By Yasha Levine: In the vast ecosystem of corporate shills, which one is the most effective? Propaganda works best when it is not perceived as propaganda: nuance, obfuscation, distraction, suggestion, the subtle introduction of doubt—these are more effective in the long run than shotgun blasts of lies. The master of this approach is Malcolm Gladwell.
Malcolm Gladwell is the New Yorker’s leading essayist and bestselling author. Time magazine named Gladwell one of the world’s 100 most influential people. His books sell copies in the millions, and he is in hot demand as one of the nation’s top public intellectual and pop gurus. Gladwell plays his role as a disinterested public intellectual like few others, right down to the frizzy hairdo and smock-y getups. His political aloofness, high-brow contrarianism and constant challenges to “popular wisdom” are all part of his shtick.
But beneath Malcolm Gladwell’s cleverly-crafted ambiguity, beneath the branded facade, one finds, with surprising ease, a common huckster on the take. I say “surprising ease” because it’s all out there on the public record.
As this article will demonstrate, Gladwell has shilled for Big Tobacco, Pharma and defended Enron-style financial fraud, all while earning hundreds of thousands of dollars as a corporate speaker, sometimes from the same companies and industries that he covers as a journalist.
Malcolm Gladwell is a one-man branding and distribution pipeline for valuable corporate messages, constructed on the public’s gullibility in trusting his probity and intellectual honesty in the pages of America’s most important weekly magazine, The New Yorker, and other highly prominent media outlets.
Early Ultra-Conservative Training
Perhaps Americans would be less shocked by Malcolm Gladwell’s journalistic corruption if they were aware of his background. Gladwell was trained up in the same corporate-funded network of training and “education” institutes and outfits responsible for churning out the likes of Michelle Malkin, convicted criminal James O’Keefe, Dinesh D’Souza and countless other GOP corporate activists. The difference: Unlike Gladwell, they rarely hid their ideological willingness to take cash in exchange for promoting the corporate right’s agenda.
While a student at the University of Toronto, Gladwell’s admiration for Ronald Reagan led him into conservative activist circles. In 1982, while still an undergrad, he completed a 12-week training course at the National Journalism Center, a corporate-funded program created to counter the media’s alleged “anti-business bias” by molding college kids into corporate-friendly journalist-operatives and helping them infiltrate top-tier news media organizations. To quote Philip Morris, a major supporter of the National Journalism Center, its mission was to “train budding journalists in free market political and economic principles.” Over the years the National Journalism Center has produced hundreds of pro-business news media moles, including top-tier conservative talent like Ann Coulter and former Wall Street Journal columnist and editorial board member John Fund.
After graduating from University of Toronto in 1984, Gladwell spent a few years bouncing around the far-right fringe of the corporate media spectrum. He wrote for the American Spectator—notorious in the 1990s as the primary media organ promoting anti-Clinton conspiracy theories—as well as the Moonie-owned Insight on the News. From 1985-6, Gladwell served as assistant editor at the Ethics and Public Policy Center, which was created to bridge the gap between neoconservatives and Christian fundamentalists and help the two hostile factions to come together to counter a common enemy: activists fighting for economic justice. Rick Santorum was a fellow at EPPC until June 2011, when he left to concentrate on his attempt to secure the 2012 GOP presidential nomination.
U.S. domestic and multinational firms find themselves increasingly under siege at home and abroad . . . They are accused of producing shoddy and unsafe products, fouling the environment, robbing future generations, wielding inordinate power, repressing peoples in the Third World, and generally of being insensitive to human needs… We as a small and ethically oriented center are in a position to respond more directly to ideological critics who insist that the corporation is fundamentally unjust.
But Lefever wasn’t just pro-corporation, he was also pro-white supremacy. In 1981, Ronald Reagan picked Lefever for the position of Assistant Secretary for Human Rights, but the nomination process blew up in his face after Lefever’s own brothers outed the man as a frothing white supremacist who believed blacks to be genetically inferior to whites. Gladwell, who is part-Jamaican, apparently didn’t mind working for a white supremacist who argued that people like Gladwell were inferior. Incredibly enough, Gladwell has continued to participate in events with EPPC outfit as late as 2005, and is currently listed on its promotional materials.
With several years of corporate media training and right-wing work experience advocacy under his belt, Malcolm Gladwell moved from the ideological fringes to the heart of the American mainstream journalism: In 1987, the Washington Post hired Gladwell as a science and business correspondent—the ideal beat for a neophyte propagandist looking to promote the business agenda.
