Source: Stanford Graduate School of Business

“We have it in our power to change the world again,” Democratic presidential nominee John Kerry declared last Thursday in Boston, “but only if we’re true to our ideals — and that starts by telling the truth to the American people.”

On one level, this is classic motherhood-and-apple-pie campaigning. After all, who can be against truth-telling? On another level, it’s a jibe at his rival. Promising change by being “true to our ideals,” Kerry implicitly accuses President George W. Bush of failures in that department.

On a still deeper level, however, his comment taps a concern far larger than his campaign. How do voters in twenty-first-century America come to know “the truth”?

The problem is that our perception of truth is not direct but mediated. The mediator is called (appropriately enough) the media. In an ideal world, this mediation is nearly invisible. But journalists, like campaigns, don’t operate in an ideal world. So it’s worth asking not only whether candidates are telling the truth, but whether today’s media is able to deliver the truth.

A report released in May by the Project for Excellence in Journalism, an initiative based at Columbia University and funded by the Pew Charitable Trusts, provides some disturbing answers that go far beyond the much-discussed supposed “liberal bias” among journalists.

Start with the fact that the media faces serious economic pressures. “A growing number of news outlets are chasing a relatively static or even shrinking audience for news,” say the authors of “The State of the New Media 2004.” So media outlets increasingly focus on new ways to disseminate news, rather than on the more expensive process of gathering it. That leads to an increased workload for journalists, who must now cover more stories with less backstopping from researchers and fact checkers.

The effects are clearly visible even to the nonprofessional. Particularly in the relentless 24-hour cycle of cable news, the public is increasingly “getting the raw elements of news as end products … without much synthesis or even the ordering of information,” according to the report. The public also is getting little new news: more than two-thirds of cable news stories are repeats of earlier stories.

No wonder, then, that viewers wanting the immediacy of cable news but frustrated by its quality are turning to the newest form of news dissemination: the Web. But that trend, although broadening a reader’s access and immediacy, “may lead to a general decline in the scope and quality of American journalism, not because the [Web] isn’t suited for news, but because it isn’t suited to the kind of profits that underwrite newsgathering.”

Not surprisingly, these pressures open the media to growing dangers of manipulation, not only by owners, advertisers, and politicians, but by celebrity subjects demanding payment — so-called “checkbook journalism” — for doing interviews. Result: declining public trust.

• In 1985, 80 percent of the public trusted newspapers — a figure that slipped to 59 percent last year.
• Network news was found believable by 74 percent of viewers in 1996 but only by 65 percent in 2002.
• In cable news, the highest believability rating, held by CNN, stands at a paltry 32 percent.
• Local television news fares even worse, with only 26 percent of its viewers giving it high marks for believability.

Does the public still care about serious news? Yes indeed. Subscriptions to the Economist and audiences for National Public Radio have both doubled in the last fifteen years. Apart from this growth and from an upsurge in alternative and ethnic journalism, however, the general picture is of decline.

So as John Kerry and John Edwards set out on their cross-country bus trip, voters should be aware that organizational issues within the media are helping determine campaign strategy. Consider, for example, the choice of a bus. While the Bush campaign is gearing up to spend $30 million advertising in the major media markets during August, Kerry and Edwards will be calling on smaller communities. Credit them not only with reaching out to America’s heartland voters but also with a canny use of the media. Remember that local television (unlike the networks) loves news, spending only 16 of its budget on it but earning 40 percent of its revenue from it. And remember that three-fifths of local television stories that involve controversy, says the report, tell “mostly or only one side of the story.”

Does this bus trip, then, have anything to do with the huge amount of free and uncritical coverage they’ll get from local television news? Probably. Yet when they’re out there “telling the truth to the American people,” shouldn’t they worry that only a quarter of the viewers will believe the media that covers them? Certainly.

So is the media reporting the news, or influencing the way candidates choose to create it? Yes.

©2004 Institute for Global Ethics

“During a yearlong investigation, ‘Panorama’ went undercover to find out what it takes to get the games, and it would appear that the answer is simple — cash.”

– BBC television program “Panorama,” alleging last week that an undercover investigation into the bidding process for the 2012 Olympic Games found evidence of corruption. The International Olympic Committee, still trying to recover from the Salt Lake City bribes-for-votes scandal six years ago, said its ethics commission is looking into the BBC’s claims. (“IOC Investigates 2012 Bid Bribery Allegations,” Reuters, July 30)

WASHINGTON
A classified report into the firing of an FBI translator who accused the government of shoddy intelligence work has found evidence that the woman was fired at least partly due to her whistle-blowing.

Sibel Edmonds, who was hired by the FBI in the wake of 9/11 to translate terrorism-related documents, was fired only a few months later for allegedly being a “disruptive” employee, reported the New York Times.

