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Readers may have wondered about the future funding of the new investigative-news organization ProPublica, if they saw an October 30 Bloomberg wire story on the impact Wachoviaâs share decline has had on philanthropists Herbert and Marion Sandler (a link isn’t available online).
Herbert Sandler is ProPublicaâs chairman, and The Sandler Foundation is a key ProPublica funder. It gave a $1,250,000 grant to the embryonic organization in 2007, and followers of the media scene know that Sandler has projected his commitment to be âlong termâ (they also ought to know that his company Golden West was a huge purveyor of the “option ARM” mortgages that greatly exacerbated the mortgage crisis and a key reason for the collapse of Wachovia).
So one particular paragraph in the Bloomberg story, sprung from a Bloomberg TV interview, might set off alarm bells:
Wachoviaâs 84 percent share decline this year has hurt the Sandlersâ personal holdings and their philanthropic giving, Sandler said in a Bloomberg TV interview today.
Then, by way of explanation:
The Sandlers received $2.4 billion in cash an Wachovia shares in October 2006 when they sold [savings and loan holding company] Golden West [Financial Corp.], which they founded, for $24 billion. They then set aside $1.3 billion for their familyâs San Francisco-based foundation.
We put in a call to ProPublica General Manager Richard Tofel, in an effort to clarify the situation regarding his organization. Informed of Bloombergâs comments on the Sandlersâ philanthropy, Tofel told us:
Weâve had no indication of that with respect to ProPublica. In fact, strong indication to the contrary.
Thanks to money from The Sandler Foundation and other sources, said Tofel, ProPublicaâs board has approved a 2009 budget of $10 million.
Okay, sounds good from ProPublicaâs side. But what about that drop in philanthropic giving Bloomberg told us about?
We put in a call to The Sandler Foundation. Herbert Sandler himself called back to clarify the situation. Much of the foundation money is in cash, he said, and so not vulnerable to the decline in Wachovia shares. What the Wachovia drop has affected is the Sandlersâ personal holdings, meaning that less will go to the foundation after Sandlerâs death.
So did Bloomberg get its own TV interview wrong? Sort of. Here are the relevant comments, verbatim from the Sandler interview:
We put 1.3 billion dollars into our foundation to give away, and the remainder, which we held on to, which comprised a lot of Wachovia stock, was also going to the foundation. So itâs not like we enriched ourselvesâŚ.The only thing thatâs gonna happen as a result of the losses that weâve taken on the Wachovia stock we held is thereâll be that much less money to give away in a philanthropic manner.
Now it does not, at first glance, seem wrong to summarize this interview clip as the writer did, with reference to Wachoviaâs negative impact on âthe Sandlersâ personal holdings and their philanthropic giving.â
The problem is that the situation looks a bit different when you know more.
We donât get enough details from Sandlerâs Bloomberg TV appearance—clarifying the way in which the foundation differs from his personal holdings—because the interviewer didnât ask the relevant follow-up questions.
The fault here is neither the interviewerâs nor Sandlerâs, because this was just a small segment in a larger interview and in such a context details werenât necessary. But when Bloomberg in print took that small segment and made it the focus of an entire, albeit brief, article—titled âWachovia Stock Collapse Didnât Spare Golden Westâs Sandlersâ—it didnât fill in the necessary details.
Good news for ProPublica fans. Not as good for fans of precise journalism.
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