Investigative Business Journalism

Presented byAlec KleinProfessor, Medill School of JournalismNorthwestern UniversityMay 7, 2010

About Me

Alec Klein, who joined the faculty of Northwestern University’s Medill School of Journalism last fall, is an award-winning investigative business journalist and bestselling author

IdeasGenerating ideas and executing them while covering your beat

Conceiving investigative stories

To begin with, you need PHOAM

P:assion H:ook O:riginality A:ccess M:arket

Image by flickr user marttj

The Best Ideas

They usually come from beats

That’s because they’re organic. They arise naturally in the course of reporting

To wit: Secret bonuses at City Hall

The anonymous tipster on AOLImage by flickr user MonkeyMike

Have a Starting Point

This is not the same thing as a preconceived notion

Rather: Consider a set of questions that need answering

To wit: When cigarettes are under attack, why are cigars being glamorized? (Yachting magazine)

How to confirm the idea

Let’s say you think you’ve hit on a great idea

How do you check it out to make sure it’s uncharted territory?

Lexis-Nexis Factiva Amazon Google

The overriding question: Has it been done before?

The Big Problem: Feeding Beast

But who has time to pursue investigative business stories, especially when you’re on a busy beat and your editor is breathing down your neck to file early and often?

The Ugly Truth: Rebellion—within reason

Get out of the office: kill or be killed Cub reporter: worked on vacations—only

time the editors couldn’t assign stories Worked on weekends Worked afterhours, after the proverbial

smoked cleared from the daily deadlines Bottom-line: find time

The Wall Street Journal way

Darwinian approach: only the fittest will get on Page One

In the old days: Only three stories on Page One

Lot of reporters, few A1 slotsMistake: Walk into your editor’s

office with an ill-conceived idea

What Not to Do

Such as: I’d like to do an investigation of poverty

Many a times: Bludgeoned in editor’s office

Finally figured out: Need to do some research before entering the torture chamber

But how much research?

The Solution

About 20 percent That’s enough to tell you if you’ve got

a story or whether you’re going to spin your wheels

The 20 percent: What’s the story? A new trend? A twist on an old idea? How will you report it and how long will it

take?

Avoid This Mistake

Mistake: Never show editors your raw notes

Made that mistake on AOL

Editor: Don’t get it, nothing here. Go back to work

The Power of the Memo

Then Enron happened

Editors: What was Alec working on?

This time: I wrote a memo

Set free for a year

Spinning Your Wheels

Having a year to do an investigative business story sounds better than it is

You better come up with a great piece

Can you withstand making no progress for several weeks at a time? Maybe inbred

Clarity of Purpose

Back to the memo

It clarifies the issues. It makes editors see. They can print it. They can ruminate over it. They can forward it by e-mail to their bosses. Then they can approve it

When All Else Fails

Let’s say your editors still say no

Then what?

Set your own agenda

The New Model

The old model: the three-part series that took a year to report and runs in December in time for the Pulitzer entries

The new model: write episodically

WSJ did this: Word was sent out at the beginning of the year—let’s write about death

The episodic approach, it’s the way of the world: The economy, the industry. Investigative reporting is expensive

The Episodic Approach

Build on your beat coverage

Think this way: once a month, craft a great piece of investigative reporting on the same subject

Over a year, you’ll end up with 12 pieces that amount to a worthy in-depth investigation into a single topic

Examples of the episodic approach

The Las Vegas Sun, most notably including the reporting of Alexandra Berzon, won the 2009 Pulitzer Prize for public service, for a series of stories about the high death rate of construction workers on the Las Vegas strip. See www.pulitzer.org

Steve Fainaru of The Washington Post, 2008,for international reporting, for his episodic stories about private security contractors

Kevin Helliker and Thomas M. Burton of The Wall Street Journal, 2004 for their episodicstories about aneurysms

Questions?

