Scott Tong is a sustainability correspondent at American Public Media. He shared insights on covering stories in the emerging green economy and detailed his experience reporting overseas in China.
Yvonne Gonzalez is an undergraduate student at Arizona State University's Walter Cronkite School of Journalism and Mass Communication with an emphasis in print and business reporting. She has interned at AZ Fact Check, a project of The Arizona Republic, and was a reporter for Cronkite News Service and The State Press at ASU.
Scott Tong is a sustainability correspondent at American Public Media. He shared insights on covering stories in the emerging green economy and detailed his experience reporting overseas in China.
In his daily beat coverage at the Pentagon, the Boston Globe’s Bryan Bender noticed that retired generals didn’t disappear to the golf course after hanging up their uniforms. Instead, they were sticking around, this time in the suits of businessmen.
Bender is a Loeb Award finalist this year for his story, “From the Pentagon to the Private Sector,” and said just being observant of possible trends in your beat can lead to bigger ideas.
He analyzed 750 three- and four-star retired military generals in his story, which took eight months to finish, and ultimately revealed the Pentagon’s own revolving door wherein retired generals were being hired by defense companies as consultants. And Bender said it all started with his own observations and curiosity.
“The idea generated from covering the Pentagon over recent years where I noticed what seemed to be more retired generals just kind of around, and almost all of them seemed to be working for one private company or another,” Bender said. “It was anecdotal.”
From Bender’s From the Pentagon to the private sector
“An hour after the official ceremony marking the end of his 35-year career in the Air Force, General Gregory “Speedy’’ Martin returned to his quarters to swap his dress uniform for golf attire. He was ready for his first tee time as a retired four-star general.”
Bender pegged his idea on the 50th anniversary of President Dwight D. Eisenhower’s 1961 farewell address. The five-star general warned of the powerful permanent arms industry unlike the country had ever seen, and he and his aides worried how generals retiring and working for private defense companies would impact democracy.
“His warning was, we need to be aware of this because there may be some power there that may be unchecked,” Bender said. “This powerful industry has this political clout as well as spending power.”
To determine if Bender’s anecdotal observations of this trend were accurate, he, a researcher and a couple of editors who were involved with the story almost daily, needed numbers.
They requested from all four military branches lists of their three- and four-star generals who had retired since 1990, a time when military spending was at historical highs. They then created a database that showed where each went after retiring.
“We got this striking growth of them going from the military to the private industry,” Bender said. “The defense industry has swallowed some of the most senior officers in the military.”
The generals advise the companies on how to pitch their latest weapons or technology to the military for purchase, much the same as Congressional aides go to work for lobbying firms. In some cases they were still being called in by the Pentagon to advise on specialized areas, creating what Bender called, “the potential for insider trading.”
They began to contact some of the retirees directly to put a face on the story rather than simply writing about the numbers, Bender said.
Some didn’t want to talk at all, some would only verify information in their documents, and some who did want to talk left Bender with the impression that this was so common nobody thought twice about it.
The consulting companies doing the hiring were even more unwilling to talk, with no response to dozens of Bender’s requests. Being private companies, they are not under the same obligation as public companies to file information about themselves, meaning he had to rely even more heavily on the generals to provide information.
“It became this accepted process and nobody asked if it was a good thing or a bad thing,” Bender said. “One of the common responses (from generals) was, ‘I’ve been doing this for 40 years, this is what I know.’ ”
Bender also looked at ethics guidelines, or any rules that were in place to dictate behavior of retired generals, and he found that many of these hadn’t been updated in years to account for this new trend. Many generals said they were unprepared for the onslaught.
“The extent to which the military and defense industry had become intertwined and arguably even more of a complex is far greater and far tighter a connection that it was several decades ago,” Bender said. “Some generals would describe retiring and feeling almost like it was an NFL draft from defense companies offering what their new career could be.”
Most reporters will find it difficult to spend eight months on a story, and many newspapers no longer have the resources to provide a researcher who can help create this type of extensive database.
“I credit my editors for seeing this as something different and new and worth investing in me, a researcher, and a couple of editors,” Bender said. “There was an understanding from the get-go that this would take some time and was worth a few months.”
