Did New Canaan Patch Hold a Bank Fraud story to Appease Advertisers?

Yesterday the FDIC took depositions of borrowers who say Fred DeCaro Jr. and his son Fred DeCaro III committed serious lending violations while running now failed USA Bank. The publicly traded institution which focused on construction lending to some of Greenwich and New Canaan McMansion developers, was the subject of an investigative report I published at DealFlow Media this May. But nearly a year before I went to print the New Canaan Patch (an AOL Publication) had commissioned the same story from me and then decided not to run it because their Regional Editor was afraid it would upset their local advertisers.

On July 14th, 2010, a fresh out of journalism school Patch editor, Max Schlesselberg met with me in New Canaan to discuss the story angle and the documents/sourcing I had developed. I told him Peter Keller, who was then an executive at Bank of New Canaan, could be implicated in the alleged fraud for being aware of the DeCaros actions but did nothing to stop it. Schlesselberg had a monthly budget of only $500 to buy freelance work and appeared so excited about the story he offered me more than half of his budget, $300, to run it. I immediately began calling around the area notifying sources in town it was a go and asking for others in town to go on the record.

Within 24 hours though I got an odd email from Schlesselberg:

Hi Teri,

I spoke to my editor about the pitch, without mentioning any names, and he asked that I pass on the story. Unfortunately I’m going to have to obey and pass on it. However, I’d love to contract you on a piece about the closure of storefronts in downtown New Canaan. If that’s something you’d be interested in, we could definitely work something out. Sorry for having to pass on this, I was really excited by it too. Let me know about the storefront story.

Thanks again,

Max Schlusselberg
Editor, New Canaan Patch

I spoke on the phone with Max about this the next day and asked what had happen. He said his regional editor was ‘too worried to rock the boat with local advertisers’. Bank of New Canaan was one of those advertisers. While it was disappointing to watch the local online publication turn away from the story for those reasons I knew I could sell it elsewhere. I kept watching the progress of a federal investigation into the failure of USA bank and saw the office of the inspector general for the FDIC bring their team into New Canaan to interview USA Bank whistleblowers and borrowers.

Schlesselberg didn’t last long as the editor of the New Canaan Patch and was replaced with an older New Canaan native Sheryl Shaker. After Shaker first started I had a short conversation with her about the story and she acted surprised a story like that was held. Shaker said “Oh no we would definitely want stories like that. I’ll get back to you when I talk to my editor.” But once again I got no response from the Patch team on running the story.
I sent an email to Shaker today asking if she’d like to comment again on why Patch held the story. I haven’t heard back from her.

Last October when I saw Business Insider run a series of stories on the journalism ethics problems at Patch (which ranged from plagiarism to political operatives being hired as editors) I decided to share my story with their team. Joe Pompeo wrote about the incident and when he went back to Patch’s press person, Janine Iamunno, to get a comment she responded the story was pulled because the sourcing wasn’t good.

Now when I heard that I knew someone at Patch was lying. First, the regional Patch editor never saw copies of my emails and documents to source the story. Second, I know the local New Canaan editor who saw a small part of my sourcing emailed me ‘great stuff’ after he reviewed it. I had people on the record willing to speak out about being interviewed by Federal agents regarding what they saw the Decaros do to alledgedly violate lending laws. What I don’t know is if the Patch pressperson, Iamunno, was just making up an excuse to cover their tracks or if the regional editor lied to cover his ass.

I called Max Schlesselberg on his cell phone when I saw the Patch’s response to the Business Insider story asking who he thought lied here but didn’t get a call back.

Business Insider has continued to do a bang up job on covering the problems at Patch. They recently broke news that Patch was asking local editors to help with ad sales. A total no-no for the Chinese wall that exists at most other publications between editorial and publishers.

The USA Bank story, which I ended up making a lot more money selling to DealFlow has made a big impact. It was followed by Connecticut WatchDog who said it was their most viewed story of the month and local Greenwich blogger Christopher Fountain got a big response from his readers when the story ran. After we went to print at DealFlow this May, more on record sources came forward explaining how Peter Keller, former executive at Bank of New Canaan, was also going to whistleblow to the FDIC in 2006 but backed out because he was afraid of what the DeCaros could do to him within the Fairfield County, CT banking community. Ruth Jones, a well known real estate developer who grew up in New Canaan and has an office in town was also on the record in my coverage stating she was given cash by USA Bank’s president to keep some of her loans paying and make the FDIC think the loan was current.

