CONTENTS

THE IRE JOURNAL 20 – 32 SALARIES, PERKS AND PENSIONS! TABLE OF CONTENTS CORPORATE COLLAPSE JULY/AUGUST 2003 Challenging assumptions was key to pursuing Enron’s shaky, but often legal, steps 4 Diversity efforts increasing By Kurt Eichenwald By Brant Houston The New York Times The IRE Journal JANITOR INSURANCE 5 NEWS BRIEFS AND MEMBER NEWS Employer profits hidden in coverage of workers, even after retirement 6 ANNUAL CONFERENCE HOSTS HUGE By Theo Francis and Ellen Schultz CROWD IN WASHINGTON, D.C. The Wall Street Journal By The IRE Journal Staff EXECUTIVE PROFITS 12 BLACK MARKET Stock options and side deals mean Studying the economic, moral impact of millions for managers as Qwest stock the nation’s underground economy takes dive By Steve Weinberg By Lou Kilzer The IRE Journal Rocky Mountain News

13 FOI REPORT LEGISLATIVE PENSIONS HIPAA starting to deny basic information Lawmakers cobble together own to public state retirement plans paying better Jennifer LaFleur than old jobs Reporters Committee for Freedom of the Press By Dunstan McNichol The (Newark,N.J.) Star-Ledger 14 INTERVIEWS WITH THE INTERVIEWERS Interviewing whistleblowers PUBLIC RETIREMENTS By Lori Luechtefeld Poor oversight of fund, ignoring or rewriting The IRE Journal rules dumps shortfall on citizens By Brent Walth 16 DRUNKEN DRIVING The (Portland) Oregonian Killer roads pinpointed through mapping project By Rose Ciotta and Karl Stark The Philadelphia Inquirer 33 NATIONAL GUARD Close look finds poor training, 18 HI-TECH START-UP FINDS SAFE HARBOR unloaded guns IN GUV’S MANSION By Sharon Smith By Beth Silver York (Pa.) Daily Record for The IRE Journal 34 MISSING PERSONS Ignored reports, disorganization keep police IRE Journal art director Wendy from solving cases Gray provides her light, but By Lewis Kamb effective, take on the hottest Seattle Post-Intelligencer game of the moment. This edition’s cover package focuses on the ways those in power tinker with salaries, perks and pensions – both for themselves and those working for them. Cover illustration by Wendy Gray, The IRE Journal

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DIRECTOR OF PUBLICATIONS & EDITOR Diversity efforts increasing Len Bruzzese ver the past decade, IRE has persistently pushed to improve the MANAGING EDITOR Anita Bruzzese diversity in its membership and to make its training more acces- sible to minority journalists. ART DIRECTOR OThe work has ranged across all of our programs as IRE strives to react Wendy Gray expeditiously to those journalists’ needs BRANT HOUSTON At Unity ‘94, a newsroom survey showed minority journalists were not SENIOR CONTRIBUTING EDITOR Steve Weinberg getting practical training, especially in computer-assisted reporting (CAR). The survey said the traditions of newsrooms led to more experienced reporters getting that training – reporters CONTRIBUTING LEGAL EDITOR who were mostly white. With that survey in hand and the successes of its previous training, David Smallman IRE won support from several foundations to fund seminars and fellowships.

EDITORIAL INTERN The Freedom Forum backed a series of regional workshops in computer-assisted report- Lori Luechtefeld ing. The John S. and James L. Knight Foundation supported six years of fellowships to CAR boot camps. The Chicago Tribune Foundation, the Cowles Foundation, the Star Tribune Foundation, the Gannett Foundation, and the Philip L. Graham Fund made significant grants IRE that enabled IRE to provide fellowships to its seminars and conferences. And when funding wasn’t available, IRE used its own money to help. IRE EXECUTIVE DIRECTOR Brant Houston As a result, IRE has granted more than 300 minority fellowships since 1994. At the same time, IRE has put together training sessions at the conferences of the National Association of Black Journalists, the Asian American Journalists Association and the National BOARD OF DIRECTORS Association of Hispanic Journalists, Unity ‘94, and Unity ‘99. In addition, IRE also has CHAIRMAN helped with Web services for Unity, AAJA and the New York chapter of NABJ. David Dietz, Bloomberg News But IRE wants to do more. Last fall the IRE Board of Directors renewed its commitment PRESIDENT to diversity as a priority of the organization and vowed to expand our efforts in this area. Shawn McIntosh, The Atlanta Journal-Constitution Since then, we have moved on several fronts. We have begun the Minority Journalist VICE PRESIDENT Development Program. In this program, IRE teams with news organizations to help get David Boardman, The Seattle Times minority journalists to our annual conference. The idea sprang from former board member Lisa Getter and current board member James Grimaldi. TREASURER Under the program, IRE waives conference registration fees and gives one-year mem- Duane Pohlman, WEWS-Cleveland berships to minority journalists whose travel and lodging is covered by the journalists’ Paul Adrian, KDFW-Dallas/Fort Worth news organizations. Despite the tight economic times, nine news organizations, both large and small, joined the program this year and sent staff members to our annual conference Stephen K. Doig, Arizona State University in Washington, D.C. The organizations were The Buffalo News, Indianapolis Star, The James V. Grimaldi, The Washington Post Oregonian, San Antonio Express-News, The (Newark, N.J.) Star-Ledger, St. Petersburg Andy Hall, Wisconsin State Journal Times, WSET-Lynchburg, Va., The (Raleigh) News & Observer, and The (Wilmington, Dianna Hunt, Fort Worth Star-Telegram Del.) News Journal. Stephen C. Miller, The New York Times IRE also has begun a pilot program with The New York Times to create an ongoing Cheryl Phillips, The Seattle Times program at the conventions of minority journalism organizations. The program, led by IRE Deborah Sherman, WTVJ-Miami board member Stephen Miller of The New York Times, offers training in investigative and Nancy Stancill, The Charlotte Observer computer-assisted reporting throughout the conference with IRE board and staff members Stuart Watson, WCNC-Charlotte and IRE volunteer instructors. The first program took place in June at the conference of the National Association of Hispanic Journalists in New York City. With the assistance of IRE board member Dianna Hunt of the Fort Worth Star-Telegram, The IRE Journal (ISSN0164-7016) is we are working on a relevant and rewarding program for the 2004 Unity conference in published six times a year by Investiga- Washington, D.C. We plan for that program to be a combination of panels on investigative tive Reporters and Editors, Inc. 138 Neff reporting and demonstrations and hands-on training in computer-assisted reporting. Annex, Missouri School of Journalism, Columbia, MO 65211, 573-882-2042. There is much more to do, including increasing the diversity on the panels at our annual E-mail: [email protected]. Subscriptions are conferences, but we believe we have a good base from which to build. $60 in the U.S., $70 for institutions and those If you have ideas or want to help us in this area, please e-mail them to outside the U.S. Periodical postage paid at [email protected] Columbia, MO. Postmaster: Please send ad- . dress changes to IRE. USPS #451-760 Brant Houston is executive director of IRE and the National Institute for Computer-Assisted © 2003 Investigative Reporters and Editors, Inc. Reporting. He can be reached through e-mail at [email protected] or by calling 573-882-2042.

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Watchdog Workshops Mike Brunker and Bob Sullivan of MEMBER NEWS adding sites for 2003 MSNBC.com in Redmond, Wash. won in Public Service in Online Journalism (Affiliated) The Better Watchdog Workshop series, eter Bhatia, executive editor of The for “The Lure of Online Auctions,” part of a co-sponsored by IRE and the Society for Oregonian in Portland, has been elected continuing series on online consumer fraud. P Professional Journalists, continues to add new president of the American Society of News- training sites. Tom Farrey of ESPN.com won in Online paper Editors.  Boston Globe reporters Mat- The sessions teach journalists how to do Investigative Reporting (Affiliated) for “Blood thew Carroll, Kevin Cullen, Sacha Pfeiffer, investigative and enterprise reporting while on the Rings,” an investigation into the abuse on a beat and emphasize the use of freedom of allegations against the Iraqi Olympic Commit- Michael Rezendes, Thomas Farragher, Ste- information laws in the pursuit of these stories. tee. Farrey’s investigation was featured in the phen Kurkjian, Michael Paulson and Walter The workshops specifically serve journalists May-June issue of The IRE Journal. V. Robinson and editors Ben Bradlee Jr. and from small- to medium-sized news organiza- Mike Lee of the Tri-City Herald in Kennewick, Mark Morrow won the 2003 Goldsmith Prize tions – both print and broadcast. The SDX Wash. won in Investigative Reporting (News- for Investigative Reporting. The winning work, Foundation has helped underwrite most of the papers/ Wire Services, Circulation less than “Crisis in the Catholic Church,” examined the events, with additional support coming from 100,000) for “Bitter Harvest,” an investigation press associations and local newsrooms. of a series of deaths, environmental damage and Catholic priest abuse scandal and ultimately Upcoming sites include: accidents that were traced back to the largest led to the resignation of Cardinal Law. The Sept. 11 – Tampa, Fla. organic farm in Washington state. same team members were responsible for the Oct. 4 – Eugene, Ore. Hagit Limor, Bob Morford, Michael Benedic bulk of the coverage that won this year’s Pulit- Oct. 25 – Pennsylvania State University and Phyllis Parker of WCPO-Cincinnati won in zer for Public Service.  Sara Catania, a staff Documentaries (all other markets) for “Critical Visit www.ire.org/training/betterwatchdog/ writer with LA Weekly, has been awarded a for the latest additions and updates. Condition,” an investigation into underpaid area doctors and its effect on the quality of John S. Knight Fellowship at Stanford Univer- IRE members named local health care. sity for the 2003-04 academic year. Her area of 2003-04 Nieman fellows Steve Miller of WBBM-Chicago won in Radio study will be mental illness and criminal law. The Nieman Foundation announced its fel- Investigative Reporting for “Day Care Crimi-  Stephen Dean, an investigative reporter lows for 2003-04. Several IRE members were nals,” a series of reports on convicted criminals with KPRC-Houston, won a Peabody Award for included among the winners: who are day care home licensees. his work in “DNA Protects Men of Dishonor.” Alan Cullison, Moscow correspondent with The Producer Benita Noel, correspondent Jane The series examined the military’s refusal to Wall Street Journal, will focus his study on the Pauley and executive producer David Corvo use DNA evidence in criminal cases involving Muslim world, Middle Eastern civilization and of Dateline NBC won in Television Feature the roots of resentment against the West and Reporting (Network/Top 25 Markets) for “The soldiers and prompted a change in federal United States. Thin Man,” a chronicle of TV weatherman Al law. Mark Muller and Glenn Garcia also Laura Meckler, a national staff reporter with Roker’s struggle with weight and why he ulti- worked on the story.  Madeleine Doubek the Associated Press, will focus her study on the mately turned to surgery. of the Daily Herald in Arlington Heights, Ill., policies and politics of child welfare. Bryan Staples and Phil Williams of WTVF- has moved from projects editor to deputy Don Schanche Jr., a senior reporter for The Nashville won in Television Investigative managing editor, where she will continue Reporting (All other markets) for “Friends in Macon (Ga.) Telegraph will focus his study on to oversee projects and investigations while public policy concerning the mentally ill in the High Places,” a series exposing potential ethics also supervising the regional and Northwest United States and how it interacts with criminal violations by Tennessee’s governor.  justice and imprisonment policies. Robert Moore, Leah Rush, MaryJo Sylwester Cook County reporting staffs. Eric Eyre and and John Dunbar of the Center for Public Integ- Scott Finn of the Charleston (W.Va.) Gazette SPJ applause includes rity in Washington, D.C., won in Public Service received the Fred M. Hechinger Grand work by IRE members in Online Journalism (Independent) for “State Prize for Distinguished Education Report- Secrets: An Investigation of Political Party The Society of Professional Journalists ing at EWA’s National Seminar. Their series announced the recipients of the 2002 Sigma Money in the States,” a nationwide investiga- “Closing Costs: The Long Haul and Broken Delta Chi Awards For Excellence In Journalism. tion of money in state politics. Promises” revealed the marathon bus rides Included among the winners were the following Anna Werner, David Raziq, Chris Henao of IRE members: KHOU-Houston won in Television Investigative children must endure following a decade CONTINUED ON PAGE 38 × Donald L. Barlett and James B. Steele of Reporting (Network/Top 25 Markets) for “Evi- Time magazine won in Magazine Investigative dence of Errors,” an investigation that exposed a Send Member News items to Len Bruzzese at Reporting for “Look Who’s Cashing in at Indian police crime lab that had been making mistakes [email protected] and include a phone number for Casinos.” that condemned the innocent. verification.

4 THE IRE JOURNAL JULY/AUGUST 2003 5 FEATURESI R E N E W S FEATURES ANNUAL CONFERENCE HOSTS HUGE CROWD IN

WASHINGTON, D.C. Journal IRE The Rubin Steven

BY THE IRE JOURNAL STAFF

early 1,300 journalists attended the Washington Post, served as keynote speaker at 2003 IRE Annual Conference in the IRE Awards luncheon. Washington, D.C., in June. The con- In annual board elections held during the Ben Bradlee, vice president at large and former executive editor of The Washington Post, delivers the ference highlighted the best investiga- conference, the IRE membership re-elected keynote address at the IRE Awards luncheon. Ntive reporting of the year, offering techniques and David Boardman of The Seattle Times, James resources for all levels of investigative reporting Grimaldi of The Washington Post, Cheryl Phil- are excerpts from some of the stories appearing in the United States and around the world. lips of The Seattle Times and Duane Pohlman of on the conference Web site. (You can read more The conference – held at the JW Marriott and WEWS-Cleveland. Newly elected were Deborah at www.ire.umd.edu.) the National Press Club – included more than Sherman of WTVJ-Miami and Nancy Stancill of This year’s conference also involved high 100 panels, roundtables, workshops and hands-on The Charlotte Observer. Seven other positions school students. The Washington Post’s Young classes and a record 280 different speakers. come open next year. Journalists Development Program hosted Wash- Showcase panels included a look at the Jayson In a follow-up meeting, board members re- ington, D.C.-area students for a program kickoff Blair affair and how it will affect investigative elected Shawn McIntosh of The Atlanta Journal- and full day of conference panels. journalism, an international group discussing Constitution as president; David Boardman of lessons learned from the war on terror, seasoned The Seattle Times as vice president; and Duane investigative reporters discussing national secu- Pohlman of WEWS-Cleveland as treasurer. rity issues in the wake of the war in Iraq and Board chair David Dietz, Bloomberg Markets news managers talking about maintaining quality Magazine, agreed to serve as secretary until the investigative work during tough economic times fall board meeting. Edward DeLaney, IRE’s and political attacks on the press. long-time attorney who is a partner at Barnes

Top names included Bob Woodward of The & Thornburg in Indianapolis, recently stepped Journal IRE The Rubin Steven Washington Post, Seymour Hersh of The New down as secretary. Yorker, Allan Maraynes of Dateline NBC, Leon- Plans are already under way for next year’s ard Downie Jr. of The Washington Post, David conference, which is to be held June 3-6 in Martin of CBS News, Daniel Schorr of NPR and Atlanta. Judy Woodruff of CNN. A new feature at this year’s conference was Ben Bradlee, vice president at large for The a daily Web publication that covered the events and sessions of each day. This publication was Tipsheets and tapes organized and staffed by four journalism schools: the Medill School of Journalism at Northwestern Panelist tipsheets from the confer- University, the Phillip Merrill School of Journal- ence are available through IRE’s Resource ism at the University of Maryland, the Missouri Center (www.ire.org/resourcecenter). School of Journalism and the American Univer- Audio tapes of the sessions can be ordered sity School of Communication. through a link off the conference Web site The Web publication provided up-to-date Pierre Thomas of ABC News speaks to a group of coverage of the daily events as well as several Washington, D.C.-area high school students attending (www.ire.org/training/dc03/). the conference with the support of The Washington in-depth stories and a video package. Following Post’s Young Journalists Development Program.

