Commentary: Failing the ‘Fake News’ Test at a Crucial Moment in History

BOSTON — There’s a story missing from the Internet.

It’s not a big story, but it’s an important one. It’s just 250 words long and its content is the result of routine reporting; nothing especially remarkable.

It’s not a blockbuster. The article was written for the Austin Business Journal, a niche publication, about a relatively minor issue. Yet it’s notable because its removal from the Web represents a betrayal of public trust at time when trust is at a premium and journalism is already in a tenuous position.

The story’s disappearance should serve as a wake-up call to anyone who values the truth because its removal was done by a news company with a national reach. It also shows that some American companies won’t hesitate to put its self-interests ahead of the public’s right to know. Censorship remains an option.

The ABJ story was a follow up to a routine piece announcing that environmental group Keep America Beautiful would present CEO Michael Dell with an award in New York City. The follow-up piece highlighted the role that a $75,000 “sponsorship” by Dell may have played in the award. Was it a legitimate award, or did Dell effectively buy it? The online article was deleted more than a week after it ran when Dell Inc., the technology giant based in Round Rock, Texas, threatened the ABJ’s North Carolina-based parent company, American City Business Journals. (Here’s an early version of the deleted piece.)

In early 2016, Michael Dell revealed his opinion of the news business when urging workers to ignore reports that a proposed business deal had hit a snag: “The media business is under a lot of stress and their business model is sort of cratering,” he said. “And what they do to survive in those tough times is they create something called click bait. They create an inflammatory headline. So and so was impregnated by aliens, or whatever, click on here to read about this story, see some ads, try to get some money.”

More than 700 stories about Dell, or referring to the company, appear under this reporter’s byline. Many of them were skeptical of information released by the company and revealed issues such as employee lawsuits Dell officials probably preferred were not reported. They commented for the (deleted) award story and never disputed its accuracy or fairness after it was posted. As such, Dell’s threat more than a week after the story ran raises questions about the company’s motivations.

In April, I recounted in another blog post the details of Dell’s censorship and the series of retaliatory actions it took with the ACBJ as an apparent accomplice. To recap, an ABJ manager said that while I was on vacation in mid-2015 a Dell official threatened our parent company over our coverage. Two weeks later, I was suddenly given an unscheduled performance review that stated my job was in jeopardy despite the lack of a single human resources issue during 10 years with the company. I was then dismissed after breaking another enterprise story about Dell planning to relocate its annual users conference from Austin to Las Vegas.

In April, the ACBJ’s CEO declined to comment on the matter to Talking Biz News, unimaginatively referring to it as a “personnel issue.” He was right. But the problem doesn’t concern the ‘personnel’ a reader would be led to believe; it’s the managers not standing up to corporate bullies.

It’s important to note that the Dell debacle has national implications because the ACBJ operates news outlets in 43 metropolitan areas. Many of the outlets provide content to NPR stations assuming the reporting is unbiased. However, it’s unlikely that this was an isolated incident. How many other companies dictate news coverage in ACBJ newsrooms?

ACBJ is owned by Advance Publications Inc., a New York-based company controlled by the Newhouse family, major donors to Syracuse University’s journalism program. That ownership structure insulates the parent company from accountability, enabling it to promote its support of quality reporting while its own lower-level execs undermine reporting.

Advertisers and the politically connected have influenced news coverage since time immemorial. But such pressures are arguably at their greatest level now as news business profits shrink. As a result, it’s never been more important to guard against anything that can result in biased coverage and violate time-tested principles.

Reporters are like the truth; you have to face them sometime, no matter how much power you have.

Commentary: Censorship And Tech Companies Keep Austin Weird

BOSTON — In November 2016, the day after Donald Trump was elected amid charges of fake news, I was walked out of my newsroom after reporting real news.

It was the culmination of a 16-month case of thinly disguised censorship sparked by Texas-based Dell Technologies Inc. threatening the Austin Business Journal over its coverage. Dell had an unlikely accomplice, a media organization affiliated with the company that owns that paragon of journalism, New Yorker magazine, and donates millions to Syracuse University’s lauded journalism program.

