Prince of the city

Lowell Sun publisher Kendall Wallace has used political muscle to revitalize his hometown. But his style raises questions about a newspaper's proper role.

Don't Quote Me by Dan Kennedy

Lowell Sun reporters Kay Lazar and Mark Arsenault thought they had a hell of a story. Last September, the Lowell City Council handed a 10-year, $570,000 tax break to a developer who planned to build an office complex near the heart of the downtown. After weeks of reporting, Lazar and Arsenault concluded that the city had gotten a raw deal. The tax break was supposed to spur new economic activity. Instead, the building -- dubbed the Gateway -- drew most of its tenants from other parts of Lowell.

But the story never saw the light of day.

It was killed by publisher Kendall M. Wallace, who reportedly feared the report would damage the city's efforts to obtain state approval for more such tax breaks -- including one that was pending at that very moment. Lazar, who's now at the Boston Herald, and Arsenault, who's still at the Sun, declined to comment when contacted by the Phoenix. But Wallace himself says he nixed the article because he had wanted them to produce an "overview" of such tax breaks, not a negative piece on one particular example. And he makes it clear that if he thinks a story would be bad for Lowell, then it's not going to appear in the Sun -- period.

The Gateway incident says much about Wallace and the Sun, a 52,000-circulation daily (56,000 on Sundays) that's notorious for the way it mixes journalism, politics, and personal interests. And other media are beginning to take notice. On Wednesday the Boston Globe, in its lead editorial, criticized a Sun-backed proposal to demolish a housing project in Lowell -- and noted that the Wall Street Journal recently found that top Sun executives stood to benefit financially from the plan. The Pilot, published by the Archdiocese of Boston, and the Bay State Banner, which covers the state's African-American community, have weighed in with critical pieces as well.

This scrutiny comes in the midst of the most wrenching transition in the Sun's 120-year history. Last August, the paper was sold for a reported $60 million to Media News Group, best known for revitalizing its flagship, the Denver Post. Upon arriving in Lowell, Media News's flamboyant president, William Dean Singleton, cut jobs and benefits, landing him in a battle with the Sun's union that's now before the National Labor Relations Board (NLRB). But Wallace actually came out of the deal with his powers enhanced: Singleton promoted him from general manager to publisher, giving him a title to match his already formidable reputation as his hometown's most influential power broker.

Wallace plays a unique role at a unique institution. At a time when most midsize dailies are bland, inoffensive affairs produced at faceless suburban office parks, the Sun remains a proudly urban, in-your-face political player. The paper dominates the city's civic life the way its giant SUN sign, high above Kearney Square, dominates the skyline. The Sun provides advice -- both in print and behind the scenes -- and, more often than not, gets consent. And it works: Lowell, an aging mill town of 100,000 on the banks of the Merrimack River, is in notably better shape, economically and socially, than urban wastelands such as Lawrence and Brockton, and many observers say the Sun's relentless politicking is a big part of the reason. Indeed, such amenities as the national historic district, the vibrant riverfront, and facilities for the city's new minor-league baseball and hockey teams are all the result of this Sun-city partnership.

"Paul Tsongas [the late US senator and a Lowell native] is probably the major reason that city is as good as it is today, but the other major reason is the Lowell Sun," says Boston Globe State House bureau chief Frank Phillips, who worked for the Sun in the 1970s. "Kendall is a Lowell boy through and through. He loves that city." The Sun's sense of mission has long attracted bright young people on the way up. Phillips, for one. And Chris Black, now with the Globe's Washington bureau. And Ray Howell, a political and business consultant close to Acting Governor Paul Cellucci.

But the Sun's activism has a serious downside that raises tough questions about conflicts of interest and journalistic ethics. Wallace's wife, Esther Wallace, serves on the board of health; a son works for the Lowell Housing Authority. Wallace himself is on the board of Lowell General Hospital, and previously served as head of the regional tourism agency. And he's not alone. Editor Jack Costello, whose family owned the paper until last year, chairs the Tsongas Arena Commission and serves on the Lowell Memorial Auditorium board. Moreover, Wallace is on intimate terms with a plethora of city officials, sitting down with them one-on-one and at Saturday breakfasts at the downtown Sheraton, where politicians, business leaders, and wanna-bes come to schmooze Wallace and top Sun editors and reporters, hoping for a plug in the ultra-insidery Sunday political column.

"The Lowell Sun -- the Costellos and Kendall Wallace -- view Lowell as having a leadership vacuum," says Philip Nussel, the Sun's former suburban editor, now managing editor of Crain's Detroit Business. "There is a very thin line between them running the city and them covering the city. You could argue that it's the responsible thing to do, that somebody has to do it. But they're so paternalistic about the city that it clouds their judgment journalistically."

Wallace, 57, has worked at the Sun his entire career, starting as an 18-year-old copy boy. A soft-spoken, courtly man with thinning white hair and a tendency to look down when he's talking, Wallace expresses some mystification at the notion that he's Lowell's leading political figure. "It's not a title I seek. It's not a title I want. It may be just because of my longevity," he says. "But I wouldn't argue that the newspaper is a force and player in the community. I think you have to be a leader in the community for quality-of-life issues."