Please feel free to contact me at alecklein@gmail.com

Interviewing techniquesHow to get people to open up

Columbo

I was accused of being like this

We’re supposed to not know

Have them condescend to you

“Treat me like a fifth grader”

Don’t have an ego about this

Need to be absolutely sure to write authoritatively

The Dumbest Question in Journalism History

New at WSJ Ordered to write lead news story IBM Earnings Sweat Call analyst: What’s P&L? Cancel subscription

Ask the Obvious Question

You may know the answer already To wit: How old are you? Answer: 51 Thought 52 Yeah, actually 52 If small lie, is there a bigger lie

Continue Reporting in 11th Hour

AOL series: Almost a year into it Had hundreds of confidential

documents Had well-placed sources Editor called me into his office Mused: Wouldn’t it be nice … Vice president of finance

Corollary to Reporting in 11th hour

Ask the same question five times

But in different waysAt different timesTo wit: Do you know a vice president-level finance guy who had raised questions about AOL’s finances?

The Notebook

When to use the notebook

Versus When not to use

the notebook

When to tape record vs.

When not to tape record Billionaire: I want to

be able to deny I had this conversation

Thinking on Multiple Levels During the interview, you need to think

about several things at the same time: The lede The images to capture The details to portray Is this the first of many interviews or a one-

shot deal? Why, why, why? The cosmic point Follow up questions

Let Them Yell

When people say you got it wrong, that you made a mistake, check it out thoroughly

Sometimes, it can help

Red Hat

The Reluctant Interviewee

What do you do when they won’t talk?

Options: Call E-mail Letter Certified letter: know

they got it, but act of war?

Intermediary: someone they know

The Cardinal Rules

Take chances Bridgestone/

Firestone

Don’t take no for an answer Surgeon General

Go there Gettysburg

Last Words of Advice Bob Woodward

Show up early

Me Show up late

Part Two: Developing sources

When starting a new investigative business story, where do you begin?

The onion: otherwise known as the circling effect

Begin on the outside, work your way in: Family Friends Friends of friends Customers Suppliers Competitors Unions Associations Former employees Current employees Secretaries Executives

Meet People on their Own Turf At their homes Afterhours On weekends Away from places

where they are monitored or overheard At bars Restaurants Bowling alleys

Places Where People Network: Conventions Industry gatherings Trade shows▪ Exchange business

cards▪ Socialize▪ Network

Don’t forget about the gadflies Yes, they can be a bit

odd

But they often know their stuff because they have no other life

Don’t Dismiss the PR People

Example: secret bonuses

But also: AT&T cable assets

“You didn’t ask the right question”

Image by flickr user Meg Marco

It’s All About the Spider Web

Example:Anonymous tipster: “How did you find me?”

Horizontal vs. Vertical Reporting

Getting Secrets

No secretIt takes timeTrustWillingness to protect sourcesAre you willing to go to jail for

them?

Bartering for Information

Exchange of information

Once you have information they want, then you become valuable

You have something to barter

As long as it’s not confidential information

Background vs. Off the Record

Define the terms Explain why it’s important to go on

the record Move sources up the ladder

Off the record On background

On the record Sometimes, refuse to go off the

record: why? It can tie your hands

Beware of Agreements

Reading back quotes?

Showing stories pre publication

My Rule

Do we let sources go? Do we let them change their minds?

My opinion: Let sources go

Example: AOL

Another Cardinal Rule

No surprises Always let them know what’s going on,

even if it works against you Better for them to be angry at you before

publication than after, when it’s too late AOL

21-page single-spaced letter Credit raters

Removed lead anecdote even though information obtained independently

Go Back to Your Sources

Repeatedly A Woodward technique You need to know when you can trust

your sources Eg.: Whether FTC would approve AOL-

Time Warner merger Origins: Editor: Woodward was a new reporter,

too FTC threatens pre publication: Last story you’ll

write Sources at the heart of the secret

Questions?

Please feel free to contact me at alecklein@gmail.com

Using public documentsWhat documents to look for and where to find them

The Secret

The secret to investigative business reporting is…

Start with:GoogleLexis-Nexis

Factiva

Everything You Need to Know

You don’t need to know where all the public documents are

You need to know what questions to ask to find them

To wit: 192.com

Hidden Depositions

Baltimore Sun investigation: Supermarket bankruptcy

Words of wise editor: “The good reporters know what’s missing”

Thinking: I never know what’s missing Did you check for hidden depositions? Not in court record: wads of cash in brown paper bags Before the jump on A1

SEC Filings

What are they?Where do you get them?Sec.govCompany Web site

SEC Filings

10k

10 Q: What’s the first thing to look for?

Proxy: What’s the first thing to look for?

