Suppose an inside scoop of official secrets gives some market players an unfair advantage—is that a good reason to muzzle the media?

People who are concerned about runaway secrecy and who cheer when the media break important stories in defiance of government edict may still find this particular affair worrisome.

Suppose the official secrets that are illegally leaked are published in an exclusive newsletter for a narrow sliver of the public that pays a lot of money for them. What’s more, the secrets don’t so much enlighten the broad public—which doesn’t see them—as they enable those lucky customers to cash in by making smarter investments than non-subscribers do.

Now, by and large, even though the government prosecutes leakers vigorously (especially in the national security realm) and tries its best to imprison them, it never goes after the outfits that publish the blown secrets. By custom—if not by statutory or constitutional entitlement, since this immunity has never been tested in court—the media get a pass.

But should the newsletter that brokered the illegal leak to its clients, who sought to profit from it financially, still benefit from the restraint that the U.S. government usually shows to news organizations that run classified material?

So to the case at hand, which involves Medley Global Advisors, owned by the London-based Financial Times. Medley describes itself as “the leading global provider of macro policy intelligence for the world’s top hedge funds, institutional investors, and asset managers. “

In October 2012 a Medley newsletter published delectable, secret information about forthcoming actions to be taken by a pivotal committee of the Federal Reserve, the country’s central bank.

The Fed is notoriously protective of its deliberations, since they routinely move markets worldwide, and is mindful of the immense advantage that knowledge of coming decisions can give to those in the know.

In this instance, according to an account from Pro Publica, Medley reported that the Fed’s Open Markets Committee had decided in September to extend its stimulus program, and would buy $45 billion per month in Treasury bonds and mortgage-backed securities for some months to come.

That was big news, and the day after Medley’s account came out the Fed, as scheduled, released minutes of the committee meeting, which confirmed the report. That caused bond prices to fall and yields to rise. Advance knowledge of what the minutes would say was, it’s safe to assume, extremely advantageous.

Fed officials launched an internal probe, and by last month the Commodity Futures Trading Commission, a regulatory agency, had started an insider-trading investigation while federal prosecutors in Manhattan were conducting a Continue reading “Suppose an inside scoop of official secrets gives some market players an unfair advantage—is that a good reason to muzzle the media?”

Why would anybody talk to a reporter? The plight of the irreplaceable source

Why should people talk to reporters? It’s a question that’s seldom raised among news people, which is too bad, because it’s an important one.

When you think about it, that question goes to the foundation of the entire edifice of a free press. And that foundation, at the moment, is shaky.

Let’s back up. No honest press, whatever its sense of mission and however firm its legal protections, can outperform its sources. It can’t be any better, stronger, braver, more richly informed, or more dedicated to broad public purpose than the people who swallow their misgivings, return the phone call, step forward, and risk embarrassment and reprisal to talk to the reporter.

The mythology of journalism enshrines the sleuths, sometimes the editors, even the publishers, but sources are really the whole ball game. Press freedom is nothing more than source freedom, one step removed.  The right of a news organization to tell what it learns is an empty abstraction without the willingness of news sources to tell what they know.

Considering how important sources are, it’s stunning how little affection they get and how flimsy the protections are that anybody claims for them.  For starters, take the current national security cases, the unprecedented Espionage Act prosecutions that the Obama Administration is pursuing against whistleblowers who gave news reporters secret information about governmental improprieties and illegalities.

Nowadays prosecutors, for the most part, prefer to leave the press alone, and happily embrace the idea that even if an informant belongs in prison for handing over secrets for publication, the media organizations that actually make them public need not be answerable.

That practice reflects a cozy little entente between government and big media: The government avoids a public fuss, and the media buy themselves immunity at the cost of their sources’ safety.

Of course, as a matter of moral logic ignoring the press is absurd. If publishing something causes real harm, those responsible should be called to account—whether they’re former security contractor Edward Snowden or The New York Times.

More important, if the publication creates, on balance, a public benefit nobody should be punished—neither the mighty news organization nor its source.

But news sources have few allies nowadays. That’s not just in the national security realm. If you look at digital era news practices, the overall environment for sources has deteriorated, and potential informants have better reason than ever to keep silent.

Consider the channels through which reporters and informants communicate. News organizations routinely post email addresses for their reporters. But does anyone believe an email to a journalist is private, in the way a phone conversation would have been a decade Continue reading “Why would anybody talk to a reporter? The plight of the irreplaceable source”

U.S. is uniquely harsh in its panic over government secrets

By the standards of other countries, the U.S. approach to official secrecy is ferocious.

For leaking hugely newsworthy information to the press, ex-intelligence contractor Edward Snowden, who’s beseeching a score of countries for asylum, and Bradley Manning, the U.S. soldier being tried by a military court in Maryland, face charges of espionage. They could go to prison for life.

Elsewhere, punishment for making official secrets public is less severe than the penalties here for driving drunk: at worst, two years in Britain and Denmark. In other Western countries, maximum punishments range from four years in Sweden and Spain, to five in Germany, Belgium and Poland, and seven in France.

That’s according to an analysis of 20 European countries by Sandra Coliver, a legal expert with the Open Society Justice Initiative. Her group has been leading a multiyear, international effort to formulate broad principles reconciling the legitimate need to keep government secrets with the no less legitimate need to hold governments publicly accountable.

Not only are penalties mild elsewhere, Coliver found, prosecutions are rare.  In six countries, nobody in the past decade has been convicted for disclosing state secrets. In Britain, since the 1989 Official Secrets Act took effect, only 10 public employees have been prosecuted. The longest sentence was imposed on a naval petty officer who sold intelligence to a newspaper about a possible Iraqi anthrax attack. He got a year.

In fact, apart from the United States, the only country where prosecutions are common is Russia. There, 10 government employees have been imprisoned in the past decade for from four to 15 years for disclosing government information publicly.

Europe’s courts seem to be moving toward support for whistleblowers, even when state security is breached.

In a 1996 case, a military intelligence official in Romania was initially sentenced to two years for releasing the tapes of illicit wiretaps his agency had made of journalists and politicians.

But the European Court of Human Rights ruled that he was wrongly convicted, Continue reading “U.S. is uniquely harsh in its panic over government secrets”

Media silent when administration targets news sources

When President Obama addressed the American Society of News Editors convention last month, the real news was what didn’t happen. The watchdogs didn’t bark. No discouraging word from the gathering of 1,000 of the country’s top news people, facing a president whose administration has led a vigorous attack on journalism’s most indispensable asset—its sources.

Obama took office pledging tolerance and even support for whistleblowers, but instead is prosecuting them with a zeal that’s historically unprecedented. His Justice Department has conducted six prosecutions over leaks of classified information to reporters. Five involve the Espionage Act, a powerful law that had previously been used only four times since it was enacted in 1917 to prosecute spies.

Some spies. We’re no longer in the era of Aldrich Ames, Robert Hanssen or Kim Philby, infamous Cold War turncoats.

Instead, there’s Thomas Drake, a career official of the National Security Agency, who faced 35 years in prison for telling a Baltimore Sun reporter about what The New York Times called “a potential billion-dollar computer boondoggle.” At stake was bureaucratic embarrassment, not national security. (The case against Drake collapsed last summer.)

Then there’s Shamai Leibowitz, a translator for the FBI, who believed he had intercepted evidence of illegal influence-peddling by the Israeli embassy. When his boss wouldn’t act, he leaked transcripts to a blogger. He got 20 months.

Ex-CIA agent John Kiriakou was indicted in January for allegedly identifying a Guantanamo interrogator (who was not working undercover;) Stephen Kim, a State Department analyst, allegedly told a reporter for Fox News—wait for it—that the U.S. was worried North Korea might respond to new UN sanctions by testing another A-bomb; and Jeffrey Sterling, who allegedly disclosed a botched CIA operation in Iran that was described in a 2006 book by a Times reporter.

And there’s the biggest case, the court martial of Bradley Manning, the Army private accused of engineering the mammoth dumps of U.S. military and diplomatic data that Wikileaks, the online whistleblower network, turned over to leading newspapers in 2010 and 2011.

The administration seems undeterred by the scanty evidence that any of these defendants was out to hurt the country, a mainstay ingredient of espionage, and the Manning judge has even warned prosecutors they must show he believed he was “aiding the enemy” or she would toss the most serious charge against him. Continue reading “Media silent when administration targets news sources”