Tag Archives: New York Times

China

New York Times unveils hidden wealth for Chinese leaders

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The New York Times’s David Barboza published an incredible story Friday, Oct. 26 on the hidden wealth of Chinese prime minister Wen Jiabao’s family. In the magazine length piece, Barboza details the power, business dealings and wealth the prime minister’s family has amassed during his political tenure.

The story is an impressive piece of journalism, especially given the Chinese government’s censorship, lack of business disclosure and that top party officials and their families are exempt from disclosing their holdings. That’s right, Barboza pieced together all the information in a country that actively hides and covers up stories.

From the story:

Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership, an investigation by The New York Times shows. A review of corporate and regulatory records indicates that the prime minister’s relatives — some of whom, including his wife, have a knack for aggressive deal making — have controlled assets worth at least $2.7 billion.

In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners. Untangling their financial holdings provides an unusually detailed look at how politically connected people have profited from being at the intersection of government and business as state influence and private wealth converge in China’s fast-growing economy.

Unlike most new businesses in China, the family’s ventures sometimes received financial backing from state-owned companies, including China Mobile, one of the country’s biggest phone operators, the documents show. At other times, the ventures won support from some of Asia’s richest tycoons. The Times found that Mr. Wen’s relatives accumulated shares in banks, jewelers, tourist resorts, telecommunications companies and infrastructure projects, sometimes by using offshore entities.

That is an impressively long list of industries and sectors. No one can accuse these investors of not diversifying their holdings. The story goes one to chronicle how members of the family made money and the influence they wield to get ventures through the notorious Chinese bureaucracy.

History is full of leaders and their families using power and control to amass personal fortunes. The extent to which Wen’s relatives have made their fortunes is impressive since they’ve done it during a time when China is allowing more and more private investment.

That means they’re not only manipulating the system, they’re also taking advantage of mutual funds, pensions, private equity firms, banks and other global financiers. Everyone wants a piece of China, which is poised to become the world’s largest economy and continues to post impressive growth while the rest of the globe is stagnant at best.

The Times makes it clear there is no direct link between Wen and his family’s investments. In fact, it’s unknown how much he knows, but:

Because the Chinese government rarely makes its deliberations public, it is not known what role — if any — Mr. Wen, who is 70, has played in most policy or regulatory decisions. But in some cases, his relatives have sought to profit from opportunities made possible by those decisions.

The prime minister’s younger brother, for example, has a company that was awarded more than $30 million in government contracts and subsidies to handle wastewater treatment and medical waste disposal for some of China’s biggest cities, according to estimates based on government records. The contracts were announced after Mr. Wen ordered tougher regulations on medical waste disposal in 2003 after the SARS outbreak.

In 2004, after the State Council, a government body Mr. Wen presides over, exempted Ping An Insurance and other companies from rules that limited their scope, Ping An went on to raise $1.8 billion in an initial public offering of stock. Partnerships controlled by Mr. Wen’s relatives — along with their friends and colleagues — made a fortune by investing in the company before the public offering.

Much of that money for the Ping An IPO came from outside investors. It’s hard to compete on a field that’s so obviously tilted in favor of the home team.

But it’s not just foreign investors who are being harmed. It’s also the Chinese people in general. Many families still struggle to make ends meet while their leaders as amassing vast personal fortunes. As China modernizes and their economy grows, the once communist country is quickly creating the world’s widest income gap.

Using influence, information and connections to grow wealthy is as old as time. What’s concerning for investors and foreign businesses is that they can’t be sure of what they’re getting into and who actually owns it. It’s also concerning for a global economy that there’s a huge income and wealth gap being created in the world’s second-largest economy. It’s a shaky foundation in an already uncertain world.

David-Kocieniewski

NY Times names new investigative biz reporter

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New York Times business editor Larry Ingrassia sent out the following staff announcement:

We’re pleased to announce the David Kocieniewski will take a new assignment in Business Day, as an investigative reporter covering multinationals and how they operate around the globe.

David has displayed his great reporting chops in various assignments at The Times, most recently as Bizday’s tax reporter, winning the Pulitzer Prize for explanatory reporting for his series on tax avoidance, “But Nobody Pays That.”

In his new beat, David will delve into a wide range of issues that have become increasingly important in the global economy – everything from how companies sell their products (and to whom), to how they tailor their products for different (sometimes lower) standards and regulations, to how they treat their workers, to how they decide where to locate their manufacturing plants.