I had been a reporter for North Carolina-based American City Business Journals for 11 years, covering technology for three years at its Boston-based Mass High Tech and then eight years at the Austin Business Journal. Managers dismissed me after breaking a story about Dell planning to move its annual users conference (called Dell World) from Austin to Las Vegas. We also reported that the relocation would cost Austin businesses about $8 million in annual revenue.

Two weeks after the article, ABJ managers called for an unscheduled performance review. Despite an unblemished tenure, they said my job was in jeopardy — something that had happened only once before, also two weeks after a manager said a senior Dell executive threatened our parent company after we broke a previous Dell story in mid-2015.

The 2015 threat came when we reported in a later version of this brief that Dell donated $75,000 to an environmental group after it provided CEO Michael Dell with a “Vision for America” award. The 230-word article, a follow-up to this brief based on a Dell news release, underscored the role money played in selecting its recipient, and Dell’s public relations department didn’t dispute the accuracy or fairness of the story after it was posted. However, more than a week later, an ABJ manager called me while I was on vacation and said I needed to delete a tweet about the award story because the Dell exec claimed the tweet was libelous.

When I returned to work the next week, I discovered the story was surreptitiously deleted. One manager later said ACBJ lawyers requested the story be removed because it had been “tainted” by the tweets. The libel allegation was an apparent ploy to censor enterprise reporting. Readers would never get the full story, just what Dell issued in a news release. There was no correction, clarification or letter to the editor posted because Dell didn’t care about an accurate report; it just didn’t want the report. Period.

Side note: More than 700 stories focused on Dell or referring to Dell are under my byline. Companies often prefer lapdog reporters to watchdog reporters because it gives them more control over their image. Yet most realize there’s an important American principle at stake that overshadows a need for control. Such businesses recognize that a free press and civil discourse dwarf the importance of any company’s image. Also, unbiased reporting should keep the powerful in check and counterbalance the influence their money can buy. But it’s a challenge creating any semblance of balance in Austin. There’s the Dell Children’s Medical Center, Dell Seton Medical Center, Dell (baseball) Diamond, the Dell Technologies Match Play, Dell Medical School at the University of Texas, the Michael & Susan Dell Foundation Hall, and so on. Get the picture?

Though Dell is publicly generous it’s privately petty. Dealings with executives were marked by hypersensitivity and vindictiveness. A Bloomberg BusinessWeek story highlighting Michael Dell’s quirky management style in about 2010 seems to have disappeared from the Web, and the Bloomberg reporters who wrote it didn’t explain its whereabouts. In mid-2013, Michael Dell direct messaged this reporter via Twitter at night taking issue with tweets. The next year, Chief Marketing Officer Karen Quintos wrote a critical letter to the editor after the ABJ (accurately) reported that an upcoming Dell World lacked a star keynote speaker. When I courteously congratulated another senior exec about landing a job with different company and wished him well, he replied with a critique of my reporting style. It was surreal.

 

In the first abruptly called performance review after the threatening phone call, managers who had written in an immediately preceding review that I was “well known in the community and respected,” “one of the most professional reporters we know” and “strictly fair” to sources now declared my job in jeopardy because I displayed “animus” toward sources. They declined to identify a single offended source. The effect of Dell’s threat was dishearteningly apparent and suggested that ACBJ execs had caved and charged my managers with creating a cover story.

Three months later, Dell denied me press credentials to Dell World. Its spokesman indicated that anyone else from the ABJ was invited to cover the event—except me. The obvious retaliation went unchallenged by ABJ managers and I covered the event with a general admission pass. In September 2016, a Dell spokeswoman denied my request for Dell World credentials and indicated that another ABJ staffer was assigned to cover event. Effectively, Dell dictated who would report on the conference. We broke the relocation story a couple days later and I waited for the second farcical performance review and subsequent termination.