From the get-go, Gladwell’s reporting stands out for its unabashedly pro-business, anti-regulation bias. Nowhere was this bias more evident than in Gladwell’s barely disguised promotion of the tobacco industry’s agenda. Gladwell’s reporting on tobacco issues in the early ’90s came just as Big Tobacco was was gearing up for its war against looming class-action lawsuits, as well as the mounting pressure for stricter regulation of the industry. As the Post’s business and science reporter, Gladwell carried the tobacco lobby’s water—and messages—while raising doubts about the industry’s critics.
One of the more obvious and disgusting examples: In 1990, Gladwell published a rank scare-article arguing that any moves to cut Americans’ smoking habits could “put a serious strain on the nation’s Social Security and Medicare programs”–meaning that high levels of smoking was helping keep America’s social safety from going bankrupt, since so many were dying before they could collect.
The article, headlined “Not Smoking Could Be Hazardous to Pension System,” was not reporting new news, but simply recycling stale tobacco propaganda: a 1987 industry study called “The Social Security Costs of Smoking,” produced by the notorious National Bureau of Economic Research, an organization with ties to the tobacco industry and bankrolled by the biggest names in right-wing corporate propaganda funding—some of the same foundations that funneled cash to one of Gladwell’s first employers, the Ethics and Public Policy Center.
Gladwell concluded the article by quoting more scare-mongering by a known tobacco lobbyist Gio Gori: “Prevention of disease is obviously something we should strive for. But it’s not going to be cheap. We will have to pay for those who survive,” he told Gladwell. What Gori didn’t say is that he had received hundreds of thousands of tobacco industry dollars to advocate for Big Tobacco, his rate set by contract at $200 per hour. Years later, after the federal lawsuit settlement with the big tobacco companies, the same study Gladwell quoted for his article was also found in the files of Victor Han, Director of Communications for Philip Morris Worldwide Regulatory Affairs.
Indeed, documents and communications later released to the public as part of the tobacco settlement showed that the tobacco industry considered Malcolm Gladwell an important friend. For example, an internal Phillip-Morris document from the mid- to late ’90s listed Gladwell as a “third party” media asset—someone who could be counted on to rally public support for tobacco industry causes.
For those not familiar with public relations industry lingo, “third party” refers to a PR technique in which a corporation’s marketing message is delivered to the public through seemingly independent journalists, academics, non-profits, think tanks and other respected “third parties” in order to bolster the credibility of “the message” and to conceal the ties between the message and the messenger. In other words, Gladwell was seen as a secret tobacco-industry propagandist.
In journalistic terms, “third-party advocate” simply means “fraud.” But here’s a more nuanced description of the third party technique and its importance to corporate messaging from a Burson-Marsteller PR expert, courtesy of SourceWatch:
For the media and the public, the corporation will be one of the least credible sources of information on its own product, environmental and safety risks. Both these audiences will turn to other experts … to get an objective viewpoint.
Developing third party support and validation for the basic risk messages of the corporation is essential. This support should ideally come from medical authorities, political leaders, union officials, relevant academics, fire and police officials, environmentalists, regulators.
This Philip-Morris document, titled “THIRD-PARTY MESSAGE DEVELOPMENT CONTACT LIST,” lists Gladwell alongside dozens of notorious corporate promoters and right-wing journalists, ranging from Fox’s mustachioed libertarian John Stossel, Bush press secretary and Fox News anchor Tony Snow, Grover Norquist, Milton Friedman and the head of the Heritage Foundation, Ed Feulner. This is a remarkable list, and it includes a disproportionate number of libertarians, like Reason magazine editor Jacob Sullum—whose role as a paid promoter of big tobacco was also exposed in the tobacco documents. (You can read more about them, including how RJ Reynolds paid Jacob Sullum $5,000 to “reprint” his article, here and here.)
Malcolm Gladwell: Trusted Tobacco Industry Media Asset
Gladwell’s shilling for the tobacco industry is shocking, but it makes more sense given his background. The National Journalism Center, which helped launch Gladwell’s journalistic career, received generous support from the tobacco industry, on the explicit understanding that the Journalism Center would train up pro-tobacco cub journalists who would later become reliable mouthpieces for tobacco-lobby interests.
This relationship is laid out explicitly in a number of internal tobacco-industry documents, including a 1994 Philip Morris strategy report. It described the company’s relationship with the National Journalism Center, and gloated about the success of their strategy:
This group was developed to train budding journalists . . . As a direct result of our support we have been able to work with alumni of this program . . . about 15 years worth of journalists at print and visual media throughout the country . . . to get across our side of the story . . .which has resulted in numerouspieces consistent with our point of view.
