How CNN's retracted story made it a rallying cry in Trump’s campaign against 'fake news'

Despite the retraction of an article and the resignation of three veteran journalists, CNN is finding itself exactly where it doesn’t want to be: a rallying cry in President Trump’s campaign against fake news.

The cable news network took swift action to remove an article from its website on Friday connecting Trump ally and Wall Street financier Anthony Scaramucci to the $10-billion Russian Direct Investment Fund.

And three journalists, Thomas Frank, Eric Lichtblau and Lex Haris, resigned Monday night after being told by management that an internal review of the story found that they had breached CNN’s standards for stories that rely on a single anonymous source.

According to people familiar with the incident who were not authorized to discuss it publicly, the CNN lawyers who vet investigative pieces were “surprised” to see the article online.

Some insiders believed that accepting the journalists’ resignation was harsh punishment. But the heightened scrutiny amid a White House at war with the press has reduced the margin for error.

“It is rare that you have three people shown the door over one story,” said a former CNN executive who spoke on the condition of anonymity. “I think they have a low tolerance for feeding the fake news beast.”

On Tuesday morning, CNN President Jeff Zucker called in from London to address CNN staffers. People who heard the call said Zucker remained upbeat and encouraged staff members to continue their aggressive reporting. But he emphasized that procedures need to to be followed in the heightened partisan environment.

The Scaramucci story was the first to be retracted since Zucker took over in 2013.

All three of the journalists responsible for the story are seasoned veterans. Frank, who wrote the piece, spent decades covering Washington for USA Today and Newsday. Lichtblau is a Pulitzer Prize winner who was poached from the New York Times in April to be an editor in the investigations unit. Haris, who oversaw the unit, has been with CNN since 2001.

Gabriel Kahn, a professor at the USC Annenberg School for Communication and Journalism, said that any failure in the reporting process becomes ammunition for Trump and his supporters who see the media as an enemy — even when the news outlet acts responsibly to fix problems.

“What might have been an error of judgment and reporting — albeit an egregious one — in another era becomes part of this onslaught against the legitimacy of the press,” Kahn said. “[CNN’s] investigative reporting, with this important exception, has been strong. And, like all responsible news organizations, when they make a mistake they cop to it, which is what they did here.”

News of Monday night’s resignations drew a quick response from Trump. The president’s relationship with CNN has become more fraught since January when the network reported on an intelligence dossier that said Russian operatives had compromising personal and financial information about Trump.

“So they caught Fake News CNN cold, but what about NBC, CBS & ABC? What about the failing @nytimes & @washingtonpost? They are all Fake News!” he tweeted early Tuesday.

Trump also tweeted that CNN is looking at “big management changes now that they got caught falsely pushing their phony Russia stories. Ratings are way down.”

No executive changes are expected in response to the retracted story, according to people at the network familiar with the matter. CNN’s ratings are pacing ahead of last year; last month the network had an average audience of 822,000 viewers, up 40% over May 2016.

Zucker said earlier this year that CNN is on track for record profit of more than $1 billion in 2017.

Deputy Press Secretary Sarah Huckabee Sanders attacked CNN as well during the daily White House briefing on Tuesday, noting that “the constant barrage of fake news directed at this president” has garnered Trump’s frustration.

Sanders directed reporters to view an undercover video that purports to show a CNN producer calling into question the network's pursuit of the Trump-Russia collusion story, saying that much of the coverage is ratings-driven.

"I would encourage everyone in this room, and, frankly, everyone across the country, to take a look at it,” she said. “I think if it is accurate, I think it’s a disgrace to all of media, to all of journalism."

The video was released by Project Veritas, the conservative activist group that has built a reputation for producing selectively edited videos and audio recordings designed to smear liberal and left-leaning groups. The organization has been criticized for deceptive editing and sketchy reporting methods that have gotten its founder, James O'Keefe, convicted of phone tampering.

"It's this type of behavior that upsets people,” O’Keefe told The Times. “More people are starting to have suspicions about the media and that gap is widening."

CNN producer John Bonifield, who is seen and heard on the latest video, works on health stories out of the network’s Atlanta office and has no involvement in the network's political coverage, according to an executive at the network not authorized to comment publicly on the matter.

A spokesperson said the network is standing by Bonifield: “Diversity of personal opinion is what makes CNN strong, we welcome it & embrace it."

CNN has become a point of obsession among many conservative activists who see the network as their prime ideological foe for its coverage of Trump. They regard the recent retraction and the Project Veritas video as evidence of widespread bias and an anti-Trump agenda.

Under pressure from activists, CNN recently fired hosts Kathy Griffin and Reza Aslan. Griffin was dismissed after posing with a bloodied prop meant to look like Trump's severed head. Aslan was fired after he posted a profane tweet about Trump.

"We see their credibility as on the line here," said Brian Maloney, co-founder of the Media Equality Project, a conservative group that has targeted CNN advertisers through social media campaigns. "I think CNN brought a lot of this on themselves by going overboard on the Russia story."

The network is a favorite target of Trump and his team, and one of its White House correspondents in particular: Jim Acosta.

This week, as the White House held another daily briefing off camera, Acosta repeatedly interjected to ask Press Secretary Sean Spicer to allow networks to air the event.

That afternoon, just before Trump was due to speak to reporters in the Rose Garden with India's prime minister, Acosta found that a placard in the seat that had been reserved for him, along with the network's broadcasting equipment, was removed from the front row to the rear.

Acosta eventually took his original seat.

stephen.battaglio@latimes.com

david.ng@latimes.com

Times staff writer Mike Memoli contributed to this report.

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