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Eugene newspaper lays off staff following alleged embezzlement

The police department confirms it has opened a theft investigation.

The police department confirms it has opened a theft investigation.

A sign at the Amtrak train station in Eugene, Oregon. (Photo by Matthew Keys for The Desk)
A sign at the Amtrak train station in Eugene, Oregon. (Photo by Matthew Keys for The Desk)

The alternative newspaper serving Eugene, Oregon was forced to lay off its entire editorial staff following the alleged theft of funds that has left the publication in financial ruin, its top editors confirmed this week.

The Eugene Weekly said the alleged embezzlement of funds by “someone we once trusted” will also result in the immediate suspension of the print edition of the newspaper, something that has not happened during its 20-year existence.

“We are still counting up the damage, but it’s thousands upon thousands,” the newspaper said in a note published on Tuesday and written by four of its executives, including editor Camilla Mortensen. “The theft of EW’s funds remained hidden for years and has left our finances in shambles. A team of private forensic accountants is analyzing our books and accounts.”

The executives did not name the employee or contractor responsible for the alleged theft. They said they were duped into believing the worker was paying the newspaper’s contractors and contributing funds to the retirement accounts of its employees, both of which weren’t actually happening.

“We had to lay off the entire 10-person staff three days before Christmas,” the executives wrote.

After learning about the theft, the newspaper said it hired an independent auditor to comb over its books. It also contacted the Eugene Police Department to report the matter, the newspaper said.

Reached for comment on Thursday, a spokesperson for the Eugene Police Department affirmed the agency received a theft report from the offices of the newspaper on December 19. The spokesperson said no arrests have been made, but declined to provide more information to The Desk, saying the matter was part of an ongoing investigation.

The Eugene Weekly prints around 30,000 copies of its alternative newspaper on a regular, weekly schedule. The paper was one of the few to continue providing a print edition during the coronavirus health pandemic three years ago, even as other alternative weekly newspapers were suspending their print editions in favor of cheaper, online-only news production.

The newspaper’s printing partner is among the clients that have not received payment in months, and has demanded an upfront payment from the Eugene Weekly before it resumes printing the paper edition in the future, the executives said this week.

“The damage is more than most small businesses can bear. The scale of this moment is unlike anything we have ever faced,” the newspaper’s executives wrote. “But we believe in this newspaper’s mission, and we remain determined to keep [the Eugene Weekly] alive.”

The newspaper said it is “working on a comeback plan,” and is asking members of the community to donate money online, so it can bounce back from the situation. Those who cannot donate directly to the newspaper have been asked to show support in other ways, to include signing up for the newspaper’s weekly e-mail newsletters and by sharing its stories online.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).