While the juicier stories swirl around Berkshire Hathaway, Warren Buffett and their corporate governance standards, the story of GE and how much federal income tax the company pays or doesn’t pay catches my eye this week. In short, GE got into to a debate on Twitter with Business Insider about the veracity of a story claiming that GE pays no federal income tax that appeared in the New York Times on March 25. The fact that the story is still making headlines is an important point. (The fact that a corporate PR department took on a Twitter master like Business Insider on their own turf should just make us scratch our heads.) It turns out that GE pays little or no federal income tax. Not exactly a shocker. What is instructive is how this story played out and how it new media guaranteed that GE could not control, corral, and quash it.
Pre-Twitter and pre-blogs, corporate PR departments had the advantage when confronted with an inquiring reporter exploring an incriminating story. The advantage was two-fold: first it was hard to pierce the corporate veil, giving companies the information advantage; second, there were a limited number of investigative news organizations and, typically, a significant amount of smoke was required to overcome standard PR resistance to unwanted inquiries.
That has all changed. First, it is easier than ever to access information, especially regulatory and financial filings, so facts are at the fingertips of reporters who only need to work so hard as Google demands. Second, Internet media has given rise to a new segment of specialist journalism that can chase even the tiniest whisps of corporate smoke and justify stories on the basis of peeling back the onion by just one more layer and, in effect, passing the baton of the story on to another Internet publication. Columbia Journalism Review’s The Audit blog calls this phenomenon iterative journalism. Furthermore, in many cases, for Internet media, unlike traditional media, the cost of investigating allegations like GE’s tax position are low to none.
This spells the end of spin. How can you spin if you can’t control access to information and create the narrative from the facts you selectively make public? Nope. It’s over, Mr. Spin Master. Some crafty journalist will have to come up with a new name for what we do, because it’s not spinning any more.