We can have facts without thinking but we cannot have thinking without facts. — John Dewey


A big Bloomberg News piece on insurance has unleashed the wrath of that industry, entangled New York’s Deadline Club in an awards dispute, and now pits journalist against journalist.

Matthew J. Winkler, Bloomberg’s editor in chief, accused the journalism club of “unethical” conduct in its most recent awards contest for allowing an insurance industry trade group to compromise the “integrity” of the club’s judging.

In a three-page letter to Tim Paradis, an Associated Press reporter and the club’s president, Winkler said that in its jury deliberations it accepted industry allegations that a Bloomberg Markets magazine expose, “The Insurance Hoax,” contained factual errors without talking to Bloomberg. Winkler said the club eventually backpedaled and admitted that the piece didn’t contain errors after all but found other reasons to deny the story an award.

“We don’t know why ‘The Insurance Hoax’ failed to win any of the four awards for which it was a finalist,” Winkler wrote. “We do know the process by which the stories were judged was irregular, opaque and unethical.”

The text of Winkler’s letter, obtained by The Audit, is available here.


The issue goes far beyond a journalism contest and pulls the curtain back on an aggressive public relations campaign by the insurance industry and others against Bloomberg News and a bitter argument over what is and isn’t an “error.”

The campaign has been led by the Insurance Information Institute and its president Robert Hartwig, who in a widely circulated letter to Bloomberg Markets’ editor Ronald Henkoff calls the story “malicious,” “biased, “inaccurate,” “intellectually shabby,” and more. Significantly, he contends the series contains several factual errors, ranging from the misuse of a key industry ratio to blown arithmetic, that are so important the series couldn’t have been written without them.

In an email to me, Hartwig goes so far as to call the series the Million Little Pieces of insurance journalism.

“It made a big splash when it came out but when subjected to fact checking it simply didn’t pass muster,” Hartwig says. “The authors and editors at Bloomberg should be embarrassed because the piece is a disgrace to the Bloomberg name.”

Bloomberg says it stands by its story and, after meeting with Hartwig, declined to run a correction. A spokeswoman adds that Bloomberg is still waiting to hear from the Deadline Club.

Paradis, the club’s president, told me the club plans to write back to Winkler. Meanwhile, he defended its awards process and offered what amounts to a qualified endorsement of the facts in the stories.

“We received complaints about the story and therefore had no choice but to examine it,” Paradis said. “We did so in good faith and gave both sides fair treatment. The results speak for themselves as the story was named as a finalist in several categories. If an entry doesn’t merit being a finalist, it’s not included. We had several categories for which no entrants were recognized.”

I’ll cut to the conclusion: a review by The Audit found no significant factual errors and no errors at all involving the insurance industry. The III’s allegations are unfounded. Details are below.

As a side note, Winkler’s allegation of an “unethical” and “compromised” awards process also appears to lack support. While the club seems initially, and erroneously, to have accepted the industry’s charges of fact problems, it backed off those conclusions after talking to Bloomberg.

To me, though, the issue of whether the story contained fact errors is central. With errors, the series’ credibility is undermined and the focus shifts to the journalists and their methods. With no errors, the series stands as a compilation of facts that portray an industry out of control and ripe for reform.

But it goes even deeper than that: everyone’s entitled to his own opinion but not to his own facts. Anti-Bloomberg forces say the story has errors; Bloomberg denies it; the Deadline Club doesn’t say one way or another.

But without agreement on facts, journalism itself becomes impossible.

The backdrop for all this is a bitter struggle over the public image of the insurance industry and growing (though still isolated) calls on Capitol Hill for its reform. Critics charge the industry with exploiting a dysfunctional regulatory system to cheat policyholders at every turn. The industry says it is in fact suffocating under regulatory burdens and is unfairly vilified by critics who either don’t understand the business or have agendas of their own.

These competing black-and-white portrayals of the industry has only grown starker since Hurricane Katrina, in August 2005, an event that triggered a torrent of lawsuits alleging wholesale abuse of policyholders even as insurers reaped (then) record profits.

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.