David will continue to help cover tax matters through the election and the end of the year.  But Bizday will be looking for a new tax reporter to fill his very big shoes.  Yes, covering taxes can be mind-bogglingly complicated, but it hugely important and can be fascinating for a creative reporter who likes to dig deep.  And did I mention that both of the last two tax reporters in Bizday (David K. and David Cay Johnston) both won Pulitzers for their coverage?  Internal candidates only for this guild reporting position.

FT logo

Who could be bidding for the FT?

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Amy Chozick of The New York Times talks with deputy business editor David Gillen about what might happen to The Financial Times now that the CEO of Pearson, its parent, is stepping down.

BarlettSteeleAward_2

NYTimes, USA Today and two North Carolina papers win Barlett & Steele Awards

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The New York Times, USA Today and a joint project by The Charlotte Observer and The (Raleigh) News & Observer won gold, silver and bronze awards respectively in the sixth annual Barlett & Steele Awards for Investigative Business Journalism, the Donald W. Reynolds National Center for Business Journalism announced Thursday.

Named for the renowned investigative team of Don Barlett and Jim Steele, whose numerous awards include two Pulitzer Prizes, these annual awards funded by the Reynolds Center celebrate the best in investigative business journalism.

GOLD: “Vast Mexico Bribery Case Hushed Up by Wal-Mart after Top-Level Struggle,” by David Barstow of The New York Times, received the top gold award of $5,000. Barstow obtained hundreds of confidential documents and interviewed important players in the company’s internal inquiry. He discovered Wal-Mart had received powerful evidence that its Mexican executives used systematic bribery payments totaling more than $24 million to obtain zoning rulings and construction permits.

SILVER: “Ghost Factories,” by lead reporters Alison Young and Peter Eisler of USA Today, received the silver award of $2,000. The series involved a 14-month investigation that revealed locations of more than 230 long-forgotten smelters and the poisonous lead they left behind.  Reporters used handheld X-ray devices to collect and test 1,000 soil samples to prove there was a serious threat to children living in dozens of neighborhoods.

BRONZE: “Prognosis: Profits,” by Ames Alexander, Karen Garloch, Joseph Neff and David Raynor, received the $1,000 bronze award for a joint project of The Charlotte Observer and The (Raleigh) News & Observer. Reporters dissected finances of large institutions through documents and sources to paint a compelling picture of nonprofit hospitals that function as for-profit institutions—often to the detriment of their care and charity missions. Discovered were inflated prices on drugs and procedures, lawsuits against thousands of needy patients and minimal charity care to poor and uninsured patients.

Read more here.

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Advertising Week! Cats and dogs living together!

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It’s Advertising Week 2012! Ok, so no one’s actually jumping out of a chair to run to New York, but Tanzina Vega and Stuart Elliot do have an interesting story in the New York Times about the five-day event.

As the world relies more on digital, companies are trying to figure out the best way to reach more segmented audiences, sometimes with shrinking budgets. This year’s conferences are increasingly focused on social, mobile and digital media – a far cry from the “Mad Men” days of beautiful print ads.

It was also a chance for social media companies like Facebook and Twitter to help advertisers better understand the value of advertising on social networking sites. From the story:

Facebook took the opportunity of a session at the Mixx conference to answer questions about the efficacy of buying advertising on its site — questions that were widespread even before the company’s disappointing initial public offering.

Brad Smallwood, director of pricing and measurement at Facebook, discussed the findings of a study the company hoped would change advertisers’ minds about depending on measurements like clicks to determine the success of campaigns on facebook.com. The goal is to have them perceive the social network more as a medium akin to television for branded advertising.

“If you ran a campaign in the last five years, you focused on clicks,” Mr. Smallwood said, but “demand fulfillment is only one piece of the marketing puzzle.”

“We have to provide a solution for the brand marketers of the world,” he added.

The study was conducted with a new Facebook partner, Datalogix, a company that measures in-store purchases. Fifty campaigns on Facebook were measured, for brands from giant marketers like Nestlé, Procter & Gamble and Unilever. When purchase data from stores was combined with data about ad impressions on Facebook, the study found that 70 percent of the campaigns enjoyed three times greater return on their budgets, and 99 percent of the sales came from consumers who did not interact with the Facebook ads.

I’m not sure that last part proves the point (unless it’s an error), but needless to say, advertisers are definitely looking for more engagement and better ways to measure their success.

