Media Structures & Regulations

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  • USA Today Report Raises New Questions About Stephen Bannon And The “Breitbart Embassy”

    Blog ››› ››› PAM VOGEL

    White House senior adviser Stephen Bannon’s housing and financial arrangements are unusually complicated. Many reporters have attempted to tackle the intricate and conflicting network of connections between Bannon, the extreme-right Breitbart.com site that he used to run, far-right billionaires, a tangle of small companies and financial holdings, and President Donald Trump. USA Today’s new report on the Washington, D.C., town house near Capitol Hill known as the “Breitbart Embassy” hints at another set of potential conflicts of interest for the senior White House official.

    The “Breitbart Embassy” has been a D.C. staple since Breitbart (then a fringe conservative site) began operating out of the residential property in 2011. As early as 2013, the town house was described as then-Breitbart chief Stephen Bannon’s house -- though it’s actually owned by an Egyptian businessman and politician named Moustafa El-Gindy. Until recently, there have been conflicting reports on the nature of any official relationships between Breitbart or Bannon and the actual owner of the property, including the nature of any financial or leasing agreements among the different parties.

    Now that Breitbart executive Larry Solov has said Bannon “resigned” from Breitbart “via phone” (though offering no proof, yet, of this separation), USA Today’s Paul Singer investigated potential current or past conflicts of interest and legal liabilities associated with the use of the “Breitbart Embassy” property -- and his findings pose some additional conflict-of-interest questions.

    Is Bannon Still Living At The “Breitbart Embassy”?

    In 2014, a writer for Vice visited the house, which he later described as “a handsome living quarters for Bannon and other company brass” at Breitbart as well as a “workspace for the website's D.C. reporters.” An October 2015 profile in Bloomberg News -- which featured original quotes and photographs of Bannon in the house -- similarly described the property’s dual usage as a workspace and Bannon’s living quarters. A week after the 2016 election, The Washington Post reported that the town house "holds offices sometimes used" by Breitbart but "isn't typically the site of the media organization's day-to-day operations." However, Bannon "would often hold team meetings around its elegant dining table” and “reportedly uses the upper levels of the four-bedroom residence as his Washington crash pad.”

    In his article, Singer implied Bannon no longer lives in the home, but he couldn’t locate documentation to back up Bannon’s living situation. When he knocked on the door of the “Embassy,” a staffer for one of Bannon’s film companies who has also written for Breitbart answered.

    If Bannon was previously living in the space -- which he does not own -- was he paying rent to either the owner or to Breitbart as a subletter? Did he continue to either pay rent to the media outlet or live there on the outlet’s dime after he joined the Trump campaign or even the administration? Could he still be doing so today?

    Did Breitbart Lease The Residential Space For Commercial Reasons?

    Though the residential property is reportedly “still the official address of Breitbart’s Washington bureau,” a Breitbart spokesperson told Singer the site was “transitioning people out of the house” and, soon, into what Singer described as “a regular office in downtown D.C.” He also noted that “the Embassy is in a residential neighborhood where it is generally not legal to run an office.” Singer also spoke with a locally elected official familiar with zoning rules, who explained what commercial uses are allowed in such a residential space and noted that Breitbart’s uses “appear to violate” the rules: 

    Breitbart CEO Larry Solov told the Senate press gallery that the company has a soon-to-expire lease in the building for corporate housing, offices and entertainment. But zoning rules for the block do not allow commercial leases.

    “That area of Capitol Hill is zoned only for residential uses, with a very narrow set of ‘home occupation’ exceptions allowing a resident (as opposed to a rotating group of occasional visitors) to work as an in-home tailor, music tutor, doctor, or the like, or to run a small bed & breakfast,” said Mark Eckenwiler, longtime chair of the zoning committee for the local Advisory Neighborhood Commission, the city government unit for that area.

    The uses Solov described to the press gallery “appear to violate the D.C. zoning regulations applicable to that location,” Eckenwiler said. Since the lease is not public, it is impossible to know whether the terms meet the neighborhoods restrictions.

    Does El-Gindy Maintain Residence At The “Embassy,” In Accordance With The Tax Deduction Requirements?

