Breaking News without Breaking the Bank: Monetary Rewards for Media Organizations that Expose Corruption

Investigative journalists play a key role in exposing corruption. In many cases, as a direct result of media exposés, the government has been able to recover substantial sums. To take just a few examples: In 2011, the Los Angeles Times revealed that officials in a small California city improperly paid themselves exorbitant salaries, and the subsequent court cases ordered restitution awards nearing $20 million. In 2012, the New York Times exposed Walmart’s widespread bribery in Mexico, and the company ultimately agreed to pay $282 million to settle the resulting seven-year investigation into whether Walmart had violated the Foreign Corrupt Practices Act (FCPA). In 2017, the International Consortium of Investigative Journalists (ICIJ) shocked the world when its affiliated journalists broke the Panama Papers scandal, exposing extensive fraud and tax evasion by world leaders, drug traffickers, and celebrities alike. As a result of the ICIJ’s investigation, governments around the world have managed to claw back $1.28 billion from perpetrators thus far. A Malaysian-born British journalist’s investigations (prompted by a whistleblower who provided her with more than 200,000 documents) produced the first hard evidence of what became known as Malaysia’s 1MDB scandal, the world’s largest kleptocracy scheme to date, which has produced, among other things, a nearly $2.9 billion settlement for FCPA violations.

But despite the crucial role journalists play in uncovering corruption, investigative journalism is a risky investment for media outlets. For one thing, this sort of investigative journalism is time- and resource-intensive—much more so than straight reporting—and many investigations come to nothing. And when investigative journalism does uncover evidence of wrongdoing by powerful figures, publishing those stories can be legally and politically risky. So, even though media outlets can reap substantial rewards from successful investigations—in the form of clicks, subscriptions, and prestige—media outlets faced with declining revenues and an increasingly hostile environment may not invest nearly as much in investigations into corruption as would be socially optimal.

To mitigate this problem, I propose what may initially seem like a radical way to create stronger incentives for media outlets to invest in this kind of investigative journalism: When media outlets expose corruption or similar wrongdoing, and this exposure leading to monetary sanctions on the culpable entities or individuals, the media outlets responsible for the reporting ought to receive a percentage of the government’s recovery. Such a proposal is inspired by (though distinct from) the whistleblower reward programs that many governments have already adopted. (For example, in the United States, individuals who voluntarily provide the Securities and Exchange Commission with original information pertaining to securities law violations may receive between 10% and 30% of the total penalty collected if their information leads to a successful prosecution.) A similar “media rewards program” could substantially improve the effectiveness of independent investigative journalism in exposing and deterring corruption.

Admittedly, major national media outlets might not need additional financial incentives to investigate stories about large-scale corruption. But a rewards program could offer the resources and incentives necessary for struggling community-based news organizations—which are currently facing substantial difficulties—to investigate the local politicians and companies that the national and global media outlets tend to overlook. Providing monetary rewards for local news outlets would not only subsidize local news, but would subsidize the sort of news that communities most desperately need. A program enabling news organizations to receive rewards relative to their contribution to the public good could also help strengthen trust in the media, which has been badly eroding over the past decade. Because rewards would be offered only after a successful prosecution, the corruption alleged by the media outlet would be verified in a court of law and the media’s contribution to the settlement—and the accuracy and integrity of the reporting—would be formally validated by the government agency that authorizes the award.

The design and implementation of a media rewards program would raise some difficult questions and challenges, and the specifics of individual programs may need to be appropriately tailored to the context. That said, such programs generally ought to incorporate a number of safeguards and requirements. For example:

  • The reward should go to the news organization, not the journalists who broke the story, and media outlets should be barred from providing special bonuses to the journalists involved in investigations that result in awards under the program. This limitation is intended to prevent unconscious bias from influencing how journalists collect and assess evidence, while still giving the media outlets that employ those journalists stronger financial incentives to invest heavily in the sorts of investigative reporting that might end up generating substantial awards. Furthermore, eligibility should be limited to established media outlets that regularly publish original news stories on a routine basis. (This would exclude citizen journalists who may be more likely to spread misinformation and less likely to publish with enough frequency to serve as a reliable news source.)
  • An award should be available only when the reporting leads to a monetary recovery above a pre-determined threshold (much as the SEC Whistleblower Program makes an award only if the enforcement actions yields at least $1 million in sanctions), in order to deter petty investigations into low-level corruption that may turn a local news organization into a community nuisance.
  • The percentage of the recovery provided as a reward should be determined by joint agreement of the prosecuting agency and an independent journalism organization or an impartial panel, taking into account several factors, including the importance of the journalistic investigation in uncovering the wrongdoing and the quality of the reporting. (Because knowledge of the journalistic investigation may induce actors involved with the corruption to pre-emptively self-report to the government, the fact that the government received the information prior to the publication of the story should not render the news organization ineligible for an award.)
  • Eligibility for an award should be contingent on compliance with an accepted code of journalistic ethics. Rewards should be reduced or barred if the journalists who reported the malfeasance engaged in unethical conduct, obtained information illegally, paid a source for information, or interfered with an ongoing government investigation.

A media rewards program is admittedly unorthodox, to say the least. But such a program could go a long way toward providing subsidies to media outlets that provide the invaluable public service by exposing corruption, as well as giving news organizations a powerful incentive to allocate a larger share of their resources towards the kinds of investigative journalism that are likely to produce such stories. Both historical and contemporary examples illustrate the potential of such reporting to transform the political landscape, if supported with the right tools.

2 thoughts on “Breaking News without Breaking the Bank: Monetary Rewards for Media Organizations that Expose Corruption

  1. “Monetary Rewards for Media Organizations that Expose Corruption” , with the protections that you mention, is a good idea. It seems that a free lance reporter should still be able to file their own SEC whistle-blower report.

  2. Pingback: Proponen recompensas para organizaciones de medios que exponen la corrupción en el mundo – expresa.SE

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