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Oregon newspaper forced to lay off entire staff after employee found embezzling funds

An Oregon weekly had to lay off its entire staff and cease publication after 40 years because its funds were embezzled by a former employee, its editor-in-chief said, in a devastating blow to a publication that is a important source of information in a community. which, like many others nationally, is grappling with growing gaps in local media coverage.

About a week before Christmas, the Eugene Weekly discovered inaccuracies in its accounting, editor Camilla Mortensen said. She discovered that a former employee “heavily involved” in the newspaper’s finances had used his bank account to pay himself $90,000 since at least 2022, she said.

The newspaper also became aware of at least $100,000 in unpaid bills — including those from the newspaper’s printer — dating back several months, she said.

Additionally, several employees, including Mortensen, realized that money from their paychecks that was supposed to go into retirement accounts had never been deposited.

A Eugene Weekly newspaper delivery box sits outside his office in Eugene, Oregon, December 29, 2023.

Todd Cooper via AP

When the newspaper realized it couldn’t make the next payroll, it was forced to lay off all of its 10 employees and shut down its print edition, Mortensen said. The alternative weekly, founded in 1982, printed 30,000 copies each week for free distribution in Eugene, the state’s third-largest city and home to the University of Oregon.

“Laying off an entire family three days before Christmas is the worst thing ever,” Mortensen said, expressing his sense of devastation. “I did not anticipate that something like this could have happened or was happening.”

The alleged employee had worked for the newspaper for about four years and has since been fired, Mortensen said.

The Eugene Police Department’s financial crimes unit is investigating, and the newspaper’s owners have hired forensic accountants to piece together what happened, she said.

Brent Walth, a journalism professor at the University of Oregon, said he was concerned about the loss of a newspaper that had “an outsized impact in filling growing gaps in news coverage” in Eugene. He described the paper as an independent watchdog and a compassionate voice for the community, citing its obituaries of homeless people as an example of how the paper helped put a human face on some of the city’s biggest issues .

He also noted how the newspaper has made “a huge difference” for journalism students looking for internships or launching their careers. He said there were stories and investigative reporting that “the community would not have had without the weekly’s commitment to ensuring journalism students have a place to publish in a professional media outlet” .

A tidal wave of local media shutdowns across the country in recent decades has left many Americans without access to vital information about their local governments and communities and helped increase polarization, Tim Gleason said. former dean of the journalism department at the University of Oregon. school.

“The loss of local news across the country is profound,” he said. “Instead of having the kind of healthy community connections that local journalism helps create, we’re losing them and becoming communities of outsiders. And the result is we fall into these partisan camps.”

An average of 2.5 newspapers will close per week in the United States in 2023, according to researchers at Northwestern University. More than 200 counties have no local news media, they found, and more than half of all U.S. counties have either no local news source or only one remaining media outlet, usually a weekly newspaper .

Although officially unemployed, Eugene Weekly staff continued to work without pay to help update the website and determine next steps, said Todd Cooper, the paper’s art director. He described his colleagues as dedicated, creative and hardworking people.

“This newspaper is definitely an integral part of the community, and we really want to bring it back and bounce back bigger and better if we can,” he said.

The newspaper launched a fundraising campaign that included the creation of a GoFundMe page. As of Friday afternoon — just a day after the newspaper announced its financial woes — GoFundMe had raised more than $11,000.

Now that the former employee suspected of embezzlement has been fired, “we have a lot of hope that this newspaper will come back, be self-sustaining and move forward,” he said.

“Geez, I hope it lasts another 40 years.”

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