Richard Chávez. She has 11 children.

Those who know Huerta describe her as a resolute and tough woman who doesn’t mince words. She certainly didn’t hold back when she spoke to Tucson high school students in 2006 and declared that “Republicans hate Latinos.” Her statement attracted criticism from students, parents, teachers, lawmakers and, most of all, Republicans.

The speech also started a movement to pass a state law to ban controversial speakers in public schools. Although that idea never became law, lawmakers have proposed an alternative this year.

H2281, the bill that Horne was talking about when he brought up Huerta, would ban classes that promote hatred against a specific race or promote the overthrow of the U.S. government. The bill passed unanimously, but before it did, Horne made the disrespectful comment about Huerta’s relationship with Cesar Chávez.

Huerta has a lot of critics, and some people downright disagree with everything she stands for. But, to many others, she is an iconic figure who has endured decades of struggle to improve the lives of disadvantaged people.

Horne, obviously, is free to say what’s on his mind, but the Arizona Capitol Times shouldn’t have repeated it. At the very least, it minimized the life of a woman who has devoted her life to bringing about changes that she believes in.

The bill moratorium is over, but senators still filed fewer bills this year than they did last year.

This year, 443 bills were filed in the Senate before the Feb. 1 deadline. The House still has another week before representatives are cut off.

That’s down from the 469 bills that were filed in the before the Senate’s deadline last year, while Senate President Bob Burns was enforcing a ban on non-budget bills. The moratorium was lifted this year, but it was replaced by a stern warning to introduce only bills that were of the highest priority.

Apparently, the senators listened.

Normally, the bill totals in the Senate are around 500. In 2008, for instance, 505 bills were filed before the deadline.

Everyone knows, however, that the bill deadlines don’t mean much. Bills that aren’t going anywhere can be re-written as strike-through amendments, and that happens quite a bit. And the Senate president or speaker of the House can give special permission to file bills after the deadline, which happens often when budget bills are introduced.

In any case, lawmakers were more prolific in at least one category this year: They’ve filed more memorials and resolutions than normal. This year, there are 70 memorials and resolutions in the Senate. That compares to the 52 miscellaneous bills filed last year and the 51 miscellaneous bills in 2008.

Sen. Pamela Gorman’s resignation of her Senate seat on Jan. 25 created a vacancy in the Senate Finance Committee, where she served as member.

Senate President Bob Burns wasted no time filling the seat. On Jan. 26, he appointed Senate Majority Whip Steve Pierce to serve as a temporary replacement on the committee.

Here’s the simple mathematics of representative government: Arizona taxpayers pay for lawmakers to show up and vote on every bill in the Legislature. Now here’s the flaw in that equation: Lawmakers get paid whether they show up or not.

Unfortunately, many Arizona residents were underrepresented at the Capitol during last year’s regular legislative session. It was a dismal performance by the 21 lawmakers who failed to show up for one out of every five floor votes.

There were many excuses: late-night votes, last-minute calls to the floor, the fact that their votes wouldn’t change the final outcome, etc. It’s true that the session was marked by poor planning, rules changes and an inability to gain consensus on many substantial bills. It’s also a fact that most lawmakers have jobs outside the Capitol, and many had to travel long distances to Phoenix from their homes in outlying areas.

Still, they were elected for a singular purpose that in some cases went unfulfilled. If they don’t vote, their constituents may as well have checked a box on the ballot for “nobody.”

In the Senate, two Democrats from Phoenix – Sen. Debbie McCune Davis and Sen. Ken Cheuvront – topped the list of missed votes. The geography is significant; they live much closer to the Capitol than Republican Sen. Sylvia Allen, who has to drive about six hours roundtrip from her home in Snowflake. Allen, by the way, didn’t miss any floor votes.

Rep. Rich Crandall, a Mesa Republican, missed 254 of the 382 House votes. Did you catch that – Mesa, a Phoenix suburb. In comparison, Republican Rep. Nancy McClain has a seven-hour roundtrip from Bullhead City and didn’t miss any votes.

For the same reason it’s important that voters recognize who is not representing them, they also should take note of those who make it a priority to be in chambers when it matters.

Eleven representatives and seven senators voted on every single measure that reached the floor. All of them were Republicans, and five of them were freshmen.