The techniques Bender used to gain information and create a peg for a historical idea can be applied to other types of stories, and finding that peg can be the life or death of a story.
Shauntel Lowe, a local editor for AOL’s Patch.com who covers the Rancho Bernardo community in San Diego, works with her beat without the benefits of a bustling newsroom.
As an editor, Lowe handles many facets of the site, including prioritizing and editing Patch.com’s coverage with her team of freelancers.
Lowe said working remotely is not as challenging as it was a several years ago because tools like Twitter, Facebook and text messaging help her stay connected to her writers. She has even used Skype to keep the face-to-face interaction with her reporters and to pass photos between herself and another editor.
“The most important tip for working with reporters who you don’t see every day is emphasizing the need for prompt communication,” Lowe said. “In a newsroom, an editor can see when a reporter is furiously typing to meet deadline; I can’t. What I tell reporters is to keep me updated on story progress. Text messages are great for that, especially when they are out on assignment. Also, even with all of the cool technology we have, it’s still useful to grab coffee in person every once in a while to maintain that relationship.”
Lowe attended the Society of American Business Editors and Writers Covering Public Pensions Seminar in June. In the video below, she shares her tips for prioritizing coverage with a small, remote staff.
Michael Lawson, a reporter at the Investigative Reporting Workshop, has covered a variety of topics. Since business is not exclusively his beat, he shared a few techniques he uses to keep informed on top trends.
• Keep clicking: “When I’m in the course of my research I just let myself go into it so that if I’m reading one thing I follow the link to another source, and then I follow another link from there, and then another, until I feel like I can tell someone else about this.”
• Utilize alerts and online data: “I try to read up on topics using general databases like Lexis Nexis or even by just doing a Google News search.”
• Use Twitter for story ideas: “I get a lot of ideas from my Twitter feed these days. I follow a lot of people, especially organizations like nonprofits and governmental departments. All day there are links to different sources. Twitter is good to keep you informed in real time when it’s used professionally.”
Lawson was a fellow during the Society of American Business Editors and Writers’ Covering Public Pensions Seminar in June. In the video below, he offers advice on finding human stories behind the numbers.
Public pensions are often just a line-item on a state legislature’s budget that doesn’t get looked at very closely. But reporters must keep a keen eye on these programs in their respective states because they can impact all the residents of a state, not just state employees.
A group of 20 reporters from around the country gathered this week to talk in more detail about just how to keep an eye on those public pensions.
The Society of American Business Editors and Writers’ “Covering Public Pensions” seminar kicked off Thursday morning at Arizona State University’s Cronkite School with a discussion of what public pensions are, the complications that go along with covering them, and how to even get started.
Public pensions, which can be covered from either the business or metro desks, have been reported to be broken in several instances in the past few years.
The Maine Center for Public Interest Reporting published a series of articles, Pensions: The next budget crisis, on the state’s funding crisis for its pension program, and reporters have dug into those plans in Colorado and Chicago to show systems that may be unsustainable if changes are not made soon.
Craig Harris, who wrote “Public Pensions: A Soaring Burden,” an eight-part November series for The Arizona Republic, spoke to the SABEW fellows before the sessions began: ‘I just dug deep.’
David Milstead, former Rocky Mountain News Finance Editor, covered Colorado’s complicated pension system in the early 2000s and spoke to the fellows about his experience.
“It took me three years and a couple dozen articles for me to figure out all this stuff because there really wasn’t any introduction to public pensions for journalists back then,” Milstead said before talking about the tips and shortcuts he learned.
Simply defining it as a savings plan for public employees is not enough. These plans not only vary state by state and, therefore, financial need, but they also vary by type and frequency.
Lynn Turner, a speaker at the seminar and former SEC chief accountant, said all pensions vary greatly. They are funded by contributions from the employer, employee and the earnings from the investment of funds from the pension. These three categories must cover the benefits being paid out and the funds’ expenses.
There are two types of contribution employers and employees can use to fund their pension.
In order to report on these plans, journalists must:
A public pension is underfunded if its liabilities exceed its assets. But how is that determined?
Milstead said most of these programs are imbalanced. Liabilities, he said, are the total amount the plan will need to pay its members in the future. This number is a guess, as it guesses at things like retirement age and life expectancy.