Republican political consultant Kevin Sowyrda, a former Sun columnist who counts Wallace as a friend, offers a blunter assessment. "He is the prince of Lowell, and I'm not saying that in a derogatory way," Sowyrda says. "He is the most politically powerful person in that city, bar none."

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Sun readers who picked up the Wall Street Journal on February 25 gained a rare bit of insight into how their hometown paper plays politics. The Journal's New England edition that day reported on a proposal to demolish the Julian D. Steele project, home to some 800 desperately poor people. The proposal, now pending before the state legislature, calls for the project to be replaced with homes for low- and moderate-income families. Among the chief cheerleaders for the plan: the Sun.

Journal staffer Carol Gentry reported that Kendall Wallace serves on the Lowell Housing Authority's unofficial "leadership committee," and that his son, Gary, is associate director of the authority. She also reported that the Costello family (which also includes the Sun's editorial-page editor, Alexander Costello, and director of operations, Thomas Costello) owns 1400 Motors, an auto dealership next to the housing project, whose property value would almost certainly rise if the demolition moved forward. None of these ties, she noted, had been disclosed in the Sun.

"That was the best piece of investigative reporting I have seen in I don't remember when," says Father John Cox, a Lowell housing activist with the Oblate Office for Peace and Justice. "The Lowell Sun represents wealth, the interests of white people, of middle-income or higher. And all others are not served well."

Dan Leahy, the lone city councilor to oppose the demolition (and a frequent target of the Sun), who also praises the Journal piece, blasts the proposal as an attack on poor people, and says the existing project could be rehabilitated for less than the cost of knocking it down.

The Journal story created an instant buzz among Sun staffers, past and present. "I got a real kick out of it," says a Sun reporter. Several alumni who had only heard about the article eagerly asked the Phoenix for faxes of it.

Kendall Wallace and Jack Costello, though, can't understand what all the fuss is about. The idea that they'd put their personal interests ahead of their city's is absurd, they say. Besides, they add, the housing authority has promised to find housing elsewhere -- possibly in some of the surrounding suburbs -- for anyone who is too poor to buy into the new development. How, they ask, could anyone oppose demolishing a project that's been a breeding ground for prostitution, drug abuse, and other urban ills, and that has blighted the lives of the very people who live there? It's a reasonable argument -- but one they would be in a better position to make if they had at least disclosed their potential conflicts of interest to their readers.

Then again, Kendall Wallace and Jack Costello have been mixing politics and journalism for so long it's almost understandable that they're perplexed when others question their ethics. Besides, their contention that they only want what's best for Lowell is true, even if their vision of what's best consists of clearing poor people off of what is potentially a prime piece of real estate. Wallace, in particular, has been pushing his agenda for more than a quarter of a century: first as a reporter and later as the managing editor, he began a single-minded effort to lift Lowell into a prosperity few others could envision. Wallace formed an alliance with a reformist young county commissioner from Lowell, Paul Tsongas, who later rose to Congress and, in 1978, to the Senate. Tsongas and Wallace formed a bond. Together they conceived a program to revive Lowell, and Tsongas -- as well as a succession of Sun-sponsored elected officials -- came through with the funds to make it happen.

But the success story started to unravel in 1986, when city manager Joe Tully, with whom Wallace had been close, resigned amid charges of corruption related to a real-estate deal involving city land. He eventually served a federal prison term. In the wake of Tully's downfall, Wallace was made general manager, a less visible business-side position, although Wallace says the two events were not related. Certainly the Tully experience did not stop him -- and Costello -- from playing politics.

For instance, Andrew Galarneau, a reporter now at the Buffalo News, recalls running into difficulty with a 1996 investigation of Middlesex County patronage. At one point, then-sheriff Brad Bailey, a Republican who's now running for attorney general, was spotted holding a discussion with Wallace at Shaw's, a Lowell coffee shop downstairs from the Sun, even though Bailey was refusing to return Galarneau's calls. Bailey was (and is) a Wallace favorite, and one of Wallace's daughters was working for Bailey at the time.

Eventually the series ran. But when Galarneau wrote a tough follow-up on problems with Bailey's attempts to reform the civil-process office, the story was killed. "They gave it the soft death," Galarneau says. "No one ever had the balls to tell me, `This isn't a story.' " Wallace responds that Galarneau had been "abusive" toward Bailey in an earlier interview ("fairly confrontational but respectful" is how Galarneau puts it). Wallace adds that he doesn't recall the story Galarneau claims was killed.

Then there was the incident that took place in February 1997, when, according to sources, Jack Costello -- upset that the Tsongas Arena Commission, which he chairs, hadn't agreed to hire a friend of his as its manager -- sat down and wrote part of a story under one of his reporter's bylines, even typing in quotes from himself. One detail the story omitted: Costello's role at the Sun. The reporter in question declines to comment, but Costello freely admits that the story is true.

"Whether I generate that on the computer or tell it to a reporter, it's irrelevant, isn't it? I am the chairman, and you would logically go to the chairman of the arena commission to get a quote," he says. "You know what I'm saying?"

