CyberAlert -- 09/27/2000 --

Back to today's CyberAlert

The September 26 edition of MediaNomics:

-- Oil Announcement Was Opportunity For Both Good and Bad Journalism: ABC Bought the Gore Spin; Russert Caught Richardson
-- CBS Evening News Broadcasts Unbalanced Claims From Liberal Activists: Distorted on Electrical Deregulation and Genetic Taco Terror

Below is the text of the two articles in the latest edition of MediaNomics from the MRC's Free Market Project (FMP), which documents what the media tell Americans about free enterprise. Both were researched and written by FMP Director Rich Noyes.

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Now to the two MediaNomics stories:

>> Oil Release Announcement Was Opportunity For Both Good and Bad Journalism

All three broadcast networks provided extensive coverage of President Clinton's decision, announced on September 22, to release 30 million barrels of oil from the nation's Strategic Petroleum Reserve, and all three of their evening newscasts dealt with the fact that Clinton's action had political overtones. "When you fiddle with oil prices, or attempt to fiddle with oil prices, in the middle of a presidential campaign, you're going to get skepticism at the very least," ABC's Peter Jennings explained that night on World News Tonight.

But while most reporters seemed to understand that political motivations were in play (it is the fall of an election year), some seemed ill-equipped to deal with the factual questions that underlay each side's arguments. "[Vice President Gore] was asked the question today in his first press conference in more than two months whether this crisis, if it is a crisis, really rises to the level of what the strategic reserve was originally designed for," ABC's Terry Moran related on September 22. "He said he helped write the strategic reserve, that he was involved in the lawmaking there and that, in fact, this is the kind of emergency that it was designed to address."

Moran seemed completely unaware that Gore was not, as he implied, a member of Congress in 1975 when the Strategic Petroleum Reserve (SPR) was authorized and initially funded. Gore was first elected to serve in the House of Representatives in November, 1976. Instead, Moran appeared to simply accept Gore's version "that he was involved in the lawmaking" as evidence that the Vice President was an expert on the original purpose of the SPR.

Contrast Moran's inexperience with NBC's Tim Russert, who interviewed Bill Richardson, the Secretary of Energy, on the September 24 edition of Meet the Press. Russert knew that the oil reserve couldn't legally be tapped simply to lower prices; the relevant provisions of the law focus on supply interruptions, emergency situations or energy supply shortages. Richardson acknowledged as much at his news conference on September 22, but Russert asked him again: "So, this is not about price. It's about disruption of supply?"

"This is about disruption of supply," Richardson agreed. "This is to increase the supply. We are not trying to manipulate prices."

Then, Russert asked Richardson about comments made by his two bosses: "You say it's about supply, not price. And, yet, the Vice President and President seem to contradict that. They keep emphasizing price." He showed videotape of Gore speaking on Thursday ("In the face of rising prices for gasoline and home heating oil, I support oil releases from our national Strategic Petroleum Reserve") and Clinton speaking on Saturday ("Families shouldn't have to drain their wallets to drive their cars or heat their homes").

"Gore/Clinton keep saying it's about price," Russert told Richardson who, faced with the fact that his boss -- the man who actually authorized the oil's release -- had stressed the price benefits to consumers, lamely responded that "all of this is consistent." But Russert had effectively revealed to viewers the fact that Richardson was mouthing a legalistic line about "potential" shortages because such an argument was needed to conform with the statutory rules on SPR withdrawals.

Next, Russert placed the amount of oil that would be released to the market in its proper context. "The United States uses 20 million barrels a day," he told Richardson. "Yes," the Secretary agreed. "You're releasing 20 million barrels total. That would last 36 hours," Russert calculated. He could also have said that the released oil would amount to less than one percent of the total U.S. consumption from October 1 to March 31, when most Northerners would be heating their homes.

Richardson did not dispute the figure, but insisted that "the objective, Tim, is to produce, through refining capacity, from 3 million to 5 million barrels more of distellate, of home heating oil."

"But the refineries say they're working at full capacity and this will make no difference," Russert responded.

"No, they're at 96 percent," Richardson countered, adding, "we think the refiners can do this." Such a conclusion apparently depends on what your definition of "full" is.

The refinery question reflects a key issue that's been missing from much of the coverage. After all, Americans consume refined products such as gasoline, heating oil or diesel fuel; crude oil isn't worth much without available refinery capacity. As the economy has grown over the past two decades, fuel consumption has naturally increased, but there has not been a corresponding increase in refinery capacity, which will eventually be necessary to meet the structural increases in demand. But "no new [refinery] plants have been built since the 1970s because of a spate of new rules," Investor's Business Daily reported on September 22.

Russert concluded by heading straight for the bottom line. "Will consumers still pay about 30 percent more in home heating this winter," he asked. Richardson vaguely said that "we expect prices slightly to go down."

