During an appearance in New York Thursday night, Wall Street Journal managing editor Robert Thomson said that former Wall Street Journal Europe publisher Andrew Langhoff did "the honorable thing" by resigning.
During a panel discussion at the City University of New York Graduate School of Journalism -- which included Bloomberg BusinessWeek chairman Norman Pearlstine and Stephen Adler, editor-in-chief of Reuters -- Thomson was asked about recent News Corp. troubles.
Among the issues is the resignation of Langhoff, who stepped down this week following concerns over two articles published about a company with contractual links to the paper's circulation department.
In addition, The Guardian broke more information about the situation, reporting:
The Guardian found evidence that the Journal had been channelling money through European companies in order to secretly buy thousands of copies of its own paper at a knock-down rate, misleading readers and advertisers about the Journal's true circulation.
The bizarre scheme included a formal, written contract in which the Journal persuaded one company to co-operate by agreeing to publish articles that promoted its activities, a move which led some staff to accuse the paper's management of violating journalistic ethics and jeopardising its treasured reputation for editorial quality.
Responding to questions from panel moderator Stephen B. Shepard, dean of the graduate school, Thomson prefaced his statement by saying that "because it's the subject of legal things, one has to be careful about what words one uses."
"But there was the perception of pressure," said Thomson, adding, "The lesson of it is that no matter how far-flung -- and this was a supplement for The Wall Street Journal Europe -- there has to be a very clear line between church and state. That line simply cannot be breached, and creating a circumstance where even the appearance of a breach can take place is unacceptable. And so ... Langhoff did the honorable thing and resigned."
Thomson said that the situation surrounding Langhoff's resignation was "clearly" related to "a circulation agreement which involved bulk sales on the Continent." But he argued that "it's pretty fair to say The Wall Street Journal Europe is not the only newspaper with bulk sales on the Continent."
"But there has to be transparency," added Thomson. "There has to be ... contractual transparency, and there certainly has to be transparency for the reader -- that you cannot pay for play."
Asked about the previous departure of Dow Jones CEO and Journal publisher Les Hinton, who resigned amid the U.K. phone-hacking scandal in July, Thomson described it as a "big loss to me, personally" and a "big loss to us, institutionally."
The event was part of a Society of American Business Editors and Writers conference.
Video of Thomson's comments is below: