By Max Wilhelm

On a November night in 2014, Sarah Lacy was redoing her home security system.

The 38-year-old investigative journalist recently heard that Emil Michael, a senior vice president of business for Uber, had publicly boasted of a $1 million smear campaign to spy on journalists covering Uber.[1]

The popular San Francisco-based ride-sharing service had faced a barrage of criticism since its founding, mostly targeting the company’s “bro-ish” culture and insensitivity to its female customers. Lacy, (right) the editor-in-chief and founder of technology news website PandoDaily, knew that she was a likely target in Uber’s campaign against journalists.

Lacy had recently accused Uber of “sexism and misogyny” after the company appeared to be working with a French escort service. Michael’s plan to discredit journalists by “digging up dirt” on their personal lives seemed like a gross violation of her privacy, a violation that she could not easily forgive.

“Paula Deen made racially insensitive comments and lost a show, lost very real money. Donald Sterling was forced to sell an NBA team,” Lacy said. “And yet we believe that frighteningly misogynist comments like this, anti-First Amendments comments like this, are ‘boys being boys’ and that ‘they’re geniuses and this is what it takes to build a company.’’

In response, Uber publicly denounced Michael’s statements, saying that “We have not, do not and will not investigate journalists.” While some might attribute this seemingly Orwellian plan to Silicon Valley hubris, the truth is that corporate spying on journalists is not a new phenomenon.

General Motors vs. Ralph Nader

One of the most famous cases of companies spying on critics traces back to a young attorney named Ralph Nader in 1966. Nader had written a mildly successful book called Unsafe at Any Speed which criticized General Motors for design flaws leading to unnecessary accidents and deaths in the 1960-1964 Chevrolet Corvair models. Months later, Nader suspected that he was being followed, and later heard reports of strangers asking his friends and family about his personal affairs.[2]

Nader eventually learned that General Motors hired a private investigation firm to dig into his personal life in order to discredit his future testimony in a Congressional hearing against the company.

On March 9, 1966, General Motors admitted the company did track Nader “for routine matters” but never admitted to the widely believed intention of attempting to discredit witness testimony from Nader.

During these four decades separating Ralph Nader and Sarah Lacy, advances in technology, communications, and globalization dramatically altered the landscape of American business. However, one of the darker business practices has remained intact.

This practice is corporate espionage.

The major difference in modern-day corporate espionage is that companies are better at gathering the information they want, and a lot harder to catch in the act.

While corporate espionage traditionally refers to companies spying on their competitors to gain a strategic edge, it can also refer to companies spying on the journalists who cover them.

Any company with an investigative division would prefer a less grating term over corporate espionage such as competitive intelligence, or market research analysis. However, these business arms of America’s corporate machine are responsible for many of the chilling cases of corporate espionage in the history of American business, cases that include spying and intimidating journalists.

These divisions are made up of the most talented intelligence analysts and sleuths around, including former agents of the FBI, CIA, NSA, and Secret Service.[3] As agents of the firm, they have a relatively simple mission. They gather and use intelligence to protect the firm’s bottom line.

The structure of large, publicly owned companies requires constant growth in profit and share price. The motivation to continuously improve means companies are heavily suspicious of any coverage which can damage business. To prevent bad press, companies have gone to great lengths to keep their brand and share price intact, and investigative journalists are frequently the prime target.

The Case of Hewlett-Packard

Hewlett-Packard is another modern example of a company that initiated a large espionage case against journalists covering their firm. In 2006, it was revealed that Hewlett-Packard illegally obtained the phone records of several board members and journalists in an effort to find a board member leaking confidential, strategic information to the press.

One story in particular speaks to the unsettling power and boldness of corporations trying to protect their image. During this Hewlett-Packard spy campaign, Chairwoman Patricia Dunn authorized the creation of an elaborate scheme to track journalists involving a fictional Hewlett-Packard employee named Jacob.

Jacob was set up as a lure for CNET reporter Dawn Kawamoto, (right) who was believed to be in regular contact with the board mole. After releasing a few credible stories to gain her trust, Jacob sent an email to Kawamoto loaded with spyware that would record every keystroke she made in a sophisticated effort to track her source.[4]

These surveillance strategies, many which were against the law, resulted in Chairwoman Dunn and a half-dozen other top Hewlett-Packard executives losing their jobs. The company was also ordered to pay over $20 million in fines.