SEC public filings only go so far

What is considered “material” to investors?

Material: Any information related to a particular business that might be relevant to an investor's decision to buy, sell or hold a security

A company can slice its business into small sectors that don’t require disclosure

To wit: AOL

New Age Documents: Alec’s Facebook Page

Lawsuits: What You Can Find

Former employees Sworn testimony Copies of contracts Business strategy

Where to find lawsuits State and federal suits

▪ Many online If not online, check Lexis-

Nexis If not there, check Pacer for

federal suits

http://pacer.psc.uscourts.gov (not free)

Pulling documentsBig issue?Money

Bankruptcy Filings

Goldmine Pacer

For what? Creditors; assets; debts; lawyers; suppliers; vendors

Key kinds? Chapter 7: liquidation Chapter 11: reorganization

Government Filings

SEC

FCC

FDA

Key: on almost every investigative business story, there is a government body that has some connection to it

Congressional Testimony Contradictions Remember the tobacco

executives who claimed they didn’t know anything about the addictive power of cigarettes?

Company Documents

Company e-mailInternal newsletters

Get on the mailing list, if possibleRemember: Don’t steal, don’t lie,

don’t break into computer system Chiquita Banana case

Wall Street analyst reports

Local Government Records

Property records: County or other

local office Many online Good to check

for: Size, details of executive’s home

Other great resources: Planning

department Zoning Construction Driver records▪ Depends on state;

eg. Maryland, need permission of driver for records

Private Company Records Better Business Bureau

Consumer complaints Uniform Commercial Code

State records, secretary of state usually; shows who has borrowed money, what used as collateral, etc.

Incorporation records Usually secretary of state; records of founding

of the business; who owns it; its executives; etc. Hoovers

Hoovers.com

Nonprofits

Can get detailed tax filings—990s—of their finances from the nonprofits themselves

Or try Guidestar at www.guidestar.org

Web Sites

Airplane ownership search Landings.com

Finding lawyers Martindale.com

Message boards, blogs

Web site ownership http://

www.whois.sc/ Internet archive:

old Web sites www.archive.org

ProfNet: e-mail queries for experts www.profnet.com

Locating People

Referenceusa.com

Superpages.com AnyWho.com Switchboard.com Infobel.com:

international directory

AutoTrack and other pay Sites: Expensive Metered Even at The Washington

Post: key holder But good resource for

information for investigative or beat reporting▪ Personal information:

telephone numbers▪ Neighbors▪ Legal judgments

Political Contributions

Opensecrets.org: Center for Responsive Politics

Tray.com: Political Moneyline

Publicintegrity.org: Center for Public Integrity

Followthemoney.org: The Institute on Money in State Politics

Lobbyists and Other Legislative Resources:

http://www.usdoj.gov/criminal/fara: lobbying on behalf of foreign entities

Congressional Research Service: http://www.opencrs.com

GAO Reports: www.gao.gov Thomas Web site:

http://thomas.loc.gov/: basic legislation, Congressional reports and records

Backgrounding an individual www.reporter.org/deskto

p/tips/johndoe.htm Born, married, died Previous addresses,

relatives, associates Lawsuits, bankruptcies,

divorce, criminal, traffic

Home phone Attended college Real estate Etc.

Courtesy of Duff Wilson of The New York Times

Truth About Criminal Records: There is a national criminal

record database but it is not available to the public

FBI database Public access to criminal

records controlled at the state level

Each state has different rules about who may access records and what records will be available

Some records handled at the county level

Freedom of Information Act

FOIA: the good and the bad Secret bonuses “Oh, that bonus” Reprocessors

▪ List of reprocessors▪ No List▪ List▪ Names missing from list

Beware: They might leave stuff

out Of fishing expeditions Of unexpected costs

Sample FOIA letters: www.nfoic.org/sample-foia-letters

FOIA letter generator: www.rcfp.org/foialetter/index.php

The Best Documents

Secret Documents

Not public

They may say “Confidential”

You need to interpret, analyze, translate

They Don’t Say “Smoking Gun”

Questions?

