BusinessJournalism.org Reynolds Center for Business Journalism » Rosland Gammon

ProPublica, Planet Money tackle CDOs with comic strip, song

Rosland Gammon — Thu, 02 Sep 2010 11:00:53 +0000

ProPublica’s Jake Bernstein and Jesse Eisinger tackled the very complicated issue of mortgage bonds known as collateralized debt obligations, or CDOs, to show how bankers created fake demand for the once lucrative product. They write:

“An analysis by research firm Thetica Systems, commissioned by ProPublica, shows that in the last years of the boom, CDOs had become the dominant purchaser of key, risky parts of other CDOs, largely replacing real investors like pension funds.”

Jake and Jesse worked with NPR’s Planet Money, which came up with the idea for a song, called “Bankers Song: We Didn’t See It Comin’,” Jake says.

The project also features a comic as a graphic to show how CDOs went into other CDOs, Jake says.

“We searched for metaphors but could never find an exact fit,” he says. “We had toyed with an assembly line to show the CDO process but it quickly became way too complicated. So, we fell into the comic format as a way to show the incentive of the manager to take assets from the bank and the disappearance of investors.”

First Tip: Find creative ways to illustrate a story.

“This topic is extraordinarily complex. Anything like a song or a comic that makes it more accessible, and frankly, more fun, is a most welcome addition,” Jake says.

Second Tip: “Don’t be afraid of complexity.”

Jake Bernstein

Jake suggests:

Talk to as many people as possible.
Don’t take no as the final answer.
Enter every interview willing to learn.
Don’t be afraid to return to your sources a dozen times if necessary to make sure you understand what they are telling you.
Start writing early because once you try and write it out, you’ll really find out whether you understand it or not.

Confronted by mega-ads, WLRN radio reporter thinks locally and nationally

Rosland Gammon — Wed, 01 Sep 2010 11:00:45 +0000

This screen grab from the Marketplace website shows a billboard in Los Angeles.

Kenny Malone, reporter/producer at radio station WLRN, based at The Miami Herald, noticed big ads appearing on buildings in Dade County. Then he received a press release from a company announcing that a “mural” was going up.

“What caught my eye was how enormous it was,” Kenny says of the 32,000-square-foot vinyl ad.

His segment that aired on American Public Media’s Marketplace says:

“Mike Freedman is CEO of Fuel Outdoor Advertising. They’re the ones renting the side of the [county's] chiller factory. He says everyone wins with the Dade project. Advertisers get unique access; his company gets the contract, and the county gets much needed non-tax revenue.”

Kenny says in the segment that the Apple iPad ad on the chiller building will earn the county a $220,000 rental fee plus 16 percent of the sign’s profits.

Today’s Tip: Think both locally and nationally with your stories, Kenny says.

Kenny Malone

“I’m someone stuck between national and local reporting,” he says. “You have to answer the questions people think of on a national level.”

In this case, he produced a local and a national version of the story. The local version focused on the county effort to raise money by legalizing an increasing number of ads. It addressed the audience’s question of why the ads were springing up.

For the national story, which has the universal angle of municipal governments struggling to make ends meet, he set out to learn what other cities were doing, he says. If you have access to LexisNexis or Factiva through work or a public or college library, those information services can help you find the national context.

“You have to understand a beat doesn’t mean you need to focus on one area,” he says. “It’s about switching the lens on your camera.”

Tax-exempt bonds benefited oil industry more than NOLA neighborhoods

Rosland Gammon — Tue, 31 Aug 2010 11:00:19 +0000

These houses in the Lower Ninth Ward of New Orleans were still abandoned in December 2008, when Flickr user Rain Rannu took this photo.

Ariella Cohen, co-founder and staff reporter at the nonprofit New Orleans news site, The Lens, found that far more of the tax-exempt bonds issued to rebuild Louisiana after Hurricane Katrina went to the oil industry than to hard-hit areas in New Orleans.

