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Rosland Gammon

Rosland Gammon is a former business journalist turned college instructor. Her newsroom experience includes reporting for The Philadelphia Inquirer, and reporting and editing at Bloomberg News. Gammon currently teaches communications at Alverno College in Milwaukee. Follow her daily posts. | E-mail: Rosland Gammon

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B&S Gold winners: Tracking charities that spend more on donation solicitors than people in need

The sensational story of a sham charity operator using a stolen identity and dodging an FBI warrant led to a 2010 Tampa Bay Times’ series. It also prompted a closer look at how much charities actually spend on people in need.

Reporters Kris Hundley at the Times and Kendall Taggart at the Center for Investigative Reporting (CIR) looked at payments non-profit charities made to for-profit fundraising companies as one indicator of how much money went to people in need. Using tax filings and public records for a 10-year period, Kris and Kendall found the 50 worst charities raised $1.35 billion and gave $1 billion of that to fundraisers.

For their work, Kris and Kendall are this year’s winners of the gold Barlett and Steele Award for Investigative Business Journalism.

“We followed the money to see where it got plugged up in the system. Most of it stopped at the fundraiser,” Kris says. “We were shocked when we added up the dollar figures.”

The findings helped create an interactive national database of the 50 worst charities and an ongoing “America’s Worst Charities” series. Reporters looked at 10 years of data to make stronger claims about the groups and their practices, Kendall says. In a sidebar about the methodology, the reporters say their data focuses on charities that paid fundraisers a large portion of  donations in at least 75 percent of all campaigns over the years.
America's worst charities
Looking back 10 years posed some challenges. Some news stories they needed weren’t available online so they had to find them the old-fashioned way: in the morgue. Kendall says they dug through news clippings in the basement of the Kansas City Star.

Kris and Kendall, who is based in California, worked in their separate offices when they weren’t travelling together to interview charity operators, donors and experts. Having a partner during the yearlong process was valuable, Kris says.

“When one of us got stuck in a rabbit hole we couldn’t get out of, we had somebody to call,” Kris says. “We did go down a lot of holes that yielded nothing and sometimes we hit oil.”

To manage all of the information, Kendall says they created a spreadsheet with their tentative findings such as cracks in the regulatory system on the top row. They entered information that supported those findings under those headings.

“That helped us track and synthesize what we were finding before we were able to sit down and write about it,” Kendall says.

Kris suggests establishing an organization strategy early. She also says to record dates of emails and calls to show a history of trying to reach people.

Kris says she did not expect the series to have such an impact. There have been regulatory changes, investigations and more scrutiny placed on charities, particularly the ones that made the Times’ list.

A greater impact has been providing a resource for regular people, Kendall says. For instance, an elderly man without Internet access heard her on an NPR segment about the series, she says. He later called and asked her to mail him the list of the 50 worst charities so he could avoid them. Kendall says he’d called the public library to get her phone number.

 For more tips from Kris and Kendall, view their slideshow from an Investigative Reporters and Editors presentation

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B&S Bronze winner: WSJ exposes insider trades, regulatory loopholes

The Wall Street Journal jumped into the murky world of insider trading to see how executives traded their companies’ stock.

A database they created using information from an eight-year period showed more than 1,000 executives earned big profits or avoided losses when they traded before company news releases.

“It‘s an area that involved an accepted practice,” Susan says. “There are times when you should question accepted practices.”

Michael says the Journal had been reporting about new kinds of insider trading.  When one of Susan’s sources told her about an executive who’d sold off many shares right before a news announcement, they had another new angle.

“No good story idea has come without an initial idea from a source on the ground,” Susan says. “It’s not like Facebook. You only need a small number of good sources who can really tell you what’s what.”
The database led to an ongoing series that also has exposed regulatory loopholes that allow executives to circumvent rules designed to prevent improper trading. The work by reporters Susan Pulliam, Rob Barry, and Jean Eaglesham, and editor Michael Siconolfi has earned them this year’s bronze Barlett & Steele Award for Investigative Journalism.
WSJ database insider trading
Susan says developing sources is a dying art because of the Internet and because it’s harder for reporters to get inside companies.

To get the story going, Michael paired Susan with Rob, who specializes in analytics. They reviewed executive stock trades to see if news led to the trades, Michael says. “When the data came together, it seemed like we struck gold,” he says.

Susan says working with Rob helped provide a solid foundation and took the story from “good to really good.” It was her first time working with a reporter with computer-assisted reporting skills, she says. “I never again want to work without a [CAR] person by my side.”