Please feel free to contact me at alecklein@gmail.com

Case studyAOL investigation at The Washington Post

What it was about

How I discovered how AOL inflated its advertising revenue to pull off the biggest merger in U.S. history to create the largest media company in the world

The beginning

Summer of 2001 Sitting at my desk Not much going on Phone rang Anonymous tipster

The mystery

Didn’t give his name or number Just told me: An AOL executive had

been suspended PurchasePro Las Vegas dot-com Red flag: Gambling & dot-coms

Confirmation

Checked with sources; confirmed Had to do with accounting Not sure what Waltzed over to my editors,

surprised that I wanted to write a story

Buried deep in the business section of The Washington Post: E5

Not even my mother reads that far

Intrigue

Nobody paid attention Before Enron Accounting scandals, not a big story

—yet Still, intrigued Why was AOL official suspended? Who was PurchasePro? What was the accounting issue?

Digging

Did what any reporter would do Started calling around Would call one person who would tell

me to call someone else That someone else would tell me to

call so-and-so So-and-so would tell me to call three

other people

The breakthrough

Eventually, I called one person “Hi, my name is Alec Klein, and I’m a

reporter at The Washington Post” Before I could say anything else:

“How did you find me?” Didn’t know I had found anyone until

he said those very words Then I realized: found my

anonymous tipster

Dingy hotels, bad restaurants

Other doors opened Met more people Wasn’t glamorous Dingy hotel lobbies Bad restaurants where they wouldn’t

be seen with a Washington Post reporter

One unnamed hotel

Spent a lot of time in one particular hotel lobby

Used public telephone So my calls couldn’t be traced back

to The Washington Post Sources were afraid of being seen or

heard talking to a Washington Post reporter

AOL was notorious for being more secretive than the Pentagon

Strange looks

Always in that hotel lobby Shoes shined Reading the paper Had cell phone latched to belt, but

was always using the public telephone

Would ask for change in the gift shop Strange looks Hotel thought: drug dealer

Jigsaw puzzle

Story began to come together like a jigsaw puzzle

Began to amass confidential documents

Didn’t say “Smoking Gun” on them But pattern emerged AOL had been inflating its

advertising revenue to pull off the biggest merger in U.S. history to create the largest media company in the world

The illusion

AOL created the illusion of significant advertising revenue in part through questionable accounting practices

For example: AOL legal case, turned it into ad revenue

AOL sold ads on behalf of eBay but AOL booked the sales as its own

The largest merger ever

Deals helped AOL clinch its historic merger with Time Warner

If AOL had revealed some of its financial weakness, Time Warner could have pulled out of the deal

11th hour

After nearly year, my editor called me into office

Wouldn’t it be nice… Should’ve run for the hills Vice president of finance? Ask question five times

We had to be right

As far as we knew, never before had a newspaper pointed the finger at a major company’s finances

Usually a whistleblower Or company comes clean If we were wrong by an inch, all over

The letter

Before my stories ran, wrote a 21-page, single-spaced letter, presenting AOL with my findings to give the company an opportunity to respond

Included everything Such as: hair plants imported from

South America Bumped into Dick Parsons in the AOL

lobby Hadn’t even noticed him

The media killer

AOL ballistic High-powered law firm to kill stories Lead attorney known as the media

killer Successful in fighting the media on

other big stories Involved in the famous case where

60 Minutes was prevented from airing a story about a tobacco whistleblower, which became the subject of the movie, The Insider

Called into the office

Pretty nervous Told girlfriend, now mother of my

children, that this might be the last story I ever write

Len Downie: called into his office Didn’t actually talk about anything Smiled at each other Just wanted to know who was this

reporter causing this ruckus

The meeting

AOL and its lawyers came to The Washington Post

Why my stories should be killed Heading to the meeting: bumped into

the managing editor in the middle of the newsroom

Looked at me in utter shock Had shaved Was wearing a tie Shirt buttoned all the way to the top