Last week, we published a list of lawmakers who missed the final vote on measures during the 2009 session (it didn’t include missed votes in committee). But we failed to call attention to those who had perfect attendance on the floor.

So, here’s a list of lawmakers who deserve a gold star - not necessarily for the way they voted, but for rising above the rest to make sure their constituents had a seat at the table when the state’s newest laws were crafted:

Rep. Frank Antenori, R-Tucson (District 30)
Rep. Judy Burges, R-Skull Valley (District 4)
Rep. David Gowan, R-Sierra Vista (District 30)
Rep. John Kavanagh, R-Fountain Hills (District 8 )
Rep. Debbie Lesko, R-Glendale (District 9)
Rep. John McComish, R-Phoenix (District 20)
Rep. Nancy McLain, R-Bullhead City (District 3)
Rep. Carl Seel, R-Phoenix (District 6)
Rep. Andy Tobin, R-Phoenix (District 1)
Rep. Jim Weiers, R-Phoenix (District 10)
Rep. Steve Yarbrough, R-Chandler (District 21)
Sen. Sylvia Allen, R-Snowflake (District 5)
Sen. Bob Burns, R-Peoria (District 9)
Sen. Chuck Gray, R-Mesa (District 19)
Sen. Barbara Leff, R-Paradise Valley (District 11)
Sen. Russell Pearce, R-Mesa (District 18)
Sen. Steve Pierce, R-Prescott (District 1)
Sen. Jim Waring, R-Phoenix (District 7)

The Equal Employment Opportunity Commission is about to tread into uncharted territory: regulating what employers can purposefully view on social networking sites.

It’s become routine for employers to use search engines such as Google to learn more about job applicants. Those searches often take hiring managers to personal Web pages such as those on Facebook and MySpace, which have become hubs for postings that are both personal and professional. It’s also common for supervisors and their employees to become Facebook “friends” or to share information on LinkedIn.

Soon, however, the federal government may choose to regulate how employers can use social networking sites to access genetic information about job candidates and employees already on the payroll.

It all started in 2008 when Congress passed the Genetic Information Nondiscrimination Act (GINA) in an effort to ban workplace discrimination based on the genetic information of employees and job candidates. But that act of Congress left myriad questions that are now up to the EEOC to answer.
It’s relatively common for Congress to write well-meaning but vague laws and leave open a wide range of interpretation. But this one is really fouled up.

There are way too many loopholes to discuss all at once, so I’m going to focus on the most unique aspect of GINA: the part about regulating social networking sites.

The EEOC will have to decide whether employers can use social networking sites deliberately to access job applicants’ genetic information, such as medical history, and then use that information against them when making decisions on hiring, promotions, etc.

The EEOC issued a draft set of instructions in May and danced timidly around the social networking aspect of GINA enforcement. The commission asked for public comment and was expected to clarify the scope of GINA in October, but it has yet to provide final guidance on the part of the act that would dictate what information sources would be off limits to employers.

Among the special-interest groups that submitted comments to the EEOC were the U.S. Chamber of Commerce and the American Civil Liberties Union. Business advocates generally oppose wide interpretation of GINA that would create liability for employers, while the ACLU was among those that urged the EEOC to give broad privacy protections to employees and job seekers.

The sections that differentiate between intentional and unintentional acquisition of genetic information is where it gets really hazy. It’s so difficult to define that the EEOC has provided several examples of legitimate ways employers could obtain genetic information, as well as several that could open them up to lawsuits.

Even though the Americans with Disabilities Act allows an employer to require a medical examination of all employees to whom it has offered a particular job, for example, to determine whether they have heart disease that would affect their ability to perform a physically demanding job, GINA would prohibit inquiries about family medical history of heart disease as part of such an examination.

On the other hand, Congress carved out an exception to address what it called the “water-cooler problem” in which an employer unwittingly receives otherwise prohibited genetic information in the form of family medical history through casual conversations with an employee or by overhearing conversations among co-workers.

Also, an employer would not violate GINA if it learned, for example, that an employee had the breast cancer gene by reading a newspaper article profiling several women living with the knowledge that they have the gene. The statute identifies newspapers, magazines, periodicals, and books as potential sources of genetic information. The proposed regulation adds to that list information obtained through electronic media, such as the Internet, television, and movies. So, presumably, information in all of those places would be considered publicly available, and employers would be exempt from lawsuits if that information was used in making workplace decisions.