I’m bringing this up since the topic of advertisers was discussed by one of the more interesting panels at last week’s Society of American Business Editors and Writers conference last week. The person with some of the most radical ideas: Bloomberg Businessweek editor Josh Tyrangiel.

Web advertisers are struggling and seem to be constantly chasing two-year-old trends, Tyrangiel said. For example, right now the hot buy is video and video pre-roll, but adding a 30-second advertisement to the beginning of every video is bad for advertisers and creates a terrible user experience, he said.

Tyrangiel said he’d like to see advertisers spend more money and not just slap the same banner ad up on every site. Companies who spend more to create a custom ad experience on different sites will “nail it on engagement.” With the rise in specialized content and people willing to pay for the information they want to receive, advertisers will have to consider a different approach to their online and mobile campaigns, Tyrangiel said.

And if customization is the key for online advertisers, then companies need to figure out how to better use social media tools to engage customers. From the Times story:

At another Mixx presentation, Joel Lunenfeld, vice president for global brand strategy at Twitter, shared data about the relationships people have with brands on twitter.com.

Nine out of 10 people on Twitter follow at least one brand, Mr. Lunenfeld said. Although most said they did so for promotions, coupons and free products, he said that 87 percent said they followed brands for fun and entertainment and 80 percent said they did so for access to exclusive content.

Among the examples presented by Mr. Lunenfeld were how brands like Panasonic and Procter & Gamble use Twitter. Perhaps most interesting was Mr. Lunenfeld’s connection between Twitter posts and television commercials.

“Twitter is the EKG of action for television,” he said, adding that 50 percent of people who use Twitter do so while watching TV.”

I find this factoid about TV and Twitter staggering. Smart companies don’t just slap a Twitter icon on the bottom of advertisements; they’re finding a way to engage the audience. And another key question for companies is how to integrate all these platforms to create a cohesive experience.

Forbes.com contributor Rhonda Hurwitz wrote in a recent post that companies typically fail with social media in one of three ways. They either outsource too much, put the department responsible for social media off to the side or don’t engage employees in the process.

As companies spend more on social advertising – it’s expected to more than double during the next five years to 18.8 percent of total marketing spend, Hurwitz said citing CMOsurvey.org.

That’s a lot of people throwing money as something not fully a part of the business. And for those who write about advertising and marketing, it’s important to pay attention.

 

 

 

Diana Henriques

Diana Henriques receives SABEW award

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Diana Henriques, reporter for The New York Times, received the 22nd SABEW Distinguished Achievement Award at the organization’s fall conference on Thursday night.

Each year the honor, SABEW’s highest, is given to someone “who has made a significant impact on the field of business journalism and who has served as a nurturing influence on other in the profession.”

Henriques has written four books, including the most recent “The Wizard of Lies” about Bernard Madoff.

She started at the Times in 1989 and specializes in writing about white-collar crime, market regulation and corporate governance. She was a member of the teams that were Pulitzer Prize finalists for coverage of the 2008 financial crisis and the Enron scandal.

She serves on the SABEW board of governors and the board of trustees at George Washington University.

To close the evening, Jill Abramson, executive editor of the Times, interviewed Henriques about how she got into journalism and accountability.

When asked what drew her to business journalism, Henriques said it was a “fascination with the con artist” and a low threshold for outrage.

“It’s a morally fascinating environment,” she said. “If profit maximization is the name of the game, how do you keep people honest? How do you keep them from maximizing their own profit at your expense.”

Of business journalism, Henriques said, “It’s an enormous amount of fun and enormously important that people understand it.”

The conversation then turned to Henriques’ book on Madoff and how she got him to talk to her. (Madoff is no longer speaking to her.) Her advice was to be persistant and not take no for an answer. It took months to convince him and his lawyers to cooperate with her.

After finally getting approval to meet with him, she recounted the trials of going into the prison, without a recording device, and having the prison approve pen, pad and files to be brought into the visitor’s room.

She also discussed how she connected with him and the questions she asked Madoff in the short period of time she had with him. Some of the harder questions, she saved for the end of the interview.

One was about the beginning of the fraud. Madoff told her he couldn’t remember the moment when he turned from being an honest broker to running a Ponzi scheme.

Henriques said she didn’t believe it possible not to remember the moment and that’s when she realized he was lying about how it started. This was the issue that caused Madoff to stop talking to her — not the book’s publication.

