Hosking slams MediaWorks over leak

NBR journalist Rob Hosking has been scathing of MediaWorks after it was revealed today that at least two of their employees had been responsible for a leak of a confidential OCR announcement from a lock-up.

“…frankly a contemptible lack of integrity all round”.

He is also scathing of modern shock-horror journalism.

Rob Hosking blasts Mediaworks’ OCR leak on

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NBR article (paywalled): The Reserve Bank leak – a matter of integrity

Hosking also made some comments in a thread on Twitter:

Well for a start people lied. Call me old fashioned.

Secondly, its a breach which could have led to a crime.

I didn’t see it as defending Mediaworks, only the value of lockups but lock ups are clearly of more value without Mediaworks in them. Can’t be trusted.

This wasn’t just stupidity. This was an absence of integrity.

If you’re cool with insider trading – whether or not it’s a crime – this is no big deal I spose

First, a disclosure. I’ve been covering Reserve Bank monetary policy statements for 19 years. I was in the lock up last month when a journalist from Mediaworks’ radio outlet, Radio Live, sneaked the decision out an hour before the embargo was lifted.

The intro calls the Reserve Bank OCR as one of the country’s most sacrosanct embargoes.

Andrew Paterson: Well the decision by the Reserve Bank to discontinue it’s six weekly OCR media and analyst lock-ups in the wake of an embargo  breach by a junior  MediaWorks reporter has raised the ire of seasoned business journalists who have condemned the actions of the reporter in question for breaching what had been one of the country’s most sacrosanct embargoes.

The Reserve Bank took the action after preparing a detailed report into the breach.

Joining me to discuss this is NBR’s political and economic correspondent Rob Hosking.

Rob you’ve obviously been a veteran of these lock-ups, you must be disappointed in this action by the Reserve Bank.

Rob Hosking: Disappointed puts it mildly. I’m more disappointed in the actions of MediaWorks, because look, it was their actions that triggered this, right. They had the choice.

I don’t think the Reserve Bank had any choice but to take some drastic action, I think they’ve gone too far and we’ll come back to that a little bit later, but the point about these lock-ups is they’re a contract, which each journalist, and the organisation they represent, enters into when they go into that lock-up.

And that basically is you do not communicate with the outside until the embargo is lifted.

And the reason for that contract is not some cosy little stitch-up or anything, the reason is you have two hours, absorb in the case of the monetary policy statement, what is often a quite complex document, it often contains significant changes in the outlook for the economy, and it certainly often contains changes in the Reserve Bank’s thinking on the economy and where it’s next move might go.

And it’s the opportunity to quiz a couple of Reserve Bank economists on just sort of what they mean by some of the material that’s in documents, and it means you can report on it fully and accurately and you can actually not only just report on what’s in there but you can give some analysis of it.

And that is very very important the conduct of the economic debate in this country, which for a long time when i was growing up was very very poor.

And i think those lock-ups have helped contribute quite significantly to the quality of economic debate in this country.

And don’t forget one of the things the Reserve Bank acts as is as a sort of referee on the Government policies of the day no matter who that Government is, and that role which is not actually written into the Reserve Bank Act.

But it is effectively because of what the Reserve Bank does it often has to respond to bad Government economic policy, and it will say it is doing that, not in quite as blunt terms as that, but if you know, you understand monetary policy and you understand why the economic and fiscal policy, you will be able to report on that.

So it’s all a part of the accountability process in New Zealand. So that’s very very important.

But what has happened in the past few years is more and more coming into that lock-up being journalists from organisations who are interested in a quick shocking grab, they’re not there to do the analysis, they’re not there to absorb the contents of that document.

They want a shock horror, and they want to beat each other by nanoseconds.

And that’s what’s driven this action  here.

This was from an organisation that in no way provides in depth analysis of anything apart from maybe Kim Kardashian’s backside.

It’s completely, and what the Reserve Bank should have done, is first say ok MediaWorks, I mean this is obviously an organisational and cultural problem within MediaWorks, right, because this wasn’t, nobody at the news desk when this reporter contacted them said ‘whoa, what’s going on here’.

They simply said ‘ok, let’s start lining people up.

So this is not one reporter, right. And so MediaWorks would say ‘look, ban him for a couple of years’. No question about that.

But secondly they should have said, look ok, the risk is in these organisations that do not report the full flipping statement anyway, so keep them out until the press conference, which happens about five minutes after the embargo, and still have you know the analysts and the journalists in there who do do that analysis to do their job.

Andrew Paterson: So the question is should a relatively junior reporter with no background in business or economics, should have been in that situation in the first place.

Rob Hosking: Yeah exactly. And even if look you know sometimes people do go in there young, and look there have been very smart young reporters I might say, we’ve got one or two on NBR staff, but you know there are some wiser heads sitting on the news desk where if something like this does happen they firstly make sure it doesn’t cause any damage, and secondly they kick the young reporter’s backside.

Ah and none of this seems to have happened in this case. It just seems to have been you a, look frankly a contemptible lack of integrity all round.

