Saturday, February 07, 2009

The Wall Street Journal is Short Staffed

Yup, that's the explanation that's percolating out of the Wall Street Journal on why it ignored Bernie Madoff whistleblower Harry Markopolos.

An anonymous source tells the CJR's Audit that unnamed Journal editors, and not reporter John Wilke, were to blame:

This person says Wilke wanted to do the story but couldn’t get approval within the Journal’s labyrinthine editorial structure to proceed.

“Wilke was hot for the story but the editors had him on other things,” my source says. “The paper had been through cutbacks and didn’t have enough people to do everything at once.”

Yeah, right. As I said before, they didn't believe Markopolos. If they did, if they believed it was possible a former Nasdaq chairman and one of the most distinguished people on the Street was a crook, it stands to reason they would have gone all out to investigate that. These are not stupid people.

In effect, this anonymous person is saying "despite the possibility of Madoff possibly being a crook and ripping off investors, we couldn't spare anyone from the mutual fund scoreboard or the Page One A-Head desk, and none of our X-dozen Wall Street reporters were available, as all were doing more important things than determining whether a vaunted Wall Street figure was a criminal". But there you have it, third hand, through an anonymous source. Sure would be nice to get an official explanation.

By the way, if they really were all tied up with more important things, why didn't they tell Markopolos to take his story elsewhere?

UPDATE: The Audit updated its item to reflect further comment from the Journal, whose spokesman now says that this unnamed source is wrong:

CORRECTION:
In this post I said the Madoff story got caught up in the “Journal’s labyrinthine editorial structure.” In fact, I didn’t have enough evidence to support that. Subsequently, the Journal spokesperson got back to us, saying this: “As a general rule, we don’t comment on our news gathering decisions, but the statements you are providing us are materially wrong and don’t come from a person in a position to know our editing decisions.”
That apparently relates to the "didn't have enough people to do everything at once" quote above, which I had found amazing. Evidently it's not true.

OK, so what is the truth? Only the Journal can address that. Since this happened under a previous editing regime and different ownership, I can't see what's stopping the newspaper from explaining why it ignored Markopolos.

UPDATE: A letter from Jesse Eisinger, published at Talking Biz News, points out that reporter John Wilke had a full plate during this entire period. I have no doubt about that, which is why Markopolos should have been referred to another reporter. I can't understand why Markpolos didn't do that on his own initiative, after it became clear he was getting a runaround.

© 2009 Gary Weiss. All rights reserved.

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