February 11, 2008 1:34 pm : Comments 002
It looks like we got spun again by The New York Times.
In our zeal to safeguard the integrity of our firm and its blog, we rushed an apology last week to The New York Times and reporter Alex Berenson that now appears to have been premature. The S&A post in question was based on a story that appeared on Portfolio.com earlier in the week. When the Times sent us a statement saying that the original story was “incorrect”, we took the newspaper at its word and felt compelled to retract some of our comments.
Well, it turns out the story wasn’t incorrect. In fact, one could argue that, for the most part, it scored a bulls-eye. The Times insisted that a misdirected email from one of Eli Lilly’s outside attorneys wasn’t responsible for Mr. Berenson’s page-one scoop that the pharmaceutical giant was close to reaching a settlement with federal prosecutors for $1 billion. But Mr. Berenson subsequently admitted on NPR radio, and to the editor of the Pharmalot blog, Ed Silverman, (see his comment on my apology post) that, well, it kinda was.
We could have a field day with the disclosures that have surfaced since our last blog on this topic, but we will stick to the high road and to these two thoughts:
- We owe an apology to Portfolio.com for unjustifiably discrediting its story. While some might argue that the misdirected email Mr. Berenson received didn’t have the depth of detailed information about the proposed settlement as the website hinted, by Mr. Berenson’s own admission the details it did offer provided the confirmation he needed to run with the story;
- This ongoing email saga illustrates clearly that there is truly no such thing as off-the-record. Once a reporter has their hands on a piece of sensitive information, they will finagle ways to use it, despite any handshake agreements not to. As we are forever telling clients, if you don’t want to see something attributed to you on page one of your local newspaper, it’s best you keep it to yourself.
One final thought: For all the blather about the capriciousness of bloggers and so-called citizen journalists, it is interesting to note how quickly those commenting online about this topic last week were quick to issue corrections and clarifications when it seemed their information was wrong. If nothing else, it’s encouraging to see the old-school principles of fairness and accuracy given the primacy they deserve.
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February 7, 2008 12:57 pm : Comments 002
Update: Alex Berenson admits some truth on NPR and The New York Times‘ comments had an element of spin.
When we launched this blog, there was unanimous internal agreement that we would adhere to the highest standards of fairness and accuracy. We demand nothing less from ourselves, clients, and the media with regard to the work we do every day, and the content of this blog is no exception.
With that in mind, we naturally became concerned yesterday to read a post on the Drug and Device Law blog that the Portfolio.com story upon which we based our own post Tuesday may have been inaccurate. The item in question reported that The New York Times reporter Alex Berenson was able to break the recent page-one story about a possible $1 billion Eli Lilly Zyprexa settlement because he had mistakenly received a confidential email about the talks from an attorney at Eli Lilly’s outside law firm Pepper Hamilton that was intended for a co-counsel colleague at Sidley Austin also named Berenson.
The D&DL post said that Mr. Berenson had denied that the errant email was the initial source of his scoop (Portfolio.com said he had declined to comment). Above the Law, a well-regarded and extremely popular website, also wrote about the wrong-Berenson email mistake, linking to our post and to the original piece on Portfolio.com. They, too, issued a subsequent clarification once Mr. Berenson’s denial was on the record.
And now it is our turn.
We contacted The New York Times spokespeople directly yesterday to determine if a correction or clarification was indeed warranted. We received the following statement from Catherine J. Mathis, a spokeswoman for the newspaper:
Mr. Berenson did receive a misdirected e-mail from Pepper, but that e-mail did not contain a detailed description of the status of the settlement talks. Mr. Berenson had known independently about the settlement talks for some time, and he obtained the details he published in the Times from sources other than Pepper.
The Portfolio version was incorrect.
When a newspaper the stature of The New York Times publicly discredits the reporting of another publication, we clearly take it seriously. It now appears that we inadvertently republished erroneous reporting in our blog yesterday, and for that we apologize to both the Times and Mr. Berenson.
Yet…
If Mr. Berenson knew about the settlement talks for “some time” and had received details of the settlement talks from “sources” (plural) other than Pepper, we can’t help but wonder why he then sat on the story. Doing so meant taking a huge risk of getting scooped by a rival on a story that he has pretty much owned. After all, as the Times itself reported, if the $1 billion figure was right, it would be the biggest penalty ever paid by a drugmaker for inappropriate drug marketing activities. Major newspapers typically require only two independent sources to confirm an unattributed story, which Ms. Mathis suggests he had in hand.
