BusinessJournalism.org Reynolds Center for Business Journalism » Investigation

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.

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.

IRE offers database of SBA disaster loans

Linda Austin — Mon, 30 Aug 2010 22:47:54 +0000

Investigative Reporters and Editors is offering a database of disaster loans made by the Small Business Administration from fiscal 1980 to 2009. Journalists can use this database of 1,088,565 records to find where SBA disaster loans went in their market or determine who is not paying back SBA disaster loans, according to IRE Training Director Jaimi Dowdell.

“SBA’s disaster loans are the primary form of federal assistance for non-farm, private-sector disaster losses,” she writes in an e-mail. “For this reason, the disaster-loan program is the only form of SBA assistance not limited to small businesses. Disaster loans from SBA help homeowners, renters, businesses of all sizes and nonprofit organizations finance their rebuilding.”

The price for the database ranges from $60 to $160, depending on the size of the news organization. Data for individual states can be had for $40 to $100.

For more information, visit the IRE and NICAR website at or e-mail IRE’s Database Library, or call (573) 884-7711.

If you’re looking for training in how to use Excel and analyze 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 IRE. You do not have to be a member of IRE to attend.

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.

MoJo looks into ‘foreclosure barons’ through ex-employees

Rosland Gammon — Thu, 12 Aug 2010 11:00:57 +0000

Photo by Flickr.com user respres.

In a piece that CJR’s Ryan Chittum describes as “the must-read of the week,” Andy Kroll of Mother Jones investigates the profitable push to foreclose and the tactics that go along with it. He writes:

“Backdated documents, according to a chorus of foreclosure experts, are typical of the sort of shenanigans practiced by a breed of law firms known as ‘foreclosure mills.’ While far less scrutinized than subprime lenders or Wall Street banks, these firms undermine efforts by government and the mortgage industry to put struggling homeowners back on track at a time of record foreclosures.”

Besides documents, the story relies on interviews with eight anonymous ex-employees to get a glimpse into the practice controlled by Florida attorney David J. Stern, whose gross revenues for processing foreclosures grew from $40 million to $200 million in two years, the story says.

Today’s Tip: To get sources to open up, flip the reporter-source relationship, Andy says.

Andy Kroll

“My first question is always ‘What questions of yours can I answer? How can I put your mind at ease?’” he says. “That makes it a conversation between two people — not a one-way interrogation session.”

To establish some rapport before transitioning into his questions, he says he explains what on- and off-the-record mean, what the story is about and what he plans to ask.

He also mentions that other ex-employees have talked with him. “That opens people up, builds trust,” he says.

Robin J. Phillips, Web managing editor for BusinessJournalism.org, offers these tips on using anonymous sources. Also check out this previous post about finding employees to talk to.

Gary Cohn, who won the Pulitzer Prize for investigative reporting in 1998, tells of following employees’ cars out of their workplace’s parking lot to their homes when employers made it difficult for him to speak with them.

As for the response to Andy’s story, he reports that the Florida Attorney General’s office has announced investigations into three of the state’s biggest law firms handling foreclosure cases, including the one run by Stern.

Award winner combines data with ‘old-fashioned beat reporting’

Rosland Gammon — Wed, 11 Aug 2010 11:00:59 +0000

Ron Seely

Ron Seely of the Wisconsin State Journal in Madison won a Kevin Carmody Award for Outstanding Investigative Reporting, Print from the Society of Environmental Journalists for a project called, “Who’s Watching the Farm?”

The page announcing his winning story noted: “This series bravely took on the big factory-farm lobby, exposing weaknesses in government regulation and enforcement that are putting important water resources — and the citizens who rely upon them — at risk.”

Today’s Tip: “Old-fashioned beat reporting is still effective,” Ron says.

“Those are important skills to have alongside the ability to manipulate and use data,” he says.

Ron, the paper’s science/environment reporter, used his 25-year connection with sources to persuade them to talk on the record. As a result, the series doesn’t have any anonymous sources.

“I make regular stops and talk to people. It’s more work, but in the end it’s more effective,” Ron says. “The beat system is a big advantage. The system is proven to turn up better and more in-depth stories.”

Ron gathered much of the story’s data through open records requests, which he advises people to file early and often. The challenge in reporting on this story was the records were scattered among several offices, he says.

IRE offers Webinars in DocumentCloud, broadcast investigations, Twitter, and doing great work with less

Linda Austin — Thu, 05 Aug 2010 23:31:04 +0000

Investigative Reporters and Editors (IRE) is offering Webinars this fall in doing broadcast investigations, analyzing text with DocumentCloud, using Twitter, and doing great work with limited resources. Training Director Jaimi Dowdell offers these descriptions of the sessions, which are all at 2 p.m. EDT and cost $10 for IRE members and $20 for non-members, unless otherwise indicated:

Aug. 26 – Broadcast investigations: Join Tisha Thompson of WTTG in Washington to find out how documents and computer-assisted reporting (CAR) can juice up your stories.
Sept. 16 — Corral and analyze text with DocumentCloud: Document Cloud Program Director Amanda B. Hickman explains how DocumentCloud can strengthen your document-driven investigations with tools for annotating, organizing and publishing those records on the Web. FREE.
Sept. 22 — Twitter tools for journalists: IRE Training Director Doug Haddix explains how journalists can best utilize the popular social networking to report, learn more from their sources, as well as share their work.
Oct. 13 — Doing great work with fewer resources: Get tips and practical advice on feeding the daily copy beast while working on bigger enterprise stories from Daniel Gilbert and Doug Pardue. Gilbert is a staff writer at the Bristol (Va.) Herald Courier, where his work won the 2010 Pulitzer Prize for Public Service. Pardue is watchdog editor for The Post & Courier in Charleston, S.C.

