ZivaGate: Ziva Branstetter accused of collusion in Rutkauskas offensive against blog critic

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UPDATE 2013/06/20: See below regarding the letter from Tulsa World attorney Schaad Titus to blogger Sean Kelly.

This is a bizarre story, and it doesn't look good for one of the stars of local print journalism. Other outlets have covered it well, but it deserves to be noted here.

Tulsa World investigative reporter and enterprise editor Ziva Branstetter has been accused of supplying research about a blog critic of Tulsa restaurant franchiser and consultant David Rutkauskas to Rutkauskas, which Rutkauskas then apparently used in a combination Twitter attack and legal campaign against the critic, Sean Kelly of UnhappyFranchisee.com. Last week, Rutkauskas dropped his lawsuit against Kelly and apologized publicly on his website. Neither Branstetter nor anyone at the World has apologized to Kelly, according to Kelly and a story last week in This Land Press.

The Branstetter / Rutkauskas story was broken by Urban Tulsa Weekly reporter Jaime Adame in the paper's June 5, 2013, issue.

Sean Kelly of UnhappyFranchisee.com describes himself as having "25 years of experience in franchising as VP of an international franchise consulting firm, Director of Marketing for an international franchise company, President of a franchise marketing firm, writer for national franchise magazine, and an expert witness in franchise cases." UnhappyFranchisee.com collects stories of problems experienced by franchise owners with the franchising companies, across all industries, including janitorial, fitness, tax preparation, hotels, insurance, multi-level marketing, and restaurants. The site logs lawsuits, criminal charges, and SBA loan default statistics for dozens if not hundreds of franchise concepts.

Kelly has written a number of critical articles about Beautiful Brands International, a Tulsa company headed by David Rutkauskas. BBI began with Camille's Sidewalk Cafe and grew to include other franchise concepts like FreshBerry and Coney Beach. BBI also provides consulting to help prospective franchisors develop a new concept.

Given reports he was reading from unhappy BBI franchisees and partners, Kelly was perplexed at the softball treatment BBI received from Oklahoma media outlets. He writes that he provided information to several local business journalists and received no indication of interest.

In February of this year, the Tulsa World did run a story headlined, "Camille's empire copes with setbacks." Here's UTW's Jaime Adame's account of what happened next:

The lawsuit against Kelly states that Kelly's comments posted to the World story in February as well as his writings at UnhappyFranchisee.com are "false, malicious, defamatory and libelous" and written "with an intent to cause disrepute, public hatred, contempt, ridicule and embarrassment to BBI, to deprive BBI of public confidence, and to injure BBI." The lawsuit -- which includes a signature from Rutkauskas dated May 6, apparently two days before Branstetter's email to him -- is asking for both actual and punitive damages, each in excess of $10,000.

Kelly says that his comments were posted under a pseudonym, and he had not publicly identified himself as the owner of UnhappyFranchisee.com until the Tulsa World notified him that they would not defend against a court order to reveal his identity after Rutkauskas's company filed a suit against the John Doe owner of UnhappyFranchisee.com and commenter on TulsaWorld.com. After Kelly outed himself, Beautiful Brands refiled the suit, naming him as defendant.

Oh, yes, Branstetter's email. From Adame's story:

Ziva Branstetter, the Tulsa World's enterprise editor and star investigative reporter, sent Rutkauskas a complete report on the background of Sean P. Kelly, a frequent critic of Rutkauskas and the company Rutkauskas founded, Tulsa-based Beautiful Brands International, LLC.

In a word, it's "unbelievable" to Jonathan Fortman, the attorney defending Kelly against a defamation lawsuit filed on May 14, just days after Branstetter's email.

Fortman provided a copy of the email to Urban Tulsa Weekly. What he provided shows information sent from Branstetter's Tulsa World email account.

Though the email could not be independently authenticated, Branstetter did not deny having provided information about Kelly to Rutkauskas. At the Tulsa World office, Branstetter met for about five minutes with a UTW reporter but declined to comment for this story....

The report included information on a bankruptcy, the number of Kelly's children and property records....

Rutkauskas did answer a few questions in a phone interview. Asked about Branstetter's email, he only remarked: "Whatever she sent me was in confidence, and I don't want to get into stuff about that."

Holly Wall's story at This Land Press has the text of the purported letter from Branstetter to Rutkauskas, and samples of the angry, insulting, and obscene tweets that Rutkauskas directed against Kelly, apparently drawing on the background information he received to make the insults more painful and intimidating, a tirade that started mere hours after the email was sent. This Land Press contacted Branstetter, who replied but said she couldn't answer their questions, and they attempted to contact the World's attorney and the newly installed publisher, Bill Masterson, but hadn't received a reply at press time.

Meanwhile Kelly himself has unsuccessfully attempted to elicit an apology or at least an explanation from Branstetter. In one email, Kelly turned the tables on Branstetter, citing information in the public record which might embarrass her or worry her if widely disseminated, in an effort to help her empathize with the emotional impact of the information she allegedly provided to Rutkauskas. Kelly thoughtfully redacted the specific information from his public posting, but it was simple enough to fill in the blanks with OSCN filings and other information readily available on the web.

