Gazette’s grey teal funders

The Australian Electoral Commission has dismissed Victorian Senator Jane Hume’s complaint that a local news startup is a “highly sophisticated digital disinformation campaign” designed to influence the next federal election. 

Gazette News, launched late last year, quickly rolled out its first five local news websites in Victoria and NSW. It was accused by the Liberal Party senator of being a front for the teal independents. Country Press Australia agreed.

The complaint was based, in part, on Gazette receiving seed funding from three individuals who have also donated to Simon Holmes à Court’s Climate 200 body. Both organisations have denied that there is any link between them.

In dismissing the complaint, the AEC said it did not consider Gazette’s content to be electoral material and therefore not subject to authorisation requirements, nor was there evidence that it should be registered as a financial disclosure entity.

The Coalition’s claim always appeared weak, but it reflects a familiar unease in the news sector: what expectations are attached to the money being given?

Gazette will be managing expectations through contracts and company policy. We don’t know the detail of the former, but since at least November its website has declared that it has “a firewall between [its] funding sources and editorial process” and that it won’t accept funding from political organisations, including Climate 200. This is likely reflected in its agreements with funders: invest because you believe in the cause, not because you want specific editorial outcomes or any influence over coverage decisions.

The controls Gazette has in place could be stronger. Its editorial policy requires reporters to declare to management any conflicts of interest they may have with a subject, but there’s no apparent requirement to communicate this to the public, nor guidance on how it manages organisation-level conflicts.

Proactive disclosure of its major funders also needs to be a priority. The three donors complained of were named in a LinkedIn post last year, but the company’s website contains no information about them. It is unclear whether these are the only three backers, or the only three willing to be named.

The US-based Institute for Nonprofit News (INN) requires its members to publicly disclose the names of any donors who contribute more than US$5,000 in a year, and anonymous funding cannot make up a material part of revenue – it sets the cap at 15 per cent. Gazette is not a charity, and INN has no equivalent body in Australia, but the standards are an indication of how a more mature philanthropic news sector handles the tricky relationship between money, coverage, and trust.

Gazette was always going to face this kind of scrutiny on its independence from competitors. The company was founded by a former Change.org manager with no background in news, is cagey about the financial interests behind it, and has rapidly expanded into five highly competitive local news markets with well-established local products. It has not joined either the Australian Press Council or the Local and Independent News Association. It has acted like a disruptor, and the protective newspaper industry has responded to it in kind.

The AEC’s dismissal vindicates Gazette, but there is still room for more openness, starting with disclosing its funders. Firewalls between business and editorial are good, but transparency is better. It’s not enough just to tell your audience that you’re independent of your investors; you need to give them enough information that they can reach that conclusion for themselves.