Tag Archives: Media

Did Bethany McLean Even Break The Enron Story?

Posted on by

n “Enronathon,” Seth Mnookin of The Wall Street Journal suggests Bethany McLean wasn’t quite the first person to break the story of Enron…and that she had a good bit of unacknowledged help:

“If journalism were in the Olympics, the Enron story might well be pairs figure skating. Bethany McLean, the young Fortune writer who first wrote about Enron’s shady finances a year ago, has, of course, already been awarded the gold.

And with that have come the requisite endorsements: In the past two months, she was hired as a consultant by NBC News and shared in a $1.4 million deal to co-author a book on the scandal. But another team is also vying for top honors — amid complaints about shoddy judging.

Reporters and editors at the Wall Street Journal believe their work has been unjustly ignored, with some wondering whether Pulitzer rivals like the Washington Post and the New York Times have gone out of their way to praise McLean.

Enron did not collapse under its own weight,” says Jonathan Friedland, the Journal editor who’s been in charge of much of the paper’s Enron coverage. “Without our reporting, I don’t think any of this would have happened.”

In response, McLean’s former editor at Fortune and current Time Inc. editorial director John Huey says, “Bethany was the first journalist in a widely respected national publication to suggest that the emperor at Enron had no clothes.” (Not that her own publication took much note: Fortune had to airbrush out Kenneth Lay from a November SMARTEST PEOPLE WE KNOW cover photo.) Let’s recap: In September 2000, Jonathan Weil wrote a long story for the now-defunct Texas edition of the Journal about odd accounting at various Texas-based energy traders; it included four paragraphs on Enron.

James Chanos, a well-known short-seller who was one of the first to start unloading Enron stock, says he got interested in the company after reading Weil’s piece.

Almost six months later, in March 2001, the then 30-year-old McLean (who Times columnist Maureen Dowd has suggested will be played by Alicia Silverstone in the inevitable movie) wrote her little-noticed 2,400-word story, “Is Enron Overpriced?”

Then, in October, the Journal ran a three-day series by Rebecca Smith and John Emshwiller detailing Enron’s unorthodox partnerships. Their articles are seen by many on Wall Street as ultimately sinking the company. Weil’s partisans think he should get credit for crossing the finish line first (an item, “Credit Due,” ran in “Page Six” recently).

But even Chanos says that “Bethany’s piece was the first one to raise really specific questions.”

Most of the Journal‘s brain trust, though, are plugging Smith and Emshwiller, who, of course, wrote their stories in 2001 and are thus eligible for this year’s Pulitzers. “The Fortune story basically said this is a company that nobody understands,” says Journal deputy managing editor Daniel Hertzberg. “It didn’t show what was wrong with the company. It took Becky and John to do that.” That’s the competition.

Now for the judging. In January, Howard Kurtz, the Washington Post‘s media writer, highlighted McLean as the first journalist to ask questions about Enron. Ten days later, the Times‘ Felicity Barringer wrote her profile of “the financial reporter everyone loves to lionize.” While McLean was being anointed as a journalistic sex symbol in a story hitherto dominated by a balding Kenneth Lay, folks at the Journal felt they were being robbed:

“People are trying to queer the Pulitzer pitch for the Journal,” says one editor there. That’s sour grapes, counters Kurtz: “In this case, a 31-year-old reporter beat them and the rest of the world by a considerable margin.”

In a bit of circular logic endemic to media reporters, Kurtz adds, “I must have been onto something, since after my piece appeared, she was profiled in the Times, given a contract by NBC, and offered a book deal.” As for McLean, she seems slightly embarrassed by all the attention. “I’ve told people I’ve gotten too much credit,” she says. “I did raise alarm bells, but I didn’t know the half of it.” “Read more: Enronathon http://nymag.com/nymetro/news/media/features/5756/#ixzz0dvvQZvUI

My Comment:

Please note also that the book was co-authored with Peter Elkind, who isn’t attributed in many of the stories.

Not that I’m all that sympathetic to the Wall Street Journal on the Enron story, since they don’t give credit to the alternative press either, and what goes around comes around. (My own experiences of plagiarism from articles and books can be found at the tab, ABOUT –  half-way down the page).

If liberal columnists steal without attribution even from liberal bloggers, can you imagine the cone of silence that descends when the victim isn’t liberal? Libertarians and conservatives get stripped clean by the vultures of the “free” (of all ethics) press.

With them, it’s never about public welfare or the good of the nation, even though that’s the standard that they like to foist on other people. Even with the global economy melting down under their noses, they’re jealous of sharing the information that activists, bloggers, and ordinary citizens give out generously for the common good.

(Again, there are honorable exceptions).

In short, they make up credit – just like the Federal Reserve.

Or they steal it – like their banker friends.

Or they collude with each other to “take-down” anyone not part of their game – just like their hedge-fund allies.

And no matter what, they always cover for each other.

Notice how other people’s personal lives are fair game for stalking, extortion, and exposes, but never theirs, as this piece on Maria Bartiromo suggests.

(Ms. McLean figures in that piece too. In fact, a brief google tells us that McLean´s had plagiarism problems and conflicts of interest more than a couple of times).

Item One. Here’s an earlier complaint about Fortune magazine plagiarism. A Fortune writer apparently used material from interviews and articles by an outfit called Annex Research, without attributing or acknowledging it. An email to Fortune got no response, either. The Fortune writer? Bethany McLean…

Item Two:  McLean at it again, swiping material from the Orange County Register Weekly

Item Three: Libertarian economist, Bill Anderson, in a piece called “The Most Dishonest ´Journalists´ In the Room,” describes how McLean was having a romantic relationship with the lead prosecutor in the Enron trial, Sean Berkowitz, before the sentencing, while she was covering the trial and getting out the government´s side of the story. Omitted in that story as well  was the disturbing fact that the prosecutor had suborned perjury in order to get a full conviction of Jeffrey Skilling.

And that´s besides Item Four….

That fetching stock-manipulation thing she had going with hedge buddies Marc Cohodes and Jim Chanos.

No wonder none of them can get the story right.

And no wonder they still won’t get it straight, not until after activists, or bloggers, or less-known writers at their own outfits or elsewhere do the hard work. Then they’ll slide in to take the credit.

Nice work.

Just as cushy and exploitative as anything on Wall Street, in its way.

Business men and real capitalists do the hard work of producing. Then the faux capitalist money-men and their shills in government rush in to cream the money off and cover themselves with glory via their mouthpieces in the shill media.

No wonder the media doesn’t understand capitalism. No wonder they love the crony capitalist bordello they call home. It’s the only one they know, the poor things.

[Again, they really ARE a minority of journalists, just a powerful minority. There are hundreds of honorable hard-working journalists who write their own stories rather than steal them off the net, whose names never get into headlines, and who wouldn’t be caught dead behaving like this].

And don’t miss the other telling details:

Enron’s Ken Lay was a Republican.

Goldman Sachs is a Democrat cash-cow, for the most part.

Jim Chanos, hedge-fund master mind, used to work at Deutsch Bank.

And Bethany McLean was once a Goldman Sachs banker….. (Maybe that explains her kid-glove treatment of Hank at Vanity Fair).….

….And her equally interesting white-washing of Spyro Contogouris, who colluded with hedge funds to attack Prem Watsa’s Fairfax Financial.

Honestly.  Rielle Hunter has nothing on any of these gold-diggers.

Climategate: Indian Environment Minister Says IPCC Wrong On Glaciers Melting

Posted on by

There are some interesting developments on the climate-gate frontier.

Apparently, the Himalayan glaciers aren’t melting, after all.

Or at least, not as fast as the IPCC (the Intergovernment Panel on Climate Change , the UN body tasked with climate change) thinks they should. Continue reading →

Doug Valentine On The Impotence Of Progressives

Posted on by

Doug Valentine offers a piece on the futility of much activism.

(Please note: The opinions in this piece are not mine. They are Doug’s. But his point was not to exclude himself or any other writer who claims to be an activist. Its something all of us feel one time or other. I know I do. Frequently. At some level, what writers do is perfectly useless and only a form of self-advancement, if that).

Why Don’t All You People Just Shut Up!

“As my friend Roger says, ‘Never have so many held Washington hangers-on office for so long and talked endlessly to each other for so much money and done so little as the Republic rotted. The utter impotence of the progressive think tanks, lobbies, etc. is a great unwritten story.’ Continue reading →

More From The Easter Bunny…

Posted on by

I’ve been curious about the identity of the Easter Bunny, although, strictly speaking, it doesn’t affect the validity of the anti-NSS campaign.

The Bunny has zeal. Bunny-speak is brave, plain-spoken and easy to read:

“The SEC was created to reassure the unwashed masses that it was safe to invest in the markets, after the Great Crash of 1929 proved it was anything but. It was a PR firm for Wall Street, slipped through as an alternative to a regulator who would or could actually do anything to curb the real crookery on Wall Street. At the helm was one of the greatest stock manipulators of all time, Joe Kennedy, who along with Percy Rockefeller and others amassed incredible fortunes running stock pools in the 1920’s.

