Top dog Matthew Winkler, editor in chief and co-founder of Bloomberg News, right, and Howard Buffett, president of the Howard G. Buffett Foundation and son of billionaire Warren Buffett, left, listen during a panel discussion on women in the media in 2011. (Andrew Harrer / Bloomberg via Getty Images)

For foreign correspondents in China, breaking stories that the censored Chinese press can’t touch has long been a core part of the mission.

In the recent past, this often happened via behind-the-scenes cooperation: Stymied Chinese investigative journalists discreetly shared details with foreign counterparts, reasoning that at least the news would be on the record somewhere, and with a bit of luck, word might eventually filter back into China.

I was the occasional beneficiary of this sort of thing during six years of reporting from China for The New York Times, from 2003 to 2008. When censorship made it impossible for local reporters to write about modern slave labor in the brick-making industry, for instance, local reporters passed along information to me and other foreign correspondents in the hopes that international coverage would blow the story open. And it did.

In 2012, though, this newsgathering model itself was blown away. Against the backdrop of a once-a-decade leadership transition in China, three big American news organization, one after the other, began breaking historic ground with original investigative work, ground on which no one in the Chinese media, however plucky, had ever dared to tread.

This new wave of extraordinary American reporting was far more than coincidence, but the result of fierce competition between news organizations over a critical story: political maneuvering and corruption at the highest levels of the Chinese political system—a subject that had traditionally been almost entirely hidden from the world.

The competition would yield unprecedented scrutiny for Chinese political and economic elites and a new cornucopia of information for readers. And it would tip one news organization into crisis from which it has not yet emerged.

Like a car wreck in slow motion, the Bloomberg team that produced the investigative work began falling apart.

Two of these organizations, The Wall Street Journal and The New York Times, were already long-established leaders of international reporting. Between them, they had racked up six Pulitzer Prizes for International Reporting from China alone. By comparison, the third player, Bloomberg News, a wing of financial-data giant Bloomberg LP, was an upstart. And yet it was Bloomberg, with its reporting on the immense, shadowy fortunes of close relatives of the incoming Chinese president, Xi Jinping, that many people who follow China closely believe broke the most ground and deserved the news industry’s greatest plaudits.

When it was instead the Times that won a Pulitzer from China—yet again—in 2013, Bloomberg reporters and editors described an immense letdown. But they were rallied by the company’s editor in chief, Matthew Winkler, who urged the China staff to keep its competitive fires stoked. According to one employee, he wrote to the team that produced the work on Xi, calling their reporting “fabulous stuff,” adding, “we’ll just keep going.”

Encouragement like this quickly led to another long-term reporting effort into the morass of political corruption at China’s highest levels. In a stroke, Bloomberg was becoming an important player in international news—and now, just as suddenly, it has tainted its corporate identity and journalism brand to a degree that could last for years. All because of its China coverage.

The crisis blew into public view last November when The New York Times, followed by the Financial Times and others, reported that a big, new enterprise project from Bloomberg, said to have documented an extensive web of corrupt ties between one of China’s wealthiest businessmen and elite politicians, had been spiked at an unusually late stage in the editing process. The reported spike came after an extensively footnoted version of the story had been fact-checked and pored over by company lawyers, and after members of the reporting team had been praised internally for yet more stellar work. The Times reported that Winkler, in a conference call with reporters, defended the decision not to publish the story by likening the situation to the need for self-censorship by foreign bureaus in Nazi Germany to preserve their ability to continue reporting there. That reasoning was controversial enough, but a Bloomberg executive would later let slip a motive that was even more problematic.

Howard W. French is an associate professor at the Columbia University Graduate School of Journalism. From 2003 to 2008, he was Shanghai bureau chief of The New York Times. His latest book, China's Second Continent: How a Million Migrants Are Building a New Empire in Africa, will be released this May. He is currently writing a book about the geopolitics of East Asia.