Why Did Press Democrat Run Extortionist Claims Against Hospital on Front Page?

Newspaper Editors Refuse to Answer Questions or Run Letters About Journalistic Ethics of Providing Megaphone for Shakedown Lawsuit


In one of the worst breaches of journalistic ethics by a major California newspaper in recent years, the Santa Rosa Press Democrat last week used its front page to smear the Sonoma West hospital and its largest philanthropist based upon unsubstantiated, easily-disprovable allegations by a disgruntled former employee bringing a shakedown lawsuit.

The Press Democrat  breached a fundamental rule of journalistic ethics by rushing to publish damaging allegations as front-page news. The headline, “Lawsuit: Hospital donor dishonest” was followed by the sub-head, ‘Ex official Goldfarb says Smith asked him to cook Sonoma West books.”

Neither the article by reporter Martin Espinoza nor the lawsuit itself provided a shred of evidence to support the article’s reckless headlines. Espinoza noted that neither hospital chair Dan Smith nor the hospital itself could comment on pending litigation. Indeed, as any journalist knows, when a person or a hospital is slapped with a lawsuit, their attorneys require them to not talk to the press until their legal response is filed.

Soon after the article appeared, Gail Thomas, president of the foundation assisting the Sonoma West Medical Center (SWMC), wrote to supporters, “It is disheartening that what we view as completely unsubstantiated allegations can be spread in the press because of the filing of a lawsuit and, since the allegations involve personnel matters, the hospital is prevented from readily and easily refuting all the allegations.”

Why did the Press Democrat not wait for a legal response to the incendiary allegations? Why instead did they choose to publish a one-sided story that did not come close to passing a journalistic sniff test for veracity? What was the rush to vilify Smith and disparage the struggling community hospital?

In its opening paragraph, Espinoza’s article misleadingly called Douglas Goldfarb’s shakedown a “whistleblower lawsuit.” At the same time, the article also noted that the former CFO, who worked at the hospital for only six months before quitting, would settle his claim and stop trying to ruin the hospital and Dan Smith’s reputation if he were paid $250,000—or 12 months salary. ‘If they go to court,” Goldfarb’s attorney Daniel Bartley warned, “it will be a lot more.”

In other words, the newspaper delivered the extortionist’s ransom note, price-included, while somehow still calling him a whistleblower.

Any common sense analysis of the lawsuit (which I have fully read) shows the Press Democrat’s headlines to be misleading and irresponsible. The plain reading to a reader of the phrase “cook Sonoma West books” and the term “dishonest” means self-interested corruption. Smith and his wife, Joan Marler, have, as reporter Espinoza well knows, sacrificed most of their net worth, have gone massively into debt, and have had to sell the restaurant they’ve owned for a decade in order to come up with the $15 million in donated capital necessary to reopen and sustain the hospital and its life-saving emergency room.

In addition, Smith has donated two years of his time without pay to manage the Herculean effort of being the first community hospital in California history to close and then reopen. Smith has also donated the electronic medical-records system and related support services for the new hospital.

In spite of these sacrifices, the lawsuit claims that Dan Smith’s true nefarious objective has been to “use SWMC as a vehicle for self-dealing in service of his personal financial interests and the financial interest of his business.”

The Press Democrat’s one-sided coverage made sure to fulfill the claimant’s extortionist intention to not just disparage Dan Smith and his software company, HarmoniMD,  but the reputation of the hospital itself. It repeated the lawsuit’s unsubstantiated claim that the Sonoma West Medical Center’s electronic medical record system, “often produced serious errors that ‘endangered patients lives.’”

There have been no reports of harm done to a single patient since last November’s reopening of the small community hospital. SWMC’s reputation for personal, humane care remains identical to that of its predecessor, Palm Drive Hospital, which Consumer Reports in 2013 ranked as the safest hospital for patient outcomes not just in Sonoma County but in the entire state of California.


Gail Raborn, the co-coordinator of Friends of SWMC, believes that publishing “such a one-sided story with such inflammatory headlines [is a] breach of journalistic ethics.”

Raborn said, “I am horrified at the irresponsible headlines and this article. They’ve apparently tried and convicted Dan Smith in their newspaper without substantiating the claims — and without taking into account that such lawsuits are very, very common among disgruntled former employees wanting to make a quick, albeit dishonest, buck from their ex-employers! They must know that neither the hospital — or Dan — can legally talk about this lawsuit and so cannot defend themselves. Pretty sleazy journalism.”

On August 5, 2016, the afternoon this story appeared, I left a voicemail and sent a direct email to each of the top editors at the Santa Rosa Press Democrat asking for comment regarding the propriety of this article. I contacted Executive Editor Catherine Barnett, Managing Editor Ted Appel, and Local editor Steve Levin.

I asked these editors four questions, including this one:
“In my 37-year career as a professional journalist, I have never seen a major newspaper like yours smear a person on its front page, causing damage to an important struggling community institution, based on entirely unsubstantiated allegations by a disgruntled former employee.