ACBJ execs assigned a reporter to uncover the truth and then enabled a company to attack him for what he found. In 2010, the ABJ publisher wrote in a nomination for a company-wide award: Before Christopher came to the ABJ, our reputation for covering technology was far from where it is today. The best example of how Christopher has advanced our coverage can be found in Dell Inc. For years the ABJ has found it difficult to cover Dell. It’s a tight-lipped company that tends to give scoops to papers such as the WSJ. Dell still supplies scoops to the national players, but more often than not Christopher beats Dell to the punch due to his outstanding reporting capabilities and his ability to work around ‘official sources.’ … On top of all that, he is an absolute workhorse. He is in the office EVERY weekend and is typically the first to show up and the last to leave. Fortunately or unfortunately, reporting consumes Christopher’s life … and ABJ readers are the beneficiaries.

New York-based Advance Publications Inc., also the owner of Conde´ Nast Publications, owns ACBJ. Advance Publications is controlled by  the family of the late S.I. Newhouse, a longtime donor to Syracuse University—home of the S.I. Newhouse School of Public Communications. Notably, NPR stations such as WBUR in Boston cite ACBJ reports in their broadcasts.

In January 2016, a couple months after I was dismissed, the White House named Michael Dell to the 28-person American Manufacturing Council expected to support Trump’s plan to increase the number of U.S. jobs. Instead, it served as a litmus test for the values of corporate executives after Trump refused to denounce white supremacists that rallied in Charlottesville, Virginia, and killed a protester. The council was later disbanded when nine members resigned over Trump’s response. Michael Dell didn’t.

Enterprising reporters are often the only thing standing between readers and corporate propaganda. This reporter is still standing — and standing up for the truth.

Lawsuit: Dell worker claims being fired after revealing cancer diagnosis

A former Dell Technologies Inc. employee says the company recently cited for its ethical practices allegedly fired him days after he told a manager he needed a liver transplant.

In September, Pennsylvania resident Michael Zappacosta filed a federal lawsuit against both Dell Technologies and its Dell EMC division claiming unlawful discrimination and retaliation in violation of the Age Discrimination in Employment Act and the Americans with Disabilities Act, according to the filing with the U.S. District Court for the Eastern District of Pennsylvania.

Zappacosta, a former customer service engineer for Dell client SunGard Data Systems Inc. in Philadelphia, alleges that he was dismissed from his position on Nov. 1, 2016, five days after he briefed a manager about a cancerous tumor found on his liver. The suit alleges that Zappacosta told his manager the condition required a transplant. He was 51 years old and a 10-year employee of Dell and the company it acquired in September 2016, EMC Corp.

The manager later told Zappacosta his position was being eliminated because of redundancy. No other positions were eliminated at that time, the lawsuit alleges.

In January, Texas-based Dell and Zappacosta agreed to suspend the lawsuit during settlement negotiations, another court filing indicates. Neither Zappacosta nor his attorney, Brian Farrell, could be reached for comment.

Last month, Dell announced being recognized by the Arizona-based Ethisphere Institute as one of the world’s most ethical companies for the fifth consecutive year. The company was one of only three technology businesses cited by the institute “underscoring the company’s commitment to leading with integrity and prioritizing ethical business practices,” according to a Feb. 12 Dell news release.

“Global corporations operating with a common rule of law are now society’s strongest force to improve the human condition,” the release stated.

CEO Michael Dell said “Ethics and integrity matter at Dell. We work hard to earn our customers’ trust, improve our communities, and inspire our team members through sound, ethical decision making. Because at Dell, how we do our work is just as important as the results we achieve.”

In 1997, federal officials fined Dell Inc. $50,000 for selling personal computers in Iran, a violation of U.S. trade sanctions. In 2016, it violated the sanctions again by selling to Iran through its embassies in Germany and France, The Register reported.

In 2010, Dell and its executives agreed to pay the U.S. Securities and Exchange Commission more than $100 million in penalties to settle accounting fraud charges related to supplier rebates used to inflate company revenue figures. Michael Dell and former CEO Kevin Rollins were fined $4 million apiece. They neither admitted nor denied the charges.