The cases of Hewlett-Packard, General Motors, and Uber exhibit the lengths companies will go to protect their market share and brand image. While extreme, these case of corporate espionage are possibly just one of many other cases that have remained secret.

The truth is that no one knows exactly how large the market is for corporate espionage, or how much spying on journalists, executives, and employees actually occurs. However, we do know that companies are willing to pay a premium for access to hidden information.

Gartner, a leading technology research and advisory firm based in Connecticut, estimated the competitive intelligence industry at around $30 billion in 2013. This industry is only expected to grow as big data becomes more prevalent and valuable for corporate strategy.[5]

Many might wonder why corporations would engage in such questionable behavior, which seems reckless given these companies are often in the media spotlight. By looking at the risks and rewards of corporate espionage, one can better understand why this practice remains in use today.

As representatives of shareholders, it is the board of directors’ responsibility to maximize shareholder value. Therefore, spying on journalists who have the potential to hurt shareholder value, in addition to the boards’ jobs, can be seen as a viable strategy for the company’s health.

It does not help the case of journalists that companies who get caught in the act of corporate espionage have faced historically low penalties. After Hewlett-Packard was caught illegally monitoring board members and journalists, the company faced a fine of roughly $20 million, or just around 0.02 percent of revenue the year before.[6]

Considering this miniscule penalty in addition to the roughly 23 percent rise in Hewlett-Packard’s share price over the year following the scandal, one can imagine why a board of directors might frequently make decisions favoring money over ethics.[7]

The example of Uber also demonstrates how profit triumphs over ethics in the minds of investors. Not even one month after Uber’s supposed plan to spy on journalists like Sarah Lacy became public, a new round of funding valued the 5-year-old company at over $40 billion[8].

It is clear that companies have far greater resources and personnel to monitor journalists than journalists have to monitor companies. So how do journalists react with all the odds seemingly stacked up against them?

Not a serious problem?

For the most part, they do not believe there to be a serious problem.

Investigative journalists work with the belief that companies are not evil, and that it is natural for these institutions to learn about the people who write about them. They believe that there is a healthy yet competitive relationship that serves the best interests of media and the companies they cover.

Companies need the media to generate brand recognition and good press, and the media needs companies to build stories about the company, its competitors, and the industry that people will want to read.

Ben Smith, the editor-in-chief at Buzzfeed and one of the first to report on the Uber scandal, believes the relationship between the media and companies to be a healthy one.

“We don’t view our role as ‘combating’ the companies we cover. Adversarial relationships are both normal and healthy,” Smith said.[9]

One might expect to hear some bitterness after Smith’s exposure to the Uber executive talking about “digging up dirt” on journalists’ personal lives. However, he adopts an attitude of taking the high road, acknowledging that there can sometimes be bad eggs who do not represent the company culture.

In regards to the media and corporate relationship Smith also said, “Companies typically respect journalists who give them fair and tough coverage. Our reporter covering Uber, Johana Bhuiyan, has not had problems with access.”

It seems apparent that many journalists do not hold grudges, and that they are comfortable with a bit of a competitive relationship.

While the relationship is generally amicable, there are some investigative reporters that have been exposed to the darkest elements of the media and corporate relationship.

Diana Henriques, (right) an award-winning financial journalist and a New York Times best-selling author on financial events and scandals, is one such journalist.

During her 12-year career at The Times and other publications, she has had a front-row seat into how different companies work with journalists. Overall, Henriques finds no problem with companies performing normal due diligence into a journalist covering them.

“Any competent public relations professional is going to research a reporter’s public track record after getting an interview request, and I don’t find anything offensive about that,” Henriques said.[10]

Henriques states an example of a journalist covering a company who might also have been paid for speaking events by an advocacy group hostile to that company. In this scenario, she believes a company has every right to refuse an interview request by this journalist.

However, reasonable inquiry into a journalist’s professional career is not always where companies draw the line, as Henriques has personally discovered.

“I have had only a few encounters with that sort of bullying research [corporate spying], most memorably by the Ponzi scheming CEO of a debt-collection agency who traveled everywhere with armed guards and who left threatening messages on my voice mail making it clear that he knew where I lived,” Henriques said.

