Access Uber Alles

NYT story on Krawcheck shows perils of business-press sourcing

If business journalism can be said to have structural problems—and I think it does—the biggest one, in my view, its Achilles heel, would be the access problem.

It’s hard to write about business without access to sources, and it is considered better to have sources at the very top. People at the top of corporations are hard to reach, and they typically don’t have to talk to reporters unless they want to. They’re protected by a phalanx of public relations specialists, who are not dummies and know when they have leverage. It is therefore much easier to write a story that is largely complimentary—or at least within some unspoken bounds of acceptable discourse—than one that is largely the opposite.

This is why the covers of business magazines look the way they do.

So there is a tension: arms-length scrutiny versus the need for access. That’s journalism for you. What can you do? I’m not saying this tension is a bad thing, just that these are the conditions under which reporters and editors operate.

So in return for access you have to give something up. But how much, and what do you get in return? That’s the question every time.

Now, I can’t prove it, but it’s my sense that the public-relations operatives have become more empowered in recent years, as business-news organizations have shriveled financially and competition for business news has, paradoxically, increased.

Productivity demands on reporters have increased—that hamster wheel is spinning like mad—leaving less time and appetite in newsrooms for sticky, time-consuming confrontation. Meanwhile, experience levels in newsroom have dropped, and investigations are left in the hands of a shrinking elite.

One suspects, further, that news cultures have been affected. The tradeoff between access and arms-length scrutiny—that never-easy balancing act—has gotten out of whack. News organizations are conceding more to sources and getting less, in some cases, much less.

Which brings us to The New York Times’s recent offering on Sallie Krawcheck, a story that seem to cross a clear bright line. It allows Krawcheck’s view of her experience at Citi to be presented in detail while she herself takes no responsibility for those views. She is not even asked for comment. Instead she hovers behind this story like some kind of weird specter, speaking to and through “friends,” who themselves are nameless.

The result is some kind of business-press prose-poem, a masterpiece of insiderism, that treats readers as if they were morons and unfortunately opens the Times up to ridicule, which I will now endeavor to apply.

Krawcheck, for casual business-press readers, was a top Citigroup executive, who after a rapid rise was forced out last September at the age of 43. Her career was notable because she had been one of the most powerful women on Wall Street at the time. Her exit was notable for the same reason. And while her rise seemed to have outstripped any visible accomplishments, that’s not really that unusual, is it?

The Times story adds the information to the public record that Krawcheck’s ouster was not the result of gender discrimination as some had feared, but instead of “an old-fashioned corporate bar brawl at a bank already notorious for dysfunctional management.”

Fair enough. To the extent that anyone thought that discrimination played a role—and I don’t think many people really did—this is useful.

But to get that—and it’s sort of non-news, when you think about it —readers are treated a festival of anonymous attribution that reaches Onion-esque proportions. There are so many people “close to” and “familiar with” it must be read to be believed; I add emphasis for comic effect:

What infuriated Ms. Krawcheck was that the bank moved up its announcement without telling her, according to a person with direct knowledge of her thinking who, like top Citigroup officials, would not agree to be quoted by name.

Hmm. Whom might that be, one wonders? Who in the world would have a “direct” pipeline into Sallie Krawcheck’s brain?

And this:

This person requested anonymity in order to preserve professional relationships with Citigroup.


Ms. Krawcheck believes her exit from Citigroup is the result of pressures she faced from Mr. Pandit to be a team player and to follow his lead on the best way to deploy talent at the bank — and not related to her sex.

The story makes no mention of attempts to reach her. This is an awkward problem. I called the author, Geraldine Fabrikant, to ask about this yesterday and will include the answer if and when it is forthcoming.

I was also unable to find Krawcheck or whether she was represented by one of the major financial PR firms. I’m guessing she was.

A couple more attribution examples:

These days, Ms. Krawcheck, a native of South Carolina, spends a lot of time running in Central Park. Leaving Citigroup felt “like I got a divorce,” she has told friends.


An addict of the fast-paced, take-no-prisoners New York lifestyle, she has told friends: “They kicked me out of the South. I only know one speed.”