This number is weighed against the assets of the plan, which consists of the total money in earnings from investments. This number is complicated by a practice called “smoothing,” which allows the pension plan to spread losses over time.
In other words, the pension plan does not absorb the hits from a bad market year right away, but can give itself, for example, five years to absorb the loss.
That aside, the takeaway for reporters is this:
When underfunded plans occur, this creates an “unfunded liability.” In other words, the liabilities must still be paid.
The question becomes when and how. For reporters, this means determining whether the liability is too great to ever be paid off so that current members still paying into the plan can reap retirement benefits in the future.
It also begs the question: where is the state going to get funding to pay off any liability it might have? And when does paying off the pension plan’s liabilities start eating away at the budget for other state and city programs?
Jason Grotto, a reporter with the Chicago Tribune, published a series on Chicago’s broken pension system. In his case, the city had over 600 pension plans for police and fireman, and had been underfunded by the state for years.
Resources for reporters:
These contain key information about the public pension, including liabilities and assets. Reporters can then use this data to create graphics that show readers how liabilities have increased over time.
These funds are managed by middlemen who negotiate between the state legislature and the workers, or unions. Grotto said they were key sources who knew exactly what the pension was doing and were often caught in the middle of the needs of the state and the unions.
The pension laws a state uses determine the behavior of the fund. Cities may alter their law in order to save money by creating incentives to encourage employees to retire early. In the case of Chicago, the mayor made the claim the city was financial secure because they were not firing people.
But more early retirement also means less people are paying into the fund and more people are drawing from it for longer than estimated,
The laws could also be changed to allow pension holidays, which allows the city to not pay into the fund for a year. While beneficial to a city that may be suffering from the economic downturn, this creates an even greater liability for the state to have to pay off later.
Pensions do not go unfunded all by themselves. Legislators have a key role in that they are the ones who determine how much they and the employee will pay into the fund. The legislature also decides when and how to amend the codes these pensions are governed by.
Legislators, however, often distance themselves from the issue because it is not politically advantageous to anger unions or cause layoffs.
Any time the pension codes are changed, an Impact Statement must be filed. This contains information about how the change will affect the pension.
In Chicago’s case, however, Grotto said only 25 percent of instances where changes took place, over the 10 year span the newspaper examined, was an Impact Statement filed. This indicated that the impact these changes would have on the pension fund were often not known.
Many pensions began to take on more risk to reap bigger returns, especially during those times in the past 20 years when the stock market was taking its dramatic rise. But the shift from safer investments, like bonds, to stocks created issues where the fund was not making as much money as was projected.
The main vehicles for pensions are real estate and private equity. The nose dive these markets took in 2007 also impacted pensions. As these pensions lost money, losses which were compounded by overly high expectations for returns on investments, some would sell of core assets to make monthly payments owed to members.
These show how the pension works and how trustees made decisions for the pension.
Reporters should look for the consequences the pension might have on:
Public pensions are funded by the state and, therefore, funded by taxpayers. As the state must cut funds to help pay for the pension program, this could mean a reduction in state funding for other services.
Pensions are more than just a line-item on a budget, and can have far-reaching consequences for the state if they are mismanaged.
Some resources to learn more:
Francine McKenna has been blogging since late 2006 when she started her site, re: The Auditors, where she tracks the big four firms, Deloitte Touche Tohmatsu, PricewaterhouseCoopers, Ernst & Young and KPMG.
McKenna worked in the auditing industry for more than 25 years and was employed at two of the four firms in her career. She started blogging as a preliminary to writing a book about the inner workings of the firms, but it soon took a backseat to reporting the news.
McKenna’a notable coverage includes a scandal that arose in 2009 when the CEO of Satyam Computer Services Ltd. admitted to extensive accounting fraud. She calls it India’s Enron. Her reporting earned her a finalist spot in 2010 for the Gerald Loeb Award for Distinguished Financial and Business Journalism in the online commentary and blogging category.
1) Do you now officially consider yourself a journalist after being selected as a finalist for the Gerald Loeb Awards?