In a piece for Newsweek marking the fifth anniversary of the storm, she writes:

“New Orleans has so far received a total of $55 million in bonds shared between eight projects—or less than 1 percent of the more than $5.9 billion issued statewide. None of the bonds issued for New Orleans projects went to development in hard-hit and still-struggling areas like the Lower Ninth Ward.

Instead, the federal largesse has been poured into oil companies operating far from New Orleans. Since Congress’s unanimous approval of the GO [Gulf Opportunity] Zone Act, Louisiana officials have issued nearly $1.7 billion in tax-free bonds—about one third of the total issued — for projects that contribute to the production of oil. Preliminary approval has been secured to tap millions more.”

Today’s Tip: Ask for documentation of how promises were carried out, Ariella says.

Ariella Cohen

She requested Louisiana Bond Commission records to see how much in bonds had been issued. She then imported the data into Excel to sort it. She says she also reviewed commission meeting minutes to see how the money was spent.

Louisiana, West Virginia, and Connecticut are some of the states that post online the minutes of bond commission meetings and other details. More info on municipal bonds issued since 1990 is available at EMMA, a website created by the Municipal Securities Rulemaking Board. EMMA is to munis as EDGAR is to stocks.

Ariella says what surprised her most about the story was that state officials wouldn’t comment.

“No one took me up on that,” she says.

If you’d like to sharpen your skills in using Excel and analyzing data, check out the free “Be a Better Business Watchdog — CAR for Business Journalists” workshops on Oct. 11 in Atlanta and Nov. 9 in Milwaukee. These workshops are co-presented by the Donald W. Reynolds National Center for Business Journalism and Investigative Reporters and Editors. You do not have to be a member of IRE or have previous database experience to attend.

Also, if you’re looking for more data from the disaster front, IRE just made available for a small fee the Small Business Administration disaster-loan records from fiscal 1980 to 2009. You can search the database of more than 1 million records to find who got SBA disaster loans in your market and who is not paying them back.

Story comments reveal tie between homeless and suicide

Rosland Gammon — Mon, 30 Aug 2010 11:00:23 +0000

Annie Lowrey of the Washington Independent found a strong correlation between unemployment and suicide. Her story says the rate of suicide among unemployed people is two or three times the national average. The longer the unemployment lasts, the more likely the person will commit suicide.

The article leads with a homeless man’s posting on an online forum, detailing his thoughts of suicide. She quotes the posting as saying:

“This is killing me physically and emotoinally [sic]. I am at the end of my rope and getting to the point of letting go. I have tried everything I know to get help. DHS won’t help’ Salvation Army won’t help. 211 won’t help. I have no idea as to where to go from here. If you don’t hear from me by tomorrow I probably will be dead.”’

She also details how others on the forum tracked him down.

Today’s Tip: Keep a large pool of “sources” in the labor market, Annie says.

These “aren’t really ‘sources’ in any conventional sense. They’re just unemployed folks, progressive activists and union leaders I email with once a week or so, who keep an eye on emerging issues and help me find sources and topics in the labor space,” she says.

Create your own source list as you talk with people. You may not quote them in the story, but you can follow up with them anyway. The best way to find activists is to head to rallies and meetings. Monitoring unemployment from this ground level truly paints a picture of what’s going on.

Scan SEC documents to track insider details

Rosland Gammon — Thu, 26 Aug 2010 12:00:18 +0000

By Flickr user Marcin Wichary

Brandon Bailey of the San Jose Mercury News checked Securities and Exchange Commission filings to learn that 3Par’s deal with Dell had been preceded by Hewlett-Packard negotiations. The deal may have been sidetracked when the investigation into former CEO Mark Hurd’s friendship with an HP marketing contractor started.

Brandon writes:

“Talks began July 8 when a Hewlett-Packard executive contacted 3Par CEO David Scott and expressed an interest in buying his company, according to the report. The two companies then held several meetings; the report indicates that Hurd expressed his ‘seriousness about acquiring 3Par’ when he met with Scott on July 14.”

Today’s Tip: Use SEC filings to get insider details about pending mergers.

Brandon, who’s been business reporter for about two years, says he checked the filings periodically, but received a call from a source when it posted.