“Can you provide me with an example of any other disgruntled-employee lawsuits whose unsubstantiated charges have been reported in a similar manner in headlines and sub-heads on the front page of your newspaper?”

Nine days later, not one of the Press Democrat editors have responded to my request for comment.

Nor has the newspaper published a letter I wrote voicing my criticism or anyone else’s letter on this subject. (Contact info for these editors and Martin Espinoza can be found here. Letters for publication can be sent to letters@PressDemocrat.com).

Instead, on August 15,  the newspaper published its first letter about the Sonoma West hospital, criticizing its fiscal management and concluding, “This whole mess would be humorous if it weren’t so serious and costly to the entire district.”

The Press Democrat (“PD”)  and reporter Martin Espinoza’s  coverage of the closing of Palm Drive and the struggle to reopen its life-saving emergency room that I, like thousands in West County have advocated for on behalf of the safety of our families and neighbors,  has been unprofessionally biased from the start.  Omitting critical information and cherry picking what side of the story is told has been standard practice, and has empowered a number of  false narratives about the hospital.

For instance, the above referenced letter suggests that reopening the hospital has been costly to taxpayers.  In fact, unknown to any reader of the PD, the tax subsidy to the hospital is less than 10% of the losses related to reopening and keeping it open. More than 80% of the cost has been personally financed by benefactor Dan Smith.  Also curiously missing from the PD’s frequent coverage of a tea party-like effort for a group of  citizens to “detach” from the Palm Drive Hospital District is the overarching fact that taxpayers in the detached District would continue to be on the hook for the past decade’s bonds that were floated, after widespread voter approval, to support the hospital. In fact, the public has not been informed by the newspaper that taxpayers will continue to pay the same tax for this hospital’s debt whether a hospital stays open or not.

Why, one wonders, does the  shakedown lawsuit story mention the $3 million that Smith and Marler donated recently, but conveniently neglects to mention that these funds come after $12 million of additional Smith/Marler donated funds.  A curious reporting error by  reporter Espinoza late last year  referred to Smith as a “billionaire,” when, in fact, Smith’s wealth has never been but a tiny fraction of a billion dollars. It is rare for an experienced reporter  like Marin Espinoza to err by a factor of 100,.  And  I have never seen the PD incorrectly refer to any other business person as a billionaire who was not one. The false impression, of course, was that funding the hospital was pocket change to Smith, instead of a sacrifice that has put he and his wife into deep debit and forced them to sell their assets.  The PD ran a correction of Espinoza’s error on its website, which can be seen at the bottom of this article here, but how many readers who are provided false information like this in print ever read such corrections online?

The Press Democrat has irresponsibly damaged the reputation of the Sonoma West hospital by publishing articles that would never written about the other major hospitals in the region, which are all owned by larger, more powerful hospital corporations. In my nine years reading the newspaper, I cannot recall them ever reporting on a lawsuit by either a patient, or a disgruntled former employee of these hospitals–much less use its front page to promote one.

As Friends of SWMC’s Gail Raborn noted, “Our new hospital in Sebastopol is busy saving lives and tendering compassionate, skilled care to those in medical need. The medical staff there sure does not need this kind of ugly, unfair reporting.”

 Newspaper cover Auh 5 2016 hospital

The founder and Editor of the Sonoma County Independent, Greenberg is an investigative financial journalist with 35 years of experience with national publications. Greenberg writes a political blog that appears in the Huffington Post In 2015, he won two first prizes from the Greater Bay Journalism Awards for his coverage of the closing of Palm Drive Hospital. In 2014, he won first prize for analysis from Award competition for his coverage of the Monday closings of Sonoma County's libraries. He has been an investigative financial and political journalist for such publications as The New York Times, The Washington Post, Mother Jones, Forbes, New York, Money, The Bohemian, The Santa Rosa Press Democrat, Playboy, Self, Inc., GQ, The New Republic, and Alternet. He is also the author of several well-reviewed books. As a new media innovator who has developed a half dozen interactive web platforms and dozens of content-focused web sites, Greenberg is committed to enhancing responsive government and expanding media democracy. Greenberg is founder of Progressive Source Communications, a Sebastopol-based public interest communications company. In the past, he founded and managed two other online companies, TV1.com, and Gist.com. Greenberg’s political work included serving as Policy Director for the New York City Council’s Select Committee on Lower Manhattan Redevelopment in the years following 9-11. His work resulted in more than $250 million of federal funds being re-directed to needy businesses and constituents in the impacted area. Greenberg has been Vice President of Fenton Communication’s New York office. His work on behalf of non-profit organizations has included communications consulting for Save Darfur, Stonyfield Farm, the ACLU, and the Lakota People’s Law Project. Greenberg holds a B.A. in writing from the State University of New York at Binghamton, and a Masters Degree in Law from Yale Law School, where he graduated with honors in First Amendment Law.
5 Comments on this post.

