Doug Mataconis · · 29 comments

The combination of a series of Fox Business Channel reports seemingly in favor of in opposition to a ballot proposition in California, combined with a donation from FBN’s parent company to help defeat that proposition, has raised questions in some circles about integrity at Fox:

The Fox Business Network focused on what it called “The War on Business” all last week, but on Tuesday its coverage was decidedly more focused — with a series of reports about a California ballot initiative that its parent company, the News Corporation, had spent $1.3 million to defeat.

Call it the War on Proposition 24

The News Corporation is one of the many major media companies that have spent more than $1 million each seeking to defeat the proposition, which supporters say would repeal $1.7 billion in corporate tax breaks to help close the state’s budget gap.

Executives at media companies, which employ tens of thousands in the entertainment industry, say defeating the proposition is one of their biggest priorities in the midterm elections, and they question how they would continue to operate in the state if taxes go up.

In five consecutive hours of live reports on Tuesday, a Fox Business correspondent, Adam Shapiro, was stationed at Cambridge of California, a small furniture manufacturing facility in Gardena. Mr. Shapiro repeatedly said the proposition could drive businesses — specifically small businesses, not media titans — out of California, and he said “332,000 jobs” were “on the line.”

Tracy Byrnes, the anchor for one of the reports, expressed the opinion that “the proposition was setting up businesses to be destroyed, quite frankly.”

Yet in its expanded coverage of the issue, Fox did not disclose the News Corporation’s donation to a group working to defeat Proposition 24. Nor did Fox report that the small-business man it featured in the news reports was asked to do the interview by the same group, No on 24 — Stop the Jobs Tax.

A Fox Business executive said he had not known about the parent company’s donation. Industry observers, however, said the News Corporation’s contribution to the group, and the organization’s role in arranging the interview, raised a potential conflict of interest that warranted disclosure.

“There’s a trust between you and your audience, no matter what the medium is,” said Kevin Z. Smith, who holds the ethics chair for the Society of Professional Journalists and is a past president of that organization. “Not disclosing conflicts, to me, severely undermines your credibility.”