In his “Stories I’d like to see” column, journalist and entrepreneur Steven Brill spotlights topics that, in his opinion, have received insufficient media attention. This article was originally published on Reuters.com.
Paging Bloomberg’s Winkler and Pearlstine
This story that ran in Saturday’s New York Times is the best one yet on the abuse of Bloomberg’s customers’ private information by Bloomberg, the financial information powerhouse founded by New York City’s mayor. As first reported in the New York Post last month, reporters at the Bloomberg news service made a practice of checking the customer service files of bankers and others subscribing to Bloomberg’s ubiquitous and extremely expensive — about $20,000 a year each — financial data information services.
For example, they reportedly figured out that the “London Whale,” who was involved in losing billions for JPMorgan Chase, had been fired by seeing that he had not been logging on to his Bloomberg account. (Bloomberg is a competitor of Thomson Reuters, which owns Reuters — where this column appears.)
Saturday’s Times story fills in the narrative of how various Bloomberg customers, led by Goldman Sachs, pooled their suspicions (mostly arising from Bloomberg reporters unabashedly citing log-on information when asking the banks’ spokespeople questions, such as the one about the Whale). They then realized that this was a regular practice and complained to Bloomberg Chief Executive Officer Dan Doctoroff. (New York Mayor Michael Bloomberg officially left the company when he took public office and has not been running his business day-to-day while he serves at City Hall.)
Doctoroff has apologized, saying the practice was a mistake. Some of the company’s major customers, like Goldman and JP Morgan, have at least publicly said they accept the apology. But this should hardly be the end of the story.
First, for reporters to get that customer data was no casual exercise. It involved using different codes to access the company’s customer service database and then another set of keyboard maneuvers to home in on a particular user. So this was hardly an accident or the work of one rogue reporter.
Second, Bloomberg is known for its rigorous training of reporters and a top-down control regime run by long-time editor in chief Mathew Winkler. So, if I were reporting this story, I would ask how much Winkler knew about this and whether he oversaw the training of his reporters to do the complicated maneuvers involved in pulling it off. He has not provided anything close to a full explanation of what happened.
In fact, I can’t find one interview that Winkler has given since the scandal broke. He has only written an op-ed article that appeared in Bloomberg View, the site’s commentary section, saying, in part, “The error is inexcusable.” What does he think the “error” was? And who made it?
Third, those $20,000 a year terminals are the core of the Bloomberg business that has made its proprietor, the mayor, one of America’s richest men. Everything else — including the news service whose reporters were spying on those $20,000 a year customers — is meaningless by comparison. At least where the company’s bottom line is concerned.
So, ethical and legal issues aside, why were Winkler and his people allowed to endanger that core business with such a fundamental violation of trust? Bloomberg’s customers have long thought the $20,000 price was abusive enough, without knowing that they were paying $20,000 for the privilege of being monitored.
Why would any business risk killing its franchise this way?
Another question is why Winkler hasn’t been reprimanded, much less fired, or even publicly criticized by Doctoroff. Which to me raises the question of who really is running Bloomberg. If the mayor is still ultimately the person in charge, reporters could examine why he has allowed Winkler to survive a mess that has undermined one of media’s richest franchises?