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Journalists on terror’s front lines keep reporting despite dangers American journalists who are grappling with how to cover the war on terrorism are just now learning to pull information from a more-secre- tive government while keeping their credibility with the public. “But there are others who have dealt with this Journal IRE The Rubin Steven much longer than we have,” said David Kaplan, a terrorism and organized crime reporter for U.S. News & World Report at a showcase panel on terrorism and the media. In Colombia and Sri Lanka, reporters have been putting their lives on the line for years cov- ering wars between government military forces and terrorist groups. “It is up to the media to highlight the issues, but it’s not easy,” said Iqbal Athas, defense cor- Iqbal Athas, left, of The Sunday Times in Colombo, Sri Lanka, and Ignacio Gomez of Noticias Uno in Colombia, respondent for The Sunday Times in Colombo, explain the dangers of investigative reporting in their own countries. Sri Lanka. Athas covers the Sri Lankan government’s trafficking rebels. But he keeps reporting. Authorities have indicted only 21 suspects on 20-year war against the Tamil Tigers – a separatist “I don’t use guns. I think we are very pro- charges of murdering a journalist, Smyth said. group that pioneered the tactic of suicide bomb- tected. I think the best way we are protected is The killers are getting “blanket immunity” and ings in 1973 and has carried out more such attacks by the public,” Gomez said. “getting away with murder.” than claimed by terrorists in the Middle East. Frank Smyth, Washington representative for “In many of these countries, you have a lack He said his reporting ability – and his life the Committee to Protect Journalists, said 366 of civic judicial systems,” Smyth said. “And – depends on the trust he has developed with both war journalists were killed over the past decade. that’s why (journalists) are so often targeted, the government and the guerillas. Only 60 of them, died in the crossfire. The rest and killed.” “Suddenly you are trusted to it,” he said. “You were murdered, mostly in their homelands. — Geoff Emeigh, American University have no going back.” While covering the war, Athas has had his life threatened, his house ransacked and has received threats that his only daughter would be kidnapped. EXTRA! EXTRA! On Feb. 12, 1998, gunmen barged into his Get inspired by IRE's online guide to investigative second-floor apartment and held a gun to his and computer-assisted reporting stories! temple. The screams and cries from his daughter, then 7, were loud enough to catch the attention of passersby, foiling any kidnapping attempt. Last Extra! Extra! features year, members of the Sri Lankan air force were summaries of recent in- convicted of the attempted kidnapping. vestigative pieces and links to the stories. “If it is dangerous for the civilians caught in the middle, it is much more dangerous” for The feature is updated reporters covering the war, Athas said. regularly with the latest Today, two armed government police officers work from newspa- stand guard outside Athas’ apartment. He said he pers, broadcast out- lets, magazines and feels safe, but the government now knows when online newsrooms. sources come to visit him. Ignacio Gomez, director of investigations for Search stories by Noticias Uno, a current-affairs television program topic, from health and in Colombia, has been forced to flee the country homeland security and twice since 1986 because of death threats over politics to nonprofits. his coverage of drug trafficking. Gomez said his first editor and 16 close Visit Extra! Extra! at www.ire.org/extraextra colleagues have been killed covering the war between the Colombian government and drug

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Steele said he recognized that most writers don’t have the luxury of spending months on an investigative story. But he said this practice is applicable to all beats and all time frames. They offered other tips: Before interview- ing anyone, read everything on a topic. Always go to the primary files. Examine every public

Steven Rubin The IRE Journal IRE The Rubin Steven record on the topic. Keep digging. “Never assume where you’re going to find material,” Steele said. “Never assume who will talk to you and who won’t.” — Cat McDonald, American University

Post 9/11 security concerns raise bar on national reporting Post-9/11 concerns have not made it any Donald Barlett, right, and James Steele of Time Inc. stress the importance of doing your homework – especially easier to report on national security issues, but with documents – before writing the story. determined journalists can still do their jobs if they are willing to work for the sources, top Barlett and Steele: This kind of detail makes readers care about journalists told an IRE audience. Details make the story a story, they said. “Yes it’s hard, but we should raise the bar Two-time Pulitzer Prize winners Donald At their panel, Barlett and Steele encour- for ourselves,” said The Washington Post’s Barlett and James Steele of Time Inc. told how aged reporters to think about records in a dif- Bob Woodward, who sparred with New Yorker they found in the divorce records of a Beverly ferent way and examine in microscopic detail contributor Seymour Hersh and CBS national Hills lawyer that his monthly household spend- every document available on a topic. security correspondent David Martin over the ing for dog care was larger than the monthly “You want to tell the best story you can,” new tenor of access to the government. pension of one of his long-time employees. Barlett said. “Practice scarfing up every record Woodward would not say that it’s harder that’s out there.” to report on national security issues and said Documents that appear uninteresting can he could not compare this administration with yield surprising stories when a writer scours those of 20 or 30 years ago. Have a new them for details. Writers new to the process “It’s always harder to report on national E-MAIL ADDRESS? will be “astounded at how rich and colorful security,” said Woodward, who believes the detail can be,” Barlett said. journalists can still do the reporting, using The authors go to the Internal Revenue multiple sources. Service reading room in Washington at least Hersh and Martin agreed that there are once a year. In 25 years of researching they’ve sources to be found: Both said they find mili- never see any other reporters there, they said. tary sources helpful, and Hersh added that there As “mind-numbing” as they are, the records of are unhappy people in the CIA, too. regulatory agencies such as the FCC and the But Hersh argued that reporting on this IRS hold a wealth of information. administration is vastly different. There is no substitute for the painstaking “I think [the Bush administration] is the hard- process of reading and rereading primary docu- est group I’ve ever worked with,” Hersh said. ments, Barlett said. “This is a government run by a very small, Please send us your new Reporters must do thorough research in tight group of people and you’re either e-mail address so we can order to “get a story that comes as close with them – if you’re with them you’re a send you important member to the truth as you can get,” Barlett said. genius, if you’re not, you’re not just part “You don’t want to have your name over a of the opposition, you’re a traitor,” he announcements. story that’s just flat out wrong because said. “And I think this goes for the you didn’t do adequate press corps, too.” Drop us a note at research.” Martin took a dif- [email protected] Still, mining docu- ferent approach, neither ments can never take blaming nor excusing the place of interviews, the administration for Investigative Reporters and Editors, Inc. Steele said. keeping out reporters,

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but saying it simply comes down to a matter of time. “I don’t see greater secrecy being a problem now,” Martin said. “The real enemy is time because events are happening so rapidly that you never have time to stop and circle back on a story.” When asked whether the media provided Journal IRE The Rubin Steven enough criticism leading up to the war, and what journalists should be doing now, the panel dissolved into a foreign policy discussion. Hersh – wielding a newspaper photo of U.S. soldiers bulldozing a home near Baghdad because gunfire had come from there – said that watching developments in Iraq over the next three months will be very interesting. But he didn’t think journalists alone should take the rap for a lack of postwar criticism over the failure so far to uncover weapons of mass The Washington Post’s Bob Woodward answers a question from panel moderator Judy Woodruff, CNN. destruction in Iraq, among other issues. “What’s missing in the equation,” said Sentinel – shared their experiences in Iraq. In enthusiastically, “We had a degree of access Hersh, is the ability to report that “senator so doing so, they illuminated issues faced by both that I never would have expected.” But asked and so said today…” because Congress is not embedded and unilateral reporters. later by an audience member whether embed- providing strong criticism. ded reporters served as a propaganda arm of the Martin said that Democrats are not speaking Defense Department, he said, “Yes, there’s no up because they are afraid weapons inspec- Skiba listed three motivations doubt about it.” He said embedded reporters told tors will find something in Iraq. Hersh agreed, } for embedding reporters: the American military’s side of the story. saying there’s a tremendous reluctance to go Kalthoff said people ought to take the point-blank against administration officials shining a light on the troops, with these issues. keeping loved ones apprised, Woodward thinks journalists now have to “figure out what’s real, what really happened.” and letting American He proposes an “excavation” of why we went taxpayers know how much to war. And he agreed with Hersh that the next three months will be significant, even beyond bang they were getting for foreign policy. their buck. ~

“It’s a pivotal point in defining not only the Journal IRE The Rubin Steven foreign policy of the country but who we are,” Woodward said. Burnett said he saw both sides as an embed- — Cheryl Johnston, University of Maryland ded reporter with the 1st Marine Division, and while “out-bedded” for a week after the war. As an embedded reporter, Burnett said he never Embedding delivered propaganda heard a “no comment,” but added, “the military as well as important information will tell you things that serve the military.” Embedded correspondents aided U.S. After leaving his embedded position, Burnett propaganda efforts during the recent Iraq war, traveled to Al-Taniya where he found that 31 but also provided information that could not “men, women and children” had been “blown have been obtained as efficiently by “lone- to bits.” He saw bomb craters and talked to wolf” reporting, according to journalists who hospital chiefs there. A U.S. Central Command covered the war. spokesman told him the strikes on Al-Taniya A panel of four journalists – John Burnett had been precision-guided. of National Public Radio, Ken Kalthoff of Burnett said he found a “disconnect” Katherine Skiba of the Milwaukee Journal Sentinel talks about the pluses and minuses of being an NBC station KXAS-Dallas/Fort Worth, Paul between the official line and what he saw. embedded reporter with the 101st Airborne, the McEnroe of the Minneapolis Star Tribune and Kalthoff followed four battalions of Marines first unit to encounter an Iraqi missile attack. Katherine Skiba of the Milwaukee Journal who constituted Task Force Tarawa, and said

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embedded reports “with a grain of salt.” Gregg who said, according to Skiba, “thanks McEnroe, who worked as a unilateral for being here, you’ve got balls.” Development Program reporter, joked that he was “embedded under Skiba listed three motivations for embed- IRE debuted its Minority Journalist a load of potatoes” – a reference to the way ding reporters: shining a light on the troops, Development Program at the confer- that he was smuggled into Kurdistan across the keeping loved ones apprised, and letting Amer- ence. The partnership with newsrooms is Turkish border. One time at 1 a.m., about an ican taxpayers know how much bang they were hour away from Baghdad, he was in a foxhole getting for their buck. She compared watching meant to improve training opportunities with a special-forces sergeant who was calling war to watching “sausage being made,” refer- for minority journalists. Newsroom spon- in air strikes. In what he called surprising frank- ring to instances of friendly fire and helicopter sorships got the fellows to the conference. ness, the sergeant turned to McEnroe and asked, crashes. In turn, IRE waived conference fees and according to McEnroe “you know the reason Burnett called the system of embedding provided yearlong memberships. These why there’s embedding?” McEnroe waited for reporters a “vast improvement,” over the fellows attended the conference: Frederic the response. “The United States wants to coun- system of pool reporting used in the first Per- Biddle, The (Wilmington, Del.) News Jour- ter all the coverage that Al-Jazeera gets to the sian Gulf War. nal; Rayhan Daudani, WSET-Lynchburg, West now,” the sergeant told McEnroe. McEnroe, who worked as a unilateral Va.; Cindy George, The (Raleigh) News & Skiba was an embedded reporter with reporter in the first Persian Gulf War, said Observer; Jeffery Mays, The (Newark, N.J.) the 101st Airborne, the first unit to that he would do his combat reporting no encounter an Iraqi missile attack. other way, claiming that his freedom Star-Ledger; Paige Parker, The Oregonian; Soon five of the eight of movement granted him Rebecca Rodriguez, San Antonio Express- embedded reporters quit a “mosaic” view unavail- News; Adrienne Samuels, St. Petersburg the unit, she said. She able to embedded report- Times; Nikita Stewart, The (Newark, N.J.) and her fellow embedded ers. Star-Ledger; and Shannon Tan, The India- reporters received praise — Dan Wilcock, Univer- napolis Star. from Command Sgt. Maj. Don sity of Maryland ��������������������� ���������������������������������� ������������������������������������������������

Government ��������������������������������������������������� Secrecy: Local, ������������������������������������������������������������������ State, National ����������������������������������������������������� �������������� ����������������������� ����������������������������� ������������������ Cities, Suburbs & Beyond ������������� ���������������������������������� ������������������������������������������������������������������������������������������������������ ����������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������������������������������������ Editorial Writers Knight Center for Specialized Journalism Seminar University of Maryland ������������ 1117 Cole Field House, College Park, MD 20742-1024 ����������������������� (301) 405-4817�����[email protected] www.knightcenter.umd.edu ������������������������������� ������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������

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FOIA denial study for IRE conference heavily on the privacy exemptions when they shows privacy cited more than security deny access to records. Hosts and Sponsors Federal agencies are increasingly using claims “As important as privacy is in the information Conference hosts were The Washington of privacy when they deny requests under the age, it is being misused all too often to cloak Post, U.S. News & World Report and the Freedom of Information Act. That trend contin- public records that should be open,” said Robert National Press Club. ued last year, even in the wake of the 9/11 attacks O’Harrow, who covers information technology and the subsequent war in Afghanistan, according for The Washington Post and who has written Conference sponsors included The to a study done for the IRE Annual Conference. extensively about privacy issues. Gannett Foundation, The Poynter Institute, The student study of FOIA annual reports from For example, even privacy advocates raised Missouri School of Journalism, USA Today, the 13 Cabinet-level departments in existence as questions when Attorney General John Ashcroft Medill School of Journalism, American Uni- of Sept. 30, 2002, showed that nearly two in three refused to release the names of persons the federal versity, International Center for Journalists, denials over the past five years were based at least government detained after 9/11. Philip L. Graham Fund, Time Inc., Newsweek, partly on exemptions relating to privacy. The Bush administration has not issued a The Washington Post’s Young Journalists For fiscal 2002, which ended Sept. 30, the directive, nor has there been a change in policy to Development Program, Bloomberg, Alicia rate was nearly four in five; in fiscal 1998, only account for the growing number of privacy-based Patterson Foundation and the National four in 10 denials were based in whole or in part denials, said Mark Corallo, a Justice Department Press Foundation. on privacy claims. spokesman. The department is charged with Meanwhile, national security claims were overseeing administration of the FOIA for all asserted in only about 1 percent of all denials of federal agencies. according to the annual reports. Not surprisingly, access to federal documents and records. Corallo said a Justice Department FOIA direc- the Defense Department cites national security The federal Freedom of Information Act, tive prepared before the 9/11 attacks instructed concerns most frequently. passed in 1966 and amended in 1974 to include employees to be more careful not to disclose But even at the Pentagon, more denials are the first federal Privacy Act, presumes that federal information that could threaten national security. based on privacy exemptions than on national records will generally be available to the public. He said the drop in the use of national security security. But Congress gave agencies nine broad exemp- exemptions could be because reporters and others Access advocates suggest that government tions they could use to withhold records from the have stopped asking for material potentially sen- agencies are increasingly using privacy pro- public, including the press. sitive to national security after years of seeing visions to hide information they don’t want Among the exemptions are two that relate those requests denied. released, said David Sobel, general counsel for directly to privacy concerns: One protects He also said that matters sensitive to national the Electronic Privacy Information Center. “personnel and medical files and similar files” security could be withheld for privacy reasons For example, he said that U.S. officials “hid and another permits the withholding of law if those concerns were also present, without behind the right to privacy” when they refused enforcement information that “could reasonably the national-security exemption being listed in to disclose the identities of prisoners at Camp be expected to constitute an unwarranted invasion official government reports, even though the X-Ray at Guantanamo Bay, Cuba. EPIC has of personal privacy.” reports are supposed to include each exemption joined several other organizations trying to gain Many reporters and freedom of information cited when an FOIA request is denied. access to those records. Sobel said officials are experts believe that federal officials, knowing the The Justice Department, which includes the trampling on prisoners’ other rights in the name public has strong feelings about protecting what FBI and other law enforcement agencies, is by of protecting their privacy. it considers to be private information, rely too far the biggest user of the privacy exemption, “I anticipated that there might also be a national security argument made [in that case], but the government did not make that claim,” said Sobel, who has studied FOIA requests for 20 years. The overuse of privacy exemptions could ultimately weaken legitimate claims to privacy in the future, said Sean Moulton, a senior policy analyst with OMB Watch. “When you let false claims stand, in the end it may end up weakening your right to privacy,” he said. Sobel said that national security concerns are still keeping information away from the public. The number of documents being classified for reasons of national security – whether they are requested or not – is on the rise, he said. – Wendell Cochran, American University and Jonathan M. Katz, Northwestern University

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tional strength of Schlosser’s research is his comfort on the documents trail, especially courthouses where trial tran- BLACK scripts provide telling detail. Few inves- tigative reporters are equally comfortable with human sources and paper sources. MARKET Schlosser is one of those few. The current underground Studying the economic, moral impact } economy is much more of the nation’s underground economy varied, accounting for at least 5 percent of the BY STEVE WEINBERG American economy, and THE IRE JOURNAL perhaps 20 percent. ~

In the first section alone, on the under- n the title essay of this book con- is the two-word main title, which fails to ground marijuana trade, here are some of taining three linked essays, Eric capture the book’s scope. The strongest the human and documentary sources used Schlosser suggests readers obtain a part of this book, however, is the way by Schlosser: map of the United States, then draw Schlosser conceives it. He is a superb • The classic economic theories of Adam aI circle encompassing Iowa, Nebraska, storyteller, which is all tied up in the Smith. Missouri, Kentucky, Tennes- way he conceives the issues • Contemporary academic studies of the see, Ohio, Illinois, Indiana and he investigates. underground economy, some published Michigan. The region within A book about economic and by university presses, some by govern- that circle produces most of moral impacts of the under- ment and quasi-government agencies the nation’s marijuana. Therein ground economy, no matter such as the International Monetary Fund, lies part of the important story how important, could be dull. I some by private-sector think tanks such chronicled by Schlosser. have read previous books about as the RAND Corporation. A talented magazine writer, the underground economy that • Census and related data from the U.S. Schlosser hit big – and deserv- are sleep-inducing, relying Department of Commerce, the Federal edly so – with his first book primarily on statistics and Reserve Board, the Drug Enforcement a couple of years ago. “Fast nearly devoid of human flesh. Administration and the Statistical Food Nation: The Dark Side Schlosser avoids dullness by Abstract of the United States. of the All-American Meal,” REEFER MADNESS: Sex, writing three connected essays • Scholarly research on the economic Drugs and Cheap Labor and health impacts of marijuana from became that rare phenom- in the American Black about different portions of the enon – a well-conceived, Market underground economy – mari- seemingly unbiased scientists publish- well-researched, well-writ- By Eric Schlosser juana production/consump- ing in refereed publications such as the ten, best-selling investigative Houghton Mifflin, tion, strawberry production/ International Journal of Neuropsycho- 310 pages, $23 book on an important topic of consumption and sex film pharmacology, and related publications potential interest to almost every person production/consumption. from government task forces such as who can read. Spin-offs by journalists in the National Commission on Marijuana every locale seemed obvious, including Human and paper sources and Drug Abuse. A special strength of the way fast-food restaurants and suppli- As with “Fast Food Nation,” Schlosser Schlosser’s research is his reach outside ers treated workers. travels extensively to see for himself. He the United States to present what stud- For his first encore, Schlosser pres- visits marijuana-growing centers indoors ies in other nations, including England ents another investigative book, this and outdoors, from a secluded Indiana and India, have concluded about mari- time about the underground economy in farm to a cramped New York residential juana. the United States. Fortunately, Schlosser apartment. He hangs out in the strawberry • Congressional hearings and studies. is not a victim of the oft-invoked sopho- fields of central California, where pickers • Individual court cases brought by local more slump. living in squalor stoop within sight of the prosecutors and U.S. attorneys, includ- Like “Fast Food Nation,” the second millionaires who consume the strawber- ing trial transcripts. book is well-researched and well-written. ries being picked. He visits the suites and • Judicial branch studies and related docu- Arguably the only poorly written portion studios of sex film producers. An addi- ments from normally obscure agencies