The document also revealed that Philip Morris regularly held briefings for the National Journalism Center’s “Alumni Council”—yep, that’s people like Malcolm Gladwell—in order to keep their assets up to date with the company’s newest policy objectives, which in 1994 included defeating President Clinton’s healthcare reform initiative:
Because Gladwell largely escaped suspicion, he turned out to be one of the tobacco industry’s most successful investments. Even after leaving the Washington Post, Gladwell continued pumping out pro-tobacco propaganda, and kneecapping or muddying the industry’s critics.
In one of the more shameless examples—a 1996 book review published in the New Republic—Gladwell attacked journalist Philip J. Hilts for comparing tobacco industry executives to Nazis. But Gladwell didn’t stop with attacking Hilts; instead, he used the example of Hilts’ analogy to smear all tobacco critics, arguing, “At the moment of its greatest victory, the anti-tobacco movement has begun to acquire a noxious odor of its own.” Shortly afterwards, a Philip Morris PR executive used Gladwell’s article in a letter to the New York Times in an attempt to get Hilts barred from the paper, so righteously indignant was he over the crime of Hilts’ Nazi analogy. Why was he so indignant? Maybe because the Nazi comparison was right on the mark: In 2011, an estimated 6 million people around the globe died from tobacco—the same as the number of Jews murdered by Nazis in the Holocaust. But while it took the Nazis years to murder 6 million men, women and children, tobacco companies churn through that same number of victims every 12 months.
Even as tobacco was preparing to settle with the Clinton Administration, Gladwell kept up the barrage of friendly propaganda. His first book, The Tipping Point, published in 2000, has a section on tobacco that, again, reads like something from industry PR. In one passage, Gladwell analyzed various studies into teen smoking and came to the conclusion that kids start smoking at a young age not in any way because of the millions of advertising dollars big tobacco spends targeting kids—but rather because kids just want to be cool and so it was practically “inevitable that they would also be drawn to the ultimate expression of adolescent rebellion, risk-taking, impulsivity, indifference to others, and precocity: the cigarette.”
“Who me? I’m not cool. Smoking Camel Lights, now that’s cool!”
This was whitewashing of the rankest, most cynical sort: In the 1990s, the average starting age of smokers was calculated to be 12. To the tobacco industry, getting kids hooked that young was a central business strategy. Gladwell could obfuscate all he wanted, but his old friends in the business bragged as far back as this 1975 internal document from Philip Morris, boasting, “Marlboro’s phenomenal growth rate in the past has been attributable in large part to our high market penetration among young smokers . . .15 to 19 years old.” Six years later it was the same old story. A Philip Morris study from 1981 called “Young Smokers — Prevalence, Trends, Implications, and Related Demographic Trends” laid it out clearly: “Today’s teenager is tomorrow’s potential regular customer, and the overwhelming majority of smokers first begin to smoke while still in their teens . . . The smoking patterns of teenagers are particularly important to Philip Morris.”
Guess Gladwell was never a big Flinstones fan…
By the time Gladwell’s The Tipping Point was published, this was the sort of message tobacco didn’t want the public to know about, or believe. Not surprisingly, Gladwell writes in his book:
Over the past decade, the anti-smoking movement has railed against the tobacco companies for making smoking cool and has spent untold millions of dollars of public money trying to convince teenagers that smoking isn’t cool. But that’s not the point. Smoking was never cool. Smokers are cool. [Notice the false antithesis to make Gladwell sound smart and outside-the-box, when he’s actually not saying anything new at all—SHAME.] Smoking epidemics begin in precisely the same way that the suicide epidemic in Micronesia began or word-of- mouth epidemics begin or the AIDS epidemic began . . . In this epidemic, as in all others, a very small group — a select few — are responsible for driving the epidemic forward.
In other words, it’s all the fault of cool people, and of natural forces and human behavior. Gladwell ignored the reams of documented evidence on the manipulative power of advertising and marketing; instead, like a classic corporate shill, he blames smokers for smoking. Blame the victims for being victimized—it is as offensive and fallacious as if Gladwell were to argue that crack cocaine dealers and drug cartel kingpins were totally blameless in the drug epidemics, and that it’s all the fault of the users, period.
Among The Tipping Point’s biggest fanswere Big Tobacco’s moguls. Gladwell’s book became required reading for industry people. An email sent by Philip Morris exec Michael Fitzgibbon to the company’s resident behavioral scientist, Carolyn J. Levy, said: “I recommend you read (or have one of your minions submit a book report on) The Tipping Point, by Malcolm Gladwell . . . Beyond the piece on teen smoking, there is some interesting, possibly useful, information.”
