McClatchy's pension fund was defrauded by an investment scam involving Westridge Capital Management. So were numerous institutional investors, including the University of Pittsburgh, Viacom, the Iowa Public Employee's Retirement System, the Kern County Employees’ Retirement Association, and the Sacramento County Employee's Retirement System.
News reports of the other victims were widely circulated, but until this week, McClatchy's connection was essentially unknown.
Here is how this story played out.
Over the weekend I looked at the Yahoo! message board and saw that one anonymous poster claimed McClatchy's pension fund had been defrauded out of $77 million. The allegation was so shocking, I first thought it was just a baseless message board rumor.
I decided to run it up the flagpole and see what happens -- Monday morning I titled a blog post "McClatchy pension fund defrauded of $77 million?". The content:
Don't know if it's true but an anonymous poster at Yahoo! message boards says it is.
I'm sure McClatchy Watch readers can flush out the real story. If you have info to put the ugly rumor to rest -- or shed more light on the situation -- post the info in comments, or email me.
The Yahoo! message board poster -- a former McClatchy employee -- emailed me Monday with more details which seemed to confirm the fraud story. He also scanned a copy of Form 5500 where MNI listed $77 million in fraud losses, and emailed it to me.
The next morning -- Tuesday -- I did a followup post including a photo of the Form 5500. (Click here to see the second post.)
The second post was picked up the same day at Meck Deck and The Medium, the Message, and Wednesday at Fitz and Jen.
There were other things going on at the time -- I understand the former MNI employee had been calling MNI's corporate office, pressing for more info on the fraud.
Meanwhile McClatchy went into action, posting details of the fraud on an internal company web site. News & Observer publisher Orage Quarles III emailed N&O employees Wednesday to reassure them their pension was sound, and he referred them to the internal company site.
Later on Wednesday, Dale Kasler published a story on the fraud at the Bee's web site -- his piece was picked up by several outlets around the country.
Also on Wednesday, MNI filed Form 8-K with the SEC with information on the Westridge fraud. (Click here to see the SEC form).
So finally, employees got information about their pension fund that they should have known about months ago. Most of the credit for McClatchy finally disclosing what happened goes to the former employee who sent emails, made the phone calls, and finally got the information he deserved.
I'd like to go on the record and state that Elaine Lintecum, MNI Corporate Treasurer did in fact return my phone call yesterday. She mention the SEC filing and also told me that it was on the MNI Corporate website. We talked for a few minutes, she answered all my questions, and handled herself in a very professional manner.
I am glad this issue has been fully explained instead of buried in a one paragraph footnote in an SEC filing. getting scammed is a big deal when it's a lot of money, whether it is $77 MM, $68MM or just $32MM. All of those amounts are MORE than MCClatchy has made in the last 5 years combined, including KRI as a standalone company.
It is PENSION money we're talking about here, money that is rightfully ours that we have earned through years of hard work.
I didn't feel it should be handled so lightly, and I am glad it has been cleared up.
Let's stay vigilant on this. Let's follow this story and see how much we really get back years down the road once this is sorted out. My bet is our pension gets next to nothing. I have spoken with a reporter in Pittsburgh that has been following this story for months, and he said he has never seen MCClatchy's name anywhere in any of the court filings regarding compensation and make goiod on the theft. Someone should follow that and see if MNI is trying to get the money back for us.
"McClatchy said it inherited the investment when it purchased the Knight Ridder Inc. chain in 2006. Last December, it decided to pull out of Westridge, but the withdrawal was subject to a six-month waiting period. The arrests came two months later."
"Inherited" seems to be the word of the year.
Yes but it’s also fair to say that like many McClatchy “stories”, Lokeman, Van Jones, Heath Care, and now ClimateGate, McClatchy only comes to the table kicking and screaming via a strong pull to the corporate child’s ear, and then only out of embarrassment.
How’s that “Truth to Power” thingy working out there McClatchy? Kind of like “Hope and Change”? Hope no one notices, then Change real fast when they do?
How McClatchy's pension fraud story was brought to light...
BY McCLATCHY-WATCH, NOT McCrappy!