The challenge Susan faced was getting information about trading plans from companies, which don’t have to disclose them, Susan said. Many companies tried to ignore or stonewall her requests. Being insistent and persistent sometimes caused the companies to relent, she says.

Sourcing was the key to getting the story started, but the team relationship pushed it forward. Michael and Susan have worked together for more than 10 years. Like many reporters, Susan says having an editor’s support and confidence is like “money in your pocket.”

Michael likens the editor’s role to the coxswain’s in rowing. “You want to guide them and encourage them to make sure the boat moves quickly and smoothly, and make sure to not get in the way,” he says. “The fun part of the process is watching reporters do their thing.”

 

 

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B&S Silver winner: NYT reporter who created business incentives database

Louise Story of the New York Times accomplished a major feat last year: She created an interactive state-by-state database calculating business incentives governments use to lure companies and create jobs. Readers can see the types of incentives offered in each state, an industry breakdown and United States of Subsidieslists of companies that received grants. Though she may not have heard it, the database elicited a collective “ooohh” from reporters who had tried unsuccessfully to get those numbers.

Louise created the database as well as a great three-part series showing how some states use those incentives, which totaled about $80 billion. That’s a lot of work, which is one of the reasons she is this year’s winner of the silver Barlett & Steele Award for Investigative Business Journalism.

I talked to Louise last year when the series ran. She gave me some tips on localizing the data. When we spoke last week, she offered some advice that could encourage other journalists: Instead of saying no one knows the answer, she says, “Think about if they can know because of you.”

Louise’s background helped her through this project. She learned Computer Assisted Reporting skills while in Columbia University’s journalism school, she says. She learned all about spreadsheets, statistics and financial statements while working towards her MBA at Yale University.

Barry and Story in Leckey's class

Rob Barry listens as Louise Story urges students to keep an investigative mindset in all their stories.

She also has the persistence needed to contact local and state revenue departments and agencies across the country. It took five months just to create the database. She had to use several sources to compile the information herself, she says

“It was pretty easy to keep going because this is an interesting area to write about,” Louise says. “It was great to have the opportunity to bring together new information and answers that everyone tells me didn’t exist.”

The database has become a tool for journalists and researchers as well. Louise says more than 50 researchers from places such as the Federal Reserve, Stanford University and state government agencies have contacted her about the database. Some have launched their own studies to expand on the data, she says.

In nominating the story, New York Times editors said some states are considering new laws to regulate the use of incentives. They also said one organization has created national group to determine how governments can reform their awards.

 

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Avoid profile ruts: Use varied sources, telling scenes and detailed background

post dispatch

Businessmen Mike and Steve Roberts (pictured above) were featured in the Post-Dispatch's Loeb-nominated story. Photo by David Carson of the Post-Dispatch.

With changing bylines on the same story, big-picture stories sometimes don’t make it onto the budget. But after writing another story about the bankruptcy filings and real estate struggles of two local businessmen, reporters at the St. Louis Post-Dispatch decided it was time to put the issues into perspective, says reporter Tim Logan.

“Four of us on the business desk, who’d all written about the brothers in one way or another, got started, and two weeks later it had evolved into this big Sunday profile,” he says. Their profile is among the finalists for this year’s Gerald Loeb Award that recognizes business and financial journalism. Winners will be announced June 25.

Tim and Lisa Brown wrote the story without relying heavily on court filings or direct quotes from the businessmen. Tim offers four tips to help you find that balance:

1. Cast a wide net to find sources from different times in your subject’s career. The reporters, including contributors Steve Giegerich and Tim Bryant, contacted people who had known the men at various stages so they could get a variety of perspectives, Tim says. “Those voices balanced out the self-interested optimism of the main characters, and gave a lot of credibility to concerns about their future,” he says.

2. Look for telling scenes, even if your subject isn’t in them, to bring the story to life. “We were fortunate to find a few scenes that showed the depths of their troubles in other ways,” Tim says. For instance, the story includes a court hearing the businessmen skipped because they were being deposed in another lawsuit, he says.

3. Read everything to find the background details. They used profiles and an autobiography to gather information. “A lot of the little details – like ‘they’ve hobnobbed with Bill Clinton’ – came from that background work, as did the basics of the section on their rise in business,” Tim says. “That paper trail lent a sense of authority to our story.”

