The Audit

Another Baseless Screed

As will most press-bias rants, Strassel’s piece is hollow

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“Many reporters built careers on the prosecutor’s leaks intended to bully innocent people” - Kimberly A. Strassel, Wall Street Journal opinion piece, Wednesday.

Ah yes, she must mean those innocents over at Marsh & McLennan who demanded kickbacks from insurers in return for commercial business. And those other innocents at Citigroup, Merrill Lynch, Goldman Sachs, J.P. Morgan Chase, Deutsche Bank, Bear Stearns, Credit Suisse—that is, all of Wall Street—which did, in fact, publish fraudulent research to hype their investment-banking customers at investors’ expense. Or maybe it was those innocents in the mortgage-lending industry, who sold exploding mortgage products to customers who patently couldn’t afford them. Or was it the innocent after-hours-trading mutual-fund executives who fleeced small investors to favor richer clients?

Or was it the Journal’s favorite martyred billionaire, Maurice Greenberg, who, in fact, did preside over the manipulation of earnings at American International Group, which wrote down $2.3 billion to correct the misstatements and paid a $1.6 billion fine because of them?

Right-wing commentators feel vindicated with the resignation of Eliot Spitzer. Strassel and others of her ideological persuasion believe that “most of Mr. Spitzer’s high-profile charges have gone up in smoke.” I’m sure they wish it were so.

Strassel’s colleague on the WSJ’s op-ed page, Daniel Henninger, tries to pile on this morning but forgets a few facts in decrying Spitzer’s supposedly most intemperate moment: the Sunday morning TV interview during the heat of the AIG probe—a moment rehashed ad nauseum among plutocrats and their press minions as evidence of prosecutorial excess.

Of the Greenberg case, Attorney General Spitzer once said: “The evidence is overwhelming that these were transactions created for the purpose of deceiving the market. We call that fraud. It is deceptive. It is wrong. It is illegal.” He said that on Sunday morning on ABC-TV. Then after saying this, he never brought criminal charges against Mr. Greenberg.

Henninger’s column is called “Wonderland,” and I think I know why. He missed the fact that only last month five people, including a former AIG executive, were convicted—that would be, criminally—of structuring fraudulent transactions to artificially inflate AIG’s reserves.

The case was brought not by Spitzer, by the way, but by federal prosecutors in Hartford, one of whom promised afterward to “work up the ladder” seeking more indictments.

Uh, oh.

And it was Greenberg, we should recall, who made the phone call that set this entire deal in motion. That may be why he was named during the trial as an unindicted co-conspirator.

And what, after all, did Spitzer say again that was so bad? “The evidence is overwhelming that these were transactions created for the purposes of deceiving the market. We call that fraud.”

Well, so did the jury, which returned guilty verdicts on all sixteen counts, so I guess the evidence was pretty overwhelming.

And this was Spitzer’s worst moment?

But, hey, if some business commentators want to apologize for, or “enable,” to use Strassel’s phrase, the worst American business practices —kickbacks, phony research, financial manipulation, after-hours cheating, and the mortgage-lending practices that landed the entire world economy in crisis—zeit gezunt.

But they can’t leave it there. Commentators, usually on the right, sometimes on the left, just can’t resist pressing their perceived advantage to attack the press, too.

Or as Strassel puts it in her piece this week, “Spitzer’s Media Enablers”:

Journalists have spent the past two days asking how a man of Mr. Spitzer’s stature would allow himself to get involved in a prostitution ring. The answer, in my mind, is clear. The former New York attorney general never believed normal rules applied to him, and his view was validated time and again by an adoring press. “You play hard, you play rough, and hopefully you don’t get caught,” said Mr. Spitzer two years ago. He never did get caught, because most reporters were his accomplices.

How long, one wonders, does the commentariat believe it can dine at this particular buffet?

Does anyone who does not make a living rooting around for press bias as if it were some kind of foul truffle notice the irony of commentators attacking the press using information they read in that morning’s newspaper?

Accomplices? Funny, but I didn’t see her byline on the tremendous, world-beating scoops—the ones pulled off by actual, non-commentating reporters, journalists who actually work for a living—that brought Spitzer down.

The press—and let’s face it, this has been The New York Times at its best—has done a spectacular job on this story. It is the press that blew Spitzer out of office like he was shot out of a cannon.

Was it the Times’s pro-Spitzer bias that led it to pursue this story—down to the interview with Spitzer’s prostitute’s mom—like a pack of ravenous wolves?

Journal editorialists, by the way, contributed exactly zero information to this story, just the usual pro-crook hot air.

Strassel, of course, isn’t referring to the journalists who brought Spitzer low, but to the other journalists, the lapdogs, who reported on his tenure as New York attorney general.

He knew, too, that as financial journalism has become more competitive, breaking news can make a career. He doled out scoops to favored reporters, who repaid him with allegiance. News organizations that dared to criticize him were cut off. After a time, few criticized anymore.

It should be noted that her colleagues at The Wall Street Journal, particularly Charlie Gasparino, now of CNBC, scored as many Spitzer scoops as anyone, if not more.

Of course, no names are named here.
See, that might lead to unpleasantness in line at the Au Bon Pain at the World Financial Center, where the Journal has its offices. Still, who are those favored reporters who “built their careers” on the wreckage of all those innocent lives?

These press-bashers never name names. Forbes’s publisher, Rich Karlgaad, pulled the same stunt a couple of week ago:

Journalism is populated by left-of-center people, many of whom are hostile to business.

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Comments

PacificGatePost

Sun 16 Mar 2008 03:25 AM

Mr. Starkman,

Great article. The press seems to miss a great deal. While we watch interviews with corporate leaders, all we ever hear propelled their way are simplistic softball questions. Once journalists get access to a senior executive, they appear to lose whatever investigative flair or inquisitorial energy they might once upon a time have possessed.

Here's a huge one they all missed.... The dramatic change that swept through all of North America's boardrooms over the past 30 years. It is one of the underlying causes of the headaches the economy is now feeling, but more importantly, it has resulted in the general feeling of "disconnect" felt by most Americans.

Due diligence and oversight long ago slid out the window. No one was watching.

Time to do something about it.

"WE THE SHAREHOLDERS OF YOUR COMPANIES...... 


http://pacificgatepost.blogspot.com/2008/03/letter-to-ceos-of-fortune-1000-cos.html


.... time for bloggers to move mountains