Zombies Among Us: The Mainstream Media and Financial Journalism

Whatever I do now, it’s in service to my desire to write. If I work for pay, whether as a consultant or a paid speaker, the objective is to earn enough to be able to write. For now, the blog is my main content distribution vehicle. Occasionally the word gets out via a freelance assignment that pays.  When I accept a paid speaking assignment, it’s for the money and with the proposed audience and potential for increased exposure to the message in mind.

I started the blog three years ago as a marketing platform for a book about the business of the Big 4 audit firms. The blog and everything that’s come with it since has taken on a life of its own. I find, especially with the advent of my participation in Twitter almost two years ago, that there’s a million other ways to get the message out real time without stopping to write a book. However, as my recent online discussion with Felix Salmon proves, even those of us who seem to be embracing the new and rejecting the old notions of what it takes to be truly heard, to be taken seriously, to achieve a modicum of status amongst our “peers” are still suckers for the traditional measures of success.

So I will write the book.  When? I’m not sure. Whenever I can afford to take the time off.

I saw pretty quickly that the blog filled a niche. No one else was writing about the audit/accounting firms as an industry. At least no one was writing consistently and hardly anyone was writing from the inside and critically. Most often the stories seemed to come directly from the firms’ own public relations professionals, the AICPA and later via the Center for Audit Quality, their official lobbying organizations. There are also the made-to-order spokespersons – professionals who appear independent and objective but who in essence are no more able to speak the truth than their former colleagues in the firms. Why? Because they owe their livelihood as pundits, monitors, special industry panel members, “independent” public company directors, and designated contrarians to the audit firms and to those that perpetuate the mythical value to the capital markets of an auditor’s opinion.

For someone who wants to be a freelance writer, potentially paid by the media organizations who I’m accusing of not stepping up to cover the audit firms in a critical manner, I’ve sure slammed those same publications often enough. You name it, I’ve stabbed at the New York Times, the Wall Street Journal more than once (some journalists by name), Crain’s Chicago Business, Bloomberg, The Chicago Tribune, even my beloved Financial Times. In some cases proxies did it for me, unsolicited.

It’s a long list.

Eventually I figured out that I was competing with the journalists. I could write the story (on the blog or as a paid freelancer) instead of them, probably in a more pungent way or I could serve them as a subject matter expert (SME) and give them a quote. That’s the reason, I think, why almost universally they would not identify me in print as a blogger but only as president of McKenna Partners LLC, my consulting arm.

In any event, with very little pitching, prodding, or poking on my part other than my high Google ranking for certain key words, they started to call me routinely for quotes. As things started to heat up, via the financial crisis and in some individual firm cases, the journalists must have realized that a new, fresh, provocative voice for their story could give them an edge. Unfortunately, they still run the stories driven by the audit firm PR pitch anyway.  The “fraud and accounting misstatements will increase in a downturn” story is an example.

Almost three weeks ago I got this email from an editor at a respected, but recently troubled, business magazine:

“Here’s the pitch: I spoke with a Deloitte fraud auditor and subsequently some academics and forensic accountants and analysts and have been told that they’re all bracing for a new wave of aggressive tactics by management to either downright fudge numbers or use accounting gimmickry. Do you agree? Have you done any reports lately that might detail some of these red flags?”

I had a little talk with this editor and explained that this was a pitch.  The firms, responsible for missing frauds like Madoff, Stanford, Satyam and for not calling out inadequate risk management and overly optimistic asset valuations at the financial firms were grasping for straws, looking to drum up business by hovering over the corpses.  Deloitte was one of the biggest offenders in this regard, having lost so many clients to failure and takeover, many of them now suing Deloitte, they were desperate for work.  I gave this journalist some other ideas and lots of other places to look for a real story and thought my job was done.

Lo and behold, the “new wave of fraud as a result of the downturn” story hit another major publication last week as a result of a KPMG “study” that came out in August or a maybe what Deloitte said back in January based on their own survey. Or maybe it was the pitch from the Association of Certified Fraud Examiners that got to Reuters and Crain’s. The appetite of overworked, job-threatened journalists for any story, even a non-story, is laughable.

Freelance assignments and links/mentions in serious publications have picked up for me, especially from the UK, and from some previously reluctant mainstream publications, due to their own epiphany about the power of blogs and Twitter. Everybody is looking for more traffic and reader comments and now they see a blog with a healthy, consistent audience in their target niche that also attracts thousands of comments to be more attractive regardless of the “controversy.” I actually get pitches from journalists in mainstream publications to link and comment on their stories.  Strange but true.

A few more things have happened recently that are really making me think harder about the power of the new content delivery vehicles such as blogs and various social media tools such as Twitter versus the traditional media model.

