Opinion: Hedge fund blues Voices founder goes to Washington to fight for local news

PHOTO | Evan Brandt

| OPINION

By Julie Reynolds Martinez

WASHINGTONThis week, I came to the nation’s capital to speak about hedge funds. Specifically, how so-called “vulture” hedge funds are destroying local news organizations around the country.

The occasion was a press conference announcing new legislation introduced by Sen. Elizabeth Warren, who of course also happens to be a presidential candidate. As a journalist, I don’t often associate with politicians, nor do I promote specific legislation. It’s not that I don’t agree with Warren’s bill, which is called the Stop Wall Street Looting Act and would demand greater transparency and accountability from hedge funds. (It’s sponsored by Warren and fellow Senate Democrats Tammy Baldwin, Sherrod Brown, and in the House by Mark Pocan and Pramila Jayapal.)

But I came here simply to let people know what’s happening to our local news universe, how certain hedge funds have taken a dire situation and made it catastrophic. Because I believe we are in the full throes of a crisis when it comes to local news in the U.S.

I’ve already written about what led me to this point, and I have to say I’m glad Washington is finally addressing the serious threat hedge funds pose to our society. Now it’s up to legislators to do something about it. 

The hedge fund I’ve investigated for the past three years is Alden Global Capital, and there’s no arguing this company is intentionally destroying the Monterey Herald, the Santa Cruz Sentinel, the Mercury News and scores of other news sources around the country. It is, after all, what hedge funds do. Like the scorpion, it’s their nature.

Walking to the event in 93-degree heat that felt like 110, I chatted with Evan Brandt, an old-school reporter from my long-ago stomping grounds, Pottstown, Penn. Evan is smart, tough and dedicated enough to keep reporting on his town, despite the fact that Alden sold his paper’s building and he now has to work from his attic. He told me that a hedge fund is shuttering Philadelphia’s Hahnemann Hospital because it didn’t like the slim profit margins that come from serving the poor.

I looked it up and found out the hospital announced Tuesday it would shut down services starting this week. I grew up in Philly and Hahnemann was the hospital of the poor and of blue-collar workers. 

Un-freaking-believable that its Wall Street owners are so utterly oblivious to the needs of this community, but I guess I shouldn’t be shocked. 

It’s their nature, after all.

Warren hosted a press conference to debut her new bill in the Capitol Visitors’ Center on Thursday morning. More than a dozen workers who had been “downsized” by hedge funds already packed the room, which was so full of cameras and speakers that some of our party had to leave. But Evan and I were on the speakers’ list, so I couldn’t bail, despite my nerves about speaking on national television. It was a surreal day as Evan and I became news makers instead of reporters of the news.

Warren swept in, between Senate votes, and spoke briefly before I gave my own talk. (There’s video here) I admit it was thrilling to hear Rashida Tlaib speak, fresh from being bullied by our president. She spoke of “the disease of corporate greed” and seemed visibly moved by the workers and especially their small children who surrounded her at the dais.

But it was the stories of those displaced workers that had me fighting back tears. They were people who worked at Toys R Us, Payless Shoes, Sears and Atlantic City casinos that were all shut down by hedge fund owners who operate with the same callousness as Alden.

'Their stories were heartbreaking and their courage inspiring'

They spoke of working for decades at these companies. They spoke not of jobs but careers abruptly cut short when the hedge funds loaded these retailers and resorts with debt that forced their closure. They spoke of losing health insurance, losing pensions, of struggling to find new jobs or having to take two or three jobs just to try to get back on their feet after being let go with little or no severance pay. Their stories were heartbreaking and their courage inspiring.

 In the afternoon, Evan and I joined a pair of staffers from the Communication Workers of America, the parent union of the one Evan and I both belong to, which is The NewsGuild. We told our stories — about working conditions, about the damage to communities left with no news source and no watchdog to keep an eye on government — to the staffs of Reps. Brendan Boyle (Pennsylvania), Rosa DeLauro (Connecticut) and Diana DeGette (Colorado).  

As the day came to a close, I saw in news reports that the Gannett newspaper chain was in merger talks with another large chain, GateHouse. Gannett, itself a notorious cost-cutter,  was recently spared an even more dismal fate when Alden attempted to take it over. Now Gannett was willingly dancing with another hedge-fund controlled chain, and who knows how that pairing will end?

It was a long, very hot day ending with sore feet and sweaty brows, but a satisfying one. I doubt Evan and I have saved local news, but we’re both the type who won’t lie down without a fight. As I told the crowd that morning, history will not judge us kindly if we allow local news sources across the country to shrivel and be blown away by the hedge fund tempest, only to be replaced by misinformation and opinion masquerading as news.

As the day’s work came to a close, I was asked by another reporter how I felt. I realized those workers’ voices from the morning press conference were still haunting me.

 A woman who worked in an Atlantic City resort had told us that her husband, a “man’s man,” suffered severe depression after losing his job when she also lost her bartending job at the casino. It hurt him deeply to believe he could no longer support his family, she said.

She described her feelings of betrayal — after all, weren’t the casinos allowed to build in Atlantic City because of the promise of employment? And yet private equity owners were now destroying those same jobs and leaving families in despair.

“We were promised jobs,” this woman told us. “Families suffer. Communities suffer.” She ended her speech with an admonition: “Now Washington, do something!”

Yes, Washington, it’s time to do something.

Julie Reynolds’ op-ed piece appeared in Newsweek on July 18. Read it here.
More about the Stop the Wall Street Looting Act:
Wall Street Journal

Reuters
CNBC
Roosevelt Institute

VIDEO | PRESS CONFERENCE

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Julie Reynolds Martínez

About Julie Reynolds Martínez

Julie Reynolds Martínez is a freelance journalist who has reported for the Center for Investigative Reporting, The Nation, NPR, PBS, the NewsGuild and other outlets. She is a co-founder of Voices of Monterey Bay.