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Investigative reporting: An introduction

investigative reporter“Investigative reporting” is a term that can cover many sins – and, hopefully, uncover at least a few sinners.

The best definition/description I’ve heard of the term is any reporting that uncovers information that people in power would like to keep secret. Under this umbrella, investigative reporting can be a daily story sparked by a sentence buried in a document.  Or it can be a months-long project that entails reading through thousands of pages of documents and talking to dozens of individuals.

Investigative reporting isn’t a traditional “beat.”  (Indeed, given what’s happening to print journalism, being an investigative reporter for a newspaper could qualify for a spot on the endangered species list.)  Unlike someone who covers an industry, such as autos or retailing, an investigative business reporter doesn’t have a natural flow of stories generated by a company or governmental body.  Essentially, investigative reporting involves looking for the information those bodies aren’t announcing and in some cases are trying to bury.

A great thing about investigative reporting is that any reporter can do it.  Much of the best investigative journalism has been done by beat reporters, who in the course of their routine work ran across a document or a source that opened a door to a hidden compartment that produced a treasure trove.

The obvious initial challenge is finding those overlooked nuggets.   There is no “scandals ready to be broken” website to consult and no oracle who’ll whisper in your ear where to find the next Watergate or Enron.

Still, there are things a reporter can do to maximize his or her chances of finding such a story.   If you are covering a business beat with publicly-traded companies (or an investigative reporter looking to learn more about a particular company), the EDGAR database of corporate filings kept by the U.S. Securities and Exchange Commission should be a regular stop.   A company’s 10K (its annual report), its 10Q (quarterly report) and its 14A (proxy statement for the annual meeting) can be great sources of information and leads.  So too can an 8K filing, which a company must make when it experiences a “material event” that requires disclosure to the public before its next 10K or 10Q report.

Much of the information in these corporate filings is mundane and written in a mind-numbingly dull style by lawyers apparently paid by the word.  Particularly good areas of the reports on which to focus include the litigation section. Lawsuits involving the company can often be great sources of information for investigative pieces.

Another area always worth reading is the so-called “related-party transactions” section.   Here, the company must report any outside business/financial dealings it has had with a company executive or director – in other words some transaction that could represent a conflict of interest.

The seeds of Enron’s spectacular late 2001 collapse into bankruptcy and scandal could be found in the company’s related-party disclosures regarding its massive financial dealings with the LJM partnerships run by its chief financial officer, Andrew Fastow.  Those disclosures had been buried – largely unread and certainly unnoticed by the press and public – for two years in Enron’s SEC filings.  When The Wall Street Journal discovered and started writing about these partnerships, Enron was in bankruptcy a month and a half later. The main pieces in that series were essentially daily stories, with the next one often sparked by a tip generated by the previous story.

Of course, investigative business journalism often involves a much longer time horizon.  While there’s no one blueprint for finding and reporting such stories, it can certainly help to choose some broad topics to follow.  The choices can be determined by areas that you decide are particularly important to your readers.  For example, if you’re in a major port city, what goes on at the port is often a major ongoing business story and a potential source of good investigative pieces, ranging smuggling operations to worker-safety issues to corruption in handing out contracts for work at the port.

Whatever the broader topic, get to know and stay in touch with some of the major players in the field.  Often, periodic conversations, ideally done in person, can produce a lead.  Also find out what the major regulatory bodies are.  Get to know as many of the current and former regulators as you can.  They can be great sources of ideas and information, to the degree they can and will talk.  Find out what filings the regulators and companies in the particular area routinely have to make. Read them.   If the field is followed by academic researchers, they can also be very fruitful sources.   In other words, find some areas to follow and then cast a wide net.

About the Author

John R. Emshwiller, a senior national correspondent for the Wall Street Journal, has spent most of the past decade covering white-collar crime and related issues. He is the author of "Scam Dogs & Mo-Mo Mamas" and "24 Days." Emshwiller has won multiple journalism awards, including the 2002 Gerald Loeb Award for his coverage of Enron.

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