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such as the U.S. Sentencing Commis- FOI REPORT sion, Federal Bureau of Prisons and state corrections departments. HIPAA starting to deny Vast and growing Schlosser’s sourcing is transparent, as it ought to be in an investigative basic information to public book. The source notes and bibliography consume 66 pages, and make for fascinat- ing study. hen reporters from The Roanoke Times of the Press wrote in com- JENNIFER LAFLEUR Schlosser, unlike many investigative went to cover a house fire that injured ments to the U.S. Depart- journalists, is also comfortable injecting two people, they could not get the names ment of Health & Human Services before the final his opinions. He makes compelling cases Wof the victims. They could not even get basic regulation was passed. “It is unthinkable that in for partial decriminalization of marijuana descriptive information such as age and gender. such a situation, a hospital communicator would and improved treatment of migrant farm When Erik Brooks of the Kenosha News asked be subject to a $25,000 fine for providing general workers in the United States illegally. He the county health department whether there were information about a victim.” seems less certain when it comes to the any local cases of monkeypox, a disease that was Local agencies such as county health depart- sex film (which he sometimes calls porn) reported to have been found in humans in Wis- ments, coroners’ offices and emergency response industry. That apparent indecision reflects consin, the agency claimed that for confidentiality agencies are not covered by HIPAA. the relative weakness of his essay; it is reasons, they could neither confirm nor deny that In Roanoke, however, the fire and emergency mainly an historical account of porn king any cases existed. medical response department claimed that Reuben Sturman’s legal troubles over the Journalists who once called hospitals to get because they provide a medical service and bill decades. The rise and partial fall of Stur- the status of a patient are now unable to get such electronically for that service, they are required to man at the hands of federal investigators information because of a new law, which limits abide by HIPAA, said Dwayne Yancey, Roanoke is interesting, but oddly flat compared to access to patient information. Times assistant managing editor. the marijuana and strawberry sections. The Health Insurance Portability and But other local agencies seem to be applying Schlosser, like the experts he inter- Accountability Act, known as HIPAA, was HIPAA beyond its original intent. Journalists views, is uncertain about the precise developed during the Clinton administration around the country report that police and fire monetary scope of the underground and went into effect in April 2001. The law gave departments have cited HIPAA for not disclos- economy, but he shows it is vast and grow- providers until April 14, 2003, to fully comply ing accident information. ing, with most of that growth occurring with the regulations, so journalists are just now In the case of monkeypox in Wisconsin, since 1970. Prohibition against drinking starting to see the impact of the law. Brooks said that being able to tell readers whether alcoholic beverages created a large but The rules were designed to protect the medi- there were any local cases was key to the story. narrower underground economy during cal privacy of patients and to give them more “We’re short-changing our readers,” Brooks the 1920s. The same could be said for control over their health information and how it said. “We can’t tell the whole story.” fuel and meat rationing programs during is used. All health care providers and entities that Brooks said the county health department World War II. The current underground work with patient billing records must comply gave him a similar nonresponse when he asked economy is much more varied, account- with the law or face steep civil or even criminal if there were any local SARS cases. ing for at least 5 percent of the American penalties. “We’re concerned about how the rules economy, and perhaps 20 percent. One Journalists who have regularly called hospi- are being interpreted,” said Andew Holtz, a well-documented piece of the evidence: tals to get the status of patients may be unable to health care reporter in Portland and president American consumers spend more annu- get such information in the future. Under HIPAA, of the Association of Health Care Journalists. ally on illegal drugs than on cigarettes. hospitals may release only the name and a one- “There’s at least an appearance that some of the To understand a nation’s character, it is word status of the patient and only if the patient interpretations are being used to protect institu- best to see it whole. As Schlosser wisely has “opted” to have his or her name released and tions rather than individual patients. Hospitals comments, “If the market does indeed then only if the reporter has the individual’s full and doctors and clinics are mostly concerned embody the sum of all human wishes, name. about their potential liability and are trying to then the secret ones are just as important “A troubled community is made more so when deny information to shield themselves, going far as the ones that are openly displayed. it cannot find or identify its victims or activate beyond what would be necessary to protect the Like the yin yang, the mainstream and the support systems that neighbors, clergy and privacy of patients.” the underground are ultimately two sides others might provide both the victims and their Journalists may need to be more creative in of the same thing.” families,” The Reporters Committee for Freedom CONTINUED ON PAGE 39 ×

Steve Weinberg is senior contributing editor Jennifer LaFleur is the McCormick Tribune Foundation journalism fellow at the Reporters Committee to The IRE Journal and a former executive for Freedom of the Press. She is chair of IRE’s First Amendment Task Force and a former training director of IRE. director for IRE.

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picks the ones he can take to the next step. Interviews with the Interviewers Backgrounding the source When a whistleblower’s tip proves news- Some journalists have a natural gift for interviewing. Others spend entire worthy and workable, a journalist still must be cautious in dealing with a source. careers mastering the skills. During 2003, The IRE Journal is presenting “Sometimes whistleblowers are the series “Interviews with the Interviewers.” We have talked with some crazy,” says Al Tompkins of the Poyn- of the most renowned interviewers in the field of investigative reporting. ter Institute. “That doesn’t make them Focusing on a different style of interview each issue, we share their expe- wrong.” “Editors will warn you to not inter- riences, techniques and advice with you. This is the fourth installment. view someone with an ax to grind,” McGraw says, but he adds that he thinks PART 4 “I’ll talk to anybody,” Pat Stith of The that is bad advice. Journalists can rely on (Raleigh) News & Observer says. “If they whistleblowers, even those with personal seem to be missing cards out of their deck, motives, to help drill holes in impregnable Interviewing I’ll call them back anyway. If I won’t work areas by obtaining documents, or by putting the story, I’ll tell them right away.” the journalist in touch with other sources. whistleblowers Stith gives four reasons for talking to However, McGraw adds that journalists have everybody: 1) he’s paid to do it; 2) occasion- a responsibility to the public to test what mal- ally his first impression of a person fools him; contents tell them. BY LORI LUECHTEFELD 3) whistleblowers often lead to other story “At some point in the relationship, you THE IRE JOURNAL ideas; and 4) the person calling him knows have to ask them a question that you know the other people. Talking to one person gives him answer to,” says Bruce Selcraig, an investiga- ike McGraw has seen some dirty a chance to establish a good reputation among tive freelancer for national magazines. “You documents. Not just suspicious, countless other people, he says. have to be leery of a whistleblower who never mind you, but downright filthy. James Neff of The Seattle Times asks him- says ‘I don’t know.’ Particular types want to MWadded up. Coffee stained. Altogether icky. self the following questions when deciding overwhelm you with their knowledge. The One particular set came to him from a with which whistleblowers to work: If every- perfect-answer man should send up flares.” source, a whistleblower who was helping him thing they say is true, is it a news story? How Selcraig recommends checking into their with an investigation. He ignored the sad state can I prove it through reporting techniques? motivations as much as possible. At the least, of the documents until his curiosity got the Do they have or can they get the documents? a journalist should run a Google search on better of him, and he asked his source where Based on the answers to these questions, he everybody. he was receiving his documents. “He’d been Dumpster diving,” McGraw says. “Ethically, we had a problem with that.” McGraw says he should have asked sooner. Whistleblowers are unlike any other source to a journalist. Interviewing them often requires a higher level of caution and awareness on the part of a journalist because

the relationship is unique. A whistleblower Star City Kansas The Eulitt Dave can be anyone from a concerned citizen to a certifiably obsessed individual, yet neither is necessarily better than the other. Because it is the whistleblower often seeking out the jour- nalist, reporters must then not only investigate an issue, but also the source. Picking and choosing Investigative journalists, especially those with well-established reputations in their com- munities, are often approached with more story leads than can possibly be followed, which forces them to choose whom to work with and Kansas City Star investigative reporter Mike McGraw, right, discusses plans for a story with the newspaper’s whom to disregard. projects editor Craig Nienaber.

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Eric Nalder, of the San Jose Mercury News, very, very slowly away from that.” agrees that the motivations of whistleblowers In the name of protecting his sources, Finding whistleblowers need to be checked, but he urges journalists McGraw says he asks interview subjects he Often it is the whistleblower who to be certain to investigate whistleblowers in suspects are holding back sensitive informa- finds the journalists, but in some cases, a way that won’t endanger them. tion to go off the record, an action deemed a journalist investigating a particular Valeri Williams, most recently with heresy by some journalists. Often, he says, he story will need to find an involved WFAA-Dallas, says she is initially guarded is able to find another source who knows the person willing to speak out. when she is approached by a whistleblower, same information and is willing to be named, When looking for a person to speak and she has a high standard of proof for decid- eliminating the use of anonymous sources in ing whom to interview. his articles. out against an organization, McGraw “They have to give me something that is Tompkins agrees that an unnamed source recommends searching records of worth a meeting,” she says. should be avoided if possible and says that if a lawsuits and worker compensation In one instance, an airport worker who was journalist grants anonymity to too many sources, claims. The U.S. Merit Systems Protec- fired after being injured on the job came to Wil- readers won’t trust what they’re reading. tion Board (MSPB) Web site also can liams with his story, and she told him to bring Unfortunately, says Selcraig, anonymous be helpful. It allows a person to pick sources are occasionally unavoidable because of her proof. A week later he called back, saying a year and search for all complaints the real dangers that surround whistleblowers. he thought he had everything she needed. about agency management abuses on “This man with a gimp leg had gone in after “People are getting fired all the time,” he a particular topic. hours and videotaped broken harnesses,” she says. “I think you have to use unnamed sources Occasionally a journalist will want to says. Despite the man’s retaliation motives sometimes.” against his former employee, Williams worked However, Selcraig recommends that you not send out a letter to all persons involved with him. grant anonymity privileges too quickly. Often in a particular incident in order to sur- “It offset his personal motives,” she says. whistleblowers ask to go off the record when face a whistleblower. “He had the goods.” they want to get your attention. Many times, they “I have done this before,” Nalder tell you what they want to say regardless. writes to an IRE listserv. “Be aware Protecting the source that your message will be read by all Unfortunately, sources that have “the Broadcasting whistleblowers involved in your inquiry. Don’t offer goods” are often putting themselves in danger, In the realm of broadcast, investigative opinions. Provide a safe means of reply, and journalists have an obligation to recognize reporters face even more difficulties when and multiple means if possible. Suggest this. Journalists should precede interviews protecting the identity of sources. For a with disclaimers that inform whistleblowers story to work, someone often has to appear that recipients pass on the message to about what they can expect if they continue on camera. others. Ask for information as well as with the interview. No matter how obvious Williams says she tries to avoid silhouett- names of others who could be helpful the dangers seem, whistleblowers might not ing her sources on camera, but sometimes it to you. Ask for helpful documents and have considered them. is necessary. Often silhouetting is an option give an address where they could be “As humans, we have that responsibil- when a victim is coming forward, but even sent anonymously. These could include ity,” McGraw says. “Many whistleblowers then, she discourages it. phones lists, payrolls and stuff like that, have gone through a divorce because they “Are you coming out or still just hiding?” as well as reports, memos, etc. Be wary, are so focused on exposing what it is they are she asks. of course, of pretenders who might blowing the whistle on, they don’t have time Even more so than avoiding silhouett- reply.” for relationships.” ing, Williams dislikes altering the voices of Other times, a whistleblower is putting a whistleblowers and will only do it if they are career on the line. One whistleblower with adamant. said, ‘You know, that’s the same thing I tell whom McGraw worked was an expert on “It’s a mental hurdle for the viewer to get my snitches.’” sonar. Last McGraw heard, he was on the over,” she says. If the voices are sped up, Merina had to spend time consoling his back of a garbage truck. they come off with a comical Mickey-Mouse source, assuring the officer that he didn’t “Sometimes whistleblowers are their own effect. If they are slowed down, they take on view him as merely a “snitch.” worst enemies,” McGraw says. They are so the ominous tone of Darth Vader. In the end, journalists who grant protection focused on a wrong that needs to be righted Even when a journalist decides to offer to sources must stay true to their word. Merina they can only focus on that, he says. protection to a source during an interview, a says that when he guarantees a source confi- It is up to individual journalists to decide journalist might run up against a wall. Victor dentiality, he doesn’t even write the person’s how much protection they can and will offer Merina of the Poynter Institute discovered name in his notebook. a source. this when, during an interview, he promised “Offer the least protection possible,” a police officer that he would protect him and Lori Luechtefeld is a graduate student at the Tompkins says. “Start by telling them you keep him confidential. Missouri School of Journalism and magazine can’t offer any protection and move very, “He was devastated,” Merina says. “He studies intern with The IRE Journal.

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CAR WORK The reporters offer more on the map- DRUNKEN ping techniques used in this story in the November-December issue of Uplink, the newsletter of the National Institute for Computer-Assisted Reporting. To DRIVING subscribe, go to www.ire.org/store or call Killer roads pinpointed 573-882-2042. through mapping project region’s “killer highways” – those stretches with the highest rates of alcohol-related crashes and BY ROSE CIOTTA deaths. Graphic artist John Duchneskie designed AND KARL STARK the package for publication that showed nearly THE PHILADELPHIA INQUIRER every major road in our region. The visual impact was especially effective f you’ve ever considered doing an investi- States than did murder. And the toll has been online where Matt Ericson, our then senior editor gative project around the issue of drunken increasing in recent years despite two decades for Web technology, designed an interactive map driving, this is the year to do it. of progress. The liquor industry plays a role by so readers could click on any segment of road and October is the federal deadline for fighting reforms and exerting its muscle over find out its alcohol-related accident history. statesI to lower their blood alcohol limit from .10 legislators. This is an epic story in which people The project included an online calculator that to .08. States yet to act are already losing millions are killed with little fanfare in small and large computes BAC (blood alcohol content) level of dollars in incentives. And those who refuse towns across the country. It behooves reporters based on a person’s body weight and number of will start seeing their federal highway money to pay attention. drinks; a town-by-town look-up on the number withheld. That could get the voters’ attention. In our four-part series “Loaded For Trouble,” of DUI arrests; an expanded photo gallery and Still, many believe drunken driving is an old we tried to show readers information they had an online discussion. (See www.philly.com/mld/ story. The IRE Resource Center lists more than 70 never seen. Pennsylvania had gathered data for inquirer/news/special_packages/dui/) projects on either drunk or drunken driving. years on where alcohol-related crashes occurred, But impaired drivers remain one of the but officials had long refused to share this data Grim parade biggest – and most overlooked – public health with the public for complex legal reasons. We We also were able to map the location of all stories. Drunken drivers kill more than 17,000 managed to score five years of older data from liquor establishments and plot their density next people in the United States each year – more a confidential source. State officials capitulated to the “killer highways.” With Ericson’s help, than all but a dozen of the most deadly diseases. when they learned what we had, and handed over we were able to show that most killer highways For the first time in nine years, alcohol-related the most recent year available. were surrounded by heavy clusters of bars. We crashes in 1999 killed more people in the United The series identified for the first time the did this using Spatial Analyst, an extension of REPORTING TIPS 1. There’s lots of information out there on 5. Don’t just stop with the .08 law. There are 8. Consider enlisting the paper’s columnist to drunken driving. Check it out but don’t get many reforms that reduce drunken driving, and drink under controlled conditions and drive a overwhelmed. Keep focused on the questions no state has passed them all. pre-arranged course. This can be arranged by you want to answer. Fight to keep the voices advocacy groups working with local police. It’s in stories. Use only those numbers that make 6. Analyze local police performance on enforcing important to scope out the legal issues, but it the point you need to make. drunken-driving laws. Some are lax because they can be very popular with readers. could be locking up friends, neighbors and the 2. Seek out data as early as possible, especially politically connected. 9. Profile a multiple offender, one who has when dealing with courts or agencies that may Get to the cops on the street. They know the been caught drinking a dozen times or more. be reluctant to give out detailed datasets. human toll and many of them don’t get the These folks can tell much about the system’s 3. Stay open for surprises from researchers who support they need to enforce the law. Look for failing and they have much to teach about the are doing cutting-edge work in this area. Seek high-arrest officers who get moved to other jobs powerful pull of alcohol. them out and try to replicate their work in your because of political heat they generate. area. They can lead you to novel reporting. 10. Look for the drinking rituals in your com- 7. Think about ways to do original reporting to munities. There are drinking events that can 4. Cover the liquor industry. It’s one of the test drinkers who leave bars and get into their lead to drunken driving. Examples: Mardi Gras, most politically powerful and active groups cars and drive away. We explored doing it and July Fourth, and New Year’s Eve are major drink- out there. Follow its campaign contributions couldn’t make it happen. This kind of field work ing holidays. College students often cross the on a state or local level. Consider the power is fraught with liability issues. But if you can plan Mexican border to buy cheap beer. Some col- of bar-tavern owners in what laws get passed. ahead, you may be able to enlist researchers to leges still allow drinking events that encourage They are often factors in states that are late in help. The payoff? Showing how many people students to indulge. Look at the accident data passing .08 laws actually drive drunk who never get caught. for stats that may reveal these trends.

