• by Erik Sass , August 17, 2006

Newsday closed the final chapter in its circulation audit scandal Wednesday with the release of a new audit from the Audit Bureau of Circulations. According to the new accounting, dubbed a "censure" audit, the newspaper's average circulation for the six-month period ending September 2005 was 431,975, a 5.9 percent decline from September 2004. Sunday circulation fell 4.8 percent to 496,392.

Following the revelation of padded circulation in February 2004--and an audacious, but failed attempt to cover it up that April--Newsday was required to submit to ABC audits every six months, rather than the usual once a year. The last six-month censure audit period ended in September 2005. But results were delayed until this week, given personnel and resource constraints at ABC.

In a statement to Newsday employees, Publisher Tim Knight remarked: "With the release of this report, Newsday has completed all censure-related activities."

According to the U.S. Department of Justice, from 2002-2004, Newsday employees conspired with newspaper distributors to inflate the paid circulations of the paper and its sister Spanish-language publication Hoy by up to 100,000 copies a week.

As part of this scheme, employees dropped 30,000 papers on weekdays and 50,000 on Sundays at retail locations--all of which were counted as sold. But "paid circulation relating to the retail locations never exceeded 7,000 newspapers per weekday, or 10,000 newspapers on Sunday," the DOJ statement concluded.

Allegations of fraud first surfaced in February 2004, when four advertisers filed a lawsuit against Newsday detailing the scheme. Newsday circulation managers responded with a bold attempt to cover up the crime, in cooperation with newspaper sellers. In April 2004, with ABC auditors watching, newsstands at four street corners in Long Island "sold" thousands of newspapers to fake "readers" (newspaper carriers employed by sales agents).

This scheme was swiftly exposed, and in June, the Tribune Co., which owns Newsday, issued a statement detailing the fraud at the newspaper. The Tribune Co. fired a number of Newsday executives and managers.

In March 2006, seven former staffers finally pleaded guilty to fraud. They were: Louis Sito, former vice president of Newsday; Robert Brennan, former circulation director; Richard Czark, Hoy's former senior vice president for circulation; Ed Smith, former liaison for both publications to ABC; Robert Garcia, a circulation manager for both publications; Dorothy McKillop, a former manager with some responsibilities for newspaper circulation; and Dennis Springer, a former circulation manager. Also convicted were Gus Acosta, a distributor for Hoy, and John Faiella, a distributor for Newsday. All are awaiting sentencing.