Government-Sponsored Enron: Executive Summary
Accounting scandals have become bread-and-butter stories for journalists. But one of the biggest accounting debacles in recent history has gone virtually unnoticed by the TV news. Fannie Mae, the government-sponsored mortgage association, has accounting errors of about $11 billion. That’s more than 19 times larger than Enron’s $567 million error. Yet a Justice Department inquiry, SEC investigation, and Office of Federal Housing Enterprise complaint were not enough to get the attention of the networks that rarely mentioned the Fannie Mae scandal. Unlike Enron, Fannie Mae has strong governmental ties and is perceived as helping the poor. Are those reasons enough to merit a free pass from TV news? The major print media don’t think so and they are correct.
The Media Research Center’s Business & Media Institute compared LexisNexis results from ABC, CBS, NBC and CNN on the term “Enron” from Oct. 1, 2001, to July 1, 2002, with a similar search of the term “Fannie Mae” for those same media from June 1, 2004, to Feb. 1, 2005. Among the findings:
- Broadcast News Loved Enron Story and Ignored Latest Scandal: While broadcast news outlets ran the Enron story into the ground, they either ignored or barely mentioned Fannie Mae’s similar fall from financial grace.
- Good Marks for Print Reporting on Fannie Mae: Print media such as The New York Times, The Washington Post, and The Wall Street Journal provided strong, detailed coverage of the Fannie Mae story.
- Connections to Power Overlooked: Broadcasters emphasized connections between the Bush administration and Enron executives; however, they failed to focus on ties between people at Fannie Mae and in the Clinton administration.