This page offers tips on searching SEC databases for information about mergers. You also can set up a free email alert through SECFilings.com and Edgar Online.

Reuters goes to ground to find homes resold at 13 times foreclosure price

Rosland Gammon — Wed, 25 Aug 2010 11:00:15 +0000

Reuters correspondent Nick Carey reports from Chicago on a mortgage-fraud hot spot he found by talking to a nonprofit lender.

Nick Carey of Reuters heard from an editor about a mortgage-fraud hot spot in Chicago. When he went to check it out, he found a trend happening in poorer communities. He writes of one house:

“Public records show it sold in foreclosure for $25,500 in January 2009, then resold for $355,000 in October. In between, a $110,000 mortgage was taken out on the home, supposedly for renovations. This June, the property went back into foreclosure.”

Today’s Tip: Find people who are monitoring real estate from the ground level, Nick says.

In Nick’s story, that person is Emilio Carrasquillo, head of the local office of nonprofit lender, Neighborhood Housing Services of Chicago. Nick says he found Carrasquillo by asking nonprofit sources if they knew of anyone working to help lower-income people. Nick visited the area four times with Carrasquillo, noting in his story the lack of police presence, gang graffiti and boarded-up homes.

Another tip Nicks offers it to ask as many questions as you can – even stupid ones. He says when you’re working on investigative pieces, those questions can generate leads.

To hear more from Nick about the story, check out this interview and video on Reuters.

And for more ideas on tracking victims of mortgage fraud, see this post about reporter David Heath’s experience when he was at The Seattle Times.

LV Sun reporter asks why, gets candid answer from casino CEO

Rosland Gammon — Tue, 24 Aug 2010 11:00:57 +0000

CEO John Unwin waves from the roof of the soon-to-open Cosmopolitan casino in Las Vegas in this image from the Las Vegas Sun's website.

Liz Benston of the Las Vegas Sun says she’s learned that asking the same question a few different ways gets a better response. So when she asked the CEO of the soon-to-open Cosmopolitan casino in Las Vegas how the company would compete, she got a candid answer: by stealing customers from his Strip neighbors.

“He said what everyone in the industry knows,” Liz says. “It was refreshingly honest for him to say that.”

Today’s Tip: “I like asking ‘why.’ You get better answers that way,” Liz says.

Liz Benston

“With any new business, that’s an important question,” she says.

Reporters have to put themselves in the consumers’ shoes without focusing on the jargon or technical aspects, she says. Once you have an answer, question what the source is saying.

With this story, readers would want to know why people would choose the new casino and what makes it special. Asking why helped Liz learn that company plans to differentiate itself with its hiring and training. She writes:

“‘We’re a blank slate,’ [CEO John Unwin] said. ‘We’re going to change the marketplace by changing the workplace.’

While many corporate giants rely on thick handbooks to instill customer-service standards such as standard greetings, the Cosmopolitan, he said, will encourage an unscripted approach.

‘We want you to bring (your personality) to work and let you (serve customers) in your own way,’ he said. ‘Guests know if you’re not being genuine.’”

NYT pers fin blogger opts for Sharpie instead of computer graphics

Rosland Gammon — Mon, 23 Aug 2010 19:21:52 +0000

Carl Richards, a certified financial planner and blogger for The New York Times, uses simple diagrams to explain financial behavior.

New York Times blogger Carl Richards could have used flashy graphics with his weekly personal finance column. Instead, he opted for a Sharpie and cardstock.

“I’ve been drawing similar drawings for 10 years on whiteboard,” he says. “I told [editor Ron Lieber] one time in a restaurant, and all I had was a napkin. He said send a sketch, and we’ll have the designer put it on a napkin.”

The sketches offer simple diagrams akin to ones that economics professors use to illustrate supply and demand.

Today’s Tip: Avoid overusing numbers.

Carl Richards

“We specifically exclude numbers because we don’t want people to miss the point because they’re so concerned about the facts,” Carl says. “The moment you put numbers up there, everyone want to argue with the numbers.”

Carl says sometimes getting your audience to understand the concept is more important than overwhelming them with the numerical evidence. In the case of his blog, he says he wants people to understand the impact of behaviors.

