Drudge wins defo battle but media ignore

Last week he won a major legal victory over former Clinton aide Sidney Blumenthal yet many in the mainstream press failed to report it. Let’s take a look at the coverage before drawing some parallels with Crikey’s own battles with the Australian mainstream press. Firstly, a couple of stray reports of Drudge’s victory we pulled off the net.

Sidney “Grassy Knoll” Blumenthal, who brought a $30 million libel suit against Matt Drudge, paid $2,500 to Drudge’s lawyer to get out of the suit.

There’s more here than meets the eye, folks. This was a Clinton-sponsored lawsuit. Blumenthal pursued this with the advice, backing and permission of Clinton and others in the White House.

Drudge ran a piece claiming that he had a source that said Blumenthal beat his wife. It turned out that it wasn’t true, so the next day, Drudge wrote an apology and a correction featured very prominently on his website.

Blumenthal wasn’t satisfied, and filed a $30 million libel lawsuit. There was a Clinton-appointed judge in the case, folks. The deck was stacked against Drudge, but for some reason the whole thing just blew up in Blumenthal’s face, and “Grassy Knoll” had to pay 2,500 bucks.

Trust me on this: Inside the Beltway, it was a big, big shocker when this one hit on Tuesday night. The truth is that Drudge is one of the many voices that the left inside the Beltway would love to silence. They act as though he’s no longer relevant. They ignore him and they trash him, but that just means that he’s gotten to them.

We understand that technique very well here. But we also know the reality of this situation: Many, many people had high hopes riding on Blumenthal’s lawsuit and it flamed – big time. He wound up paying Drudge. Sidney Blumenthal brought the suit – and had to pay $2500 to get out of it!


Now, let’s look how Drudge himself reacted to the media’s coverage of his win.


‘Play up accusations, and when they aren’t true, don’t mention it.’


The news that former Clinton White House aide Sidney Blumenthal dropped his $30 million four-year litigation against the DRUDGE REPORT and editor Matt Drudge after agreeing to a settlement which requires Blumenthal to pay cash to Drudge’s attorneys failed to grab the attention of big media’s elite editors and reporters.

After exhaustive coverage of the case, nearly 3700 breathless stories are filed on the Lexis-Nexis database about Blumenthal vs. Drudge, the nation’s major outlets stopped the presses.

No news is good news, and in this case, good news is no news if it is good news for Drudge.


WALL STREET JOURNAL Washington Bureau Chief Alan J. Murray, when reached by telephone Thursday, exhibited a spell of confusion when asked why his paper has not issued a follow-up to its Page 1 above-the-fold multi-thousand word dissection on “Drudge’s troubles”.

“There is such a level of built-in irresponsibility in everything he says and does,” the JOURNAL quoted ‘First Amendment’ protector Floyd Abrams in its Page 1 rant. “If one were rewriting libel law today, one would try to write it to assure that the false statements of Matt Drudge were treated as libel.”

The WALL STREET JOURNAL and Murray’s splash headline ‘INTERNET BAD BOY HAS HIS DAY IN COURT’ has been left as the paper’s only coverage, without any follow-up or reporting on the bad boy’s good outcome.

“I don’t know. I don’t know,” Murray said repeatedly when asked why the paper failed to inform its readers of the case’s outcome, let alone Blumenthal retreating, checkbook in hand.

Murray conceded he was aware of the withdrawal of the case by Blumenthal but didn’t know why the paper had not followed up its Page 1 splash, which was assigned by Murray himself.

“Call me back at 5 o’clock and I’ll try to have some answers,” Murray assured, proving once and for all that news moves at its own sweet pace in America’s sacred newsrooms.

Nearly 72-hours after the case had been settled, and word spread across the world’s wires, Alan J. Murray — was simply not in a hurry.

Over at CNN the Drudge/Blumenthal legal battle was mentioned 24-times in various rotations through the years. Blumenthal’s suit was played up on LARRY KING LIVE, INSIDE POLITICS, RELIABLE SOURCES, CAPITAL GANG [Saturday and Sunday], CROSSFIRE, TALKBACK LIVE, CNN & CO., MONEYLINE, LIVE EVENT/SPECIAL and alas BURDEN OF PROOF, which fell silent when Blumenthal’s burden in court could not be met.

