Q&A: Statements of ownership


Q: Can you give a general description about circulation statement requirements?

A: A federal statute mandates the publication of the annual statements of ownership for periodicals. Periodicals have to run these around Oct. 1 every year. USPS considers them “public,” as the statute requires publication, but I’ve never had anyone try to obtain them through the FOIA. I think USPS figures you should get the record from the publication.

The other document that is pertinent is the statement of mailing (3541) that goes with the mail each week. Those are considered proprietary by USPS and will not be released under FOIA.

Theoretically, the weekly statements should tie in to the annual statement, but as someone pointed out, USPS does not audit as frequently as it once did.

Free newspapers do not have to file either document, as they are Standard mailers. However, they do file a 3602 form with each mailing. USPS has never really audited those the way it does the 3541s, though it does have some audit procedures for them. (They are not nearly so complex.)

However, all of these documents are sworn federal statements. In addition to any fraud claims that someone may have for false statements in them (usually it would be an advertiser standing to claim injury, not a competitor), USPS has the right to enforce perjury laws for intentional falsity.

In addition, USPS can go back for revenue deficiencies if something in a statement would wind up disqualifying a publication for discounts or other privileges. The National Newspaper Association has been involved in several serious investigations against newspapers for these sorts of problems, and they are no fun. Finding reasonable defenses is almost impossible.

Usually if these things are wrong, it is because they are so complex that newspaper managers don’t really understand them. Using PAVE-certified software helps to avoid problems in most cases, and that is why NNA’s Max Heath preaches so fervently that newspapers need that software.

But even then an improper setup can cause errors. However, audits do find outright fraud at times, and it can result in fines and even jail sentences.

Contact Steve Key, HSPA executive director and general counsel, with media law questions at skey@hspa.com or (317) 624-4427.