Posts about transparency

The transparent Guardian

We’re starting, just starting, to talk a good game about transparency in some quarters of American journalism — and, I’m afraid, still arguing over whether it is a good idea in others. But at the Shorenstein Center’s 20th anniversary fest this weekend, Alan Rusbridger, editor-in-chief of the Guardian, put us to shame, I’d say, with a talk about his paper’s open discussion of its corporate values, accountability, and transparency — in short, “what it means to run a newspaper along the sort of ethical lines we tell everybody else to run their corporations.”

Each year for the last three, the Guardian has issued a “social, ethical, and environmental audit” of itself, publishing it online and in print and hiring an independent auditor to check them on it. It is an impressive document that sets context by explaining the mission of the Scott Trust that owns the paper and by reviewing the changes in the business in the last year, trying to open the door on debates within the institution (see the discussion of objectivity in this post, below). The report reveals the results of reader surveys criticizing and praising the paper’s performance. It goes into considerable detail about the company’s relationship with its employees, rating itself on many measures. And, being a liberal institution, it pays homage to environmental concerns like recycling and power use.

Transparency in the UK means something different from transparency here. The papers here are, of course, mostly once-size-fits-all monoplies that are hung up on “the notions of impartiality and balance,” while the papers there engage, Rusbridger said, in “highly polemical argument… There is something about the British dustup that does grind out the truth.” The papers there start by wearing their hearts on their sleeves. Rusbridger showed a slide with many self-ascribed adjectives and assets of the paper: Liberal. Progressive. Trusted. Edgy. Serious. Independent. International. English-language but not American. Context. Analysis. Diversity. Well-resourced. Open. Un/self-regulated. That, already, is an ocean away from how we look at newspapers. Here, we start with and end with “objective” and haven’t’t much cared whether anyone believed that. In the UK, they start with “liberal” or “conservative” and then discuss the quality of the journalism, not the hidden agendas. Clearly, I prefer the UK model. But transparency must mean more than simple, shallow labels, of course.

Rusbridger explained the unique situation he works under: a newspaper supported by a trust, which is, in turn, supported by other profitable businesses (an auto magazine that clears 100 million a year plus radio and regional papers), and a mission to inform from a position of independence. “There is no proprietor and no conventional corporate structure telling us what to think,” he said, and I could hear the wheels whirring in the heads of the journalists in the room: No vice-presidents, no stockholders, no Wall Street. But Rusbridger was quick to add: “I will try to convince you that there are some things in this which are as much about self-interest as the desire to behave well.” That is, transparency is about serving our public well.

He quoted C.P. Scott, legendary and longtime editor of the Guardian, who wrote on the paper’s centennial in 1921 (see the post below): “A newspaper is of necessity something of a monopoly, and its first duty is to shun the temptations of monopoly.”

Rusbridger said that when he walked into the editor’s office 11 years ago, he was “rather shocked about the power I was about to acquire.” It sobered him. “Newspaper people are talking more about rights and less about transparency and responsibility. But the explosion of the web has changed all that, allowed readers to challenge us… or to bypass us altogether…. It boils down to the word we have been using a lot this weekend: trust. We should think rather more about trust than we used to.” He showed the latest of many surveys that showed how little newspaper people are trusted (39 percent believe the British broadsheets, 9 percent the tabloids, but 48 percent local MPs).

So in 2002, Rusbridger made its code of conduct for journalists public and hired a readers’ editor he could not fire. “In no other walk of life would the person who makes the mistakes be the court of appeal,” he said. That readers’ editor gets 18,000 complaints a year; 300 emails a week. Rusbridger said he feels confident that “very few errors escape detection because we have millions of fact-checkers.” And he showed one such error: a decision to “bleach” out a red severed limb in a picture of a train bombing, which was “the wrong decision if you’re going to have a code that says you’re not going to do that.”

He told about the morning conference, which anyone from the paper may attend — as many as 70 have — and everyone knows they are free to criticize the paper. That meeting is blogged (note also that NPR’s Morning Edition meeting is now blogged as well). I blogged the Guardian’s meeting once.

