Tag Archives: Coverage
Fortune magazine writer Bethany McLean, widely credited for writing the first story that criticized Enron and questioned its accounting, was interviewed by the Houston Chronicle about why she is at the trial and what role she played. She downplayed her story and her role in bringing down Enron.
“The story took on an importance later that it did not deserve originally,” McLean said during a break in proceedings. “Whether I wrote that story or not, Enron would have gone bankrupt, investors would have lost billions of dollars and thousands of people would have lost their jobs. I just picked up on an underlying skepticism. If you had told me then that the company would go under by the end of the year, I would have never believed it. I was as naive as the rest of us.”
I applaud McLean for not getting a big head. A review of her March 5, 2001, article shows that her reporting did raise some serious questions about the company, but she ultimately failed to find what was wrong. Even McLean admitted the shortcomings of her reporting in the article. â€œThe inability to get behind the numbers combined with even higher expectations for the company may increase the chance for a nasty surprise,â€? she wrote at one point. â€œThe numbers that Enron does present are often extremely complicated.â€?
However, McLeanâ€™s reporting raised enough concerns that other business journalists should have been more aggressive in examining Enron. She noted how Enronâ€™s debt had increased substantially and that its cash flow had slowed. She also pointed out that no analyst covering the company knew what was included in a division called Assets and Investments. McLean dug into the companyâ€™s financial statements and found where some potential accounting moves were being made to make Enron look better.
Although she had training in investment banking, her analysis was simple enough that it could have been accomplished by anyone with a basic understanding of how to read a balance sheet and a financial statement â€“ training an increasing number of business journalists are receiving.
Chronicle reporter Mike Tolson added, “McLean is the most visible of a modest corps of reporters who have followed the Enron story for the last five years, and most of which has assembled in Houston for its culminating act.
“Joining in are writers for American news magazines, foreign journalists â€” France, Germany and Norway are represented â€” and a few from unexpected publications.” Matt Taibbi, national affairs correspondent for Rolling Stone, is among those at the trial.
Read the Chronicle’s story about the media covering the trial here.
Denver Post business columnist Al Wilson has also been at the Enron trial, and he actually shook the hands of the defendants as they ran the media gauntlet outside the courtroom. Wilson also overheard Skilling tell Fortune writer Peter Elkind, “You look prosperous,” as reported on the Fortune blog of the trial in the posting below.
Wrote Wilson: “I thought it was a spontaneous remark, demonstrating Skilling’s keen wit, until co-author Bethany McLean told me he used the same line on her.
“It was a day to forget about the Enron movie, the Enron books and the seemingly endless Enron exposÃ©s in magazines and newspapers. It was a day to finally hear another side of the story – one we’ll be hearing for the next four months.” Let’s hope so. There’s been too much talk of the coverage already in the opening statements.
Read Wilson’s column here.
Bethany McLean and Peter Elkind, the two Fortune magazine writers who wrote, “The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron,” are in Houston at the Enron trial, and they posted some of their observations this morning.
Included is some points about the media coverage, and how they were received by defendants Ken Lay and Jeff Skilling. They wrote: “Despite a close cooperation in trial strategy, Lay and Skilling have shown flashes of their contrasting personalities. Neither former CEO is a fan of our Enron book, ‘The Smartest Guys in the Room.’ And Skilling, never much good at hiding his feelings, made a point of offering a sly jibe, sidling up to each of us during a break in the courtroom proceedings, to offer the same remark: ‘You certainly look prosperous. Your book must have sold quite well.’ Lay, as always, was genial, greeting us as he did other journalists, with a broad smile and a handshake.
“The media jam for Monday’s jury selection eased a bit on Tuesday, though reporters who really wanted seats in the courtroom (as opposed to a separate courthouse room offering a closed-circuit video feed) sent paid line-holders (in one case, at $50 an hour) as early as 3 a.m.
“The hometown Houston Chronicle has provided saturation coverage, including three separate online blogs. Among the pre-dawn arrivals Tuesday was the paper’s sleepy-eyed fashion writer, who is preparing an analysis of the courtroom stars’ sartorial splendor — such as it is. (Grey suits are the uniform of choice.)”
Can’t wait to read that story about the attire.
The Syracuse Post-Standard announced in today’s paper that its previous stand-alone Technology section would now be folded into its Business section, beginning with Wednesday’s paper.
Senior managing editor Stan Linhorst wrote, “In the end, it no longer made sense to segregate technology news in a separate section. It’s everywhere in our world, and that’s reflected in the newspaper. So we are planning to stop publication of the section, with this, the last issue.”