In that same email, Kelly reflects on his 2007 bankruptcy (one of the items mentioned, with the wrong year, in the alleged Branstetter email to Rutkauskas), and how he handled the adversity:

As a business owner, I had tried to play by the rules, and did the best I could for my clients and my employees.

While I would always feel ashamed, I knew I hadn't done anything to be ashamed of.

Eventually, it occurred to me that this hardship was actually an opportunity.

It was an opportunity for my wife and I to show our kids how to face adversity with integrity and grace.

It was an opportunity to teach them not to panic, to walk tall, and to work together in a crisis.

It was an opportunity to show them that if you conduct yourself ethically and try to treat people fairly, you've got nothing to be embarrassed about.

Ziva, that terrifying ordeal made me better in a lot of ways.

It made me unable to just divert my gaze when I see someone who is leading others to their own dark, dark mornings and empty driveways.

It made me unable to remain silent when people like David Rutkauskas, empowered with the validation of media like Tulsa World, encourage individuals to gamble their family's futures based on misleading claims, misinformation, and a semi-fictional success story.


UnhappyFranchisee's complete archive on Beautiful Brands International, LLC, including his pieces on what he calls "ZivaGate."

Ziva Branstetter is running to be a board member of Investigative Reporters and Editors at this week's IRE conference in San Antonio. She is also 2013 president-elect of Freedom Of Information Oklahoma. Sean Kelly has written an open letter to IRE members about Branstetter.

UPDATE 2013/06/20:

Tulsa World attorney Schaad Titus has sent a letter to Sean Kelly's attorney putting Sean Kelly "on notice" that Branstetter only sent the dossier she had compiled on Kelly to Rutkauskas to help Rutkauskas understand why there wasn't a story of local interest for her to pursue. Titus seems to be suggesting that for Kelly to continue to write about Branstetter would put him at risk for a "false light defamation" or harassment suit. Titus demands on behalf of Branstetter and the Tulsa World that Kelly "cease and desist from any further communication or dissemination of this information about Ziva Branstetter."

In response, Kelly offers a rebuttal that seems to poke several holes in Branstetter's justification of her actions as reported by Titus.

Notably, Titus's letter seems to confirm the authenticity of the email reported to have been sent by Branstetter to Rutkauskas. The claim that Branstetter was merely trying to explain why she wouldn't pursue a story doesn't seem to be consistent with the first line of the email (emphasis added):

Here are the reports I pulled on him. It may be hard stuff for you to interpret but if you look at it long enough you can pick out the pieces of info you are interested in.

There's not a hint of that motivation in the rest of the email either.

One detail got me curious: Titus mentions that Branstetter used "Lexis Nexis (or what she calls auto track)" to investigate UnhappyFranchisee.com and discover the owner's identity. This may be a reference to a service called ChoicePoint AutoTrack XP, a service that was sold in 2008 by LexisNexis (under an FTC consent order) to Thomson West as the core of a new business called West Government Services. AutoTrack XP is described as a service that "allows users to search through billions of current and historical records on individuals and businesses when investigating fraud, conducting criminal and civil investigations, locating witnesses, finding missing children, or locating and verifying assets." The target audience for the service appears to be law enforcement and other government agencies. The information that might take "20 to 30 minutes to compile" using AutoTrack could take hours or days without it, and some of the information might only be available to the general public by mail or in-person inspection of records, if it was available at all.

There is one fact that appears to contradict both Kelly's and Branstetter's explanations of Branstetter's email. Beautiful Brands International LLC filed a dismissal in its case against "John Doe" on April 19, 2013. The dismissal names Sean P. Kelly as the defendant, not "John Doe," so at that point Kelly's identity was known to Rutkauskas's attorney and presumably to Rutkauskas himself. So Rutkauskas would have been able to provide that name directly to Branstetter on May 6 or 7, and indeed Kelly notes that "the search record documents she sent to Rutkauskas indicate that she initiated her searches with the term 'Sean P Kelly.'" So it would appear that Branstetter would not have needed to learn of Kelly's identity as webmaster of UnhappyFranchisee.com via "auto track" as Titus asserts she did, but neither would she have needed access to any secret internal Tulsa World information about his identity, as Kelly seems to suggest.

Seems to me Branstetter and the Whirled could have put this whole thing to rest with a simple, "I'm sorry. I understand how hurtful this was to you and your family. It was poor judgment on my part to provide a background check on you to someone in order to cultivate what I thought might be a source for future stories." Instead, they send a four-page legalese version of "'Shut up,' he explained," which is unlikely to make the story go away. (See Streisand effect.)

(UPDATED 2017/04/11 to convert UTW and This Land links to Internet Archive version.)

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This page contains a single entry by Michael Bates published on June 19, 2013 11:42 PM.

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