What is it with conservatives and self-dealing publishing scams? The New York Times reports today on a group of five conservative authors suing the parent company of Regnery -- the conservative publishing dynasty -- over what they claim was the house's deprivation of royalties. This suit claims that Eagle Publishing, of which Regnery is a subsidiary:
“orchestrates and participates in a fraudulent, deceptively concealed and self-dealing scheme to divert book sales away from retail outlets and to wholly owned subsidiary organizations within the Eagle conglomerate.”
In Regnery’s case, according to the lawsuit, the publisher sells books to sister companies, including the Conservative Book Club, which then sells the books to members at discounted prices, “at, below or only marginally above its own cost of publication.” In the lawsuit the authors say they receive “little or no royalty” on these sales because their contracts specify that the publisher pays only 10 percent of the amount received by the publisher, minus costs — as opposed to 15 percent of the cover price — for the book.
This reminded me of a piece I wrote several months back about Karl Zinsmeister, currently President Bush's Chief Domestic Policy Advisor (whose ex post facto quote and resume-fixing earned the moninker "Zinsmeistering"). Two months previous to his hiring by the White House (where he replaced the kleptomaniac Claude Allen), Zinsmeister was fired from his position as Editor of the American Enterprise Institute's American Enterprise magazine, partly for his involvement in a similar scheme:
And so it was that AEI began buying Zinsmeister's books to give to new subscribers. The strategy, whichdebuted in 2003, was to lure people into subscribing through directmail by offering a free Zinsmeister book with their subscription. At first, these mailings offered multiple options for subscribing, some of which included a Zinsmeister book, some of which did not.The magazine's then-business manager, Garth Cadiz, says that the offers without Zinsmeister's books invariably received better response rates. Yet, in June 2005, Zinsmeister eliminated theoption to get a subscription through direct mail without buying oneof his books as well. The move was a flop, according to Cadiz. Around that time, subscriptions, which had been climbing for years, began falling. No books by other AEI scholars were ever offered insimilar arrangements, Cadiz notes...
The books were shipped to Zinsmeister's home in Cazenovia and mailed to subscribers from there. Over three years,according to an e-mail David Gerson would later send to Zinsmeisterafter he had announced his plans to step down, AEI purchased 13,700 Zinsmeister books at a cost of $131,000. And what a gift that proved to be for Zinsmeister, as AEI's purchases wound up accounting for 45 percent of the total sales of Dawn Over Baghdad's hardcover edition--and more than half its paperback sales.
You can read the rest of the story for the nitty-gritty details. Granted, the situations are a bit different in that in Zinsmeister's case, he (as the writer) was making quite a good deal of money off of AEI through this arrangement, whereas in the Regnery case the writers claim to be getting screwed. I wonder if this latest incident will make some people think twice about market forces curing everything.