4. Don’t let the subject dictate the story. The businessmen didn’t agree to an interview until about 10 days into the reporting and were likely hoping for a “rising from the ashes”-type story, Tim says. “We listened respectfully, but by that point we had more than enough material to write a story about their state of limbo,” Tim says. “So we incorporated their arguments and plans but kept writing the story that all the rest of our reporting was telling us.”

 

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Have individual investors been pushed out tax-lien auctions in your area?

tax lien auctionWith increasing property tax delinquencies, many local governments have turned to tax-lien auctions to collect the money and avoid budget shortfalls. It’s not much of a business story until you look at who’s buying the liens – which is what Megan O’Matz and John Maines of the Sun Sentinel did.

Historically, individual investors bought the liens to save for things like retirement, college educations and vacations, Megan says. But now, banks and hedge funds have dominated Florida’s market, which is worth about $1 billion, she says. The reason: Florida tax liens can generate annual returns of as much as 18 percent, Megan and John write.

Megan O'Matz

Online auctions have helped larger companies outbid competitors in tie bids, Megan says. They create “tens and hundreds of thousands of shell companies to bid on their behalf. That way, one hedge fund can have, for example, 450,000 chances of being declared the winner in the tie vote,” she says. “An individual investor, by comparison, essentially has only one shot.”

If you’re interested in pursuing this story, start by asking your local officials how they conduct tax lien sales, Megan says. In-person auctions can decrease the number of bidders. However, a group of bidders illegally can decide upfront which liens they want to avoid the competition, she says. “Look for whether there is competition in bidding and whether the liens are sold repeatedly at the highest interest rate,” she says.

If your area does online auctions, ask if “subaccounts” or proxy bidders are permitted, which could indicate whether shell companies are bidding, Megan says. She says they found one bidder had set up 20,795 affiliated companies, which had names such as Polka Dot Cupcakes, Cricket Trapper, and Ms. for Ms. Onetwothree. “Others were named after superheroes,” she says.

You can trace the companies by using state incorporation records and Securities and Exchange Commission filings. For instance, they linked one bidder, which had more than 450,000 affiliates, to US Bank, Megan says.

Megan says most homeowners don’t realize their debts have been sold to private companies. “They simply thought they were paying interest and penalties to the county, not to some odd company named Toad LLC or Pork Chop Sandwiches!” she says.

 

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Lesson from payday, title-loan stories: Check impact on related industries

Katrina Sutton of McDonough, Ga.,

Katrina Sutton of McDonough, Ga., she took out an installment loan from World Finance in August 2009. Erik S. Lesser/EPA for ProPublica

Until ProPublica and Marketplace co-produced a series this month, installment lenders had remained in the shadows of payday and title-loan lenders, which have received a lot of scrutiny.

That was the case even though installment lenders have a comparable market size and often charge annual rates of more than 200 percent, ProPublica reporter Paul Kiel says.

Paul points out in part one of the series that the installment lending industry has “survived” laws that try to limit these types of loans. For instance, he writes:

Borrower Katrina “Sutton’s loan contract said her annual percentage rate, or APR, was 90 percent. It wasn’t. Her effective rate was more than double that: 182 percent.

World [Finance] can legally understate the true cost of credit because of loopholes in federal law that allow lenders to package nearly useless insurance products with their loans and omit their cost when calculating the annual rate.”

Paul Kiel

Paul’s story uses borrowers and employees to tell the story.  He follows Ms. Sutton’s loan chronologically. Using another borrower’s story, he illustrates how companies earn profits on the loans. He writes that borrower Emma Johnson received her first loan from lender World Finance in 1993 and has taken out 48 loans, which includes new loans and refinanced loans.

“When Johnson finally declared bankruptcy early this year, her two outstanding loans had face values of $3,510 and $2,970. She had renewed each loan at least 20 times, according to her credit reports,” he writes.

Paul says reporters can localize the story by finding installment lenders in their areas, particularly near military bases, which is the focus of his second story.

He says to find garnishment lawyers to explain details because state and federal laws differ. To find sources, contact legal service lawyers and bankruptcy attorneys. He says reporters should always ask borrowers if they have multiple loans, which was the case for Ms. Johnson.

Like most reporters know, finding people may not be that easy. He estimates he approached about 50 people and found six to talk with him.

 

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Skilled temporary foreign workers and the impact on U.S. jobs

visaThe Seattle Times does a comprehensive job of exploring how foreign worker visas affect American workers in the technology field. Reporters Kyung Song and Janet Tu start the story with a recent computer science graduate who struggled to find a job. They write thousands of programmers and engineers have faced the same challenge “despite reports of a scarcity of qualified American high-tech workers.”