Since the last paper audit, the Guardian also started Comment is Free: “You are putting your commenters in the space where they can be rubbished… It’s quite a bumpy ride, we have to admit. But it is all part of the media experimentation demanded by the web…. We’ve opened the doors, we’ve widened the liberal debate to hundreds of people who previously would have had no access to a mass audience.” This is partly about good journalism, Rusbridger said, and partly about not acting like a monopoly and not watching readers desert you because they are not heard. To date, CiF has played host to 6,000 blog posts and 240,000 response.

The paper performs a survey of its staff and find good and bad news there (I would love to see the same survey taken in American news organizations, for comparison): 91 percent are proud to work for the Guardian, 79 percent enjoy work, but a substantial number believe the selection process for internal jobs is unfair. And, of course, it surveys readers.

“Why do newspapers find this stuff so hard to do?” Rusbridger asked. He acknowledged that newspapers feel beseiged and do not want to “give them, the baying mob, more meat to attack us… But I think that’s simply not going to work in the future, whatever our business model. The benefits of opening up in these kinds of ways outweighs the pain.”

He ended quoting David Broder from a book in which he said that newspapers are not exercises in perfection but in imperfection, “a complete reversal of the story we always tell about ourselves.” If we make our imperfections clear to people, he said, they will trust us more, not less.

Amen.

Transparency is about being human.

: One interesting part of the audit addresses the Guardian’s effort to find its proper voice:

We were aware that the increasingly competitive nature of the media sector had, over time, led to a drift away from traditional standards of reporting across the industry as papers sought to grab the attention of potential readers. We were not exempt from the charge of sometimes stepping across the line in terms of exaggerating stories to make them appear as strong and interesting as possible.

To counter this, we looked at the US model of journalism, which has an institutional separation between news and comment and seeks to be completely “objective” in its news coverage.

But a number of journalists felt the Guardian would suffer if it followed the American way. One said: “I find the big American metropolitan papers excruciatingly boring… We have to tread carefully not to lose the exuberance that makes our papers fun.” A former US correspondent added: “I would hate it if the Guardian became so passive and ponderous.”

The result of this debate was to find a Third Way. In a presentation to his senior editors, Rusbridger introduced his vision for the paper’s journalism saying that it was not realistic to be completely objective, but that we should strive to be fair: “There are such things as verifiable objective facts; they are the building blocks of any story. Beyond that, there are numerous complications of the sort they teach in the better sort of journalism school. We accept that, from the moment reporters write an intro, they
are introducing an element of subjectivity into an article… We want good writing — including writing brimming with passion and humour and immediacy. We don’t want over-statement, hyperbole and lazy acceptance of prevailing ideas and journalistic lines.

: Disclosures: I write a new-media column for Guardian, occasionally consult, and admire the paper and its leaders.

: LATER: See also this week’s column by the Guardian’s readers’ editor on making errors.

: RELATED: Jack Shafer wonders why papers have such a problem correcting errors of judgment as well as fact.

In theory, objectivity is a terrific concept: By considering all the facts impartially and presenting them in a balanced and fair manner, you find the truth. But journalistic objectivity fractures when its practitioners get many important details right–as the Times reporters have in their Duke dispatches–but still manage to botch the essence of the story. As long as they satisfy themselves that they’ve been objective and accurate in the presentation of facts, newspapers have no elegant mechanism for saying, “Whoops!” and correcting course. Instead, newspapers tend to reinforce their mistakes in judgment or ignore them until the noise from critics forces them to confess to a kind of journalistic malpractice. This is how the Times finally extricated itself from its flawed Wen Ho Lee and WMD coverage.

Dumb money

The Online News Association just announced that Mark Cuban will be their keynoter this year. Yow. Now on the one hand, Cuban could be perfect, for he has been pushing back at reporters and making his interviews with them open, even over their wailing and whining. But on the other hand, Cuban is most decidedly imperfect, for his latest venture, Sharesleuth.com, raises no end of troubling ethical and journalistic, if not legal, questions about his media activities.

