The maintenance men at the local public school are as important to us as the teacher. After all, he is the person most likely to know whether there is any leftover asbestos in the school lunchroom. The cops on their beats are often our best sources. We have been known to pay for information by buying a source a bagel, a burrito, or a cob salad.
As Michael Connelly, the famed mystery writer who once worked for the Los Angeles Times, likes to say, “everybody counts or nobody counts.”
The New York Daily News once broke a story about steroids when a reporter heard voices outside a grand jury room. We are insatiable. But until recently, we prided ourselves on not being like them: the government agents who use electronic wizardry to intrude into the lives of our readers.
Not until they decided to become one of us, in a big way. Call it the Bloomberg Way, in honor of Mayor Michael Bloomberg, founder and controlling stockholder of Bloomberg LP, parent company of Bloomberg News, where reporters tap into the private financial world of its customers in pursuit of a story.
No one knew what was going on until The New York Times reported on May 13 that Goldman Sachs executives told Bloomberg LP that one of its reporters had logged on to the terminals it rents from Bloomberg to try to check out the employment status of a Goldman partner.
Matthew Winkler, editor in chief of Bloomberg News, acknowledged that the practice had been in existence since the early 1990s, before Michael Bloomberg became Mayor Bloomberg. Winkler said there was no malice involved in the behavior of his reporters.
“Let’s be clear about what reporters had access to,” Winkler wrote on the Bloomberg News website. “First they could see a user’s login history and when a login was created. Second they could see high-level types of user functions on an aggregated basis, with no ability to look into specific security information. This is akin to being able to see how many times someone used Microsoft Word vs. Excel. And finally they could see information about help desk inquiries.”
Winkler apologized, said he would harness his reporters, and quoted The Washington Post as saying Bloomberg reporters were simply collecting “mundane” facts “such as log in information.”
Not so mundane or innocent.
The Times reported that Bloomberg financial journalists would sometimes eavesdrop on the conversations between their clients and Bloomberg help desk consultants. Something the White House might do these days in the name of national security, if not Wall Street securities.
Jane Mayer, a writer for The New Yorker, in writing about the Obama administration’s phone bugging scandal, noted that knowing the person someone calls is very intrusive, indeed. So when someone is logging on to a terminal, or asking help questions, a reporter could ultimately uncover some proprietary information a company wanted to keep to itself.
In a June 6 New Yorker article titled “What’s the matter with metadata?” Susan Landau, a former Sun Microsystems engineer, told Mayer that knowing who someone is calling “is much more intrusive than content.” So it is not a stretch to be concerned about reporters gleaning information from tapping into a terminal.
Some media monitors have compared Bloomberg News’ intrusion to the hacking scandal that forced Rupert Murdoch to close down News of the World in Great Britain. The two are quite different. Murdoch uses his papers to politic, but Bloomberg is an elected official whose policies affect Wall Street. Then Bloomberg News, a subsidiary of Bloomberg LP, the source of the mayor’s extraordinary wealth, analyzes Bloomberg’s decisions. It’s like Barack Obama setting editorial policies for the New York Times.
Mayor Bloomberg insists that he is not involved in the day-to-day operation and has refused to answer any questions about it. He said that he stopped being involved in Bloomberg LP after he was elected in November 2001. But reporters have not pursued him about the fact that Bloomberg journalists began snooping on terminal log-in information when he still ran the company. And they might still be doing it if Goldman Sachs hadn’t complained.
Meanwhile, close associates of the mayor are very much involved in this story. Daniel L. Doctoroff, chief executive of Bloomberg LP, is a former deputy mayor of New York City under Mayor Bloomberg. By all accounts, they are close friends. The Times refers to Doctoroff as the mayor’s “confidant.”
And the first thing that Doctoroff did was ask Samuel J. Palmisano, former chairman and chief executive of IBM, to analyze the privacy and data operation of Bloomberg News. Palmisano is a member of the board of directors of Bloomberg Philanthropies, the mayor’s personal philanthropic operation.
Clark Hoyt, who once served as a monitor of journalistic behavior at the New York Times as public editor and is now an editor-at-large at Bloomberg News, was asked by Doctoroff to analyze the controversy and recommend how to strengthen the company’s ethical standards. Here are some questions he may want to put to his colleagues on the Bloomberg News team:
Why did Mayor Bloomberg, when he was just Michael Bloomberg, allow Bloomberg News journalists to behave like FBI agents? Are there any internal documents showing what he thought of the practice?
How many of the 2,500 reporters at Bloomberg News were involved in the log-in screening? Which stories resulted from information gleaned from that behavior?
Did any of these stories negatively affect any financial institutions? And if they did, who wrote them, and who were the editors who permitted them to be posted online?
How many complaints, if any, did Bloomberg News receive about the practice?
Was anyone fired because he or she pursued some proprietary information too aggressively?
Did reporters who left Bloomberg News use their information at other news organizations?
Ask Harry “Hank” Paulson -- former U.S. Secretary of the Treasury, member of the Bloomberg Family Foundation board of directors, and former chairman and CEO of Goldman Sachs -- whether he ever suspected that Bloomberg News reporters were listening in on his Wall Street traders.
Companies like Goldman Sachs pay approximately $20,000 a year to Bloomberg LP for access to financial data terminals. They don’t expect any of their money to be used to pay reporters to spy on them.
Allan Wolper is a professor of journalism at Rutgers-Newark University and host/producer of “Conversations with Allan Wolper,” a broadcast on WBGO 88.3, an NPR affiliate in the New York area.