Smoking with Fidel

Managing editor: “You look like a defendant”

He was right Can’t discuss details of meeting But can tell this: Len Downie talked about smoking

cigars with Fidel Castro. That set the tone

How Gerald Ford got his job

Another thing: Meeting was held in the main newsroom conference room

On one wall, an old print plate: “Nixon Resigns”

On opposite wall, a framed classified ad, showing a picture of Gerald Ford

“I got my job through The Washington Post”

Jaws of death

Suffice it to say, The Washington Post didn’t back down

Newspaper went ahead and published my stories

Day of the first story, AOL’s chief operating officer was forced to resign

Call from an AOL official: Congrats. Jaws of death

The denouement

Within days, AOL confirmed the SEC had launched an investigation into AOL’s accounting as a result of my stories

Then the U.S. Justice Department launched an investigation because of my stories

Then AOL admitted it had improperly booked $49 million in ad revenue

Then: $190 million

Prison

AOL was forced to revise two years of its financial results

Head of its business affairs division was locked out of his office and fired

Business affairs division that was the focus of my investigation was disbanded

Others went to jail

The end of AOL

Ultimately, the company was forced to pay more than half a billion dollars to settle civil and criminal allegations

They even removed AOL from company name

No longer: AOL Time Warner Just: Time Warner

Journalism of compassion

A term I invented to guide my reporting

Fair checking Another term I invented Put yourself in their shoes Is it fair? Different than: Is it accurate? To wit: The paunch

Letting sources go

AOL investigation Threatening letters Sources run for the hills Track them down Beg Grovel But can’t threaten Can’t coerce Only: Do what’s right

OrganizingPresenting investigations on multiple platforms

Organize From the Beginning Develop your own

system Be your own best

secretary It’s not glamorous

but someone has to do it

Keeping track of mounds of documents, notepads, calls—need to be organized

My system: Daily log Phone log Contact list Cork board▪ Visualize key

players▪ Calendar▪ Themes

The Perennial Problem

The lede: Hours or days or weeks of anguish

Blood on the computer Should’ve done something else Work with hands Like a farmer

Good Ledes

LAS VEGAS -- Chastity Ferguson kept watch over four sleepy children late one Friday as she flipped a pack of corn dogs into a cart at her new favorite grocery store: Wal-Mart.

The Wal-Mart Supercenter, a pink stucco box twice as big as a Home Depot, combines a full-scale supermarket with the usual discount mega-store. For the 26-year-old Ferguson, the draw is simple.

"You can't beat the prices," said the hotel cashier, who makes $400 a week. "I come here because it's cheap."

Image by flickr user Lone Primate

What Makes This Lede Work? Classic anecdotal

lede Simple, straight

forward Nothing fancy about

it Quote that gets to

the heart of the story: “You can’t beat the prices”

We can do this

The Los Angeles Times; that’s the lede from a series that won the 2004 Pulitzer Prize for national reporting

Trick to Ledes

Me in the old days: Frantically flipping through notebook searching for the lede

Not there Me now: Report the

lede beforehand so you don’t have to search for it later in your notes

To wit: Lede to Stealing Time--grumpy old man

WSJ approach to ledes: All about the purity of the

lede Must be exactly on point Not sort of the point

▪ Joke:

▪ Colon▪ Question mark▪ Pithy-sentence lede

When You’re Still Overwhelmed

KISS KeepItSimpleStupid

Overlooked: Tone

Okay, enough about the torture of writing

Here’s an overlooked aspect of writing: Tone The sound of the

story Rarely is it

premeditated It should be

THE BOY LOVES GAMES OF CHANCE. He loves slot machines and playing cards and instant-win lottery tickets. He learned at an early age to count coins, and to bet them. He learned in the hospital that money comes in get-well cards.