Mark Cuban has made his career and his fortune on dumb money. He sold his first company to CompuServe, a failure acquired by AOL, another failure. He sold his next company, Broadcast.com, to Yahoo, which promptly did nothing but kill it even as broadcasting came onto the internet, yet Cuban walked away with something in the billions, allowing him to have fun, buying a sports team and starring in a TV show, which was also a failure. He invested in another well-known company sold to AOL; return to Square One. Yet people still invite him to share his wisdom. That’s because he loves to be provocative and he’s good at that.

But now Cuban is making smaller killings from the dumb money of smaller players who’ve invested in bad companies. Now one could say that’s just the way the stock market works: smart wins, dumb loses. But Cuban has given himself an advantage: He started an apparently journalistic enterprise in Sharesleuth to find the bad companies . . . so he could short them first.

What’s wrong with that? That’s what a prospective student at CUNY asked and so I went to read the controversy at Sharesleuth and the defensiveness at Cuban’s blog and here’s what I come away with:

* Cuban says he is being transparent: He says he warned us that he would trade on the information Chris Carey, his editor at Sharesleuth, digs up. Except that he’s not transparent at all — not until after a story about a stock is released. He has a period of utter opaqueness when he knows a company is crap and you don’t — nya, nya, nya — and so he gets to trade on his information and take money not from the offending company but from the poor shlub on the other end of Cuban’s trade.

* Cuban tries to say that he is underwriting this journalism to do what journalism is supposed to do: help the poor shlub. Except he already took the shlub to the cleaners. Doesn’t wash.

* Cuban also has to be aware that his celebrity will have an impact here. He argues that he’s just sharing what he knows about a company after he took advantage of the information he paid to gather about it. Generous, eh? Except he has to know that a site he, Mark Cuban, underwrites and promotes — he was, after all, a TV star… for a few minutes — will have an influence on the market for that stock. Is that company insider information? No, it’s Cuban information. But he can move a stock and he acts on that knowledge before the rest of the market can.

* It becomes a bit of self-fulfilling prophecy, doesn’t it? Cuban and company find a company they think is suspect. Cuban and company investigate and find smelly fish. Cuban shorts the stock. Then his guy reports what’s what to the world. The market gets a whiff. Then the stock falls. Then Cuban profits. You have to trust Cuban and company not to use their power to manipulate. After what he does to little investors, do you trust him?

You see, it’s not just about transparency — and I like to toot the transparency horn at every opportunity. It’s about conflict of interest. Whom are you serving, Cuban? If you say you are committing acts of journalism, exposing bad companies and outdoing the business journalists you despise, then you are saying you’re serving the public and the public should be able to trust you to do that. But no, the public in this case is the aforementioned poor — now poorer — shlub. So you’re not doing journalism, you’re serving yourself. Well, that could be OK: You hire your private analyst to find turkeys to short and you short them. But then you use your public prominence to reveal what you now know and that all but assures that the stock will fall, making your short a good investment. I’d call that a virtuous circle except . . .

Is everything unfair in love, war, and Wall Street? Yes, but some things are less fair than others. And it’s hard to sit up on a journalistic high horse — to ridicule the rest of journalism — even as you take behind-the-scenes advantage of your knowledge and the impact of your prominence. This, of course, is exactly why news organizations have policies requiring either not owning a stock or revealing ownership in companies you cover or not trading on them when you write about them: so you can judge whether to trust them and so they cannot take advantage of moving the market for a stock. If a professional reporter did what Cuban did, he would be fired … and Cuban would probably write a blog post attacking him.

There has been much discussion of this online. See this excellent editorial in the Star-Telegram:

It’s too bad that Cuban couldn’t let his investment in Sharesleuth stand on its own. He had to use it as a tool in a side deal to make himself a few more bucks to add to the gigazillion that he already has.

In the process, he cast doubt on Sharesleuth’s efforts.

See Gary Weiss writing on his blog:

It’s a shame that an ethical rich guy– one with the public spirit Cuban lacks — hasn’t stepped into the breach and set up a genuine financial investigative reporting outlet to examine crummy stocks. But as a public service, not as a source of pocket money.

