The Huffington Post May Be Chopping Off Its Investigative FundS

The Huffington Post is poised to announce a merger of its investigative fund with the Center for Public Integrity tomorrow morning, a move that will effectively end the fund as it exists today, we hear.

The fund, co-located with HuffPo's DC bureau, is said to be closing out its current incarnation as a de facto investigative wing of the Huffington Post, chaired by HuffPo editor in chief and co-founder Arianna Huffington . But some people close to the fund also expect it to announce some sort of new affiliation with CPI, the investigative nonprofit that just won a $1.7 million digital journalism grant from the Knight Foundation. Fund executive director Nick Penniman declined to comment, beyond noting some unspecified discussions that have been ongoing. Executive editor Keith Epstein also said things are in flux: "There are some very exciting developments... Happy to fill you in tomorrow morning," Epstein said. "We are not closing and I've never been more excited about our future. We're not being taken over, either."

Whatever happens to the staff, chatter that the fund itself is kaput is hardly surprising. There have been prior signs of agitation at the organization, including the resignation of Washington Post veteran Larry Roberts in March, less than a year after the fund's very public launch, which Huffington said would "save investigative journalism." We also heard this past summer that inaugural backer Atlantic Philanthropies, which funded the organization together with HuffPo proper, had declined to renewal its initial $250,000 contribution. Indeed, a search of the organization's online grant database does not show anything beyond that first nine month grant issued in April 2009.

Then there's the matter of the fund's taxes. When last we checked in January, the fund's tax exempt status was still pending with the IRS. It's not clear whether it ever came through — we sent Penniman a followup question and are awaiting his reply — but experts told us earlier this year that it was legally problematic that the fund fed its stories mostly just to the Huffington Post. Even the attorney handling the fund's IRS application told us he expected special scrutiny.

In the end, perhaps a divorce from HuffPo and its money is just what the fund needs. It has other "partners," which included, at launch, Columbia University's Stabile Center for Investigative Journalism. It certainly appears to have a very solid corps of journalists. Detaching itself from HuffPo would help make any tax exemption questions go away. Huffington would have to replace some of the prestige she got from the fund, but the HuffPo founder is already at work on that, spending some of her new profits hiring away writers from the New York Times and Washington Post. As long as she can avoid headlines like "Blog Empress Squanders Journo Charity Bucks on Jon Stewart Rally Buses," she'll be fine. As always.

Update: Huffington confirmed the story to the New York Times a few hours after our post went up.

Update: Penniman said of Atlantic Philanthropies, "Atlantic pledged $500,000, not $250,000. And they've followed through with that commitment. They never waffled. We're now in discussions with them about a future commitment."

[Photo of Huffington getting a playful shove from Bill Clinton last month via Getty]