At 11 p.m. it became a moot point. If memory serves me correctly, it was John King on CNN who first stated that bin Laden was dead and that this was what the president was going to announce. Damn, I thought. I could have reported that 20 minutes earlier and scooped everyone! What a coup that would have been for a local news station.
In Bill Carey’s office the following morning, I told him I respectfully disagreed with his decision. He explained his concerns, among which was the matter of national security. He had feared that some lone wolf, an Al-Qaeda sympathizer, would hear the news on Channel 11 and immediately decide to retaliate by strapping on a bomb vest and going into a public place, and expressed the belief that news of that magnitude should come from the president. But Carey admitted that these examples were only used to foster his argument, but were not the determining factors for his decision.
“It wasn’t the public safety issue that caused my decision… though I did offer that as an argument,” he explained. “Rather, my decision was based on the fact that it was not ready to air. It needed a second source.” It was simply a question of professionalism—and though it wasn’t what I wanted to hear, I did understand his position. “I am confident you did your job well that evening,” Carey told me, adding, “But so did I.”
Ultimately, my only regret was that I didn’t call the news director at home myself that night. I was so busy working the phones that I allowed my producer to do my pitching to him—and Carey would later concede that, had we spoken directly to one another that night, and had I revealed my source to him, I probably could have persuaded him to let me break one of the biggest stories of the decade before anyone else.
* * *
Because I’ve gained the trust and respect of so many newsmakers over the years, they know that I can be trusted to never reveal any of them as a source, or anything told to me off the record. I’ve often stated that I would be willing to face jail time rather than reveal a confidential source; fortunately, it has never come to that. And aside from the bin Laden episode, I’ve always had multiple sources for every exclusive story I have ever broken.
There were two-and-a-half sources back in 2009, when I reported that New York Governor David Paterson had selected Congresswoman Kirsten Gillibrand to fill Hillary Clinton’s seat in the U.S. Senate when Clinton was named Secretary of State. It was the source of much speculation at the time; Caroline Kennedy, daughter of the late president, had been mentioned as another likely successor. I received my initial tip from a reliable source, who told me it was “a done deal.” Then I spoke with a congressional source, who said he was told the Gillibrand announcement was imminent. The half-source was another member of Congress, who was given the information secondhand. That much was considered hearsay—but the two other sources were solid enough to enable me to break the story before the competition did.
Immediately after the story aired, I received a call from the governor’s office, denying the accuracy of my report, and claiming that the governor had not told anyone in Congress of his choice. Perhaps not—but someone had leaked the news to a few people in Washington, and one of them had helped me chalk up a good exclusive. It wasn’t long afterward that Governor Paterson made the formal announcement, with Gillibrand at his side.
* * *
Back in the seventies, I was credentialed to cover the United Nations. I would spend time in the delegates’ lounge, often sharing coffee with foreign diplomats. Nurturing those sources paid off on a few occasions.
It was a foreign diplomat, for instance, who tipped me off that Saudi Arabian interests had offered to help bail out New York during one of its worst financial crises in 1975. I then received confirmation from a source in city government that a foreign money broker had a lender who wanted to offer New York a $250-million loan. The terms, my diplomatic source revealed, were for a 20-year loan with 7.7% interest, compounded annually and payable in one lump sum at maturity. I reached the money broker in Germany—my third source—who confirmed the terms and identified the would-be lenders as Saudi Arabian.
This was big news. My report was quickly picked up by national news outlets. The then–City Comptroller, Harrison J. Goldin, told me the city hadn’t sought the loan, but said that the offer had been made by a foreign entity. Goldin said the offer was rejected because the terms “were out of line and not competitive”—in the end, he said, it would have involved too high a cost to the city.
* * *
I had confirmation from four sources before I revealed that New York Yankee legend Joe DiMaggio was hospitalized with terminal lung cancer. It began with a tip from a New York attorney who knew DiMaggio’s close friend and attorney Morris Engelberg. Privacy rules made it difficult to get any information from the hospital where the iconic slugger spent 99 days. I reached another source who had once been a nurse at the hospital. She was reluctant to share any information with me, but when I told her what I knew and asked if it was true that DiMaggio was being treated for lung cancer, she confirmed it. In the course of that conversation she also revealed that he’d had several setbacks from lung infections, and even fell briefly into a coma. Subsequently I was steered toward another hospital worker, who not only corroborated the former nurse’s story, but also told me that at one point a priest had been summoned to administer last rites to the ballplayer. Finally, before running my exclusive report, I reached out to the man closest to DiMaggio—Morris Engelberg himself. For his part, Engelberg didn’t add anything to the information I had, but he didn’t refute it either. Once I told my producers I had four sources who had confirmed my information, we all felt comfortable enough for me to report it; and again, the story was immediately picked up by national media.