Deborah_Needleman_headopt

WSJ. editor leaves for NYT’s style magazine

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Deborah Needleman, the editor in chief of The Wall Street Journal’s style magazine WSJ., has been hired to run T: The New York Times Style Magazine.

Christine Haughneyof The Times writes, “Ms. Needleman will replace Sally Singer, a former Vogue editor who left The Times in August after running the T magazines for two years.

Jill Abramson, executive editor of The New York Times, said she expects Ms. Needleman to help drive T’s expansion.

“‘Deborah is a creative and innovative editor with an impeccable sense of style and design,’ Ms. Abramson said in a statement. ‘As we look to expand and extend T and continue to evolve it for our loyal and sophisticated New York Times audience, we will rely on Deborah’s broad range of experience and creative energy. She is coming on board to strengthen the franchise and re-imagine its future on all platforms.’

“In addition to running the Journal’s style magazine, WSJ, Ms. Needleman oversees the paper’s weekend lifestyle section, called Off Duty. Earlier in her career she founded the style and decorating magazine Domino, and was an editor at large for House & Garden. She also co-authored ‘The Domino Book of Decorating’ and wrote ‘The Perfectly Imperfect Home.’”

Read more here.

Kevin-Delaney_0

Covering the world of business, online only

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David Carr of the New York Times writes Monday about how The Atlantic’s new business site Quartz aims to change how business news is delivered.

Carr writes, “Quartz is the company’s effort to take advantage of a changed environment, not just in publishing, but in the world at large. The editorial product is aimed at the front half of airplanes that crisscross from Zurich to São Paulo to Singapore, serving executives who are increasingly having similar conversations no matter where they land. It was built for tablets, conceived as a mobile product for mobile people.

“‘This is a global audience, one that is growing very rapidly,’ Mr. Smith said. ‘When you walk through a busy Asian airport, nobody is talking about or thinking about the American economy. The world has gotten much bigger than that.’

“Quartz is staffed by 20 journalists, including Kevin Delaney, its editor in chief, who was managing editor of The Wall Street Journal Online, and Gideon Lichfield, global news editor, who was deputy digital editor and media editor at The Economist. Of course, Quartz won’t have the financial data resources of Dow Jones, Reuters or Bloomberg, but Mr. Delaney suggested that data is ubiquitous while real insight on the news is a rare commodity.

“‘Any good blog or magazine has defining obsessions, and we’ll structure around the ones that we think smart, globally minded people will be interested in,’ he said.”

Read more here.

Deborah Needleman

WSJ. editor offered job as editor of T magazine

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Deborah Needleman, the editor of WSJ. magazine, has been offered the job as editor of the New York Times’ T magazine, reports Joe Pompeo of Capital New York.

Pompeo writes, “It’s unclear what the exact status of the deal is; sources cautioned that anything could still happen. And Needleman, reached on her cell phone, hung up before I could ask. Later, responding to an email about whether she’d accepted an offer from the Times, Needleman wrote: ‘That is not true.’ She did not immediately respond to follow-ups asking for confirmation that the offer was on the table, but I’ll update if I hear back.

“The Times declined to comment on the matter. A spokesperson for The Journal likewise did not immediately have a comment.

“The timing, of course, is a bit awkward: It’s Fashion Week, for which Needleman is WSJ.’s ambassador. But Needleman had been floated early on as a possible successor to Singer. And getting her would be a huge coup for the Times, which has been struggling to increase its advertising revenue with T as the Journal is making significant gains under Needleman with WSJ. The Journal magazine was launched as a major initiative of the company in 2008, after Rupert Murdoch took over the paper. Needleman, formerly editor of the late Conde Nast shopping title Domino, became the editor of WSJ. in 2010.

“Both magazines are meant to bring new revenues to their parent publications with lucrative luxury advertising, commanding high prices for large, glossy pages full of high-end fashion and design photography that doesn’t share space with the type of horrifying news from around the world that has often repelled luxury brands.”

Read more here.

Sheila Hawkins Harris

The ties that connect Nelson Rockefeller, Henry Luce and the Times’ Gardiner Harris

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The bride, according to news reports, wore an ivory antique-lace blouse and a blue and ivory silk brocade skirt belonging to her maternal grandmother, Elizabeth Roberts Clark.

The groom, a seventh-generation Kentuckian, was an award-winning journalist and editor – a protégé of Henry Luce – the founder of Time, Fortune and Life magazines.