For those who don’t know what a stock pool is, it’s a hedge fund whose sole purpose is to manipulate stocks, first up, then down, making money in both directions. Which was enormously lucrative for the operators of the pools, and the investors therein – the only losers were always the general investing public, and other participants who weren’t on the inside. I would argue that’s precisely what some of the most lucrative hedge funds of modern times also do – there aren’t a lot of ways to beat the market with 30 or 40% returns, year after year, that don’t involve larceny and criminal behavior, at least in my study of the last century of market history.”

The Bunny doesn’t mince words:

“I concluded a while ago that the rot in the system is pervasive, runs from top to bottom, and is largely unfixable. You have oligarchs, powerful and rich families and corporations, who are having their bought-and-paid-for politicians operate the country for their personal enrichment, at the direct expense of everyone else…..

“My point is that absolute power and wealth enable one to control the safeguards that were put into place to protect populations. By co-opting politicians and capturing regulators, the bad man is allowed to come into the room and do whatever he wants, whenever he likes – and the captured media merely pretends that it can’t hear the cries for help or investigate the countless damaged lives. It’s as bad as Russia under the communists, or perhaps worse.”

The Easter Bunny stays under wraps for a reason I can guess… but maybe not express publicly.

I asked a couple of people in a position to know if it was so-and-so. They denied it stoutly.

I could, of course, go the route of the New York press, which likes to stake out, tap phones, access medical records illegally, go undercover,or violate court orders, or any number of other things.

Including hounding erstwhile presidential candidates long after they have ceased to be of political importance.

(If only John Edwards knew how lucky he was to avoid a life as a national figure, official prey for every predator with a pen)

But that particular game doesn’t seem worth either the moral or social candle. And, most often, almost as much can be learned by reading between the lines and studying public evidence as by sleuthing.

But, while sleuthing only requires elbow grease and chutzpah, analysis requires a degree of knowledge, judgment, and intellect that is simply beyond the pay-grade of some journalists, however exalted their professional status. These petty despots have pens and they have power, but they have no clothes, as surely as the emperor they shill for.

A few have figured that out. More will follow suit.

To make the story short, I went and reread a few public records that reference NSS and replayed the stout denials in my mind, recalling as best I could the silences, the gaps, the tone of the answers. I reread The Bunny carefully.

He’s an erudite man, it’s clear. I came to my conclusion about who he was. Right or wrong, time will tell.

I only bring it up to show how looking at the big picture and developing the correct perspective can be as useful and is far more cost-efficient than private-eye sleuthing that reporters think is the one and only credible way to tell a story. Baloney. And morally dangerous baloney. Dirty tricks, even for some intended good you believe in, inevitably corrupt the people who play them, in the same way  black ops corrupt intelligence agencies.

Sleuthing is good to add the footnotes and the QED at the bottom of a piece of research and critical analysis. But as a way of curing social cancers – and financial racketeering is more social cancer than legal infraction – it has limited use. By the time you have written your expose to your editor’s satisfaction and done what it takes to avoid libel litigation, the story is old, the crooks have covered their tracks in paper dirt, and a new game is afoot.

Far better to play Sherlock and deduce your conclusions. Leave the investigative reporters to do their thing. You do yours but you do it to appease your own conscience, out of love for what human beings might be (hard to love them as they are, frankly), out of sheer intellectual curiosity (a great part of what drives me), glee at pelting stones at arrogant predators, and…yes…because after life’s fretful fever, we really don’t know what comes next. It might be wise to hedge our bets, as Pascal did.

There may or may not be Judgment Day. But should it roll around, we want to be able to pass muster. Well, at least, we want the She: Who Is Probably Not There to know we tried…

And  then of course, we write mainly because it’s fun…

How, my dear Mary, — are you critic-bitten
(For vipers kill, though dead) by some review,
That you condemn these verses I have written,
Because they tell no story, false or true?
What, though no mice are caught by a young kitten,
May it not leap and play as grown cats do,
Till its claws come? Prithee, for this one time,
Content thee with a visionary rhyme.

(Percy B. Shelley, “The Witch of Atlas”)

Bill Anderson On The New KKK: Kleptocrats, Kartels, and Kon Men

Posted on by

“As I see it, the bankers are not clueless at all. They understand the game, they understand that the government is going to clean up the mess that they and their friends in Congress and the Bush and Obama administrations have created, and they understand that their antics are going to give them what they always have wanted: a nice, cozy, financial cartel which will provide sweet political contributions for the political classes, bonuses and high pay for themselves, and very little for everyone else. Continue reading →

Goldman Charity Prompted By PR Concerns

Posted on by

RaceTotheBottom, a law blog on corporate regulatory issues, has this on the latest PR move  by Goldman Sachs, one we noted in our previous blog post on Haiti. which mentioned the donations made by the big banks.