Even as Gladwell slowly started to rebrand himself as something of a “liberal” during the Bush years, his support for the tobacco industry remained constant. In 2006, Malcolm Gladwell told the New York Times that although he believes the tobacco industry should be regulated, he also “thinks that filing product liability lawsuits against cigarette manufacturers is absurd.”
Put in simpler terms: Gladwell thinks people should not sue suing tobacco companies for knowingly and purposefully misleading customers about the dangers of cigarette smoke. By this time, no one could maintain credibility while arguing against regulation of tobacco; however, the industry’s biggest problems lay in the ongoing lawsuits that Gladwell forcefully opposed. Across the US juries were handing out massive awards against tobacco companies—like the $37.5 million a Miami jury awarded in 2002 to John Lukacs, a 76-year-old former three-packs-a-day smoker who lost his tongue and lower palate, in his lawsuit against Philip Morris for false advertising and consumer fraud.
While Gladwell went around blasting such lawsuits as “absurd,” the industry, led by Philip Morris, was funding a major effort for “Tort Reform” to drastically limit and curtail Big Tobacco’s liability exposure to ongoing and future lawsuits.
The tobacco industry that Gladwell defends has plenty of reason to fear lawsuits: arguably, the tobacco industry is responsible for the largest, focused mass murder in human history. According to the CDC, “More deaths are caused each year by tobacco use than by all deaths from human immunodeficiency virus (HIV), illegal drug use, alcohol use, motor vehicle injuries, suicides, and murders combined.” Tobacco kills about 500,000 people every year in the US, and is expected to annually kill 8 million people worldwide by year 2030.
Multiply these grizzly numbers by decades, and you will have death tolls that make the Holocaust, Stalin’s crimes and America’s aggregate war dead pale by comparison—all that murder and death for the profit of tobacco industry shareholders and executives. You can see why they would consider Malcolm Gladwell such a valuable asset.
You can’t get much worse and more amoral than shilling for tobacco while posing as a mainstream journalist. Once you’ve gone there, there’s nothing holding you back from propagandizing for highly-profitable merchants of death from any industry—and by “you,” we mean “Malcolm Gladwell.” Along with big tobacco, he took up the cause of the pharmaceutical industry, defending the industry’s right to reap mega-profits on the backs of schoolchildren who were being turned en masse into highly profitable amphetamine addicts.
In 1999, the New Yorker published a Gladwell article in which he all but promoted the powerful stimulant drug Ritalin as a safe, non-addictive way to treat childhood A.D.H.D. “Obviously, taking Ritalin doesn’t have the same consequences as snorting cocaine . . . It’s not addictive,” he wrote.
The article was titled “Running From Ritalin” and came just in the nick of time for Big Pharma—amidst a fierce national debate about the alarming rise in prescriptions for powerful stimulants like Ritalin to treat childhood hyperactivity.
“Mommy, can you up my Ritalin dose today? Mr. Gladwell says it’s good for me . . .”
The 1990s decade saw a sevenfold increase in the production of ADHD stimulants, causing a growing number of medical professionals to complain that the drug was being over-prescribed, and wrongfully prescribed to treat what often would have been considered normal childhood behavior.
In 1998, the year before Gladwell’s article came out, Time magazine put Ritalin on its cover and ran a negative story that questioned the skyrocketing use of Ritalin and other powerful psychotropic drugs among American children. Even Hillary Clinton got into the fray, announcing a campaign to combat the growing problem of overmedicating children.
Among other things, drug companies were accused of using aggressive marketing techniques and industry-funded front groups to promote childhood A.D.H.D., frighten and confuse parents, and seduce doctors into treating hyperactive children with prescription speed. The adverse effects of this highly-profitable enterprise were evident: a study showed that up to one in ten children who were on Ritalin suffered psychotic episodes, including intense hallucinations. The FDA itself came out with a report that compiled story after story of children, some less than 10 years old, suffering from a range of “hallucinations, both visual and tactile…involving insects, snakes and worms.”
And what was Gladwell’s reaction? He dismissed it all as bunk, and took the side of the pharmaceutical industry. In his article, which relied heavily on quotes and information provided by A.D.H.D. researchers who later were found to have financial ties to the pharmaceutical industry*, Gladwell, ever the master of suggestion and nuance, posed the problem this way: “even with that dramatic increase, the number of American children taking Ritalin is estimated to be one or two per cent. Given that most estimates put the incidence of A.D.H.D. at between three and ﬁve per cent, are too many children taking the drug–or too few?”
In other words, if there’s any problem here, it’s that the kids aren’t being medicated enough!
