Bloomberg News Curbs Articles That Might Anger China

"If we run the story, we’ll be kicked out of China." -- Matthew Winkler, Bloomberg News editor in chief.

By EDWARD WONG
Matthew Winkler compared his decisions to the self-censorship by foreign news bureaus trying to preserve their ability to report inside Nazi-era Germany.

BEIJING — The decision came in an early evening call to four journalists huddled in a Hong Kong conference room. 

On the line 12 time zones away in New York was their boss, Matthew Winkler, the longtime editor in chief of Bloomberg News. 

And they were frustrated by what he was telling them.
The investigative report they had been working on for the better part of a year, which detailed the hidden financial ties between one of the wealthiest men in China and the families of top Chinese leaders, would not be published.
In the call late last month, Mr. Winkler defended his decision, comparing it to the self-censorship by foreign news bureaus trying to preserve their ability to report inside Nazi-era Germany, according to Bloomberg employees familiar with the discussion.
“He said, ‘If we run the story, we’ll be kicked out of China,’ ” one of the employees said. 

Less than a week later, a second article, about the children of senior Chinese officials employed by foreign banks, was also declared dead, employees said.
Mr. Winkler said in an email on Friday that the articles in question were not killed. 

“What you have is untrue,” he said. 

“The stories are active and not spiked.”
His statement was echoed by the senior editor on the articles, Laurie Hays.
Mr. Winkler and several other senior executives at Bloomberg declined to discuss his conference calls with reporters and editors in Hong Kong.
Several Bloomberg employees in Hong Kong said Mr. Winkler made clear in his call that his concerns were primarily about continuing to have reporters work in China, not protecting company revenues. 

Even so, they said, he gave the listeners a clear impression that the company was in retreat on aspects of its coverage of the world’s second-largest economy, a little more than a year after it locked horns with a confident Chinese leadership that has shown itself willing to punish foreign news organizations that cross it.
Bloomberg News infuriated the government in 2012 by publishing a series of articles on the personal wealth of the families of Chinese leaders, including the new Communist Party chief, Xi Jinping. 

Bloomberg’s operations in China have suffered since, as new journalists have been denied residency and sales of its financial terminals to state enterprises have slowed. 

Chinese officials have said repeatedly that news coverage on the wealth and personal lives of Chinese leaders crosses a red line.
The perception among Bloomberg employees that the company is now unwilling to cross such lines has left them unsettled. 

More broadly, it has cast new light on the dilemma that numerous foreign news organizations confront as they navigate the pressures of doing both journalism and business in China.
As the article on Mr. Xi’s family was published, in June 2012, Chinese officials ordered the Bloomberg News website blocked. 

Today, it remains inaccessible on Chinese servers. 

No Bloomberg journalist trying to enter China on a new long-term assignment has received a residency visa.
Most important for the larger Bloomberg company’s bottom line, financial news terminal subscriptions, which cost more than $20,000 per year and are the main revenue generator for Bloomberg, slowed for a spell in China, after officials issued orders to some Chinese companies to avoid buying subscriptions. 

Despite all that, Bloomberg got a license renewal this July from the State Council, China’s cabinet, that allows it to continue providing financial news for two more years.
Other news organizations have come under similar pressure. 

The websites of The New York Times, including a new Chinese-language edition, were blocked when it published an article in October 2012 on the family wealth of Wen Jiabao, then the prime minister. 

Like Bloomberg, The Times has also not received residency visas for new journalists.
In recent years, some editors at Bloomberg have encouraged reporters to tackle ambitious investigative reports, in order to broaden the company beyond its foundation as a speed-driven financial news service. 

At times, that aggressiveness has resulted in ethical breaches, as when Bloomberg was forced to disclose in May that its journalists had gained access to the log-in data of terminal customers to gain an edge in reporting.
But the investigative work has also won top prizes, most notably for the China family wealth series in 2012. Two of the main writers on that series, Michael Forsythe and Shai Oster, were the lead reporters on the recent tycoon story.
Editors at Bloomberg have long been aware of the need to tread carefully in China. 

