Overdraft on credibility?

Reporter faces conflict-of-interest charges

His editors knew that he belonged to a credit union about which he wrote. Did that clear him of allegations made by staffers of conflict of interest?

By Christopher P. Beall

Christopher P. Beall is a staff writer for the Providence (RI) Journal-Bulletin.

Author bio information is from the time of article submission and may not be current.

Source: FineLine: The Newsletter On Journalism Ethics, vol. 3, no. 5 (May 1991), p. 5.

This case was produced for FineLine, a publication of Billy Goat Strut Publishing, 600 East Main Street, Louisville, Kentucky 40202. Reprinted with the permission of Billy Goat Strut Publishing. This case may be reproduced for classroom and research purposes. Publication of this case in electronic or printed form requires written permission from the publisher and Indiana University. An exception is granted for use in readers designed for specific academic courses.

 

On Jan. 1, Rhode Island’s $3 billion credit union industry melted down to zero. Very quickly and with little warning, the credit union crisis touched more than a third of the state’s million residents in an intensely personal place, their bank accounts. And it forced many Journal-Bulletin editors and reporters, including myself, to re-examine the extent of our community involvement and where we should draw the line between private affairs and journalistic responsibility.

The turmoil began with an alleged embezzlement from a single bank. The $13 million hole led to a financial crisis that closed 45 financial institutions.

Among those shutout of their banks were the 1,600 shareholders of the Journal Employees Credit Union, every one of them a newspaper employee, with some $3.5 million on deposit.

But by mid-January, the newspaper credit union rescued itself by winning federal deposit insurance. The move got scores of reporters off the ethical hook since they no longer had deposits that would be affected by governmental plans to rescue the closed credit unions.

However, some reporters, including myself, also had accounts at other credit unions that remained closed. The newspaper’s management never polled any of its reporters or editors, including those covering the crisis, about whether we had accounts in the still-closed credit unions. Instead, they relied on individuals to raise the issue independently.

Before I wrote my first credit union story, I did just that.

I told my editors about how I had opened an account at East Providence Credit Union last year after hearing rumors of insider loans and other questionable management practices there. My supervisor, Karen Maguire, and I had agreed that the best way to get access to inside information was to become a member.

Three months before any hint of the impending banking collapse, I moved some of my personal savings from the Journal Employees Credit Union to the East Providence Credit Union. On New Year’s Eve, I had not yet written a single story about East Providence Credit Union. But that was soon to change.

When the crash came on New Year’s Day, I reminded Maguire of my account. I also discussed the potential conflict of interest with our ranking editor, Andrew Burkhardt. We all agreed that my account was indistinguishable from the 30,000 other accounts at East Providence Credit Union, and that it would not affect my coverage of the credit union. As a precaution, I decided not to vote on any shareholder ballots at the credit union. I also told the credit union president that I had an account with his institution.

Neither I nor my editors considered adding a note to my stories telling readers of my savings account in the credit union. The newspaper does not have a tradition of such self-disclosure and it did not occur to us that such a note might be warranted.

Two months into the credit union crisis, and many stories later, I thought my ethical concerns were over. That was, until a debate about journalistic ethics sprung up in CritQ, the newspaper’s electronic in-house forum for newsroom employees. Several colleagues accused me of a conflict of interest, saying I had a direct financial stake in the resolution of the credit union’s fate and therefore should not be writing about it.

I responded that I did not believe my account at the credit union had influenced my writing and that my editors agreed and had been fully informed.

Nevertheless, the criticisms from my colleagues shook my confidence.

In the week following the CritQ debate, I again raised the issue of my potential conflict of interest with my supervisor, asking whether I should stop writing about East Providence Credit Union in light of the allegations. She said absolutely not, reiterating her belief that there was no conflict. She also said my knowledge of the history of East Providence Credit Union and its ties to the state political leadership was too valuable to the newspaper and its readers for me to disqualify myself. In this case, she said, the public interest in the news outweighed a marginal consideration of conflict.

Since that discussion, I have written many more credit union stories and there have been no further submissions in CritQ about me. Even so, I remain acutely aware that some of my colleagues may be looking over my shoulder, trying to detect the slightest hint of bias.

In retrospect, I still believe journalists should not be forced to stuff money in their mattresses and that it was important for a reporter to open an account at East Providence Credit Union. There was legitimate news interest in creating the relationship. Perhaps, with the benefit of hindsight, I would have opened only a nominal account, say $25, rather than $1,000.

But the fact remains, if my editors had removed me from covering East Providence Credit Union, they also would have been forced to remove half the staff from covering the initial days of the crisis. There were just too many of these financial relationships with all the closed credit unions, including the newspaper‘s own employees’ credit union.

And then, surely, the public’s interest in getting the news would have been sacrificed on the altar of ethical purity.

 

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