OLD Media Moves

On being a kick ass business journalist

December 20, 2011

Posted by Chris Roush


David Evans is an investigative business journalist who writes for Bloomberg Markets.

A graduate of the University of Southern California Law Center, he spent five years prosecuting fraud for the U.S. government as a trial attorney for the Commodity Futures Trading Commission before joining Bloomberg in 1992.  He joined the magazine’s staff in 2002.

In 2002, his investigation of stock manipulation by arms dealer Adnan Khashoggi, won enterprise reporting awards from the Society of American Business Writers and Editors and the Los Angeles Press Club, and preceded a federal criminal investigation.

In 2004, he won a UCLA Gerald Loeb award for his reporting about how energy trader Dan Gordon embezzled $43 million from Merrill Lynch & Co.

In 2006, he won the George Polk Award, his third SABEW award, and the Investigative Reporters and Editors Magazine Medal and a Sidney Hillman Award for a series of stories about how poor people are exploited in experiments to test new drugs, as the FDA relies on private ethics boards financed by Big Pharma to provide oversight.  The stories led to the shutdown of the largest clinical trial site in North America, a converted Holiday Inn in Miami.

In 2010, he won his fifth SABEW award for documenting patterns of criminal behavior by the world’s largest drug companies.

In 2011, Columbia University honored with the John Chancellor Award for lifetime achievement. (The second photo below is David posing with the 2011 Chancellor Award. Photo credit is Diane Bondareff.)

In 2011, he also won the Silver Gavel Award from the American Bar Association, and was a Pulitzer Prize finalist for his exposé of how life insurance companies have turned death into a $28 billion profit center, retaining money belonging to survivors of soldiers killed in Iraq and Afghanistan, as well as civilians. The investigation brought him his sixth SABEW award, second Investigative Reporters and Editors award, second UCLA Gerald Loeb award.

Evans talked last week by e-mail to Talking Biz News about his career. What follows is an edited transcript.

How did you settle on journalism as a career?

I became frustrated after working as a trial attorney at the Commodity Futures Trading Commission for five years. That’s the agency that’s supposed to catch frauds before they’ve made off with millions of dollars of customer money. The agency was run by a laissez faire economist, and I had a difficult time persuading my superiors to allow me to file cases to protect the investors from dishonest salesmen in finance.

I took some vacation days in 1992 to attend the Investigative Reporters and Editors annual conference in Portland, Ore. I saw a demo of a portable Bloomberg terminal — something few outside Wall Street had ever seen back then. I was blown away by its ability to bring news from around the world to its tiny screen.

Within weeks, I was trying out for a job at Bloomberg headquarters in New York. I abandoned a stable career as a government lawyer to join a start-up news organization.

I lost my subpoena power, but gained a public platform to warn investors about financial scams before those slow- moving regulators could even send out their subpoenas and crank up their investigations.

What got you interested in writing about business and economics?

When I started out in journalism, I don’t think most people spent much time reading business news. As a kid, I enjoyed browsing the Wall Street Journal and New York Times business sections. I found stories and advertisements that intrigued me. Eventually, I realized that the influence of money was everywhere.

Before SEC filings were available online, I’d go down to the SEC’s regional office in Los Angeles and browse through their filings by public companies. They were reproduced on microfiche cards, and there was a special reader to view them.

When did you start writing more investigative pieces, and why?

When I joined Bloomberg, the news organization had just been set up, and we were a skeleton crew. Based in Los Angeles, I was covering general news up and down the West Coast, from Boeing labor disputes in Seattle to biotech breakthroughs in San Diego.

In what little spare time I had, I developed a specialty in exposing small cap stock frauds. Without the bureaucracy of a federal agency, I could discover a fraud, conduct and investigate, and quickly publish a report that warned investors.

As Bloomberg built up its reporting staff on the West Coast, I was able to focus full-time on stock scams, including a bogus goldmine, a phony AIDS cure and a Caribbean-based Ponzi scheme.

My investigations got the attention of law enforcement, including the SEC and the Department of Justice. Both civil and criminal cases were filed based on the facts I unearthed.

How do you find your story ideas?

I still read lots of SEC filings, browse through court decisions and talk to readers and Bloomberg subscribers. I also spend lots of time reading news stories and press releases. S Sometimes, I just start looking at an industry with a history of problems, to see what the latest abuses are. That’s what I did with the life insurance industry in 2010 when I discovered their little-known use of retained asset accounts, which turned death into a profits center.

Does the fact that you have a reputation of writing investigative pieces hurt you or help you when contacting companies for responses?

I think it helps my stories. When a company sees that I have the support of Bloomberg Markets to write hard-hitting stories, year after year, I think they’re less likely to think they can simply ignore us. We’re not going to go away. And we’re not going to be pressured into softening a tough story.

And the more a company is willing to answer our questions, even if they disagree with our findings, the more balanced and accurate our story becomes. Bending over backwards to be fair and include the company’s best answers to the questions we raise helps all the way around– the reader gets a more complete picture, the company gets its side across and as a result, the story more powerful. It’s much harder for a company to credibly complain that your story was one-sided when everyone has already read the company’s responses in your story.

How long do you typically work on a story, and when do you know it’s ready?

My stories often take six months to a year of reporting. I’ll spend weeks reading about a new topic, including what other journalists have written, what opinions judges have written and what professors have published.

I think it’s critical to figure out who the most knowledgeable people are in a field and see what they’ve written, but I don’t talk to them for long until I feel I know enough about the subject, and can speak their language. I don’t want to waste anyone’s time.

In 2005, I spent more than a month studying the clinical trial industry before I began doing interviews. The story wasn’t finished until we had gathered many examples of how the U.S. Food and Drug Administration’s system to protect human subjects was outdated and broken.

And as I said, no story is complete until you’ve given everyone a chance to comment on your findings.

How has your work an attorney for the CFTC helped you as a journalist?

If you’ve never been a bureaucrat, you really can’t imagine the frustrations those folks endure. After five years at that agency, I developed tremendous empathy for folks who work for government agencies. It’s very important to develop good relationships with public servants as you dig for information, and I think my time at the CFTC makes that easier for me.

And when you’ve been a bureaucrat, you realize that there are spectacular tidbits of information that never see the light of day because they get buried in the system. I try to keep that in mind as I compose my open records act and FOIA requests.

What story have you done recently that you’ve been the most proud of?

In 2010, we published an investigation about a virtually unknown sector of the life insurance industry, explaining how insurers had turned death into a profit center. They were holding on to and profiting from money that belonged to the survivors of U.S. soldiers killed in Iraq and Afghanistan, as well as federal employees and ordinary Americans. State insurance regulators didn’t understand the money wasn’t in bank accounts protected by the FDIC. Survivors weren’t sent the checks they were expecting. Their money, in so-called “retained asset accounts” was actually sitting in the insurer’s general corporate accounts, earning as much as eight times the interest paid to the survivors.

After we published, the Veteran’s Administration halted its practice of making retained asset accounts their default payment method. States, including California, moved to provide better disclosure about these accounts to survivors. And the New York Attorney General began a major fraud investigation.

Is the objective of any investigative business story to get some sort of reaction — either to get a company to changes its ways or to get a government agency to enact new regulations?

Our goal is to inform the public about important facts that are being concealed or going unnoticed. It’s then up to society or the government to take action.

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