CBC's Nortel Torque
I'm rarely in the habit of criticizing other media organizations for their coverage but CBC's latest torque of a class-action lawsuit involving Nortel is misleading and exploitive. The CBC is making a huge deal today of an “exclusive” interview they did with a fellow named John Foster, who worked as a scheduling engineer with Nortel in Dallas before being laid off in 2001. Foster claims he told the U.S. Securities and Exchange Commission in 2001 that Nortel was doing some odd things when it came to revenue recognition. It is important to note as a scheduling engineer, Foster did not have access to Nortel's accounting systems so he's making assumptions and guess-timates rather than basing his assertions on real figures.
Now, anyone can say anything in a class-action lawsuit but it doesn't mean it's newsworthy. The CBC's decision to interview Foster about his allegations is what I would describe as “news manufacturing”. If you wanted to sift through all the class-action lawsuits against Nortel, you could write nothing but allegation stories until the cows came home. But this “let's turn a lawsuit into news” approach is nothing new to the CBC, which pulled off a similar stunt a couple weeks ago. If ex-CFO Doug Beatty or ex-CEO Frank Dunn decided to spill the beans (which they won't do because they still have severance/settlement issues) that would be huge news that the CBC could justify leading off their newscasts with. I'm not suggesting the Foster interview isn't news, it's just not that good.
Just to hammer home the point, here's are parts of an interview done with Foster today.
When asked to comment on CBC's assertion he's a key whistle-blower:
“They [the CBC] are making some of that up because I don't [know where the money went.] I wasn't saying Nortel is worse than Enron or anything. All I was saying was that the records weren't good enough to say what was happening. All I was trying to do was get the scheduling system fixed. It only becomes intentional if you don't fix it.”
On the total revenue that could have been misrepresented, which claims could have been as high as US$900-million:
“It was a big figure and I have no way of knowing the actual figure…..It wasn't even just a best guess. It was just a ball park figure.”
On why he went to the SEC after he was fired:
“Partly, because I couldn't take it to the company, could I?”
The CBC's believes they have a huge scoop. I think their enthusiasm got the best of them.
For a good take on Nortel's corporate governance woes and the CBC's flawed “investigation” check out Terence Corcoran's editorial in the National Post.
