The Bureau’s written submission to Lord Justice Leveson

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Lord Justice Leveson.  This is for you.

The following is The Bureau’s written submission to Lord Justice Leveson as part of his inquiry into the culture, practice and ethics of the press.  In it we impress on Lord Justice Leveson the need for a public interest defence, that charitable status should be available in principle to not-for-profit organisations that provide public interest journalism, a call to the Charity Commission to provide greater clarity in this area and a suggestion for a public interest journalism fund, paid from  regulatory fines or a media levy. 

1. Introduction
The Bureau of Investigative Journalism (TBIJ) is a not-for-profit news organisation launched in April 2010. It is the first not-for-profit body of investigative journalists of its kind in the UK and is funded by David Potter and The David and Elaine Potter Foundation. Grants to date have amounted to some £2m. The Bureau aims to bolster investigative journalism through its funding, but it also has a commercial element, in that the organisation is commissioned by broadcasters to turn some of its work into television reports and documentaries. The Bureau is paid to do this. The Bureau is run out of City University and part of the organisation’s ethos is to provide a hands-on training ground for journalism students, some of whom come from City University.

2. The Value of Investigative Journalism
The Leveson Inquiry has heard extensive evidence regarding how far the ideal of journalism in the public interest has been corrupted in some newsrooms. There has been much about the need to protect and encourage journalism in the public interest. Good journalism makes a contribution to the health of the many communities that make up the modern public sphere, to the quality of public reason and debate, and to informed democratic choice. Preserving this is an urgent task. Setting new standards for the future is part of that. The Bureau was formed and funded on the assumption that investigative journalism is indispensable and that its continued survival and quality matter. Fine journalism continues to be published and broadcast in Britain, but it is squeezed and shrinking. Transformative technologies in publishing have led to the migration of advertising away from old platforms such as newspapers and television towards the internet. This has had a dramatic and detrimental impact on all media outlets, leading to the decimation of newsrooms and even of simple reporting. A study in 2008 by Cardiff University revealed that the media has become heavily dependent on ‘pre-packaged’ news. It found that it was common practice to simply lift copy from the Press Association (PA) or from press releases issued by the public relations world, often with little changed and no fact-checking. Even old Fleet Street’s best now rely on the PR world or the PA to supply them with nearly 60 per cent of their content.

3. The Bureau of Investigative Journalism
Everyone involved in the Bureau shares a common belief that democracy itself is imperiled by the absence of honest information and a robust watchdog to hold governments and the powerful to account. Without that, citizens become susceptible to the manipulation and deceptions of the powerful, be it government, industry or even the media itself. This ethos underpins all the organisation’s work. We think the Bureau’s objective can best be achieved by accomplishing journalism which satisfies three tests:

1. Its output and reportage should be as close to incontrovertible as is possible;
2. Its subjects are of the broadest interest and application to consumers of information in the UK and elsewhere in the world and arise from no political or partisan agenda. The selection of matters for investigation must be filtered through strict tests of public interest and value and not simply responsive to the market for journalism and news. Such analysis, argument or opinion as may be required to make sense of new facts disclosed will be derived from the evidence reported.
3. The organisation aims for its output and editorial processes to be a masterclass, a gold standard for evidence-based journalism of this kind. The aim is to make a contribution to raising the quality of investigative journalism in the future through training interns and lecturing about the Bureau’s work, but by also providing a benchmark.

In short, the Bureau aims to produce journalism of an outstanding kind as a contribution to alleviating the slow-burning but nevertheless serious threat to democracy that indifference to fact-based, long form, probing journalism poses. Since the Bureau’s launch two years ago the organisation has achieved considerable success. Its investigations have featured on more than 40 front pages.

The Bureau has worked with the Guardian, the Financial Times, the Sunday Times, the Independent, the Telegraph, the Mail on Sunday, the New York Times, Le Monde and the Evening Standard. In broadcast the organisation’s work has formed the basis of a Panorama, a Dispatches, four half-hour Al Jazeera reports, and several Channel 4 news and Newsnight reports.