Yet – here’s the kicker – the EEOC didn’t outline how to handle information obtained from personal Web sites or social networking sites. In fact, it asked for public comment on whether those sources should be included in the list of excepted sources or the list of prohibited material.
To clarify: The EEOC hadn’t found a clear way to regulate the acquisition of genetic information on Web sites such as Facebook or MySpace. It leaves open the question about whether those should be considered sources of public or private information.

While GINA pertains only to obtaining and using genetic information, any regulation of what employers can and can’t view on personal Web pages would create a whole new standard when it comes to online interaction between employers and employees.

Based on my experience using social networking sites, they clearly are used by people with divergent views on what sort of information to make available about themselves: Some people post material that’s purely professional in nature and intended for the general public; others, however, post very personal information, including stuff that could be used to determine family medical history.

The problem is and always has been this: No matter how you think the information should be used, once the information is out there, it’s out there for just about anybody. Nobody should expect it to remain confidential or that it will be shared only among friends. We, the media, use social networking sites to find all sorts of information. So do potential employers – at least for now.

People who watched television news this weekend might be confused into thinking that Monday’s “emergency” meeting of Governor’s Office policy advisers is significant – as if some sort of budget solution will emerge now that the governor has gotten serious. 

Those of us who spend more time at the Capitol know it’s a publicity stunt. It’s the kind of PR move initiated by people who know more about lobbying and campaigning than they do about actually communicating with the public and the media. 

Tack on the word “emergency,” and it looks as if something is finally going to shake loose after more than a year of budget problems and months of deadlock on how to close the deficit. And, of course, television reporters who spend about five hours per year covering the Capitol will jump on board and exclaim to hundreds of thousands of at-home viewers that the governor is rushing to action now that the Legislature has failed to close a $1.6 billion deficit.

These TV reporters will stand in front of the cameras with stern looks on their faces as if they understand how dire a situation this really is, but the fact is that they know far more about chasing ambulances than they do about state government. (On Saturday, one television station reported a statement from House Minority Leader David Lujan, pronouncing his last name as Loo-jen.)

Those of us who spend 10-12 hours per day at the Capitol are much more suspicious about the notion that the governor’s emergency meeting will produce anything other than sound bites to aid her election campaign. And, if we’re wrong, then why hasn’t she taken a more active role in the legislative process so far? Why has she waited until now – halfway through the fiscal year – to call an emergency meeting?

The longer it takes to come up with a solution, the tougher it is to balance the state budget. We’re six months into fiscal 2010, so we have only six months to cut spending from a budget that is already half-spent. The roughly $8 billion state pie that was available for adjustments in July has been eaten away to about $4 billion.

For 11 months now, the governor’s spokespeople have said as little as possible about the governor’s plans to solve the budget problems. In fact, when the Capitol press corps asks questions about the budget, Brewer’s communications office says pithy things like “She’s in the process of talking to legislative leaders now to come up with solutions that will be something lawmakers and the public can support.” Asked for more details, they decline comment. It’s happened hundreds of times during Brewer’s time in office.

We ask for time with the governor, and we are told she’s too busy to talk to the media. So we follow her to luncheons and other public appearances, and listen to the same speeches over and over, just so we can ask two or three quick questions as the governor is herded into an awaiting car by her staff.

And now they’ve called a dog-and-pony show – and opened it to the media – to give an impression that the governor has a plan and that she’s ready to make things happen. Make no mistake, there will be lots of media at the meeting. It will be packed with video cameras and people with recorders and notebooks, ready to capture every sound bite. Our reporters will be there too.

But you will have to forgive me for being skeptical. The only plan we’ve seen from the governor so far is a proposal to raise sales taxes, a plan that, by the way, lacks the necessary support from the Legislature. And, even if lawmakers pass a referendum and allow voters to have a say, it might fail at the ballot anyway. And if it does pass, it’s only going to fill about one-third of the fiscal 2011 deficit – it’s far too late for a sales tax increase to rescue the fiscal 2010 budget. 

The bottom line: Gov. Brewer is in a weak spot politically. She can’t seem to rally support among members of her own party for the one thing that she continues to ask for over and over. And she’s facing an election in which she is not considered the favorite. She’s tried to be tough with the Legislature – taking them to court on one occasion, vetoing budget bills on another – and she’s even tried to play nice with them by agreeing to spending cuts that she had opposed on prior occasions. Nothing has worked.

So, now we have an emergency meeting of her cabinet members. Look for lots of bluster, little substance and probably a lot of backlash from lawmakers after it’s all over. But there is a bright side for Brewer: The television media doesn’t know enough about politics to pick up on it, and the staged drama will probably be on every evening newscast in the state. Good for election campaigns, bad for the people of Arizona.

An unnamed entity sent a letter of intent to buy the East Valley Tribune last week, but a second potential buyer has made it clear that he intends to make a bid for the newspaper in the near future.

Steve Hadland, CEO of the Santa Monica Media Company, said he is still pursuing the purchase of the Tribune. He said an offer he made at the end of August was still on the table and that the deal included a pre-bankruptcy down payment. He said the down payment was small, but he declined to disclose the amount.

“We are still actively seeking the deal,” he said. “We believe we have an executable contract to buy the Tribune, the Ahwatukee Foothills News, Arizona Interactive and the Daily News-Sun in Sun City.”

For details of that pre-bankruptcy offer, go to http://azcapitoltimes.com/azpolicywonk/2009/09/15/a-last-ditch-effort-to-buy-the-east-valley-tribune/

Hadland said he intends to submit a bid if Freedom Communications presents the new buyout offer, which was announced Nov. 20, to a bankruptcy judge. He said the purchase offer by the unnamed entity was a stalking-horse bid, which is known in investment circles as an initial bid on a bankrupt company’s assets to prevent low-ball offers.

“Frankly, the intent was never to shut down the Tribune,” he said. “It’s just that they had to give the 60-day notice as required by law.”

Hadland said he thought he had struck a deal with Freedom executives back in August, but then “they pulled the rug out from under me.”

“I met with them in August, and we were hell-bent on working out the deal,” he said.

Hadland’s company also had made a bid for the Tucson Citizen several years ago, but the deal never materialized.

The Tribune has failed to turn a profit in at least two years, and it has laid off almost half of its staff in an effort to cut costs. It tried several other desperate measures, such as switching the format of the paper to a tabloid from a broadsheet and starting free distribution. The paper also stopped daily circulation and began publishing three days per week.

Hadland said he would like to make several changes if he were to gain a controlling interest in the Tribune. Foremost, he said he wants to restart daily circulation and charge for subscriptions. He said he’s thought about making the Sunday edition free.

“I think putting it back in daily circulation is critical,” he said. “I’d want to expand. Obviously, the newspaper has to make money, but at the end of the first year I’d like to put more reporters on the street and make sure there was more advertising staff out there.”

Hadland said he doesn’t make decisions in a vacuum. “Before I make decisions, I talk to editors, reporters and people on the streets.”

Asked how he intends to make that happen and how he’d be different than others who have talked about similar strategies, he said avoiding the mistakes of many big corporations would be the first step.

“Big corporations have all sorts of corporate charges they lay on their newspapers,” he said. “There is overhead you have to pay corporate, and I’ve never seen a paycheck like the ones they pay their corporate publishers. Wall Street was the worst thing that happened to the newspaper business.

“At the end of the day, if the paper does well, I do well. Everything has to be reinvested in the paper right now.”

Hadland recalled buying newspapers in L.A. for a dime and said it’s ridiculous to ask readers to pay more for each edition and then give them half the news they once had. To make things work, he said, papers need to “go back to the basics.”

“I don’t know all the answers, but I know where to start,” he said. “Find some really talented people and go back to the basics. Cover national news, local news, national sports and local sports. I’ve watched newspapers put out all sorts of goofy sections, and I wonder what’s this all about.”

Hadland said it’s clear that Freedom’s creditors, such as JP Morgan Chase, are calling the shots now and that the corporation is no longer in control of the situation.

So, what’s the next move?

“Freedom will put a contract on paper and put it before the bankruptcy judge,” Hadland said. “Others will have an opportunity at that point to bid against them. We will be there as an active bidder.

As for the deal he was working on three months ago, Hadland said: “We have counsel in Delaware to find out what rights we may have under the former contract.”

When will we know what’s going to happen to the Tribune?

