Jan
01
1990

The Washington Post: The Establishment's Paper

Don't get too far from the establishment.

--Walter Lippmann to Katharine Graham

File Lippmann's remark under the category of superfluous advice. Graham and the company of which she is "chairman"--she lists herself in the D.C. phone book as "Graham, Philip L. Mrs."--have never entertained a thought of straying from the establishment.

Katharine Graham, Washington Post

"We live in a dirty and dangerous world. There are some things the general public does not need to know and shouldn't. I believe democracy flourishes when the government can take legitimate steps to keep its secrets and when the press can decide whether to print what it knows." --Katharine Graham addressing senior CIA employees at Agency headquarters in November 1988 (Regardie's magazine, Jan. 90)

In 1933, when Graham's father, Eugene Meyer took control of the bankrupt Washington Post, it enjoyed only physical closeness to power. The paper badly needed the wealth and connections that Meyer had in spades: Over the years, he'd been a Wall Street banker, director of President Wilson's War Finance Corporation, a governor of the Federal Reserve, and director of the Reconstruction Finance Corporation. And Meyer wanted a soapbox. "People like to be told what to think," he once said, happy to oblige.

After World War II, when Harry Truman named this lifelong Republican as first president of the World Bank, Meyer made his son-in-law, Philip L. Graham, publisher of the paper. Meyer stayed at the Bank for only six months and returned to the Post as its chairman. But with Phil Graham in charge, there was little for Meyer to do. He transferred ownership to Philip and Katharine Graham, and retired.

Phil Graham maintained Meyer's intimacy with power. Like many members of his class and generation, his postwar view was shaped by his work in wartime intelligence; a classic Cold War liberal, he was uncomfortable with McCarthy, but quite friendly with the personnel and policies of the CIA. He saw the role of the press as mobilizing public assent for policies made by his Washington neighbors; the public deserved to know only what the inner circle deemed proper. According to Howard Bray's Pillars of the Post, Graham and other top Posters knew details of several covert operations--including advance knowledge of the disastrous Bay of Pigs invasion--which they chose not to share with their readers.

When the manic-depressive Graham shot himself in 1963, the paper passed to his widow, Katharine. Though out of her depth at first, her instincts were safely establishmentarian. According to Deborah Davis' biography, Katharine the Great, Mrs. Graham was scandalized by the cultural and political revolutions of the 1960s, and wept when LBJ refused to run for reelection in 1968. (After Graham asserted that the book as "fantasy," Harcourt Brace Jovanovich pulled 20,000 copies of Katharine the Great in 1979. The book was re-issued by National Press in 1987.)

The Post was one of the last major papers to turn against the Vietnam War. Even today, it hews to a hard foreign policy line--usually to the right of the New York Times, a paper not known for having transcended the Cold War.

There was Watergate, of course, that model of aggressive reporting by the Post. But even here, Graham's Post was doing the establishment's work. As Graham herself said, the investigation couldn't have succeeded without the cooperation of people inside the government willing to talk to Bob Woodward and Carl Bernstein.

These talkers may well have included the CIA; it's widely suspected that Deep Throat was an Agency man (or men). Davis argues that Post editor Ben Bradlee knew Deep Throat, and may even have set him up with Woodward. She produces evidence that in the early 1950s, Bradlee crafted propaganda for the CIA on the Rosenberg case for European consumption. Bradlee denies working "for" the CIA, though he admits having worked for the U.S. Information Agency--perhaps distinction without a difference.

In any case, it's clear that a major portion of the establishment wanted Nixon out. Having accomplished this, there was little taste for further crusading. Nixon had denounced the Post as "Communist" during the 1950s. Graham offered her support to Nixon upon his election in 1968, but he snubbed her, even directing his allies to challenge the Post Co.'s TV license in Florida a few years later.

The Reagans were a different story--for one thing, Ron's crowd knew that seduction was a better way to get good press than hostility. According to Nancy Reagan's memoirs, Graham welcomed Ron and Nancy to her Georgetown house in 1981 with a kiss. During the darkest days of Iran-Contra, Graham and Post editorial page editor Meg GreenfieId--lunch and phone companions to Nancy throughout the Reagan years--offered the First Lady frequent expressions of sympathy. Graham and the establishment never got far from the Gipper.

War on Labor

The president who smashed the air traffic controllers union (PATCO) in 1981 took a page from Graham's book. (See "Washington Post Labor Struggles," Extra!, 5-6/89.) A Post reporter, Peter Perl, researching a story on union-busting consultants, was told by a practitioner that his paper was "a leader in the field." When he attended one of the anti-union classes, Perl found four Post execs as fellow students.

As Davis tells it, shortly after Graham took over the Post, Jack Patterson, a veteran newspaper executive, offered the following advice: Use rewards and punishment to pit workers against each other; take union officers into your confidence and give them a taste of privilege; automate, and bring in nonunion workers to operate the new machines; and treat journalists as professionals, thereby causing them to compete with each other, killing whatever interest they had in such odd blue-collar notions as solidarity. This latter idea dovetailed nicely with Bradlee's Hobbesian strategy for running the newsroom: "creative tension." Only the strong survive this war of each against all, a style called "hairy-chested journalism" by macho Posters.

