Preface

In the wake of the savings and loan and BCCI scandals, the question was raised as to why the news media, in conjunction with the political and governmental communities, seem so systematically slow in awakening to the scope and implications of major business and financial debacles. Why, specifically, did the news media -- and congressmen and regulators, consumers and voters -- take so long to focus on the savings and loan and BCCI disasters in alert and aggressive fashion?

The complexity inherent in such stories -- density of detail; circuitous, secretive scheming on the part of perpetrators -- is a large part of the answer. There is a fabric, too, to journalism's institutional response to the savings and loan and BCCI stories, and others like them, that bears examination.

News organizations, like most institutions, compartmentalize information and the handling of it. The result is a tradeoff: order out of chaos, on the one hand; barriers to discussion, on the other. For journalists, as for doctors, lawyers, and scholars, the discipline of specialization makes for precision in handling complex news stories; however, it can also make for tunnel vision.

Like academicians, journalists often have trouble crossing boundaries. The culture of most newsrooms encourages hierarchies and provincialism. In our country, which does not teach "political economy" as it is taught in European societies, the business and financial departments of newsrooms have traditionally ranked at the low end of the totem pole; they are also considered more provincial than other departments. There are a number of reasons for this, including:

the lack of interest and orientation most top editors bring to financial and economic topics;
the time-worn stigmas attached to business news coverage, such as the possibility of special deference toward the publisher's or general manager's office, and toward major local advertisers;
the tendency to assign business coverage to staff members who will follow specialty beats or specific corporations so as not to rock boats; and
the assumption of many editors that financial coverage is either tediously institutional, or the forbidding by-product of "the dismal science" of economics -- in either case, of little or no interest to the general reader.

The sum of all these factors is a syndrome that more or less guarantees that coverage of business and financial stories will lack the aggres-sive, investigative thrust of political or crime coverage -- and find its place not leading the news, but in the ghettoized compartment that constitutes most news organizations' financial sections or segments.

Even in the very best news organizations, this syndrome was at work in the coverage of such financial titans and wizards of the 1980s as Donald Trump, Michael Milken, Robert Campeau, and Robert Maxwell, whose rises were propelled not simply by leveraged debt, but by admiring, sometimes reverent news coverage of their alleged financial acumen, which in turn helped them with creditors. Their downfalls took most news organizations -- whose business it is to know better -- by surprise.

Similarly, though the savings and loan and BCCI stories were not altogether ignored, they were, for significant amounts of time, ghettoized. To explore the story behind the downplayed stories, and the nature of the relationships between the news media and Washington's regulatory and congressional oversight communities, The Annenberg Washington Program sponsored a half-day forum on May 29, 1992, entitled "The Media and Complex News Stories," which took the savings and loan and BCCI affairs as cases in point. The ensuing discussion, led by panels of journalists who forced those stories to the top of the news, provided significant insights into the difficulties of covering such cases -- and more important, insights into the costs to the public of the news media's slowness in picking up on them. The report that follows highlights the themes and conclusions of that discussion.

Michael C. Janeway
Dean
Medill School of Journalism
Northwestern University