Of course, there is yet another alternative, which is that mainstream media outlets crank up their coverage of stock fraud.

Securities Litigation Watch, a blog, says — and others quoted here agree — that Cuban’s actions are not illegal but that Cuban…

…has found the previously unexploited Achilles’ Heel of the insider trading laws and fired an arrow deep into it. The result is that for the first time, a legal form of what most people would consider “insider trading” exists and can be replicated by anyone with (a) the resources to hire a skilled investigative journalist, (b) the ability to generate a readership on the Internet.

And see the comments on Sharesleuth itself: This poster tries to give analogies that explain why Cuban’s activity doesn’t seem right:

I see a huge contradiction in providing information on what you personally believe to be a scam (in escence, posting a “do not enter” sign) but then on the other hand potentially making a financial gain (shorting the company stock). Essentially, it seems, indirectly partaking in the named fraudulent operation and knowingly so. This is even magnified by the fact of Mr. Cuban shorting the shares PRIOR to the report that it appears he has direct input.

In the report D’Arnaud-Taylor and his wife are demonized for selling the company shares into the open market, and maybe rightly so. But how are the buyers of Mr. Cuban’s short sell any less a victim than the buyers of D’Arnaud-Taylor sells? If both are aware that the underlining business that the shares represent to be a perversion of truth are they not each participants? (though Mr. Cuban on lower level understandably so). Is not the instrument of the fraud the stock itself?

Another commenter identifying himself as a shareholder in the company that Sharesleuth pilloried — an aforementioned poor shlub — says:

On the outset, it appears that you have good intentions Mr. Mark Cuban. Your plan is to uncover the “dirt” on companies to save investors from losing out, correct?…So this might make you a “hero” to some people…and I might agree with that EXCEPT for the fact that you appear to be making a decent profit on all of this negative hype you are building up. In a sense, you are profiting off of the unsuspecting shareholders (like me), who have put their trust in the companies you are digging up “dirt” on.

The honorable thing to do would be to NOT trade on the companies that you write about, thus giving your readers a chance to exit…or if you do trade wait for 30 days after the article has been released.

If you happen to uncover true “dirt” about a company, and that company is truly an “evil” company, than the shareholders are victims, correct? So, in essence, what you are doing now is profiting off of victims before they have an opportunity to escape.

Another shareholder:

So this is suppose to “help” people avoid investing in poorly managed companies or just plain bad companies…unfortunately the average investor got the info too late. I was down over $1200 by the time I was “informed”. Mr. Cuban I appreciate your work, but a little heads up for the little guy would have been nice. I know $1200 may only be lunch for you, but it is a lot more than that for most people. I love the Mavs, I love you, but this hurts. That’s just $1200 less I have to spend on Mavs tickets this year.

You see, journalism is, in the end, about trust and credibility and this is what Cuban is doing to his. Mind you, Cuban is right to ridicule the trust and credibility of stock analysts and much financial journalism that just sucks up what those analysts and company flacks feed them. They, too, don’t protect the public. But just because they’re bad, does that mean you need to be? Two wrongs, etc.

Cuban is, of course, unrepentant. He goes off on a rant that, as near as I can tell, reasons that news organizations make profits so why shouldn’t he? He says:

Every media outlet has an agenda. Given that almost all are public entities, the primary agenda is Earnings Per Share. When was the last time you read the New York Times say they were going to proactively choose to lower their earnings this quarter and for the next several quarters so they can invest in doing a better job of reporting ? Or that they planned on expanding the number of pages dedicated to their journalistic endeavors at the expense of shareholder return ? Anyone ?

Well, actually, I’ve sat in public meetings with Times editors as they talk about the cost of maintaining a Baghdad bureau and that is not a financially motivated decision. I’ve watched papers add pages to cover big news — as an editor, I’ve done it myself — when those pages came with no advertising and thus only brought loss. I’ve sent reporters on trips to cover stories that would bring no revenue. Why do journalists do these things? To serve the public. Haughty but true.

