Fox News and Bill O'Reilly have denied knowing until this week that right-wing website Newsmax was using an interview with O'Reilly to sell its financial schemes. But Newsmax has used O'Reilly to sell financial products for months, and Fox News' Dick Morris has shilled for various Newsmax schemes for years.
On August 17, CBS reports Newsmax used O'Reilly interview to sell financial products
O'Reilly webcast used to promote Newsmax “IRS payouts” financial scheme. As CBS Moneywatch reported on August 17, a webcast featuring O'Reilly was a promotion for a $99 newsletter, “The Dividend Machine,” produced by Newsmax's Bill Spetrino, as well as Spetrino's “report about a 'forgotten, seven-state Constitutional Clause' that guarantees generous tax-free 'IRS payouts' of $1,196 or more. And, he's agreed to provide this report 'free' to viewers of the show.” Moneywatch continued:
But why would conservative talk show host Bill O'Reilly promote investment flim-flam? O'Reilly hasn't yet responded to my email, but my guess is that he was an unwitting dupe in a clever product pitch designed to look like a news show.
The faux news show (linked here) starts with an anchorman sitting at a desk in front of a glowing “Economic Crisis Summit” video screen. The anchor welcomes O'Reilly and gets him talking about Obama and taxes -- O'Reilly's normal bailiwick. Then he asks: “How can you invest in this treacherous environment?” O'Reilly suggests buying depressed stocks that pay dividends, which plays right into the anchor's hand.
As soon as O'Reilly leaves, the next “guest” is a smarmy-looking “accountant” named Bill Spetrino, who purports to agree with O'Reilly and offers a newsletter called “The Dividend Machine.” But he adds that he has “something even better.” Spetrino maintains that he's written a report about a “forgotten, seven-state Constitutional Clause” that guarantees generous tax-free “IRS payouts” of $1,196 or more. And, he's agreed to provide this report “free” to viewers of the show produced by Newsmax.
What's the investment? The dowager of the investment world -- municipal bonds. Municipal bonds are issued by states, cities, counties and government agencies to finance everything from parks to water treatment facilities. These bonds do pay tax-free income, but at low rates of interest. To get the promised $1,196 weekly return, you'd have to invest about $2 million in munis at today's rates.
If you got the report, you'd likely toss it and figure that “free” advice is often worth exactly what you paid for it. What you didn't know is that you've actually gotten caught up in “a free trial offer” that's going to quickly cost you.
What the show is really peddling is Spetrino's $99 investment newsletter, which you will subscribe to automatically, if you're gullible enough to ask for his “free” reports. How? You must pay $1 on a major credit card to get the free reports. (Spetrino justifies the $1 fee in the video by saying that people don't pay attention to free advice, so he's charging a token just to get you to listen.)
Newsmax scrubbed O'Reilly from promotion after Moneywatch report. Moneywatch added in a update to its post: “Shortly after this was posted, Newsmax pulled the video and took all references to O'Reilly out of the newsletter, linked above. Neither O'Reilly nor Fox News have responded to my requests for comment. I received the new 'Dividend Machine' pitch -- nearly identical to the old, but sans O'Reilly references on 8/18/2010.”
Fox News, O'Reilly reps deny knowing about Newsmax's use of O'Reilly interview until this week
Fox exec Shine: “They took an interview that Bill did and used it for other purposes.” From an August 19 New York Times Media Decoder blog post:
This summer Bill O'Reilly, the biggest star on Fox News Channel, lent his name -- inadvertently, he claims -- to a dubious financial scheme peddled by Newsmax, the right-wing Web site.
Mr. O'Reilly was the featured guest in an online video billed as an “Economic Crisis Summit,” which also promoted a financial newsletter and a secret “IRS payout” that viewers could pay to find out about.
The video was first published in June. It was yanked from the Web on Tuesday after a financial columnist questioned why Mr. O'Reilly was promoting “investment flim-flam.”
In response, Fox News said that Mr. O'Reilly was not aware that an interview he granted would be used to solicit subscribers to a financial newsletter.
“They took an interview that Bill did and used it for other purposes,” said Bill Shine, a Fox News executive vice president, adding that “we're all disappointed in this.”
O'Reilly's agent: “we did not know Mr. O'Reilly's interview would be purportedly used to promote anything.” From the blog post:
The interview was set up by Mr. O'Reilly's speaking agent, Mr. Shine added. That agent, Don Walker, said in an e-mail message that “we did not know Mr. O'Reilly's interview would be purportedly used to promote anything.”
“As a matter of fact, we were very specific from the outset of our conversation with Newsmax that we would not allow that, either explicitly or implied,” he added.
