Internal chaos after Newsweek fires staffers who reported on ownership's financial dealings

After a series of articles, Newsweek Media Group has let go key staff members, leaving employees panicked

Published February 5, 2018 5:35PM (EST)

 (Getty/Nicholas Kamm)
(Getty/Nicholas Kamm)

After a tumultuous month that saw the resignation of its parent company's co-owner, several key editorial staff members from Newsweek were laid off Monday morning, according to multiple sources.

CNN Money reached editor-in-chief Bob Roe, who said, "Can confirm I was fired. I know nothing else. Can say nothing else yet." Sources inside the Newsweek newsroom also confirmed to Salon that executive editor Ken Li was also laid off.

Moreover, those sources confirmed the dismissals of staff writers Celeste Katz and Josh Saul, reporters who had written several articles on the magazine's financial dealings and the ongoing investigation into the publication's parent company, Newsweek Media Group, by the Manhattan District Attorney's office. Josh Keefe — an editor for International Business Times, another Newsweek Media Group property — was also fired.

Katz and Saul both have bylines on an article reporting on the D.A.'s raid of the Newsweek offices, a raid that saw several company servers taken into custody late last month. They reported on other aspects of that financial probe together with Keefe. Katz is the sole byline on a piece on the leave of absence of Newsweek chief content officer and IBT global editor in chief Dayan Candappa following sexual harassment allegations against him. It was confirmed that Roe and Li had edited those articles.

Similarly, all three contributed to an article reporting that Etienne Uzac, co-owner and founder of Newsweek Media Group, would be stepping down along along with the company’s finance director and Uzac's wife, Marion Kim, amid the investigation.

Sources tell Salon that Roe and Li both threatened to resign during a meeting last week if Katz, Keefe and Saul were fired. They also confirmed that after the editorial staff were told of the terminations,  all staffers were allowed to cease work and go home; instead, the editorial staff remained in the newsroom, drinking alcohol and discussing the news. One source tells Salon that junior members of the staff were in tears. Another reports that, after being fired, Katz left the offices to a standing ovation from her now-former colleagues.

Employees for IBT and Newsweek were due to be paid Monday, but that has yet to materialize according to those on staff. One source reported that most employees are not optimistic they will receive their paychecks.

Over the last 17 months, the Major Economic Crimes unit at the Manhattan D.A.'s office has conducted an ongoing probe into the Newsweek Media Group, focusing on Uzac's business dealings. Among other things, the company has been accused of "fraudulent online traffic practices" — that is, buying fake reader views in order to boost its readership numbers and thus put itself in a position to charge more for ads.

Moreover, there are suggestions that the company may have been involved in a money-laundering scheme with Olivet University, an institution founded by a Christian fundamentalist church that several members of Newsweek Media Group’s leadership have connections to. The IRS enforced a $400,000 lien against the company in 2017 for failure to pay back taxes. These and other aspects of Newsweek's troubled financial management were reported on by the staff members dismissed today.

Serving as acting editor after the dismissal of Roe and Li will be Nancy Cooper, the current managing editor of IBT. Jonathan Davis will return as chief content officer in Candappa's stead. "Davis is a cult guy and it’s embarrassing," said one anonymous staffer, referring to the executive's connections to Olivet University. "It’s going to damage us to no end."

The staffer said, "There are great reporters on this staff that have put themselves through hell to do a service for people, and time and time again we have been sabotaged by ownership." The source added, "They apparently only give a shit about their fucking stupid cult."

By Gabriel Bell

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