Newsweek editors, exec clash in heated meeting: 'Are we running a money laundering operation?'

Newsweek editors and a top executive clashed in a contentious meeting in the latest sign of turmoil at the company, the Daily Beast reported Friday.  


The meeting reportedly involved Chief Content Officer Johnathan Davis pointing the finger at staff for compromising the business by reporting on its legal issues, while declining to answer a barrage of questions regarding money laundering allegations and tax evasion, according to a recording obtained by the Daily Beast.


The tension comes after Newsweek fired its editor-in-chief, executive news director and two senior writers earlier this week after publishing reports regarding financial challenges at the publication and a law enforcement raid in January. Last week, BuzzFeed highlighted a report that accuses Newsweek's sister outlets of using fraudulent online ad practices.


"[The raid] led to the BuzzFeed article about the fake clicks, which you orchestrated," Gersh Kuntzman, a breaking news editor, said to Davis. "So you should be honest with everybody in this room: Are we running a money laundering operation? Are we evading taxes? You need to tell us that because we can't work here if you're a liar."

Davis didn't provide any answers about the ongoing district attorney probe into the company, according to the Daily Beast report. 

"There's an investigation going on right now that's active," Davis said. "And they're going to come up with their own conclusions. And when that comes out, you're going to know the answer."


Editor-in-chief Bob Roe, executive news director Ken Li and senior reporters Josh Saul and Celeste Katz were all fired on Monday and staffers were told to go home for the day, a source close to Newsweek's newsroom confirmed to The Hill in an email at the time. Since then, a number of other editors and reporters have resigned. 

The departures come in the wake of recent upheaval at the publication.


Last Thursday, Newsweek Media Group co-owner and CEO Etienne Uzac and his wife, Marion Kim, both resigned. Kim served as head of finance for the media group.


Davis also reportedly said that Newsweek's reporting on the raid and other issues unfavorable to the company derailed a major business deal overseas. 

"The recent string of articles has done real damage to our business relationships, to our partners," Davis, a co-founder of Newsweek's reboot in 2013, said. "So there's a larger business context."

One editor took exception to Davis's claim. 


"Do you think that the articles we published did more damage than the fact that we were raided and accused of ad fraud and there was a sexual harassment story that came out and there were questions about the ownership?" one asked. 

"Yes," Davis replied.