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Investigation forced TechCrunch founder to disclose investment

Kara Swisher, editor of “All Things Digital,” reported that TechCrunch Editor Mike Arrington disclosed his investments in startups following her questions about the matter, put to AOL senior management.

Swisher writes:

On Tuesday night around 10 pm (just when I start getting revved up), I wrote a testy email to Arrington’s bosses at AOL-Huffington and CEO Tim Armstrong-as well as the Internet portal’s sharp PR head, asking for a response about what seemed to me to be a glaring conflict of interest at TechCrunch related to new investment activity by Arrington and the site’s coverage of those particular companies he had invested in.

…And, given the recent and loudly stated goal of promoting quality journalism by Huffington-including the recent dismissal of AOL’s Moviefone site editor over what the company considered ethical lapses-it seemed pertinent to ask.

Mostly because I don’t think they actually knew much-if at all-about Arrington’s increasing investing action. Armstrong said as much in an email to me, and Huffington assured me they were going to check it out tout de suite.

The next day, Arrington, clearly prompted by his AOL bosses, wrote his disclosure.

It’s interesting to note that the disclosure was forced on him, rather than offered in the spirit of full and voluntary disclosure, as he has made it seem in his post.

Swisher has some tough words for Arianna Huffington, Arrington’s boss, who she also describes as her friend:

But Huffington is another story. She has put herself in word and deed right into the center of the debate on where news is going on the Web, especially after AOL paid US$315-million for her Huffington Post…

The cute-kitten and celebrity-loving angle played up by her detractors to dismiss her is silliness, because she and the Huffington Post are clearly more than that and are obviously having a major impact on the future direction of content in the digital age.

But that power she has sought also gives her a responsibility to say exactly what that means on a real and granular and consistent level, beyond the platitudes of wanting to make great journalism that she declares all the time now.

In other words, very specifically:

What does Arianna Huffington stand for in regards to journalism?

What are her rules and standards and codes?

And, perhaps more importantly, what does she not stand up for?

Great questions.

In the meantime, AOL has responded to questions about its code of ethics saying that Arrington is exempt!

From what we now know about this matter, AOL didn’t have a choice to exempt Arrington because senior executives knew nothing about his investments.

However, I can’t see how Huffington can move forward in her key role at AOL, without making a strong case for an ironclad ethics policy– without exemptions.

An ethics policy that allows for exemptions is a joke. By its very nature, it has to apply to all, or it applies to none.

Author | Tom Foremski: In Silicon Valley

Tom Foremski: In Silicon Valley
Tom Foremski is a former Financial Times journalist and the Founder and Publisher of Silicon Valley Watcher, which is an online news site reporting on the business of Silicon Valley and the culture of disruption. More