Oregon newspaper forced to lay off entire staff after discovering that an employee embezzled funds

Oregon Weekly Paper Halts Print and Lays Off Entire Staff After Embezzlement of Funds

An Oregon weekly newspaper faces a devastating crisis after discovering that the publication’s reserve had been misappropriated by a former finance staff member, forcing the paper to terminate all employees and cease printing operations after more than 40 years.

About a week before Christmas, Eugene Weekly found discrepancies in its financial records, stating its editor, Camilla Mortensen. She disclosed that a former employee who played a significant role in managing the paper’s finances had used the company’s bank account to pay themselves $90,000 since at least 2022.

The repercussions of this mismanagement were felt with outstanding unpaid bills amounting to $100,000, extending several months. This included debts owed to the paper’s printer, Mortensen revealed.

Furthermore, multiple employees, including Mortensen, realized that their intended retirement contributions were never deposited from their paychecks.

Unable to meet the next payroll, the paper regrettably laid off its entire 10-person staff and stopped its print edition, as stated by Mortensen. The alternative weekly, established in 1982, previously circulated 30,000 copies weekly for free in Eugene, the third-largest city in Oregon and home to the University of Oregon.

“To lay off a whole family’s income three days before Christmas is the absolute worst,” Mortensen expressed her shock. “It was not on my radar that anything like this could have happened or was happening.”

The suspected perpetrator, who had been employed with the paper for approximately four years, has since been dismissed, noted Mortensen. The Eugene police department’s financial crimes unit has launched an investigation, and the paper’s owners have engaged forensic accountants to unravel the situation, she reiterated.

A journalism professor at the University of Oregon, Brent Walth, voiced concerns about the impact of the paper’s loss, emphasizing its role in addressing the expanding gaps in news coverage in Eugene. He emphasized the paper’s integrity as an independent watchdog and compassionate voice for the community, citing its inclusion of homeless people’s obituaries as a means of humanizing significant civic challenges.

Walth underscored the paper’s contribution to journalism students through internships opportunities and launching their careers. He emphasized the need for feature stories and investigative reporting that the community may not have access to without the weekly’s dedication to providing a professional platform for journalism students.

The former dean of the University of Oregon’s journalism school, Tim Gleason, attested to the profound impact of the decline in local news outlets across the United States. He highlighted the repercussions of this loss on community connections, exacerbating partisan divides due to limited access to critical information about local governments and communities.

According to researchers at Northwestern University, the closure of local newspapers in the U.S. averaged 2.5 per week in 2023, leaving over 200 counties without any local news source. Eugene Weekly staff, despite officially being unemployed, are working pro bono to update the website and strategize next steps, as highlighted by Todd Cooper, the paper’s art director.

The paper has initiated a fundraising campaign, including establishing a GoFundMe page. Within a day of announcing their financial hardships, the page had raised over $11,000, indicating community support.

With the alleged embezzler having been terminated, there is strong optimism from the staff that the paper will be able to recover and become self-sufficient. “We have a lot of hope that this paper is going to come back and be self-sustaining and go forward,” expressed Todd Cooper, looking towards a brighter future.

“Hell, it’ll hopefully last another 40 years.”