On a separate case, Henriques said she was trailed by a private investigator 24/7, a time which she described as “a little unsettling”. These are the only events of corporate spying that she has encountered in her 40-year career as an investigative journalist, but they are enough to leave a mark.

Dan Kane, investigative reporter for The (Raleigh) News & Observer, is an example of a journalist exposed to intimidation tactics, though from a different source.

Kane was the first to break the story of the widespread academic negligence at the University of North Carolina at Chapel Hill, starting a chain of events that culminated in a federal investigation and the withdrawing of former Chancellor Holden Thorp. Soon after releasing his research on the academic scandal, Kane said he was exposed to numerous threats from the UNC-CH fan base, including threats against him and his wife’s safety.[11]

Kane never became aware of a university-led investigation led into his personal affairs, but he did find that the school cut off all ties with him in a damage control campaign to prevent any more bad press.

“After that Julius Peppers mess it was very hard to get people to talk to me on the phone or in person,” Kane said. “It shouldn’t be that way.”

Companies and institutions who take a strong-armed or closed-door approach against media exposure can lose more than the public’s trust. Henriques believes that it erodes the entire corporate-media relationship that is essential for companies.

In regards to the intimidation tactics taken against her, Henriques said, ”Knowledge about that kind of research being conducted can introduce a strong adversarial tone to the relationship right out of the blocks, which is unfortunate for both sides…opposition research can sometimes push reporters into that posture despite their best effort to be fair and diplomatic.

“That can only backfire for the company, which loses any opportunity to open a constructive dialogue with the reporter and which risks coming across to the public as a bully with something to hide.”

While corporate spying is a serious problem, the truth is that extreme cases of corporate bullying rarely happen.

Arguably the rise of social media has facilitated greater public awareness of businesses, and makes spying on individuals riskier. When it does happen, it is generally rooted in the personalities of the company’s top executives who might believe themselves to be larger than ethical business practices, an opinion that Sarah Lacy seems to have of Uber.

“I’ve never heard of a very high-ranking executive at a $20 billion company talking about a million-dollar budget to destroy my life,” Lacy said. “I’ve never heard of a case where someone was bragging about it at a dinner, where it was considered socially acceptable.”

While companies can often be the source of the problem, the responsibility to prevent this type of destructive behavior does not solely rest on companies. Journalists must be held to the same professional standard as the companies they cover by striving to remain impartial.

“A reporter has the same obligation to be held accountable for her professional performance. And that means avoiding associations, activities and assignments that can be reasonably challenged as conflicts of interest,” Henriques said.

In and of itself, companies researching the professional background of reporters is not a vicious act. It is a necessary process to facilitate ties within the media and companies, although it can never entail “digging up dirt” on reporters’ personal lives to discredit their research.

The mystery lies in where the line is drawn.

[1]Nellie, B. (2014, November 18). Sarah Lacy on Exec’s Plan to Smear Her: “Every Woman Using Uber Should Be Scared.”. Retrieved April 29, 2015.

[2] Jack Doyle, “GM & Ralph Nader, 1965-1971,” PopHistoryDig.com, March 31, 2013.

[3] The Fifth Surveillance: Corporate Spying On Non-Profits | Techdirt (Techdirt.) https://www.techdirt.com/articles/20140711/08223227850/fifth-surveillance-corporate-spying-non-profits.shtml

[4] Martin, P. (2006, October 2). Hewlett-Packard spying scandal sheds new light on US corporate “ethics”. Retrieved April 15, 2015.

[5] Chidi, G. (2013, February 2). Confessions of a Corporate Spy. Retrieved April 22, 2015.

[6] Hewlett-Packard Company (2006). 10-K Annual Report 2006. Retrieved from SEC EDGAR website http://www.sec.gov/edgar.shtml

[7] HPQ Interactive Stock Chart | Yahoo! Inc. Stock – Yahoo! Finance (HPQ Interactive Stock Chart | Yahoo! Inc. Stock – Yahoo! Finance)

[8] MacMillan, D., Schechner, S., & Fleisher, L. (2014, December 5). Uber Snags $41 Billion Valuation. Retrieved April 21, 2015.