We have won two Amnesty Awards and a Thomson Reuters Award. We have been nominated for many other awards including a Foreign Press Association Award. Investigations by the organisation have been quoted in UN councils, used by NGOs including Amnesty International and the American Civil Liberties Union and quoted in parliament and the European parliament. They have resulted in referrals to the parliamentary Standards Commissioner of two members of the House of Lords and caused both the World Health Organisation and the Independent Police Complaints Commission to review internal processes.

Yet despite the Bureau’s success many of the investigations it has carried out would not have gained the necessary investment or a newsroom’s patience in the wider media. Much of the work covered by the Bureau is not generally considered the type of stories that would sell newspapers or bring in television ratings. A dwindling paying market has resulted in most media outlets pursuing populist subjects rather than public interest stories.

The Bureau seeks to redress this. In doing this, the Bureau believes it is fulfilling a requirement largely unmet even by publicly funded broadcasters (C4 and BBC) evidenced by the fact that its work is used by such broadcasters, but such projects are usually subsidised by the Bureau.

The type of projects undertaken by the Bureau require considerable time and investment.  An investigation into EU structural funds revealing how the money is distributed and spent, systematic and wide ranging fraud and how regulatory checks are insufficient and toothless took a team of five journalists more than nine months to complete, for example. The work provided for the first time a transparent database listing the allocation of every penny from the EU structural fund. Another project, which has been running for more than 18 months, has gathered evidence of every reported US drone strike in Pakistan, Yemen and Somalia.

This ongoing project would not have a place in a modern newsroom and yet the work has added considerably to the public’s understanding of a covert war that is killing hundreds of civilians. We have fully disclosed our methodology on our website and provide a constantly updated database to allow others to interrogate our evidence. The transparency of our work is a matter we take seriously across all our projects, enabling others to use our data but also interrogate our findings. A recent investigation into the financial lobby was able to publish a database that listed more than 130 lobbyists representing the City with more than £90m to spend.

The transparency that this work has provided into this closed, secretive industry has brought wide public understanding of a world that the prime minister has described as the next scandal waiting to happen. But the project took over four months of painstaking work and again is unlikely to have found funding in the wider media. Working as an independent organisation free from the commercial pressures of today’s newsrooms provides an environment that is beneficial to investigative journalism, but it also brings its own problems.

The Bureau believes two areas in particular need to be addressed by the inquiry if proper investigative journalism is not to be further strangled by the demands and pressures on today’s media.

1. The urgent need for a public interest defence written into the law.
2. The encouragement of an environment that values and invests in investigative journalism.

Both these areas have been covered fairly extensively by the inquiry, but the inquiry has mostly heard from large, well-established organisations and their representatives.

The Bureau believes these issues also have a detrimental impact on small independent news organisations, perhaps explaining why there is such a dearth of such agencies.

This is in sharp contrast to the situation in the United States for example, where a proliferation of organisations like the Bureau are filling much needed gaps left by struggling media giants.

4. A Public Interest Defence
There has been much evidence brought to the attention of the Leveson inquiry about the genuine threat to investigative journalism posed by our defamation laws. As has been presented it is not just the threat of expensive libel actions that are handicapping genuine journalistic inquiry. Privacy, confidence, contract and copyright are all areas increasingly strangling investigative journalism.

For a small organisation like the Bureau a legal action would threaten its very existence. This necessitates that many of the Bureau’s investigations must be published in partnership.

By drawing on the resources of a large media company the Bureau is able to protect itself, at least in part, from the potentially fatal blow that a legal action would bring. The Bureau has found that even large media organisations are not immune to staying away from a public interest story that also carries considerable legal risk.

Last year the Bureau had a story about two Mid-Staffordshire NHS surgeons who had been criticised over deaths at Britain’s then worst hospital and yet were still carrying out operations without patients knowing about their records. The paper the Bureau was initially working with on the story backed off after receiving a legal letter. The Bureau had obtained a damning review by the Royal College of Surgeons, and the lawyer argued that this was ‘plainly private information’. This was clearly a story of wide public interest and yet the threat of legal action was enough to halt its publication, at least by one paper.