It is unclear how much Mr. O'Reilly was paid for the appearance, but Fox said he has no financial stake in the newsletter sign-up scheme.
Newsmax has used O'Reilly to sell financial schemes for two months
June 3: Newsmax features O'Reilly in tease for “Economic Crisis Summit.” On June 3, Newsmax sent out an email to its mailing list, signed by CEO Christopher Ruddy, touting an “Economic Crisis Summit,” featuring “Premier Guest” O'Reilly as well as Fox News contributor Dick Morris. The email stated:
On June 17, an esteemed panel led by Fox News' Bill O'Reilly and Dick Morris, along with global investor Jim Rogers and Newsmax CEO and Editor in Chief Christopher Ruddy, will convene to discuss inflation, higher taxes, our fragile economy, and real solutions that average Americans can take to ensure their wealth is safeguarded and positioned to prosper in an uncertain future.
The email, as well as related promotions, was illustrated with a banner featuring pictures of O'Reilly and Morris:
June 17: “Summit” promoted Newsmax financial product. As Media Matters detailed, the June 17 webcast introduced O'Reilly -- who in the past has repeatedly downplayed his economic credentials -- with host John Daly saying that O'Reilly was not “here to endorse anyone's point of view or to endorse product or financial service,” adding that O'Reilly was “joining us just to give us” his take. O'Reilly advised viewers that gold “is a good hedge,” although they should “be very careful about what they buy.” O'Reilly also said that “The most important thing for your elderly viewers who are dependent on a monthly check from their investments is to be smart about what to do in the next two years.” The webcast was a promotion for a “hot commodities insider membership” with a price of $1,995 -- or $1,495 for the first 1,000 subscribers. Daly claimed that the package “is worth $5,681.”
July 21: Newsmax promotes second webcast featuring O'Reilly. A July 21 Newsmax email promoted the “Economic Crisis Summit Follow-Up Briefing,” which “reveals never-before-seen footage of Bill O'Reilly explaining what he is doing right now to prepare” for “the upcoming tax hikes.” The email claimed that O'Reilly and “Newsmax Financial Brain Trust member and acclaimed accountant” Spetrino “will give you a clear picture of what to expect from these tax hike ... ultra-safe, yet profitable, investing tips and how you can actually make a great deal of tax-free income each and every week.
Fox News contributor Morris has long helped sell Newsmax financial products and has personally endorsed them
Morris has shilled for Newsmax since at least January 2008. Media Matters has detailed the numerous Newsmax promotions in which Morris has played a role:
January 2008: “Grow Your Wealth In Turbulent Times.” Morris was prominently featured with Newsmax Media CEO Christopher Ruddy as part of a series of Newsmax seminars (PDF) in California in January 2008 titled “Grow Your Wealth In Turbulent Times.” According to the promotion for the seminars, “famed political guru Dick Morris will be joining us to offer his take on how the '08 elections will affect your portfolio. Dick is predicting a Democratic takeover with enormous changes for capital gains, taxes, budget priorities and other areas, with broad-based economic consequences.” The seminar cost $75 per person to attend.
May 2009: “A Call to Arms.” On May 7, 2009, Newsmax hosted “A Call to Arms,” a “national internet webcast” in which Ruddy invited viewers to pay $1,295 for a package including a year's worth of stock tips from Ruddy's “chief financial adviser.” During the webcast, Morris stated, “I think that Obama definitely is leading America into socialism.” He also commented that “of course” President Obama's policies will lead to “huge inflation,” adding, “I don't see how any expert could disagree with that.” Morris also said of Newsmax's stock tips package, “I sure am putting my own money into it.” He also suggested the package was “a strategy” people could use to “keep yourself safe” from “the kind of offensive Obama is launching against the American economy.”
February 2010: “Aftershock.” In early 2010, Newsmax offered free copies (after $4.95 shipping and handling) of the book Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown as part of a larger promotion for the “Money Matrix Insider” -- a method of investing in foreign currency exchange markets. Ruddy touted the “exclusive Internet broadcast” as featuring “Fox News analyst Dick Morris along with an esteemed panel of experts.” In the webcast, Morris attacked Obama's economy policies, claiming that “the cancer's dead, now we're suffering from the chemotherapy.” The ultimate goal of the webcast was to promote what Newsmax called the “Money Matrix Insider” -- a method of investing in foreign currency exchange markets, for which Newsmax charged $1,495.
June 2010: “Economic Crisis Summit.” Morris joined O'Reilly in participating in the July 17 “Economic Crisis Summit.” During the summit, Morris announced that while he's “no expert on investing,” Newsmax's commodities product “sounds reasonable,” so he's “going to give it a try.”