Saturday, May 08, 2010

In shallow look at charges against Prokhorov, the Times can't verify claims that his company is active in Zimbabwe

The New York Times, which pursued "the journalism of verification" when in came to the murky saga of Megan and Jeff, authors of a publicity-seeking (seeming) stunt in Madison Square Park, today throws up its investigatory hands when it comes to expected Nets owner Mikhail Prokhorov.

The article (labeled more clearly in print as a Sports Business column), headlined Vetting the Nets’ Suitor Is No Easy Task, is written by New York-based sports business reporter Richard Sandomir, with no cited help from Times staffers in Russia or in Africa, despite the expertise and assistance they might provide.

While the article leaves lingering questions about both Prokhorov and the NBA's vetting process, it also fails to evaluate some information that would raise even further questions about the alleged Prokhorov connection to sanctions-busting in Zimbabwe.

No disclosure

And it fails to disclose the Times's relationship with Forest City Ratner, Prokhorov's business partner--he'll buy 80% of the Nets and 45% of the arena. FCR depends crucially on Prokhorov's involvement to move forward with the project and stanch the losses on the Nets now being absorbed by parent Forest City Enterprises.

Times Sports Editor Tom Jolly has said, in response to my concerns over a previous Times puff piece on Prokhorov, "If the story deals with real estate or business issues beyond the playing field (or court, in this case) and the Times's relationship is pertinent, we note it parenthetically." This should qualify.

Ignoring some evidence in Zimbabwe

Regarding New Jersey Rep. Bill Pascrell's claims regarding in Zimbabwe, Sandomir writes:
Onexim Group, the company through which Prokhorov is buying the Nets, last year bought nearly 50 percent of an investment bank called Renaissance Capital, a division of Renaissance Group. Quinn Martin, a spokesman for RenCap, as it is called, said it owned no Zimbabwean companies and that its only presence in the country was in stock research. Attempts to independently verify Martin’s claims were unsuccessful.
Maybe so, but the Times could have noted that the Zimbabwe government newspaper The Herald, in a 2/15/10 report headlined 1,000 Delegates Expected for Investment Summit, stated that Renaissance Capital was among several companies that "have confirmed their participation."

The Herald article stated:

Minister of Tourism and Hospitality Industry Walter Mzembi told journalist at a Press conference on Friday that 10 ministers of tourism are expected from different African countries and more than 300 foreign investors are expected for the summit.

"The two-in-one event will showcase tourism investment opportunities in Zimbabwe and Africa at large. Projects exhibition will be pitched to profile investment opportunities in tourism and related sectors," Minister Mzembi said.

That sounds more hands-on than stock research.

Sandomir does note that Martin said the sister company Renaissance Partners was the division of the group active in Zimbabwe, but "various reports" pointed to Renaissance Capital instead as the purchaser of the Commercial Bank of Zimbabwe.

If "various reports" could be cited regarding the purchase, why can't they be cited regarding Renaissance Capital's alleged participation in an investment summit this year?

To verify the saga of Megan and Jeff, the Times assigned both Deputy Metropolitan Editor Wendell Jamieson and City Room Bureau Chief Andy Newman, who conducted "days of reporting and interviews."

"Parochial interests"

Sandomir notes that Pascrell has "parochial interests in opposing the team’s move from New Jersey," which is undeniable, but fails to point out that the NBA's interests are equally parochial.

While Sandomir reports that NBA commissioner David Stern said "multiple investigations had found nothing to prevent Prokhorov from becoming the first overseas owner of an N.B.A. team," he notes that the league has refused to provide any details on the vetting.

Unmentioned: Stern's performance on 60 Minutes, where he was asked, "Do you think he's a man of character?"

"I think he's a man who's passed a very tight security check," Stern replied deliberately, "and nobody has come up with any reason why he shouldn't be an NBA owner."

The difficulty of vetting

Sandomir notes that vetting a foreign owner is rare, and Prokhorov is the first "who has benefited mightily from Russia’s frenetic transformation to capitalism."

The Times does not ask the Treasury Department whether it has followed up on Pascrell's call for an investigation of sanctions-busting.

Sandomir concludes:
Last fall, Stern said the investigation into Prokhorov would be “very extensive, stringent, some would say, invasive.” On Friday, [league spokesman Mike] Bass said that generally, “it is fair to say that we do not routinely investigate the business operations of every company in which a prospective owner has invested.”

It makes you wonder what the league did not investigate about Prokhorov.
Rather than end with a reporter-as-columnist's lingering question, why can't the Times do some investigation of its own? It worked with Megan and Jeff.

2 comments:

  1. The Times is well on its way to becoming a parody of itself, and as with the NBA, it's clear that it would rather not learn too much about Mr. Prokhorov and his business dealings. Megan and Jeff? Gimme a break. How about Bruce and Mikhail?

    ReplyDelete
  2. New York-based sports business reporter Richard Sandomir writes that Prokhorov “has benefited (sic) mightily from Russia's frenetic transformation to capitalism”? That doesn’t make Sandomir much of “business reporter.”

    When the Soviet Union disbanded Russia didn’t convert to “capitalism.” Russia went from a system where the politically-connected elite that was privileged with special benefits under communism graduated to version of perpetuated political-insider privilege. In a 52-card pick economy, what was public and what was privately owned was scrambled and made (deliberately?) hazy with the politically-connected elite getting to cherry pick the benefits and best assets for their private portfolios while deliberately leaving the Russian public with the remaining liabilities. This is not a form of capitalism. Evidence that it is not capitalism can be seen from the fact that ownership of Russian businesses is only as and when permitted by Vladimir Putin. As has been well documented, this, not capitalism, is the economy that Mikhail Prokhorov has benefitted from. It is telling that Prokhorov now wants to come to the United States specifically to do business with Bruce Ratner. Looking at Ratner’s operation we can see that the United Sates is importing and adopting the same kind of system now operative in Russia. It is not surprising that Prokhorov has been attracted and wants an in to a system that must seem remarkable familiar to him.

    ReplyDelete