It’s clear there would have been lots of angles for the New Canaan Patch to cover with all the local players coming forward about USA Bank’s problems. It’s a story I’ve continued to report on and Greenwich Time recently figured out there are a lot of abandoned McMansions around Fairfield County because of the USA Bank lending problems. There are two other long time print newspapers in New Canaan who the Patch has to compete with for ad dollars and eye balls. I’m not sure what their editorial agenda or goals are these days but it appears they aren’t focused on impact reporting that informs the local readers about accurate news they can’t read elsewhere.


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  1. Sam in New Canaan says

    Good reporting Teri. I saw your coverage on USA Bank this summer at Fountain’s blog and wondered why the local Patch didn’t jump all over this story with Ruth Jones in it. I’m not sure anyone but board housewives actually read the Patch but it’s good you brought up these issues. Although it is not like the other local papers do a good job of covering controversial subjects. A sad fact since we actually do have some interesting players in this town. They could start with the back room deals Jeb Walker did handing out ‘consulting contracts’ for a town redevelopment that will likely never happen.

  2. Your point is valueble for me. Thanks!

  3. Teri thanks for bringing this topic up. Patch is a mickey mouse organization with a single person trying to edit, report, and now I guess sell ads. As a result the reporting is weak but Hearst – New Canaan News has a lot more resources. Why don’t they cover more hard news topics like illegal short sales going on with some New Canaan RE agents in town and their friends at banks.

  4. This is very interesting! Great information and it is also very well written. I wish more journalist would speak out about what goes on behind the scenes in the edit process.

  5. A couple of things here:

    1. I think it is pretty juvenile when you decide to send Business Insider your side of the story, knowing quite well what angle it would take in its story.

    2. You have absolutely no proof that the regional editor did not see your notes. If you sent them to the local editor, who is to say he did not send them to his regional editor? It is more believable than he did than he did not.

    NOTE:Some of Ben’s comment has been removed because it did not relate to the topic. I have asked Ben if he works for AOL or Patch and am waiting to hear back.
    10-28-2011: Ben responded he does not work for AOL/Patch.

    • Ben – Business Insider interviewed me about the event and then gave Patch a chance to respond and Joe printed what both parties said about what happen in the story. When I interviewed with the BI reporter he didn’t tell me what angle he was going to take.
      Second – I know Max did not show his regional editor the rest of my source documents or on record notes because he did not have a copy of them. He only had a copy of one email from a source talking about Peter Keller’s role as President of USA Bank and his involvement with the Decaros. Max also never told me there was any problem with the sourcing when we talked about why his editor decided to kill the story. I found Max to be refreshingly honest.The story ended up running at a publication who has some of the strictest sourcing standards I’ve ever written under. So it is my view sourcing could not have been a reason to kill the story within 24 hours after it was commisioned by Patch.

      When freelance journalists speak out about editorial actions in a story it does put them at risk of not getting hired by other publications. I think that is why we see so few stories about editorial policy problems at some publications. But we all know they happen. I think a freelancer shouldn’t be afraid to shine the light on edit problems for fear of not getting work again. I work for the reader not a single publication. Luckily I’ve found a few great ones in the last two years who pay for investigative work and don’t violate the wall between editorial and publishing.

  6. Robert in Greenwich says

    Teri you are brave a reporter. It’s a shame we don’t have more like you.

    Ben – The USA Bank failure and Fred Decaro’s role in the bank has been written about by multiple CT publications from Hearst to national ones like Bank Implode. Have you asked why the New Canaan or Greenwich Patch never followed the story after it was published at DealFlow Media when other local publications did? It is a juicy story and with the OIG report Teri last wrote about (available to the public) it would not be hard for AOL/Patch to cover some of the news with easy sourcing now.

    • Robert,
      No, I didn’t ask Patch why they didn’t cover the story but you don’t have to be a genius to see that Patch isn’t the typical “newspaper” and they seem to cover a bunch of different stories that are a little lighter. It’s not a newspaper and it’s not even 100 percent a news site. Patch seems like it’s about 25 percent news, 50 percent entertainment and 25 percent opinion. But each site is different, and the differences can be drastic. The quality of each Patch site really relies on the person behind the site and his or her support network. Some sites are awful and some are pretty good.

  7. Patch is used a vehicle to protect those who have paid into advertising to produce stories that they want to be presented online. These stories are paid for by dirty political operatives in exchange for negative, character assassination stories that are manufactured and designed to destroy people who are whistleblowers and not interested in participating in political corruption. George E. Norcross is a big investor with Arriana Huffington who has allowed george to produce and write negative manufactured stories and use them to optimize on google and other search engines with the intent to gangstalk, harassass and cyber stalk his victim. This is social media that is highly Criminal and considers gangstalking organize crime.

    • Arriana Huffington, Tim Armstrong and George E. Norcross are all crooks that should be under Federal Investigation with the UNETHICAL and Criminal practices they are producing via AOL PATCH.

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