Edmonds says the real reason she was fired was because she would not keep quiet about serious breaches that compromised intelligence — sloppy translating, claims of espionage on the part of a coworker, and agency pressure to impede some translations because of diplomatic concerns.

After Edmonds’s complaints went unheeded by her FBI supervisors, she took her concerns to the Senate Judiciary Committee, whose then-chairman demanded an investigation by the Justice Department.

The results of a newly concluded inquiry by Justice Department inspector general Glenn Fine have been classified, but the New York Times was passed a copy of a letter describing the findings. The letter was written by FBI head Robert Mueller and sent to lawmakers.

The inspector general’s report concludes that Edmonds’ whistle-blowing was “at least a contributing factor” in her firing, and that her allegations of espionage by a coworker were inadequately investigated by the agency, according to Mueller’s letter.

Mueller said the FBI is working to correct any problems and may discipline some of the employees involved, noted the Times.

The Justice Department has taken “unusually broad” efforts to keep the Edmonds case secret, according to the Times, invoking the State Secrets Act to classify nearly every detail about the case, including blocking her testimony in a lawsuit filed by the families of 9/11 victims and classifying the findings by Fine.

Edmonds’ lawsuit seeks the release of the Fine report.

WASHINGTON
Saying health care chaos will results if litigation is allowed, the U.S. government has been reversing course to side with drug companies in stanching consumer lawsuits seeking to prove that a government-approved treatment is unsafe.

In an about-face from a stance last spelled out before the Supreme Court in 1997, the federal government now argues in court papers that consumers, juries, and “lay judges” have no right to “second-guess” government regulators.

Under the new view, advocated by the Bush administration in a series of recent lawsuits, when the Food and Drug Administration (FDA) says a drug or medical device is safe, that is the final word, the New York Times reported.

Whereas previous administrations viewed FDA approval as a sufficient minimum standard of safety, allowing states to set higher limits, the Bush administration says FDA approval now “sets a ceiling as well as a floor.”

If lawsuits, juries, and judges are allowed to hear cases contesting the safety of FDA-approved treatments, the consequences would be calamitous, the administration says.

Threats cited by the federal government include the possibilities that good products could be removed from market, others could become underutilized, and federal assurances could be questioned, reported the Times.

The government’s new position was criticized by Kimberley Witczak, who filed suit against Pfizer after her husband committed suicide while taking the company’s antidepressant drug Zoloft, which she and others say carries inadequate warnings about its risks.

“I do not believe in frivolous lawsuits,” Witczak told the Times, “but it’s ridiculous that the government is filing legal briefs on the side of drug companies when it’s supposed to be protecting the public.”

While the government has not yet intervened in the Witczak case, it has used a similar case in California to side with Pfizer, which insists the drug is safe, noted the Times.

WASHINGTON
For the second time in as many weeks, the U.S. agency that regulates firearm sales was criticized, this time over its failure to keep guns out of the hands of known criminals and others barred from buying them.

Under U.S. law, gun purchasers are given automatic approval on firearm sales if the government takes more than three business days to run a required background check, according to the Associated Press.

Over the past two years, more than 7,000 firearms have been sold to people barred from buying them due to the government’s failure to conduct background checks within the mandated time limit.

Even when violations are found, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) is slow to act and only rarely prosecutes, according to an investigation by the inspector general of the Justice Department.

The ATF took more than a month to resolve 40 percent of illegal gun sales; 15 percent of the violations took between four months and a year to resolve, providing ample time for crime, according to the Washington Post. Less than 1 percent of violators were prosecuted in 2002 and 2003, when 17 million guns were sold.

The ATF says understaffing and technology problems are partly to blame. Another cause is the agency’s determination that illegal weapons sales pose little threat since criminals are unlikely to go through legal channels to get their guns, noted the AP.

Responding to last week’s report, the ATF said it would be taking steps to improve its enforcement, including seeking a funding increase in 2006.

HARARE, Zimbabwe
Ahead of upcoming elections in March, the government of Zimbabwe is preparing to pass a law that analysts say will block nearly all foreign funding for local aid organizations and government watchdogs.

The text of the proposed law was leaked last week to news organizations, which reported that the measure would make it nearly impossible for most foreign nonprofits and NGOs to provide services in Zimbabwe.

The effort, similar to a crackdown on press freedoms in 2002, is being championed by Zimbabwe president Robert Mugabe, who has been accused of corruption and faces a national election next March.

Mugabe has accused foreign aid organizations of meddling, saying the new law will keep local charities from being “instruments of foreign interference in our national affairs,” reported the Reuters news agency.

The draft of the law would require all NGOs to register with the state and ban any foreign organization whose “sole or principal objects involve or include issues of governance,” which it defines as “the promotion and protection of human rights and political governance issues.”