[9] Smith, B. (2015, March 29). Uber’s Opposition Research [E-mail interview].

[10] Henriques, D. (2015, April 28). Investigative Reporting and Opposition Journalism [E-mail interview].

[11] Kane, D. (2015, April 2). Investigative Reporting at The Raleigh News & Observer [Telephone interview].

Max Wilhelm is a junior in the UNC-Chapel Hill School of Journalism and Mass Communication.

By Matt Kupchin

“Business is boring,” said Dan Johnson, senior finance major at TCU, who reads the Wall Street Journal daily and listens to NPR one to two times a week for business news. Johnson admitted that many of his peers lack the enthusiasm he has for staying up-to-date with the complex and perceived to be mundane topic of business and economic news.

“There isn’t an obvious side to take, like in politics where it’s democrat versus republican, good versus evil or vice versa depending on who you are,” Johnson said. “It can be a lot more difficult to read.”

This year, “Millennials” (ages 18-34) are projected to surpass Baby Boomers as the nation’s largest living generation. And while local television, which reaches about nine in ten U.S. adults, currently remains the primary place American adults turn to for news, a clear shift is taking place in terms of how people, especially young people, are getting their news.

Whether it be concerning, sad or a mix of the two, only 53 percent of online respondents, not only millennials, in a new Pew Research Study had ever even heard of NPR. Instead, numbers from 2014 bring more evidence that news is a part of the explosion of social media and mobile devices, and it may have the opportunity to reach more people with news than ever before.

Thirty percent of U.S. adults get their news from Facebook, which isn’t incredibly surprising considering 71 percent of online adults in the country use Facebook. Half of Facebook users say they get news there even though they did not go there looking for it. And this isn’t just a millennial thing.

John Harvey, professor of economics at TCU, said he gets most of his news from Facebook, using the site to filter interesting news his way.

“I have many friends who are also economists and when one of us comes across something of interest, we post it,” Harvey said. “Their ultimate source varies widely: BBC, Wall Street Journal, The Economist, AP Wire, Reuters, etc. In that way, we collectively serve to screen news articles for each other.”

In terms of millennials, social media has an even stronger pull, as Facebook users who get their news at the highest rates are 18 to 29 year olds. 71 percent of Crowdtap survey participants, all millennials, listed social media as a top priority in their lives, engaging in it daily. 60 percent of these same millennials said they depend on social media to keep up-to-date on current global and local news.

However, what’s concerning about this new found reliance on social media, primarily Facebook, for news consumption is that recent evidence finds these consumers have very low levels of engagement with the news sites. Visitors who arrive directly at a news site typically spend over four minutes at that site, looking at more than 24 pages on average monthly. Those same users who arrive from Facebook spend about a minute and a half on that news site, looking at only four pages during that same time.

And in terms of business news coverage, Facebook is also lacking. Only 31 percent of Facebook news consumers regularly see business news on the site. This ranks last by quite a large margin in terms of topics of news seen on Facebook.

This lack of business and economic news coverage isn’t only happening on new age social media sites such as Facebook. Traditional media organizations and primarily those on television, which still reach the most Americans as previously stated, have begun to drop the ball on business coverage.

Less Coverage on TV

According to a Media Matters report, the total amount of television news coverage devoted to the economy and business related issues declined significantly across all networks during the second half of 2014.

Media Matters recorded only 475 economic segments on the three largest broadcast (ABC, CBS and NBC) and three largest cable (CNN, FOX News and MSNBC) networks from July through December, compared to 861 economic segments from January through June. CNN virtually ignored economic coverage during this period, airing only 34 recorded segments. MSNBC led the pack by dedicating 231 segments to economic news and policy debates.

And while these statistics along with many others in this report are startling, I found that the most noteworthy was that economists account for only 3.2 percent of all recorded guests during economic news coverage. Political guests and journalists make up almost the entirety. Those who could provide expert analysis, actual economists, represented only 23 of the 715 total guests in segments on the economy during the second half of the year. And apparently this is normal according to past trends.

This makes it incredibly concerning that even if more Americans start following economic news coverage, even if more young Americans start following economic news coverage, the coverage and news they will receive will merely follow the political agenda of whichever network they tune in to and not actually provide them with concrete, expert knowledge from professionals.