In mid-2009, Dell settled a $9.1 million federal gender-discrimination lawsuit filed by former company human resources manager Jill Hubley. The class-action case alleged that Dell “systematically denied equal employment opportunities to its female employees.”

 

Dell, which was founded in 1984, has attempted to transition from a company best known for personal computers to one offering a full line of tech products and services. The shift was sparked by the slim profit margins generated by commoditized computers versus the larger profits provided by software and storage. Dell is now structured with two segments: client solutions (computers) and enterprise solutions group (networking infrastructure such as software, servers and storage).

The company operates manufacturing plants in the United States, Malaysia, China, Brazil, India, Poland and Ireland. It employed about 138,000 workers at the end of its last fiscal year, SEC filings show.

Dell has posted declining revenue every year since 2011 (fiscal 2012). That trend changed during fiscal 2017 largely due to the late 2016 acquisition of Massachusetts-based EMC. The EMC deal boosted Dell’s revenue but hasn’t helped its bottom line. The company posted a $3.7 billion net loss ($2.1 billion of which attributed to EMC) on revenue of $61.6 billion during fiscal 2017, according to an SEC filing.

Dell also reported a loss of $1.1 billion on revenue of $50.9 billion during fiscal 2016 following a loss of $1.1 billion on revenue of $54.1 billion in fiscal 2015. (Although Dell is privately held, it reports quarterly financials because of the tracking stock it sold when buying EMC and VMware. It also hosts quarterly conference calls with Wall Street analysts.)

In November 2017, Michael Dell told an audience of Boston executives his company has invested $12.7 billion on research and development during the last three years. But that figure conflicts with Dell’s SEC filing indicating the company spent far less, just $4.6 billion: $2.6 billion in fiscal 2017, $1 billion in fiscal 2016 and $920 million in 2015.

Dell spokeswoman Lauren Lee subsequently said the $12.7 billion actually included the R&D spending of seven companies Dell Technologies acquired when it bought EMC. Effectively, the investments largely predated Dell’s ownership.

Dell Technologies increases lobbying amid annual losses

BOSTON — The amount of lobbying money Dell Technologies Inc. spent spiked in the run up to last year’s election amid four consecutive years of losses for the Texas tech giant.

The amount raised by the Round Rock, Texas-based company’s political action committee (PAC) doubled versus 2015 largely with donations from company executives who regularly contributed to the fund, filings with the Federal Election Commission show.

The sharp increase came the same year Dell completed its $58.1 billion acquisition of Massachusetts-based EMC Corp., a deal that resulted in Dell absorbing EMC’s lobbying activities. But the merger did little to put an end to Dell’s annual losses and it’s too early to tell if the lobbying can help Dell reverse its downward trend.

Lobbying experts said it’s not unusual for companies to tap its top executives as regular contributions to PACs that promote specific industry and legislation benefiting the business. A look at Dell’s federal filings reveals a web of connections and provides a glimpse into the role money can play when government business intersects with big business.

iRobot reveals financials of its latest acquisition

The French company that iRobot Corp. bought in October posted profits of $23 million on revenue of $151.5 million during 2016, according to a Friday filing with the U.S. Securities and Exchange Commission.

Massachusetts-based iRobot (Nasdaq: IRBT) reported the financials in an amendment to October filings related to its acquisition of Robopolis SAS. iRobot bought Robopolis, its largest European distributor, for $141 million.

Robopolis’ financials reveal a healthy growth trend. In 2015, it posted a profit of $16.4 million on revenue of $123.8 million, the filing shows.

iRobot is best known for its Roomba home vacuum cleaner. It has sold more than 20 million of the devices since launching them in 2002. The Robopolis deal was first announced last July. The French company represented nearly half of iRobot’s 2016 revenue in Europe, the Middle East and Africa.

“As iRobot expands globally, we are excited about the current and future opportunities in Europe,” CEO Colin Angle said in October.

iRobot, which was founded in 1990, employed 607 workers in late 2016. Last year, it reported a profit of $41.9 million on revenue of $660.6 million.

