IBM breaks law; Wall Street Journal buries the news

So IBM gets busted by the SEC for misleading investors (see here) and a dude from the SEC says, “The facts here are particularly troubling …” And where does the Journal play the story? On B4. Bit hard to find it back there innit? I mean one of the biggest companies in the world gets nailed by the SEC (and settles without admitting wrongdoing) and it’s no big deal? Kind of hard to understand, since the first line of the Journal story announces that, “The Securities and Exchange Commission said International Business Machines Corp. broke federal securities laws …” (See here.)

Forgive me for being peeved, but the Journal reporter on this story, Charlie Forelle, has had the world’s biggest hard-on for me since last year and has been hounding me over the backdating thing like I’m Public Enemy Number One. Even though, let’s be honest, I’ve been charged with nothing. Now here comes IBM and they’re fully busted and somehow this isn’t big news. Could it be that IBM is a big advertiser with the Journal? Yep, and these are the sanctimonious pricks who think Murdoch will soil their precious integrity. Ahem.

But that’s only part of it. Here’s the rest, according to Katie Cotton, our PR expert. As Katie explains it, poor Charlie has the unfortunate job of having to cover IBM and deal with its PR flacks. The deal with reporters on the IBM beat is this: Step out of line, IBM never talks to you again. And not just to you, but to your entire publication, so all of your fellow reporters get screwed too. Then IBM yanks its advertising, so now the guys on the sales side of the publication hate you too. Now you’re truly Mr. Popular around your own shop. Happened to David Kirkpatrick at Fortune. And to Jon Auerbach, one of Charlie’s predecessors at the Journal.

If you’re really naughty, IBM goes to every Wall Street analyst who covers its stock and every market researcher at IDC, Gartner, etc., and instructs them never to talk to you. And guess what? Those shills all go dark on you. Some will even come out after you write a story and publish “research notes” saying your story was wrong. Then IBM’s PR people take those notes to your editor to show that “independent researchers” are saying you are wrong; and they demand you be taken off the IBM beat.

If you really keep pushing, IBM goes on the offensive — its dark ops team starts floating disinformation to bloggers, urging them to smear you. Suddenly every time you write an article, no matter how innocuous it is, no matter what it’s about, no matter if it’s completely unrelated to IBM, all sorts of random people start flooding your publication with angry letters to the editor saying how you got things wrong, you’re stupid, how can they keep you on staff, you’ve made so many huge mistakes, you’re biased, they should let you go, etc. And funny thing — those letters all include links to those blog articles where you’ve been “exposed” as a biased, lying shill.

“In the world of what I do,” Katie says, “there is no one who plays hardball better than IBM. Honestly. They’re the best. They wrote the book on this stuff. All we do is refuse to talk to people. We’re pikers compared to them, honestly.”

So poor Charlie. He knows if he pisses off IBM he’ll find himself in a world of shit. On the other hand, he can’t just ignore this SEC story completely. He has to write something. So he reports just what he has to, and they bury it in back. And he makes sure to mention that “the befuddling presentation” for which IBM got in trouble “came as IBM and other large companies” were struggling to adjust to “new financial-reporting rules.” Oh, those complicated rules — they frighten and confuse me! We call this the “Unfrozen Caveman Lawyer” defense. Nice work, Cirroc. Er, Charlie.