Wednesday, September 5, 2012

NY Times Report On Public Officials Suing On `Broadening' LIBOR/Barclays Scandal Doesn’t `Broaden' To Mention “Barclays” Center

In a new article (in today’s print edition) the New York Times has continued reporting about how government officials around the country are “working intensely behind the scenes to build a case for suing the nation’s largest banks” in connection with the LIBOR/Barclays rate fixing scandal. . . .

(See: Banks Face Suits as States Weigh Libor Losses, by Nathaniel Popper, September 4, 2012.)

. . .  It’s the second Times article about such government lawsuits.  Once again, the article doesn’t report that local New York government lawsuits against Barclays Bank would occur, ironically, just as the New York taxpayers are providing massive subsidy for the promotion of Barclays Bank with the opening of the Ratner/Prokhorov basketball arena to which the “Barclays” name is being affixed.  (See my Noticing New York article pointing out this dereliction with respect to the first Times article: Friday, August 17, 2012, The New York Times Starts Reporting That New York Government Officials Are Looking At Suing Barclays Bank- Leading to. . . ?)

The first Times article (very short) appeared immediately after I’d finished writing a Noticing New York article suggesting that the New York Times start reporting that local New York government officials are looking at suing Barclays Bank.  (See: Noticing New York’s Wednesday, August 15, 2012, With Discordant Synchronicity The “Barclays” Center Will Open At LIBOR Scandal’s Peak: What The New York Times Is And Isn’t Covering.)

"Big," "Widely Spread," "Broadening"- And Of Relevance To   . . New Yorkers?

That Noticing New York article made the point that in reporting about Barclays, the Barclays Center and the LIBOR rate-fixing scandal for which the “Barclays” name has become a near synonym, the Times reporting needed to be less compartmentalized and more integrative.  That would mean paying attention to what local New York government officials are doing with respect to suing Barclays Bank and mentioning the overlaps respecting those local officials involved in the possible lawsuits against the bank and those involved in promoting the Barclays Bank via unjustifiable subsidies for the “Barclays” Center.

The new Times article quotes one state official working to build her case saying:
We think this could be as big as the mortgage crisis settlement, that this could be a really high impact situation and that we should be aggressive on this,” . . .  referring to the $25 billion settlement that the nation’s biggest banks entered with state attorneys general.
The Times reporter adds this assessment:
The activity provides a glimpse at how widely the Libor scandal has spread through the financial world, and how much damage may still be in store for the banks accused of manipulating Libor.
Notably, despite this gloomy assessment about the future discovery of widespread damage, the quoted assessment that the LIBOR damages “could be as big as the mortgage crisis settlement” is not provided by a New York official, it is provided by Janet Cowell, North Carolina’s State Treasurer.  In fact, there are no quotes or similar assessments provided by New York government officials.  The article does, indeed, report that New York’s attorney general, Eric T. Schneiderman, is pursuing the possibility of such litigation but instead of including a quote or assessment from Mr. Schneiderman or his office the Times fills in with a quote from George C. Jepsen, Connecticut’s attorney general, who is working on this matter together with Mr. Schneiderman and his office.  Mr. Jepsen says his work with Schneiderman’s office, “has broadened significantly over the last few weeks and we are now coordinating with a much larger group of attorneys general.”

Mr. Schneiderman's Current Chosen Investigative Focus

Mr. Schneiderman is making himself much more available to the press (three New York Times reporters and presumably a photographer for a contemporaneous photograph) in connection with another of his investigations: Whether private equity firms have abused, perhaps illegally, the IRS code by manipulating to convert monies earned as management fees into “fund investments” so as to thereby pay a much lower tax than should be paid when management fees are received.  There is a reason to make that investigation important in the national news at this moment: Bain Capital is one of the private equity firms employing this tax device and Mr. Schneiderman has subpoenaed the firm in order to learn more.  Bain Capital is, after all, the private equity firm that made Mitt Romney exceptionally wealthy.  The Romney campaign issued a statement that at one and the same time defends the tax device (as both acceptable and legal) and states that Mr. Romney didn’t himself benefit* form the practice.  (See: Inquiry on Tax Strategy Adds to Scrutiny of Finance Firms, By Nicholas Confessore, Julie Creswell and David Kocieniewski, September 1, 2012.)