The next morning, I almost cut my face shaving as I listened to a local radio newscast. The reader was well into his story when I tuned in, and I was startled when the first words I heard were, “The family is denying…” It was the millisecond from hell. Had I screwed up, I wondered? The rest of the sentence dealt with the administering of last rites, which the family said had never occurred. But there was no denial of the rest of what I had revealed. On March 8, 1999, Joe Di Maggio succumbed to his illness. He was 84 years old.
* * *
The trust I gained among my sources by withholding information that I was told to “sit on” often paid off in positive ways. But there were other times when a story was ready to break and I had the details, but was unable to get the news on the air.
Such was the case in 2003, when Libya finally struck a deal to offer $10 million to each of the families of the 270 victims of the Pan Am 103 bombing. My source for that story was James Kreindler, the lead attorney representing the families, who had told me ten weeks earlier that negotiations for a settlement were underway.
“We’re very close,” he said, and explained that the talks, in which he and a partner were directly involved, were at such a sensitive stage that any premature reporting could be detrimental to the negotiations. I agreed to hold off on the story, and Kreindler promised to give me the first shot at it when the agreement was reached.
He kept his word. Immediately after adding his signature to the agreement, Jim called me from London to give me the heads-up. His associate added some details. It was around 2 p.m., and we were between our morning and evening newscasts. Now I had a scoop, and I had to get it out there. But while it was a big story, it didn’t warrant breaking into regular programming with a bulletin—so I had to do the next best thing and turn to social media. I wrote and posted the exclusive news on the PIX11 website. Within minutes CNN picked up the story, but failed to give us credit and attributed the report only to “a local New York City television website.” It was not long after that that other media outlets began running the story. But it was my exclusive.
* * *
There have been times when other reporters have scooped me on stories because I would not betray sources who had given me information off the record and with my assurances of confidentiality. Win some, lose some,
I say—it’s always better to retain the trust of my important contacts.
James Kallstrom was one of them. The Assistant Director of the FBI’s New York office, Kallstrom was given the daunting challenge of leading the criminal investigation into the crash of TWA 800 in the summer of 1996. He pledged to “leave no stone unturned,” and assigned hundreds of agents to the investigation to determine whether the crash of the jumbo jet over the Atlantic—which had killed all 230 people aboard—had been an accident or an act of terror.
Kallstrom and his wife Susan had become friends of my wife and mine, with whom we occasionally socialized. I knew that Kallstrom had a personal interest in the TWA probe; the wife of a fellow FBI agent was a flight attendant on the doomed plane. So quite naturally, the investigation usually made the leading topic of conversation when Kallstrom and I would meet for lunch at the Friars Club. He felt comfortable talking to me about it, knowing that if he said anything I found to be newsworthy, I would ask his permission before using the information on the air. When I did, the answer was usually no—or a slightly more drawn-out form of refusal.
“Give me a couple of days and I’ll let you know when you can go with it,” he would sometimes say. I would follow up with calls to his office and he would tell me to continue to hold onto the story each time.
On a few occasions, while I was sitting on Kallstrom’s stories, NBC’s Robert Hager and others were breaking them. One exclusive I was eager to report was that investigators had fired missiles through the fuselages of abandoned aircraft at the China Lakes test range in California, attempting to determine if the missiles left any traceable forensic evidence as they passed through the skin of the plane. I had been holding the story for a couple of weeks when Hager broke it, and I immediately let Kallstrom know that I was pissed off. He apologized and assured me that Hager’s information had not come from him or his office.
A similar situation occurred about 16 months after the crash, while the FBI investigation was winding down. It was a Tuesday evening when I learned from another source within the FBI that the federal investigation was over, and that no evidence of criminality had been found. I was told that letters were going out to families of the crash’s victims, informing them that the FBI had determined that an accident—an explosion in the fuel tank—had brought the plane down. I immediately reached out to Kallstrom, and got him on his cell phone in his car. He neither confirmed nor denied the story, but told me to come to his office on Thursday and he would give me the whole story. He assured me that no other news-media outlet had advance knowledge that the FBI had reached a conclusion about the cause of the disaster. I took him at his word. A couple of hours later, my executive producer interrupted me during an editing session to show me some copy that had just come across as a bulletin from the Associated Press. Under a Paris dateline, the story revealed that families had received letters informing them that the FBI had determined that TWA 800 was brought down by an accident, not a missile, and that no criminal act was involved.
“Damn it, I had that story!” I shouted angrily as I raced to the phone to call Kallstrom. When I reached his public-affairs officer, I told him to inform Kallstrom that he had just lost a friend in the media.