    As the USA Today report also notes, the Capitol Hill home is not technically Bannon’s -- it’s actually owned by an Egyptian politician and businessman named Moustafa El-Gindy. Washington, D.C.’s public records show that El-Gindy purchased the property in 2009 and appears to have been renting to Breitbart since 2011. As reported by BuzzFeed in August, El-Gindy told an Egyptian reporter he is “just a landlord” and that he rents the house because tourism has slowed in Egypt. But the article points out that El-Gindy may stay at the town house sometimes, and appears to get friendly coverage from Breitbart. He’s been quoted in Breitbart articles without any disclosure of his relationship to Bannon or the outlet at least four separate times.

    The nature of any type of lease between El-Gindy and Breitbart -- or Bannon himself, for that matter -- is not clear. Singer’s investigation adds an interesting wrinkle in the story:

    El-Gindy is receiving a homestead deduction on the property, a $72,000 tax credit that requires the owner to maintain residence in the building. He could not be located for comment on this story.

    In Washington, D.C., individuals qualify for this tax deduction if the property is their “permanent home” or if they own the property and consider it to be their “principal residence.” The Washington, D.C., Office of Tax and Revenue website indicates that violations of this tax rule could result in the property owner owing back taxes, interest, and a penalty to the district.

    There are still more questions than answers when it comes to the connections between Bannon, Breitbart, and El-Gindy -- maybe because the answers could point to questionable legal practices, tax violations, and conflicts of interest. 

  • Advertisers Are Fleeing YouTube To Avoid “Directly Funding Creators Of Hateful” Content

    Blog ››› ››› MEDIA MATTERS STAFF

    YouTube is losing advertisers as big-name companies pull ads from the site because, according to a report from The New York Times, “The automated system in which ads are bought and placed online has too often resulted in brands appearing next to offensive material on YouTube such as hate speech.”

    More and more major companies are abandoning the ad services of YouTube's parent company, Google, amid concerns that ads for their brands are being placed next to extremist material. On March 22, The New York Times reported that AT&T and Johnson & Johnson “were among several companies to say Wednesday that they would stop their ads from running on YouTube and other Google properties amid concern that Google is not doing enough to prevent brands from appearing next to offensive material, like hate speech.” The decision by advertisers comes as Google has struggled in its efforts to prevent websites that peddle fake news from using its online advertising services to profit. It also comes as Google and YouTube have been criticized following a BuzzFeed News report for driving revenue for conspiracy theorists who broadcast to millions and monetize conspiracy theories like “Pizzagate,” which led to an armed confrontation in a DC-pizza shop.

    Now, The New York Times reports that “the technology underpinning YouTube’s advertising business has come under intense scrutiny” as “other deep-pocketed marketers [are] announcing that they would pull their ads from the service.” According to the Times report, the problem “is particularly jarring” for YouTube specifically, because “YouTube splits advertising revenue with its users, meaning advertisers risk directly funding creators of hateful, misogynistic or terrorism-related content.” From The Times’ March 23 report:

    YouTube is now one of the pillars of Google’s advertising business and the most valuable video platform on the internet. In recent years, advertisers, unable to ignore its massive audience, flocked to YouTube to reach younger people who have started to shun traditional broadcast television.

    But the technology underpinning YouTube’s advertising business has come under intense scrutiny in recent days, with AT&T, Johnson & Johnson and other deep-pocketed marketers announcing that they would pull their ads from the service. Their reason: The automated system in which ads are bought and placed online has too often resulted in brands appearing next to offensive material on YouTube such as hate speech.

    [...]

    That technology, known as programmatic advertising, allows advertisers to lay out the general parameters of what kind of person they want to reach — say, a young man under 25 — and trust that their ad will find that person, no matter where he might be on the internet. This approach plays to the strengths of tech giants like Google and Facebook, allowing advertisers to use automation and data to cheaply and efficiently reach their own audiences, funneling money through a complicated system of agencies and third-party networks.

    But more than 400 hours of content are uploaded to YouTube every minute, and while Google has noted that it prevents ads from running near inappropriate material “in the vast majority of cases,” it has proved unable to totally police that amount of content in real time. And that has advertisers increasingly concerned.

    [...]

    While brands have expressed concern about showing up next to unsavory photos and videos uploaded to digital platforms by users — like pornography on Snapchat — the situation with YouTube is particularly jarring. YouTube splits advertising revenue with its users, meaning advertisers risk directly funding creators of hateful, misogynistic or terrorism-related content.

    The revenue-sharing model has minted stars, some of whom gain cultlike followings for edgy and inappropriate content. Last month, the platform cut business ties with its biggest star, Felix Kjellberg, known to his 54 million subscribers as PewDiePie, after The Wall Street Journal reported on crude anti-Semitic jokes and Nazi imagery in his comedy videos. He was part of YouTube’s premium advertising product called Google Preferred — a category of popular, “brand safe” videos on YouTube.