(* It is worth remembering that in a previous parsing the Romney campaign disavowed Mr. Romney’s associations with Bain Capital activities by asserting that Mr. Romney had resigned from Bain retroactively, notwithstanding that "retroactive" resignation is a  legal impossibility, and evidence showing that Romney was involved with and its sole stockholder of Bain several years later than he acknowledges.  The degree to which his ongoing “Managing Director” title meant involvement in day-to-day management- vs. benefit?- involves some debate and additional parsing.)
The Schneiderman investigations of the private equity firms are being justified as “an effort to recover more revenue” for the state under New York State (not federal) tax law  (Wouldn’t the recoveries in the LIBOR suits be potentially even greater?), but the Times reports that executives at the firms under scrutiny are accusing Mr. Schneiderman, "a first-term Democrat with ties to the Obama administration," (as observed by the Times) of acting politically.  That accusation hearkens back to the motif, examined in the last Noticing New York article on the subject, that Mr. Schneiderman may pick and chose among his investigations with political motivation: Schneiderman said when running for office that he saw reasons to investigate the Atlantic Yards mega-monopoly but has so far bypassed his opportunities in that regard.

The Times story about government officials suing over LIBOR doesn't correct one ongoing omission: Notwithstanding that the Times is presumably supposed to serve as New York City’s local newspaper the Times has still not reported Mayor Bloomberg’s statement that he expects the city will join in the LIBOR scandal-based lawsuits.  Although the article mentions possible lawsuits against the LIBOR/Barclay Bank cohort by the states of North Carolina, Maryland, Massachusetts and Connecticut and contains a quote from the Connecticut attorney general, the article is seen largely through the eyes of  Ms. Cowell, the North Carolina Treasurer who is running as a Democrat for another four-year term in that office.  It could therefore be accused of being an example of press release journalism in its almost complete reliance of statements from Ms. Cowell’s office to present its picture of the news.

One service the article performs is to explain with relative clarity how localities may have lost funds and suffered damages for which they can sue banks such as Barclays.  Though clear in describing “two areas of the state’s finances” “primarily” focused on by North Carolina in its pursuit of damages, Noticing New York’s previous coverage described more ways that local governments may have incurred damages.

Hot Off  the Press: New York Times Own Version of "Less Compartmentalized" and "More Integrative"

Meanwhile, it may be that the New York Times has considered taking my Noticing New York advice that its reporting about Barclays needed to be less compartmentalized and more integrative, but not in the way I had intended.  When I argued that everything reported about comprises an interrelated fabric and tableau of relevancy I had meant that questionable government subsidies to promote the name of Barclays at the “Barclays” Center are relevant to the LIBOR Scandal, especially since the officials involved in each sphere of activity are largely the same.  Accordingly, the public relations push and spending for the “Barclays” Center should not be treated as sacrosanct to be kept inviolate of any mention of the glaringly obvious and embarrassing scandal it evokes.

That’s what I meant . .   but the Times has decided to implement its less compartmentalized and more integrative reporting in quite the opposite way. . .  By expanding and integrating its public relations, press release-based articles promoting the opening of “Barclays” Center into a disingenuously faux mimicry of its other city news reporting . . . 

. . . On Tuesday the Times ran two stories complete with seven pictures and a map (four of the pictures and the map being in color) that took up a full one and two thirds pages in all.  Both stories were promotional pieces about where the Nets players “who will play at the Barclays Center” will live.  The coverage was prominently introduced on the first page of the SportsTuesday section but carried over to cover the entire last page of the sports section where, looking suspiciously like the Times Real Estate pages (and unlike a sports section), it might snare and draw in unwary readers curious about Brooklyn living.  The page even borrowed the real estate section’s customary formatting, fonts and layouts- See, below: Can you tell which is which?  Which is the sports section page and which, alongside, is the page from the Times actual real estate section?  (Keep reading for the answer. . . .  Click to enlarge and inspect more closely.)

(Answer: This week’s real estate section page, from just two days prior, is on the RIGHT side.)

I suppose this is all in the tradition of the kind of advertorial that this so closely resembles being, something the Times is helping along here: Making something look like the news reporting that it is not.  

Norman Oder of Atlantic Yards Report wrote up the two Times articles, which he described as “fanciful”: Tuesday, September 04, 2012, OMG, where will the Nets players live? Times devotes two articles, six reporters, to investigation, promotion .

Despite the substantial ink and page spread devoted to the work product of what Mr. Oder notes was a mustered force of six reporters (not to mention four photographers), nowhere in all of this reporting about the coming of the “Barclays” Center that promotes Barclays Bank does the Times mention the Barclays LIBOR scandal.. .  or the Times business relationship with the Atlantic Yards developer, without which the Atlantic Yards mega-monopoly might never have gotten this far.

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