A system has been in place that allows editors to add an internal prepublication code to some articles to ensure that they do not appear on terminals in China, two employees said. 

This has been used regularly with articles on Chinese politics, including the one on Mr. Xi’s family.
The debates within Bloomberg over the two recent China stories have taken place right before scheduled trips to China by two senior Bloomberg figures. 

Daniel L. Doctoroff, the chief executive of Bloomberg L.P., the parent company, is expected to travel to China in the coming weeks, employees said. 

The company’s billionaire founder, Michael R. Bloomberg, told Forbes this fall that he plans to go to China soon after stepping down as New York City’s mayor in January to “give some speeches on behalf of the company.”
Bloomberg News has already come under criticism as word of the uncertain fate of the investigative China articles has slowly leaked out in recent days. 

An animation arm of Next Media, a powerful Hong Kong media company critical of the Chinese Communist Party, released an online video cartoon on Friday evening mocking Bloomberg for self-censorship.
The turmoil since October was described to The Times by four Bloomberg employees who spoke on the condition of anonymity for fear of losing their jobs.
The recent article by Mr. Forsythe and Mr. Oster was focused on a Chinese billionaire entrepreneur who had financial ties to relatives of current and former members of the Standing Committee of the ruling Politburo, the top political body in China, said employees who had read the article.
Until late October, no editor had raised any serious objections to the tycoon story, even though it had gone through extensive editing and fact-checking, the employees said. 

The final editing stage began in September. 

Two senior editors in New York, Ms. Hays and Jonathan Kaufman, shepherded the story and were enthusiastic about it, employees said. 

So was a company lawyer who, after reviewing it in early October, suggested some minor wording changes.
Mr. Winkler also looked at the article and made some small suggestions.
Mr. Kaufman flew to Hong Kong in October and raised no serious objections to the article, employees said. From mid-October onward, the reporters and editors in Hong Kong did not hear much from New York. Then Ms. Hays and Mr. Kaufman told editors in Hong Kong that the story would not be published, employees said. 

The next day, Mr. Forsythe and Mr. Oster, the story’s two main reporters, took part in a conference call with New York. 

The editors there said that the article had no “smoking gun,” that billionaires around the world had close ties to governments, and that the article did not provide enough new information beyond what Bloomberg had reported in its 2012 series, employees said.
“They were adamant that the reasons for killing the story were editorial reasons, not political reasons,” an employee added. 

When Ms. Hays was asked who had made the decision to shelve the article, she said she and four other editors had, including Tim Quinson, who in September was assigned to the new position of standards editor after an internal review of the May reporting scandal. 

Ms. Hays said Mr. Doctoroff, the chief executive, had not seen the article.
Mr. Winkler, the top editor, then spoke to four reporters and editors in Hong Kong on a final conference call, which was held on the night of Oct. 29.
The strongest reason he presented was the possibility of Bloomberg’s being evicted from China, employees said.
“He was speaking from a news perspective, not a sales perspective,” an employee said. 

Mr. Winkler also said he had read a lot about foreign journalists working under the Third Reich and wanted to formulate a strategy for staying in China as long as possible. 

“He said he was looking at the example of how news organizations worked in Nazi Germany, how they were able to stay there, how they were able to write in that environment,” the employee said.
The message was clear to those in Hong Kong: There was no chance of publication for now.
An article by Cathy Chan, another reporter in Hong Kong, ran into similar problems within a week. 

The article was halted after a conference call with New York, employees said. 

The article outlined how children of Chinese leaders, or “princelings,” had secured jobs at foreign banks. 

The hiring practice has come under scrutiny: In August, American newspapers reported that the Securities and Exchange Commission was investigating whether JPMorgan Chase had hired the children of senior Chinese officials to win business in China.
Ms. Chan had been told to get more documentary evidence for the article and rely less on human sources, said one employee, even though that demand is very difficult for such reporting. 

The employee said, “Some people at the top are setting a much higher bar for stories.”