The Wall Street Journal is now following the investigation by the Los Angeles Times and The New York Times into whether Vanity Fair editor Graydon Carter is using his close ties to Hollywood to benefit financially. The first story may be printed by the LAT as early as this Monday.

Sources say the LAT investigation, which began weeks ago under the direction of the Business section’s Hollywood writer/editor Michael Cieply and is further ahead than the other newspapers’, is focusing on whether Carter allegedly made deals with Hollywood moguls and their companies beyond the scope of his editorial duties. These same insiders say the LAT article will explore whether the deals included allowing for pre-publication reads of VF articles or charging for his consulting services (some supposedly valued between $100,000 and $200,000 each).

The big three’s look at Carter’s perhaps too cozy relationship with Hollywood was first reported in the L.A. Weekly yesterday.

The LAT probe revved up within the past week by putting reporters, including Cieply, on the ground in New York City. Following that, the directive came down from NYT editor Bill Keller to NYT’s Business-section media editor, Lorne Manly, to pursue the same Carter story that the LAT is doing. Manly put his reporters to work on it this week. Now, sources tell the Weekly that the WSJ is on Carter’s trail as well, spurred by the head start of its two biggest rivals for entertainment and media business news.

Yesterday, Beth Kseniak, VF’s spokesperson, said she knew the LAT story is in the works, but not an NYT one as well. “That’s news to me,” she told the Weekly. “We have no idea what the L.A. Times is writing about. They have not spoken to me directly. As for the rumors you mentioned, they are completely and utterly baseless.”

Kseniak did not return calls in time to comment on the Weekly’s latest info today.

The Weekly has learned that last week, Cieply, while conducting one interview, claimed to have “six cases already” of Carter’s benefiting financially from his cozy relationship with Hollywood. Other sources say that another alleged “side deal” the LAT is pursuing is whether Carter benefits financially from who gets on the cover. Cieply, a former Forbes and Wall Street Journal entertainment-business writer, spent nearly a decade working in Hollywood before returning to journalism and a second stint at the Los Angeles Times. He is known to be an indefatigable reporter with excellent sources.

It’s certainly no secret that Carter is best friends with some of Hollywood’s most powerful players, especially media mogul Barry Diller, CAA partner Bryan Lourd, Imagine producer Brian Grazer and CBS topper Les Moonves, and that those relationships already have paid off in one way or another. Carter’s documentary about Robert Evans, The Kid Stays in the Picture, was distributed by Diller’s company. The VF editor is doing another documentary, this time about New York writer Fran Lebowitz, part of Diller’s inner circle. Carter seriously considered a lucrative job offer from Grazer at one point, plus he received “special thanks” in the Grazer-produced A Beautiful Mind. The VF editor was executive producer of a 9/11 documentary that Carter brought to the attention of Moonves’ CBS, which aired it in 2002. And so on . . .

The general consensus is that for some time, Vanity Fair’s coverage of Hollywood has changed dramatically, and not for the better. Sure, the celebrity cover stories have always been, and probably always will be, puff pieces. But at the start of Carter’s editorship, on June 30, 1992, and continuing until 2000, the magazine seemed intent on exhaustively reporting every twist and turn in the entertainment business. Even though Carter started the magazine’s hugely successful Oscar-night Hollywood party, few hints of favoritism could be seen in the editorial content. If anything, writers Bryan Burrough, Kim Masters, Peter Biskind and Maureen Orth were seen as near ruthless. (Full disclosure: In 1993, I wrote two feature articles for Vanity Fair under Carter.)

But then came the February 2000 departure of deputy editor George Hodgman, who edited many of the toughest Hollywood articles. Kim Masters’ contract wasn’t renewed. Ned Zeman, to name one writer, penned entertainment-business articles with a decidedly positive spin to them and is now writing screenplays on the side. For some time, the conventional wisdom has been that VF won’t go after entertainment moguls, who often are Big Media moguls as well, as long as they keep their jobs. The result is that the quantity and quality of entertainment-business coverage have declined. At the same time, Carter’s penchant for pitching movie ideas to Hollywood is intensifying.

But the real question for the LAT and NYT to consider is whether the VF editor’s kinship with Hollywood is worse than, say, fellow Condé Nast personality and Vogue editor Anna Wintour’s hand-in-glove relationship with the fashion industry.

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