LAS VEGAS — Matt Haggman of The Miami Herald slogged through massive databases to turn up more than 10,000 people with criminal records in the mortgage industry in Florida.
Gary Cohn, then of Bloomberg Markets magazine, delved deep into the footnotes of financial documents to find stealth fees that AARP, the nation’s largest seniors group, charged its members for insurance.
However, both agree that what made their journalism so powerful were the stories of real people affected by what they found. Each, with partners, won a 2009 Barlett & Steele Award for Investigative Business Journalism, awarded by the Donald W. Reynolds National Center for Business Journalism.
“You need the numbers, the overall quotes, the experts, but what you really need are the stories of real-life people to make your readers or listeners care about these stories,” said Cohn, who also won the 1998 Pulitzer Prize for investigative reporting. He said that finding those people was challenging, but that he learned from Don Barlett, when they were both reporters at The Philadelphia Inquirer, that “if one technique doesn’t work, try another thing.”
For example, Cohn said they started searching the letters to the editor in newspapers in LexisNexis and found more than 100 writers complaining about AARP insurance. “For some reason, people who write letters to the editor have listed phone numbers, and most of these people kept records. We were really able to document this,” said Cohn, who is a freelancer and adjunct professor at the USC’s Annenberg School for Communication and Journalism.
The awards are named for Barlett and his partner, Jim Steele, who have won two Pulitzers and two National Magazine Awards in their almost 40-year collaboration as investigative reporters at The Inquirer, Time and now Vanity Fair. This video describes the pair’s storied history and the awards that bear their name. The deadline to apply for the 2010 awards, for work published in print or online by June 30, is Aug. 2. They were first conferred in 2007 and carry $7,000 in prizes.
Haggman said the idea for the “Borrowers Betrayed” series, reported with Jack Dolan and Rob Barry, came out of working the real estate beat. He came across one mortgage broker with a felony conviction and wondered if there might be more in a state already known to have a high rate of mortgage fraud.
That led them to the Florida Department of Law Enforcement, which initially wanted to charge the paper $24 for each criminal-history check of individuals licensed to work in the mortgage industry. Haggman calculated that would have cost $133 million. Ultimately, they were able to negotiate with the state to run a study without releasing the names.
Cohn said his Bloomberg colleague, Darrell Preston, got a tip that unions that had endorsed insurance products were getting legal kickbacks, or royalties, for doing so. They started with a list of 50 large nonprofits and began checking for royalty payments on their tax returns, which are public on GuideStar.org.
“When we came to AARP, we were startled,” Cohn said. “In the last year we looked at (2007), they were just under half a billion dollars….That’s when we decided to focus on AARP.”
He said many nonprofits, including AARP, make public their consolidated financial statements on their websites. “That’s where you would find the really good stuff by reading the footnotes,” he said.
He and Preston then did a statistical comparison of AARP’s rates to those of similar insurance products and found they were not the cheapest.
“We wanted to test what we were finding. We went to AARP very early to ask them about this,” he said. Their interview with a financial expert at AARP confirmed they were on the right track, but AARP soon stopped talking to them, making it difficult to balance the story.
Cohn’s advice to the journalists listening to him on an IRE panel was to make a list of the larger nonprofits in their area and start pulling their tax returns on GuideStar.org. Nonprofits are still largely uncovered, he said, and they “include huge hospitals, private universities and not just small mom-and-pop organizations….They operate as businesses.”
He added, “Trust your instincts and trust your eyes. If you get a lot of mail promising lower insurance rates, check it out.”