However droopy the rest of the news business might be, dishonesty has become a growth industry, with a steady churn of mini-scandals involving theft, pillage, and fiction. The latest flap over media fakery concerns Journatic, a six-year-old company that sells news organizations what’s called hyperlocal coverage, once known as community news.

Journatic’s approach to journalism is unusual, and it came to light in a recent report on This American Life (TAL), the public radio magazine. TAL’s chief informant was a cheerful but disgruntled Journatic employee named Ryan Smith.

The Journatic that Smith described is a globalized, Internet-based informational assembly line: U.S. data sources are scraped for micro-news of appeal to neighborhood-sized audiences — home sales, death notices, Little League scores, police blotter entries, honor rolls, school lunch menus, company press releases.

Sometimes raw items are shipped overseas (to the Philippines, for instance) and shaped by low-paid freelancers, then polished by various stateside editors, and finally channeled to client publications, which print them in neighborhood news sections or post them online.

Other times source materials are handed off to piecework U.S. journalists who are told to make a call or two, add live quotes, and re-file for clients far away.

Journatic developed a thriving business among reputable newspapers including the Houston Chronicle, San Francisco Chronicle, Chicago Sun-Times, and Long Island’s Newsday, and it moves tens of thousands of items a week. In April Tribune Co., owner of the Chicago Tribune, bought a minority stake, handed Journatic its own TribLocal network — with 22 weekly print editions and 90 town websites — and sacked 40 employees.

Paying little is key to Journatic’s success: Its stateside writers get $24 for an 800-1,000-word story (a shade longer than this column), $12 for 500 words. Its Filipino help is getting 35 to 40 cents per item.

Company founder Brian Timpone argues that slicing custodial reporting into discrete functions carried out by dispersed, underpaid workers on a digital factory floor was “saving journalism. The whole purpose of this is not to replace reporters. It’s to clear the way for reporters to do what they uniquely do. No reporter wants to get the honor roll. Our clients have great reporters mired in this process, and we take it away from them.”

Besides, he asks, what’s the alternative? Major league hyperlocal networks that rely on traditional reporting, like AOL’S Patch with 863 sites, have been money pits — Patch lost some $150 million last year.

But it’s not Journatic’s outsourcing that provoked outrage. What drew the angriest comment in the TAL report was something else: Journatic was fabricating bylines. When the home sale report drafted in Manila and rewritten in Chicago and St. Louis was finally published, it was credited to some make-believe author. Pseudonyms were routinely used.

Suddenly, a scandal. No, not about sweatshops. TAL had “busted” Journatic for “using fake bylines.” The broadcast triggered an “investigation” by one client, a public apology from another, a reappraisal of Journatic’s contract by a third. (On Friday, after disclosures that a high school sports story supplied by a Journatic writer contained one quote that was plagiarized and another that was fabricated, the Tribune announced it had suspended its arrangement with the company pending further review.)

Timpone defended the stories themselves as accurate, and as for the bylines, said: “It was an oversight and mistake, but hardly malicious.”

Why do it? Timpone suggested he was trying to shield his staff from blowback from people who were unhappy that their high-end home purchases were made public, and said team efforts are awkward to credit accurately.

Now, for centuries bylines weren’t used by journalists, as Jack Shafer points out, and are still used inconsistently. And pseudonyms have honorable literary pedigree. But the Journatic fuss isn’t about credits. As Matthew Ingram argues, the bylines are “a red herring.”

The issue is authenticity. Ryan Smith, the TAL informant, described his discomfiture about concealing his whereabouts from a school principal in Texas, whom he phoned from Chicago for a quickie profile of a student for a Houston website. “There’s just something inauthentic about the whole process,” he said.

Time and again, in the recurring flaps over plagiarism and originality, the liberties writers take with facts, spin and bias, truth and fabrication, authenticity emerges as a major concern in this new media age.

The preoccupation is understandable in that digital media, miraculous as they are, make falsity and concealment easier than ever: Content is replicated and shared instantaneously; authorship becomes unknowable. The most innovative new expressive form of digital media isn’t creation, it’s curation: The thoughtful selection and reassembly of work originating elsewhere.

So curious though it is, the Journatic dustup reflects concerns that won’t go away. Digital technology’s capacity is breathtaking, but the difference between an honest report and a computer simulation is one that must not be lost.