WEDNESDAY PM: The Los Angeles Times is supposed to report entertainment news. Now it’s making the news with its own Hollywood scandal. A lot of eyebrows were raised recently when powerful entertainment mogul Brian Grazer was tapped as the first of what would be quarterly “guest editors” of the Sunday LA Times‘ classy Current opinion section. Well, woo-hoo. It turns out there was a romantic relationship between Andrés Martinez, the paper’s editorial pages editor who assigned the gig to Grazer, and Kelly Mullens, an exec for the Hollywood PR firm 42West which just happens to represent Grazer’s production company Imagine Entertainment. logo_latimes.gifI’m told that publisher David Hiller knew all about it and still didn’t pull the plug — even though the girlfriend’s PR boss Allan Mayer was the person who flacked Grazer to Martinez in the first place. Now Hiller has killed this Sunday’s Current that was put together by the producer rather than run a mortifying editor’s note. And a furious Martinez has quit in protest. Granted, it’s not news that a pushy Hollywood PR firm had considerable influence with the local paper. This is a case of unusual influence. But was it improper influence? And, really, isn’t the Current mess the publisher’s fault since he was making the final decisions after all?

Now the LA Times‘ opinion section is embarrassed, the paper’s news side horrified, the Hollywood mogul humiliated, the PR company spinning. Media critics already beating up on the Tribune Co.-controlled LA Times are gonna have a field day with the latest contretemps. (I’m sure ousted editor Dean Baquet is enjoying it. After all, Hiller fired him.) If all this isn’t enough to get Hollywood and media circles buzzing, consider that, irony of ironies, Grazer and his Imagine partner, director Ron Howard, made the 1994 pic The Paper about journalism ethics at a big city daily.

It all began when Steven Spielberg was Martinez’ first choice to guest-edit. So the Timesman contacted his girlfriend’s boss — Martinez says in January, Mayer says in December — because Mayer had repped Munich and spoken about it months earlier at a Times lunch with a number of editors present including Martinez (“at a time when I had no contact with Kelly,” he said in his blog tonight). Mayer told me: “He knew I had a professional relationship with Spielberg. When Andres told me about this guest editor program he wanted to start, I told him Brian would be perfect for it.” Unfamiliar with showbiz, Martinez didn’t know much if anything about Grazer. “So Andres went and did his homework. Then he calls me and says, ‘David Hiller loved the idea. Can you introduce it?’ At that point, I went to Imagine’s Michael Rosenberg and said, ‘The LA Times is interested in Brian. I’m going to have Andres get in touch with you.'” On January 22nd, Martinez, his deputy editor Michael Newman, and Op-Ed/Current editor Nick Goldberg went to talk to Grazer in person. I reported this last week. But no one close to Grazer or the Times ever mentioned to me 42West’s involvement or the Martinez-Mullens romance. So much for transparency. Though, I think the Imagine producer was a good suggestion, no matter who influenced his selection, because of his extensive and eclectic interests beyond showbiz.

According to my sources, the paper’s publisher knew Martinez was dating Mullens. “Because Hiller met her when Andres brought her to social functions. Andres never made a secret of it.” (I’m told Martinez is presently separated from his wife and in the middle of divorce proceedings, but did not begin dating Mullens until after he and his wife split.) Hiller also knew about the girlfriend’s PR connections to Grazer. “In fact, when it was decided that they were going to do this with Brian, Andres made a big point of reminding Hiller. I thought that was kind of silly,” Mayer told me. When he was a top PR executive at LA’s crisis communications firm Sitrick & Co., Mayer hired Mullens as his No. 2. I’m told she started going out with Martinez while she was working there. At Sitrick, Mayer had been paid by Hollywood studios to rep Grazer’s more controversial movies since 2001 (A Beautiful Mind, The Da Vinci Code). After moving last October to Leslee Dart’s Hollywood PR firm  42West, Mayer brought Mullens along. He says he was eager to sign Grazer’s Imagine Entertainment as a corporate client and that was accomplished in February. The timing is interesting since it occurred after Grazer got the LA Times gig in January. “He didn’t become a client of mine because of it,” Mayer said to me.

But is this just PR spin? A source tells me, “Mayer is obfuscating here. Leslee Dart has represented Brian Grazer for a long, long time. She started working with him way back in the mid-’90s when she was at PMK. Alan joined Leslee’s firm to run the West Coast office out here and Brian was already a client.” Also Mayer downplays Mullens’ involvement with Imagine, but one of his colleagues tells me the Mayer-Mullens duo work “hand in glove. They’re totally attached at the hip. To suggest she doesn’t get involved with Grazer’s accounts is not believable.” Even Martinez in his blog tonight says “Kelly does some work for Imagine.”

I’m told Martinez again reminded the LA Times of his girlfriend’s PR connection with Grazer just before the public announcement was made of the new guest editor program. “Andres, in what I took to be an excess of ethical zeal, told the paper’s spokesperson Nancy Sullivan that he was dating Kelly,” Mayer said. Yet 42West not only helped write the LA Times’ news release announcing Grazer’s guest editor stint (and quoting Martinez extensively), but both Mayer’s and Mullens’ names and numbers were listed as contacts on it. “She was my backup,” Mayer maintained. “I was traveling when the press release went out, so she handled some of the inquiries. But that was really the extent of Kelly’s involvement. We didn’t want there to be any reason for raising eyebrows that we’re concealing anything.”

