'UPI Signs Deal With USIA'

Here's a story by George Garneau from the Oct. 17, 1987 edition of Editor & Publisher:


United Press International has contracted to deliver information overseas for the propaganda arm of the U.S. government.

The contract, worth about $2.5 million, with the U.S. Information Agency, was won earlier this year in competitive bidding against MCI Communications.

The two-year agreement, with an optional year extension, initially calls for UPI to transmit information from Washington, D.C., to 33 USIA clients -- newspapers, wire services and other agencies -- in six European states. Plans call for extending the communications to a total of 32 countries.

The new system is intended to speed delivery of what is called the "wireless file" by delivering electronically direct to newsroom computers and printers. Other USIA operations such as Voice of America and Worldnet are also upgrading facilities.

Electronic delivery of the wireless file replaces a system by which USIA sends items such as news, features, official statements and speech texts via cable to U.S. diplomatic stations, which copy and hand-deliver hard copies to foreign media requesting service.

The objective of USIA, which is banned from distributing information domestically, is promoting U.S. government foreign policy objectives, or "telling America's story," according to William B. Reinkens, a USIA spokesman who said the wireless file is often used by U.S. journalists overseas.

Under the contract, UPI will install and maintain equipment and transmit USIA information to USIA clients, including the Turkish news agency in Ankara; newspapers in Belgium and Denmark; the Dutch press agency; BBC Radio and Jane's Defence Weekly in London; and the ANSA news service and newspaper Il Messagero in Rome.

It will make the government's point more readily available in foreign newsrooms, Reinkens said.

UPI executives said the transmission system, scheduled to start Oct. 16, will be completely separate from the UPI news wire, traveling on separate circuits and arriving on separate printers.

The arrangement, they stated, is similar to communications services routinely provided by the major wire services for fees to third parties, including supplementary news services, business wires, government-controlled services and public relations services.

However, the arrangement aroused questions and concerns among editors and press critics.

George Cotliar, managing editor of the Los Angeles Times, said he had not heard of the contract and had no conclusions, but questioned how UPI would report on government if it were "in effect subsidized" by the government.

He said the Times, a UPI subscriber, would question UPI "very closely and very quickly."

Ben Bagakian, dean of the Graduate School of Journalism at the University of California at Berkeley, called the UPI-USIA contract "unfortunate."

The alliance, he said, "will add to the impression that UPI carries official government news. It also somewhat bothers me when the organization depends on government contracts."

UPI executives objected to the criticism, saying wire services for years have provided communications services to all kinds of agencies and still maintained their independence and credibility.

"It's strictly a communications operation," said UPI vice president James Hood. "News has nothing to do with it. I don't see any possibility of confusion. Information is information, and when you transmit it straight through as a common carrier, there's no implication of trying to put a stamp of approval on this."

The income from third-party services increasingly helps support newsgathering operations and reduce dues increases, notably at the Associated Press, which provides services for the official Soviet news agency Tass, as well as the U.S. Department of Agriculture, among many others.

"People shouldn't criticize us for getting a little bit of what AP has a lot of," said UPI's Hood, a former AP executive.

AP president Louis Boccardi said AP decided not to seek the USIA contract because it would "blur the distinction that must be maintained in environments around the world between AP and the U.S. government.

Acknowledging AP provides services for the USDA as well as Tass and other national services, he said those relationships do not threaten the differentiation between AP and the U.S. government.

There is a difference between carrying hog prices for the USDA, Boccardi said, and delivering information from the U.S. government to foreign newsrooms.

"To be perceived around the world as the communications arm of the USIA is something we thought was inappropriate," he asserted.

UPI currently earns less than 5 percent of its revenue from communications services provided to a host of government and independent news services and businesses, including PR Newswire.

Hood compared UPI's role to newspapers, which are paid regularly by local governments for providing a service: required legal advertising. He said the USIA arrangement might clear up perceptions overseas that U.S. wire services are connected to the government.

Bagdikian, noting a historic relationship between some foreign national press agencies and their governments, said that overseas the presumption of U.S. government influence on U.S. news agencies -- even without contracts between them -- would be enhanced.

He added that a wire service contracting with government posed greater risks of conflict than dealing with business because of the likelihood crucial news would flow from, and be influenced by, government.

The situation differed, he claimed, from a local government buying legal ads, because readers here are familiar with editorial and advertising boundaries as they are not overseas about contracts behind the scene.

Jim Hampton, editor of the Miami Herald, said the relationship with USIA "will enhance the perception that there is a distinction between the private press and government entities," but added that if the relationship is confined to technical service, "I don't see why it reflects on the credibility of news operations.

One executive with authoritative knowledge of wire service businesses called the debate "crazy."

"International news agencies have to deal with, provide service to, and collect service from governments," he said. "That's the nature of the beast. News agencies need this type of revenue to support freedom and independence on the news side. There isn't a news agency in the world that can survive in the next decade without outside sources of income."

He said the wire services earn far more selling news to government agencies -- including USIA, which buys all three -- than they do selling communications, with no apparent conflict.

Bagdikian, who acknowledged that UPI, which was brought from bankruptcy last year, was fighting to survive, said: "But I wish they had found another client."