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Web sites Along with checking the IRE Resource Center (www.ire.org/resourcecenter) for other stories and tipsheets and the IRE and NICAR Database Library (www.ire.org/datalibrary) for fatal accident and cam- paign donation data, there are many valuable sources available through the Web. Advocacy groups www.madd.org/stats MADD statistics and facts

Government www.nhtsa.dot.gov/people/injury/alcohol NHTSA drunken driving division

www.fars.nhtsa.dot.gov The NHTSA—FARS-Fatal Accident Reporting System Research/University/Government http://etoh.niaaa.nih.gov Comprehensive online bibliographic database on Arcview mapping software. Paul J. Gruenwald of on the last day of the series, empowering teen- alcohol abuse the Pacific Institute for Research and Evaluation agers with police guidance to check if bars are seconded this finding and said our analysis had selling alcohol to underage customers. www.ama-assn.org/ama/pub/category/3337.html American Medical Association been only recently done by front-line research- ers. A kiss goodnight www.nlm.nih.gov/medlineplus/alcoholism.html Medline The link between bar concentration and Drunken driving continues to kill and maim crashes suggests a simple and powerful solution with astonishing frequency. Diane Kelly, whose www.cspinet.org/booze/index.html for state and local officials. They can lower the 19-year-old son was killed by a drunken driver, Center for Science in the Public Interest main alcohol page number of alcohol-related crashes by keeping said some things much better than we could in bars farther apart. a class for convicted drunken drivers last year. www.cspinet.org/booze/ppstudy.html Computer work was just part of a series that “I always saw those signs, ‘Drinking and Driv- Report by the Center for Science in the Public Inter- est relied heavily on intimate personal stories. ing Destroys Lives.’ I still see them,” she said We found drivers with as many as 26 DUI early in her talk. “The difference is I used to http://camy.org convictions who were willing to talk about how think that meant the person who died. It’s not. The Center on Alcohol Marketing and Youth at Georgetown they skirted the law. One man whose crash para- It’s the person who survives, the family of the lyzed his little girl told of becoming her primary person who died.” www.niaaa.nih.gov National Institute on Alcohol Abuse and Alcoholism caregiver and steering his wheelchair-bound “I think back to [my son’s] funeral,” Kelley daughter to college. Inquirer photographer continued. “People kept saying to me: ‘How www.epi.umn.edu/alcohol Michael Perez spent 48 hours with this family did you do it?’ Here’s how, and I bet any other Alcohol Epidemiology Program at the University of Minnesota capturing their daily struggle. Another anecdote mother would tell you the same thing: There’s detailed how a 16-year-old boy was killed by a no way I would be at my child’s funeral think- www.hsph.harvard.edu/cas repeat offender with 70 moving violations and ing it was my child. You have to shut that off College alcohol study, Harvard School of Public Health three prior drunken-driving convictions. in your mind …” By day, we watched the grim parade of “The last thing I had to do that day, I had to www.marininstitute.org The Marin Institute tracks policies and research DUI defendants troop through the region’s pick the blanket up and cover my child’s body courts, documenting how the country’s most for the last time and then shut the casket. I told www.tf.org/tf/alcohol/ariv/reviews/outlet5.html Alcohol-related injury and violence common violent crime is often treated with a myself as I took the blanket up over his body: hand slap. By night, we rode with officers on Think of it this way. He’s 8. You’re tucking him Industry patrol, learning why some departments wink at in bed at night. You just read him a story. You www.nbwa.org/index2.html drunken driving while others come down hard. pull the cover up and put it under his shoulders. National Beer Wholesalers Enforcement was surprisingly spotty even in Kiss him good night, tell him you love him, and www.beerinstitute.org areas with many drunken driving crashes. walk out of there.” The Beer Institute

The public response was huge. More than www.abionline.org 250 people wrote or called within a few days. Rose Ciotta and Karl Stark are veteran investi- American Beverage Institute Pennsylvania Gov. Mark Schweiker stiffened gative reporters for The Philadelphia Inquirer. www.discus.org Ciotta is editor of computer-assisted reporting. the penalty for repeat offenders by signing a The Distilled Spirits Council of the United States law following the death of a 16-year-old boy by Stark, a business staff reporter, is a specialist in a drunken driver – a case that the Inquirer had health care reporting. The project was edited by www.wineinstitute.org The Wine Institute featured. Schweiker also signed a bill, featured Daniel R. Biddle, investigations editor.

16 THE IRE JOURNAL JULY/AUGUST 2003 17 FEATURES FEATURES

I also tracked down proposed legislation that included SafeHarbor and I searched the Internet for mention of the governor and the company, which provides Web-based help desk services. The governor’s staff had posted every speech he had delivered while in office. Not only was there a link, Locke served as the company’s most high-

Drew Perine The News Tribune News The Perine Drew profile booster. Records showed he requested leg- islation to give the company complete relief from its business and operation taxes and tax credits for hiring employees in a rural area. Copies of his speeches put Locke directly in SafeHarbor headquarters as the keynote speaker at company parties – events he later said he couldn’t recall. The governor appeared at a news conference touting SafeHarbor on another occasion for helping update the state government’s Web sites. Like many Internet start-ups, SafeHarbor encourages employees like Jason Kaufman to work off job stress by After that news conference, I requested a copy of playing games in the company cafeteria. SafeHarbor’s state contract. It turned out the state signed a contract that required every state agency to give SafeHarbor first consideration when hiring HI-TECH START-UP a company to design or update their Web sites. After months of looking at records and talking to anyone who knew anything about the company, FINDS SAFE HARBOR I hit a dead end. Then came our biggest break. A tipster who didn’t realize we already were looking into the story contacted the newspaper with an insider’s viewpoint, and better yet, a CD-ROM IN GUV’S MANSION full of e-mails, loan applications, invoices, leases and letters. It took days to read them all, even BY BETH SILVER longer to figure out what they meant and what FOR THE IRE JOURNAL we still needed to learn. Invoices showed SafeHarbor consistently late on its rent to the government agency. Rewritten y tipster spotted four unusual guests Harbor at a mothballed nuclear facility in rural leases showed how the government agency for- at a soiree inside the governor’s Grays Harbor County. The agency illegally loaned gave late payments and made SafeHarbor appear mansion – three business partners SafeHarbor money to furnish its offices with such current on its bills. Leases detailed the govern- and one of their employees, the extravagances as cherry wood desks and oriental ment agency’s unconstitutional practice of loaning Mgovernor’s brother-in-law. Being neither legis- rugs. It repeatedly granted SafeHarbor breaks on state money to SafeHarbor so it could lavishly lators nor members of Washington Gov. Gary its rent to keep the company afloat. It looked the furnish its offices. E-mails and Uniform Commer- Locke’s staff, the four men stuck out at the post- other way when SafeHarbor pledged the govern- cial Code documents confirmed that SafeHarbor State of the State reception, where even spouses ment-owned assets as collateral to secure a loan. pledged government assets as its own to secure weren’t welcome. He suggested something might And it misrepresented SafeHarbor’s finances on a loans. A copy of an application for a federal Hous- be amiss. federal loan application to secure a second office ing and Urban Development loan revealed that From that tip, I tracked down the story of a building for the company. the government agency lied when it applied for technology start-up, SafeHarbor, which depended If SafeHarbor were to fail, so would the state’s a $5 million loan to build SafeHarbor a second on political connections for its very existence. The business development park. If the park were to office building. The agency said SafeHarbor was company’s chief financial officer, Judd Lee, liter- fail, so would Locke’s plan to bring high-tech in good financial shape when it was hundreds of ally lived with his sister and brother-in-law at the economic development to rural Washington. thousands of dollars behind in its rent. governor’s mansion for a time. With the help of Just before I interviewed the governor, I the governor, the company received millions in The paper goods requested a copy of correspondence from his state and federal aid. Records provided the story’s backbone. I office that mentioned SafeHarbor. In addition, SafeHarbor squandered most of the money started by requesting copies of guest lists from the state auditor had been looking into the before nearly going bankrupt and taking a small the governor’s post-State of the State address development authority, so I requested the audit’s government agency down with it. The public receptions. Indeed, Lee and his SafeHarbor working papers. They provided a good way to development authority served as landlord to Safe- bosses stood out. double-check much of what we already had.

18 THE IRE JOURNAL JULY/AUGUST 2003 19 FEATURES FEATURES

With the help of my editor, Hunter George, we I wrote up an outline, and with George and KEY ELEMENTS drew up about a dozen public records requests to Bellows, we determined what we had and what file with the public development authority. We we still needed. We settled on a date to publish Some of the key elements that made this knew the agency had a history of trying to pre- the piece and worked backward, scheduling most project possible: emptively smooth out bad news. So at Executive of the on-the-record interviews for the final three 1. Records: When SafeHarbor and the gov- Editor David Zeeck’s suggestion, we hired a weeks before we thought it would run. Timing ernment were touting a rural, high-tech lawyer to file the requests for us. It bought us the interviews with SafeHarbor’s CEO and the success story, records told otherwise. a couple of months before SafeHarbor and the head of the public development authority were 2. Sourcing: Three years on the political beat development authority knew we were looking into the most critical. I set them up back-to-back. provided a wealth of people to mine for the story. Zeeck also suggested we file requests Since that would be the first time any of the many of the story’s details. for records we already had as a test of the devel- main subjects of the story would discover we opment authority’s compliance. The agency pre- were behind the records requests, I didn’t want 3. Lawyers: We hired them to file public sented two boxes of documents, none of which the two talking to each other before I talked to records requests. The anonymity bought included the ones we already possessed. both of them. us more than a month before key players Source work was invaluable. SafeHarbor was knew we were investigating. Pertinent nuggets so intricately involved with the political process, 4. Timing: We waited until just three weeks More than a year elapsed between the con- that nearly every person I spoke with – people I before we were going to publish to inter- versation with my first source and when the had cultivated in three years on the beat – con- view key players. That bought us time. tributed something. At my request, they kept the story ran. Staying interested was a challenge. 5. Time: I begged for it, and the editors pro- But finding time between stories on my regular story quiet until it published vided it – four weeks off the political beat to political beat proved most difficult. I interviewed multiple people to get con- When Senior Editor Peggy Bellows asked firmation on every detail. I started with the dedicate to the project’s completion. what it would take to finish, I said I needed one lowest-level people I could find and worked my 6. Luck: Just when I thought the story would thing: time. Bellows came through. I returned to way up. I didn’t interview the main subjects of never come to fruition, a source with loads the newsroom during the middle of the legislative the story – SafeHarbor’s CEO and the governor of documents came forward. session. Three other reporters rotated through the – until I had as much information as I could Legislature to cover the beat. gather without them. I knew when they weren’t conducted with them months before the project George emptied an office in the newsroom telling the whole truth. I had documents, in some was complete, they touted a financially healthy and I filled it with documents. I separated the cases with their own signatures on them, that company. The CEO even bragged about his paperwork into piles by subject, highlighted told another story. political connections and said the press his the pertinent nuggets and labeled them so both I thought it was important to confirm as much company had received to date had been so flat- George and I could easily reference them as I information as possible before their interviews tering it bordered on embarrassing. wrote and he edited. It made double-checking because they had been selling a different story facts much easier. to the public. In fact, in preliminary interviews I Results and regrets Soon after the project ran, I left the paper. My husband, who had followed me halfway across the country when I took my job at The News Tribune, got a job offer in San Diego that we couldn’t pass up. Before moving, I had time to write two follow-up stories. Still, I left town with a nagging sense that the best stories were yet to come. At the time I left, legislators had begun look-

Dean J. Koepfler The News Tribune News The Koepfler J. Dean ing into the state contract with SafeHarbor. They also held hearings on the role of public devel- opment authorities and whether they had given them too much power. And the state auditor had expanded his investigation into the government agency that ran the business park. Having been rescued by another infusion of venture capital, SafeHarbor is back before the Legislature this year asking for another tax break.

Beth Silver, formerly a state government reporter Rich Miller, director of the Internet Security Group at SafeHarbor and his wife enjoy a lunch together in the with The (Tacoma) News Tribune, now freelances parking lot of the office. from San Diego.

18 THE IRE JOURNAL JULY/AUGUST 2003 19 CORPORATE COLLAPSE C O V E R S T O R Y Challenging assumptions C O V E R S T O R Y was key to pursuing Enron’s Salaries, perks and pensions! shaky, but often legal, steps Sounds like the latest game show, BY KURT EICHENWALD doesn’t it? THE NEW YORK TIMES

“Swindle millions from sharehold- or more than a decade, I have built a career on fraud – or at least reporting on it. So, Fwhen the Enron debacle emerged – leaving thousands without jobs or even retire- ers! Grab all the pension you can! ment funds – it seemed like it would just be more of the same, digging into the doings Enjoy houses, cars and other luxu- of a corporation that had fallen off of a cliff in ways that were awfully familiar. Whoo-boy, was I wrong. ries at the expense of others!” Continued on page 22

Unfortunately, it’s not a game, but a sad reality. Executives and power brokers from the public and private sectors have set themselves up in grand style while they ignore warning signs, deci- mate companies and rob longtime employees of rightfully earned wages and retirement funds. Investi- gative reporting reveals some elaborate and truly crafty schemes from those seeking to get all they can at the expense of shareholders, taxpayers and workers. That is why it is so critical that you learn how this game is played – and how to investigate those who are breaking the rules.

20 THE IRE JOURNAL JULY/AUGUST 2003 21 JANITOR INSURANCE EXECUTIVE PROFITS C O V E R S T O R Y C O V E R S T O R Y Employer profits hidden Stock options and side deals in coverage of workers, mean millions for managers even after retirement as Qwest stock takes dive

BY THEO FRANCIS AND ELLEN SCHULTZ BY LOU KILZER THE WALL STREET JOURNAL ROCKY MOUNTAIN NEWS

hortly after the 9/11 terrorist attack we began to wonder whether employers oe Nacchio saw the bargain. Swould profit from the deaths of their workers in the World Trade Center. J At $45 a share, the stock of Qwest Communications was terribly It took more than a year to fully answer the question, but it turned out to be undervalued, he told the public. true. Employers have been buying life insurance on the lives of their workers at So the brash Qwest CEO went on a spending spree, pouring $1 all levels – with the company as the beneficiary. And, contrary to the industry’s billion of company funds into buying back Qwest stock. claim, companies buy policies on hundreds, or even thousands, of employees at That was in January 2001 – some nine months after the stock of a time. other telecom companies began a long and relentless retreat. The policies act like giant tax-shelters, and the earnings within the insurance Qwest seemed to be defying the odds. Day after day came glow- policies boost company income. As workers die, the death benefits bring tax-free ing reports that the company would meet or exceed its financial cash to corporate treasuries. forecasts. Rank-and-file employees usually have no idea that they are covered by such But one savvy investor was busily bucking the trend. In the same policies, and though managerial employees may know about the cover- month Qwest was buying up its supposedly undervalued stock, that age, they usually don’t realize the size of the policies taken out on their investor unloaded 799,467 Qwest shares, garnering some $32 mil- lives. Employers often receive a half-million dollars or more at the lion. employees’ deaths, and the policies remain in force until they die The investor? – even years after they change jobs or retire. Joe Nacchio. Continued on page 24 Continued on page 27

LEGISLATIVE PENSIONS PUBLIC RETIREMENTS Lawmakers cobble together Poor oversight of fund, own state retirement plans ignoring or rewriting rules paying better than old jobs dumps shortfall on citizens

BY DUNSTAN MCNICHOL BY BRENT WALTH THE (NEWARK,N.J.) STAR-LEDGER THE (PORTLAND) OREGONIAN

he headlines are large and the spotlight shines brightly whenever state law- ew people would pass up the chance to retire and make more T makers consider raising their pay. Fmoney than when they did while working. And the fact that plenty But for most legislators, the paycheck they collect while in office is small of Oregon’s public employees are doing just that was the first sign of change compared to the payout that awaits when they retire from public life. serious trouble with the state’s pension fund. Last year, the Star-Ledger of New Jersey took a hard look at the public pensions At The Oregonian, we took a hard look at the state’s $34 billion our state lawmakers have been collecting. Public Employees Retirement System (PERS) and came to a singular What emerged was the picture of a system, which, through quirks and manipu- conclusion: It’s out of control. lation, gives part-time lawmakers astonishing payouts, often exceeding $100,000 A decade ago, PERS had all the money it needed to meet its future a year. It’s one of the most generous retirement programs in the nation and is obligations to workers. particularly remarkable because lawmaking in New Jersey, for most, is a part-time That was before the go-go 1990s stock market had more than second job. doubled PERS’s assets. The fund should have had plenty of money. Half of New Jersey’s former lawmakers are earning more in retirement than they But it doesn’t. Our review of PERS’s books found that the pen- were paid while in office. Compared to full-time teachers, state workers, police and sion fund – once fully funded – now has only 75 cents for every $1 firefighters, lawmakers vest for benefits earlier and accrue benefits more rapidly it needs in the coming years. than other public servants. And Oregon taxpayers are faced with filling in that gap, long after The Ledger found an Assembly speaker who had inserted special they thought they had adequately funded the pension system. language in the state budget to give himself a $57,000 bonus for We found that it’s not just that the pension fund’s investments lost quitting his job at a community college. money after recent Wall Street downturns. Continued on page 29 Continued on page 31

20 THE IRE JOURNAL JULY/AUGUST 2003 21 C O V E R S T O R Y C O V E R S T O R Y

Have Beetle, will travel entities? Total return swaps? That, on any level, was CORPORATE COLLAPSE By Dick J. Reavis Yeesh. This threatened to be an outrageous. The story landed on eye-glazing experience. page one, and shortly afterward, I from page 20 So, I began my reporting the worked on a piece with Diana Hen- Enron proved to be both one of the most frus- same way I always do on a complex story, riques about securities law specialists trating – and most rewarding – corporate fraud by taking several days to get educated. I called proclaiming their disgust at the setup. stories I ever handled, dwarfing in scope every- a few of the gray-heads I have stashed around At this point, something disturbing came up thing that ever happened at Drexel, Prudential the financial world who periodically serve as for me. I noticed that many commentators were or Columbia/HCA. In the end, it was both the my tutors, and plunged into Structured Finance lambasting Enron for “breaking the law’’ in ways most difficult to comprehend, and – amid the 101. From there, I branched out to the account- that did not strike me as illegal. Having seen surrounding hysteria – the most challenging in ing specialists in the structured finance world, plenty of corporate fraud cases collapse under terms of ensuring the accuracy of what I was hoping to learn enough that I would be able to the weight of proving criminal intent, from the writing. see where the story was going. beginning I had cautioned my colleagues about The biggest problem, starting off, was Indeed, taking time to prepare has always jumping too quickly on the “crime’’ bandwagon. timing. I was assigned to the story in the first served to my advantage. Years ago, a Times Indeed, on one day I told them that we would of week of January 2002, having just come off a reporter told me a tale with the moral that report- have to wait until the accountants said they were few months of tracing the finance network of Al ers who prepared ahead of time in the long run lied to before we could establish that a crime Qaeda. And, put simply, The Wall Street Journal got the story, while the ones who ran out full of may have been committed. (The head of Arthur had already handed the competition their heads ambition but empty in the head ended up going Andersen announced the lie the next day during on the Enron story, having published devastating down the wrong path. a congressional hearing.) article after devastating article in the fall. It’s But while there were undoubtedly things that funny to admit it now, but I wasn’t sure there Read the documents Enron had done that crossed into the realm of was much else left to say. At that point, I had one goal: Find something crime, many of the things being cited were not Then there was another problem: What the newsworthy – anything, really – that hadn’t among that group. In essence, our ruling bodies heck was everyone talking about? I had, at already been trumpeted in the pages of The Wall – from Congress, to the accounting rule-makers best, a workmanlike knowledge of the com- Street Journal or elsewhere. First, came word and so on – had created rules that, in themselves, plex accounting issues surrounding structured that the Justice Department had formed its own made no logical sense, but it was hard to argue finance, the controversial alchemy used by Enron task force. Then, I obtained some sworn that someone could have criminal intent for Enron in many of its dealings. Special-purpose testimony from Andrew Fastow – the former following them. chief financial officer at Enron who was at This came down to the whole “hidden debt’’ the center of the case – and used that to write argument: Enron established its off-books part- another story. nership, the argument went, to hide its burgeon- After that, I obtained a copy of an offer- ing debt. ing document sent out to private investors for Well, yeah. But that, unfortunately, in and of LJM 2 – the partnership controlled by Fastow itself was perfectly legal. Under the accounting that seemed to have played the key role in the rules, a company could set up a partnership with events leading to Enron’s collapse. Others had as little as 3 percent outside capital – 3 percent the document for months, so I didn’t hold out – and treat it as an independent entity, so long ����������������������������������� much hope for anything other than education. as it met some other rather lenient rules. In other But, quickly, I relearned one of the lessons a words, a company could theoretically own 97 ���������������������������������� wiser reporter had once told me: Always read a percent of a partnership, but treat it on its books ������������������������������������� document, even when you think it’s not possible as if it didn’t really exist. ������������������������������������������� that there is something in it. Because you never Illogical? Yup. Nonsensical? You bet. But ������������������������ know when there will be. them’s the rules. And suddenly, commentators This one was simple: In the document, were acting shocked that a company had actually ��������������������������������������� ������������������������������������������� Fastow and other Enron executives promised followed the nonsense to its illogical extreme. that the investors in LJM2 – which was supposed ����������������������� to be an entity separate from Enron – would Sorting legal from illegal ������������������������������� have big profits because the principals would That’s why, early on, I had a discussion with ������������������������� other members of the Times team cautioning ��������� be using their access to Enron’s information �������������������� about possible investments to ensure “superior them about being too quick to head down the ������������ returns’’ for the partnership. Cutting through the criminal route. Fastow – who by that time had ������������������������ gobbledygook, what that meant was that Fastow been linked to a partnership that had violated �������������������������������� & Friends would be using Enron’s inside infor- the 3 percent rule, and soon would be linked ����������������������� mation for the benefit of investors in the equity to another that was basically used to rip off ������������������������� fund they ran. Natwest – was almost certain to be indicted.