And what this brings out is the equally haughty question: What is the nature and mission of journalism? Is it an effort to serve the public over oneself ; is that a key element in the definiton? That’s where the Cuban case would lead us, I think. Is journalism now about getting any information from any source with any agenda? Well, I’ve argued that we all do have agendas and the worst thing is for them to be hidden. Is journalism about trust and credibility? And can we trust and believe Cuban when he’s making money on the information he can afford to gather and disseminate?

I sure as hell hope there will be ample opportunity to discuss this and challenge Cuban at the Online News Association. Are they presenting him as some paragon of journalism? Some new kind of media mogul? Some opponent of journalism’s old ways? Or a circus act? I’m bringing popcorn.

If Cuban had just started a new journalistic endeavor to show the way and shame the business press into reporting and investigating — not to mention to create jobs for reporters — he might have been welcomed with open arms. I’ll bet that there are plenty of ripped-off shareholders out there who’d have gladly contributed to make this a success. And advertisers would want to talk to an audience of smart investors. But by turning this into a personal and shady profit center, by trying to play the bad boy in this arena as he does in the basketball arena, he harmed his endeavor, his reputation, and even the nascent movement in independent journalism. Just so he could make a few bucks. Now that’s what I call dumb money.

: LATER: Mark Cuban responds on his blog. He digs up every snarky thing I’ve said about him and that’s fine. My view of Cuban is encapsulated in what I said at the start of this post. He doesn’t really respond to the ethical question about reporting on the company from a position that can move the market for it while having an interest in that market. I would very much like to see him explore that more. He lists the stocks he has shorted and their status so we can judge whether he has had an influence. I do think that Sharesleuth is bigger — and, in so many ways, better — than a blog comment and so its influence will surely be different. Cuban says that trust is built with getting the facts right. Amen, brother, amen. It is also built, in this age of transparency, with both revealing and avoiding, when possible and when necessary, conflicts of interest. You see, I’m a big fan of Sharesleuth and Cuban starting it in every aspect except that conflict, which does undermine trust.

See the comments on his post and this one; lots of good discussion. And I’ll repeat that I hope there is this sort of discussion at ONA. There are a few vital debates here. One is about reporting on companies and protecting the public and how we find better ways to do that than relying on newspaper business writers who are good at nothing so much as retyping press releases and quoting analysts who are good at nothing so much as spitting up company lines. The other is about journalism and what expectations and standards the trusted will operate under, whether that journalism is performed by a big, old, professional institution or by a renegade upstart company or by individuals or networks of all of the above. I’m not sure what the answers are in either case but I think we need to explore them through these debates.

: LATER STILL: Mark Glaser writes a very good summary of the good, the bad, and the ugly of Cuban and Sharesleuth. See also Gary Weiss’ next post.

Networked journalism: Exposing earmarks

The Sunlight Foundation — in a coalition with Porkbusters, the Washington Examiner, and others — has a most cool project unleashing the citizenry to perform the very important act of journalism of digging up and exposing to the air the earmarks that our elected representatives throw into bills spending our money. Now that is what I call networked journalism.

: LATER: Jay Rosen on this as networked journalism, which is also the subject of my next Guardian column.

Gagging editors

Roy Greenslade, former editor, writes about gagging former editors, a subject dear to the heart of this former editor. This comes after the ousted chief of the Sunday Telegraph finally felt she had to speak out about the sniping at her by her former bosses. Says Roy about gag orders:

They are imposed by owners and managers who, for one reason or another, seem not to understand the concept of freedom of expression. I experienced this when I departed as editor of the Daily Mirror back in 1991 and soon realised just how iniquitous it is to be gagged. Like Sands, I suffered from the fact that I was unable to answer back to the critics of my editorship. And, like her, one comment too many – in my case, by my former employer, Robert Maxwell – spurred me to speak out. In so doing, I ended up in court when Maxwell sued me for breach of contract, and I sincerely hope that doesn’t happen to Sands. If it does, she might like to know that the judge, Mr Justice Rougier, found for me on the grounds that it was unfair for one party to the agreement to speak while the other could not.

