Steven Hofman: When it comes to handling government data the media and Trump have a few things in common
For Steamboat Pilot & Today
STEAMBOAT SPRINGS — As a former assistant secretary of labor who was responsible for putting out many press releases on embargoed economic statistics, I won’t defend President Trump’s early tweet reference to last month’s employment numbers. With the June numbers release just days away, I hope this is his first and last time.
But I would also note that when it comes to handling government economic data, the media has less than a stellar record. A little history makes this point.
When I took office in July 1991, the process for releasing economic data had long been in place. Unfortunately, it was rife with the possibility of abuse. Take the monthly employment report, the subject of President Trump’s recent tweet. Here is how the process worked.
Each first Friday of the month, reporters would gather in and around the Labor Department’s Office of Public Affairs and at 8 a.m., be given an embargoed copy of the monthly employment report. The embargo on such releases was set at precisely 8:30 a.m., not a second before.
Any story issued prior to the release time was deemed a serious violation of release rules, and indeed, when such early releases occurred, as they infrequently did, they were subject to a department investigation and possible sanctions against the violating media organization. Reporters used the 30 minutes between 8 a.m. and 8:30 a.m. to prepare their stories on the report.
There was one rather serious problem with this process. Reporters were not prevented from calling outside of the department during the embargoed period to get expert analysis for their stories of what the data meant in terms of the economy, market reaction or whatever. In effect, reporters were able to share the embargoed information with people, be they economists, Wall Street analysts or corporate executives among others who were not subject to the embargo rules, allowing tens and perhaps hundreds of non-governmental individuals to have advance word of the employment report prior to the 8:30 a.m. release time.
No one in the government knew who these people were. No one knew if any of these people were telling their friends, co-workers, or relatives about the data. And there was no way to monitor whether trading occurred informed by this advance or insider information.
This was brought to the attention of my boss, Secretary of Labor Lynn Martin. She recognized this as the problem it was and convened immediately a department review led by our solicitor’s office.
In short order, the review recommended that the old system be scrapped and that we build an office where reporters could gather to receive department releases, and that no phones in that office would be use capable until the exact time an embargo expired. The same prohibition applied to cell phones (in their early days), with my office monitoring adherence to these new rules.
Despite the old system’s obvious flaws, the press never blew the whistle on it with any of the vigor and criticism directed recently at Mr. Trump. Why? Because the system served their interests, even if it failed to serve the interests of the public. It allowed reporters to pick up a phone, dial an expert, inform that expert of the data and get quotes and analysis for their assigned story. All this in a mere 30 minutes.
It worked well for them. It just was not secure. But it sure was efficient from the perspective of reporters and editors.
Beyond self-serving convenience, the system also enabled news organizations to often assign reporters who were not experts themselves in the subject of the release. Any reporter with a keyboard and good list of sources could do the job.
Under the new system, reporters had to work harder. They had to get quotes in advance on a range of data possibilities. That meant putting more time and effort into the story. And news organizations couldn’t assign just anyone to the story, given the possibility that a novice reporter lacking expertise could miss key elements in the release.
The morning the department announced preliminary rules governing the new system, I heard from representatives of each of the then national television news organizations. They weren’t calling to praise the department’s efforts to tighten data security. Instead, to a person, they asserted their demand to do their jobs as they wanted.
Perhaps this was not a surprising response on the heels of years of complicity in what were clearly problematic and potentially illegal activities. After all, when it comes to double standards, as most Americans rightly recognize, there is nothing new in politicians judging the media or the media judging politicians — or in the media judging itself.
Steven Hofman lives full time in Steamboat Springs. In addition to his former government position, Hofman advised the executive leadership of the Washington Post for 15 years.
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