  • Andrew Napolitano's International Embarrassment Could Put Murdoch's Sky Bid In Jeopardy

    Blog ››› ››› MATT GERTZ

    The reason Fox News benched senior judicial analyst Andrew Napolitano isn’t that he pushed a bogus conspiracy theory that the network was unable to confirm.

    Wild fantasies are Napolitano’s bread and butter. He regularly appears on Fox to fulminate over the alleged crimes of progressives. He has used his Fox platform to champion 9/11 trutherism, suggest that Osama bin Laden wasn’t really dead, and blame President Abraham Lincoln for having "set about on the most murderous war in American history" over slavery.

    Those incidents did not inspire Fox to examine Napolitano’s reporting, publicly declare that the network could not substantiate it, and pull the former judge from the airwaves.

    So what led the network to take those steps over the past few days, after Napolitano’s claim that President Barack Obama had used the British intelligence service GCHQ to surveil President Donald Trump’s communications last year fell apart?

    The White House supercharged the story when press secretary Sean Spicer read Napolitano’s comments from the press room podium. Napolitano’s typical practice of spitballing a conspiracy on Fox’s morning news show suddenly spurred an international news story that threatened U.S. relations with the United Kingdom.

    And that firestorm of coverage in the U.K. around Napolitano’s comments threatens Rupert Murdoch’s dream of owning the satellite broadcasting company Sky, which owns that nation’s Sky News network and pay-TV operations in the U.K., Germany, Austria, and Italy.

    Murdoch's 21st Century Fox, which owns a minority position in Sky, has bid $14.3 billion for the remaining stake. 21st Century Fox is Fox News' parent company. The bid is currently under review by the British media regulator Ofcom.

    The international news mogul previously sought to take over Sky (then known as BSkyB) in 2010. But he was forced to withdraw that bid in response to the investigation of phone hacking at his U.K.-based papers.

    Losing out on BSkyB was part of a long series of humiliations Murdoch endured due to the phone hacking scandal, culminating with a parliamentary committee’s declaration that he “is not a fit person to exercise the stewardship of major international company."

    But those were humiliations ultimately driven by the failures of his son James, who was overseeing the family’s newspapers as head of News International, and who remains an heir to the Murdoch media empire. He surely has no intention of suffering a similar fate due to the actions of a random Fox News commentator.

    And yet, Napolitano’s actions put Murdoch’s massive Sky bid in jeopardy. Days after Britain's culture secretary asked Ofcom to review whether 21st Century Fox is sufficiently “committed to the required editorial standards, such as accuracy and impartial news coverage,” U.K. newspapers were filled with stories about how a Fox News commentator’s anonymously sourced, unverified claim had damaged that nation’s relationship with its closest ally.

    Yesterday, hours before the network acknowledged that Napolitano was “being kept off the air indefinitely,” Britain woke up to a front-page story in The Guardian reporting that the “former British ambassador to Washington, Sir Peter Westmacott, has issued a withering criticism of Donald Trump and his inner circle, accusing them of making absurd, unthinkable and nonsensical claims about the UK’s involvement in alleged wiretapping of Trump Tower that he warns could damage close ties between the two countries.”

    In a Guardian op-ed, Westmacott wrote of Spicer’s repetition of Napolitano’s claim that “anyone with any knowledge of the intelligence world knew the suggestion was absurd.”

    The Napolitano-sourced allegation was also torched in British media by a spokesman for Prime Minister Theresa May (“ridiculous and should have been ignored”); the former foreign secretary Sir Malcolm Rifkind ("foolish and very dangerous"); GCHQ, the British intelligence service that Napolitano accused (“nonsense”); Dominic Grieve, chairman of the parliamentary committee which oversees the U.K.'s spy agencies (“I echo [GCHQ’s] sentiment”); Tim Farron, the Liberal Democrat leader in Parliament ( “shameful”; "harms our and US security"); and Richard Ledgett, deputy director of the NSA ("just crazy").

    The story has been discussed on the BBC and Sky News, as well as in the pages of The Telegraph, The Times, The Daily Mail, The Independent, The Daily Express, and The Daily Mirror, among others.

    Some of the most brutal headlines on the story over the past few days have been published by a Murdoch-owned tabloid, The Sun.

