The Deal’s Audit Gotcha

Trade-mag editor falsely implies that we pull punches at CJR

Anyone who’s read half an Audit post would find it laughable to think that we bow down to Wall Street. But Yvette Kantrow, executive editor of a trade magazine called The Deal, isn’t laughing.

She’s written an innuendo-laden piece implying that The Audit (which would mean mostly me, since I write 90 percent of the posts) didn’t write about the recent Matt Taibbi piece on Goldman Sachs in Rolling Stone because we didn’t want to offend Goldman Sachs, which is one of the dozen or so funders of The Audit.

This is bogus, of course, but what’s worse is that Kantrow knows it. We understand why The Deal doesn’t like us. Fine. The problem here is that the facts undermine the premise of Kantrow’s column.

The truth is actually somewhat more mundane. Much as I’d love to tell you that Goldman Sachs’ terrible tentacles have tried to silence The Audit (and believe me, I’d be the first to tell you—loudly—as I quit CJR), the actual reason is I hadn’t even read Taibbi’s piece till earlier this week.

Of course, questions about our funders are legitimate. We understand how it looks from the outside and how it would look to us if we didn’t know what went on. But if you’re going to raise questions, you’re not allowed to blow off the answers, which Kantrow clearly does here.

So at the expense of my Saturday, I’ll walk you through the boring details of how the sausage gets made (or sometimes doesn’t).

Best I can tell, Taibbi’s Goldman story hit newsstands on June 24, but Rolling Stone decided to not publish it online, presumably in an attempt to drive newsstand sales and give existing subscribers reason to, you know, stay subscribers. I work from CJR’s Washington, D.C., bureau (read: my couch), and don’t subscribe, so I didn’t have the magazine.

Now, yeah, I could have gone out and bought it from a newsstand, but I didn’t. It’s true that various sites scanned the magazine into PDFs and posted them online, but that’s simple theft to me. I saw a couple of those (I’m not going to link to the sites), but didn’t want to read a stolen copy and figured I’d check it out when RS got around to posting it online.

On Monday, perplexed by the magazine’s strategy, I wrote this on Twitter:

Why didn’t/doesnt Rolling Stone charge a buck or 2 to read Taibbi’s Goldman Sachs piece online? It’s unavailable unless you want to steal it

The New York Times quoted me on its website asking about it at nearly the same time Kantrow emailed me Wednesday night—something I pointed out to her.

On Monday or Tuesday, Rolling Stone finally posted the entire piece online and I read it.

As it happened, when Kantrow emailed me Wednesday afternoon, I was working on a piece on Goldman Sachs earnings coverage that day that looped in Taibbi’s Rolling Stone story. I told her that and said it would be up in an hour or two, which it was. Here’s the post, which asked whether Goldman is becoming the new AIG—poster boy for all that’s wrong with the financial system.

But that didn’t fit with her story, so she twisted that, got it wrong, and buried it in the second-to-last paragraph:

Audit writer Ryan Chittum said his site’s silence had nothing to do with Goldman but everything to do with the fact that Rolling Stone was slow to put the entire Taibbi piece online. (It was a complaint lodged by many bloggers, who apparently did not want to shell out $5.95 at the newsstand. How sad for magazines.) But he also said he would include the Taibbi story in a roundup of Goldman’s earnings coverage that would run the next day. In that post, Chittum calls the piece “a fascinating-if-hyperbolic polemic” but does not address some of the journalistic issues surrounding it, such as the value of throwing up lots of different charges to see what ultimately sticks.

That’s a distortion of what I told Kantrow, who makes it sound as if I only wrote about Taibbi’s piece because she emailed me, which is false. It’s also false that I told her it would run “tomorrow,” as you can see in the full text of my email to her:

Hey, Yvette,
Indeed Goldman is one of our funders, but that doesn’t have anything to do with why I haven’t written about the Taibbi piece. That’s just my fault.
I didn’t get around to reading it until a couple of days ago because I didn’t have a copy of the mag (I work from DC and not in our publication-infested HQ in Morningside Heights), and RS didn’t put it online. I’m opposed to stealing people’s content, like some sites have done in posting PDFs of the story, so I didn’t read it there.
Right now, I’m finishing up a post on Goldman Sachs coverage for today in which I try to loop in Taibbi’s piece to make a bigger point. That should be up in an hour or two. My boss Dean Starkman handles all The Audit’s fundraising stuff and I haven’t participated in any of it. So it’d be best to talk to him about this.

Have a good one,

I’ll also point out that I’m hardly the only business journalist who didn’t read Taibbi’s piece for a while. Justin Fox of Time for instance, didn’t either, for many of the same reasons.

