Friday, April 30, 2010

Reuters Opinion 2.0

Reuters waded into the waters of opinion and analysis against a very strong tide: An iron-clad policy of doing nothing that could conceivably open the 150-year-old news agency to the charge it was not absolutely free from bias. In the not-yet three years since Reuters columnists began taking sides on stories Reuters reporters were covering, a breakthrough I called "Reuters Opinion 1.0," its global reporting power has only grown.

But Thomson Reuters CEO Tom Glocer seemed to complicate the question of institutional ambivalence with a post on his personal blog in which he inveighed against a "rush to judgment" concerning financial giant Goldman Sachs and a civil complaint by the SEC which accuses the Wall Street behemoth of fraud.

Glocer states an obvious fact: Goldman is guilty of nothing until the company is found guilty of something, or agrees that it broke a rule or regulation.

But now comes an object lesson into why this may not have been the best idea: News that federal prosecutors are now investigating the company prompted a rush to judgment on Wall Street as investors shot Goldman shares down 10% to a nine-month low.

Of course, Glocer's message is still valid and correct and (irony noted) probably not directed at the markets, whose amorphous, amoral, extralegal and essentially unchallenged power to literally take sides at all times on anything is precisely what Reuters' business is based upon (to say nothing of the basis of the broad charge that Wall Street created or at least exacerbated the global financial meltdown.)

I've lauded Glocer for being among the few CEOs who actually does blog. It is genuinely bold and refreshing: He has an unusually high burden to bear since he is not only a material person who can't say certain things publicly but the head of a media company which takes extraordinary pride in its impartiality.

So the problem isn't really that he's taken the side of a concept enshrined in the U.S. Constitution but that he picked this fight to take that stand -- a fast-breaking story being covered aggressively by people who report up to him who already know that they aren't supposed to pre-judge anything. And it doesn't help that Goldman is a major client -- at the very least an inconvenient truth.

Criticism when the context was only the sleepyish SEC civil case came quickly, from expected and unexpected quarters. The union representing US reporters seized upon the incident to renew its call for an ombudsman to advocate for editorial. The New York Times stepped in to say that Glocer's post was "an unusual step for a media executive." Michael Reupke, a former Reuters editor in chief and general manager, had much stronger language: "outrageous and inadmissible."

"Are the Trustees too sleepy to think of stepping in here?" Reupke wrote in a letter to "The Baron," a social network for current and former Reuters employees. "If this had happened in my day I doubt whether he could have survived in his job."

I'm inclined to think that there is nothing sinister going on, even though the atmospherics are terrible: Defending Wall Street, which pays many Reuters bills, as it digs it way out of the worst PR challenge since tainted Tylenol. The first non-editorial person to run the company in modern times, he screws the pooch in a way no Reuters journalist without a death wish could even imagine.

The Goldman story will play out for some time and there will be lots of opinions expressed about the company's comportment from all sides. In fact, Glocer need look no further for judge-and-jury-like conclusions than "The Great Debate" blog on Like in this post, from veteran columnist James Saft:
"Regardless of whether the actions of Goldman meet a legal hurdle of fraud, they very easily clear a very low hurdle of immoral and unethical behavior. Seriously, would you let these guys repair your car or treat your house for termites?"
And that's the point. The hue and cry of the masses -- and even by British Prime Minister Gorden Brown, whom Glocer singles out for excess -- are not part of the process Glocer wants to protect, unless one is to believe that the SEC will be persuaded by the likes of Jon Stewart.

Goldman will get its day and its due and is still powerful enough to do as well as is humanly possible in their legal tussles no matter what the world thinks of them.

As Saft notes in that same column:
So remind me, why will clients continue to do business with Goldman Sachs?

I know, it is a stupid question; investors and corporations will continue to do business with Goldman even after the bank has been charged with an alleged fraud for the same reasons they always have: because they hope, like every gambler, to beat stacked odds and because they flatter themselves that they are not the sucker at the table.

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