"The Secretary of the Treasury said two cents a gallon at most," Russert continued. "And this is why it's being seen as a political ploy: you're only using 30 million barrels, which is a day and a half's worth; it is not going to drop the price all that much, unless you can guarantee this morning to consumers that their home heating is not going to go up 30 percent."

"What everybody wants, Tim, is moderation in oil prices," Richardson finally said. "The problem is increased demand and an exceedingly high price of crude. If we moderate those prices, if we improve the kevel of crude oil stocks in the world, in our country, and home heating oil stocks in our country, the effect is a positive one. The first one for us, to protect our consumers from a possible dire winter."

By the conclusion of the interview, Russert had effectively unmasked the decision to release oil as largely, if not completely, rooted in political calculation. As an interviewer, Russert had prepared himself for the interview by discovering the past law governing the Strategic Petroleum Reserve, the average daily U.S. oil consumption, current refinery usage, and projections of heating oil prices this winter.

Business reporters typically have such information available, or know which analysts to call upon for expertise. Consequently, most of the discussion of this issue on CNBC, CNNfn, and other business news outlets has gotten it right from the very beginning. On September 25, for example, CNNfn correspondent Greg Clarkin showed an oil industry analyst, Fadel Gheit of Fahnestock & Co., who reminded viewers that Clinton's action would mean little over the long run.

"It will give the politicians what they, what they believe the public wants to hear, and that is lower oil prices," Gheit explained. "But it's a Band-Aid. It's a good solution in the near term, but it really doesn't get us anywhere in the long term."

The smart money apparently agreed with Gheit, as Clarkin noted that "brokerage houses told clients to buy oil stocks on weakness, saying the new oil does little to change the tight supply and demand problem."

Political journalists, though, are often put in the position of covering market issues, such as the oil price increases, without the resources typically available to full-time business correspondents. Kudos to Tim Russert, for challenging Richardson with the facts and offering viewers an informative look at the issues surrounding the Strategic Petroleum Reserve.

END reprint of first of two MediaNomics articles

>> CBS Evening News Broadcasts Unbalanced Claims From Liberal Activists

When it comes to stories bashing business, it appears that fairness and balance -- offering the chance for a business or industry to defend itself against critics -- are no longer mandatory at the CBS Evening News. Two recent stories -- one criticizing electricity deregulation in California, and a second questioning the safety of the food supply -- prove the point:

On September 13, the Evening News led with a package of stories on the "energy crunch" crisis, beginning with a story in which reporter John Blackstone panned the concept of de-regulation and allowed sources to impugn electricity providers. He quoted a consumer advocate, a protester, an industry critic, and a liberal Democratic politician -- but no one from the industry under attack or experts who held contrary positions.

"San Diego is the first city in the nation where electricity has been freed from price controls," Blackstone told viewers before showing a woman leading a protest: "There is price gouging going on."

"Deregulation was supposed to bring prices down," Blackstone continued, "but in California, the wholesale cost of electricity at peak demand has soared from $25 a megawatt reaching $250 a megawatt today." He then allowed a Democratic politician, Rep. Bob Filner to lambaste utility companies as crooks.

"This is not an, an issue about supply and demand and markets not working. This is criminal activity by a bunch of folks who decided to gouge us for anything they could get," grandstanded Filner, who in 1999 earned a zero rating from the American Conservative Union.

Even after the incredible allegation of criminal conduct, Blackstone did not allow any industry spokesman to offer an opposing view, but piled on with another quote from an industry critic, Nettie Hoge of the Utility Reform Network. Referring to the state's power shortages, Ms. Hoge claimed, "that's a problem which allows free market exploiters to come in and demand the highest price possible." (In Ms. Hoge's lexicon, out-of-state or independent electricity providers who step in and provide needed power when local utilities face shortfalls are "free market exploiters.")

The CBS Evening News story was stunningly one-sided, as source after source condemned the power companies who were given no chance to respond. Perhaps sensing their unfairness, CBS followed-up six days later (September 19) with another California power story, this time including the perspective of power company sources and an industry analyst who said that the issue was basic supply-and-demand, not greed or criminality.

"Energy analyst Mike Zenker says the demand for energy in California has grown at close to double the national rate, but no new power plants have been built in the state for a decade, " explained Blackstone. On-camera, Zenker added that the supply shortages mean "reliability and price levels are both going to be called into question next year, no question about that."

While neither Zenker nor Blackstone said so explicitly, that analysis directly refuted the charges leveled against the industry in the previous story. Unfortunately for viewers, that bit of balance was incredibly tardy -- it should have been included in the September 13 story which broadcast the inflammatory charges in the first place. And, of course, the second story was buried deep inside the newscast, airing after the second commercial break.