If you still work for McClatchy, this site is a MUST READ daily. If you don't have it bookmarked, you're a complete idiot. Stories like this are invaluable to current and former employees. You won't read them anywhere else, unless McClatchy is forced to print one as embarrassing as this one.
"In announcing its lawsuit against Westridge, the SEC said Westridge principals Paul Greenwood and Stephen Walsh "essentially treated their clients' investments as their [personal piggy bank] to buy luxury homes, a horse farm and other goodies."
This sounds like the salary and bonus plan of MNI corporate as well, IMO. what's the final difference? Both were greedy. Take the Pruitt 'personal piggy bank' theory out for a spin. It may be legal, but the end result is the same. The only real difference is the wording, IMHO.
Wow, a shining example of citizen journalism once again bringing the fading and phony mainstream media to its knees. Bravo!
The McClatchy papers are so lame. They still think they can dictate what is news. That kind of thinking might get them out of business. Geez, wouldn’t that be too bad? [Eyes rolling!]
To McClatchy's credit, the Sac Bee at least had a story this morning on ClimateGate. In case ya'll missed Jon Stewart hammering the mainstream TV networks ignoring ClimateGate, here's a goodie from Foxnews.com:
The network news broadcasts have ignored a growing scandal over evidence of a potential climate cover-up — and now they've even been scooped by the fake news at Comedy Central.
"The Daily Show with Jon Stewart" produced its "reporting" on Climate-gate Tuesday night, when Stewart quipped, “Poor Al Gore. Global warming completely debunked via the very Internet you invented. Oh, oh, the irony!”
Getting Elaine Lintecum to call you back is like getting Robert Gibbs to return Sean Hannity's call! JayFred, you da man! Props to 'ol Elaine too. Has Gary Pruitt ever called any former employee back other than Howard Weaver?
7:49: LOL at that one!!!!!!
LOL, our persistent troll from the KC Star is gnashing his teeth and chomping the bit over this one. Good job MW. Yet again you've beat the old dog at it's own game, at it's own expense.
Watch your back and fasten your seat belts though. In a couple of days their militant minions in San Fransissy will mount a new slander campaign against you.
Anon 7:49 12 days after the story broke...
"To McClatchy's credit, the Sac Bee at least had a story this morning on ClimateGate."
It proves the rule that McCrappy is either woefully behind the news curve, and is only good for distributing Sunday coupons, or are DNC shills who refuse to cover important stories against those DNC interests.
Anon 7:49 Does this help you out any with the Bee's being 12 days late to the ClimateGate (or any other non-DNC) party:
Sac Bee's news boss Melanie Sill admits blatant bias in editorial today:
"There's no dispute that The Bee has a liberal editorial page on most issues, though not all matters, and has mostly endorsed Democrats.
We won't change our editorial philosophy to placate critics."
The state-owned media had to get clearance from the Obama White House before they could run any stories about the scam known as global warming.
They had no choice but to run the story on our pension fund being robbed.
You know what? No matter if it was $30 some million or $70 some million, those are dollars that would have been invested in some evil for profit corporation anyway.
Dollars that could have helped some big pharmaceutical conglomerate exploit sick and dying women and minorities by keeping them alive longer so they would be more dependent on their stupid life saving drugs.
Or, some member of the industrial/military/bait store complex that would just use those millions to make bombs and bullets and shinny fishing lures.
We should rejoice that these dollars are not in the hands of evil capitalists. Admittedly it would have been better if those dollars had gone to a good cause like support of public TV or the Obama campaign, but anything is better than adding to the obscene profits of corporate America.
Anon 10:12 So it’s great that McClatchy pensioners lost money, no matter the amount, because of the evils of capitalism?
My God (I mean my Stalin) You are a sick liberal.
I know Comrade: “From each according to their abilities, to each according to their needs”.
Karl Marx said “The meaning of peace is the absence of opposition to socialism.”
10:42... you might want to fine tune your sarcasm detector. You can usually tell it needd calibration when you knee starts jerking anytime you read something.
I wonder how diligent they really will be since they know that the tax payer will cover the pensions if it all collapses ?
McClatchy's crack reporter's missed their own story. Kinda sums it up. Too busy posting AP news stories.
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