I do. I would say that part of that “About Me” on my website where I say I’m not a journalist is just me being funny and having fun because when I first started blogging nobody was paying my salary. I felt I shouldn’t have to answer to anybody but myself and my standards. I’m also an auditor, so I verify my sources and check everything.
But when you say you’re a journalist, you’re adopting a whole other profession that has standards for ways of doing business, and I didn’t know if I could do that. But if you’re working in that area you need to adopt those standards. So I started asking other reporters about their jobs and started going to seminars at Poynter. And now with last year’s award, I consider myself a journalist. Whatever consulting I do is to support myself so I can write. I don’t want any work to interfere with my writing. I’m a journalist first.
2) What holes in journalism do you fill?
A lot of the work I do is really interesting because nobody is covering it. When you’re in the industry you can see how the general financial press was covering certain industries or not covering them at all. You can see the things they’re not talking about.
Because of the pressure journalists are under now they don’t get to stay with one specific beat for a very long time. Audit firms are private, inscrutable and sometimes seen as boring. I would get calls from legal journalists because the only reason they cover the accounting industry is if they’re being sued. A lot of coverage of the auditing firms is positive because it’s all PR generated. So I wanted to cover the issues and challenges in the industry.
3) How did you stick with the Satyam scandal for so long?
To get ideas I set up google alerts for all the big four firms. One morning I woke up and saw an alert about this guy who admitted to this massive fraud in India, and they were audited by PwC, one of the big four. This major tech outsourcing company was listed on the NYSE and had committed this fraud. Then I set up even more google alerts on this to find progress on specific parts of the story.
With something like Satyam, I knew no one was going to report it. I saw nothing on it for a couple days, then a story or two, then coverage stopped. Mainstream media in the U.S. may write something when it first drops and then they move on to other breaking news. But I can write about a topic until I’ve exhausted all the information and then wait for new stuff.
That was a big story for me because no one else was talking about it.
4) What is a challenge you face as a blogger rather than a journalist at a news organization?
In the beginning, I’d write something and then I’d see almost the same story in another paper that was my work but they had basically just rewrote it. They didn’t feel they needed to credit me. But it hardly ever happens anymore that people get away with that because of the way the Internet and Twitter is now, everyone knows what’s out there and what’s original.
But it does take me a lot longer to do research because I have no tools. I have to pay for my own resources, databases, travel and information, and the firms are very private. I’m not in New York, so I can’t just go in to talk to them. I don’t have a newsroom, I don’t have an administrative person, and I don’t have a bunch of people around me who I can ask for help.
5) How do you go about gathering information and doing research without those resources?
Lawyers help and professors, because they have tons of access to libraries and databases. There are a lot of journalists who are nervous about their jobs, not wanting to take risks, and they’re very competitive with the journalism industry in the state it is. You have to respect when people are not as forthcoming or quick to help.
But there are a lot of amazing people, on Twitter and otherwise, that have supported my work, tweeted me, liked to me, asked to quote me, without me every having to ask. There are some people out there who are just nice people. There are some people out there who are very well respected in the field and when they see people how are working hard and doing good things, they extend themselves. I get enough of that encouragement that it keeps me going.
The Knight Center for Journalism in the Americas released a free e-book that details the inner world of journalists covering the drug trade in Latin America and the Caribbean.
Based on conversations among journalists from several different countries during the 8th Austin Forum on Journalism in the Americas, the book examines the dangers and issues related to this coverage.
Tyler Bridges, an attendee of the forum and Peru-based freelance reporter, wrote the first chapter of the book. Here’s an excerpt:
“Drugs and organized crime have become so complex that simply covering them the same way won’t cut it anymore. That was a central theme that emerged as journalists from different countries offered their perspectives on the interrelated problems of drug trafficking and organized crime, at the event organized by the Knight Center for Journalism in the Americas at the University of Texas and the Open Society Foundations, which includes programs that focus on Latin America and the media.”
The five chapters of the book detail the discussions that took place in Austin, the trends in drug trafficking and organized crime in Latin America, the “paradoxes” in drug coverage, the threat of violence that keeps reporters in Mexico quiet, and an analysis of Mexico and Central America’s drug trafficking.
You can download a free PDF of the book in English or Spanish.