Tainted Wall Street Reporters:1932-2012

By Pam Martens: August 11, 2012 

There is growing evidence that Wall Street and other corporate money is finding its way into the pockets of business reporters today, just as evidence surfaced in 1932 of bribes to reporters at the New York Daily News, Wall Street Journal, New York Times, New York Herald Tribune, New York Evening Post and others. 

Yesterday, Yasha Levine and Mark Ames of ExiledOnLine.com published a stunning investigative report of a deeply compromised Adam Davidson, host of NPR’s Planet Money.  On September 12, 2011, we reported that CNBC’s Larry Kudlow had pocketed $332,500 from the Koch funded Mercatus Center without disclosing it to viewers of his program.  

On July 2 of this year, we reported that Andrew Ross Sorkin, of the New York Times and CNBC, attempted to downplay the need for restoring the Glass-Steagall Act by reporting that Lehman Brothers, Merrill Lynch, and AIG had no connection to the Glass-Steagall Act, when, in fact, each owned FDIC insured banks which would have been impossible if the law was still in force. Despite two requests for correction of Sorkin’s spectacularly erroneous article, the article remains on the New York Times web site as written, suggesting it is not poor reporting but propaganda.  

Back on February 2, 2007, we wrote about Maria Bartiromo of CNBC accepting international flights on Citigroup’s corporate jet and speaking engagements to Citigroup clients.  An in-depth look revealed that CNBC and Citigroup were engaged in what marketers call co-branding. 

Today’s Wall Street has engaged in every practice that led to the crash of 1929; rigging hot new issues, tainted research, pump and dump, stock loan schemes, collusion, price manipulation.  And yet today’s Congress has yet to take up the obvious inquiry as to whether Wall Street’s boosters are on the take.  

During the hearings of the Senate Committee on Banking and Currency following the stock market crash of 1929, we saw some shining examples of what a real investigative body is capable of doing for the American people they are supposed to represent. 

The hearings were titled “Stock Exchange Practices” and delved into every device of collusion and corruption that members of the New York Stock Exchange were deploying against the investing public. 

Unlike the Wall Street hearings that have been held by today’s Congress, members actually showed up with hard evidence to enlighten the public to the details of the corruption.  

On April 26, 1932, Congressman Fiorello La Guardia of New York arrived at the hearing, armed with cancelled checks showing reporters at some of New York City’s most prominent newspapers were taking bribes from Wall Street promoters.  Let’s have a listen to how things were done in our Congress 80 years ago: 

Representative LaGuardia. Very well, we will return right to that matter. As to the statement that the public was to blame in their wild scramble to invest, and that brokers had absolutely nothing to do with fixing prices, with promotions, or advertising, I now state to this committee that that statement is not true. Not only do brokers rig the market, not only do brokers speculate in stocks in which members of the firm are directors of the corporations, but I say now that I shall proceed to deliver to this committee proof that when any of these stocks are selected to be rigged, a high pressure publicity man is retained. He writes the stuff and the papers copy it. Financial writers contact the publicity man, and I have the checks here of some financial writers that received money from one of these high pressure publicity men…The publicity man in this case was A. Newton Plummer. He operated under the name of publicity counsel, and also under the name of Institute of Economic Research… 

I think for about 10 or 15 years he was doing this work. I have one account of his here, from 1919, just before the 1921 crash. But the most of his activity, I will say, was during the period of the big boom which ended in the 1929 debacle. 

This man Plummer is a very smart young man. He writes this high-powered stuff, and I will leave it with the committee. He had the contacts and this was the modus operandi : He would be given a stock and he would send out the stories about the stock…Then he would be given cash for his necessary disbursements… 

Plummer got out of the business, and then he started a financial magazine, and he commenced telling about those transactions. So Mr. Plummer has been hounded since then, and he has been under indictment in connection with some evidence he was looking up to write some sensational story. Now, if our friends on the New York Stock Exchange say that Mr. Plummer is not a reputable, honest man, then I submit that they were using Mr. Plummer for 15 years to write their stuff on their stocks. So they may take their choice on that… 

Here are the checks he paid. Now, here is a check for $50, dated July 24, 1924, made out to Mr. J. F. Lowther, which synchronizes with his story. 

Senator Bulkley. Was it drawn by Plummer? 

Representative LaGuardia. Yes. Mr. Lowther was then on the New York Herald Tribune, but he is now employed by a stock firm… 

And here is a check dated July 11, 1924, given to Mr. W. J. Gomber. Mr. Gomber was then with Financial America…It is for $140.50. 

The Chairman. As to this check to W. G. Gomber, isn’t he employed by the Wall Street Journal, which is panning this committee for this investigation? 

Representative LaGuardia. I would not be surprised…Now, Mr. Chairman and gentlemen of the committee, I have here three checks dated July 31, 1924, July 17, 1924, and July 7, 1924, in the amounts of $1,000 and $300 and $600, respectively, made out to cash and given to the pay-off man…I do not care to disclose at this time the name of the pay-off man, but I will give it to the committee…And here is a check for $268, and this particular financial writer also participated in this pool, and this check is indorsed by Mr. Richard Edmondson, who was then on the Wall Street Journal. I am sure that Mr. Edmondson would be glad to explain to this committee why he received $268 from Mr. Plummer, who was plugging Savage Arms stock at the time… 

The next financial expert’s fee is the check dated December 5, 1924, for the amount of $184, indorsed by Mr. Charles T. Murphy, who was then with the New York Evening Mail writing financial information for the newspaper. 

Senator Barkley. Let me ask you there, did any articles appear in the Wall Street Journal under the name of this gentleman who received the $258? 

Representative LaGuardia: Yes; I have all the clippings…And here is another check for $200 paid out by the same promoter of the Savage stock, and indorsed by Mr. W.F. Wamsley, who was then with the New York Times, and I am reliably informed is no longer with that paper… 

I have here the other checks in the Pure Oil transaction, one dated January 20, 1925, for $468, indorsed by Mr. Richard Edmondson, of the Wall Street Journal. Another, for $100, indorsed by Mr. J. F. Lowther, of the Herald-Tribune.  Another, for $184, by the same J. F. Lowther, of the Herald-Tribune. And another, Mr. William White, of the New York Evening Post. 

Senator Barkley. How much is that? 

Representative LaGuardia. That is $184. And another of Charles T. Murphy, of the then Mail, and another for $284, Mr. William J. Gombor, of Financial America… 

Also noted in the summary of the Senate hearings was the following: 

“John J. Levenson, a free-lance trader, testified that from May 1929 to March 1930 he conducted operations in various stocks which netted him a profit of $1,138,322.41. To assist him in his market transactions, Levenson availed himself of the services of Raleigh T. Curtis, who conducted a financial column under the name of The Trader in the New York Daily News, a metropolitan newspaper of wide circulation. Under the guise of impartial, disinterested discussion of the stock market, Curtis treated his readers to ‘tips’ on the particular issues in which Levenson was interested. Although Levenson testified that he did not pay Curtis directly for this propaganda, it was conceded that Curtis, without putting up any money, received a profit of over $19,000 from trading accounts guaranteed by Levenson, who bought and sold for those accounts the various stocks which he employed Curtis to boost. 

“Indisputable evidence was adduced at the hearings demonstrating that in connection with pool operations it was usual and customary for the operators to pay newspaper writers for publicity and propaganda disguised as financial news.” 

Until our Congress or prosecutors root out every artifice of Wall Street’s rigged wealth transfer machinery, investors will wisely hold on to their dough. 

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