Handling Story Tips

By Chris Roush
February 12, 2009

Congressional testimony last week by whistleblower Harry Markopolos disclosed that he tried to get a reporter at The Wall Street Journal interested in the now-unraveling Bernie Madoff fraud cause for several years, without any success.

We only have Markopolos’ side of the story, and the e-mails that he sent to the Journal reporter, so we don’t know the full details.

But anybody who has been a business journalist for any period of time has likely dealt with off-the-record sources and people with inside information that at first glance might appear to be a future Pulitzer Prize if treated correctly.

Oh, if only that were the case.

Business journalism sources come in all shapes and sizes, and my experience is that the ones who purport to have the most explosive stories are typically exaggerating their claims. Some of them present stories that are so twisted factually to fit their perception of reality that it’s often hard to see how they could perceive that their information is newsworthy.

That’s not to exonerate the Journal and its handling of the Madoff information it was given, whatever it was. But I can understand how a reporter, particularly one that has chased a lot of dead ends in the past, may have been skeptical about the veracity of any claim that Madoff was running a Ponzi scheme.

Here are some basic steps that any business journalist should take when dealing with such hot stories:

1. Always ask for documentation from the source. The more documents they can provide the better. Such sources need to back up their claims with information that can be easily verifiable.

2. Always ask for names and contact information of other people who believe the same thing as the whistle blower. If one person sees a scam, then it’s likely others have as well, and they’ve probably traded notes. Remember, there’s safety in numbers.

3. Look to see if the person or company has ever been investigated in the past, and go to that regulatory agency and talk to someone. Find out of the issues were resolved to their satisfaction. If they were not, maybe there’s still something going on.

4. Litigation is often a tell-tale sign. If a company or person is involved in what seems to be an extraordinary number of lawsuits, particularly as a defendant, then that is often a signal that there’s more to the story.

5. Get as much on-the-record comment as possible from both the people who believe that there’s something wrong, and from the company or person being accused of wrongdoing. Let their comments -- and the facts -- tell the story so that the readers can determine what’s going on.

Good business journalists can often detect when they’re being fed something that smacks of truth and when they’re being given a line of B.S. But sometimes we get it wrong too.

Copyright © 2009 Donald W. Reynolds National Center for Business Journalism