Andrew Langhoff, managing director of Dow Jones & Co. in Europe, Africa and the Middle East, and publisher of The Wall Street Journal Europe, stepped down after an internal probe showed two articles in the paper's Special Reports section had been prompted by an agreement the circulation department struck with Executive Learning Partnership, or ELP, a Netherlands-based consulting firm.
"That relationship, overseen by a now-former employee, is no longer in place," Mr. Langhoff said in an internal email to employees. "Because the agreement could leave the impression that news coverage can be influenced by commercial relationships, as publisher with executive oversight, I believe that my resignation is now the most honorable course," Mr. Langhoff said.
Dow Jones is a unit of News Corp., which owns all editions of The Wall Street Journal.According to people familiar with the matter, an internal investigation at Dow Jones showed that Mr. Langhoff personally pressured two reporters into writing articles featuring ELP.
The Wall Street Journal Europe has appended disclaimers to two articles featuring ELP that ran in the paper's Special Reports section on Oct. 14, 2010, and Mar. 14, 2011. The disclaimer says the "impetus" for the stories was an agreement between The Wall Street Journal Europe's circulation department and ELP. It says "the reporting and writing were solely the responsibility of the News Department" and were not subject to review by the paper's circulation department or the firm. "However, any action that creates an impression that news coverage can be influenced by commercial interests is a breach of the ethical standards of Dow Jones & Co.," the disclaimer says.
"I always understood that editorial had complete discretion and independence in writing these two articles," Mr. Langhoff said when asked to comment.
Between May 2009 and April 2011, ELP was a lead sponsor of the "Future Leadership Institute," an initiative of The Wall Street Journal Europe's circulation department, Nick Van Heck, a partner at ELP, said in an interview Tuesday.
Both Mr. Van Heck and a spokeswoman for Dow Jones & Co. declined to comment on the specifics of the contract. According to a person familiar with the matter, the agreement was a bulk-circulation deal in which discounted papers were sold to ELP for distribution to students and others, boosting the Journal's circulation in Europe.
People familiar with the matter said the contract included language suggesting ELP could receive some coverage in the pages of The Wall Street Journal Europe. A paragraph in the agreement gave the paper's news department final control over any article, including the possibility that no story at all would appear, one of the people said.
"It was made very clear to us that the editorial freedom, or the editorial independence, was not being infringed by this," Mr. Van Heck said. He said if executives from ELP were interviewed or included in the paper, that was the editorial staff's choice. Mr. Van Heck says ELP terminated the relationship earlier this year.
Still, last fall, Mr. Langhoff personally, and through people who worked with him, pressed for an article featuring ELP to fulfill the contractual obligation, people familiar with the matter said. A Special Reports reporter alerted the paper's then-editor, Patience Wheatcroft, who people familiar with the matter say reviewed the contractual language about editorial control. The article went forward and was published.
Ms. Wheatcroft left The Wall Street Journal Europe in late 2010 to join the U.K. House of Lords. She declined to commentTuesday.
The following spring, Mr. Langhoff and others pressed for ELP to again be featured in an article, according to people familiar with the matter. The reporter didn't flag the assignment because he believed the practice was established policy, people familiar with the matter said.
The issue came to light after a former Dow Jones circulation employee in Europe lodged complaints about Mr. Langhoff and the ELP contract, people familiar with the matter said. An internal investigation was launched, leading top editors in New York to discover the editorial component of the deal and the two stories produced, according to the people familiar with the situation.
The Wall Street Journal Europe has a circulation of about 73,250. The paper runs themed Special Reports regularly.
New York-based News Corp. has been reeling from a scandal at News of the World, its now-closed British tabloid that intercepted voice-mail messages in pursuit of scoops and allegedly paid bribes to police.
Mr. Langhoff is the second top Dow Jones executive to depart in recent months. Les Hinton, chief executive of Dow Jones and before that executive chairman of News Corp.'s U.K. newspaper unit, resigned in July amid the backlash over the voice-mail hacking scandal at a now-closed tabloid. Mr. Hinton said he didn't know about the phone hacking but resigned because it occurred on his watch. Mr. Hinton is scheduled to appear before a parliamentary committee via video link Oct. 24.
Dow Jones said it will begin a search for Mr. Langhoff's successor. Kelly Leach, senior vice president and head of strategy for the company, will oversee Europe, the Middle East and Africa in the interim.
"Andrew has played a number of important roles at Dow Jones since 2003 and has been instrumental in successfully growing our businesses in Europe over the past several years," Todd Larsen, president of Dow Jones, said in a statement. Mr. Larsen said Mr. Langhoff built a strong team and left the paper with strong momentum in Europe.