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We’d like to discuss, disclose banking shares

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Posted: Friday, April 30, 2004 10:00 pm

As many readers are aware, there is much discussion these days involving our local banks, the Bank of Lodi and Farmers & Merchants Bank.

Some dissatisfied directors believe the Bank of Lodi is underperforming and that major changes are needed. Bank of Lodi officers have claimed that Farmers & Merchants bank would like to take over their bank and erase local competition.

It is quite a dust-up - and a strong local news story. That, for us, is the rub.

Richard Hanner

The family ownership of the News-Sentinel has financial interests in both banks. We've discussed internally whether those financial interests should be disclosed to our readers and the community. We also sought counsel from Bob Steele, an ethics specialist at the Poynter Institute, a top research and learning center for journalists in Florida.

Ultimately, we felt compelled to disclose these interests. Here's why:

Newspapers are like other businesses in many ways. They have financial linkages in the community. They take out loans. They have bank accounts. They buy supplies and machinery. They sell advertising to hundreds of local firms and individuals.

Traditionally, newspaper publishers have been business leaders in the communities they serve. It is not uncommon for publishers to be active on business roundtables, chambers of commerces, etc.

Fred Weybret, who is now the chairman of the News-Sentinel but served as publisher for many years, is no exception. Nor is Marty Weybret, one of Fred's two sons, who is the current publisher. Both have lived and worked in Lodi for many years (Marty for nearly all of his life) and both have been robustly involved in the business and civic life of Lodi.

Such involvement can extend to investing directly in the community, and that is the case with the holdings in the local banks.

In 1966, Fred purchased shares in Farmers & Merchants Bank. Farmers & Merchants, by the way, also handles the newspaper's day-to-day banking needs. Those shares have grown over the years and are held entirely by the Weybret family. Together, they are far less than 1 percent of the bank's total shares.

In 1992, Fred purchased shares in the fledgling Bank of Lodi. Most of those shares are now held by the family, too, but a block is also held under the name of the Lodi News-Sentinel. These Bank of Lodi shares, too, have grown over time. Together, they amount to about 1 percent of the bank's total shares.

In speaking with Fred, he felt the stock purchases were a way to support a growing community. I might add that neither Fred nor Marty serves, or has served, on either bank's board.

Why are we telling you all this?

Because while newspapers are like most businesses in many ways, we are different in important respects.

We strive to report the news, as the old saying goes, without fear or favor. Although we clearly state positions and preferences in our editorials, we take pains to keep our news coverage as balanced as possible.

There are some who might argue that newspapers, to avoid even the hint of a conflict, should avoid all direct investments in local businesses. Possible dangers do exist. Could a newspaper trumpet a company it has a secret interest in, while ignoring or attacking a competitor?

There are some who might argue that we shouldn't report on companies in which the paper has an ownership stake.

It's not easy to draw the line, though. Newspapers have many business connections and even degrees of connection. Should a newspaper fail to report on news involving one of its major advertisers? A major advertiser could likely mean more to a newspaper's long-term finances than shares in a local bank.

In my view, it's important for the newsroom to pursue the banking story. It might even be said that, with stock in both banks, the newspaper ownership is showing its own kind of balance.

The proof, so to speak, is in the journalistic pudding. Readers might fairly ask if our coverage has been even-handed. Frankly, we have received some comments from bank officials about accuracy, which we have tried to address. We did receive feedback from readers who wondered why we did not cover one meeting of the dissident directors.

Those concerns, I'd suggest, reflect a challenge on our part to report on a complex issue with limited resources and expertise.

They certainly do not reflect an attempt to twist the story toward one angle or another. And perhaps most telling: There has been no attempt on the part of ownership to influence the newsroom's banking coverage in any way.

As an editor, I respect that. I also appreciate the ownership's willingness to publicly discuss their holdings in this way.

In the end, and over time, I'm convinced that readers will be well-served by such openness.

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