22 THE IRE JOURNAL JULY/AUGUST 2003 23 C O V E R S T O R Y C O V E R S T O R Y

But, I cautioned, unless the government could that Enron had shredded documents illegally under the weight of its own financing mecha- prove that the former chief executives – Kenneth (an allegation investigated and discarded since nisms. And even though I have made my career Lay and Jeffrey Skilling – had involvement in then by the Feds). Everyone knew that Skilling on fraud, picking through the shattered lives those particular partnerships, the government had knowingly orchestrated the fraud. and other wreckage left in the wake of these might have great trouble bringing a criminal I began to pick at the assumptions, sometimes debacles is an experience I would be delighted case against them. to the dismay of my colleagues and competitors. to never repeat. That caution has proved important in our I obtained all of Ken Lay’s financial records, coverage. We rarely, if ever, beat the “Lay ran them through a spreadsheet and concluded Kurt Eichenwald, a senior writer and investiga- and Skilling should be indicted’’ drum, wait- (dammit) that Lay had believed in the company tive reporter at The New York Times, has written ing instead for the evidence to emerge of their when he said he did. I closely studied another about corporate corruption and related topics for involvement in criminal activity. While the case, brought against executives in Enron’s more than 15 years. investigations are continuing, more than a year broadband division, and concluded that there and a half later, it is clear that a prosecution was a whole lot less there than met the eye. And Tipsheets worth noting of either man would be far more difficult than I studied the information coming out against some would have led the public to believe in Fastow and his colleagues for their dealings, and If you’re interested in more information on those early days. concluded – well, that Fastow’s defense lawyer salaries, perks and pensions, try these tip- Indeed, it wasn’t long until I was wonder- has his work cut out for him. sheets available through the IRE Resource ing whether much of the coverage of Enron had In the end, my articles had evolved into Center (www.ire.org/resourcecenter): gotten off on the wrong foot. Sure, there were consistently splitting the difference between crimes. But a lot of what happened at Enron the wrong thing and the illegal thing. Why did • Tipsheet No. 1595. Edward Iwata, a business seemed to be massive mismanagement at an that matter? Because by that time, I felt like I writer with USA Today, and Vince Kueter, a unconscionable scale, with executives taking knew what had driven Enron under – the abuse news researcher with The Seattle Times, pres- advantage of the rules in ways the writers of of structured finance by the company. And for ent a well-documented list of general and them never imagined. If true, that outcome was all the legislation that emerged because of the specific tips on backgrounding public and far more disturbing. After all, if what Enron did corporate scandals, Congress had done virtu- private businesses. The list is completed by was illegal, then the chances of it happening ally nothing to fix the real problem. That meant Web links to organizations or associations again were under control. But what if a lot of to me that the legacy of Enron was that our it was legal? economy was still at risk, that we were all still that can jump-start you on the road to Maintaining that position amid a sea-storm subject to the vague and irrational interpreta- obtaining accurate information. An example of anger was difficult. When the government tions of corporate executives who believe their of a published article is included. brought its indictment of Arthur Andersen, only restriction is the letter of the law. • Tipsheet No. 1602. Adam Lashinsky of For- Enron’s accounting firm, charging obstruction And so, to close out the year, I wrote one of tune Magazine includes seven helpful tips on for destroying Enron documents, some commen- my last pieces, which had as its undercurrent where to find and how to interpret financial tators went down the path of proclaiming this the theme that we as a country had failed to to be some sort of scheme to allow the Enron learn the lesson of the Enron debacle because statements. Also included: an article about crooks off the hook. But in truth, we had pointed of our certainty that such horrible actions had Enron’s broadband business charade and out early on that – because of the complexity to be illegal. One quote in the piece summed it how informed investors could have avoided of the Enron case – the document destruction up: “Enron was following the letter of the law the disaster. investigation was almost certainly going to take in nearly all of its deals,” said Frank Partnoy, • Tipsheet No. 1732. Vince Kueter of The Seat- precedence, since it would then be more easily a finance professor at University of San Diego tle Times gives four steps to backgrounding resolved and allow the government to pressure Law School and a former derivatives trader. “It witnesses to cooperate. is fair to say that the most serious allegations privately held companies. He also includes By the summer of 2001, the criminal cases of criminal wrongdoing at Enron had almost tips and resources that might help in the began to emerge. One of Fastow’s colleagues, nothing to do with the company’s collapse. process. Michael Kopper, cut a deal and agreed to testify Instead, it was the type of transaction that is • Tipsheet No. 1340. Tami Luhby of Newsday about kickbacks he had paid to his friend. Other still legal.” tells journalists how to track companies on allegations emerged in government filings. But It was a different conclusion than the one with evidence of money swishing around among reached by the makers of the Enron television the Net and where to look for financial infor- executives at Enron from what purported to be movie, one that I could not have reached if I mation on companies. criminal conspiracies, none of it ever landed hadn’t kept challenging my own assumptions • Tipsheet No. 1406. Mark Tatge of Forbes said with Skilling or Lay. That avenue of the crimi- throughout the reporting of this story. that there are 10 flags that indicate trouble nal case seemed harder. But in the end, it was the terrifying verdict, for companies. This tipsheet lists the meaty At that point, what constituted the “Enron far more unsettling than any judgment from a business Web sites and financial books. Much story’’ was already moving into the public jury. Ultimately, it told me that I could be back consciousness. Everyone knew that Lay had at this sometime again real soon, following the of the information is out there – reporters engaged in insider trading. Everyone knew trail of another company that had imploded just have to know how to read the data.

22 THE IRE JOURNAL JULY/AUGUST 2003 23 C O V E R S T O R Y C O V E R S T O R Y

are financing – the policies are just typically have insurance to pro- JANITOR INSURANCE ordinary corporate assets, like any tect themselves. We also knew other investment. that companies often insured their from page 21 executives for large sums, payable Employers claim they use the insurance to Hidden practices to the company, to protect themselves “finance” employee benefits, but we showed Regulators have tried repeatedly to curtail the from financial loss if key people die. Ellen Schultz that this is a tenuous claim. In fact, our articles tax breaks critical to make corporate-owned life remembered that years ago companies had bought demonstrated that many workers who have died insurance profitable over the years, but with the policies on low-level workers – so-called janitor – including a convenience store clerk murdered help of insurance lobbyists – often former key coverage. on the job and a nurse killed while making a home government officials – employers again and We began to consider whether employers visit to a patient – were ineligible for employee again found ways around the rules. In fact, while might, in fact, have profited from the deaths of benefits. We also interviewed managers who life insurance was originally intended as a safety their workers in the terrorist attacks – and even weren’t eligible for retiree health benefits from net for widows and orphans, employers are now their former workers or retirees. We called insur- former employers who had insured them – the among the biggest buyers, and beneficiaries. ers and employers, who told us repeatedly that principal reason employers cite for buying the None of this was apparent in the weeks after employers no longer buy life insurance on lower- coverage. 9/11, however. As attention gradually shifted level workers. We could learn virtually nothing We also questioned company claims that they from the tragic loss of life to the financial costs about payments from key-man policies. use life insurance to “finance” executive deferred of the attacks, companies warned that the final So, we turned to corporate filings with the compensation programs, which are special 401(k)- bill could be huge: Billions of dollars of property Securities and Exchange Commission. A number type plans open only to highly paid employees. We had been destroyed, and thousands of people had of the companies who lost employees on 9/11 are found that companies are only a little more likely been killed. Employers were seeking government publicly traded, and file annual 10-K and quarterly to “use” life insurance for this purpose than they aid and tax breaks after the attacks, to help them 10-Q reports with the SEC. These are searchable are to pay for benefits for rank-and-file workers. with the costs of providing benefits to surviving using services like 10-K Wizard Technology Moreover, most companies don’t really dedicate family members. Ltd.’s Web site, www.10kwizard.com. We also the insurance to whatever benefits they say they At the same time, we knew that companies looked at companies’ Form 5500 filings with Unstacking the Deck: A Reporter’s Guide To Campaign Finance

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24 THE IRE JOURNAL JULY/AUGUST 2003 25 C O V E R S T O R Y C O V E R S T O R Y

the Labor Department, which detail benefit pro- Still, those documents proved invaluable in Just another corporate asset grams – including the life insurance they provide piecing together how janitor insurance worked. As we reported on corporate-owned life to employees. Moreover, buried within the files that we did insurance, most companies echoed the None disclosed 9/11-related payments. But in get was a so-called “death run” – a list of all the same refrain: We use the insurance to fund the course of our search, we came across several employees the company had insured, with their employee benefits. Where more recent poli- vague references that suggested some companies Social Security numbers, dates of birth and other cies had been bought on managers, com- were still chasing tax benefits from the policies details – including the amount for which they panies said the insurance funded executive they had bought on employees – and even that were insured. benefits – chiefly deferred compensation some policies remained outstanding. These com- With the death run, we were able to use the plans. panies had sued the Internal Revenue Service to Social Security Administration index of deaths to Of course, we ultimately established that, try to recover tax deductions from the policies that identify some of those who had died. Ultimately, for tax reasons, companies never truly dedi- the IRS had denied. we were able to find their families, who had no cate these insurance investments to paying These are practices employers prefer to keep idea that the insurance even existed, including executive benefits. Rather, the insurance hidden: buying life insurance on workers as a tax the family of Margaret Reynolds, who died of amounts to just another corporate asset. dodge. Employers wouldn’t discuss the issue, Lou Gehrig’s disease at 62. Her family received Ditto for the insurance companies bought beyond repeating the vague language we found a $21,000 insurance payment, while her employer to finance employee benefits – the vast in their filings. Consultants and insurance com- received $180,000. majority of it has little or no concrete link to pany officials would only discuss a few aspects of Some six months after we began working the benefits the company pays. the practice. Regulators and government officials on the piece (after a number of interruptions for, But the justification led us to a strong story knew almost nothing about it. among other things, coverage of Enron’s execu- in its own right: We demonstrated that com- A few people both understood some of the tive compensation and 401(k) plan woes) we had panies use these deferred compensation technical details or circumstances around the a story. It wasn’t the one we first went looking for, programs to deliver huge benefits to top practice, and were willing to talk to us (although but it was compelling. executives, even while effectively hiding the mostly on background). We relied mostly on full scope of the payments from the public. written documents in an area where disclosure Understanding technicalities Deferred compensation plans are little is incredibly weak. Companies have to report As we prepared the story for publication, we understood piggy banks into which execu- almost nothing about these practices. What little checked in one more time with a few particularly tives can stash their pay, avoid being taxed they do disclose is hard to decipher, with insur- helpful sources. One had mentioned a law firm on it for the time being, and, in many cases, ance proceeds rolled into different parts of the in Texas that had filed lawsuits against several earn high, guaranteed rates of return with a income statement and balance sheet at different companies over janitor insurance policies. We generous company matching contribution. companies – and virtually never broken out and called, and at the same time pulled the decisions For example, John Stafford, chairman of described in detail. that were available through Lexis-Nexis. Wyeth, received $3.8 million in one year in We kept digging. The attorneys put us in touch with the families interest payments on his account, a number Regulators collect no data, and insurance they had represented, and helped fill in details of that could only be determined with a thor- industry trade groups professed to have none the cases, which helped us with the human picture. ough understanding of disclosure rules. as well. So we had to sift through thousands of There was William Smith, a 20-year old conve- General Electric for years paid its top execu- pages of corporate filings, legal documents, court nience-store worker killed by an armed robber, tives a 3.5 percent company contribution exhibits, federal and state regulations and state which meant $250,000 for his employer; Doug plus 12 percent annual interest. It turned codes going back to 1990 and earlier. Much of Sims, a distribution-center worker who died at 47 out GE had a total liability for executive the material was available only in paper form, and of a heart-attack, bringing Wal-Mart Stores Inc. deferred compensation of $2.4 billion, a had to be examined by hand. Virtually none of it is $64,504; Peggy Stillwagoner, 51, a home-health figure disclosed nowhere in the company’s covered by federal or state freedom of information nurse, who brought her employer $200,000 after filings. (GE says it’s not disclosed because it’s laws, though SEC filings and court documents are she was killed in a car accident two months into inconsequential for a company with some readily available. a temporary job. $500 billion in assets.) We started by trying to track down the tax law- Even as we were finishing the first story, it To get the story, we had to thoroughly suits. Several were still in tax court, but others had became clear to us that we had barely scratched understand SEC executive compensation been appealed to federal district courts across the the surface. We quickly followed with a story that disclosure rules and learn how to find and country. Researcher Elizabeth Yeh got us docket explained whether – and how – workers could read the legal documents detailing the plans. sheets for these cases, and published opinions for learn if they were insured by employers past and (They’re listed in the exhibit index of each a few of them, and we tried to zero in on the fil- present. Since insurance is regulated on a state-by- year’s 10-K filing with the SEC.) We also built ings that might help us most. Although we mostly state basis, this meant calling many state insurance a model in Excel that would let us plug in the used document-retrieval services, in Delaware, commissioners and trying to understand a variety terms of a company’s deferred compensa- Journal stringer Tom Greer tried to get what we of statutes, some of which regulated corporate- tion plan, and figure out how much interest asked for from the federal court there, in a case owned life insurance to varying degrees, and or other benefits an executive would get involving CM Holdings Inc. Most of the docu- others of which were silent on the topic. over time. ments were sealed. We also dove more deeply into bank-owned

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Covering Conflicts life insurance, which insurance its case in U.S. District Court in industry sources told us had Bay City, Mich., though the federal and Terrorism recently been a big growth area. We government may appeal.) learned that banks, unlike companies in Dow’s case was highly technical, A Unique Course for Mid- any other industry, had to report their life- but even more so, the history of the Career Journalists insurance assets in filings with federal regulators. practice was intimately linked to accounting Offered in Fall 2003 Bank and thrift call reports, available through practices and developments in tax law. Without a by the Washington Program of the the Federal Deposit Insurance Corp.’s Web site Medill School of Journalism solid technical understanding, we would not have (www.fdic.gov), list the figure on a schedule been able to even confirm critical information with This fall, Medill’s Washington Program will obscurely titled “Other Assets,” and even then the companies we wrote about. Many companies offer a limited enrollment graduate-level seminar for mid-career journalists to examine only if the assets reach a certain threshold. With denied even the simplest facts (including the fact contemporary war — from the small, far- the help of financial-services analyst Eric Con- that they owned this type of life insurance), until away conflicts that spell future trouble to nerly, at Boston Partners, an asset-management presented with the evidence. To help readers major interventions involving the United company, we were further able to estimate how through the technical morass, we wrote a simple States and its allies. It will feature leading U.S. experts on war, military tactics and war much of a profit a number of banks made from explanatory sidebar to our Dec. 30 history story. crimes, and include a “hazardous environ- their insurance investments. In some cases it was We also were finally able to make the 9/11 ments” course given by Centurion Risk stunning: 2 percent or 3 percent of earnings at a connection that we suspected from the beginning. Assessment. It is designed for both defense number of banks, and as much as 12 percent or Unfortunately, this story was much harder to tell specialists and general reporters. 15 percent at some. through ordinary people. There were no lawsuits Meeting once a week, the seminar will inves- When you’re trying to figure out a practice that involving this kind of practice against employers tigate the changing nature of war, challenges few experts will describe to you, it’s crucial to take in the Trade Center (yet), so there was no easy for “embedded” as well as “unilateral” reporters and the coverage issues raised by the time to learn the technical material. We had to way to find human faces. Anecdotally, from terrorism. It will address U.S. military history learn the basics of life insurance accounting, proxy insurance-industry insiders, we knew companies and practice as well as the “nuts and bolts” of and annual-report disclosure requirements, and had collected on 9/11 deaths, but concrete details military organization. The Centurion course, understand the interplay between life insurance, were elusive. Even a year after the fact, insurers a two-day version of the training now required by many media organizations, will corporate finance and tax law before we could and other companies hadn’t made any mention of focus on minimizing risks in situations of construct a complete picture of how companies gains or losses from janitor insurance. Finally, in combat or civil unrest. were using life insurance on their employees as a the third quarter of 2002, Hartford made the kind of disclosure we were expecting. It didn’t give us Roy Gutman, who edited “Crimes of War” corporate finance tool to boost the bottom line. and won the 1993 Pulitzer Prize for disclos- This was even more true as we began working everything we wanted – the human face – but we ing atrocities and other human rights viola- on what was clearly the most important follow-up had to be willing to go with what we had. tions in Croatia and Bosnia-Herzegovina for to the initial piece: a history of janitor insurance. The response to the janitor insurance articles Newsday, will lead the seminars, with guest speakers from the Marine Corps, Army, State We had touched on the subject in our initial article, has been long-lasting. After the initial articles ran, Department, Justice Department and other but we had seen hints that there was much more to U.S. Sen. Jeff Bingaman of New Mexico proposed institutions. the story. Trying to understand employees’ rights eliminating tax benefits for corporate-owned life- insurance policies held on employees who have Applicants should be working journalists in various states, we saw more clues: Simply by with at least three years of experience. reading insurance laws in state after state, and been gone from an employer for more than a Development of the course is underwritten by in several cases looking at prior versions of the year. U.S. Rep. Gene Green of Texas proposed the McCormick Tribune Foundation. Costs to law (usually available through Lexis-Nexis) a bill requiring employers to tell past and present participants: $400 administrative fee. or the original legislative bills, we saw steady, employees about any coverage bought on their APPLICATION DEADLINE: July 21, 2003. gradual changes in “insurable interest” laws, lives since 1985 (attributing his decision in part to which determine who may buy life insurance Houston Chronicle articles that detailed the Texas Send to: Covering Conflicts on whom. It bore all the marks of a concerted janitor insurance lawsuits). Medill News Service lobbying campaign. Court documents also had The National Association of Insurance 1325 G St. NW, Suite 730 suggested that major brokers and underwriters Commissioners last fall published guidelines Washington, DC 20005 of janitor insurance had lobbied to make sure the calling for employers to get written consent from For more information: practice became, or remained, legal. insured employees. This year, U.S. Rep. Rahm Contact Assistant Dean Ellen Shearer at 202- We ultimately framed the story around Dow Emmanuel of Illinois (and about a dozen cospon- 661-0102 or go to www.medillnewsdc.com. Chemical Co., which had sued the IRS over a sors), proposed eliminating the key tax benefits program that looked much like the others that had of corporate-owned life insurance, as has Sen. landed in tax court. Dow’s consultants also had John Edwards. Medill School of Journalism Northwestern University been instrumental in shaping Michigan’s law to be friendlier to the practice – something we learned Theo Francis and Ellen Schultz, reporters at by poring through hundreds of pages of exhibits The Wall Street Journal, shared the George in Dow Chemical’s lawsuits, and later confirmed Polk and Sidney Hillman awards for their work with the consultants. (Earlier this year, Dow won on this story.