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A watershed event took place in 1987, when John Costello, Jack's father, led a successful effort to buy out his brother, Clement Costello, an eccentric right-winger who held the title of editor. Within a few years, both John and Clement were dead. But the power struggle had saddled the paper with a $28.5 million debt. That, along with the prospect of some 20 or 30 young Costellos coming of age and having a say in the operation of the Sun, led to the inevitable: the sale of the paper last year to MediaNews Group, the eighth-largest chain the US.

Some staffers were hopeful that Singleton would bring in his own editorial team and erase the Sun's reputation for being Lowell's unofficial city hall. After all, even the blandest chain newspaper has professional standards that would result in more ethical, even-handed reportage.

Singleton's approach, though, was precisely the opposite. Not only was Wallace promoted and Jack Costello retained, but executive editor Jonathan Kellogg, respected for doing his best to keep his bosses' fingers out the editorial pie, was let go. (Now an editor at the Waterbury Republican-American, in Connecticut, Kellogg declines to discuss his tenure at the Sun.) And Singleton started slashing, cutting about 20 of 350 jobs, trimming vacation and health benefits, eliminating sick days for editorial staff and others falling under union jurisdiction, and dumping night and weekend differentials.

"They had come in all sweetness and light. Then they whacked us," says night editor Jim Chiavelli, the former union chairman.

Thus, even though Wallace's and Costello's powers were left intact, they are presiding over an uneasy newsroom where shaky morale has led to a spate of resignations. The union filed a complaint with the National Labor Relations Board, demanding some $600,000 in severance pay and the reinstatement of two union officials who had been fired. (Joe Kane, a supervisory examiner for the NLRB, says the complaint is "still under investigation.") Meanwhile, many staffers charge that the union itself is the problem: 81 percent of employees under union jurisdiction have signed a petition to go non-union, reasoning that the NLRB dispute is holding Singleton back from reaching an agreement on sick leave and other issues.

"The union is pathetic," says Sun columnist Paul Sullivan, who's leading the effort to decertify the union, and who notes that no more than 20 or 30 percent of eligible employees had ever even bothered to join. Union officials retort that employees, mindful of Sullivan's close relationship with Wallace, don't dare withhold their signatures. "I've talked to people who are so afraid that they won't even tell me their name," says Tom Hiltz, administrative officer for the Newspaper Guild of Greater Boston, to which the Sun union belongs.

But given that 81 percent say they want the union gone, it appears inevitable that the Sun will eventually go non-union. The current top reporting salary of around $40,000 has enabled the Sun to attract -- and hold -- experienced journalists, many of them with ties to Lowell. Getting rid of the union may have little effect in the short term. In the long term, though, the road is being paved for the Sun to evolve into the sort of low-pay stopping ground for young reporters that is typical of chain journalism.

Dean Singleton, though, insists that he runs a different kind of newspaper chain -- one that believes in local autonomy, and that encourages its papers to have a strong community presence. "We agree with the concept that the newspaper plays in the field and doesn't just watch from the sidelines," Singleton says. And he is effusive in his praise of Kendall Wallace and Jack Costello. Though admitting he had not seen the Wall Street Journal article on the Julian Steele proposal, he calls Wallace and Costello "two of the most ethical people I've ever known in my life." The best guess is that Wallace's style of journalism is safe -- as long as Singleton doesn't see it as a threat to the bottom line.

On a drizzly Monday morning recently, Kendall Wallace walks to the Sheraton. Along the way, he offers historical tidbits about the Sun building (the paper moved to its present location in 1941; the tower with the SUN sign, on the other side of the street, is now an apartment building) and the Sheraton's woes (it was built to service a Wang training facility that was canceled when the computer company collapsed). Wallace is a creature of habit. He rises at 5:30 a.m. every day, works out at the local Boys Club, and is at his desk by 6:50.

"I wouldn't live anywhere else," says Wallace of the city that allowed a working-class kid without the benefit of a college education to rise to the pinnacle of success. Fastidious in muted colors and a crisp white shirt, he takes a seat by a window overlooking the Merrimack River and proceeds to work his way through a breakfast of English muffins and undercooked bacon.

Wallace is still stewing -- mildly -- about the Journal story, and he's anticipating that his visitor is going to whack the Sun, too. "I don't know why we beat each other up," he says. "I guess when we write about each other, all we think is scandal. We've worked so hard to make this a better place, and for that we get attacked."

No doubt there will come a time when the Lowell Sun will become more like other newspapers: more professional, more dispassionate, more ethical. In many respects, the result will be a better newspaper. It will also be a less important newspaper, less quirky, less engaged, less rooted in the community. And it's far from clear whether the end of "media-controlled government," as one Sun staffer disparagingly puts it, will be good for the city that Kendall Wallace has labored so diligently to save.

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Dan Kennedy's work can be accessed from his Web site: http://www.shore.net/~dkennedy

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Dan Kennedy can be reached at dkennedy[a]phx.com

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Articles from July 24, 1997 & before can be accessed here

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