Kyung and Janet focus on H-1B visas that allow companies to temporarily hire foreign skilled workers. They use data for Microsoft in their story, but Kyung says the story can be localized. “It would require some digging, and a bit of spreadsheet analysis,” she says.

Kyung says to start with the Department of Labor’s Office of Foreign Labor Certification, which keeps a database of visa and green-card applications. The information can be sorted by employers or by state. For instance, this link shows national information such as number of applications and top 10 employers.

The U.S. Department of Homeland Security has specific company data; however, contacting Ron Hira, a professor at the Rochester Institute of Technology, who uses the data, might be quicker, Kyung says.

“I suspect most employers will not readily divulge the percentage of foreign workers on their payroll,” she says. “Microsoft did, but even it refuses to say how many visa workers it hires through contracting firms.”

Also, find and interview workers hired through the visa program, since there is a direct impact on them as well, she says.

 

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Pulitzer Prize winner used science background for spill series

Inside Climate News Pulitzer PrizeElizabeth McGowan, Lisa Song and David Hasemyer won a Pulitzer Prize this year for their InsideClimate News series “The Dilbit Disaster: Inside the Biggest Oil Spill You’ve Never Heard Of,” which looked the impact of a diluted bitumen, or “dilbit,” spill in Michigan. I talked with Lisa, whose science background helped research the series, and Elizabeth, who left InsideClimate News last year to write a book. They gave tips from different perspectives so I’ll break them into two posts.

Lisa Song

From Lisa, I learned you don’t always have to leave the newsroom to find an expert. She has degrees in environmental science and science writing from the Massachusetts Institute of Technology. She says her background allowed her to comprehend what sources said without too much explanation. Because she understood the information, she was able to ask important follow up questions, she says.

Her primary task in the project was determining the technical aspects of the oil that caused it to sink into the water instead of lying on top like most oils, she says. With no specific research available, Lisa had to do her own. “I couldn’t get at the question directly,” she says. She searched for articles, interviewed scientists, and dug through government records, she says.

The reporters needed information about the oil to show how the Michigan spill differed from others, including the Gulf of Mexico spill that also happened in 2010. They found most procedures and equipment focus on floating oil. “Because the Marshall accident was the first major spill of dilbit in U.S. waters, cleanup experts at the scene were unprepared for the challenge of submerged oil,” one story says.

Lisa also had to crunch numbers from a database of pipeline spills. (You can read more about that process in this Investigative Reporters and Editors post.)

One of her most daunting tasks was reviewing about 10,000 pages of a National Transportation Safety Board investigation. “I was able to go through the documents to pull out key facts,” she says. “It helped strengthen the story and fact check information from the Congressional Record.”

 

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If it bleeds, it leads. If it’s funny, might be worth a trend piece

While reading about the Boston bombing and the West, Texas, explosion, I came across a Sun Sentinel story noting interesting ways lawyers get paid for their services. It was the kind of lighthearted trend story that many of us need this week. Reporter Paula McMahon writes:

Sun Sentinel image of items offered to cover legal fees

 

“A herd of cattle in Venezuela is one of the most unusual offers [defense lawyer Jason] Kreiss has rejected. He also turned down a boat from a guy accused of stealing boats and declined the offer of paralegal services from the guy who pleaded guilty to impersonating an attorney.”

“My beat at the Sun Sentinel is federal courts, but we try very hard to keep the focus on stories that are of very general interest, informative, outrageous or amusing for our readers,” Paula says.

Paula says she’d considered this story since she noticed a lawyer driving a vintage car he received from a client who’d run out of money.

A recent story about a judge ordering a defendant to surrender his wine collection to pay legal fees made the timing right, she says.

Paula McMahon

Getting stories from lawyers wasn’t a challenge, she says. “One lawyer called me back and left a voicemail where he was laughing so hard that he could barely get the words out,” she says. But she also checked with local prosecutors to see if any lawyers had been charged for doing illegal trades, she says.

Paula suggests beat reporters keep a list of funny things that happen so they can find trend stories. She keeps a list on her phone. “I go through notebooks so quickly that some of the ideas scrawled on the back cover of my notebook disappeared into the abyss of my desk or the trunk of my car,” she says.

She also says reporters should know their beats well enough to “feel confident enough to step back and write these ‘overview’ kinds of stories.”