CNN’s INSIDE POLITICS did a 9-second detailed summary on the case’s ending late Wednesday still asserting that Drudge’s initial report, which was at the center of the lawsuit, was ‘a reckless and malicious lie.’ Quoting Blumenthal, of course, but ignoring completely any Drudge response.

BURDEN OF PROOF TV presenter Greta Van Susteren had been on the receiving end of many a Blumenthal leak while he was at the White House. At the height of litigation, Van Susteren hosted Blumenthal’s pitbull attorney William McDaniel and gave him the forum to declare: “Drudge will have to give up his sources!”

Van Susteren has yet to inform her viewers that Drudge never had to give up his sources.

In the end it was Mr. Blumenthal and Mr. McDaniel, in fact, who had to give it up.

LARRYKINGLIVERELIABLESOURCESCAPITALGANGCROSSFIRETALKBACKLIVECNN&COMONEYLINELIVE EVENT/SPECIAL viewers are left with the impression that the slam-dunk case against Drudge is still ongoing.

USA TODAY, which featured ten stories referencing Blumenthal’s case against Drudge, did not even run a single line in one of their clever 50-state (and District of Columbia) news summaries.

After headlines that blared ‘Drudge Dredges Media Mistake’, ‘World Wide Web Net’s Future Raises Fears’, and a photo of Matt Drudge Page 1 above-the-fold, the nation’s most circulated newspaper stopped circulating.

The LOS ANGELES TIMES featured five stories referencing the lawsuit, including a four-thousand word cover story in its Sunday magazine headlined: ‘Matt Drudge Has Been Accused of Recklessness and Libel’.

Not a word. Not a period. Not a comma out of Times Mirror Square about the vindication of Drudge.


NEW YORK TIMES Washington bureau chief Jill Abramson said Thursday the case filed in a Washington D.C. Federal Court “has not been a Washington story.”

Although reporters who are housed in the NEW YORK TIMES Washington office have written about the case, Abramson explanied they report elsewhere in the NEW YORK TIMES maze of command.

So the paper that reported every accusation alleged by Blumenthal — 6-times over — finds itself in a bureaucratic snafu when it comes to the case’s grand finale.

NYT business/media/legal editor David Smith, who is said to have green-lit most of the TIMES’ coverage of Drudge [Smith unleashed media gossip columnist Felicity Barringer to write a particularly nasty case mop-up in the Summer of ’98], when reached on Thursday was curiously out of words.

When asked directly why he has not assigned anyone to write about the Drudge win, a flustered Smith repeated a ‘no comment’ mantra.

NEW YORK TIMES readers have been left with the impression that the lawsuit against Drudge is ongoing and will continue forever until Mr. Blumenthal is victorious.

“What the NEW YORK TIMES is doing with its sin of omission is no doubt a form of libel of its own, corporate news slander of the highest degree,” said Professor Emeritus Andrew Breitbart of the Cashmere Institute of Media Studies.

“How does Drudge begin to clear his name with the NEW YORK TIMES readership? It appears there is little recourse with ‘The Paper of Record.'”

Take it to the web, young man.

Take it to the free and wonderful web.

EDITORS NOTE: After this dispatch hit the web, Matt Drudge received e-mails from the NY TIMES and the WALL STREET JOURNAL, both now rushing to do stories on the Blumenthal cash settlement:


I’m doing a piece for The Times on the settlement of Blumenthal’s libel suit against you. I’d like to talk to you. Do you have a new number? The one I have rings without answering.

Felicity Barringer


Am writing a story about the settlement of your lawsuit with Blumenthal, and would like to talk with you soon as possible today. thanks,

Robert Greenberger

The Wall Street Journal


The parallels with Crikey’s struggles in Australia

Crikey faces different issues in the Australian media and it varies across the different media companies. Titles under the control of Fairfax Business Publications boss Michael Gill give Crikey minimalist coverage, probably because I left the Fin Review in dispute with Gill. The ridiculous upshot of this is that all these titles – The Fin Review, BRW, Personal Investor and Shares magazine – have been unable to cover the issue of shareholder activism properly because you can’t deal with the issue without looking at what Australia’s best known shareholder activist is actually doing.

A good example of the policy came in the piece Christine Lacy obviously supplied to Andrew “I pay $100 an item” Burrell on the Rear Window column last week. Many of the Rear Window readers are company directors who have faced questions from Crikey at AGMs. Therefore, they want to know when we are scoring a hit and where we are popping up.

