Glenn Beck has become something of a Gold Bug on his Fox News show, advising viewers to buy gold to protect themselves against the collapse of the dollar.
But what he hasn’t told the Fox News audience is that he has a major sponsorhip deal with a gold coin dealer, according to Jeff Bercovici at Daily Finance. (Although this relationship is obvious and open to any listeners of his radio program.) And his close relationship with the dealer, Goldline International, now has Fox’s lawyers in talks with his agent.
What may have actually landed Beck in hot water this time is that his endorsement of Goldline International may overstep the internal rules at Fox.
Jeff Bercovici at Daily Finance reports:
Beck is prominently featured on the website of Goldline International, a vendor of “gold, silver, and platinum coins and bars as well as rare and collectible numismatic coins.” According to the site, Beck is a “paid spokesman” for the company. “This is a top notch organisation,” a thumbnail photo of Beck’s head declares.
Beck regularly does “live reads,” or live commercials, for Goldline on his syndicated radio show, and has even interviewed Mark Albarian, Goldline’s president and CEO, twice on the show, most recently on Nov. 12, 2009…
Like other news organisations, Fox News prohibits its on-air personalities from making paid product endorsements. But it makes an exception for its commentators who are also radio hosts, who are allowed to perform live reads, says Joel Cheatwood, senior vice president for development…
But the exemption is meant only to apply to live reads, not to the kind of broader spokesmanship Beck, to all appearances, provides Goldline. In particular, Beck’s ubiquity on the Goldline website is not in keeping with Fox’s rules. A Fox spokeswoman said the network’s legal department is taking up the matter with Beck’s agent, George Hiltzik.
Bercovici goes on to say that even if the relationship with Goldline were fully disclosed and in keeping with Fox’s rules, “it could be argued that taking money from a gold vendor in any form creates a conflict of interest that calls into question Beck’s objectivity on stories touching on gold’s investment value.”
We’re not shocked that Beck’s role as an investor in gold himself and an advocate of others buying gold is drawning critiques from nattering nabobs of journalistic “ethics.” But those complaints are largely nonsense— there’s nothing wrong with a commentator advising viewers, listeners, or readers to take positions that he is taking himself. In fact, you might wonder about the motivations of someone giving financial advice he wouldn’t take himself.
The presumption that taking money to endorse something corrupts the endorsement is basically a bias against commerce. Does anyone really think that Beck is secretly sceptical about gold going up and only advocating buying gold because Goldline is paying him? We didn’t think so. It’s far more likely that Beck is bullish on gold and found a way to make some extra money on that position.
We guess there is always the danger of “talking your book,” especially if the potential conflicts of interest are not clearly disclosed. But that’s easily remedied by having a good disclosure policy. And the odds that Beck has built an elaborate scheme of endorsing Goldline and talking up gold on his shows simply to boost his own gold investments seem extremely remote.
(Disclosure: at the bottom of each author page at TBI, there is a disclosure section that reveals our investment positions. I am neither long nor short Fox News or gold. I am long the dollar if you count the money in my checking account and my left hip pocket.)
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