“I would guess they are going to move very, very quickly,” he said. “They want to get it done by the end of the year.”

Most Freedom Communications employees probably have never heard of the company’s MBO bonus program, but the higher-ups know all about it.

The program paid out more than $3.7 million to Freedom’s top executives during the past year, not to mention other expenses such as partner distributions, automobile reimbursements, club memberships and, for at least one executive, housing allowances, according to federal bankruptcy filings.

At least 49 Freedom executives, including publishers at various newspapers across the country, dipped into the MBO bonus program during the 12 months leading up to the company’s bankruptcy filing in September.

Freedom CEO Scott Flanders received two MBO payments totaling more than $1.1 million during that time, including a $400,000 bonus only weeks before the company filed bankruptcy. Others, such as Orange County Register Publisher Terry Horne and Community Newspapers Division President Jonathan Segal, received bonuses totaling six-figures.

Horne, who was publisher of the East Valley Tribune for a short time before heading up the Register, received roughly $200,000. Segal, who was in charge of the division that included the Tribune, received approximately $189,000.

Tribune employees were told Nov. 2 that the paper would shut down at the end of the year, following 118 years of publishing in Mesa. Tribune Publisher Julie Moreno received two MBO bonuses that totaled more than $65,000.

In addition to the bonuses, there were other perks to holding a top job in the company. Freedom Broadcasting executive Doreen Dawson-Wade was reimbursed more than $7,000 for club membership payments, and Flanders was given more than $70,000 in housing allowances.

Following is a list of the Freedom executives who received bonuses under the MBO program (dollar figures are rounded to the nearest thousand):

Olaf Frandsen, Freedom Newspapers
$72,000 (four MBO bonuses)
John Greider – Freedom Newspapers
$9,000 (one MBO bonus)
Tyler Patton – Freedom Newspapers
$19,000 (two MBO bonuses)
James Shrader - Freedom Newspapers of Illinois
$27,000 (four MBO bonuses)
Richard Davis - Seymour Tribune Company
$4,000 (one MBO bonus)
Richard Fazzone – Porterville Recorder Company
$30,000 (five MBO bonuses)
James Shine - Lima News
$16,000 (three MBO bonuses)
Jennie Lambert – Gaston Gazette
$53,000 (three MBO bonuses)
Ray Sullivan - Freedom Newspapers of New Mexico
$37,000 (three MBO bonuses)
Stephan Wingert – Daily Press
$60,000 (six MBO bonuses)
Paul Mauney – Times-News Publishing Company
$35,000 (four MBO bonuses)
Patrick Canty – Odessa American
$66,000 (four MBO bonuses)
David Phillips – Missouri Freedom Newspapers
$20,000 (three MBO bonuses)
Kent Kilpatrick – Illinois Freedom Newspapers
$34,000 (two MBO bonuses)
Arthur Foster – Freedom Shelby Star
$34,000 (two MBO bonuses)
Vernon Debolt – Freedom Eastern North Carolina
$31,000 (five MBO bonuses)
P. McKibbon – Freedom Colorado Information
$25,000 (one MBO bonus)
Steven Pope – Freedom Colorado Information
$30,000 (two MBO bonuses)
Julie Moreno – Freedom Arizona Information
$65,000 (two MBO bonuses)
Thomas Conner – Florida Freedom Newspapers
$30,000 (three MBO bonuses)
Karen Hanes - Florida Freedom Newspapers
$63,000 (four MBO bonuses)
Erik Thomason - Florida Freedom Newspapers
$18,000 (one MBO bonus)
David Schmall – Appeal Democrat
$53,000 (five MBO bonuses)
Michael Burns – Freedom Newspapers
$150,000 (four MBO bonuses)
Dianne Ippolito – Freedom Newspapers
$68,000 (four MBO bonuses)
Levi Knapp – Freedom Newspapers
$49,000 (three MBO bonuses)
Teresa Nelson – Freedom Newspapers
$61,000 (three MBO bonuses)
Jonathan Segal – Freedom Newspapers
$189,000 (two MBO bonuses)
Michael Costa – Freedom Broadcasting Tennessee
$25,000 (two MBO bonuses)
Lawrence Beaulieu – Freedom Broadcasting Texas
$26,000 (three MBO bonuses)
Kingsley Kelley – Freedom Broadcasting Oregon
$42,000 (three MBO bonuses
Robert Furlong – Freedom Broadcasting New York
$29,000 (three MBO bonuses)
James Lutton – Freedom Broadcasting Michigan
$33,000 (two MBO bonuses)
Doreen Dawson-Wade - Freedom Broadcasting
$155,000 (two MBO bonuses)
Edward Brien Kennedy – Freedom Broadcasting
$44,000 (two MBO bonuses)
William Rinchik – Freedom Broadcasting
$51,000 (two MBO bonuses)
Katherine Bartzoff – Freedom Communications Inc.
$5,000 (two MBO bonuses)
Douglas Bennett - Freedom Communications Inc.
$199,000 (two MBO bonuses)
Ken Brusic - Freedom Communications Inc.
$40,000 (three MBO bonuses)
Marcy Bruskin - Freedom Communications Inc.
$98,000 (two MBO bonuses)
Scott Flanders - Freedom Communications Inc.
$1,150,000 (two MBO bonuses)
Michael Henry - Freedom Communications Inc.
$41,000 (three MBO bonuses)
Terry Horne - Freedom Communications Inc.
$200,000 (three MBO bonuses)
Mark McEachen - Freedom Communications Inc.
$33,000 (one MBO bonus)
JoAnne Norton - Freedom Communications Inc.
$31,000 (one MBO bonus)
Rachel Sagan - Freedom Communications Inc.
$113,000 (two MBO bonuses)
Richard Sant - Freedom Communications Inc.
$43,000 (four MBO bonuses)
Cathy Taylor - Freedom Communications Inc.
$35,000 (three MBO bonuses)
Nancy Trillo - Freedom Communications Inc.
$79,000 (two MBO bonuses)

