Determination 44: MN State Auditor Arne Carlson v. Corporate Report MN
Minnesota State Auditor Arne H. Carlson complained that an article in the magazine falsely implied that he was involved in a conspiracy to gain control of investment of public pension funds for improper purposes. He further complained that the publication failed to properly correct the article’s errors after he had brought them to its attention.
Background: Corporate Report is a regional business magazine headquartered in Minneapolis. The article at issue, entitled “A Capital Fight,” was published in its September 1981 issue and portrayed a bitter political struggle underway for control of the investment of Minnesota’s public employee pension funds. The article described the workings of the Minnesota State Investment Board, which managed and invested some $4.3 billion in pension monies, including the pension funds of the Public Employees Retirement Association (PERA), the Teachers Retirement Association, and the Minnesota State Retirement System.
The main thrust of the article was that John Allers, a union leader and a PERA director, was critical of the Investment Board’s performance and was seeking to withdraw PERA’s funds from the Investment Board’s control so that PERA could manage its own pension funds. Also involved in this effort was Michael McLaren, another PERA director and, according to the article, a “point man” for John Allers.
Response of the news organization: While the magazine admitted it had been inaccurate, it claimed its article did not accuse Carlson of collusion or conspiracy, as Carlson had appeared in the article as only a secondary player. Carlson had clearly aligned himself with the pension fund directors in their effort to withdraw funds from the Investment Board, and such errors in the article were technical and minor, said the magazine.
Corporate Report conceded that it failed to promptly correct the errors, but asserted that it had always been willing, and remained so, to print Carlson’s response to its article in a form “both adequate and appropriate.”
Determination of the Council: The Council finds there were factual errors in the magazine’s article relating to Carlson. The article wrongly implied that he worked in concert with others to obtain control of pension money away from the Investment Board for improper motives.
The Council proposes a two-step remedy: that the magazine, at its next opportunity, publish a correction of the errors of fact; and that Carlson take advantage of its offer to use its “Executive Forum” space to respond to those portions of the article offensive to him.
The complaint against the magazine is upheld.
Concurring: Allen, Brooks, Carlson, Egert, Fairbanks, Foley, Forsythe, Fushan, Higgins, Holloran, Kramer, McCollough, Miles, Myers, Peek, Selby, Simonett, Ryan, Ziegenhagen.
Partial Dissent by Earley: While the article contains some factual errors, it does not necessarily imply that Carlson shared the personal motivations of other critics and worked in concert with them to obtain control of the pension money.
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