One more, because I know this is getting to you, too:

Ms. Krawcheck has told friends that growing up in Charleston, S.C., as the daughter of a Jewish businessman and a Protestant mother taught her about being an outsider and toughened her for a career in a cut-throat, male-dominated industry.

“I have a real problem with this Times story,” I’ve told people around here. I’ve also said that my upbringing as the son of an Ashkenazi circus promoter and Sephardic candy peddler has left me with moderate coulrophobia and a taste for those orange peanuts.

In a sense, it is fitting that Krawcheck’s story would be told through this business-press-attribution shuffle since she is in many ways a business-press creation. As the Times story recalls, she rose to prominence in 2002 on the cover of Fortune, which hailed her as the “last honest analyst.” This latest Times piece takes business-media insiderism full circle.

It should be understood that my issue here with the Times revolves around attribution and sourcing. The piece is otherwise fine and shouldn’t be considered a puff piece. It reports, for instance, that Krawcheck was not considered to have done an especially good job as Citi’s chief financial officer.

After she leapt into Wall Street’s upper ranks, however, some of her appetites might have outpaced her abilities. When she first arrived at Citigroup, she oversaw an area with which she had deep familiarity — the brokerage business. But just two years later, Mr. Prince, Mr. Weill’s heir, promoted her to a substantially more complex job, chief financial officer.

Many analysts came to believe that Ms. Krawcheck did not handle that post well, especially after the bank began posting titanic losses and suffering downturns in some of its key businesses.

Also, the Times allows Citigroup officials to talk about Krawcheck under the same convoluted rules as Kra… I mean, Krawcheck’s friends:

Several sources close to the bank say that Citigroup did not oppose some of Ms. Krawcheck’s ideas but that it needed more time to consider them. And they say the bank had to move up the announcement of Ms. Krawcheck’s revised role because news of it was already spreading.

One executive in the wealth management unit, who requested anonymity because he is not authorized to speak publicly about the bank, said she was seen as counterproductive. “I think they thought she carried her advocacy too far,” he said.

So, what am I saying? Don’t do this story? Would the world be better off without it?

I’ll answer my own question (I’ve told my friends that I’m concerned about my creeping schizophrenia): I understand the problem, but it’s time for business-news publications to start pushing back.

The news value is low: no gender bias in the Krawcheck case. And all planes landed safely yesterday at JFK. This isn’t worth the credibility lost by allowing anonymous sources to use the paper to make assertions without accountability. She should come on the record here, obviously, or take her story to the Deal.

And there’s a larger issue here.

I don’t think it is fully understood among my old colleagues that it is a new day on Wall Street. The beat they once covered no longer exists.

Citigroup may look the same, but, Audit readers, it is now a ward of the state, a welfare case.

It is one of three banks to receive $25 billion from the U.S. government, which bought preferred shares only because no one else would.

The other two banks that got that much, Wells Fargo, and JP Morgan Chase, didn’t need it as badly, as this stock chart plainly shows.

And unlike most welfare cases, Citigroup is distinctly undeserving. As we’ve written elsewhere, courageous reporting in the alternative press earlier in the decade demonstrated that Citigroup led the mainstreaming of subprime lending, principally through its CitiFinancial unit, a successor to the notorious Associates First Capital, which Citi bought in 2000. Indeed, it is doubtful that any bank had a more extensive conveyor belt running from subprime mortgage to substandard CDO than Citi.

Krawcheck’s career at Citi, from 2002 to 2008, pretty much coincides with the planting of the seeds of destruction that Citi is currently wreaking on its shareholders, its borrowers, its CDO-buying pension-fund clients, and the world at large. Was it her fault? No. But she was a senior executive, the CFO, for pity’s sake.

It seems to me that Wall Street’s new era would give rise to a more assertive, accountability-oriented culture among the financial press. I see signs of it, but this piece feels very August 2008.

Oh, I forgot to mention one more bit of info, in the last paragraph of the Times piece, that Krawcheck would like to get across, apparently:

Ever restless, she’s also hesitant to stay on the sidelines. From her apartment in Manhattan, where she lives with her husband, a fund manager, and their teenage son and daughter, she is putting out feelers, looking for another job in wealth management.

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.