How covering the Libor scandal turned into a book for this WSJ journalist
David Enrich is The Wall Street Journal’s financial enterprise editor, managing a team of investigative reporters in New York.
He previously was European banking editor for The Journal, responsible for coordinating its coverage of banking and regulatory policy across Europe.Enrich joined the Journal in December 2007 in New York as a reporter writing about the U.S. banking industry, with a particular focus on Citigroup.
He relocated to the Journal’s London bureau in March 2010, covering British banks and regulation. He was named European banking editor in March 2012. Prior to joining the Journal, he was a reporter with Dow Jones Newswires for several years.
Enrich was part of teams of Journal reporters who were finalists for Pulitzer Prizes in 2009 and 2011.
His book, “The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History,” is being published this month and covered the libor scandal.
Enrich spoke Monday about how the book came about in an email conversation with Talking Biz News. What follows is an edited transcript.
How did you first get the idea for this book?
I got the idea for “The Spider Network” as I worked on the five-part WSJ series in 2015 about the unraveling of Tom Hayes. I had so much detail and narrative material that just couldn’t fit into those stories, even though they were about 8,000 words long, that I realized this was my opportunity to write a book.
Why should people care about Libor? How does it affect them?
Libor affects just about every corner of the financial system. It’s the basis for interest rates on credit cards, mortgages, student loans and much more — but it also underpins derivatives contracts that states and pension funds and university endowments use to protect themselves against swings in interest rates.
So if someone is manipulating Libor, it has the potential to affect a vast swath of the country if not the world.
How did you get people to cooperate and talk to you?
The best way to get people to cooperate on a contentious tale like this — or probably any tale, for that matter — was to convince them that it was in their best interest to talk to me. I tried to do that by emphasizing that I had an open mind and was genuinely interested in hearing their sides of the story.
A lot of the characters in the book have been caricatured as villains, and I told them (honestly) that I was interested in getting past the superficial stuff and really understanding what their jobs were, what their lives were like, etc.
This is the part of a journalist’s job that most resembles that of a psychologist.
How did you gain the confidence of the central character, Tom Hayes?
Very slowly. In early 2013, I was working on a profile of Hayes, who’d just been criminally charged. I got a former classmate to pass on my contact info to him. One evening, he texted me out of the blue. Over the next few weeks, I coaxed bits of information out of him. Right before the profile ran in the WSJ, I did a final round of fact-checking with him, and he freaked out when he heard that I was going to mention some professional details about his wife. He agreed to meet with me if I left out those details.
I wasn’t sure if he’d live up to the bargain, but I agreed. The next day he met me in a dingy cafe and that was the start of a regular series of meetings and phone calls over the next few years. He gradually came to trust that I was in this for the long haul and wasn’t going to burn him. In exchange, he opened up his whole life to me.
How long did it take you to put together the manuscript, and what were the hurdles?
I started writing the manuscript in early fall 2015. I handed in a draft to my publisher in January — so it took about five months. However, that draft was a total mess, and I ended up rewriting large portions of it. The final version was done last fall.
Did you take time off from the Journal to work on the book? How did the paper help you?
I took three months of unpaid leave from the Journal at the end of 2015. In addition, the WSJ was very generous tolerating my obsession with Hayes over a several-year period. And a number of WSJ editors, most of all Bruce Orwall, provided crucial editing of my stories and advice on the project.
How do you make a complicated story like this appealing to the average person?
I think the key in making any complex topic interesting is to make it relatable. So yes, Libor is really important to anyone who has a loan, but this book isn’t fundamentally about Libor. It’s about how powerful institutions can suck in and then spit out relatively normal, well-intentioned human beings.
That said, there is a lot of finance in this, and my goal was to demystify an industry that relishes its own complexity. One of my favorite parts of the book is when a broker is being interrogated by regulators and is clearly trying to confuse them with an alphabet soup of financial minutiae.
When distilled to its essence, finance isn’t as complicated as some financiers would have you believe.
What did you learn about your own reporting and writing skills in this process?
The biggest thing was that even though I’ve written a fair amount of long newspaper stories, writing a book is a completely different type of writing. I had the goods as far as the reporting was concerned, but the writing proved a challenge, especially at first.
I needed to learn to really slow down and paint scenes and describe emotions, but at the same time avoid wallowing in extraneous muck.
There aren’t as many books written about trading. Why do you think that’s the case?
I think a lot of people — writers, publishers, readers — find the topic intimidating, at least when you get past the superficial “Wolf of Wall Street”-style shenanigans. That’s one of the things I’m proudest about with this book: I think it’s readable for everyone without completely dumbing down or excising the finance element. Hopefully most readers will learn a lot by reading the book.
The investigative team at the Journal seems to be a ripe place for book ideas. What’s next for you?
That is a good question. I wish I knew the answer!