Lisa Pollak’s story Baltimore Sun Winner of the 1997 Pulitzer

Prize for feature writing

A Tone Technique

Read a book or other story that reflects what you’re doing

To wit: Writing about the civil war Read the classic, Killer Angels Wrote lede to reenactment of the

Gettysburg Battle Using old English Should’ve mentioned it to my editors

Mastering the Information Let’s Get Down to the Nitty Gritty:

Organizing the investigative business story

How I do it:▪ Divide by interviewee▪ Annotate my own notes▪ Develop a detailed outline from the notes▪ Review and re-review the notes▪ Can take days—or weeks▪ But you have a roadmap

The Cosmic Point

The nut: everyone knows the nut, right?

How about the so-what graf: Otherwise

known, at least to me, as the cosmic point

The reason why we’re reading your story

Examples:▪ Greed▪ Hubris▪ Ambition

The To-Be-Sure Clause: Wall Street Journal thing The exception to the rule, or the

trend Up high To immunize yourself Because there’s always an

exception

Time to Respond

Give the company or individual plenty of time to react and respond

Not enough to call the night before Call, e-mail, stop by—and repeatedly To wit: AOL

Six weeks, an eternity Risk: story leaks to competitors But must be done

The New World Order

One of my last Washington Post investigations in 2008: Military contracting In desert in suit (not a good idea) Carrying notepad Digital camera Camcorder

Photography for Multimedia Everything I know about

photography, I owe to Steve Liss, who taught me:

Now, we are all photographers When you’re shooting,

take a lot of pictures—at least 100 images

Camera is your notepad Record moments as they

unfold Don’t wait for the perfect

moment

The first way you view a scene is not always the best

Try different shooting angles Eye level From above on a chair From below on the floor Look for the inherent logic of

the shot;▪ eg,. a shot of giant might be

better from a higher angle Don’t shoot everything from a

wide angle Look for other opportunities,

such as close-ups, which can have more impact

Imagine, say, an expressive face

Audio

We’re now all in the business of gathering audio Online audio stories Online audio with

photos—slideshows All you need:

A digital camera A digital recorder

that can connect to a computer to download audio files

Audio Slideshows: You need to show how the story

begins How the subject gets from point

A to B to C Show in the photos what the

audio is telling The photos must match the

audio So take lots of pictures Helps to ensure that images

match sound Usually: you don’t want a single

image to linger onscreen for more than 10 seconds

For a three-minute slideshow, plan for at least 18 photos

Kinds of Sound

There are two kinds of sound Natural sound, or “nats”▪ For a slideshow, you

usually need natural sound—eg., the sound of bacon frying in the background, the roar of the crowd

▪ Turn on the recorder, point it at the natural sound and capture a lot of it

▪ May help later during editing to bridge sections of your audio story

Interviews Beware of loud background

sound Move interview subject

away from that noise Hold the recorder close to

the subject, within a foot and a half

Avoid talking over the interviewee: “Uh huh” et al

If necessary: Nod head Beware of wind Stay away from yes or no

questions Ask open-ended questions:▪ Why?

Video Basic Rules

We are all videographers now Use a variety of focal lengths and angles

Establishing shot, wide, tells the viewer where the story is taking place

Medium shot: takes the viewer closer to the action

Tight: close up No zooms or pans Shoot and move: Zoom with your feet Limit motion of the camera; use set shots

Video Rules

The rule of thirds: Divide the screen into thirds, with subject taking up one of the thirds—more visually arresting

Rule of 180 degrees Which way is the

subject’s nose pointing? Stay on that side Don’t switch sides Disorients viewer

Jump Cuts: Common mistake Two things don’t match

visually To wit: Person is in one

spot; in the next frame, he magically jumps to another spot

One way to avoid jump cuts: have person or action come into and out of frame before moving on

Final Phase: Fair Check

Walk away from the storyPut yourself in the subject’s

shoesIs it fair?Go through the story line by lineDifferent than fact checking; it’s

all in the nuances

The Story Doesn’t Belong to You The story may carry your name but it

belongs to the paper, Web site, television station

It’s a communal project; must get buy in; editors must be on board

Must be willing to let go of the language; be amenable to change

One third of the investigative business story is the reporting

Another third is the writing The final third is the in-house hurdles

Questions?

Please feel free to contact me at alecklein@gmail.com