In 2004, Gladwell came to Pharma’s rescue again, just when the industry was taking a lot of heat for the skyrocketing costs of prescription drugs. True to form, Gladwell published a piece in the New Yorker challenging the “conventional wisdom” about drug prices, arguing that the poor persecuted pharmaceutical industry was being scapegoated, blamed for problems that were beyond their control. Citing a pharma-funded study, Gladwell, ever the contrarian, located what he argued was the real reason drug costs were soaring: the victims were to blame, because Americans loved their pills so much they couldn’t buy enough of them, leaving poor drug industry manufacturers struggling to keep up with demand:
… drug expenditures are rising rapidly in the United States not so much because we’re being charged more for prescription drugs but because more people are taking more medications in more expensive combinations. It’s not price that matters; it’s volume.
The drug companies were merely responding to consumer demand—it was the consumer who was in charge, he argued, pushing one of the oldest PR tricks in the corporate playbook. Once again, it’s the victim’s fault: In Gladwell’s view, medical patients who can’t afford prescription medications have only themselves to blame and should accept personal responsibility rather than shifting the blame onto the innocent party—i.e., the pharmaceutical industry. This is the same “blame the victim” argument that Gladwell used to defend tobacco companies against well-founded accusations that they had targeted juveniles in marketing campaigns to turn them into addicts.
Gladwell’s prescription drug argument hinged on a study of drug prices in different countries by two University of Pennsylvania economists that had been published in Health Affairs. Gladwell didn’t mention that the study was funded by pharma giant Merck, nor did he inform his readers that the study’s leading author, economist Patricia M. Danzon, worked as a paid consultant for the pharmaceutical industry. Danzon’s CV contains a list of “selected consulting experience” that includes clients such as Merck, Pfizer and the Pharmaceutical Research and Manufacturers Association, the industry lobby juggernaut commonly known as PhRMA.
Views are those of the authors, funding for those views provided by Merck
Gladwell’s article on the explosion of drug prices and costs also didn’t say much of anything about pharmaceutical companies’ profits—by that time, Pharma’s profit margins were among the highest of any industry. Nor did Gladwell include the numerous documented cases in which drug companies have been busted engaging in criminal conspiracies to inflate and manipulate prices, leading to billions in fines and lawsuits. Neither did he address the various ways the industry pressures, manipulates and cajoles doctors to overmedicate patients, including bribes and kickbacks to doctors that are now routine practice in the medical industry.
There were plenty of examples for Gladwell to choose from, like the 2001 case against TAP Pharmaceutical Products involving both bribery and price manipulation, for which the company settled for nearly $1 billion. Or a lawsuit filed by 29 states against Bristol-Myers Squibb Co in 2002 that accused the giant pharmaceutical company of conspiring to delay the release of a generic cancer drug commonly used to treat ovarian and breast cancer by almost three years in order to keep the price of its own cancer drug, Taxol, inflated by as much as 30 percent.
Not surprisingly, Gladwell’s defense of Big Pharma’s pricing schemes won Gladwell high praise from various public relation flaks, including John Moore, a veteran corporate food marketer:
I can’t help myself when it comes to pimpin’ Malcolm Gladwell. You see, I value people who can make the complicated uncomplicated and can forgo conventional thought for intellectual thought. And Gladwell does both.
Case in point … his take on the high prices of prescription drugs.
In a recent New Yorker article, High Prices — How to Think about Prescription Drugs, Gladwell expertly dispels the myth that it’s the fault of the pharmaceutical drug companies for rising drug costs.
And in case anyone had any doubts over whether or not he was on the take, Malcolm Gladwell was finally forced to confess that he did indeed take money on the sly from the pharmaceutical industry, including under-the-table cash from companies he specifically mentioned and defended in his 2004 New Yorker article that blamed high drug prices on American consumers.
At the New Yorker, Malcolm Gladwell developed another branch of his branded Malcolm Gladwell, Inc. business: as a highly-paid corporate speaker. Indeed, Gladwell is ranked as one of the highest-paid speakers in America today, commanding anywhere from $40,000 to $80,000 for a single talk to corporations and industry groups eager to pay for his soothing wisdom. In 2007, Fast Companyestimated Gladwell does “roughly 25 speaking gigs a year, his current going rate some $40,000 per appearance.”
That would translate into roughly $1 million that year in speaking fees alone—four times what he made at the New Yorker in 2005. It’s a huge amount of money, as far as speaker’s salaries go. For comparison: Mitt Romney only made $500,000 in speaking fees in 2010.
Despite posing as a credible journalist at one of America’s premiere media outlets, Gladwell has yet to disclose which companies and lobby groups pay him to speak, or how much they pay him. Although he makes more money as a corporate speaker than he does as a journalist for the New Yorker, Gladwell claims that the speaking fees do not affect his reporting—in spite of all evidence to the contrary.
His New Yorker article about high drug prices was so gratuitously biased and so obviously skewed in favor of the pharmaceutical industry that it touched off a minor controversy about his speaking fees and, for the first time, raised serious questions about Gladwell’s potential financial conflict of interest and his credibility as a reporter. Even some of his own colleagues wondered whether Gladwell went too far this time.
Slate’s Jack Shafer raised the question, but quickly backed off after New Yorker editor in chief David Remnick went to the mat for Gladwell, assuring Shafer that there was nothing to worry about because Gladwell “is extremely eclectic in his interests and independent in his thinking. He is just about the least political or ideological writer on the staff—and wonderfully unpredictable.”
I contacted The New Yorker asking if the magazine had a policy on undisclosed conflicts-of-interest for their writers. The publication would not comment on the record for this story.
Strangely enough, Brandweek, the trade journal of the marketing industry, was much harsher in its criticism, noting that Gladwell’s pro-pharma article distinguished the New Yorker as one of the few news outlets not critical of industry’s role in skyrocketing drug prices—and they wondered, correctly, if Gladwell’s paid speaking gigs had anything to do with it:
One of the more sympathetic articles, published last October by The New Yorker, was penned by Malcolm Gladwell, author of The Tipping Point. … The piece did not mention, however, that Gladwell has been paid by pharmaceutical companies on numerous occasions in recent years to give speeches on his marketing theories.
The criticism was not very loud or sustained. But it was enough to make Gladwell uncomfortable, forcing him to publish an equivocating, message-confusing, rambling “disclosure statement” on his personal website that clocked in at over 6,000 words.
It was published on December 2004, and it began:
As a writer I wear two hats. I am a staff writer for the New Yorker magazine, where I have been under contract more or less continuously since 1996. I also do public speaking, based on my second career as the author of two books–The Tipping Point and Blink. Over the past four or five years, I have given talks to corporations, trade associations, conventions of one sort or another, colleges, think tanks, charitable groups, public lecture series and, on one occasion (arranged by my mother) my old high school. For some of those engagements, I have been paid. For those given to academic and charitable organizations, I generally have not…
Seems straightforward enough, right? Wrong: it took Gladwell 5,000 words before he finally addressed the reason he posted this Bible-length disclosure in the first place:
Have I given paid speeches to companies or industries mentioned or affected by that article? Yes I have. As I stated earlier, I have given my Tipping Point talk to groups of doctors, hospitals, insurers, as well as Pharmacy Benefit Managers and groups funded by the National Institutes of Health. More specifically, I have on several occasions over the past four years given paid speeches on the Tipping Point to pharmaceutical companies. So did that create a bias in favor of the pharmaceutical industry?
Leave it to the master propagandist to pose an admission of guilt as a question.
Most news organization have specific rules and guidelines about speaking fees, and some—including the Wall Street Journal, Bloomberg, and the Washington Post—ban their journalists from taking fees for speeches. But the issue is far from settled, and regularly comes up in debates about journalistic ethics. Jonathan Salant, former president of the Society of Professional Journalists Washington chapter, considers corporate speaking fees to be outright bribes. He’s not the only one.
In a March 2012 article in the Columbia Journalism Review, Paul Starobin wondered if speaking fees are a “dark and an indelible stain on journalism” and noted that most journalists would not talk openly about the details of their corporate speaker side-gigs on the record and that some tried to prevent their names from being mentioned at all.
The reason for their secrecy should be obvious to anyone: If you are paid tens of thousands of dollars by a company or lobby group for merely speaking at one of their conferences, wouldn’t you be more favorably inclined to see things their way, and less eager to air their critics, than if you hadn’t been paid by them, and didn’t expect future payments as well?
The fact is, corporations and industries that Gladwell defends and promotes in print have paid him tens of thousands of dollars—more than what most Americans make in a year—for just a few hours of his time. And yet Gladwell feigns ignorance of the financial side of his speaking business—he even pretends he doesn’t know who or what pays him how much. As he told New York Magazine in 2008, “I never deal with any of the money-negotiation part . . . It just goes into my account, so it’s like I’m not even aware.”
A million dollars a year goes into his account, and he’s not even sure what happens to it . . .
In Defense of Financial Deregulation
About six months before world financial markets froze up in the summer of 2007, Malcolm Gladwell wrote another one of his “contrarian” articles for the New Yorker, this time defending the actions of Enron executives. Gladwell was most concerned for Enron President Jeffery Skilling, who was convicted of 19 felony counts, including securities fraud, conspiracy and insider trading, and sentenced to 24 years in prison—after having dished out $40 million on his defense.
According to Gladwell, the prosecution and jury were wrong; Skilling didn’t necessarily break any laws when he cooked books and conspired to defraud investors, prettying up Enron’s financial statements while looting the company, leaving investors and employees fleeced and in some cases ruined. Gladwell implied, as is his wont, that the real culprits were the victims—investors who didn’t do their due diligence and properly sniff out Enron’s financial fraud, which Skilling and others did everything in their power to conceal. Gladwell argued essentially that corporations should be expected to lie, cheat and steal—the pursuit of profit was always blameless—it’s up to investors to ferret out fraud, and if they don’t, relying on the law and juries to punish the crimes was tantamount to rewarding investor failures. It was the same old Gladwell technique: blame victims for allowing themselves to be ripped off and robbed.
Gee, New Yorker, why don’t we ask some experts…
Announcing the publication of the article on his personal blog, Gladwell represented the Enron crimes in such a way as to, again, confuse and humble his readers:
“Can anyone explain–in plain language–what it is Jeff Skilling and Co. did wrong? . . . The question is strictly a legal one: according to the way the accounting rules were written at the time, what specific transgressions were Skilling guilty of that merited twenty-four years in prison?”
Gladwell probably wasn’t counting on someone like U.C. Berekley Economics Professor Brad DeLong to come in and call him on his sly defense. DeLong went into Gladwell’s comment section and ripped his article to shreds, forcing Gladwell to backtrack on his claim that Enron execs were not in fact guilty of committing a crime. In the end, Gladwell was reduced to calling critical commenters as “grouchy” and in need of a “chill pill.”
Meanwhile New York Timesbusiness columnist Joe Nocera dug deeper into Gladwell’s article and discovered even worse deception and journalistic malpractice. Gladwell had grossly distorted a crucial piece of evidence that supposedly proved that Enron’s bad accounting practices were out in the open and easy to spot:
As his coup de grâce, Mr. Gladwell writes about a group of Cornell University business school students who looked closely at Enron financials in the spring of 1998, over two years before the fraud was exposed. According to Mr. Gladwell, the students concluded that Enron’s business model was far riskier than its competitors. And they found “clear signs” that “Enron may be manipulating its earnings.” They put a sell recommendation on the stock, then at $48 a share.
Out of curiosity, I looked up the students’ work on the Internet. Their research report does indeed have a sell recommendation. But it’s not really because the students thought Enron had deep problems. Indeed, the report praises much about Enron and its business. The main issue was a “lack of upside potential in the near term.” Over the long term, the students had a neutral rating on the stock. The students put a price target of $42 — not exactly something you’d do if you suspected fraud.
As for that line about manipulating earnings, that’s in the report, too, but it is also not quite as Gladwell makes it out to be. The students used a complex statistical tool called the Beneish model, which helps investors detect whether there might be some earnings manipulation. Sure enough, that is what the model suggested. But then the students went on: “Further analysis of these indicators showed no cause for concern.”
Gladwell’s sly defense of Enron came out just as the financial industry and corporate America were launching a coordinated campaign to gut the Sarbanes-Oxley Act, which had been passed in the wake of Enron to beef up oversight of company accounting and to stiffen penalties for accounting fraud. Industry argued that Sarbanes-Oxley made the cost of doing business too expensive, and threatened America’s global competitiveness. None other than the newly installed Federal Reserve Chief Ben Bernanke came out supporting a drastic gutting of the bill; so did President George Bush.
Tea Party sugar daddy Charles Koch slammed Sarbanes-Oxley Act, telling the Wall Street Journal’s Stephan Moore (also on Koch’s pay at the Cato Institute) that the costs of complying with the accounting requirements were so onerous that they threatened to destroy publicly traded companies.
It was this coordinated industry campaign that caused New York Times business columnist Joe Nocera to get so weirded out by Gladwell’s article, considering the timing and the message:
I confess that I thought I was done with Enron. But it strikes me as important to wrestle with Mr. Gladwell’s position. Already, “Open Secrets” has been embraced by those who argue that the Enron prosecutions were an effort to “criminalize” what amounted to flawed business decisions. The efforts to weaken Sarbanes-Oxley are also rooted in the idea that the country overreacted to Enron and the other corporate scandals. In effect, the central defense argument — that Enron didn’t really do anything illegal — has been given new life by Mr. Gladwell. And it isn’t remotely true.
Gladwell responded to criticism of his Enron article with a typical PR industry technique: obfuscation and redirection. In a 2008 interview with New York magazine, he sidestepped the issue altogether, saying that his articles aren’t supposed to be authoritative or correct, but simply to “provoke a debate” on the subject. “I don’t think it’s proper for someone in my position to be a definitive voice. These books and New Yorker articles are conversation starters.”
What kind of conversation starters? The kind that engender personal gain from whatever toxic industry Gladwell happens to be shilling for at the moment?
A few days after his Enron article came out, Gladwell praised former Goldman Sachs CEO Henry Paulson for his dedication to “public service.” As Gladwell framed it, Paulson selflessly quit Wall Street to serve as U.S. Treasury Secretary. Gladwell further wrote that Paulson was part of a Washington D.C. “group that’s self-selected toward public service, as corny as it sounds.”
Aw shucks, it’s so corny—and yet so sincere!
In reality, Paulson’s move to Treasury was the furthest thing from selfless: Because of laws requiring him to sell his shares in Goldman Sachs, Paulson saved himself at least $100 million in tax bills. That’s because, by law, any investments sold to avoid conflicts of interest are exempt from taxes. On top of that, Paulson used his position of “public service” to dole out trillions of bailout funds to his former banking colleagues, including mega-billions to Goldman Sachs—one of the biggest beneficiaries of Paulson’s bailout scheme—at the end of the Bush presidency. His replacement at Goldman, Lloyd Blankfein, helped draw up the bailout plan with Paulson.
And yet, to once again quote Malcolm Gladwell, Paulson’s decision to leave Goldman Sachs and come to Washington, D.C. was just more proof that that the capital is home to the nation’s most elite “intellectual and social culture” that thrives not on money, but on “ideas and social interactions.”
Gladwell does not disclose his corporate client list, but his name does pop up from time to time headlining various financial industry companies, conferences and promo events. Most recently, Bank of America hired Malcolm Gladwell in November 2011 as a spokesman for a multi-city speaking tour promoting BofA’s small business lending services.
Nov. 16, 2011, 9:00 a.m. EST
Bank of America Features Malcolm Gladwell in Speaker Series for Local Small Business Owners
Renowned Author Joins Local Leaders to Help Small Business Owners Focus on Success
CHARLOTTE, N.C., Nov 16, 2011 (BUSINESS WIRE) — Taking another step in its ongoing effort to encourage small business growth, Bank of America today announced it has conducted a series of events with Malcolm Gladwell to deliver quality education and actionable advice to small business owners in various markets throughout the country. This program, entitled “Bank of America Small Business Speaker Series: A Conversation with Malcolm Gladwell,” was held in Los Angeles on September 27, in Dallas on November 3, and in Washington, D.C., on November 15.
. . .
In each market, Gladwell’s presentation was preceded by a panel discussion on relationship capital, a core component of business success, moderated by a Bank of America Small Business regional leader and featuring a cross section of prominent business leaders from each local market.
This wasn’t just a speech given at a conference, but a multi-day, multi-city event designed to promote Bank of America’s commitment to small businesses at a moment when the banking industry was in the middle of a PR nightmare.
Washington Post’s Melissa Bell wondered: “Malcolm Gladwell: Bank of America’s new spokesman?” Writing for the Columbia Journalism Review, Paul Starobin remarked that the “entire point” of Gladwell’s participation in the event “seemed to be to forge a public link between a tarnished brand (the bank), and a winning one (a journalist often described in profiles as the epitome of cool).”
Malcolm Gladwell says that he got into journalism by accident, that his real dream was to work for an ad agency. “I decided I wanted to be in advertising. I applied to eighteen advertising agencies in the city of Toronto and received eighteen rejection letters, which I taped in a row on my wall,” he wrote in his What the Dog Saw. If true, then Gladwell didn’t fail at all. Rather, he has achieved his dream of becoming an ad man beyond all expectation. His position as a public intellectual and respected New Yorker makes him infinitely more effective and useful as an ad man than he would ever be if he were sitting and writing ad copy in the office of some big-name advertising conglomerate.
Yep, Gladwell has come a long way from his youthful days at the National Journalism Center, but, on the other hand, he hasn’t really moved at all. As Philip Morris put it, the National Journalism Center “was developed to train budding journalists in free market political and economic principles . . . to get across our side of the story.” Their investment in Malcolm Gladwell has paid off beyond their wildest dreams.
* Russell Barkley got over $50,000 from Eli Lilly, maker of ADHD drug Strattera, from 2009 through 2011. Timothy Wilens took almost $10,000 grand from Eli Lilly just in 2009, and was written up by the New York Times.