And therein lays a very big question. So who were these non-Pepper sources?
We can appreciate why someone on the government side might leak that settlement negotiations were underway. But we would expect that Mr. Berenson’s editors would insist that he get confirmation from someone at, or very close to, Lilly with first-hand knowledge of the talks. It’s fairly safe to assume that Lilly didn’t offer any confirmation, officially or on background, given their reported statement to the Times saying in part, “…we regularly have discussions with the government. However, we have no intention of sharing those discussions with the news media and it would be speculative and irresponsible for anyone to do so.”
Mr. Berenson’s scoop is extremely damaging to Eli Lilly. If the company does indeed settle for $1 billion, the Times will again undoubtedly give the story some pretty prime real estate and repeat all the damaging allegations regarding Zyprexa. And with the figure now public knowledge, it would seem difficult for prosecutors to accept a settlement for less than $1 billion without it appearing that they had blinked.
It will certainly be interesting to see how this fascinating story plays out.
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February 5, 2008 12:05 pm : Comments 003
Update: The New York Times claims that the Portfolio piece was “inaccurate”.
Update 2: Alex Berenson admits some truth on NPR and The New York Times‘ comments had an element of spin.
More about Alex Berenson.
The New York Times‘ pharmaceutical industry reporter Alex Berenson scored a heck of a Page One scoop last week when he revealed that Eli Lilly was looking to reach a settlement with federal prosecutors over the company’s alleged inappropriate marketing of antipsychotic drug Zyprexa. A staggering “mea culpa” settlement figure of $1 billion or more was mentioned.
This was a big story, no question about it. Eli Lilly is a publicly traded company and the $1 billion settlement would be the largest ever paid by a drug company for improper drug marketing (so said the Times).
In the piece, reporter Alex Berenson cited sources who requested anonymity “because they have not been authorized to talk about the negotiations.” He also included a statement from an Eli Lilly representative saying, in part, “…we regularly have discussions with the government. However, we have no intention of sharing those discussions with the news media and it would be speculative and irresponsible for anyone to do so.”
So how did Mr. Berenson get the scoop? It turns out that it wasn’t through any tried-and-true gumshoe reporting techniques taught at j-school. He simply had the fortune of having the same last name as one of Eli Lilly’s attorneys.
According to a story posted today on Portfolio.com, one of the drugmaker’s outside attorneys at Philadelphia-based Pepper Hamilton had mistakenly emailed detailed, highly confidential information on the settlement talks to the reporter instead of Bradford Berenson, the intended recipient (co-counsel at another law firm).
The email gaffe, unquestionably one of the greatest fears of everyone handling sensitive information, is apparently the result of very similar email addresses: Mr. Berenson, the reporter, simply goes by berenson in his email address while Mr. Berenson, the attorney, goes by bberenson.
We can’t honestly fault the Times or its reporter for breaking this story. I would have done the same thing back in the day. But Mr. Berenson mislead by omission. He should have been upfront with readers about how he learned of the settlement talks. Since there was no official confirmation from either side, doing so would have gone a long way toward letting readers judge the credibility of the story for themselves. Mr. Berenson quotes Nina Gussack, a Pepper Hamilton lawyer representing Eli Lilly, as saying she couldn’t comment on the case. Judging from Eli Lilly’s own statement, it doesn’t appear that anyone alerted the company’s spokesperson as to how Mr. Berenson got the story.
Mr. Berenson’s earlier reporting on this topic has been called into question before. According to a respected federal judge, Mr. Berenson was “deeply involved” in an “illegal” scheme that effectively amounted to “stealing” documents. (Neither the Times nor Mr. Berenson have ever publicly explained the extent of his involvement.)
Eli Lilly is reportedly sticking by Pepper Hamilton, and I applaud the company for its loyalty. That said, I can’t help but wonder why an attorney at Pepper Hamilton had Alex Berenson’s email address in her email database in the first place. As I’ve argued before, reporters and attorneys are best left in separate corners. Especially when the latter specializes in high-profile, high-stakes crisis work. By any measure, Eli Lilly’s PR handling of allegations of wrongdoing regarding its Zyprexa marketing has been a debacle. If its attorneys are driving the media relations strategy, it’s easy to understand why.
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