[4] Disheartened by what he perceived as inadequate local coverage of congressional affairs, Schwartz resigned from his position and, with Howard Abramson, a friend from New Haven, established the Connecticut News Service.
Operating from Schwartz's modest D.C. residence, equipped with two second-hand Senate desks, two phone lines, and a slow telecopier, they initially had only two clients — the New Haven Register and the Journal-Courier.
[4] Their early endeavors included a significant story claiming that Connecticut Governor Thomas Meskill intended to resign and receive a federal bench appointment from President Richard Nixon.
Although Meskill persistently refuted the allegations, he eventually did announce his decision not to seek another term, with Nixon nominating him for the judgeship shortly before resigning due to the Watergate scandal.
For $1,300, Schwartz acquired a rival agency, the Capitol Hill News Service, an offshoot of Ralph Nader's think tank Public Citizen, which had five reporters.
[6] By that point, States was $700,000 in debt — "creditors include the Internal Revenue Service, the District government, and the telephone company,"[6] as well as Schwartz's own parents.
He imagined creating an "information bank" that could also "be sold to radio and television stations, cable systems, special interest magazines, and the government and corporate fields.
"[7] Despite Schwartz's ambitions for the agency, however, it continued to face numerous challenges: a union drive by reporters, the early 1980s recession, and losing $1,000 a day.
"[8] In 1990, Schwartz created The Latest News, a 12-20-page packet of information compiled hourly, in partnership with Financial World magazine and United Press International.
Mr. Schwartz says the newspaper has made a modest amount of money with advertisers like BMW and others that aim at the affluent audience of 5,000 shuttle customers daily.
With 15 employees recording U.S. Securities and Exchange Commission transactions or writing briefs on Capitol Hill markups, States sold information to newspapers, lobbyists, and corporations.
[18] In 2009, American Journalism Review lamented the lack of coverage of the federal government from a local angle, specifically mentioning the States News Service as a previous example of that practice: The now-defunct States News Service once filled the gap for many papers, which could pay a fee to buy all or part of a reporter's time.
"It used to be if we closed this bureau, San Diego would have that option of having somebody from States watch them, but that's not there anymore," [the Copley News Service's George] Condon says.