For more about using numbers effectively, check out Math Tools for Journalists. It offers exercises as well as tips on using numbers in your stories.

Court doc nets St. Louis P-D story about city aid to indicted developer

Rosland Gammon — Thu, 19 Aug 2010 11:00:53 +0000

St. Louis developer John Steffen (left) received a historic preservation award, along with fellow developer Craig Heller, from First Lady Laura Bush in 2007. Steffen was indicted in 2010 for bank fraud.

Tim Logan, who covers economic development for the St. Louis Post-Dispatch, said rumors were flying about a pending federal indictment against local real estate developer John Steffen, so the press release announcing it wasn’t a big surprise. However, a closer look at the filing did provide something he wasn’t expecting. His story says the city stepped in to pay half a million dollars to help settle a lawsuit against the developer brought by his lenders:

“Revealed in Friday’s charges against Steffen is the fact that most of that $775,000 settlement with the Business Bank was paid by the city-run Land Clearance for Redevelopment Authority. It kicked in $500,000. Environmental Operations, which Pyramid had hired to clean up the building, paid $200,000. Steffen himself paid $50,000.

Barbara Geisman, St. Louis’ deputy mayor for development, said the city paid to avoid a long, drawn-out lawsuit between the Business Bank and the state Department of Economic Development, which issues brown-fields credits and other incentives that are key to the city’s revitalization. The fear was that messy litigation could slow the flow of tax credits to other city developments.”

Today’s Tip: Watch for secondary stories in filings, Tim says.

“The criminal filing was the first time that was made public,” he says.

Tim Logan

Just as you do with SEC documents, familiarize yourself with court records. Determine where your companies are incorporated to keep an eye on the dockets there, too. For instance, during the corporate bankruptcy boom, many companies opted to file in Delaware because that’s where they were incorporated. Here’s a Reynolds Center tutorial on covering bankruptcy court. You can find some out-of-state court records through this public records portal operated by BRB Publications.

Read dockets carefully instead of just skimming them to be sure you find any secondary stories. Legal filings can sometimes be redundant, but new information may be introduced on subsequent references.

As this Chicago blog notes, sometimes the stories you find can point to a pattern.

DMN digs behind data to profile Southwest’s ‘chief apology officer’

Rosland Gammon — Wed, 18 Aug 2010 11:00:15 +0000

Passengers on a Southwest Airlines flight were photographed by Flickr user davitydave.

Readers of the Dallas Morning News forward copies of apologies they’ve received from Southwest Airlines to aviation reporter Terry Maxon, who files them in his “mental ticker file.” He took those nuggets this week to write a story about what some airline employees are doing to make customers happier. He writes:

“Their job: to find out the situations in which something went wrong – a mechanical delay, bad weather, a medical emergency or a berserk passenger – then apologize to all passengers on that flight quickly and profusely, within 24 hours of their bad experience, if possible.

[Fred Taylor Jr.] cringes at the title he was given a couple of years ago by one reporter: chief apology officer. But apologize is what he does for a living, along with assistants Melissa Chalupa and Adrienne Yurdyga.”

To determine the effectiveness of the e-mailed apologies, Terry says he calculated his own statistics using monthly customer-service data from the U.S. Department of Transportation.

Today’s Tip: Don’t just repeat the numbers; interpret them.

Terry Maxon

“By slicing and dicing data, I can present in it a way that the customer can understand and so I can understand it,” Terry says. “I create databases out of their databases.”

For instance, Terry calculated market share versus complaint share to determine that Southwest gets about 13 percent of all domestic passengers and gets fewer than two percent of all complaints, he says.

If you’d like to learn more about how to analyze data, check out the Reynolds Center’s upcoming workshops on Oct. 11 in Atlanta and Nov. 9 in Milwaukee, co-presented with Investigative Reporters and Editors, called, “Be a Better Business Watchdog: CAR for Business Journalists.” CAR is computer-assisted reporting, and the workshops will take you from zero to 60 on using Excel spreadsheets, as well as pointing out great databases for business coverage.