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EXECUTIVE PROFITS

from page 21 And so began the Rocky Mountain News’ account of the troubled Baby Bell and its execu- tives. Simple database It started as a simple exercise – compare

what Nacchio was saying about the company News Mountain Rocky Jr. Kochaniec George with what he was doing in his own portfolio of Qwest stock and stock options. But as always seems to happen in investiga- tions, we were soon deluged with paper. First came securities filings, the 8-Ks, 10-Ks, 10-Qs and disclosures of insider transactions, with some documents exceeding 100 pages. And there were hundreds of press releases, news reports and analysts’ statements that all The expansive home built by former Quest executive Stephen Jacobsen in Arapahoe County, Colo. had to be organized and dissected. We adopted the Rigert method of tracking chio” and trying to find which document and managing editor Deb Goeken. The reporters documents, named after former IRE board on what page the factoid appeared. included David Milstead, Jeff Smith and me. member Joe Rigert. As nettlesome as the process is, it has one Milstead and Smith are full-time business Rigert lists files and documents sequen- great benefit: It allows you to sleep in on the reporters accustomed to producing five to tially, instead of by subject, noting on what weekend day that the story appears, instead seven stories a week. I, wearing an investiga- page in each document a certain factoid of being seized by anxiety-driven insomnia as tive cap, work at a more “deliberate” pace. The exists. you try to remember if you got it all right. cultures clashed occasionally, but in general Rigert always did this painstakingly by The Ullmann method assures that you the team worked well. Smith brought his hand, being terribly suspicious of computers. have it right. experience of having covered Qwest for two We, however, have no such phobias and devel- At the News, the line-by-lining is handled years, and Milstead his experience in executive oped a very simple database with only four by the reporters and, on one occasion, mostly compensation and accounting. fields: Name, date, event and location. by the lawyers. Whatever, it always seems to For instance, a record could read: Name: help. Nacchio, Joe. Date: 3/10/2002. Event: Joe One last challenge was nailing down lashes out at “corporate McCarthyism.” exactly what Nacchio sold and when. Qwest Location: Q48, 54. executives used a government rule that allowed The location coordinate simply means that

them to file their stock-sale forms only on Press Associated The the factoid is found in the 48th Qwest document paper, not electronically. We had to reconcile on page 54. two surprisingly different reports from private Of course, the database can be sorted in the data providers and compare them to the yearly name or date fields, or name then a sub sort on Qwest company filings that listed executive the date, to help in all kinds of narratives. stock ownership. One reporter spent nearly Of particular benefit is the way this super- five full days on that task alone. easy database helps during the Ullmann line- What emerged from our effort was a pic- by-line, named after former IRE executive ture of a man who consistently boosted Qwest director John Ullmann. while selling $250 million in Qwest stock he Ullmann had the sometimes-uncomfortable gathered mostly through stock options. idea of bringing in an editor who had little His defenders said it was merely prudent knowledge of the story to go over it line- of Nacchio to “diversify his portfolio.” And, by-line, asking a reporter to produce paper indeed it was. or interview transcripts for each and every Qwest stock went from a high of $66 a factoid in a story. share in March 2000, to trade as low as $1.07 in The modified Rigert database is a lifesaver, August 2002, as more and more news appeared because one can actually locate things instead of questionable accounting. Former Qwest Chairman and CEO Joe Nacchio. of digging through a massive file named “Nac- The editing chores were handled deftly by

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– each his own narrative. So we partner, pledging to ante up its Line-by-line accuracy used an old-fashioned separate own $84 million. The joint ven- To read more about prepublica- files approach. ture agreed to pay Qwest $119 tion review and line-by-line accu- We carried forward with the more million over 10 years for telecom- racy checks, see chapter 23 of The traditional approach as we, joined by munication services. reporter John Accola, did some tough reporting The enterprise was renamed Qwest Digital Investigative Reporter’s Handbook this year on billionaire Phil Anschutz, Qwest’s Media. (www.ire.org/store/books/rh4.html) founder and chief stockholder. The next year, as the whole telecommu- by Brant Houston, Len Bruzzese and Again the idea was simple and straight- nications sector went wobbly, Anschutz sold Steve Weinberg. forward. Qwest half of his remaining stake for $48.2 Playing a hunch, we gathered what informa- million. He kept 50 percent of the voting rights, The same reporters teamed with newly tion there was available concerning telecom however. appointed projects editor Carol Hanner to startups in which Anschutz invested. We The enterprise lost $65 million in 2000 on $4 examine how executives below Nacchio fared wanted to see if any of them did business with million in revenue. By the next year, it was clear with their stock options. Qwest, a publicly traded company. the venture wasn’t going to make it, and in early The answer: They fared rather well. In this, the Anschutz Investment Co. was a 2002, Qwest and Anschutz pulled the plug. One, Stephen Jacobsen, built a 16,000- big help. Though it had taken down its home The deal ended up costing Anschutz some square-foot mansion south of Denver that left page, there existed mirror sites archived on the $60 million. But because of Qwest’s invest- an assessor scratching his head. Internet and we were able to resurrect those. ments, he lost far less than he might have. For “How do you appraise it?” he asked. The home pages listed many of the telecom its part, Qwest Digital Media cost Qwest $94 “There’s nothing else like it in Arapahoe startups, which had won millions of dollars million. County.” from Anschutz companies. That matter raised unanswered questions Naturally, an aerial shot of his home Simple searches on the Web where we listed about how Anschutz’s private investments adorned the front page of the paper. both the Qwest name, and the names of the meshed with Qwest’s business. A top Anschutz companies listed on the Anschutz home page, official says that Nacchio sought out the rela- Many bingos gave us plenty of hits. tionship. In doing the senior-executive package, We also became pros at EdgarPro, the ser- Nacchio said that wasn’t the case, but I chose not to apply the Ullmann/Rigert vice that scans SEC filings. Again, we merely refused to elaborate. approach. The executives were discrete entities searched for files containing the two names – Qwest’s and those of the private Anschutz Satisfying the lawyers companies. As could be expected when writing about a Nuts and bolts information for And we searched Qwest’s archives of past billionaire, the paper’s lawyers became curious news releases, noting each company in which as publication neared. computer-assisted reporters. Qwest had announced a business deal. Then It was at that point that the lack of the simple Uplink is a it was back to the Internet. flat file database was sorely missed. bimonthly There were many bingos. It was the bad old days when you spent an newsletter covering every In all, 12 companies in which Anschutz hour trying to find the file that has the informa- facet of computer- companies had invested venture capital tion the lawyer wants and then another hour assisted reporting. ended up doing business with Qwest or affili- to skim it two, three and four times trying to It’s written by the nation’s top ates. Whereas some of the relationships were locate a factoid. reporters seemingly minor such as a Qwest field test, But we eventually prevailed to our lawyers’ for the National others were less so. satisfaction, though at least one of us will prob- Institute for Computer- One, Juniper Networks, netted Anschutz at ably dust off the Ullmann/Rigert methodology Assisted least $55 million in stock profits and became for most upcoming projects. Reporting. a major Qwest supplier of Internet routers. The project did produce one zinger of a quote. When asked about the ability of Articles include valuable information for journalists, On other deals, Anschutz has lost or stands to educators and students on uses of databases, lose his entire investment if the market doesn’t Anschutz to win lucrative new-issue stock spreadsheets, Internet resources, mapping and bounce back and rejuvenate the companies. deals – the subject of a New York State Attor- statistical software. Investigative reporters explain There were other kinds of relationships – for ney General’s investigation – an Anschutz offi- how they developed significant stories through these techniques. Technical tips and Q&As serve example, a joint venture in a video storage and cial explained they way the system works: beginners and advanced journalists. distribution business. “It isn’t fair,” he said. “But it’s rational.” That company started with the name of To subscribe, go to www.ire.org/store Slingshot in 1999. Anschutz was the sole Lou Kilzer is a reporter at the Rocky Moun- or call 573-882-2042. owner, having purchased the assets for $84 tain News and has won two Pulitzers, an IRE NICAR is a program of Investigative Reporters and Editors, Inc. and the Missouri School of Journalism. million from Roy Speer. Award and a George Polk Award for National Shortly after that, Qwest became a 50-50 Reporting.

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representative” in the state Department of for lawmakers. LEGISLATIVE PENSIONS Transportation, an appointed post that paid Under pension regulations, any person $89,500 a year. who holds more than one job within the pen- from page 21 Bubba served there until March 1, 2000, the sion system must be marked as a “multiple Another, currently Senate co-president, had day after he turned 62. That’s when he quit and employee.” The designation remains even if assembled a pension of close to $100,000 a started collecting a pension of $48,777 – twice the employee returns to holding only one job. year by cobbling together salaried positions as much as his legislative pension would have To track down lawmakers building substantial as local attorney in seven towns and adding been, and $13,000 more than he earned while retirement packages we requested and received them to his Senate salary to generate a huge in office. a computer listing of all “multiple employees.” retirement package. The exercise identified many of the lawmakers That is a strategy called “tacking.” Essen- A primary issue who would figure prominently in the stories, tially, under New Jersey’s pension regulations, For a number of reasons, everything “fell but also showed a glaring gap in the state pen- lawmakers and any public employees who into place” last year to make the timing right sion records. work in more than one community can add for a story about pensions. No legislative pensions were included in up their separate salaries to form the “annual” The collapse of the stock market had the report. It turns out lawmakers are filed salary used to calculate pension benefits. deflated everyone’s 401(k) and retirement separately from other state employees in the In New Jersey, a public employee’s pension savings, making pensions a primary issue on pension record system, even though they are is generally determined by taking the average many people’s minds. enrolled in the standard Public Employees of the three highest-paid years on the job and The state’s pension system itself had Retirement System. multiplying that average salary by the number lost $27 billion in soured investments, a Our various false starts convinced us there of years worked, divided by 55. topic the paper had covered extensively. was only one proper way to get at the story. We Thus, higher salaries translate directly into And an unusual number of legislators – 22 asked for a complete copy of the state’s pen- higher retirement pay, no matter when the high- – were heading into retirement last year as a sion system database. That includes retirement est pay was earned. result of redistricting and changing political and salary records for about 700,000 teachers, In “tacking,” lawmakers must convince tides. Other longtime lawmakers were depart- government workers, police officers, firefight- local municipal officials to hire them as salaried ing cabinet posts and top state offices with the ers and judges. employees, thus generating a local salary that start of a new administration. Getting that required some negotiation. The can be used to bulk up their retirement awards. Against that backdrop, we set out last March database includes Social Security numbers and Twelve New Jersey lawmakers engaged in to compile a story about the retirement pack- other items deemed private by the state. tacking, including two who had assembled ages our departing lawmakers could expect. more than seven local jobs simultaneously to After about a week of initial reporting, it USEFUL WEB SITES amass huge retirement benefits. became clear that getting a good handle on At the same time, the law firm of John the benefits would not be simple. • The Web site of the National Conference Bennett, Senate co-president, collected fees For instance, when we submitted a list of the of State Legislatures, at www.ncsl.org, of several million dollars a year from the same names of the departing lawmakers for whom offers a state-by-state comparison of towns. After assembling the retirement infor- we were seeking pension benefits, we were pension provisions for state lawmakers. mation on our lawmakers, a round of interviews told the state could produce estimates only for You’ll find it under the Legislator Com- generated generally priceless quotes, including ex-lawmakers who had already asked to have pensation section of the site’s “about one from retired Sen. Joseph Bubba: “It just so their benefits calculated. legislators” section. happened that everything fell into place,” said About half had done so, and we quickly had Bubba, said when queried about his $48,777 reliable data for them. • Individual state Web sites, specifically a year pension. For the rest we were still in the dark. And their pension program sites, provide What fell into place for Bubba was this: He six of the outgoing lawmakers were moving further detail on pension programs for had been ousted in his own Republican primary into new state government jobs. The state comparison and ranking. in 1997, three years short of reaching the full data gave us no leads on how to estimate their retirement age of 62. retirement pay. • The National Conference on Public But as a lame duck he held a critical vote Others, who had served as local elected Employee Retirement Systems at that then-Gov. Christie Whitman needed to or appointed officials in addition to their www.ncpers.org. win passage of a plan to borrow $2.8 billion legislative terms, were difficult to track down to shore up the state pension system. Two days across the state’s fragmented computer record • A reasonable clearinghouse site is after losing his primary, Bubba postponed a system. through the public employees union, golf vacation in Reno, Nev., to visit Trenton, By this time, we had read and re-read the AFSCME. It has pension organization where he cast the deciding vote in favor of state’s pension rulebooks, so we were getting links at www.afscme.org/pension/ Whitman’s borrowing plan. familiar with the particulars of the pension ppanlink.htm He was then appointed by Whitman to system. One provision offered promise as a the newly created post of “customer service way to assemble a comprehensive work history

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Eventually we reached agree- This year alone the Ledger ������������������� ment on a database that included has run three front-page ��������� 13 fields, including name, job loca- retirement-related stories. One tion, service time, pension amount involved windfalls awarded to two (for retirees), current annual pay (for ex-lawmakers who retired after serv- ���������� active workers), average annual salary, date ing exactly one year on appointed state jobs of birth, and veteran or non-veteran status. – the exact amount of time needed to nearly The last item proved invaluable, since it is double their retirement pay. These unique seminars give journalists impossible to calculate a pension accurately As did the original stories, the follow-ups a jumpstart in computer-assisted without knowing whether a pensioner is a generated memorable quotes from those whose reporting techniques. Participants veteran and thus entitled to faster vesting and padded pensions were disclosed. are trained in how to acquire accrual rules. Lawyers had to come in to convince the electronic information, use spreadsheets If anybody don’t like it, that’s state we were entitled to dates of birth. That, and databases to analyze the also, proved an invaluable addition to the } too bad,” said former Sen. information and to translate that database. Lou Kosco, who turned a information into high-impact stories. Dates of birth enabled us to determine The National Institute of Computer- precisely when pension benefits would kick $30,000 legislative pension Assisted Reporting provides follow-up in. They also were irreplaceable in helping into a retirement package us identify lawmakers in multiple pension help when participants return to their systems and in identifying lawmakers with worth $54,500 with one news organizations. common names, like Jack Gibson, from a data- base that included numerous Jack Gibsons. year in an appointed Parole The last hurdle involved identifying the Board position. “Let them go retired lawmakers among the thousands of • Aug. 3-8 – Columbia, Mo. pension recipients. spend 33 years in office. ~ Once they are collecting benefits, lawmak- ers are not identified as anything except regular “If anybody don’t like it, that’s too bad,” employees in the database. Identifying former said former Sen. Lou Kosco, who turned a lawmakers required a tedious manual verifica- $30,000 legislative pension into a retirement ���������������������� tion process. package worth $54,500 with one year in an ������������������������ Ultimately we used legislative rosters of appointed Parole Board position. “Let them ����������������� former state lawmakers to identify those who go spend 33 years in office.” ��������������������� were among the pension recipients. We then Another follow-up involved plans – since used dates of birth to verify that the pension derailed – to award a Republican lawmaker “The workshop and the conference recipients were indeed the former lawmak- special pension considerations to induce him have convinced me that the ers. to leave the state Senate for a non-elected investigative reporting approach and post. That deal was significant because the techniques can be easily applied to Reward for service state Senate is currently evenly divided beat reporting and daily journalism.” Eventually we identified 142 former law- between 20 Democrats and 20 Republicans, – Afi-Odelia Scruggs, Professor of makers collecting state retirement checks. The and Democrats have been trying mightily to Journalism at Ohio Wesleyan University whole exercise of assembling the pension data coax a Republican out of office. cost about $2,000, which has proven money As that situation illustrates, retirement “Overall this is a wonderful seminar. well-spent. pay is more than a reward for service in the This is a great start for working with The original battery of stories prompted state Legislature. It’s also a currency among CAR for someone who came a flurry of letters and e-mails, and even lawmakers – a currency that can have pro- with no experience.” prompted legislation aimed at tightening up found influence on the fate of state policy – Anonymous (from seminar evaluation) the system. and politics. “Well worth the money!” And the database has proven useful in And that, ultimately, is the argument for – Anonymous (from seminar evaluation) identifying public employees at all levels of monitoring retirement pay. the state and local bureaucracy. In addition, the stories focused so much Dunstan McNichol covers pensions and other attention on retirement benefits that the issue state finance issues for The Star-Ledger of �������������������������������� has continued to generate stories as regularly Newark, N.J. He has been a daily newspaper �������������������� as any state beat. reporter for almost 25 years.

