I've kind of been staying away from Gannongate because it is so very sordid: I think pretty much everything you need to know is at Americablog, and I warn you that, even censored, the page is a little racy. To summarize: He was discovered thanks to an improbably sycophantic question he asked the President during a televised press conference:
Senate Democratic leaders have painted a very bleak picture of the U.S. economy. Harry Reid was talking about soup lines, and Hillary Clinton was talking about the economy being on the verge of collapse. Yet, in the same breath, they say that Social Security is rock-solid and there's no crisis there. How are you going to work -- you said you're going to reach out to these people -- how are you going to work with people who seem to have divorced themselves from reality?Blogger investigations, now closely followed by newspaper investigations, have revealed that he was regularly given daypasses and called upon in White House Press conferences despite being employed by a new, little known, & partisan online news service. Then it turned out Jeff Gannon is a psuedonym, he's really called James Guckert, and he seems to be connected with/featured on a whole lot of very racy escort sites--which apparenlty raises the possibility of blackmail being involved.
The problem is this is all so tangled and mucky, I'm not sure what the legal issues actually are anymore. Americablog is probably your best bet for keeping track. The reason why people are pissed--the principle of the thing--however, is more obvious. This is an administration that has been deeply unfriendly to the press in any real sense. (Giving people nicnames is not a sign of friendship.) Its lack of transparency is mindboggling. A simple example: try to figure out what the structure of the National Security Council is . A simple search (Google [national security council site:whitehouse.gov]) lands you on its page: and the only links are to press releases, speeches, a brief historical overview, the biography of the National Security Advisor, and three documents. No list of offices or responsibilities at all. In fact, if you Google [national security staff] the first official site you get is a national archive reproduction of the Clinton White House National Security Council webpage, complete with a detailed list of all the major offices, and biographies of the two deputy advisors.
So this is White House that doesn't want to disclose simple information about its staff, but does want to coddle a reporter with no experience and a negligible readership. The Administration doesn't view the press as agents of one of the oldest and most fundamental principles of democracy--transparency and accountability. Instead it sees the press as either a tool or an enemy. George Bush doesn't want the people to be informed. He just wants them to be sheep.
UPDATE: Hee hee. Watch the Daily Show. Hits all the right points and then some.