Business Investigations: When There Isn't Time

By Alec Klein
May 1, 2008 11:07 AM

It’s a perennial question: How do reporters conduct an in-depth business investigation when they’re pressed for time?

The question has invariably come up over the past several years when I’ve given talks at newspapers and universities around the country about the work I do as an investigative business reporter at The Washington Post. Nowadays, though, the question carries more urgency as newspapers, magazines and other traditional media outlets are struggling with declining circulation and cutbacks and seeking ways to move forward at Web speed.

One answer is not terribly popular though I found it effective early on: work on weekends and through vacations. I don’t necessarily advocate the approach, but that’s how I started my first major investigation as a reporter nearly 20 years ago at The Virginian-Pilot based in Norfolk, Va.  Back then, I was covering City Hall, a deadline-driven beat that demanded a lot of time and bylines. But when a source gave me a tip—that the elected City Council had been using taxpayer funds to give out secret bonuses to the city manager, the top executive—I had to get to the bottom of it. And the only way to do that was to create time. The result, several months later, was an investigation that sparked a grassroots campaign to oust the mayor, followed by a formal apology by the City Council and promises of reform and better disclosure practices.

Later, as a reporter at The Wall Street Journal, I came across another answer to the question: set your own agenda. That’s what some of our editors did when they sent word that reporters should be thinking, from the beginning of the calendar year, about the industry built up around death as a topic to mine for enterprise stories. It’s a valuable lesson for beat reporters because they, too, can try to determine the important issue—or issues—that need to be probed over the course of a given year. And if they can manage to produce, say, about a dozen original, incisive stories—investigative, explanatory, profile, narrative, breaking news, among others—the combined work can be viewed as not just good beat work, but good project reporting.  Indeed, one of the best investigative reporters I know, Dan Golden, won the Pulitzer Prize not long ago for writing stories episodically over the course of a year about a different kind of affirmative action in education that often goes unnoticed and unchecked: for the rich and well-connected.

When I joined The Washington Post about eight years ago, I discovered a third answer to the question: the power of the memo. Back then, I was covering the looming merger of AOL and Time Warner, the largest takeover in U.S. history that would create the biggest media company in the world. The competition among reporters at various newspapers and other media outlets was intense, and the stories I wrote came fast and furious. Along the way, I received an anonymous tip that a mid-level executive at AOL had been suspended. Through sources, I was able to confirm it, and I wrote a 10-inch story buried deep within the bowels of the paper’s business section. The story, I wrote, had something to do with accounting and a dot-com company based in Las Vegas, though it was unclear at the time what precisely had transpired. Immediately, though, I was convinced that there was more to the story, and after I did some additional digging, I showed my raw interview notes to an editor who was promptly unimpressed.

Frankly, it was the natural reaction. The notes were barely comprehensible. They didn’t draw the connections. They didn’t explain the background. They didn’t furnish the context. All of which is the kiss of death for editors who are busy putting out a newspaper. But after I obtained a stack of confidential AOL documents from sources, I finally figured out a better approach: I wrote a coherent memo to my editors explaining what I had. In short order, I was set free from my daily beat and spent months probing AOL’s accounting.

The result was a series that showed how AOL secretly inflated its advertising revenue at a critical time before and after its merger with Time Warner. The Securities and Exchange Commission and Justice Department launched investigations of AOL in the wake of the stories, and AOL later admitted that it had improperly inflated its revenue by $190 million and ultimately paid more than half a billion dollars in government fines. Company executives were fired, partners at other companies went to jail, the division of AOL that was the subject of the investigation was disbanded, and the company, then called AOL Time Warner, lopped off part of its name and now simply goes by Time Warner.

Since then, my editors have seen fit to set me free on other long-term investigations at The Washington Post.  I’ve spent more than a year investigating the credit-rating industry and a year probing medical devices. On other projects, I’ve written stories episodically. In the end, the common denominator through them all hasn’t been a preoccupation with time; it’s been a compulsion to find out what happened.

Alec Klein is a best selling author and an award-winning investigative business reporter at The Washington Post.

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