For more information, or to register go here. On that same page, you can review IRE’s list of archived Webinars, including tips on tracking down data online and analyzing stimulus data. Recordings usually cost $5 for members and $10 for non-members, although some are free. E-mail Dowdell with questions about any of the Webinars.

If you’re looking to polish your computer-assisted reporting (CAR) skills, IRE has partnered with the Donald W. Reynolds National Center for Business Journalism to offer two free, daylong workshops. “Be a Better Business Watchdog — CAR for Business Jo urnal i sts” will be in Atlanta on Oct. 11 and Milwaukee on Nov. 9. The morning will consist of hands-on training in the basics of Excel spreadsheet software, while the afternoon will highlight useful databases for business reporters and how to download them. Space is very limited, and registration is required.

IRE also has boot camps coming up in mapping at the University of Missouri in Columbia from Aug. 13-15 and in CAR at San Diego State University from Aug. 16-20. While not free, IRE offers a sliding-scale for tuition, depending on the size of your news organization. The weeklong CAR session focuses on Excel for two days and the Access database software for three days.

St. Louis P-D shows how hard getting info on medical errors is

Rosland Gammon — Thu, 05 Aug 2010 11:00:58 +0000

: Image by Flickr user Nick J Webb.

Jeremy Kohler and Blythe Bernhard of the St. Louis Post-Dispatch found public information about serious medical errors rarely exists. So along with their story about a 16-year-old girl’s death caused by improper restraining in a hospital, they chronicled their challenges in gathering information about a surgeon who removed the wrong kidney. They write:

“You start with the Joint Commission, an organization that accredits hospitals. It confirms a ‘wrong-site’ surgery occurred at DePaul in 2007 but won’t tell you more.

Someone probably sued, right? But no court file exists.

The state tracks all malpractice claims, even those that don’t end up in court. So, you ask the Missouri Division of Insurance for a copy of its malpractice database. The agency removes identifiers before providing it.”

Today’s Tip: Tell readers how you found your information, Jeremy says.

Jeremy Kohler

“Readers do like to hear about what process we use,” he says. “If you give them some insight, that helps.”

The process story ran as a sidebar to the main story to illustrate the problem, he says. Information about the girl’s death was available because her case was ruled a homicide.

He says he and Blythe wrote the process story as a chronology and presented it to their editors, who liked it. “It’s more telling than a traditional story.” CJR also sang the Post-Dispatch’s praises for its transparency.

Being open can have some challenges, as Rachel Smolkin notes in this piece for the American Journalism Review. She asks the questions: “Is more transparency always better, or are there dangers lurking within an otherwise healthy movement? In short, is the pressure for explaining spiraling out of control?”

BBC, ICIJ: asbestos industry ‘exporting an epidemic’ to developing world

Rosland Gammon — Fri, 30 Jul 2010 11:00:30 +0000

The BBC and the International Consortium of Investigative Journalists (ICIJ) investigated how a global network of lobbyists has spent nearly $100 million since the mid-1980s to preserve the market for asbestos, especially in the developing world where use of the cheap — but carcinogenic – building material is growing.

Among the key findings of their investigation:

“Despite waves of asbestos-related disease in North America, Europe, and Australia, bans or restrictions in 52 countries, piles of incriminating studies, and predictions of up to 10 million asbestos-related cancer deaths worldwide by 2030, the asbestos trade remains alive and well….

“More than two million metric tons of asbestos were mined worldwide in 2009 — led by Russia, China and Brazil….More than half that amount was exported to developing countries like India and Mexico.”

The news organizations in the project spent nine months poring through court filings, scientific studies and financial records, and interviewing health officials, industry representatives, scientists, victims, lawyers and activists. In the United States, they found, asbestos use is limited to brakes, gaskets and a few other products, and the industry has paid out $70 billion in damages and litigation costs.

Be sure to look at the project’s online presentation. It is clear, uncluttered, attractive and easy to navigate, and it incorporates multimedia and social media effectively. There’s even a link, as yet inactive, to buy the e-book of the project.

Today’s Tip: Don’t be daunted by stories about hazardous materials.

You don’t have to have the global reach of the BBC and ICIJ to look into chemicals. Starting in 2007, The Milwaukee Journal Sentinel tackled the issue of BPA, a controversial material used in baby bottles and other products. Its coverage was recognized as a 2009 Pulitzer Prize finalist.

In an interview, Susanne Rust, one of the reporters on that story, offered tips on staying organized. She also provided more ideas in a presentation, including using PubMed.gov to read scientific abstracts, during the Reynolds Center’s recent “Covering the Green Economy” seminar. | Video and presentation: Susanne Rust on covering chemicals

The CDC has a list of hazardous workplace chemicals. Look at the financial impact on the companies who make or use them. Pay attention to disclosures on SEC documents to see if lawsuits have been filed. Search the name of the chemical in Google Scholar to find academic sources.