Graham, who handed out garment workers' union literature in her college days, broke the press workers' union in 1975 by provoking a strike and putting out the paper with scab labor and out-of-town contractors. Other blue-collar unions, tamed by this example, have accepted job-eliminating automation quietly.

Fresh from this victory, the paper instituted a two-tier system, in which all news-room workers hired after 1977 are paid an average of $200 a week less than pre-1977 hires. According to the Newspaper Guild, this arrangement saves the Post about $1.5 million a year, about 1 percent of pretax profits, or enough to pay Kay Graham's salary for 15 months.

The Guild, which represents about 40 percent of the paper's 2,000 employees in news, circulation and advertising, had worked without a contract from July 1986 to August 1989, a tense interval that reporter and Guild activist Frank Swoboda called "one of the most bizarre labor relations environments I've ever seen, and I've covered labor for 35 years." Union sources speculate that the Post Co. management finally tired of warfare and decided to sign a five-year contract, which included a no strike pledge, the first in the Guild's 51 years at the paper.

Even though Graham runs around the country preaching the need for daycare, she still refuses to grant her employees this benefit. And the Post still refuses to pay reporters overtime--something most big papers do. The Guild has filed suit over the matter.

The contract did address a long-standing Guild complaint--the huge spread between low- and high-paid workers. But even after a disproportionate raise for the low-end employees, the Post's minimum salary for reporters is still $250 per week below that of the New York Times. Unsurprisingly, the ranks of the low-paid are heavily female and nonwhite. According to the union, women reporters make $121 a week less than men, and black women make $172 a week less than white men. If circulation and advertising workers are included, the gaps are even wider, with black women making an average of $332 a week less than white men.

The Post says this is the result of its aggressive affirmative action policies--non-white non-males are more recent hires than white men, so the salary differentials are just an artifact of relative tenure. The Guild says its figures are adjusted for experience. The matter will be adjudicated by the D.C. Office of Human Rights, where the Guild has filed a complaint against the Post.

Despite the normalization of labor relations, in late November the Post ceased to allow union representatives into the building on routine business, a privilege it grants to advertisers, and refuses to allow the union to hold meetings on the premises, a privilege it grants to virtual strangers.

Money Machine

Graham is reportedly fond of saying that "unions interfere with freedom of the press." A more likely explanation for her hostility to labor can be found in the Post Co.'s financial performance.

The Post Co. is consistently one of the most profitable publishers in the business. According to the Newspaper Guild, the Post earned a profit of $42,700 per employee in 1988, the highest of any newspaper, well ahead of the second-place Dow Jones ($25,200) and the No. 3 New York Times ($15,800), and four times the national average of $11,000.

The Post's newspaper profits fell slightly from 1987 to 1988, the result mainly of higher newsprint prices (partly offset by the Post Co.'s interests in two paper mills) and severance payments to redundant typographers and mailers. Though advertising income has slowed for most papers, the Post has bucked the national trend--important to a company that earns 70 percent of its revenue from advertisers.

Over the years, the Post's competitors have all died, leaving the paper as a virtual monopoly in a virtually recession-proof, newspaper-dependent city. (The Moonie-owned Washington Times is the only competition.) The daily paper reaches 55 percent of the potential D.C. market--74 percent on Sunday--well above national big-city averages of 22 percent and 29 percent respectively.

Owning a network-affiliated TV station is a license to print money, and the Post Co.'s stations are no exception. Like many broadcasters, rather than worry about the potential competition from cable, the Post Co. has gotten into the business. While only half as profitable as broadcast TV, Post-Newsweek Cable is nothing to sneeze at.

Newsweek is the least profitable realm in the Post Co.'s empire--partly because it faces something newspapers are unfamiliar with, competition. (The New Temperance has also hurt; ads for smokes and drinks take up less than a third as many pages as they did a decade ago.) To beef up the magazine's relatively anemic profit figures, management has been managing "intensively," as an admiring Merrill Lynch analyst put it: continuing a multi-year strategy of reducing staff, and, more recently, relocating back office workers from high-rent Manhattan to low-rent New Jersey. Relentless application of the knife has taken its toll on morale; a Guild member at the Post said he was glad he didn't work at Newsweek, an extraordinary remark given the environment of his own shop.

At the end of 1988, the Post Co. had $300 million in cash on hand, twice its long-term debt. The newspaper might need a new plant sometime soon, but that would hardly put a dent in the company's wallet. The cable TV operations completed major rebuilds in recent years, so their capital requirements are minimal. If the price of TV stations comes down from the stratosphere, the Post Co. might pick one up.

Management can think of little better to do with its money than buy back its own stock--which didn't stop the Post from demanding that its Guild employees start paying for part of their health insurance. With the company firmly in the hands of the Graham clan, it doesn't even have to worry about a hostile takeover from Rupert Murdoch. No wonder the Post isn't interested in rocking the establishment's boat.

Doug Henwood is the editor of the Left Business Observer.