Both bride and groom had been married previously, and among those participating in the service conducted in the bride’s Manhattan home were the groom’s three children, Anne, Crane and Gardiner.

At the time, in March 1979, Gardiner was 15 years old.  He was raised on his dad’s Todd County (Ky.) farm, where he learned to cut and hang tobacco.

It’s hard to imagine what must have been careening through Gardiner’s head on that festive Saturday in the Big Apple – only slightly more than two years since his mother, Sheila Hawkins Harris, died of cancer at age 50.

What a whirlwind experience it must have been to leap from the fields of a Kentucky tobacco farm to the upper echelons of Manhattan society, all while coping with the loss of his mother and the creation of a new, merged family identity.

Gardiner’s new step-mom, Ann R. Roberts, went by and still uses her grandmother’s maiden name.  Ann’s mother, was Mary Clark (Roberts) Rockefeller, wife of Nelson A. Rockefeller, former vice president of the United States and governor of New York State.  Ann’s politician father was a grandson of John D. Rockefeller, founder of Standard Oil Co. and progenitor of one of the world’s great family fortunes – worth nearly $200 billion in 2012 dollars.

At the time that Gardiner’s father, T. George Harris, married into the Rockefeller clan, Gardiner’s new step-mom was president of the Rockefeller Family Fund. (Nelson had died only two months earlier.)

Interesting family ties?  No doubt.

But is this background on Gardiner Harris, now 48, and the recently named India correspondent for The New York Times, anyone’s business – especially his readers and story subjects?

For the more than a dozen years that Gardiner covered science, medicine and food for the Times – and prior to that The Wall Street Journal – did anyone of the folks he contacted professionally or those who read his probes of the pharmaceutical industry and public health have a need to know about these aspects of his personal life?

Is their a right to personal privacy on the part of influential journalists, whose job it is – in part – to explore similar possible influences on the lives and actions of public figures, especially those in positions of prominence, such as the CEOs of major corporations and elected officials?

I have found no mention of Gardiner’s family circumstances in his official Times biographies over the years or in promotional materials for his first novel, Hazard, published in 2010.

A 2008 Times “Ask a Reporter” official bio does note that Gardiner was captain of the swimming team at private Trinity (High) School in Manhattan and that he sang in the choir and was active in theater.

Neither Gardiner nor the Times apparently deemed it any of the public’s business that through his father’s marriage, Gardiner’s family circle included some of the largest shareholders in Exxon Mobil Corp., and the owners of a 3,500 acre estate in Westchester, N.Y., on the Hudson River, that includes a 50-room mansion, a private golf course, six swimming pools and 80 miles of trails and carriage roads.

According to The Wall Street Journal, Gardiner’s step-mom – representing the Rockefeller families’ interests – attended and spoke at the May 2009 annual meeting of Exxon Mobil.

In thinking about his mother’s passing when Gardiner was only 13 years old, one might wonder if all the health officials and pharmaceutical executives that Gardiner interviewed prior to his reassignment to India had a clue about who – if anyone – Gardiner blamed for his mother’s death?  Did Gardiner harbor resentment toward the medical establishment? And, even if he did, did it impact his reporting?

Would any different business-health reporter, say one whose middle-class parents are both still living and well, have reported any differently had they – not Gardiner – been assigned to cover the stories he was assigned to chronicle?  If the sources he interviewed had known his family history, would they have treated him any differently?  More openly perhaps?  Less openly?

Who can say?

It feels like being a quasi-Rockefeller would make some difference in how a journalist views everyday topics, such as executive compensation and environmental and health regulation.  Ditto, having such a harsh exposure to the medical establishment at such an impressionable age might color one’s thinking when covering that same establishment as an investigative reporter.

But I’m not a psychiatrist.  I don’t know if such a distinctive background would make Gardiner (or anyone else) more likely to be sympathetic on certain issues or more naturally antagonistic.

In the end, I simply sense that if I were briefing a Fortune 500 CEO who is about to sit for a long interview with Gardner, I would feel I am doing my job more thoroughly if I mention his family history ahead of briefing the CEO on Gardiner’s role on the Trinity swim team.

Speaking of thoroughly briefing a Fortune 500 CEO.  In my next column, I’ll give you a head’s up on why you might remind your executives to avoid disparaging the global-warming crowd on your company’s next high-level visit to Bloomberg News.