He later added, “The Business section, which already carries a fair amount of technology news, will devote a full page to technology on Wednesdays, beginning today. On this Business page, we will still want to report news about upcoming events, contracts and awards.
“Technology news already appears more and more often on the front page, inside the main news section of the paper and in the Business section.”
Other changes were made as well. Read about it here.
NewsBusters, a web site devoted to exposing the liberal bias in media, has a nice analysis of how the media cover the Gross Domestic Product numbers when they come out every quarter. The GDP measures how the U.S. economy is growing, and it’s typically measured against estimates from economists.
Noel Sheppard, writing on NewsBusters, states, “Media coverage of the nationâ€™s economic growth can vary a lot depending on how strong or weak the economy is doing. Strong numbers are downplayed or undermined and weak numbers like the fourth-quarter results are highlighted in some of the major media.”
The fourth-quarter GDP numbers were released last week. Sheppard called the New York Times’ coverage “gloomy” and the NBC News coverage “bearish.” The Washington Post was “downbeat” in its coverage. However, when the third-quarter numbers were released back at the end of October and showed stronger-than-expected growth, Sheppard said that the media didn’t give the story as much coverage.
Read his entire analysis here. I think he has a point, but I don’t know if it’s a problem. Economic growth slowing seems to be more important to people than when it’s humming along. It’s the change in the rate of economic growth that often determines whether the GDP is a big story, or how it’s played.
Mike Ramsey, who represents former Enron Corp. CEO Ken Lay in the current conspiracy and fraud trial by the government against Skilling and Lay over the energy company’s demise, made his opening statement in court today, and he blamed the company’s problems on Wall Street Journal reporters talking to shortsellers, according to Houston Chronicle columnist Loren Steffy’s witty and insightful blog from the trial.
Steffy writes: “Mike Ramsey continues to try to make the Wall Street Journal a culprit in Enron’s collapse. Journal reporters talked to short sellers.
“Short sellers are ‘vultures’ who set out to destroy companies for their own quick profit, Ramsey said. They ‘sponsored’ the Journal stories, he said, which is both insulting and wrong. They were a source. Ken Lay would have been a source, too, except his crack PR team advised against it.
“When the Journal called to asked about the LJM partnerships and Andrew Fastow’s role in running them, Enron’s PR people’s reply, according to Ramsey, was:
“If you call them back, it’s a two-day story. If you don’t call them back, it’s a one-day story.
“Now, there’s some advice that worth it’s weight in Enron stock.”
“As for short sellers, they’re easy demons. Shorts make money when stocks fall. Since markets tend to rise over time, clearly they aren’t popular. And some of them are sleazy. But many of them spend hours digging through company finances — more time, in fact, than many Wall Street analysts did in the days before the global settlement on tainted research.
“To say short sellers destroy companies by planting false stories is like saying executives build companies by planting false press releases. The market is pretty efficient about sorting out bogus claims.”
If I were the Wall Street Journal reporters — Rebecca Smith and Johm Emshwiller — who wrote most of the newspaper’s Enron coverage in the fall of 2001, then I’d be “insulted,” to use Steffy’s word. And to say that my stories were “sponsored” by short sellers shows that Ramsey doesn’t understand the processes involved in reporting when it comes to business journalism.
I hope the jury saw through his attempt to place the blame on journalists for Enron’s problems.
Earlier in the day, Ramsey mentioned Smith by name, saying he would call her to testify that she didn’t listen to a conference call in which Lay disclosed a $1.2 billion cut in shareholder equity.
Steffy’s comment on this: “Well, as someone who’s covered public companies for a good long time and done far more earnings stories than I’d like to remember, let me first say that not listening to a conference call isn’t, to use the defense’s lingo, a crime. Nor does it signify laziness, ignorance or not doing a job. The job often requires you to listen to multiple calls for multiple companies in a single day. Sometimes, you have to make choices. I don’t know what Rebecca Smith did or didn’t do, but I don’t think Kenny Boy is going to beat this rap by trashing the press, revered tactic though it may be.
“Smith wrote her story from the company’s press release, which is supposed to be the official communication of the company’s financial health, at least until its 8-K is filed with the Securities and Exchange Commission. Dropping a bomb like that on a conference call with analysts is selective disclosure.”
Sounds like the business press is in for a rough ride.
Brent Hunsberger, who covers workplace issues at the Oregonion, has been asked by his editors to put together the newspaper’s first examination of executive compensation of public companies in the state. (It’s a long overdue story, he adds.)
But Brent wants some advice on how to do this from other business reporters. What papers do a good job of this, in your opinion? He knows some papers actually hire consultants to analyze executive pay for them. Do you think this is the only way to go, given compensation’s complexity? Have you seen other papers do the analysis using their own staff?
