Audit Notes: Sorkin, Stone, and Schwarzman; WSJ Mag; Bloomberg on the VA

Andrew Ross Sorkin has a fun column in The New York Times this morning: An interview with Oliver Stone about Wall Street greed—at the Four Seasons!

While Mr. Stone clearly has his own feelings about Wall Street, he said the film tried to offer a somewhat more balanced view. “They’re mixed bags, and that’s what Gekko says at the end of the movie, ‘We’re all mixed bags. Human beings are mixed. Good and bad.’ ”

Indeed. And we get this gem when Blackstone CEO Steve Schwarzman pops by:

Before leaving the restaurant, Mr. Schwarzman stopped by our table, and when he realized Mr. Stone was there, the conversation seemed to awkwardly fizzle out. After Mr. Schwarzman left, Mr. Stone looked down.

“That’s the problem with these places. If you had Henry Kissinger here,” he said gesturing over to his regular table. “What are you going to do? Not shake his hand? It’s a real problem. That’s the problem with New York society, it’s all an interlocking network.”

Good stuff.

— Felix Salmon takes down a WSJ magazine story about Ugg boots and in the process takes down the idea of the glossy magazine for the super rich “Hunters” and “Gatherers” itself. There are competing journalistic standards here: Those of the Journal and those of a wannabe ultra-elite fashion magazine. For instance:

What’s more, throughout the article, the Deckers product is referred to in all caps, as an UGG. No self-respecting newspaper style guide would ever allow such a thing, but glossy fashion magazines never had any self-respect in the first place, and it’s clear which side of the line the WSJ magazine falls.

This is no accident:

…you can be sure that a glossy fashion-focused magazine is never going to cut against the grain of the fashion industry when it comes to issues surrounding trademark law and intellectual property.

Which is why it’s crazy that the WSJ tries to cover the fashion industry from within the covers of a glossy fashion-focused magazine. The conflicts are far too big — and, as this story shows, the winner in those conflicts is always going to be the big fashion multinational, rather than the magazine’s readers.

— Bloomberg’s David Evans follows up on his investigation that showed the life-insurance industry withholding lump-sum payments to veterans and others and depositing it in the company’s own non-FDIC-insured quasi-checking accounts—and profiting from it.

Now he reports that the Department of Veterans Affairs has known about this for more than a decade. It agreed to let Prudential use the so-called retained-asset accounts for benefits—without telling veterans and their families.

The Sept. 1, 2009, amendment to Prudential’s contract with the VA ratified another unpublicized deal that had been struck between the insurer and the government 10 years earlier — one that was never put into writing, Bloomberg Markets magazine reports in its November issue. This verbal agreement in 1999 provoked concern among top insurance officials of the agency, the documents released in the FOIA request show.

For a decade, until the contract was formally changed, Prudential wasn’t fulfilling its obligations to survivors of fallen service members, says Brendan Bridgeland, an insurance lawyer who runs the non-profit Center for Insurance Research in Cambridge, Massachusetts.

“It’s very clear they violated the original terms of the contract,” says Bridgeland, who is retained by the National Association of Insurance Commissioners to represent consumers.

“Every veteran I’ve spoken with is appalled at the brazen war profiteering by Prudential,” says Paul Sullivan, who served in the 1991 Gulf War as an Army cavalry scout and is now executive director of Veterans for Common Sense, a nonprofit advocacy group based in Washington. “Now vets are upset at the VA’s inability to stop Prudential’s bad behavior.”

Good work.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.