    Several British papers produced articles on Fox removing Napolitano from the airwaves. But the story won’t end there. According to Murdoch’s Times, the incident is likely to come up when Jeremy Fleming, the incoming director of GCHQ, next visits the United States. "Jeremy will be expected to make a trip to the US very early on to seek reassurances from our partners," a source told that paper.

    The more that story stays in the news, the less likely British regulators may be to allow the company that started it to dominate the U.K. airwaves.

  • Report: FBI Investigating Russian Operatives Using Bots To Spread Stories From Breitbart, RT, Infowars

    Investigators Are “Exploring Whether The Far-Right News Operations Took Any Actions To Assist Russia’s Operatives”

    Blog ››› ››› MEDIA MATTERS STAFF

    According to a report from McClatchy, the FBI is investigating Russia’s use of “bots” to push pro-Trump news stories on Facebook and Twitter from conservative websites and “Kremlin-backed RT News and Sputnik News.”

    The March 20 article from McClatchy reported that “[o]peratives for Russia appear to have strategically timed the computer commands, known as ‘bots,’ to blitz social media with links to pro-Trump stories.” The “bots” pushed stories that mixed fact and fiction from “conservative sites such as Breitbart News and Infowars, as well as on the Kremlin-backed RT News and Sputnik News.” From the March 20 report:

    Federal investigators are examining whether far-right news sites played any role last year in a Russian cyber operation that dramatically widened the reach of news stories — some fictional — that favored Donald Trump’s presidential bid, two people familiar with the inquiry say.

    Operatives for Russia appear to have strategically timed the computer commands, known as “bots,” to blitz social media with links to the pro-Trump stories at times when the billionaire businessman was on the defensive in his race against Democrat Hillary Clinton, these sources said.

    The bots’ end products were largely millions of Twitter and Facebook posts carrying links to stories on conservative internet sites such as Breitbart News and InfoWars, as well as on the Kremlin-backed RT News and Sputnik News, the sources said. Some of the stories were false or mixed fact and fiction, said the sources, who spoke on condition of anonymity because the bot attacks are part of an FBI-led investigation into a multifaceted Russian operation to influence last year’s elections.

    Investigators examining the bot attacks are exploring whether the far-right news operations took any actions to assist Russia’s operatives. Their participation, however, wasn’t necessary for the bots to amplify their news through Twitter and Facebook.

    [...]

    As for the bots, they carried links not only to news stories but also to Democratic emails posted on WikiLeaks, especially those hacked from Podesta and made public in October, said Philip Howard, a professor at the Oxford University Internet Institute who has researched the bot attacks.

    Howard said that, as an example, bots had spread links to fictional stories that accused Clinton of involvement in running a child-sex ring in the basement of a Washington pizza parlor. The posts inspired a North Carolina man to drive to Washington and fire an assault weapon in the restaurant, according to police reports.

    Howard’s study of bot-generated Twitter traffic during last fall’s Trump-Clinton campaign debates showed that bot messages favorable to Trump significantly outnumbered those sympathetic to Clinton.

  • Report: Top Pence Adviser Is Partial Owner Of Independent Journal Review

    Blog ››› ››› MADELINE PELTZ

    BuzzFeed News is reporting that a political adviser to Vice President Mike Pence is also a “major investor” in the conservative media outlet the Independent Journal Review (IJR), which has gained exclusive access to the administration as the only media outlet allowed to travel with Secretary of State Rex Tillerson on his trip to Asia. 

    The IJR is a conservative, pro-Trump outlet which recently faced criticism for publishing, then retracting, an article suggesting former President Barack Obama had the “timing and the opportunity” to influence the judge that halted President Donald Trump’s Muslim ban. The outlet also faced criticism after Tillerson’s “decision to bring only Erin McPike of Independent Journal Review” with him on his first trip to Asia. According to Politico:

    McPike has been with IJR for only a few weeks and doesn’t even cover the State Department: She’s its White House reporter and is often in the briefings. McPike won’t be acting as a pool reporter for the rest of the diplomatic press corps, meaning she won’t be sharing information about the trip with other reporters, which is what would normally happen if there were limited space for reporters and only a few were chosen.

