Four months ago, The New York Times ran a big story contending that Bloomberg editors had quashed an investigative report about corruption among leaders in China. The Times story was clearly based on informed comment from people inside Bloomberg who were unhappy about the result. It said that higher-ups at Bloomberg were worried that the story would hurt the company’s sales of financial terminals—the mainstay of its business—inside China, since the main purchasers would be directly or indirectly subject to government control.
Like the NYT and some other Western news organizations, Bloomberg was already “on probation” with the Chinese government, because of some very brave and probing official-corruption stories the previous year—including the one on “Red Nobility” that is the source of the graphic above.
As a reminder, here are the main story steps since then:
- The FT did a similar report (here, but paywalled), also clearly based on inside-Bloomberg sources and also saying that Matthew Winkler, Bloomberg’s editor-in-chief, had ordered the story killed, for fear of ramifications inside China.
- Bloomberg denied the reports, in categorical but not specific terms. I.e., variations on the theme that: Of course we didn’t bow to political pressure, and the story was just not ready yet.
- Amanda Bennett, a long-time editor and reporter with experience in China (she was co-author of Sidney Rittenberg’s book, The Man Who Stayed Behind), promptly resigned as head of Bloomberg’s investigative unit. She did not explicitly address the controversy but made her feelings clear in her resignation statement. It said: “I am totally proud of the work of the Bloomberg Projects and Investigations team over the past five years…. I’m also most proud of the groundbreaking June 2012 story that the team led, that for the first time exposed the wealth of the relatives of China’s top leaders. I’m proud of the courage it took from top to bottom in Bloomberg to make that happen.”
- Michael Forsythe, the Bloomberg reporter who had worked for decades in China and was involved in these corruption-investigation stories, was quickly suspended by Bloomberg. He later joined the NYT staff.
- Bloomberg continued to deny the allegation of knuckling-under but refused to address any specifics. The story that reportedly was underway has not yet appeared. Soon after the flap broke, I received several calls from people inside Bloomberg, all of them insisting that I say nothing that could identify them, or even about the fact that we had talked. One was from a person who warned me that it would be a big mistake to put too much faith in what this person said were competitively motivated attacks by Bloomberg rivals. The other calls were from Bloomberg reporters or staffers, who said that the NYT and FT reports were essentially accurate. I wrote to the man who reportedly gave the spiking order, editor-in-chief Matthew Winkler, and did not hear back.
- Then, last week, the chairman of Bloomberg L.P., Peter Grauer, appeared to confirm the original accounts by saying that it had been a mistake for Bloomberg ever to deviate from its business-oriented coverage.
All this is prelude to the latest news, which is Ben Richardson’s resignation as a Bloomberg editor. Jim Romenesko had the story yesterday, followed by this from Edward Wong of the NYT, who also had the story about Michael Forsythe back in November. After I saw the item on Romenesko, I wrote to Richardson asking if he would say more about the situation. He agreed. What follows are my emailed questions to him and his replies:
James Fallows: Four months ago, during the Mike Forsythe episode, Bloomberg officials contended that his stories just “weren’t ready,” and that the accounts in the NYT and elsewhere were misleading or incomplete. What was your understanding of the episode and whether the company’s claims were correct?
Ben Richardson: I was one of the two editors on the story that was spiked last year, and one of three who helmed the 2012 stories on the hidden wealth of China’s Communist Party leaders, so I have a pretty intimate knowledge of what happened. Unfortunately, I am bound by a confidentiality agreement that prevents me from disclosing the details. That said, much has already become a matter of public knowledge.
I felt the NYT and FT articles were a fair account. As often happens in news coverage, the stories painted the picture in stark black and white when in reality it was more nuanced. However, the contention that the story “wasn’t ready” is risible: the only proof of readiness is publication. The real question is whether the story had any merit, and if it did, how could we get it to press?
That’s a simple question. So if Bloomberg felt the story had no merit, then why has the company not explained its reasons? Four seasoned, veteran journalists (with help from many others on the periphery) laboured for months on this story. Were we all wrong? All of us deficient in news judgment?
JF: Amanda Bennett left the company at that same time. I know you can’t speak for her, but should outsiders see her departure and yours as similar reactions to a trend in coverage?
