Anonymous Sourcing is Dividing Issue in Business Reporting

In business journalism, news often breaks before events happen.

This can be particularly true in merger and acquisition stories, where news before deals are sealed comes at a premium. But sources who leak M&A information often request anonymity.

Since most newspapers prefer to cite sources who will be accountable by name, the use of anonymous sources is a dividing issue in business reporting. Newspapers across the nation have formulated stringent policies for dealing with the issue.

"We have to make sure the credibility of the source who wants to remain anonymous is impeccable," said Jim Henderson, Money managing editor at USA Today. "Even if the level of news is important, if we don't feel we've met that high level of credibility, we won't go for it."

USA Today operates under a detailed 10-point policy that outlines the use of unnamed sources and confidential documents.

According to the policy, a reporter must reveal names of unnamed sources to his section's managing editor for approval. After determining there is no better way to present the information, managing editors must then sign off on the authenticity and chain of custody of confidential documents.

Prior to approaching managing editors, reporters would serve themselves well by bolstering the credibility of unnamed sources. One way to achieve this is to describe sources precisely without revealing identities.

"We don't like to say 'a source said,' and 'a person close to the situation' is only a little better," said Bob Rose, assistant managing editor of business at The Philadelphia Inquirer. "We like to say which side the person is on and whether they are an industry official -- the more specific the better because it adds to our credibility."

In takeover stories, investment bankers or lawyers who are in on the deal often leak news. Though they rarely want to be quoted by name, they often want credit for their companies. The extra level of description can add to source credibility.

Both USA Today and The Philadelphia Inquirer prohibit the use of anonymous speculations or accusations.

"If an anonymous source gives a negative quote, we would rarely if ever use it because it gives someone a chance to do a hatchet job on someone else or another institution without any accountability," Rose said.

But sometimes the guidelines for approving anonymous source use are not so clear-cut.

Henderson said he struggles most with situations in which beat reporters get anonymous scoops on smaller, less significant stories.

"They've got it nailed and from an impeccable source, but what if the story isn't that important?," he said. "We don't want to risk our credibility with our readers by having too many unnamed sources for the paper."

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism