Bloomberg’s Pulitzer winner Mider talks tax coverage
Bloomberg News reporter Zachary Mider received a Pulitzer Prize on Monday in explanatory journalism for his stories last year about corporate tax inversions, or the process by which companies claimed a legal address in a foreign country to lower their taxes.
It is the first Pulitzer won by Bloomberg. Links to the stories are here.
In a letter to the judges, former Bloomberg News editor in chief Matthew Winkler called the stories “meticulous” and “innovative” and wrote, “Mider’s reporting helped spur reforms. The Obama administration, after previously saying it lacked authority, imposed tougher rules. Obama denounced inversions in July, calling them ‘unpatriotic.'”
Mider analyzed hundreds of corporate documents in the United States and Europe and spoke with dozens of tax lawyers, executives and government officials. His reporting that the cost of inversions to taxpayers was $10 billion and growing was cited on the floor of the House of Representatives.
Mider and Bloomberg News withstood lobbying from inverted companies when it compiled an authoritative list of all inversions dating back to 1982. Three firms, including investment bank Lazard Ltd., asked to be removed from the roster, but weren’t.
Mider, a Harvard graduate, joined Bloomberg in August 2006 after four years at the Providence Journal. He spoke by telephone with Talking Biz News on Wednesday about the stories. What follows is an edited transcript.
Why did you start writing about inversions?
I had been writing about tax stuff the previous year, mostly personal income tax such as how billionaires use techniques to lower their tax bills. So I was sort of vaguely aware of the inversion thing, which was heating up in 2013. But I couldn’t tell if it was anything that required a sustained attention. I kind of wondered if it had all been written. There were stories in 2012 and 2013 that mentioned the phenomenon.
In 2014, I kind of randomly wrote a story about inversions in January. I kind of thought I was done with it. And then I guess about April I was actually at the Sard Verbinnen cocktail party, an annual event in New York, and heard from a couple of folks that there were a lot more of these inversions in the pipeline.
So I thought that it was worth paying more attention to. It turns out that was right, and before too long it had gotten the attention of Washington. Some of the biggest companies were considering inversions.
When did you realize this was kind of a big deal?
I think it was then, when I realized that there were more deals in the pipeline and they were becoming increasingly popular. It wasn’t just one or two companies a year.
How difficult was it to get the companies planning inversions to talk with you?
For the most part, they didn’t. And even companies that had done it a long time ago weren’t really keen on discussing their situation with us, which I can kind of understand. There is a lot of things companies aren’t particularly open about. But fortunately the tax world is full of experts who are paid to understand how these transactions work, and there are always people you can call and explain it to you and help you understand the mechanics, even though they can’t explain how a specific company did it.
What was the hardest thing about reporting and writing these stories?
Any time you are writing about taxes, you have a big hurdle to overcome. A couple of hurdles. One is that they’re just not the most interesting things in the world. No matter how larger than life the characters are, if you’re writing about taxes you’re writing about an abstract paper financial kind of thing.
The other is that to the extent that there is tension or drama, you don’t really get to see the other side. Companies plan to arrange their affairs to avoid taxes. But the ultimate victims are the federal government and tax revenue, indirectly all of us who pay taxes in America. There’s not like a person you can go interview who lost the money that some company would have paid. So it’s hard to find a way to make the story human.
Since tax stories aren’t the most scintillating copy, how do you make them interesting to readers?
You always look for characters and people, and I got really lucky on one of the last stories I did on the inversion issue. It was about the first inversion in 1982, and it could have been a really boring story. It almost was.
But I eventually got lucky in that I found some kind of records from the past that brought it alive and helped me make it a story about an interesting character, John Carroll, who was the genius behind the first inversion. And he isn’t alive, so I couldn’t interview him. I was able to string it together around him and brought it life.
How did managing editor Dan Golden at Bloomberg helped you in the past year with these stories?
Dan was my editor on all of them. He’s my assignment editor and edits all my copy. He’s done just a huge amount of great work over the years, so he brings kind of a reporter’s outlook to stories. He’s not just an editor. He can give good advice about what lines of reporting to pursue.
So the general interaction is he will read a story or a draft, and say, you’ve got to do this and this and this. And I will say that’s crazy and doesn’t make any sense. But an hour later, I will say I can do one. And a couple of hours later, I will end up doing all of them.
These stories seemed to be time intensive in terms of the reporting. How did you get that time?
I’m lucky to work at a place like Bloomberg where we do have the bandwidth. We have tons of people who work on fast-breaking news every day, but we also have people who can get time to work on longer-term projects if they are deemed to be worthwhile.
I was given a ton of freedom to be able to dig into this. From April until probably December, it was almost all I did. It kind of became a breaking issue in that there was this developing issue in Washington about how to react to the inversion phenomenon. At the same time, these companies we’re thinking about announcing and negotiating M&A deals based on inversions. So I kind of worked on both of these stories as kind of the inversion guru.
Why don’t more business media outlets cover tax issues besides leading up to April 15?
I do think that the major business media outlets last year definitely wrote a bunch about inversions. The Wall Street Journal and Financial Times did. But one thing that I found that even as business reporters, there’s often a minimum investment that you have to put into a complicated area like taxes or investments that repels casual coverage.
You have to do a bunch of homework before you can write the first authoritative story. After you do that, you can write more than one. But we all spend a lot of time on breaking news, but not all business news organizations can do the homework to get the full understanding of how these complicated issues work.
Is the inversion issue dead, or are there more stories?
There’s definitely more stories, and I just wrote one the other day. In terms of Washington, there is this false narrative that emerged that the Treasury Department wrote a bunch of new rules to discourage inversions. That killed three of the eight deals pending at the same time. So we don’t see a lot of people putting forth a lot of effort in Congress to do anything about inversions.
I don’t think we’ll see much happen in terms of more policy making on this issue this year. But we’ll continue to see inversions. The basic structure is still available. We’ve had a handful of inversions since September. It’s still possible, and companies are still doing it.
Until you have a more fundamental change to our tax system, it’s inevitable.
How did you celebrate?
I’m boring. We had a little celebration right here. The first inkling I got that we had really won was when the hundreds of champagne flutes appeared on the floor. So somebody had better intel than I did. Everybody gathered around in the newsroom.
Monday evening, we went over to Bloom’s Tavern with some reporters and editors and had some pints. No wild parties.
I came into work late yesterday. Like an hour.