BR: Amanda Bennett must speak for herself on this. The only comment I can make is that her departure coincided with the decision to spike the China wealth story and the effective dismantling of her Projects & Investigations team — along with the sacking of a number of seasoned and award-winning journalists. At the same time, the company is shifting ever-more resources into the short, bullet-point end of the news spectrum. That trend isn’t unique to Bloomberg and is undoubtedly sound business, but the overall direction is clear.
JF: What happened, now, in March, 2014 to persuade you to leave the company, versus the controversy in November, 2013?
BR: Time. Like most Bloomberg staff, I have a family to support, credit card bills, taxes and a mortgage to pay. I timed my departure to the company’s annual bonus.
JF: Is the main change that is afoot here on the Chinese side, in decreased tolerance for any investigation into (especially) leading-family corruption issues? Or is it on the Western-press side, in decreased willingness to run these risks?
BR: It’s hard to say. I’m not aware of any reporting of this nature up until Bloomberg and the New York Times stories of 2012, so there’s little to gauge the government reaction against. Those stories were published against the backdrop of a power transition, the purge of Bo Xilai and incoming president XI Jinping staking his legitimacy on cleaning up graft. And on top of that, growing inequality and soaring home prices are stoking public resentment of corruption — making the government even more sensitive.
As for the international press, there are many reasons for crimped ambitions. The first is that these stories are immensely expensive to execute. Even if a news organisation has the money, it may not have enough people with the right skills. And then it needs the will. I don’t know whether it was bravado fueled by ignorance or true cold-steel nerves, but Bloomberg stood up to intense bullying by the Chinese government in 2012. Last week in Hong Kong, Chairman Peter Grauer made it clear that China is just too big a market to miss out on. The jury’s still out on how most other big organisations would handle a similar situation.
JF: If you were in charge, how would big Western news organizations set this balance? To be more precise, Bloomberg is in a different situation from NYT or WSJ, in that its main business is not reporting but financial services. How should Bloomberg set this balance?
BR: I’ll combine this with your next question, “What is the main thing you would like people without experience in China to know about your situation and decision?”
Bloomberg has to act with the interests of the majority of its employees at heart. The company provides a good living for thousands of people. The vast majority of its news is untainted by the kind of constraints you see in China. If that’s the kind of news its clients want, give it to them. The world is full of news organisations that feed different parts of the spectrum—including many trade and specialist publications that never write critical articles of any kind. I think the debate should now move beyond Bloomberg.
Business and political power are inextricably linked everywhere. That’s especially so in China, where both are largely in the hands of a single, unelected political party that forbids the free flow of information and ideas and operates behind a veil of secrecy. Lack of transparency and accountability fuel rampant corruption, human rights abuses and environmental crimes. As China goes global, those values and practices are in danger of gaining currency elsewhere.
The question is a bigger one for society as a whole. What value do we place on investigative journalism? If the world’s best-resourced news organisation leaves the field, who will fill the gap?
I’m grateful to Ben Richardson for his quick and forthcoming answers. This may be the time also to share something I received from a person inside Bloomberg at the time the news first broke, which is a useful complement to what Ben Richardson says. This Bloomberg employee said:
“There is a bigger contradiction for the company than most people perceive. Outsiders think the worst explanation for this controversy is that it’s concern about selling terminals within China. It’s bigger than that. Really it’s about continuing sales all around the world, if Bloomberg can’t promise having the fastest inside info from China.
Everyone knows that it’s a company that exists on the terminals. But now that they have saturated the US market, all of the growth will come from areas with these deep contradictions between the company’s financial-business interests and its journalistic aspirations.”
Until very recently, the very fact that Bloomberg was not principally a journalistic company seemed to be its greatest strategic asset. It could use the stream from those financial terminals to bankroll ever-expanding coverage, while companies that were mainly or only in the troubled journalism biz kept cutting back.
From Citizen Kane onward (and beforehand), it’s been obvious that these extra-journalistic business ties can complicate news coverage. It’s time for someone with standing-to-speak for Bloomberg values—Winkler, Grauer, or the mayor himself—to address these concerns directly.