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pension fund was not some distant problem for have sent PERS into a spiral. Here’s what we PUBLIC RETIREMENTS the next generation but a real-time financial found: crisis for state and local governments – and, • PERS uses an accounting technique to push from page 21 ultimately, taxpayers and the pension fund’s the cost of investment losses off to future The pension fund’s board of directors made own members. years, helping to cloak the growing problem. the retirement system increasingly generous to PERS’s 295,000 members carry out some In early 2002, we found that, in real terms, workers and, in turn, increasingly expensive. of society’s toughest, most thankless jobs: PERS’s shortfall had jumped to $8.5 billion. And they did this while failing to put enough firefighters and teachers, health care workers By year’s end, we recalculated the number money aside for the rainy day Wall Street experts and prison guards, mental health specialists and found it had jumped to $15 billion. told them was inevitable. and police officers. An ample retirement is a • Most PERS members are offered a promise The PERS board did this for years in con- just reward for a public-sector career that often that their retirement accounts will grow 8 per- flict with PERS rules and state law. Where doesn’t pay all that well. cent a year, whether or not the pension fund’s were the watchdogs? The PERS board was But to pay for increasingly expensive investments have lost money. This incredible dominated by pension fund members. State pensions, the payroll charges PERS levies on guarantee costs billions each year – billions lawmakers – who had long ago voted them- government agencies are set to jump by an the PERS board failed to set aside to protect selves special pension treatment – had no astonishing 40 percent this year. That means against hard financial times. incentive to challenge the status quo. less money for public services. In some cases, • Oregon lawmakers designed PERS to provide Our reporting found warnings had been it has meant layoffs of the very public employ- career employees with 60 percent to 70 per- ignored. In 1995, one worried state investment ees PERS is supposed to help. cent of their final salary at retirement. Thanks official asked the pension fund’s actuary what I didn’t know any of this in the fall of 2001, in part to the ad hoc hikes in pensions by the would happen if the stock market suddenly when I started looking into reports of problems PERS board, these career employees last year turned sour. with PERS’s computer system. I switched my retired – on average – with pension checks “There is something to fall back on,” the focus after tips from sources told me that the 105 percent of their final salary. actuary replied. “And it is the taxpayer.” bigger story was with how the pension fund • The board also increases retirees’ checks by That reply, captured on a long-forgotten was being run. ignoring changes in life expectancy. The life- tape from an obscure public meeting, rose The Oregonian’s stories, written by Kim expectancy tables PERS uses to set pension like a ghost. It helped show readers that the Christensen and me, showed an array of forces checks date to 1978, when people did not live Ross William Hamilton The Oregonian The Hamilton William Ross

Sherman County Sheriff Brad Lohrey makes a traffic stop in Moro, Ore. Lohrey spends much of his time on patrol these days because his department can’t afford to fill a vacant deputy position. The rising cost of the state’s Public Employees Retirement System is a major reason the department is short.

30 THE IRE JOURNAL JULY/AUGUST 2003 31 C O V E R S T O R Y FEATURES

as long as they do now. As a result, retirees’ • Study the rules. State law and “defined-benefit” plans, those pension checks keep coming an average of PERS’s own rules spelled out for which the pension fund four years after PERS runs out of money to how the pension board was to must have enough cash to pay cover them. handle investment gains — rules out future pension checks based • Lawmakers made changes to PERS without the board routinely ignored. In one on a worker’s final salary or some regard to the future costs. For example, we case, board members, knowing their actions other formula. found lawmakers had settled a billion-dollar violated their own guidelines, simply rewrote Either way, they can fall behind or face tax case on the back of the pension fund. the rules. unforeseen jumps in costs. (One organization Without adequate reserves, PERS couldn’t • Ask outside experts. The actuaries and that can help you compare the health of pen- absorb the costs and increased the burden on other consultants hired by pension systems sion funds is the Public Pension Coordinating government agencies. to provide official reports may be honest, Council, http://ppcc.grsnet.com.) Oregon’s pension system is unique in many but they also have an incentive to deliver Our stories helped clarify the debate over ways. But a few of the lessons we learned are news the pension system wants to hear. Find PERS. Oregon’s chronically gridlocked legis- standard strategies for any effective investi- actuaries who have no stake in the pension lature is now moving fast to fix problems. gative project. fund to help you learn the jargon and find the Oregon’s new governor, a Democrat and • Listen to the naysayers. Not everyone turned warning signs. former labor lawyer, might have been the last their backs on PERS’s problems. Some board One warning sign we tracked was PERS’s politician to go along with changing PERS. members and other state officials tried to shortfall, called the “unfunded actuarial liabil- During his campaign, he had pronounced it a draw attention to the looming problem with ity.” This shortfall is the difference between model pension fund. PERS years ago. But with the stock market how much money the fund has today compared But three days after taking office, he told booming, few listened. Take time to hear out to what it will need in the future. If the shortfall Oregonians he saw a new reality and called people whose views seem out of step at the is growing, the pension plan is going to need for sweeping reform. moment; they could be right tomorrow. more money to keep pace. “We need a new retirement system,” the • Trace the system’s legislative history. Over Some plans don’t have problems with governor said. “PERS as we know it is over.” the years the Oregon legislature had sweet- shortfalls: so-called “defined-contribution” ened the pension system for workers while retirement systems work like 401(k) plans, Brent Walth is a senior reporter, member of The earlier efforts at reform had sputtered under giving back to workers only what was put in. Oregonian’s investigative team and part of a lobbying pressure from unions. But a shortfall can be a problem for 2001 Pulitzer-winning team. ������������������������� ����������������������������������� Investigative Reporters and Editors Inc. and the Society of Professional Journalists, with funding from the Sigma Delta Chi Foundation, have joined forces to offer a series of workshops focused on doing investigative reporting while covering a beat.

The workshops, specifically for journalists at small- to medium-sized news organizations and those in bureaus of larger organizations, will emphasize the use of freedom-of-information laws and address juggling a beat while producing investigative and enterprise pieces.

“You’ll learn enough in the first 15 minutes to keep you busy for a month.” Kevin McGrath, The Wichita Eagle

Workshops are scheduled for: Oct. 4 – Eugene, Ore. Oct. 25 – State College, Pa. Sept.11 – Tampa, Fla.

For more information, visit www.ire.org/training/betterwatchdog

To request a workshop for your area, contact Executive Director Brant Houston at [email protected].

32 THE IRE JOURNAL JULY/AUGUST 2003 33 C O V E R S T O R Y FEATURES

money into the state. No one had questioned the Guard’s record before, because it was a long-standing military NATIONAL organization. The military runaround With my editor’s blessing, I headed off to GUARD the state library in Harrisburg and obtained copies of 50 years worth of bi-annual adjutant Close look finds generals’ reports. Those reports gave me a glimpse of the poor training, organization as seen through the eyes of those unloaded guns responsible for running it. As I leafed through the reports, which are meant to apprise the BY SHARON SMITH governor of the Guard’s activities, I was able to YORK (PA.) DAILY RECORD come up with a list of 20 previous missions. The reports also gave me a little back- ground on the organization’s structure and any investigative pieces start Before I could answer that question, I had to mission. The Guard is essentially owned by with a phone call from a source, get to know the Pennsylvania National Guard. the state, funded with federal dollars and can providing a juicy tip about I found little or next to nothing in our paper’s be loaned to the federal government. some sort of wrongdoing or library system about the Guard. I searched With that information and the list of 20 mis- Mcorruption. the Internet and had our librarian run a Lexis- sions, including the Guard’s response to the Others, like “Changing of the Guard,” Nexis search to see what other Pennsylvania partial meltdown at Three Mile Island, I sent begin with a simple question. The question papers had written on the organization. out 20 Freedom of Information Act requests posed by my editor, Rob Walters: “Do we have Other than the feel-good, patriotic stories seeking after-action/lessons-learned reports. a Guard that learns from its mistakes?” on guardsmen being sent off on a mission or Initially, I sent the requests to Fort Indian- It’s a simple question. We thought, perhaps returning from one, I found nothing. Penn- town Gap, where the Pennsylvania National naively, that we could get a straightforward sylvania has the largest National Guard in Guard has its headquarters. I was told by the answer. the country, and it had virtually received no FOIA officer there that I would need to send As a reporter in a town that is known more scrutiny from the press or those in the state the requests to the National Guard Bureau in for its manufacturing of Harley-Davidsons Legislature. The Guard, after all, is made up Virginia. The bureau is responsible for doling than its military presence, I had my work cut of civilian part-time soldiers, called upon in out the federal money to the 54 Guard units out for me. I knew very little about covering times of crisis. throughout the country. the military. The Guard also brings huge sums of federal There, I was told, the bureau does not really maintain those records. My requests got bounced back to Fort Indiantown Gap, where they languished for months. It became clear that answering my editor’s question would be a lot harder than either he or I imagined. Unloaded weapons

Paul Kuehnel York Daily Record Daily York Kuehnel Paul With a September publication date carved out on the budget, I had to move on. That initial question got tweaked to “Do we have a Guard that is up to the challenges of a post- 9/11 world?” To answer this question, I would have to do more than look through adjutant general reports and send out FOI requests for after- action reports. I had to go to Fort Indiantown Gap. I had to get to know the National Guard and the men and women who make up the organization. I Pennsylvania Army National Guard troops receive a hero’s send-off as they march through York. CONTINUED ON PAGE 37 ×

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veteran police reporter who covered the Green River killings at the height of that investigation in the 1980s, did initial interviews and wrote a MISSING proposal for what was then known as the “Miss- ing Women” project. Early on, the idea didn’t get much attention. PERSONS As it wasn’t organic – spun off of news or out of beat reporting – other news took precedence. Ignored reports, disorganization But soon, the idea began to gather steam – thanks largely to a break in the longest unsolved keep police from solving cases serial killing investigation in America.

BY LEWIS KAMB Unsolved homicides SEATTLE POST-INTELLIGENCER In November 2001, investigators arrested a Seattle-area truck painter who was charged in connection with four of the 49 murders attrib- ometimes they’re called “the less dead” the nut-graph of a 10-part series: uted to the Green River killer. – the teenage runaways, prostitutes and “Because of ignorance, indifference or Now, the project had a news peg. Wright drug users who simply disappear with- poor training, police officers in Washington sent a public disclosure request to police agen- out police giving them a second thought. state – and around the nation – routinely fail cies statewide. The request was simple: all case SOften, authorities refuse to even accept a report to take even the most obvious steps, conduct reports on all open missing persons and unsolved if anyone tries to file one. routine follow-ups or comply with the law when homicide cases for the past 20 years. In a region that has been home to some of handling missing persons cases. By the end of March, we had a good-sized the most infamous serial killers of modern time, “As a result, bodies remain unidentified, stack of reports and I was shifted from the authorities should know better than to ignore families are left without answers and killers Seattle police beat to analyze them. While we missing person reports. get away with murder.” had a theory in mind, I had to find out what the The Seattle Post-Intelligencer found that By then, the words came easy – I’d taken a reports really told us – and dog agencies that they don’t know better. yearlong crash course in how missing persons hadn’t responded to our request. After working months on an investigation, investigations work. I was surprised to find out Under Washington law, police are not I sat down to write the lines that would become that the time my colleagues and I spent learning required to release information for “open” cases. about such cases far exceeds the training that Although several agencies gladly sent reports, most cops get. feeling that any publicity could help close cold cases, others resisted. Women at risk It took another three months of phone calls The P-I “Without a Trace” project began and constant pestering to convince many agen- in the fall of 2001, when assistant metro editor cies to send us their records. James G. Wright proposed an in-depth look As the reports came in, the project’s theme at the connection between serial killers and broadened. I began to see patterns in the way the way authorities disregard missing persons police handled all missing persons reports, and reports. not just those regarding women. At the time, there had been no arrests in the In cases of all kinds – from juvenile run- Gilbert W. Arias Seattle Post-Intelligencer Seattle Arias W. Gilbert long unsolved Green River killings and a new aways to likely abductions to disappearances string of unsolved disappearances of women in with telltale signs of foul play – police often put Vancouver, B.C., was making fresh headlines. little or no effort into an investigation. Wright theorized that we might be able to spot In some cases, reports indicated that people patterns in missing persons reports that are com- had tried several times to report a loved one monly overlooked by police. missing before they found an agency willing to His gut feeling was that police often ignored take a report. Others showed that departments the disappearances of “at-risk” women and routinely purge reports without follow-up, or killers seized on such indifference to avoid failed to enter or delete them from state or detection. national databases designed to link the missing At the very least, he told me, we’d be able to the unidentified dead. to provide readers with the most complete Calls to agencies showed chronic poor record Robinette Struckel, an autopsy technician with the King County medical examiner’s office, prepares an look ever of missing women’s cases in the keeping and indifference. Some departments unidentified skull for X-rays before being examined Northwest. said they simply couldn’t find reports because by a forsenic anthropologist. Wright and P-I reporter Mike Barber, a their computer systems weren’t programmed

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to do so, or that the records had been lost or TEN USEFUL TIPS destroyed. The paper’s computer-assisted reporting 1. Take a personal approach with police 6. Update your data. expert, Lise Olsen, started building a database departments. We obtained a state missing persons database in June with the reports we’d received. I hit the road to interview forensics experts and We cited public records law in our initial letter in June to compare against our records. This investigators – and found the key data and seeking missing persons reports across Wash- helped us spot flaws in the system and frame case examples we needed to prove how bad the ington. That rankled some agencies and stalled stories. Because the number of missing people system really is. us from receiving the information we wanted. is constantly changing, we went back to the Personal calls to departments first would have state for a current list six months later to update Unidentified dead served us better. If you can get what you want our lists and make sure the data wasn’t stale. Through interviews and research on state without filing a request, do it. and federal missing persons laws, I found out 7. Never assume the data is correct. what’s expected of police once a person has been 2. Know alternate sources for information. Always double-check the “official” record and reported missing. Several departments said they had no way to never assume the database is correct. This Police immediately must accept all reports of missing and runaway children, regardless of find cases to help them pull reports we wanted approach saved us in at least one instance circumstance. because of their primitive computer systems. I when the state’s database showed that police While there are no such laws for missing told them the state had a master list of missing had failed to obtain records for a missing adults, guidelines for the FBI’s National Crime persons cases they could consult. For homicide person while the department’s own case file Information Center computer – a sort of com- cases, I suggested they look through their proved that it did. puter filing cabinet of law enforcement records annual reports to FBI’s Uniform Crime Report. that links police agencies nationwide – recom- The suggestions often helped them locate the 8. Research the law, not just the practice. mend police accept cases meeting certain crite- reports we needed. Searching Westlaw – even pulling the congres- ria, and enter them into the national system. sional record – alerted me to little known laws Those cases include people who are disabled, 3. Make yourself inevitable. are believed to have vanished because of foul and their intent, plus histories about prob- play, or are otherwise endangered. Give agencies time to respond to record lems with missing persons investigations and For anyone who remains missing 30 days or requests, but don’t let them off the hook. Sev- tracking systems. This basic research helped more, state law requires police to obtain dental eral departments that initially refused to give me understand what’s expected of police, to records, if available, and send them to a state us their reports because the law says they didn’t identify sources and add context to stories. repository. A similar federal law requires all have to, ultimately relented. They should know Even though there are policies requiring states to have such a requirement for anyone you aren’t going to go away. Consistent phone police action, don’t assume that they always missing for at least 60 days. calls and personal contact work wonders. follow the policies. Like most states, Washington operates its own statewide crime information system based 4. Read the original case files at the police 9. Look for audits and academic papers. on NCIC. Both state and national systems hold records of unidentified bodies. department. State and federal agencies audit local police Many state police agencies or attorneys gen- You’ll find more compelling details for both sto- use of the NCIC database. We obtained seven eral that operate missing and unidentified per- ries and graphics if you do. I gathered crucial audits covering 14 years, which helped us sons repositories also maintain a more detailed details for several of the project’s main stories better understand the missing persons list of unidentified dead. The Washington State this way. Even police agencies that are coopera- systems. Academic papers by experts often Patrol is no different. tive may not photocopy and send everything in clearly outline problems in the system that go Through public disclosure requests, I a file. A way to convince police is to say you’ll be unnoticed by the general public. obtained both state databases. saving them time from having to make copies The missing persons database, which you can do yourself. 10. Fend off editors with progress reports. includes victim names, report dates and agencies Take time to write a weekly update of what handling the cases, was crucial for comparing the data we’d collected from local police reports. 5. Get organized early – and stay that way. you’ve found so far, and what you’re going We found major discrepancies. Create individual case files for each department after. Editors like to know what you’re up to, Local police agencies often hadn’t entered to save time tracking down reports when writ- and sharing tidbits about your findings helps their reports into the system, and couldn’t ing, and use a spreadsheet program to monitor keep them on board and willing to give you account for more than 100 people on the state’s what reports have been received, which ones the time to pursue more. The memos also help list. are still needed and who your primary contacts organize your reporting. We also surveyed every county medical are for each department. examiner and coroner in Washington about

34 THE IRE JOURNAL JULY/AUGUST 2003 35 FEATURES FEATURES

ing persons that matched the corpse. Without knowing the victim’s identity, the county sheriff investigating the case had little to go on. It took nearly 17 months to identify the corpse as Michelle Vick, done so only after a detective in far-off Spokane became inter- ested in the case while searching for possible victims of a known serial killer. He compiled a list of several missing persons cases, and win-