It’s a familiar story these days: Top executives reaping disproportionately large salaries and mind-boggling bonuses while executing poor business strategies and laying off hordes of employees.

It’s happened in the finance industry, construction, automobile manufacturing, computer software and beyond. But now, we can count the newspaper industry among them.

Julie Moreno, who became the publisher of the East Valley Tribune in 2008, was paid more than $334,000 in salary, benefits, bonuses and expense reimbursements during the past year, according to Freedom Communications Inc. bankruptcy documents filed Oct. 31.

As part of that package, Moreno was paid a lump sum of $57,949 to relocate to the Valley from Yuma, where she was publisher of Freedom Communications’ second-largest Arizona paper, the Yuma Sun. Yuma, by the way, is 203 miles from Mesa.

She was given two bonuses in early 2009 that totaled $65,456. The first bonus of $37,123 under the company’s MBO program was paid on Feb. 13. The second, for $28,333, was paid on March 13.

The filings detailed Moreno’s compensation from Sept. 1, 2008, through Aug. 31, 2009. During that 12-month period, more than 150 employees were laid off, low-level employees were forced to take unpaid furloughs in addition to 5 percent salary reductions, the 401k match was suspended, and the company’s net revenue plummeted.

Then, on Nov. 2, the 118-year-old paper announced it will cease operations entirely at the end of this year.

The East Valley Tribune’s demise was swift; during the past three years, the company went from an 83,000-circulation daily newspaper that was adding staff and trying to expand its coverage across the Valley to a free paper distributed on racks three days per week.

Since the beginning of 2008, more than 40 percent of its staff was fired, pages of news were eliminated and what was once a proud broadsheet became a tabloid.

The changes resulted in drastically reduced revenue figures. Freedom Communications reported its Arizona operations garnered revenue of $70.2 million in 2007, $53.3 million in 2008 and $17.5 million so far in 2009. The bankruptcy filings also show Freedom’s Arizona division hasn’t been profitable for the past two years.

The worst of times occurred while Moreno was in charge of the paper, but it would be unfair to say she caused the paper’s problems. The economic downturn and increased marketing opportunities on the Internet represent a double-edged sword that has cut the heart out of the newspaper industry.

Newspapers across the country, in a panic, have reconfigured their business plans to meet the needs of the new marketplace. Cutting expenses has been the norm, and wholesale reformation has been tried in some instances.

The East Valley Tribune was one paper that tried an entirely different approach, and it didn’t start under Moreno’s leadership. I should know – I was there.