So where should Americans, young Americans, turn for their news? Where do they turn?

Well, when looking to digital news, a NiemanLab poll found that 54.3 percent of millennials favored Vice, Slate, Buzzfeed and similar “non-traditional” sites for their news. This seems to show how young people are changing the way news is consumed and where they prefer to consume it.

Vice Media, the global digital youth brand with an audience of 130 million viewers/readers a month, has become one of the fastest growing channels on YouTube. It’s innovative site, paired with HBO, with 60 Minutes-style investigative pieces that would often times be too risqué for the CBS mainstay, have made Vice News appealing to younger audiences.

“Our approach and the way we are trying to package what we do is radically different to what we see in terrestrial TV,” Kevin Sutcliffe, the head of news programs for Vice Media, said at the Guardian International Television Festival in August. “Vice News isn’t TV news. We are building it out of an already engaged online audience in their 20s. We are in a different space. Response to people moving away from the old fashioned forms of TV news, whether that’s news bulletins or 24-hour [rolling news] TV. We have responded to that.”

Vice is now valued at more than $2.5 billion after receiving a $500 million investment in September from A+E Networks and TCV, so it’s safe to say that this new form of media has found success.

Vice has also continued to adapt and add to their repertoire as a news provider, recently partnering with Snapchat to provide more mobile access to their stories. Snapchat’s new tool, ‘Discover,’ allows media outlets like Vice to post bite-sized content on the popular messaging app.

Snapchat currently is working with ten media partners, including CNN, ESPN and Vice who release new editions of their Discover content every 24 hours, featuring both videos and articles from the companies. A goal of these media companies is to hook a new, younger audience that doesn’t often connect with traditional media. Personally I use Snapchat’s new ‘Discover’ tool daily, and will often share videos and interesting stories I find on Vice with friends and vice versa on my mobile device.

The Mobile Trend

And mobile seems to be the most apparent future of news. S. Mitra Kalita, (right) managing editor at the Los Angeles Times and former executive editor at Quartz, a business news outlet built primarily for tablets and mobile phones, said that the mobile trend is simply how news outlets must now connect with their audience.

“Rare is the person who doesn’t have a smart phone. Our model is shareable so they discover us mostly through Facebook, Twitter, and other sites such as Reddit and LinkedIn,” Kalita said. “I think over the last few years traditional organizations gave up on younger readers in an era of bleeding and major cuts. Now they see young readers via mobile, iPads, watches or texts as their future.”

Hanna Jane Stradinger, senior entrepreneurial management major at TCU, said she gets nearly all her business and daily news from her mobile phone. For business news, she said she uses the Wall Street Journal app and their breaking news alert system, which sends her direct messages. And for daily news Stradinger said she subscribes to the Skimm, a free daily e-mail newsletter with an editorial perspective.

“The Skimm does a great job of reaching both younger audiences and audiences that wouldn’t typically read the news on a daily basis,” she said. “It gives a very easy to understand description of top news stories and provides links to read up on further details.”

This concept Stradinger brings up regarding easy to understand news seems to get back to the idea of why business and economic news doesn’t seem to attract the average young reader. Most readers, especially young readers, lack background knowledge on complex economic issues that are difficult to explain in short news stories. Professor Harvey compares it to reading sports news.

“You don’t seek out NFL news if you don’t understand football,” Harvey said. “Reading every economics article you find online isn’t very useful if you don’t have a frame of reference to interpret them. This is especially problematic when many of those authoring the articles also don’t have a firm grasp of the underlying processes.”

Harvey said this lack of understanding might not be that different for older readers, but they may have a vested interest to stay informed.

“Even if I don’t understand the stock market, if my retirement money is there, then it’s a topic of interest to me,” he said.

Kalita, however, said she believes that this idea of having a vested interest is beginning to occur within young people, who will soon become much more connected to business news.

“I think young people are actually obsessed with money in a way we haven’t seen before because they are the first generation to risk being worse off than their parents,” she said.

This responsibility of growing up in a struggling economy may force young readers to more closely follow areas of business and economic news that they never would have. Yet the only seemingly certain thing is that they will be following this news on their mobile devices, and sharing news on the go through social media like never before.

Matt Kupchin is a senior at the Bob Schieffer School of Journalism at Texas Christian University.