Gilbert W. Arias Seattle Post-Intelligencer Seattle Arias W. Gilbert nowed them down one by one until he came to Michelle’s runaway report. By then, the young man who police now say is their lone suspect in Vick’s killing – a convicted child rapist she was dating – had fled to Mexico. Had police followed state law and retrieved Michelle’s dental records, a near instant match would have allowed a homicide investigation to start when the suspect was still around. We found the lack of follow-up in the Vick John Dazell, chief deputy with the Grant County Sheriff’s Department, walks to the spot where hunters found the body of Michelle Vick. case was common. By using the state’s missing persons database, which included a field for each unidentified bodies, and compared those records files simply doesn’t work and hasn’t since it was case telling whether police had tracked down to the state’s list. We found that at least 18 cases established 20 years ago. Even perfect matches dental records, we were able to show that were not on the list, and that records for several between dental records of the dead and those authorities fail to comply with the state law in – as well as a few bodies – had been lost. of the missing won’t produce a correct hit in more than 60 percent of all cases. Lost reports or ones never entered into state the NCIC computer. What’s more, I found that Such failures may mean that the 100 or or national tracking systems diminish the likeli- experts have known about the system’s failures so unidentified bodies in Washington State, hood that a person who disappears one place and for years. which include many homicide victims, could winds up dead in another will ever be identified Washington, California and Maryland are the be identified if police did not routinely ignore because police lack access to the records needed only states that have recognized the problem and the state law. to establish a link. have implemented their own statewide dental Even so, Washington is a national leader in Even if they did have access to all the search programs that consistently match the obtaining such records. Through FBI statistics, records, we discovered, it didn’t necessarily missing and dead, which makes requirements we found that police only obtain such records make for a match: We also found major flaws for police to obtain dental records that much in about 4 percent of missing persons cases in how the national tracking system works. more important. nationwide. When missing persons or unidentified body Knowing about that law during my initial cases are entered in NCIC, the computer auto- interviews, I learned of a case that would Cases solved matically cross-searches the files looking for become the prime example of what bad things With the Vick case as a good starting point links, then notifies local agencies of potential can happen when police blow off missing per- for our project, we drafted tentative budget lines matches. The search is based on matching sons cases. in August 2002. Barber, Olsen and I divided up physical characteristics, which often may only the stories. be bones and teeth. Colossal blunder We initially conceived a five-part series But the system’s comparison search of Fourteen-year-old Michelle Vick ran away using Michelle’s case as the overview. We dental records between the missing and dead from her home in a small Eastern Washington wanted to put a face on the problems up front, farm town in June 1998. Her mother reported with a strong narrative that proved our key CAR WORK her missing to local police, who immediately points and drew readers in. Lise Olsen offers more on the computer- entered the report in state and national comput- In addition to our stories showing flaws in assisted reporting techniques used ers, as is required by federal law. the system, we compiled the first-ever compre- in this story in the May-June issue of But that was nearly all they did. Their failure hensive list of more than 40 modern day serial Uplink, the newsletter of the National to track down her dental records and forward killers in Washington with a timeline of their them to the state proved a colossal blunder. crimes; created a graphic detailing all unidenti- Institute for Computer-Assisted Report- Four months later, when hunters found fied dead cases in the state; and complemented ing. To subscribe, visit www.ire.org/store/ human remains just 37 miles from Michelle’s our print coverage with an online searchable periodicals.html or call 573-882-2042. hometown, investigators searched the state’s database of more than 700 people reported miss- repository of dental records and found no miss- ing in Washington for a year or more.

36 THE IRE JOURNAL JULY/AUGUST 2003 37 FEATURES FEATURES

With most of our stories completed by Janu- ary 2003, we looked to verify our findings. We National guard obtained a more recent version of the state’s led to the revelation that guard members were CONTINUED FROM PAGE 33 missing persons database to ensure that cases patrolling the plants with unloaded M-16s. were still active. started off small, writing stories about upcom- As a matter of public safety, we published We also presented a synopsis of our major ing missions to Bosnia and members returning that story right away. findings to several forensics experts and inves- from Kosovo. I even wrote a story about an By September, I still hadn’t received those tigators without revealing actual stories. Their endangered butterfly that called the military after-action reports. But, I could answer my feedback supported our key findings, and we base home. editor’s question about whether the Pennsyl- knew we weren’t off base. As I developed insight into the organiza- vania National Guard was up to the challenges At the last minute, it was decided that we tion and sources within it, I continued to of today’s world. should parcel the stories over 10 days to avoid research the Guard. I searched for lawsuits, I Those answers are as follows: overloading readers with too much information requested liability claims, I pored through bud- From Oct. 1, 2001, to Aug. 8, of 2002, the each day. After a few rewrites to add context to gets, I sent more FOI requests to the National Pennsylvania Army National Guard granted stories initially planned as sidebars, we were Guard Bureau. Those requests were met with 547 waivers for new recruits. Only eight other ready to roll. hostility on the part of the FOIA officer, who units handed out more waivers. A waiver Even before the series was published, police claimed that most of the information I sought means a new recruit is getting a break on one departments saw us coming and began looking was either classified because of heightened of the Guard’s own requirements to join. at long-ignored cases. Several agencies “solved” national security or because those requests A quarter of the Pennsylvania Army more than 150 of them by locating people still should be made directly to the Pennsylvania National Guard soldiers are not trained in listed as missing. National Guard. their specific military jobs. The state’s largest police agency, the Seattle Although the National Guard Bureau doles In 1997, the Pennsylvania Army National Police Department, overhauled its missing per- out the federal money to Guard units, it has no Guard’s readiness levels were on the decline, sons system by creating a new computer pro- authority over those units. so a senior Guard leader suspended the physi- gram to better track cases and by assigning an I was a month or two into my project, and cal fitness program for full-time guardsmen. aggressive detective to screen all case reports. I was no closer to answering those questions The program was reinstated, but the official As the series unfolded, more results came. than when I began. I turned to the Internet violated U.S. Army regulations. Two unidentified bodies have been identi- again. This time, I found a series that ran in The The Guard was unarmed at the state’s fied in the wake of our reporting, and a third Indianapolis Star about a recruiting scandal airports and its five nuclear power plants, unidentified body case in Florida is now being in that state’s National Guard. I printed out including Three Mile Island, the site of the compared through DNA tests to a missing the series, and I called Bill Theobald, the Star worst nuclear disaster in American history and Washington man. reporter who covered the scandal. the subject of several threats since 9/11. Officers from several departments statewide A 30-minute conversation with him proved – including the police chief in Michelle Vick’s to be invaluable. Theobald offered key tips Results home town – have said that they now see flaws in on who at the Guard Bureau was helpful and After the paper first reported in May that the their departments that they’ll work to correct. to look at the Guard’s own regulations. The Guard was carrying unloaded weapons at the State law enforcement officials are research- military has a regulation for almost every- nuclear power plants, Mike Veon, a Democrat ing ways to improve investigations and at least thing, including the types of information it in the state House, fought to have the arming one lawmaker has said he will introduce legisla- must release. orders changed. A resolution was introduced, tion next year to create a statewide policy for After I got off the phone with Theobald, I urging the governor to change the orders. It missing persons investigations. A Washington called the National Guard Bureau and asked passed unanimously. congressman also vows to find funding for a for recruitment and waiver figures for all 54 After months of haggling with the Penn- more modern national system to aid missing Guard units, in Excel format. I asked for sylvania Army National Guard about the 20 persons and death investigations. military occupation specialty numbers for after-action reports, we have finally received But perhaps more important was the response all 54 units, again in Excel. I then sent FOI a handful of those reports and are now in the from the families and friends of the missing and requests to the Army and Air Force’s Inspector process of reporting on them. We continue to murdered, who bombarded us with calls, e-mails General’s offices asking for information on the doggedly pursue the rest and make requests for – and other story ideas. Pennsylvania National Guard’s leadership. other reports that critique our National Guard’s Most of their comments held a common As I made my requests, I continued to performance. refrain: We thought no one cared, they said. interview Guard members and former mem- Now, maybe someone finally will. bers, including a former adjutant general Sharon Smith is an investigative reporter for and inspector general for the Pennsylvania the York Daily Record. Prior to that she was a Lewis Kamb is a reporter for the Seattle Post- National Guard. business writer for the York Daily Record. She Intelligencer. In his three years at the P-I, he What started out as an innocuous interview also has covered the police and courts for the has covered suburban news and criminal justice about the Pennsylvania National Guard’s mis- Express-Times in Easton, Pa., and the Times- issues, and now covers Indian affairs. sion at the state’s five nuclear power plants News in Burlington, N.C.

36 THE IRE JOURNAL JULY/AUGUST 2003 37 FEATURES DATABASE UPDATE Member News

Death records database CONTINUED FROM PAGE 5 story, “The Death of Jim Lankford.” The work added to data library of school consolidation. Eyre and Finn were exposed the mistakes of the local sheriff’s The IRE and NICAR Database Library selected out of the 2002 National Awards department in investigating an apparent recently added a database of every recorded for Education Reporting first-prize winners. suicide and led to a new investigation into death in the United States since 1988 to its government database collection.  Tom Farrey of ESPN.com won the national the case.  Gayle Reaves of Fort Worth Weekly The Centers for Disease Control Mortality, Emmy award for Outstanding Sports Journal- won an Alternative Newsweekly Award in Multiple Cause-of-Death database arrives as ism for his work on the pieces “Blood on the Business Reporting (circulation more than the public is becoming increasingly aware of Rings” and “Eligibility for Sale.”  David 50,000) for “Accounting for Anguish.” The the risks associated with obesity. A study pub- lished in The New England Journal of Medicine Griner has moved from The (Fort Wayne, article tells the story of a WorldCom analyst reports that being overweight increases the risk Ind.) Journal Gazette, where he was a city who refused to carry out improper account- for death associated with cancer. The mortality hall reporter and political columnist, to The ing policies – a refusal that cost him his job data shows that in 2000, more than 1,000 people Union in Grass Valley, Calif., where he is the two months later.  Tom Robbins of The Vil- died in the United States due to causes directly city editor.  Joe Jordan, an investigative lage Voice won an Alternative Newsweekly related to obesity. Journalists can use this database to track and political reporter with KM3 News-Omaha, Award in Investigative Reporting (circula- many diseases and other health issues, such received a USC Annenberg Walter Cronkite tion more than 50,000) for “The Lush Life as infectious disease and cancer, within their Award for Excellence in Television Political of a Rudy Appointee: Russell Harding.” The state or community. The data consist of detailed Journalism. Jordan exposed efforts by Pfizer story revealed the virtual nonstop spending information about each death compiled from death certificates. Geographic information is to influence state and federal elections with of a top aide to former New York Mayor Rudy complete for metropolitan areas with popula- a TV commercial paid for by Pfizer that fea- Giuliani – a spree for which taxpayers picked tions of 100,000 or more. tured a congressional candidate promoting up the tab.  Laure Quinlivan of WCPO- For more information about this database go a prescription drug card for senior citizens. Cincinnati received a USC Annenberg Walter to www.ire.org/datalibrary/databases/health.  To order data, call 573-884-7711 or down- Eric Longabardi, an independent producer Cronkite Award for Excellence in Television load an order form at www.ire.org/datalibrary/ with TeleMedia News-Los Angeles, covered Political Journalism for exposing a case of orderform. the Pentagon/National Security beat for Fox party leaders trying to limit voters’ choice by News Channel in Washington during the war hand-picking candidates and intimidating Historical data offers in Iraq. He is currently writing his first investi- others from running for office.  George context to fed contracts gative book, which will give the inside story of Schwarz has left the Los Alamos Monitor, The IRE and NICAR Database Library now has records of federal contracts since 1979 avail- the Pentagon’s secret biological and chemi- where he covered county government, to able in its government database collection. cal testing.  Chris Lydgate, assistant news join the staff of the Amarillo Globe-News as NICAR’s addition of historical federal con- editor of Willamette Week in Portland, has medical and health reporter.  Mark Skertic tract data adds decades worth of data, covering been awarded a Knight-Wallace Fellowship has left the Chicago Sun-Times, where he was a 1979-2002. Previously, NICAR’s earliest year at the University of Michigan for the 2003-04 projects reporter, to join the Chicago Tribune, was 1992. By going back that far, a journalist can track contracts during the early history of the academic year. Lydgate’s area of study will be where he covers banking and insurance. space shuttle program, review the waning years emerging diseases and syndromes.  Vince of the Cold War, cover five administrations, wit- Patton, an environmental reporter at KGW- Passed Away: ness the rise of federal dollars for companies like Portland, has been awarded a Knight-Wallace E.L. Gold, a reporter for Kentucky New Era, Microsoft, and more. The database lists almost all federal contracts worth more than $25,000 Fellowship at the University of Michigan for died April 19, 2003. At the New Era, Gold and includes the amount, name and location the 2003-04 academic year. Patton’s area of was the self-taught in-house expert on com- of the company, the agency, the type of work, study will be Native Americans and environ- puter-assisted reporting, and he won several where the work was performed, and more. mental law.  Andy Pearson of KTHV-Little Kentucky Press Association awards for his For even more details, www.ire.org/ Rock received a first-place regional Edward datalibrary/databases/fedcontacts/. reporting. He was a recent small-news orga- To order data, call 573-884-7711 or down- R. Murrow award for Investigative Reporting nization fellowship winner to IRE’s Annual load an order form at www.ire.org/datalibrary/ and a first-place Arkansas AP award for his Computer-Assisted Reporting Conference. orderform.

38 THE IRE JOURNAL JULY/AUGUST 2003 39 FEATURES IRE SERVICES FOI report INVESTIGATIVE REPORTERS AND EDITORS, INC. is a grassroots nonprofit organization CONTINUED FROM PAGE 13 dedicated to improving the quality of investigative reporting within the field of journal- their newsgathering. In the case of the Roanoke ism. IRE was formed in 1975 with the intent of creating a networking tool and a forum in fire, reporters were able to get information from which journalists from across the country could raise questions and exchange ideas. IRE neighbors. Brooks was able to get monkeypox provides educational services to reporters, editors and others interested in investigative information by contacting local veterinarians. reporting and works to maintain high professional standards. The best thing journalists can do is educate Programs and Services: themselves about this new law so they know IRE RESOURCE CENTER – A rich reserve of print and broadcast stories, tipsheets and guides to help when something truly may be withheld under you start and complete the best work of your career. This unique library is the starting point of any the law or when an agency is just crying HIPAA piece you’re working on. You can search through abstracts of more than 19,000 investigative reporting as an excuse to not release information. stories through our Web site. The Department of Health and Human Ser- Contact: Carolyn Edds, [email protected], 573-882-3364 vices Office of Civil Rights has an online guide to HIPAA at www.hhs.gov/ocr/hipaa. DATABASE LIBRARY – Administered by IRE and the National Institute for Computer-Assisted Reporting. Last summer, the Reporters Committee for The library has copies of many government databases, and makes them available to news organizations Freedom of the Press produced a guide to help at or below actual cost. Analysis services are available on these databases, as is help in deciphering journalists understand the new medical privacy records you obtain yourself. regulation. The guide is online at www.rcfp.org/ Contact: Jeff Porter, [email protected], 573-882-1982 pullouts/medicalprivacy. For the Reporters Com- CAMPAIGN FINANCE INFORMATION CENTER – Administered by IRE and the National Institute for mittee comments on the law, go to: www.rcfp.org/ Computer-Assisted Reporting. It’s dedicated to helping journalists uncover the campaign money news/documents/medprivacy.html trail. State campaign finance data is collected from across the nation, cleaned and made available to The Minimum Necessary Standard journalists. A search engine allows reporters to track political cash flow across several states in federal (from federal guidelines) and state races. The minimum necessary standard, a key Contact: Brant Houston, [email protected], 573-882-2042 protection of the HIPAA Privacy Rule, requires ON-THE-ROAD TRAINING – As a top promoter of journalism education, IRE offers loads of train- healthcare entities to limit unnecessary or ing opportunities throughout the year. Possibilities range from national conferences and regional inappropriate access to and disclosure of workshops to weeklong boot camps and on-site newsroom training. Costs are on a sliding scale and protected health information. The Privacy fellowships are available to many of the events. Contact: Ron Nixon, [email protected], 573-882-2042 Rule’s requirements for minimum neces- sary are designed to be sufficiently flexible Publications to accommodate the various circumstances THE IRE JOURNAL – Published six times a year. Contains journalist profiles, how-to stories, reviews, of any covered entity. investigative ideas and backgrounding tips. The Journal also provides members with the latest news The minimum necessary standard does on upcoming events and training opportunities from IRE and NICAR. not apply to the following: Contact: Len Bruzzese, [email protected], 573-882-2042 • Disclosures to or requests by a health care UPLINK – Newsletter by IRE and NICAR on computer-assisted reporting. Published six times a year. provider for treatment purposes. Often, Uplink stories are written after reporters have had particular success using data to investigate • Disclosures to the individual who is the stories. The columns include valuable information on advanced database techniques as well as success subject of the information. stories written by newly trained CAR reporters. Contact: Jeff Porter, [email protected], 573-884-7711 • Uses or disclosures made pursuant to an individual’s authorization. REPORTER.ORG – A collection of Web-based resources for journalists, journalism educators and others. • Uses or disclosures required for compliance Discounted Web hosting and services such as mailing list management and site development are with the Health Insurance Portability and provided to other nonprofit journalism organizations. Accountability Act (HIPAA) Administrative Contact: Ted Peterson, [email protected], 573-884-7321 Simplification Rules. For information on: • Disclosures to the Department of Health ADVERTISING – Pia Christensen, [email protected], 573-884-2175 and Human Services (HHS) when disclosure MEMBERSHIP AND SUBSCRIPTIONS – John Green, [email protected], 573-882-2772 of information is required under the Privacy CONFERENCES AND BOOT CAMPS – Ev Ruch-Graham, [email protected], 573-882-8969 Rule for enforcement purposes. LISTSERVS – Ted Peterson, [email protected], 573-884-7321 • Uses or disclosures that are required by Mailing Address: other law. IRE, 138 Neff Annex, Missouri School of Journalism, Columbia, MO 65211

38 THE IRE JOURNAL JULY/AUGUST 2003 39