Conflict of Interest? Gibberish

The New York Times worries about ethics. Okay, stop laughing. They worry about what they consider to be ethical principles, anyway.

This leads to such absurdities as you'll see here.

"In the Talking Business column in Business Day on Saturday, Joe Nocera wrote about a lawsuit by Oracle against a division of SAP, claiming theft of intellectual property. Mr. Nocera learned after the column was published that Oracle was represented by the law firm of Boies, Schiller & Flexner, where his fiancée works as director of communications. To avoid the appearance of a conflict of interest, Mr. Nocera would not have written about the case if he had known of the law firm’s involvement."

It sounds like they're trying to be nice to Joe, while giving him some sort of slap on the wrist. Would someone explain to me why the slap?

Suppose that Nocera had been aware of the rather indirect connection between himself and Oracle discussed here. It sounds like the game of "six degrees of Kevin Bacon" or however many degrees its supposed to be. But never mind that.

Suppose Nocera had known and had written exactly the same column anyway.

Here is the offending column.

Now: what would Nocera have done wrong?

Talking Business is an opinion column. It has always been an opinion column. If you want a just-the-facts type of story -- don't read it. Nocera isn't twisting your arm into reading his opinion. If you read Nocera (and you should, he understands business and he writes well) -- it is because you expect and desire his particular slant on business news.

So; who friggin' cares where his fiancee works? He hasn't even tied the knot yet. Besides, the law firm she works for, Boies, Schiller & Flexner, is huge. It represents lots of companies that someone like Nocera will write about. So let him write about them.

The way people get twisted around pretending that any significant piece of writing is not advocacy is just astounding.

Christine Richard's book

I've recently read CONFIDENCE GAME, the Richard book on Bill Ackman's daring, risky, but ultimately successful bet against the bond insurers' business model. One of the neat revelations in this book is telegraphed in the title of chapter 14, "When Crack Houses Become Collateral."

In 1998, it seems, MBIA, the bond insurance company at the center of Richard's story, bought out Capital Asset Research Management, a company that was in the business of buying "past-due tax bills from cities and counties at a discount and then [trying] to collect on the debts. These tax certificates also gave holders the right to collect interest and penalties and, if the debt went unpaid, to foreclose on the property."

Unfortunately, it soon became clear that Capital Asset had overpaid for the tax certificates. To pretty up the books, rather than writing these assets down and taking a loss, MBIA sold the tax liens to a special purpose vehicle (SPV)'s. The SPV paid MBIA an inflated price for them, having raised that money through the sale of bonds. What was the name of this vehicle? Caulis Negris: somebody's inaccurate and jokey attempt to render the phrase "black hole" into Latin.

Caulis Negris was a shell, it was still MBIA that was on the hook for payments to the bondholders. It turned out that most of the properties on which MBIA, through Black Hole, held tax liens were in the City of Pittsburgh. Richard got a list of all the properties in that city with Caulis Negris liens and looked them over, with the aid of a cabbie. "Almost invariably," she says, "we stopped at the worst property on the block, though sometimes that was a hard call." Some of them had clearly become magnets for drug abusers -- hence the title.

MBIA wanted to write down the value of its Black Hole slowly, so as to avoid any investor apprehension such as might have been instigated by a big single-shot write down. But that was no mere book-keeper's quirk. Its unwillingness to recognize losses "could hold up the redevelopment of entire neighborhoods." Not just one or two isolated blocks either -- Black Hole owned liens on 11,000 Pittsburgh properties.

Her story on this subject ran through Bloomberg News in November 2006. I'll give you a link to it.

The Hartford Courant

The leading source of dead-tree news in my neck of the woods, the HARTFORD COURANT, has apologized, although in rather lawyerly language rather than in any terms that would be satisfyingly abject, for repeated plagiarism.

[This is not breaking news, BTW. Anyone who wants breaking news should go elsewhere. This is my blog, I'll get around to things when I do.] Anyway, last week the Journal Inquirer's managing editor, Chris Powell, complained in a letter to the publisher of the Courant, that the latter had been "misappropriating on a wholesale basis local stories published in the Journal Inquirer." It appears that this has been going on since July.

Last weekend, Jeffrey S. Levine, the Courant's senior vice president, said in a statement that the paper in the past month has been experimenting with new strategies regarding the "aggregation" of news. They were trying to be hip and google-like. In the process, they forget some rules they should have learned in kindergarten.

"While attribution to the JI of the occasional big story we have broken may be welcome, the Courant's frequent use of the JI's work to report ordinary events in the towns in which our circulation overlaps is not welcome -- it's theft of copyrighted material and costly to us," as Chris Powell put it.

There were five other papers, aside from the JI of Manchester, that have apparently been ripped off in all this aggregation.

That isn't the only pile of crap the Courant has stepped into lately. It has placated Sleepy's, a chain retailer of beds and matresses, and a major advertiser, in a way quite pathetic.

George Gombossy has served as the consumer advocate columnist, under the heading "Watchdog," at the Courant for many years. In that capacity, he wrote a piece about a state investigation that Sleepy's may be selling mattresses with used boxsprings, selling them as new.

That's precisely the sort of thing they were paying him to write. Hence the term "Watchdog."

Apparently, not enough of a lapdog, though. He's been fired.

Here's his final column

and here is his website, where he proposes to carry on with his life's work.

Ben Stein Watch: No More Pirates

In my last BSW blog entry, two weeks ago here, I noted with some amusement that Ben is now doing ads for Free Score which has something to do with credit reports.

I update this just to note that others of Ben's fans, critics, and "watchers" noticed this too, and had many more insightful things to say about it than I. Felix Salmon for example didn't find it at all amusing. Here is his recent post on the subject.

Likewise for The Columbia Journalism Review, which weighed in after Felix.

There are worse ways to advertise such an operation than to put Ben Stein out there with a cartoony squirrel, though. You could have three guys in pirate suits in a seafood restaurant bemoaning their fate. Or have them show up at a Renaissance fair, still with pirate suits. Is Stein replacing those losers?

The worst one is the bit where the guy is married and complaining that he should have run a credit report on his wife first, or he would ... what? have dumped her? And they say chivalry is dead. Its all far worse than that. Chivalry is decomposing.