“The latest effort by Goldman to ameliorate the criticism is apparently to require top officers and managers to donate a certain percentage of their compensation to charity. As the NYT noted:

* While the details of the latest charity initiative are still under discussion, the firm’s executives have been looking at expanding their current charitable requirements for months and trying to understand whether such gestures would damp public anger over pay, according to a person familiar with the matter who did not want to be identified because of the delicacy of the pay issue.

Apparently Bear Stearns had done something similar in the past, requiring the top 1000 employees to contribute 4% of their compensation to charity.

The specifics have apparently not yet been determined. Nonetheless, unlike the stock bonuses, the approach effectively reduces the amount of compensation paid to each employee.

Goldman could have considered reducing the amounts paid in compensation and contributed the saved amounts directly to charity. The financial institution in fact added an additional $200 million to its charitable foundation. But making direct contributions would have potentially violated state law.

Corporations are obligated to profit maximize. Some portion of the company’s profits can be donated to charity. Companies may do so, however, only if there is a business benefit. See RMBCA § 3.02(15)(permitting “donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation.”). For modest amounts of contributions, the business benefit can be vague, with enhanced reputation in the community enough of a justification.

For more significant amounts, however, there must be a sufficient nexus to the business of the company. Had Goldman chosen to donate 5% of the amount left aside for compensation, an amount that would probably exceed $1 billion, it would have needed to show some type of meaningful connection to its business. Any failure to do so would likely generate lawsuits from shareholders alleging that the board had failed to engage in the required profit maximization.”

My Comment:

Isn’t this exactly why the more laws you have on the books, the more complicated your problems get?

Think about it. Goldman can’t make direct charitable contributions, because companies are obligated to maximize profits. Why are they obligated to maximize profits?

Because that’s what shareholders are due, per company law.

You might ask whether maximizing profits is always in a company’s best interests, versus building long term value or market share or any number of other things that stake-holders in the company might value more than high returns, but those things don’t count, because that’s how a law works – like a blunt instrument.

And then when managers focus on these short-term horizons and start doing legal (or illegal) tricks to show quick gains on their books, then we need another set of laws to curb them, with incentives running in the opposite direction….

The end result is a muddle of misplaced directives and restrictions that distort the market.
And people criticize the free market!

Sith-Lord Sweep: AG’s Pending Indictments Cover Major Hedgies, Journalists, and Regulators

Posted on by

Corporate finance generalist, investment banker and expert in derivatives, Austin Burrell, sums up last week’s announcement by Attorney-General Eric Holder that there are 5000 pending indictments [sic] arising out of the investigation of fraud in the capital markets:

[Note: the DOJ is involved in some 5000 odd cases of fraud related to the financial industry… Continue reading →

Obama’s Man In China – Jon Huntsman Jr.

Posted on by

I’ve been thinking that any real change in the US..or anywhere else… will only come from outside politics, from business, or from technology, or from a cultural trend (such as, off-grid living) or from a spiritual movement. But occasionally, I wonder if some politician could actually push things in a new direction, make some kind of real difference.

Recently, some people have been touting a GOP  dark horse who´s joined Team Obama. That’s former Utah governor and current Ambassador to China, Jon Huntsman Junior, who even struck some writer at the Washington Post as a potential ‘next big thing.’ Continue reading →

Pankaj Mishra On The Strength Of Passivity

Posted on by

The old world, with its failures, weaknesses, and poverty, has at least a proper estimation of the limits of human action, says writer Pankaj Mishra in an oped in the New York Times, last August:

“India may have been passive after the Mumbai attacks. But India has not launched wars against either abstract nouns or actual countries that it has no hope of winning or even disengaging from. Another major terrorist assault on our large and chaotic cities is very probable, but it is unlikely to have the sort of effect that 9/11 had on America. Continue reading →

Kingsford Capital And The Captured Media

Posted on by

Mark Mitchell at Deep Capture has some interesting details about the extensive influence of hedge-funds, specifically Kingsford Capital, on the reporting of stories in the financial press:

“Another focus of my investigation at CJR was the appalling bear raid on a collectibles company called Escala. Not only was Escala the victim of massive amounts of illegal naked short selling, but a hedge fund convinced the Spanish government that Escala’s parent company, based in Madrid, was fleecing investors in philatelic collectibles. Continue reading →