The broadly written measure is expected to curtail or entirely block foreign funding of nearly all charitable organizations, both local and foreign, currently operating in Zimbabwe, according to Voice of America.

LONDON
Britain last week promised to crack down on extreme tactics by animal rights protestors, heeding the concerns of pharmaceutical companies who say the homes of corporate officers should be off limits.

The government’s decision last week worried some civil rights groups, which caution that the aggressive tactics of a few protestors should not be manipulated to curtail the country’s legitimate right to protest.

At the center of the controversy is the testing of drugs and other products on animals — a practice pharmaceutical firms say is necessary for safety, but which many animal rights groups say is frequently excessive or unnecessary.

Claiming lack of progress on the issue, some protestors have relocated their picket signs and chants from company facilities to executives’ homes. In extreme cases, protestors have made threats, reported the BBC.

Last week, the U.K. government said such tactics were over the top, giving the nod to proposals that will make it illegal for protestors to demonstrate outside the homes of drug company executives, reported the Guardian.

“People have the right to campaign lawfully and peacefully against the use of animals in scientific research,” said Home Office minister Caroline Flint. “But they do not have the right to intimidate people and their families in their own homes.”

“We are talking about a tiny minority, but their actions are causing a great amount of fear, and we can’t back off from this,” Flint said in comments reported by the Guardian.

Mel Broughton of the animal rights group Speak criticized the new measures as a “knee-jerk reaction.”

“There are already a plethora of public order laws to deal with protests by animal rights campaigners and we feel this is not so much to do with clamping down on protest but stifling the debate altogether,” he told the Independent.

The government’s action comes shortly after Jean-Pierre Garnier, head of Britain’s biggest drug company, GlaxoSmithKline, complained that animal rights protests were causing economic harm and should be stopped.

Condemning activists as “despicable cowards,” Garnier said the costs of providing increased security at Glaxo facilities was costing tens of millions of dollars that otherwise could have been used for research and development of new drugs, noted the Independent.

BOSTON
Ending four years of debate, Harvard University last week said it would be returning a controversial $2.5 million donation from the president of the United Arab Emirates (UAE), who has been accused of supporting anti-Semitic causes.

Sheik Zayed bin Sultan al-Nahyan, the unelected president of the UAE, released a statement saying that he was taking back the $2.5 million gift to Harvard, earmarked to endow a chair in Islamic religious studies.

The funds were held up after protestors linked Zayed to an Abu Dhabi-based think tank named after him that sponsored speakers who alleged that the Holocaust was a Zionist conspiracy and that the United States orchestrated the terrorist attacks of 9/11.

The Zayed International Center for Coordination and Follow-Up, which had received government funding, was closed last August after officials determined that it “contradicted the principles of interfaith tolerance,” reported the Boston Globe.

Rachel Fish, a Harvard graduate who led the fight against Zayed’s funds, said the center’s closure was a good step, but not sufficient to make the money clean in her eyes.

Zayed “has never publicly condemned or disassociated himself from the anti-Semitism emanating from his country, and until he does, he should not be associated with a prestigious university like Harvard,” Fish contended to the Washington Post.

Abdulla Saboosi, a spokesman at the UAE Embassy in Washington, said such reasoning was not fair, arguing that Zayed had nothing to do with the controversial center.

“It’s like Reagan National Airport,” Saboosi told the Post. “What does it have to do with the late President Reagan?”

LONDON
New reports last week from both sides of the Atlantic paint a bleak picture of continued school violence, providing a data snapshot of school expulsions, suspensions, and cut classes due to fear of violence.

Figures from England were gathered by the Department for Education and Skills, which tabulated 2,400 expulsions and 80,000 suspensions in summer 2003, reported the BBC.

While many of those exclusions were made on the basis of threatening or disruptive behavior that did not involve physical violence, more than 4,000 students were penalized for assaulting adults and more than 13,000 for attacking other students.

Statistics of violent behavior at schools, which appears especially common among boys aged 13 and 14, were submitted by local districts, many of which likely underreported the problem, the government said.

In the United States, the Centers for Disease Control and Prevention (CDC) last week released statistics showing that one out of every 20 teenagers skipped school last year due to fear of school violence.

The CDC said such fears likely were compounded by persistent worries generated by the spate of school shootings in the 1990s, noted the Associated Press.

The data, while troubling, was accompanied by some good news: The percentage of students who said they either had been in a fight or had carried a weapon on school grounds dropped over the past decade.

LONDON
Seven months after the scandal began, the Royal Dutch/Shell Group last week agreed to pay $150 million in fines over charges that it defrauded regulators and investors by knowingly exaggerating the size of its oil reserves.

Since at least 2002, executives at U.K.-based Shell knew that the company was misclassifying less-certain stocks of oil as “proven” deposits, distorting the firm’s most valuable asset, reported the Associated Press.