We’ve never claimed at The Audit to be a comprehensive review of everything out there. In fact, if you’ll notice, I blog and focus most of my attention on newspapers. I hadn’t got around to writing about Taibbi’s piece, but I also hadn’t got around to writing about Michael Lewis’ big piece on AIG in Vanity Fair or Connie Bruck’s Angelo Mozilo profile in New Yorker. Neither has made the splash Taibbi’s piece has made, but they’re important works.

I’d also point out that I didn’t get around to writing about Taibbi’s piece on AIG in March—which if not as talked about as his Goldman one, was a close second. AIG is not an Audit funder, by the way.

The Audit has never made any claims to be completist. We’d love to critique everything, but our resources are limited. And, you know, we try to do things that go beyond merely reacting to the article of the day, such as this deconstruction of business failures pre-crisis.

I went back to the archives to see if I could find one time we’ve mentioned Goldman Sachs in a positive light but couldn’t find one. We have been hard on Wall Street, including and perhaps especially Goldman.

Here’s a post from July 7 in which I asked if a prosecutor’s statement means that Goldman has the power to manipulate markets in unfair ways and called for the press to dig into that area (with a follow-up highlighting it again three days later). Weirdly, Kantrow cites this as evidence that we were covering up the Taibbi piece.

Still, nothing was forthcoming — a state of affairs that got stranger when an Audit piece on the Goldman Sachs code-theft case linked to two stories on the powers of “Government Sachs” but made no mention of Taibbi’s blockbuster. Now, we understand that The Audit isn’t necessarily comprehensive. But we were also tempted to speculate that the silence may stem from the fact that Goldman is one of The Audit’s backers. In fact, reacting to the brouhaha over The Washington Post’s fundraising “salons,” The Audit recently disclosed that it holds semiannual breakfasts for its funders and potential funders, including Goldman and Citigroup Inc.

But that’s made even stranger by the fact that Kantrow admits that The Audit has hammered Goldman.

That could make it decidedly awkward for the site to deal with Taibbi’s takedown. It’s a tough situation. Praise Taibbi and piss off a funder; tear the story apart and look like its mouthpiece. Still, The Audit has not shied from criticizing Goldman in the past; it even got into a public spat with Goldman spokesman Lucas van Praag over its take on the firm’s role in the AIG bailout and how it benefited from it.

Which we have. Here’s Audit CEO Dean Starkman zeroing in on Goldman last fall, calling the events “Goldman’s Backdoor Bailout. And more here and here. Here’s that “spat” Dean got into with Goldman last year.

Here’s one from April in which I took the press to task for not nailing Goldman on its first-quarter earnings chicanery. And for not giving more play to a massive mortgage settlement the firm paid to Massachusetts (with a follow-up).

There’s a lot more like that in the archives. Go have a look.

This is not to mention a freelance piece Dean did for The Nation that goes out of its way to debunk Goldman’s claim that it was somehow wronged by The New York Times during the turmoil of last September.

Another point I’d like to make is that I made it clear from when I joined that I didn’t want to be involved in fundraising. I’ve never been involved in it, have never attended an Audit Breakfast or any other fundraising event, and have never talked to a funder (I did have a dispute with a Goldman spokesperson over email once, but nothing that didn’t happen when I was a reporter at The Wall Street Journal).

As Dean wrote in response to questions from Kantrow (she didn’t bother to quote him):

To clarify a bit about fund raising since Ryan is kept cloistered in DC and is blissfully unaware of what goes on. I talk to funders a few times a year, give updates on progress etc., but we have a fulltime person who does that and reports up the business side to our chairman, Victor Navasky. That’s the state to our church, such as it is.

Every publication, including Kantrow’s not-exactly-hard-on-Wall Street The Deal, which has funders known as “advertisers,” has to manage conflicts, as Dean pointed out in his email to Kantrow:

Finally, it’s worth noting that we get comparable or more money from several places, including The Nation institute, a Soros-funded group, a short-selling hedge fund, Kingsford Capital, etc. It’s all over the map, which I guess is good. Is this the perfect model? No, but none of them is, including, I’m sure, and no offense intended at all, The Deal’s.

We’d like to think journalists can manage these kinds of things—after all most of us got into this business because of principles, not pecuniary reasons. Barney Kilgore, the legendary editor of my alma mater and Dean’s, The Wall Street Journal, faced with a devastating boycott from his biggest advertiser, General Motors, famously told them to stick it. We’ll do the same if we ever sense any influence-wielding.

That’s what journalists with integrity do. I don’t like having mine attacked with innuendo and poor reporting.

But what really hacks me off about this is: I hate working on weekends.

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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.