Brent has three basic pieces of information he’d like to know:
1. How does your paper do it: In-house or outsourced?
2. If outsourced, what is the cost?
3. What challenges have you encountered?
I’d also be interested in hearing about how total compensation is determined because I’ve seen it done in so many different ways. Do you include stock options? What about restricted stock? Other compensation such as benefits like country club memberships and car allowances?
My last experience in writing this story was in September 2004, when I wrote the annual North Carolina CEO compensation story for Business North Carolina. The magazine hired the Charlotte office of Findley Davies Inc., a Toledo, Ohio-based human-resources consultant. The study calculated CEO pay using salary, bonus, estimated value of stock options granted, restricted-stock awards, long-term incentive payouts and all other compensation
You can post your answers here on the Talking Biz News blog, or if you don’t want to share that information, you can reply directly to Brent at firstname.lastname@example.org. He promises to keep your newspaper’s information confidential if you don’t want it shared.
Carol Kleiman, who has been writing about workplace issues for the Chicago Tribune since 1967, is retiring. In her farewell column in today’s newspaper, she noted the evolution of her writing and the importance it had in the newspaper.
Kleiman said, “As Working Woman, which started in 1967 in the features section (long before the national magazine with that title was launched), morphed into Women at Work, appearing in the Business section, and then, more recently, became WorkLife, I also wrote two other columns, Jobs and Letters (where I became the Career Coach both in the paper and on CLTV) for the Business section, pouring my commitment to feminism and my passion for equal opportunity and dignity for all workers into them.
“I covered what was happening and also tried to empower people–women, minorities, the disabled, the elderly–who had very little positive exposure in the media. I made sure my columns and photos included a diverse population.”
The New York Times once called Kleiman “the undisputed godmother of workplace reporting.” She is a Peter Lisagor Award recipient for business journalism, and also has also received awards from the Illinois Associated Press and Illinois United Press International. Kleiman has been honored by Glamour and Mirabella magazines, the Coalition of Labor Union Women, Chicago Nurses Association, Metropolitan Chicago Healthcare Council, Mexican-American Business and Professional Women, the Girl Scouts of America and Chicago YWCA. She was the first “Today’s Chicago Woman of the Year,” one of 100 women to be commemorated with a monument in Chicago’s Loop, and was the Midwest Women’s Center 1995 Woman of Achievement.
Along with Jane Bryant Quinn, Kleiman has been one of the female business journalists of the past 40 years who has served as an inspiration to other females wanting to make a mark in the financial reporting world.
Well-known journalist Sydney Schanberg takes on the issue of real estate mogul Donald Trump and his recent libel lawsuit against New York Times’ reporter Timothy O’Brien for allegedly overstating his net worth in his book called Trump Nation.
As Schanberg notes, Trump is suing O’Brien and his publisher, Warner Books, for $2.5 billion, saying that his business has been affected by that amount. If Forbes magazine is to be believed, then Trump’s net worth of $2.7 billion has taken a serious hit.
Trump’s net worth is the reason for the lawsuit. O’Brien wrote in his book, which was also excerpted in the Times, that Trump’s net worth was in the hundreds of millions, not the billions.
Schanberg notes: “The suit contends that Trump provided O’Brien with all his financial documents and gave the reporter hours to pore over them. O’Brien says the documents he was shown were marginal or useless in determining net worth. He says Trump refused to let him see any pertinent documentsâ€”specifically his tax returns, bank statements, an accounting of his debts, and his casino reports to New Jersey’s Division of Gaming Enforcement.”
Schanberg also wrote: “At the start of his career in hype and carnival barking, the press fawned over him; he made great copy. It’s refreshing that reality has finally crept into the coverage.” He also claims that Trump’s attorney threatened O’Brien at a book signing last month.
Doesn’t Trump realize that all of this publicity is good for O’Brien’s book sales?
Read Schanberg’s piece in the Village Voice here.
According to L.A. Observed, Miriam Pawel applied for an employee buyout and it was accepted. The series on the United Farm Workers ran earlier this year and has been criticized by the union and by others in California, including in an opinion piece on the paper’s editorial page.
The paper fears that her departure will be used by the union to help “spin” their side of the story. Editor Dean Baquet said her decision had “absolutely nothing to do with the UFW series. I thought it was a terrific piece of journalism, and her decision to leave came before publication of the story.”
LA Obserbed writes: “In truth, the seeds of Pawel’s departure were sown after she lost her title as the assistant managing editor for Metro in 2004 and went back to reporting. I mentioned she was likely to leave back in the first post about the UFW stories on January 8. Newsroom speculation is that Pawel hopes to write a book, perhaps on the UFW.”