The company increased it focus on consumer products with the divestiture of its defense and security business in 2016. However, shares have slumped 24 percent during the last six months as investors react to competition from SharkNinja Operating LLC. The company that is also based in suburban Boston markets an ION Robot that cleans floors and carpets and recharges automatically at a comparable price to the Roomba.

 

Boston bank develops small biz loan technology

BOSTON – One of the oldest lenders in the nation had a hand in developing technology intended to enable banks to win back the small business loan market from alternative lenders.

Eastern Bank
 

A tech incubator at Boston-based Eastern Bank, founded in 1818, has spun off Numerated Growth Technologies Inc., a startup that developed an online platform designed to identify and contact small businesses eligible for loans of up to $100,000.

Numerated Growth, which was founded in March, developed its tech in Eastern Labs and has generated about $100 million of volume since 2015. The model, which features real-time approval, is based on the tact banks first took with pre-approved credit cards in the 1990s, Numerated CEO Dan O’Malley told deBanked.

“We’re just taking the same rules and applying them here,” he said. “And by the way, that’s what customers want.”

Closing Loans and MCAs — From the Bedroom to the Office

The merchant cash advance industry has gone mainstream so quickly that it has become more difficult to identify potential customers.

Market saturation and industry consolidation have caused the cost of sales leads to increase sharply. Yet a New York business loan broker is finding success by applying lead generation and online marketing strategies to merchant cash advance, or MCA, while expanding the number of services he offers prospects. Funding is just the foot in the door.

Philip Smith, founder and CEO of PJP Marketing Inc., told deBanked the MCA industry’s acceptance has made it more difficult for sales lead generators to produce profits. But expanding the number of services that independent sales organizations (ISOs) offer can offset the contraction. Smith’s life as a stay-at-home-dad, was recently featured in Innovate Long Island, a regional newspaper.

Fintech innovator launches mobile app company

An early innovator of the merchant cash advance industry has re-emerged on the business scene in very different new venture focused on a mobile shopping.

Meir Hurwitz, co-founder of Pearl Capital, the MCA company acquired in 2015 by Capital Z Partners Management LLC for as much as an estimated $60 million, is now the chief visionary officer of ScreenShop. The New York startup markets an app designed to enable users to shop for a specific item by uploading a screenshot of the item to the app.

Working on a mobile app is a longer shot than MCA and it doesn’t always pay off, but Hurwitz said Thursday he’s enjoyed learning the business after two years off and visiting 62 countries since selling Pearl Capital.

“It’s new and exciting for me, but I don’t get paid right away,” he said. “It’s something I haven’t done before — it’s kind of exciting for me.”

Finding the Right Funding Partners

Matthew Guruge wanted more than money. The co-founder and CEO of Awato LLC, a career-counseling firm, was looking for investors for his New Ipswich-based business. Ultimately, he chose a syndicate of five angel investors who could provide key introductions and expert advice in addition to $300,000 in funding.

“We were really interested in getting people who could help us,” Guruge says of his now seven-person startup. “For us, [raising capital] was easy and fast. We were hoping to find mentors who could help the company grow and help us grow as entrepreneurs.”

Startups like Awato have more choices than ever for raising investment capital, but that doesn’t mean it’s easy to find the right funding match or partners.

More colleges provide enterprise architecture training

Enterprise architecture is slowly establishing itself in colleges and universities as information technology matures and becomes a more integral part of business, industry experts say.

The number of US colleges offering enterprise architecture programs continues to grow with schools such as Penn State University and Carnegie Mellon University. The popularity of EA programs is being driven by a need for greater alignment between the goals of the technology side and those of the larger business or organization, said Rosalie Ocker, director of Penn State’s Center for Enterprise Architecture.

Course enrollees are typically technologists “looking to understand the business better and to work with the business side of their organization,” she said. “Tech people and business people have to work together, and EA should span their areas. That’s what we try to do.”