I understand it was the Times‘ own media reporter, Jim Rainey, who just recently got wind of the editor-flack romance and first raised the red flag about it internally this week. My sources say Rainey began asking people who worked for Martinez about his personal life before approaching the editor directly. Martinez became livid and hurriedly called a staff meeting. But because of the LA Times‘ troubled relationship with its parent Tribune Co., Rainey is accustomed to threading the ethical needle on difficult stories involving his newspaper. (Though I’ve taken issue here and here with his coverage, or lack of it, of some related stories.) It’s no secret there has been tension and resentment between the LA Times newsroom and the paper’s editorial/opinion pages. Rainey in his story Thursday even makes the connection to one of the worst scandals in LAT‘s history. “Many reporters and editors said they were unhappy about how readers might perceive the decision to let an outsider — with the appearance of a special inside connection — hold sway over the Sunday opinion and editorial pages. Several journalists recalled how the newspaper’s reputation for impartiality suffered in 1999 when it was revealed that The Times had shared profit from a special magazine edition with the management of Staples Center.”

Rainey said reporters “registered their dismay” to LAT Editor Jim O’Shea. But O’Shea doesn’t oversee the editorial/opinion pages. Ever since Jon Carroll left as the paper’s editor in July 2005, those sections have answered only to the paper’s publisher. I reported in January that, surprisingly, O’Shea resisted the opportunity to expand his turf when he took over from Baquet in November. “When I came here, Hiller said to me, ‘Do you think we ought to change that since the Chicago Tribune editor oversees it?” And I said ‘No,’” O’Shea told me, explaining he had “enough mud on my shoes” without navigating that terrain, too. I’m confident that an editor like O’Shea would have been more aware than publisher Hiller that the Martinez-Mullens romance provided the appearance of a conflict, even if the reality turned out that nothing inappropriate or untoward had been done by anyone involved.

After Rainey internally outed the Martinez-Mullens relationship, the Times this week began falling all over itself publishing a Business story about it Thursday, planning an Editor’s Note about it in this Sunday’s Current (the one that Grazer guest-edited, if the section even runs at all), and a blog posting about it tonight by Martinez on the Opinion section’s website.

In addition, I and‘s Kevin Roderick (who scooped the story on the Internet under the headline “Grazergate”) have both been told that there’s an internal examination underway inside the paper whether Martinez’s section was too influenced on subject and writer selections by his girlfriend’s flackery. In fact, just before the Oscars, her boss placed an Op-Ed piece in Martinez’s pages by film mogul Harvey Weinstein complaining about producers’ credits. Mayer explained to me: “Harv had been talking to me about that, so I called Nick Goldberg, whom I know. I asked, ‘Would you be interested in this?’ He said that would be terrific. Andres didn’t know about it until he read it in the newspaper.”

Tonight I was given this statement from Mullens: “I believe my personal relationships are a private matter. That said, I have a great respect and a keen understanding of journalism and journalistic ethics. I have never let my personal relationships interfere with my work and any suggestion to the contrary is insulting and untrue.”

An indignant Mayer told me today, “The selection of Brian had nothing to do with Andres’ relationship with Kelly. There’s nothing that comes close to crossing any ethical lines. The fact that there is any concern at all comes as a great surprise to me. It’s a sign of the complete dysfunction at the paper. People there are trying to make an issue about this. Tonight, Jim Rainey asked me what I would say if the paper decided to kill the section [edited by Grazer] I told him it would demonstrate to me the complete moral bankruptcy of the Los Angeles Times.”

Martinez himself blogs in part tonight, “Some questions have been raised in the blogosphere and in our newspaper (on Friday) about the choice of Brian Grazer to guest edit Current this Sunday, and whether our judgment was affected by a conflict of interest. It was not. I think it’s important to address these questions, and innuendo, head on because our integrity is our most important currency in this business of offering scarce space in the paper to outside voices. This is why in 2005 I instituted anti-nepotism policies barring editors’ relatives from writing for our pages, even if the editor at issue is disclosed. No one I have a personal relationship with would ever dream of approaching me about trying to get something in the paper…  At issue here is my personal relationship with a publicist named Kelly who works for a firm that does some work for Imagine Entertainment, Ron Grazer and Brian Howard’s firm … But I can assure readers she had no role in our decision to choose Grazer, and readers can make up their own minds as to whether this choice was a wise one.”

And Hiller told his own newspaper he intends to decide Thursday whether to run the editor’s note or stop the edition before its scheduled Friday printing. “I believe, based on everything that I have seen, that we have only the appearance of a conflict here. I believe that the selection of Grazer was not based on this relationship. We have an appearance and not a case of actual undue influence. “We want to do the right thing for our readers and for the paper,” Hiller added.