    On March 17, BuzzFeed News reported that a “top strategist” for Vice President Pence, Nick Ayers, is a “major investor” in IJR. Ayers also works for America First Priorities, a political group that works to push Trump’s agenda. While the article notes that “there is no indication” that Ayers played a role in IJR receiving favorable treatment from Tillerson, the Ayers connection reinforces the “close ties between Trump’s orbit and a favored media outlet.” From BuzzFeed News:

    Nick Ayers, Pence’s top strategist outside of the White House, confirmed to BuzzFeed News that he owns part of IJR. He is also playing a major role in America First Priorities, a political group launched by Trump campaign advisers to trumpet the president’s message. He joined Trump’s campaign when Pence was tapped as the vice presidential nominee and later acted as a senior advisor for the vice president-elect during the transition. Ayers previously worked as a political consultant and as campaign manager for former Minnesota Gov. Tim Pawlenty’s presidential bid in 2012.

    There’s no indication that Ayers was involved in this week’s controversial State Department decision to grant the sole press spot on Secretary of State Rex Tillerson’s trip to Asia to IJR’s White House correspondent. The move, a break from tradition, has enraged the State Department press corps as Tillerson makes big diplomatic news without a traditional pooler tagging along.

    Ayers’ investment in IJR is another example of close ties between Trump’s orbit and a favored media outlet. Steve Bannon, the president’s top strategist, ran Breitbart News for years and has brought with him to the administration a handful of ex-Breitbart staffers. The company has said that it no longer has financial and editorial ties to Bannon. Trump’s son-in-law and senior adviser Jared Kushner transferred his ownership of The New York Observer to a family trust.

    There’s no sign that Ayers has had any editorial involvement with his investment, and a person involved in the company noted that IJR notably didn’t benefit from insider leaks during the campaign.

  • Breitbart Helped Boost A Man Vying To Become The Next Dutch Prime Minister: Geert Wilders, Dubbed The "Dutch Trump"

    Blog ››› ››› JARED HOLT

    Breitbart.com provided a platform for far-right Dutch political leader Geert Wilders, who is running for prime minister of the Netherlands in the March 15 election, by publishing columns he wrote. Wilders used Breitbart to boost his anti-Muslim brand among factions of the white nationalist “alt-right” in 2016.

    Wilders, leader of the Dutch Party for Freedom (PVV), has been labeled “the Netherlands' Donald Trump.” Like President Trump, Wilders gained prominence with a candidacy driven by anti-Muslim rhetoric and populist sentiment, courting key figures among the far-right factions overtaking conservative politics globally. Recent I&O Research polling showed Wilders trailing among voters, but NBC News noted that Wilders successfully pulled mainstream Dutch politicians toward the extreme right -- a dangerous victory for anti-immigrant populists in Europe.

    In 2016, Wilders’ anti-immigrant rhetoric found a platform on Breitbart under Stephen Bannon, who later left the site to run Trump’s presidential campaign and who now serves as chief strategist and senior counselor to the president. Wilders' columns have been published on both the American version of Breitbart.com and the "Breitbart London" site, which is apparently in charge of the outlet's desired expansion into other European markets.

    In a column published by Breitbart in February 2016, Wilders described the growth of Islamic faith as “an existential threat to our Western freedoms and our Judeo-Christian civilization.” Wilders argued that Western nations have a “duty” to “stop Islam … as a matter of survival” and advocated a Western freeze on “all immigration from Islamic countries.”

    The columns Wilders published at Breitbart all contained similar inflammatory anti-Muslim, anti-immigrant commentary. In another column published in September 2016, Wilders stated that Muslim immigrants “carry our passports, but they do not belong to us” because they “spit on” Dutch identity “and behave like conquerors.” Wilders went on to describe Islam as “an existential threat to” the Netherlands’ “survival as a free nation.”

    This isn't the first time Breitbart has gone to bat for far-right European parties and politicians. The site has consistently promoted Marine Le Pen and The National Front, France's most prominent far-right political party; Germany's Alternative for Germany (AfD) party, a far-right, anti-immigrant, nativist political party; and the United Kingdom's UK Independence Party, a group that has been denounced for pushing "open, explicit racism."

    Breitbart under Bannon and beyond also played an instrumental role in the success of Trump’s candidacy, acting as the de facto propaganda arm of the Trump campaign. In the year leading up to the 2016 election, Breitbart defended Trump’s claim that Mexicans were “rapists,” attacked a Mexican-American federal judge on behalf of Trump, and smeared Gold Star father Khizr Khan. Trump often repeated conspiracy theories published on Breitbart during his campaign, and Trump’s administration has continued to give special access to Breitbart in the White House.