Without wishing to make wanky comparisons, when Johnny Cochrane gets involved in a court accusation, reporters don’t just refer to him as “a lawyer” and when Ralph Nadir runs a campaign, he is not just “a consumer activist”. Maybe a less grandiose and more appropriate comparison is when the Serial Pest disrupts a sporting event, the media usually point out it is the same guy who was at World Cup soccer, the Australian Open tennis and Melbourne Cup.

My point is that when Australia’s best known shareholder activist lands a telling blow, it should not just be “a shareholder”. Surely it is part of the “who, what, where, why, how ” we all learnt as first year cadets.

Anyway this is the Rear Window column from last week’s Hutchison Telecommunications AGM.

Directorships not so rosy with Gardener

Independent company director and former Arthur Andersen bean counter Justin Gardener has been having an interesting time of it lately with his little portfolio of non-executive board spots.

Not yet a John Ralph or Stan Wallis, Gardener has been sitting on the board meetings of Hutchison Telecommunications, Austar and, until recently, HIH.

At the Hutchison Telecommunications shareholder lovefest, Gardener had a small note at the ready in his top pocket for any dirt the mobile phone group minority shareholders could throw at him.

Unfortunately for Gardener, the shareholders’ ammo was pretty good. The Hutch price has tanked in the past year, setting the scene for a mop-up by its parent, Li Ka-shing’s Hutchison Whampoa.

Directors, however, did impose an alternative yesterday: shareholders could delve into their own pockets to help out with the company’s capital requirements.

One wonders whether Gardener could take the same notes to Austar’s annual meeting, which is battling to fully fund its business plan after its rights issue fell short yesterday. It’s shares have lost more than 90 per cent of their value in the past year.

The speech won’t be required for any HIH meetings however, although Gardener was quick to point out that he was a director only of the “holding company” and not the “insurance companies that have done all the damage”.


The facts of this little case is that I got up and blasted Gardener for his HIH debacle and politely told him to shove off. I also drew the parallels with Austar and Hutchison, noting that the combined losses Paula and I have suffered in these stocks is $6000. This was not just a case of get someone else’s proxy to stir trouble but one where Australia’s only professional shareholder activist did not have to fake the anger as he’d actually lost some of his real money in all three companies that this dud director is involved with. No other shareholder mentioned Gardener so it wasn’t a collective view taken by the meeting either.

The Australian is the only paper that deals with stories coming out of the Crikey camp on their merits and the same can be said for the ABC in regards to broadcast media. Drudge complains that he gets beaten up by the mainstream whereas the likes of the Herald Sun tend to run a ban on Crikey no matter whether it is good or bad news. For instance, last Thursday occasional Crikey contributor Hugo Kelly rang 3AW when Neil Mitchell was interviewing Steve Bracks and refused seven times to confirm he was not “Jack”. We immediately told our 1200 subscribers about it and ran a complete transcript of the exchange so they could make up their own minds. I was half expecting a bucketing from our critics but the only outlet to pull us up was Rash Ash Long and Media Flash. As an outlet which aims to lecture others on media ethics, there was at least a debate to had on Hugo’s controversial tactic but the ban prevailed over any desire to pillory.

The Herald Sun had also refused to run the story which triggered the call by “Jack” – namely the Bracks ban on my attendance at the John Brumby business tax cuts announcement a week earlier. Herald Sun state political reporter John Ferguson filed a gossip column item which did not make the grade but he was forthright at the press conference asking why the government had taken such a draconian step. We reported earlier that Ferg had discussed the matter with Jon Faine on air the next day but have been advised this is not correct. Whoops and apologies to Ferg.

3AW has also tended to run a rarely lifted ban on Crikey ever since we criticised them and we’ve never been mentioned on 2UE because we dare to criticise those government makers and breakers and cash for commentors in John Laws and Alan Jones.

Drudge has faced problems with political staffers suing him but has never been in the unusual position of being sued for defamation by a fellow journalist as Crikey is at the moment.

All of this will make for very interesting media watching from next Sunday when our political party People Power will be launched. The Press Council and the Australian Broadcasting Authority claim to try and uphold balance in political reporting so we’ll be testing their regulatory credentials if need be. Given that we’ll be running hard on reducing the powers, reach and political influence of media moguls, the way the outlets owned by the likes of Packer and Murdoch report what we say will be very interesting to watch.