Harvest of Panic?
The pattern of one-sidedness was evident again on September 18, when the CBS Evening News began with what seemed an alarming report from Wyatt Andrews about dangerous food in American supermarkets. "Food safety groups have been warning about it for years," anchor Dan Rather gravely noted, "genetically-altered foods not approved for human consumption getting to your dinner table anyway."

That's not what they've been warning about, actually. Most of the critics of genetically-modified (GM) foods oppose even FDA-approved products, including corn that has been genetically altered to be resistant to crop-destroying pests, claiming that government testing is insufficient and that these crops may contain unknown dangers for consumers. In fact, because modified corn, soy and potato has been included in so many commercially-prepared foods, practically all Americans have eaten the stuff for years, and there have been no reports of any problems apart from food allergies. (For example, if a peanut gene is spliced into another food, people who are allergic to peanuts will probably be allergic to the resulting food product, too, and current FDA rules require such products to be labeled so consumers can protect themselves.)

Potential allergies are the problem in the case of the taco shells. "The charge is that Taco Bell taco shells sold in grocery stores contain a gene-altered corn specifically banned from food because of the risk of allergies in people," reporter Wyatt Andrews expanded. "While there are no known reports of injury, this finding by a coalition of environmental groups is the most serious evidence so far of the potential danger in some gene-altered food."

Andrews then quoted Jane Rissler, a representative of the left-wing Union of Concerned Scientists, who declared "this is a possible allergen that is illegally on the market." Andrews then showed Larry Bohlen from the self-styled "Friends of the Earth," who was even more dramatic: "We're saying that the FDA should exercise their authority and seize the product." The only other on-air quote came from Anne Haegert, the scientist hired by the environmentalists to conduct the tests, who declared her results were proof "without any doubt." None of these sources were labeled as liberal anti-industry activists.

Four days later, on Friday, September 22, Kraft had completed its own testing and initiated a voluntary recall of the taco shells. The CBS Evening News once again pushed the story all the way to the top of its evening newscast. "The fear became reality tonight," Rather sensationally claimed before telling viewers about the recall. "All this adds new urgency to the debate over genetically-altered foods and what your government is and isn't doing to regulate them," he ominously added.

"The unprecedented recall is the first one aimed at any genetically-modified food," Andrews echoed, before quoted two anti-GM food activists (neither of whom was labeled as liberal): Andrew Kimbrell, the lawyer who heads the Center for Food Safety, and Rebecca Goldburg, a spokesperson for the Environmental Defense Fund. As with his first story, no representatives of the company, or industry spokesmen, were shown on-camera, although Andrews did summarize Kraft's press release.

On both days, CBS made it seem as if public health and safety were in immediate jeopardy, and reinforced the sense of urgency by placing the stories at the top of the newscast. CBS also bolstered the credibility of the environmentalists by quoting them so prominently and without any countering sources. Not only does that bias the individual report, it also provides support for the groups' overall campaign to use isolated instances such as the taco shell story to discredit all genetically-modified foods in consumers' eyes.

Compare CBS's urgency to NBC Nightly News, which didn't bother to even mention the taco shell story when it broke on September 18, although Robert Hager reported on the recall on September 22. ABC's World News Tonight skipped the recall, but covered the story on September 18. Unlike at CBS, the ABC correspondent followed the accepted journalistic practice of quoting both sides. After quoting Friends of the Earth's Bohlen, ABC's Barry Serafin announced that "the biotech industry says before any action is taken, the test results must be verified, noting that the lab in this case has been wrong before." Serafin then showed Val Giddings, Vice President of the Biotechnology Industry Association, who told viewers that "these results have been alleged by a company that has a history of finding things that aren't there."

The subtext of both of Andrews' pieces was identical to the explicit message of activists such as Kimbrell, Goldburg, Rissler and Bohlen: that all genetically-modified foods -- even those that have been approved by the FDA for sale in grocery stores -- may contain hidden dangers. The absolute absence of harm to people who have already consumed GM corn is, in the activists' formulation, no proof that some dangers may lurk unnoticed. The consumer fears spawned by the media's uncritical repeating of this line is to blame for the reduction in sales of modified seeds to farmers this spring -- although farmers recognize the benefits, they're wary of producing crops which they may not be able to sell.

By only showing sources who think this corn is dangerous, Andrews was peddling panic, not journalism. In his introduction to the September 18 story, Rather boasted that "Wyatt Andrews has been investigating this story for days." If that's true, then his failure to offer viewers a balanced report wasn't the by-product of haste; it was premeditated. As in the case of John Blackstone's story on electricity prices, there was another side to these business-bashing stories -- and CBS withheld that story from its viewers. They deserve better.

END reprint of second MediaNomics article. -- Brent Baker

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