But let me get back to the general principle. We work in a profession (or industry, whatever) that is founded on disclosure, on the notion that nothing should be secret. Yet almost every ex-editor (and this affects regional editors too) is inhibited from speaking. I understand that no editor should reveal a commercial secret, which includes, say, the existence of plans to turn a paper from broadsheet to tabloid, or the timing of a cover price rise or the salary of a columnist. But there is no earthly reason why ex-editors should not have the right to say that they felt let down by a lack of resources or that their editorial initiatives were stifled or, in my case, that my boss grossly interfered in editorial matters.

Some will say that editors would be free to speak if they simply walked away without taking a pay-off. If they take money then it’s reasonable that employers should have their silence in return. Great in theory, folks, but utterly naive. Editors who are fired very rarely get the chance to be editors again. Their pay-offs compensate them for the fact that, in career terms, they need a financial cushion. That reality should not be used to prevent them from their right to free speech.

My letter to the editor of the NY Times Book Review in March, 1992, tells my tale:

Your review of “To the End of Time” says that managing editors of Time Inc. magazines were presented with a contract that tied their jobs and severance to a clause forbidding them to denigrate, criticize or ridicule the company and its products. That is true. But the review also repeats Richard Clurman’s assertion that all the company’s editors signed the contract. That is false.

I was the founding managing editor of Entertainment Weekly, and I refused to sign the contract precisely because of that gag clause. I said then that I was appalled to see an institution that lived by freedom of speech trying to muzzle the speech of anyone, especially its own managing editors (not to mention other journalists and critics).

If Mr. Clurman had bothered to get in touch with me and check his facts, he would have heard a great deal about the contract and more — for I retained the right to criticize, ridicule, denigrate or simply talk about Time Warner when I resigned from the company over matters of principle in 1990. Mr. Clurman also writes — wrongly — that I was fired. If, as he reports erroneously, I had been fired and had signed the editors’ contract, then I would have received three years’ salary, bonus and benefits, and I wouldn’t be sitting in New York reading book reviews. I’d be sitting, speechless, on a beach somewhere.

I may have been an idiot but I was a principled idiot. Even then, I was obnoxious on the subject of transparency and journalism.

Amanda exposes herself

For those following the Strumpette saga, “Amanda” has exposed her/him/their self in the comments below:

If you did just a little research, you’d readily find that there are 5 people that write for the character “Amanda Chapel.”

Why a character? Two reasons:

1. It provides us a platform (brand) where we are able to draw attention to some of the hypocritical issues that presently plague PR.

2. It’s safe. This shields us from ad hominem arguments which are a mainstay of net discussion. See, in the “flat world,” Jeff can rally 6 million people (as with Dell) with pitch forks and torches very well. Regrettably, that comes without any real depth. That, by definition, is a mob. Mobs like hangins.

Our motive is simple to check the blog hype, especially in PR, and to do that without retribution.

Kind regards,

– Amanda

PS Regarding Edelman… They get our attention a lot because they are some of the most prolific blog advocates in PR. We’ve come to call their “Me2Revolution,” the Me2CommieBastards.

He/she/they are still trying to take the easy way out, though. I emailed “Amanda” and said:

I still want to push you on the anonymity/pseudonymity of “Amanda.” Yes, it’s cute. Yes, it lets you go hyperbolic. But as PR (communications) professionals, I’d think that you’d want to get credit for your ideas. Or to put the question another way: What does attacking the ideas of others do for your business?

They complain about bloggers being snarking mobs but then they create a character to do nothing but snark from behind a veil.

By the way, the assumption from all the prior sleuthing is that Amanda is a creation of at least one person in this bunch.

: I still prefer Rex’s theory, from the comments below:

Just a theory: Nick Carr is Amanda Chapel. Or maybe Nick is John Dvorak.

: The Amandas respond in email:

We are our words. The motivation is exclusively within the art. However, Guernica, Strumpette is not?

Oh, gag me with a PR schwag pen. I don’t buy it. Art? Hardly. Amusement? Why? I still don’t see the business motivation from a bunch of flacks so clearly is intent on protecting big business. Perhaps this is just their last will and testament.