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  • Russell Naylor
    15 August 2016 at 8:41 am

    The Press Democrat has engaged in the most Machiavellian journalism I have ever witnessed in at least the last 21 years I have been reading them, under the old ownership or the new. They have published the most fear inducing/character assassinating pictures, graphics and content imaginable. One wonders how this paper has been allowed to so recklessly operate without a smidgen of accountability by the powers that be.

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  • Hosanna
    15 August 2016 at 2:20 pm

    I went the extra mile to read your “BIO”.
    I’m glad you are willing to be such a crusader and figure the hard stuff out
    that takes so much concentrated effort and focus and vision!
    Really man, I am proud of you.
    I did a Lakota project in 1996 in the Black Hills. Participated in making
    a film of Dr. Arvil Lookinghorse arriving on horseback with his band, after
    “mending the hoops” with his ancestors in Canada.
    Then I rode freight trains back to California with a body guard as my vision quest. CRAZY.

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  • Michael F Smith
    15 August 2016 at 4:12 pm

    It should be pointed out that my brother Dan and sisterinlaw Joan began funding life saving endevors decades ago. They funded needle exchange here in Sonoma County. They provide funds for that program because the County was too afraid of the politics even though every metric showed needle exchange could and was saving lives. AIDS was a death sentence at the time. They funded needle exchange even alowing it to be run out of thier office at considerable risk to themselves. They funded this program long before they had any real financial wealth. After Dan and Joan sold The Master Builder they were asked to help save Palm Drive. Dan and Joan were never billionsars. Their wealth was more akin to that of a professional baseball payer, and not a top player. It is important to note that Dan and Joan bailed out Palm Drive years before Dan even had the notion of developing hospital related software. It was becoming involved with tryinng to save Palm Drive that Dan became aware of the need for an affordable software system for small hospitals.

    Please note the timeline. Dan and Joan bailed out Palm Drive years before any idea of creating hospital related software.

    It has been suggested by some that Dan and Joan’s efforts are somehow an attempt to use the sofware program Dan has subsequently developed to enrich themselves. The timeline doesn’t support that. Dan and Joan don’t really seem to care all that much about wealth beyond what good they can do with it. We were brought up to value community and social justice above wealth. To better understand my brother Dan and Joan ask yourself how many people do you know who on a middle class salery and owning only thier own home and struggling business would step in and rescue a fund a needle exchange program with all the hate telephone calls and legal risks. Even running out of their office for a time. The awnser is no one. No one else in Sonoma County.

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  • Dave Kopel
    15 August 2016 at 8:44 pm

    Please people, let’s not get it twisted. The Press Democrat is not in the journalism business, its in the advertising business. Its mission is to make as much money as possible selling advertising in its newspaper and on its website. And what helps to do that is juicy headlines. That is how the paper has managed to stay in business while many small town papers are closing up shop. And lets not hate on Martin Espinoza… He’s just a working class guy trying to put food on the table for his young family. He can’t help it that the metrics used to measure his job success are the number of online ad impressions his stories get on the Press Democrat website vs the accuracy of his reporting. And lets not get too caught up in feeling sorry for Dan Smith. Let’s be real here. How dare he try to disrupt the medical industrial complex with his cutting edge digital health software, HarmoniMD and HarmoniMobile. God forbid there be a hospital where the nurses use tablets to manage patient care. What was he thinking donating the HarmoniMD software to Sonoma West Medical Center on top of all of those millions of dollars he donated over the years to try and keep a small hospital in his community open. Doesn’t he know that NO GOOD DEED GOES UNPUNISHED.

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  • John Dierke
    16 August 2016 at 3:07 pm

    I fully concur with Gail Raborn’s comment that this article and headline is irresponsible. Our community deserves higher journalistic standards and factual reporting –no matter what the issue/subject matter or who the person/group.
    As Jonathan Greenberg points out the Press Democrat’s “unsubstantiated allegations by a disgruntled employee” were used on the front page to smear Dan Smith and in my opinion cast a shadow on our struggling local hospital, Sonoma West Medical Center, which a very great many in the community have worked to support the revitalization and reopening.
    The damage to the image of our local hospital –beyond loss of cliental and revenue- is nothing short of a direct slap in the face to every West County resident who has stepped up, spoken out, displayed a sign or placard, and contributed to the movement enabling the hospital reopening for residents and visitors.
    It appears the Executive, Managing, and Local editor(s) of the Press Democrat should hold an in-service for some staff and themselves covering such topics as – News Media and Ethics: ethical responsibilities in reporting and publication of stories; News Gathering: research and analysis. The overall theme of the in-service I might suggest should be “fact checking” and somewhere along the line a review the advanced reporting concept of how to hold “personal interviews” whereby one ends up with information and data from ‘the horse’s mouth’ instead of ‘the lengthy tale’.

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