First, several local journalists here in Chicago have defected from mainstream media publications to join the Chicago News Cooperative. (I suspect they were already independent, recently cut, or on the verge of being cut.)

“At a time of declining resources in newsrooms across the nation, journalists must adapt to new technologies and devise some creative, innovative ways to fulfill our obligations,” O’Shea said, “so we can hold our government accountable to citizens and restore to our journalism the standards desperately needed in these troubled times.”

Noble, but borne of necessity not true desire.  I imagine most of these journalists would rather be back comfy and cozy in their newsrooms writing for venerable institutions with supposed job security, health insurance, pensions and the camaraderie of like-minded colleagues rather than hitting the dog-eat-dog streets of independent freelancing supported by not-for-profits. There have been others recently – ProPublica, True/Slant and GlobalPost.com. They all espouse some kind of public interest or community journalism and a digital empathy. I am assuming these organizations pay their journalists, albeit more like independent freelancers than guild members.  This is in opposition to the major beef many journalists have with the Huffington Post because, for the most part, they do not.

Which brings me to the second thing I heard recently… It seems a major media publication that recently cut scores of journalists tied the phone call to congratulate the survivors to a somewhat sinister request.  An “offer you can’t refuse…” Give the editor names and contact info for at least five potential “community contributors” on your beat.  These “community contributors” would be content providers who would not be paid. The high concept is to pump up “reader engagement.”  Yeah.  Kind of like asking a factory worker who’s being squeezed tighter and tighter as he watches layoffs all around him to cough up names of five potential scabs who would do his job in case the company decided to play hardball with strikers.

I told the skittish journalist that there are three kinds of people that might consider such an “assignment:”

• The fully employed subject matter expert who can’t or won’t take any money for their contributions, but likes to write, to see their name in print, to build up their reputation as an authority in service to future personal goals which may or may not include their current employer – The negative here is this contributor is still taking money out of a professional journalist’s pocket.  The other negative is that even the best, longest tenured, professional journalist can never substitute for a real subject matter expert, assuming no conflicts. That’s the attraction of these public figures, lawyers, academics, corporate executives. And then there’s the independence issue.  As long as a journalist works for a media company who takes advertisements and other financial support from the subjects of their coverage they are beholden. They will never be as truly independent as I am, no matter how much the pure of heart idealists like to think so.  That constraint on independence is called an editor who reports to a publisher and I saw it in action in the publication in question.
• The mostly amateur blogger/freelancer who welcomes the opportunity to be published in a prestigious mainstream publication, benefits from having an editor, and is ready, willing, and able to produce when/how the publication requires – This contributor isn’t typically invested in the piece or is so invested that getting the word out is more important than getting paid. Activists and other “alternative voices” who have no desire to be professional writers but want to see their words in print to further their cause fall into this category. In both cases, these contributors are competing with paid full-time journalists and the complaint is they may be diluting the quality of the content if not monitored and edited closely.  This is the fear amongst journalist and others of non-fact-checked, “irresponsible ” content produced by the stereotypical blogger writing in their pajamas in the basement.
• A freelancer who is typically paid to write but may consider the opportunity to be published in a prestigious mainstream publication with a wide circulation – I could fall into this category. Nowadays, every time my content appears anywhere other than my own blog, I am asked by someone whether I was paid for it.  Some just want to know who is paying and how much.  Some are acting as watchdogs for the freelancer community, sussing out the scofflaws who do unpaid work and, therefore, take bread out of the mouth of those trying to maintain the value of their work and promote living wages for their contributions. I reserve the right to make choices based on my own personal needs and objectives and I will take the consequences of those decisions.  I don’t usually answer these questions when posed in a confrontational manner but I’m always glad to help others find outlets for their work. The key with me is I rarely pitch. (Nor do I pay attention to most pitches because my blog is 99% all my own original content, except for book reviews which are inspired by others’ hard work on a slow, staggered editorial cycle here in the re: The Auditors newsroom.)  I’m asked to do pieces, with the clear understanding I expect to be paid for my work, because no one else is writing about these topics in quite the way that I do.

“Hard to believe that Deloitte is still the biggest in Chicago, given that they’ve cut so many people in the last two years. Perhaps it’s due to the fact that they’re the only ones who have any kind of consulting business in the region to speak of. I’d like to see more stories about the “business of the firms” that are investigative and not so PR/promotional. Do you have a dedicated journalist covering the business of the firms? Why not? We have a huge Big 4 presence here, as well as having one next tier firm based here, Grant Thornton. With stories like the ex-Vice Chairman Tom Flanagan insider trading scandal at Deloitte, it would be good to have more insight into the firms to support both their employees (of which you say there are so many) and clients, as well as local vendors.  In the meantime I guess folks will have to read my blog for news.“