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"White's word choice is illuminating," Leopold wrote, "because at that point, EES's primary concern became how to 'hide' growing losses behind new contracts that, through a questionable use of an accounting loophole, allowed it to claim profits that were wildly speculative in order to give the appearance that the company was actually making money. That false image, of course, would be shattered in the fall, when Enron became the country's biggest bankruptcy ever and 4,500 employees lost their jobs."
Leopold's story attracted some notice in high journalistic places. On September 17, the New York Times's Paul Krugman published a column, "Cronies in Arms," that repeated some of Leopold's charges and concluded, "New evidence indicates that [Vice President Dick] Cheney's handpicked Army secretary was a corporate evildoer." Krugman explained: "Jason Leopold, a reporter writing a book about California's crisis, has acquired Enron documents that show Mr. White fully aware of what his division was up to. Mr. Leopold reported his findings in the online magazine Salon, and has graciously shared his evidence with me. It's quite damning." But a short time after Krugman wrote those words, the Leopold story began to unravel. On September 23, Salon posted a notice saying the piece contained several instances of plagiarism. Leopold, Salon explained, had lifted significant portions of his article from a story that had appeared seven months earlier in the Financial Times. For example, here is a selection from Leopold's article in Salon:
Here is the corresponding portion of the Financial Times story:
Here is another selection from Leopold:
Here is the corresponding portion of the Financial Times story:
In all, the Salon editor's note said that seven paragraphs in Leopold's story came from the Financial Times piece. The note explained: "Jason Leopold, the freelance writer who wrote the Salon story, told Salon that he accidentally copied the passages while writing his own story, and never noticed the error during the editing of the story, or after it was published. The problem was originally brought to Salon's attention by the Financial Times." Apart from the plagiarism, the Salon correction contained another, intriguing, note. It said that the e-mail attributed to Thomas White had been quoted incorrectly. Instead of White saying "Close a bigger deal to hide the loss," Salon said the e-mail in fact read, "Close a bigger deal. Hide the loss before the 1Q." Simply from reading the editor's note, it was unclear how much of a difference that wording made in the basic meaning of the e-mail. What Salon's readers could not know was that even as the editor's note was published, the entire e-mail story — and with it the main gotcha allegation against White — was falling apart. Yesterday, Salon published another editor's note. "After careful review," the note said, "Salon's editors have decided to take down from our Web site an article titled 'Tom White played key role in covering up Enron losses' that we published on Aug. 29. We took this unusual step because we have come to the conclusion that we can no longer stand by the story in its entirety. Though we have corroborated most of the reporting in the article, some unanswered questions remain. Specifically, we have been unable to independently confirm the authenticity of an e-mail from former Enron executive and current Army Secretary Thomas White that was quoted in the article." With that, the original Salon story, so compelling in its allegations against White, simply vanished. To their credit, Salon's editors were the ones who informed their readers of the serious problems with Leopold's piece. But readers of the New York Times have not been so well informed. Despite the seriousness of the plagiarism — which became public more than a week ago — Paul Krugman has not yet published a correction or a clarification of his original piece touting Leopold's work. Now that Salon has backed away from the e-mail story, Krugman's allegations seem completely baseless. Of course, Thomas White has been saying that all along. After Krugman's column was published, White wrote a letter to the Times saying of the critical e-mail, "I am not aware of the document in question, nor to the best of my knowledge has Mr. Leopold contacted me to validate his interpretation. For the record, I do not recall saying or writing anything close to the quote attributed to me." When he wrote those words, White could not have known that Salon was about to begin its retreat from the Leopold story. Now Salon has removed the piece from its website. The question is: What will Paul Krugman do? |
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August 29, the struggling left-wing website Salon published a sensational
story with the headline "Tom White played key role in covering up
Enron losses." Writer Jason Leopold alleged that Army Secretary Thomas
White, a former executive at Enron, had engaged in fraudulent practices
to conceal mounting losses at the Enron Energy Services (EES) division.
When White was told that EES was losing money at a rate of more than $3
million a month, Leopold reported, White responded with an e-mail that
said, "Close a bigger deal to hide the loss." 