“Do you think this also reflects in the case of MediaWorks, the fact that when you don’t train journalists appropriately, these accidents, these sorts of mistakes will happen?

Rob Hosking: That’s partly it. But again I come back to that contract, and a basic matter of integrity. You should not need any training as a journalist to know that when you agree to something you stick to that agreement.

That’s got nothing, I mean that’s not about being trained as a journalist, that is basic integrity.

Andrew Paterson: Now you’ve written to the Reserve Bank yourself?

Rob Hosking:Yeah I’ve suggested that they do something along the lines of what I’ve suggested and that they reconsider the decision. I’m not hopeful.

But I think that you know there needs to be some, if you want to see the quality of economic debate improve effectively,and you know there is a level of knowledgeable economic debate in the country that just wasn’t there  when I was growing up in the seventies when we desperately needed some I might add, then it should be reconsidered.

As I say I’m not hopeful, but we’ll have to wait and see.

Reserve Bank leak and MediaWorks

In March a journalist from MediaWorks leaked information about an OCR announcement that could potentially have resulted in insider trading, and another MediaWorks employee passed the information on to a blogger.

This was a serious breach.

Journalists had been brief on impending announcements so they cold prepare stories on the condition secrecy was maintained until the official announcement was made.

Yesterday the Reserve Bank issued this press release:

Reserve Bank takes action after investigation confirms leak

Thursday, 14 April 2016, 2:15 pm

Reserve Bank takes action after investigation confirms leak

An independent investigation has confirmed that highly sensitive and valuable market information on the March Official Cash Rate (OCR) cut decision was leaked by a journalist ahead of the official release, the Reserve Bank said today.

Following the investigation, the Bank will tighten its procedures for the release of confidential information. The Bank will discontinue embargoed lock-ups for news media and analysts ahead of announcements of interest rate decisions, Monetary Policy Statements and Financial Stability Reports.

The investigation by Deloitte’s forensic unit found that, contrary to the rules of the lock-up, information on the Bank’s decision to cut the OCR was transmitted by a Newshub Mediaworks reporter to several people in the Newshub office from the media lockup for the Monetary Policy Statement on 10 March.

This information was then passed on by another person in Newshub Mediaworks, well before the MPS official release, to an economics blogger. The blogger only alerted the Bank to the leak after the MPS was officially released.

Deloitte was assisted in its investigation by Mediaworks’ legal team, who undertook an internal investigation, uncovered emails that confirmed the leak, and reported these to Deloitte.

Governor Graeme Wheeler said: “The leak is a serious and disappointing breach of many years of trust. It created the opportunity for improper gain on financial markets and damage to the integrity of the Bank’s communications. I am extremely disappointed that the information was leaked initially and then communicated more widely.

“The fact that several people outside the Bank, who had access to the information improperly, failed to alert the Bank immediately, was irresponsible and left open a significant risk that the Bank could have closed down quickly with an immediate official release.”

No evidence has emerged that the leak gave rise to any financial market impact.

The Bank has considered alternative arrangements relating to information security. However, none completely mitigated the technology and human risks, said Head of Communications Mike Hannah.

“We have reviewed the procedures of several central banks. None provide lock-ups for analysts prior to major policy announcements, and the few that provide embargoed lock-ups for media representatives take extensive measures to control the media environment in the lock-up that are not viable for us. Most central banks do not provide embargoed lock-ups.”

Mr Hannah said that from the 28 April OCR statement release, the Bank will issue OCR and MPS statements via its pages on Thomson Reuters and Bloomberg screens at 9:00am, as is currently the case, followed by release on its website and to email subscribers. In the case of the quarterly MPSs and six-monthly FSRs, the release of a news release and these documents at9:00am will be followed an hour later by a press conference.

“The decision not to provide lock-ups for media or analysts means that these parties will receive the information at the same time as other financial market and public audiences.”

More information: Investigation into leak of March 2016 OCR announcement

MediaWorks issued their own press release:

MediaWorks Response to Reserve Bank Statement

Thursday, 14 April 2016, 2:07 pm

Mark Weldon, Group CEO, MediaWorks said: “MediaWorks unreservedly apologises to the Reserve Bank for this incident. Once MediaWorks was aware a leak had taken place, it conducted its own investigation to determine whether the leak had come from within MediaWorks and self-reported that to the Reserve Bank.”

Regarding the specifics of the matter, Richard Sutherland, Acting Chief News Officer, said: “The leak was caused by a failure within News to follow proper process and changes have already been made as a result. We are addressing the breach with those concerned and new policies and training will be implemented moving forward.”

There was a strong response on Twitter from journalists from other companies who were very annoyed their privilege of lock-up provide information in advance had been removed.

Some suggested that MediaWorks only should be penalised, which is a fair point.

Others said that much stronger action would be appropriate from MediaWorks, with sackings amongst the suggestions.

It was pointed out that if a Reserve Bank employee or politician had leaked information like this the media would be all over the story, they would have identified the people involved and named and shamed them.

Instead they muttered on Twitter where it was also suggested that they protect their own.

Except Rob Hosking from NBR who was scathing. See next post.