In January, Shell began a series of downgrades, ultimately lowering its proven reserves four times to a final level nearly 25 percent lower than it had originally claimed, shaking investors’ confidence and raising regulators’ ire.

Last week, in a deal that does not require the company to admit wrongdoing, Shell said it would pay $120 million to U.S. authorities and just over $30 million to U.K. regulators for its actions and misstatements.

The firm, which says its key priorities now are “rebuilding credibility” and “regaining trust,” also must spend an additional $5 million to establish a “comprehensive internal compliance program,” according to the AP.

While last week’s settlements end some of the uncertainty facing Shell, other troubles remain, including a U.S. criminal investigation, an inquiry in the Netherlands, and several stockholder lawsuits, noted the New York Times.

Special to Newsline from Canadian correspondent Errol P. Mendes

NEW YORK
The National Post is reporting that shareholders of Bennett Environmental, Inc., based in Oakville, Ontario, have hired a New York law firm to launch a class-action lawsuit against the company and several of its officers, including CEO Al Bulckaert and Chairman John Bennett.

The suit seeks unspecified damages for alleged material misrepresentations made about major subcontracts the company claimed it had won, but which later turned out to be worth far less than asserted.

Shareholders are alleging that Bennett kept silent about the uncertainty surrounding a subcontract to treat 300,000 tons of contaminated soil in New Jersey. It later turned out that the company had agreed to a much smaller subcontract for treating 100,000 tons of contaminated soil — a deal worth far less than the company’s original claim.

Bennett Environmental stock fell steeply on the Toronto Stock Exchange on the announcement that the larger contract was unlikely to be carried out by the company.

Securities laws and regulations passed in the United States and Canada after the Enron debacle have encouraged such material misrepresentation lawsuits by shareholders against managers and created much apprehension on the part of senior managers and directors of public companies on both sides of the border.

From the Stanford Graduate School of Business:

“The fall of WorldCom, Enron, and Arthur Andersen, and the public humiliation of Kenneth Lay, Dennis Kozlowski, and Richard Grasso have caused the passage of the Sarbanes-Oxley Act, prompted the New York Stock Exchange to create new corporate governance standards for listed companies, and spurred major firms like the Walt Disney Company to adopt new, stringent, and wide-reaching guidelines for corporate ethics.

“These events also have dramatically changed the way that MBAs view their job choices.

“A survey of more than 800 MBAs from 11 leading North American and European schools found a substantial number were willing to forgo some financial benefits to work for an organization with a better reputation for corporate social responsibility and ethics….

“The results were stunning: Intellectual challenge topped the list as the most important attribute for MBAs in their job choice decision. Interestingly enough, the financial package was only 80 percent as important as intellectual challenge.

“Even more surprising was that reputation for ethics and caring about employees both rose to the top third of the list of 14 attributes, proving to be approximately 77 percent as important as the top criterion of intellectual challenge. Moreover, more than 97 percent of the MBAs in the sample said they were willing to forgo financial benefits to work for an organization with a better reputation for corporate social responsibility and ethics.

“How much were they willing to give up? Again, the numbers were surprisingly high. On average, MBAs were willing to forgo 14 percent of their expected income.

“…A preliminary, pre-Enron study of the subject found that 94 percent of the MBAs were willing to forgo an average of only 12 percent of their income to work for ethically and socially responsible companies — a number that grew nearly 20 percent in the 2003 final report.

“What does this portend for the future? There is a strong argument for firms to become more ethically and socially responsible in order to attract MBA candidates. There are important practical implications for both recruitment and retention related to maintaining a reputation for caring about employees and stakeholders; for a commitment to environmental sustainability; and for providing products and services that are considered ethically sound. MBAs want jobs where they can be intellectually challenged, but they prefer positions in organizations that demonstrate a set of socially responsible values in the way they do business.

“Human resources and career experts already have been advising corporations that ethics is important to the best and brightest job hunters of the future. Indeed, a poll of career transition and career management professionals in 26 countries found that 82 percent cite corporate leadership ethics as of critical importance to job seekers, and that therefore ethics is fast becoming a major factor in the battle for top talent, according to a recent global survey by New York-based consulting firm DBM.

“‘The big surprise was that no one thought that corporate ethics was all that important’ to jobseekers, said [Stanford Graduate School of Business professor David] Montgomery. Conventional wisdom dictated that the major incentives to join a company were financial, financial, and financial. The implications? ‘Everyone thinks they know that MBAs are avaricious and greedy. And while no one is claiming that they are perfect, it turns out that MBAs are willing to forgo a significant percent of their income to be more moral across a number of dimensions.’”

“If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.”

– Thomas Jefferson (3rd U.S. president, 1743-1826)