Our draconian legal system really is threatening genuine journalistic investigation in the public interest and the Bureau of Investigative Journalism welcomes and supports the many calls heard by the inquiry for a broad strategy public interest defence to be made available to all genuine investigative journalists. We would hope that such a defence could be invoked in response to legal action in each of the areas mentioned above – defamation, privacy, confidence, contract and copyright.

5. The need for an investigative journalism fund
When the Bureau launched over two years ago, the legal issues were the organisation’s gravest concerns. However, these have subsequently been overtaken by a worsening media environment that has made it extremely difficult to secure the necessary funding to keep the organisation running.

The lengthy, resource-heavy investigations pursued by the Bureau require extensive funding. Many of our projects cost in excess of £10,000, and some of our biggest investigations have cost more than £50,000.

The growing economic crisis of journalism has been dealt with thoroughly by the Co-ordinating Committee for Media Reform. Professor James Curran, director of the Goldsmiths Leverhulme Media Research Centre and part of the CCMR, has alerted the inquiry to the fact that the increasing financial pressures on media have left investigative and local journalism most vulnerable. The Bureau strongly agrees with Professor Curran’s argument that there ‘must be a place for journalism that is not limited to meeting consumer demand’. And yet funding this area of journalism is far from easy.

The Bureau has sought commercial funds for its investigations from the wider media. Perhaps not surprsingly it has found that there are very limited funds available for organisations focused on investigative journalism either in television or print. Resources are still being made available within broadcasting and print organisations, albeit in smaller quantities, but there simply are smaller and smaller budgets available to commission or ‘buy in’ outside investigations. From the many partnerships entered into by the Bureau only a tiny handful have contributed to the costs of the actual journalism involved in a project; rather they have covered the production of a story – filming and editing in the case of broadcast, writing and subbing in the case of print.

Professor Curran in his evidence to the Leveson Inquiry suggested there is an urgent need for funding for investigative and local journalism. He recognised that in a time of austerity this could not come from the government, so he suggested a public interest media levy, which would be made on larger print organisations and online media. The Bureau would ask Lord Justice Leveson to consider this recommendation.

The issues of funding for investigative journalism have also been covered by a House of Lords select committee, which looked into the future of investigative journalism. The third report recommended that if in the future fines were introduced for breaches of the Editors’ Code of Practice by newspapers and magazines under a new system of press self-regulation that a proportion of these should be allocated to a fund reserved for financing investigative journalism. The Bureau welcomes this recommendation too and would argue that such funds are sorely and urgently needed.

6. The Value of Charitable Status
In spite of the decline in investigative journalism, efforts to address the issue are hampered by the inability of public interest journalism to access charitable funds.

The Advisory Group on Journalism and Charitable Status, co-chaired by Bates, Wells & Braithwaite, the Bureau of Investigative Journalism and Wilkes, another not-for-profit news organisation, has prepared a report for Lord Hodgson in which it discusses the Charity Act in relation to journalistic practice. This report has also been submitted to the inquiry. The most salient points are repeated here.

The submissions argue that viable third-sector organisations, which do not seek to generate profits or create shareholder value, and do not wish to rely upon state subsidy, must be capable of attracting and accepting philanthropic support. This effectively requires charitable status, with its fiscal and reputational benefits. While charitable status is not the only form of non-profit ownership, it is the favoured one.

Two other options include the non-charitable Company Limited by Guarantee (CLG) and the Community Interest Company (CIC). A non-charitable CLG can demonstrate best practice in terms of transparency. This is a useful structure for companies pursuing objectives not recognised as charitable but which aim to attract public support. However, unless its non-profit status is entrenched, the Articles of a CLG can be changed and its non-profit status removed. Furthermore, a CLG lacks the reputational advantage of a charity; it is not eligible for tax or rate relief; and it will struggle to attract grants.

