The European managing director of Dow Jones and Co., Andrew Langhoff, resigned on Tuesday under allegations of artificially boosting the Wall Street Journal's European circulation figures.
Langhoff's decision to leave Dow Jones came as the result of an internal inquiry by the Rupert Murdoch owned news group, which showed that Langhoff had made deals under which the Wall Street Journal bought thousands of copies of its own paper.
According to the Guardian, a contract with the Dutch company, Executive Learning Partnership (ELP), compromised the paper's editorial quality by agreeing to publish information which promoted the company's activities.
The affair started in January 2008, when the Wall Street Journal publicised activities of sponsors who were to boost the circulation of the paper amongst university students, by buying the paper at a reduced price of €0,05. The deal resulted in ELP sponsoring 16 per cent of the paper's European circulation.
When ELP later withheld its payments and claimed that the paper was not delivering the promised amount of publicity, Langhoff channelled money to ELP through various European firms which sponsored events held by the Wall Street Journal to ELP, to keep up the sales.
As indicated in an email Langhoff published two articles on ELP, one a full page article on a survey the firm had carried out. According to the Guardian, staff complained that these actions were journalistically unethical and were concerned about the reliability of the survey.
Senior Dow Jones executives in New York, including chief executive Les Hinton, who resigned in July in connection to the phone-hacking scandal, had already learnt of the scam through an internal informant a year ago. The employee, who had worked for the news group for nine years, presented the case to the Dow Jones lawyer in London and was made redundant earlier this year.
The ELP chairman, Nick van Heck, said that he was sure that his company's activities were legal. In a statement Dow Jones commented:
"We came to the conclusion that ELP was only compensated for valid services; however, we were uncomfortable with the appearance of these programs and the manner in which they were arranged."