In April 2007, former Arizona Republic executive Terry Horne replaced longtime East Valley Tribune publisher Karen Wittmer. While Wittmer was respected by the staff, there was great fanfare when Horne took over. He was hard-charging, spoke frankly and, in a way, had declared war on his former employer. It was exactly what we wanted to hear.

Before he took over, Horne tasked everyone on staff to list what each of us thought the paper was doing wrong and what should be done to improve it. Some of us wrote lengthy responses. I was a mid-level editor at the paper at that time, and my response was eight pages long. A reporter on my team wrote 12 pages.

Several of us noted that the paper was focusing too much energy and money on trying to retain its position in Scottsdale and Tempe, while the Republic appeared to be devoting far more resources to those areas. We suggested redirecting our resources to our stronghold in Mesa and Gilbert, as well as northwestern Pinal County and the eastern cities in Maricopa County, where the Republic was almost non-existent.

Horne, in one of his first acts as publisher, called a series of group meetings to discuss our share of the market in various cities as compared to the Republic’s. He produced compelling figures that indicated we were, indeed, losing the battle in Scottsdale and Tempe. And, frankly, we weren’t doing so hot in some areas of Mesa. In short, our circulation was falling in almost every area.

Weeks later, he unveiled a plan to recreate the paper. The daily edition was going to be distributed free and we were going to publish fewer news pages. In fact, rumor had it we were going to stop publishing the larger broadsheet editions and switch to a tabloid format.

Despite these landmark changes, most of the staff was excited. We believed in Horne. We thought it would work. After all, Horne knew what the Republic knew, and he was ready to do battle.

He must have impressed the corporate folks as well; a few months later they promoted him to president and publisher of Freedom Communications’ flagship paper, the Orange County Register. He was replaced by Moreno, who also served as regional vice president of Freedom’s Pacific Region.

Moreno told me during an interview on Nov. 4 that she was largely an observer during the time Horne and other Freedom executives discussed the new strategies. But she said she believed the plan was solid and she was on board to implement it when her time came. In fact, she still believes it was a good strategy.

“I think that, directionally, the changes make sense, given what we face here in this particular market,” she said. “What we’re dealing with is an economy that has presented challenges for all of us. It becomes very difficult to separate what might be an impact from the model from what might be happening in the broader economy in general. But, directionally, I don’t believe the model was wrong.”

Wrong or not, the concept didn’t work.

During a meeting in October 2008, Moreno announced the elimination of 142 positions, saying “We must turn the boat while we have the opportunity to do that. … We have to position the Tribune to be part of the community for the long term.”

On March 20, a week after Moreno was given a bonus of more than $28,000, the company forced remaining employees to take unpaid furloughs.

That day, Freedom CEO Scott Flanders said: “Freedom continues to generate positive cash flow, and we see the furlough program as a sound business and financial move to help weather the present severe economic conditions that we believe will improve by year-end.”

Conditions didn’t improve. On April 13, more layoffs were announced and the paper transitioned to three-day publication.

Moreno said the layoffs and, later, the decision to close the paper were “gut-wrenching.”
“You never want to see the day happen, because you’re impacting your work force,” she said. “And with the newspaper, it’s not just a job for a lot of people. It’s an organization with a unique identity in the community. When you tell people you work for the newspaper you get, in some circles, a lot of respect for that. For associates who work here, they’re extremely loyal. It’s very difficult. And you know you’re leaving a void for your readers. Words cannot describe how that feels. It’s just not a good day.”

Moreno refused to discuss her compensation package.

“I’m really not at liberty to discuss my compensation,” she said. “It’s not something I care to discuss at this point.”

In the end, hundreds of people will lose their jobs as a result of the Tribune’s demise. But Moreno is not one of them. She will continue on with Freedom in her executive role.

“At the time being, I have a dual role with freedom. I also serve as pacific region vice president. I will likely continue with Freedom in some role,” she said. “Beyond that, I don’t have a necessarily clear assignment at this point.”

Neither do the reporters and other staffers, many of whom own homes here and have raised their families with meager salaries during the past several decades.

Full disclosure: I worked at the Tribune from the beginning of 2006 until December 2007. I left voluntarily to take a job as managing editor of the Arizona Capitol Times. I do, however, have friends who were laid off after I left the Tribune.