A CIC can be a company limited by guarantee or a company limited by share capital. It has special features that ensure its assets are applied for the benefit of the community. CICs are regulated by the CIC regulator. They are regulated more lightly than charities, but more heavily than standard companies. A CIC’s community benefit is hardwired through the community benefit test, which asks whether a reasonable person would consider that its activities are being carried out for the benefit of the community. There is an ‘asset lock’ which means that there can be no transfer or distribution of assets out of the CIC except under certain stringent conditions; and a CIC cannot convert into a private company; it can only convert into a charity.

A CIC is not eligible for tax or rate relief, and does not attract Gift Aid. Unlike CICs or non-charitable CLGs, charities are eligible for relief on corporation tax, capital gains tax and stamp duty. A newspaper owned and operated by a charity would be eligible for 80% mandatory rate relief. Gifts to a charity attract tax relief either to the donor or recipient. But most importantly, many charitable funders will only give to organisations with charitable status. Even where the terms of a grant do not rule out non-charitable organisations, charitable status still gives a grant applicant a reputational advantage.

The Bureau itself has been turned down for significant partner funding solely because it lacks charitable status. Indeed, without charitable status the long-term survival of the Bureau is under threat.

In line with its fiscal and reputational advantages, charitable status is a unique badge of trust. The Charity Commission rightly sees itself as the guardian of the public’s confidence in the integrity of the sector. It is not in the public interest for charitable status to be compromised by charities with political aims or which pursue private benefit at the public’s expense. Investigative journalism is not currently recognised as a charitable purpose in its own right in charity law.

The Advisory Group on Journalism and Charitable Status believes charitable status should be available in principle to not-for-profit journalitic organisations. Charity law should be capable of recognising the broad public benefit in certain forms of public interest journalism, subject to conditions that would not open the floodgates to the registration of news organisations that are pursuing commercial benefit or political objects. But as heard by the House of Lords select committee, if investigative journalism in its own terms were to be included as a charitable purpose, this would require legislative change, for which the government does not at present have any plans.

In his supplementary written evidence to the Lords select committee, the Secretary of State wrote that: “There have been no calls from the public or the charity sector to recognise investigative journalism as a charitable purpose so … Government is not currently inclined to legislate.”

The Advisory Group on Journalism and Charitable Status has urged the Charity Commission to publish detailed guidance on citizenship and public benefit that would aid a journalistic organisation seeking charitable status. It has also recommended that the Charity Commission draw from the approach taken by the United States Inland Revenue Service to news organisations with 501 (c)(3) tax-exempt status (the US equivalent of registered charity status). As a result there has been an extraordinary proliferation of not-for-profit and public interest news organisations, almost all philanthropically supported across the US. They include organisations such as the award-winning ProPublica, which now employs 33 journalists and distributes its work through 78 traditional news organisations and other partners.

Like the Bureau, Propublica is largely funded through philanthropy. It receives a tiny fraction of its annual budgets from commissions, relying instead on a widening pool of benefactors. And there are many others. An analysis by the Investigative Reporting Workshop, an American body, found that there are now 75 not-for-profit news organisations in the US, receiving annual funding of $135m and employing 1,300 staff. But in the UK the Bureau is still unique.

The Bureau believes the ability of qualified journalistic organisations to gain charitable status would encourage many more such bodies to flourish.

7. Conclusion
In conclusion the Bureau hopes that, given the vital contribution of investigative journalism to the wellbeing of democracy, Lord Justice Leveson will see the value in a healthy, thriving not-for-profit journalistic sector in this country.

We hope he will share our view that a proliferation of organisations like the Bureau would be a welcome and indeed beneficial contribution to society.

A series of practical steps are required to establish an environment that would allow not-for-profit public interest journalistic organisations to thrive. The Bureau would like to impress the following on the Committee:

1. The need for a public interest defence
2. Charitable status should be available in principle to not-for-profit organisations that provide public interest journalism.
3. To assist this the Charity Commission should provide greater clarity in this area and take into consideration both the current pressures on investigative journalism as well as its democratic importance when interpreting the relevant legislation.
4. A public interest journalism fund is sorely required. Consideration should be made of the proposals that this should be funded from any fines, which are levied for transgression of journalistic codes of conduct—including fines that might be introduced under a new system of press self-regulation, or through a media levy.