Mr Clark made the comments during a recent New Zealand Taxpayers Union "Hands Off Our Homes" meeting at the Invercargill’s Workingmen’s Club, where he was a guest speaker.
During the meeting, Mr Clark claimed the Government "controls the media", through the general assessment criteria within its $55 million Public Interest Journalism Fund (PIJF).
"One of the conditions is, you don’t criticise iwi and you don’t raise any journalism that might throw them into a bad light," Mr Clark said.
"When we had the vaccine rollout, there was little information to tell us how well iwi picked up the vaccines — in fact they were diabolical — but very little media, because the media was scared of losing their share of their fund, and I’ve had the editors tell me that," Mr Clark said.
The clause Mr Clark appeared to be referring to states that one area Public Interest Journalism could cover is reporting "by, for and about Māori that prioritises the perspectives, issues, needs and interests of Māori".
There is no mention of media organisations being unable to criticise iwi.
University of Otago media, film and communication lecturer Dr Olivier Jutel said Mr Clark’s comments were ignorant, and a government funding agency did not control what a journalist chose to write.
"I would have thought that somebody who’s a local civic leader would really champion the ability of local journalists to be involved and engaged and have oversight in the process."
"I don’t know if this is like a [Auckland Mayor] Wayne Brown effect, but there is definitely a kind of a populist demagoguery that’s kind of set into city politics a little bit."
Dr Jutel said he "vigorously defends" the PIJF as integral to regional journalism.
"The big companies, NZME, they don’t really have huge economic incentives to invest in the kinds of stories that our communities are crying out for."
He said the Māori and iwi criteria for the fund was an important priority as the market often did not have incentive to produce news from marginalised communities.
"[Mr Clark’s comment] is nonsense.
"This is not grounded in reality.
"It’s based in ignorance," Dr Jutel said.
During a public forum at the meeting, Invercargill city councillor Barry Stewart said reforms proposed last Thursday by the Department of Internal Affairs (DIA) for safer media and online platforms were "another example of a communist agenda to censor everything the public can see read or hear".
Speaking to the Otago Daily Times, Mr Stewart said he meant the Government was trying to centralise "everything" and take power from local governments.
He said his comment did not tie in with Mr Clark’s earlier claims, but he had not made his mind up whether the PIJF amounted to censorship.
"The media seem a bit biased about a few things the Government are doing and it annoys me a lot, but it’s about as far as I’m going to take it."
News Publishers’ Association general manager Brook Cameron said professional independent New Zealand media companies were already heavily regulated and worked within New Zealand legislation.
"The current model for our members’ editorial content has operated effectively for many years, providing New Zealanders with a robust and efficient complaints process via the Media Council".
She said the association would be working with its members during the consultation period to provide detailed feedback on the DIA proposal.
Mr Clark declined to comment on his claims when contacted by the Otago Daily Times.