Yes, I once drank the Bloomberg Kool-Aid
National Public Radio’s David Folkenflik interviewed me Monday afternoon about the culture at Bloomberg News that would allow reporters to access personal information about some of its clients — the main crux of the scandal that has now enveloped the company.
You can listen to Folkenflik’s segment from “All Things Considered” here. You’ll get a couple of clips from our talk.
Here is the gist of what I told Folkenflik, along with some conclusions:
I was Bloomberg News’ U.S. beverage reporter from 1997 t0 1999, working out of its Atlanta bureau. That meant that I covered publicly traded companies such as Coca-Cola, PepsiCo, Anheuser-Busch, Coors and Robert Mondavi. I drank the Bloomberg Kool-Aid.
My previous employer was the Atlanta Journal-Constitution, where I had also covered Coca-Cola. But the stories I wrote for Bloomberg were much different because of the target audience — investors, analysts, buy-side and sell-side researchers and short sellers. At the Atlanta paper, I wrote for a general audience that wasn’t necessarily interested in investing in beverage stocks.
Working for Bloomberg, even during those early days of the news service, brought cache with Wall Street sources. Bankers, investors and analysts knew you were a serious business journalist if you worked for Bloomberg, and they were more likely to return your phone calls.
The Bloomberg terminal that sat on our desks also helped our reporting. We would look up phone numbers and email address of people on the terminal, and we could see if a person had a terminal and whether they used it. If they had a terminal on their desk, we could message them directly using the terminal.
Another useful reporting tool on the terminal — available only to Bloomberg reporters — was that we all put notes into the system about our sources. You could call up a CEO of a company or an analyst and see what other Bloomberg reporters had to say about them, such as what questions they were more likely to answer. It often included their cell phone numbers and other tidbits. (Editor in chief Matt Winkler once showed this feature to one of my beverage sources, who was incensed that I had entered into the system that she was sometimes difficult to work with.)
The terminal also helped you write stories that no other business journalists could do. For example, I remember writing stories about how some beverage stocks were poised to rise in the future because of money flow data that showed more money was being used to buy the stock than was being received from those selling the stock. It was data I had never seen before, but which I now had easy access to on the terminal. (For those of you with a Bloomberg terminal, see “Coke May Be Poised to Rise as Money Flows Into Stock” from Aug. 20, 1998.)
I don’t recall ever using the now-infamous Z and UUID functions on the terminal to check on information about sources. Then again, I wasn’t covering Wall Street or investment banks.
I also don’t think that the current Bloomberg journalists who used this access, which has now been removed by the company, did anything wrong. All business journalists, not just those at Bloomberg, are taught to aggressively look for stories. Those that used their access to client data to mine for stories were using the tools that were available. I don’t see anything wrong with what we’ve been told happened. Let’s remember, it’s Wall Street bankers and traders who are complaining. They’re one of the lowest life forms on the planet.
Now, let me talk about what effect this might have on Bloomberg’s journalism. I have many friends, former co-workers and former students who work there, so understand that the following is with me thinking about them. I have a lot of respect for all of them.
What concerns me is that the Wall Street sources who helped make Bloomberg’s coverage the premiere news source on markets and companies are now likely to be more leery with what they share with Bloomberg, both on the terminal and on the phone with its reporters. In the end, I think that these sources will decide that the Bloomberg terminal, and its news coverage, help them make money, and the relationship will be mended.
This has been a blow to Bloomberg’s carefully developed and cultured image, and the company has done itself no favors with how it has handled the coverage since the scandal broke last Thursday night. It no longer controls the story — other business media organizations are all over it. Bloomberg should have published the definitive story about what happened this weekend, painfully detailing what information its reporters had and how it was used, leaving no stone unturned. That’s what we’ve come to expect from Bloomberg.
For a news organization that prides itself on reporting and writing stories that are among the best, if not the best, in business journalism, exposing what others don’t want exposed, its inability to do just that with a story that resides in its own newsroom has been the biggest surprise.
Too much Kool-Aid has been consumed.