Two days later, when I showed up for the news conference, I snubbed Kallstrom, who knew I was angry with him. After presenting the findings of the FBI’s lengthy investigation, he opened up the news conference for questions. Without mentioning their names, he called on reporters raising their hands. Mine was up when Fox News’s Eric Shawn got called. Shawn asked the same question I was hoping to ask. Moments later, I heard Kallstrom’s voice calling out the only name he had mentioned during the entire news conference.
“Mr. Scott…the distinguished Mr. Scott,” he said—his subtle way of apologizing for costing me an important scoop.
Kallstrom would later explain that special delivery letters had been sent to families in Paris, with instructions for them not to be delivered before the news conference. Someone had failed to get the message, he explained, and one of the letters’ recipients called the Associated Press’s Paris office to give them the story. I had missed out on a big one, but not by any intention of Kallstrom’s—and I won his praise for being so trustworthy.
24
THERE’S GOLD IN THOSE ROTTING FERRYBOATS: A CLASSIC INVESTIGATION
The dilapidated ferry boat, Binghamton, resting half sunk in the Hudson River.
There is no greater achievement for a reporter than to bring about public awareness of wrongdoing, flaws or abuses in our system, and to uncover the evidence that results in corrective measures. Investigative reporting is the hallmark of journalism, and where it leads us can be quite unpredictable.
It was a dilapidated, age-old ferryboat sitting in the murky waters of the Hudson River that led me on such a mission in 1975—a journey that would take me all the way to the White House and through the halls of Congress. The ferryboat, originally christened the Binghamton and pulled from the graveyard of vessels on Staten Island, was destined at that time to be converted into a restaurant on the shores of New Jersey. Though the boat was not proven to be part of any illegal transaction itself, it played a pivotal role in leading me to a pattern of extremely dubious practices by individuals at the highest levels of government, who were acting in collusion with the maritime industry.
During our three-month investigation, researcher Stanley Pinsley and I studied hundreds of documents and met with government officials, shipping-company executives and more than 30 maritime industry sources, on occasion wearing concealed recording devices. We found that shipping companies were the beneficiaries of certain loopholes in maritime law that enabled them to secure obsolete but still-viable ships for private conversion into cargo vessels. Of particular interest was the Vessel Exchange Act, a provision under the Maritime Act of 1960 and 1965, which was designed to help non-subsidized shipping companies improve the quality of their fleets.
The law provided that shipping companies could trade in old vessels that weighed more than 1,500 tons for newer and more efficient ones left over from World War II and still sitting in mothballs. Along with the trade-in, these private companies would pay a nominal sum of money for the government vessels, which had each been built at a cost of $2.5 million. For the shipping companies, this was a great deal—critics of the program in Congress likened it to trading in a secondhand Ford for a Cadillac.
The intent of the law was that oceangoing and Great Lakes vessels be used for the trade-ins. But our investigation found that shipping companies were not playing by these rules, and were dredging up rotting old ferryboats to turn in for the trade. Some of these, we found, even failed to measure up to the required 1,500 tons—in which case the shipping companies resorted to a process called “box-topping.” A company we located at the World Trade Center provided this service, whereby they would build a phony plywood superstructure atop an existing boat, giving the impression that the boat conformed to the weight requirements for the trade-in. Our source likened it to a child sending in a cereal box top for a prize: after a transaction was completed, the “box-top” was removed and used on another underweight boat.
Our investigation determined that at least 30 decommissioned ferryboats had been traded in, some using this box-topping practice, by at least ten corporations including SeaLand Services and Alcoa Steamship. We also found that on August 10, 1961, Malcolm McLean, then-president of Waterman Steamship Corporation, told a congressional hearing that the Vessel Exchange Act was “a giveaway not in the public interest”—then, five years later as President of SeaLand Shipping, dipped into the pot himself, and became involved in at least three of the transactions we uncovered.
* * *
The scandal went further. One of the primary beneficiaries of the trade-in, we found, was the Waterman Steamship Corporation itself—which, curiously, was one of the heavier contributors to Richard Nixon’s reelection campaign. The company succeeded in exchanging at least half a dozen rotting ferryboat
s for valuable government vessels, one of which was the Binghamton. According to Coast Guard records, three days after Waterman purchased the boat from Ruscon Industries, it turned it over for the government trade. The government never picked it up, and for $50,000 turned it back over to the company from which Waterman had originally bought it—though documents showed that Waterman actually wrote the check. The Binghamton was subsequently acquired by the New Jersey restaurant consortium, and we never got an explanation for this transaction, which was certainly questionable at the very least. But we did learn that just seven days after taking office as part of Nixon’s new administration, Commerce Secretary Maurice Stans—who had been Nixon’s chief fundraiser—had approved the ferryboat swap for Waterman, whose CEO’s name was prominent on a list of contributors to the Nixon campaign.
We brought this information to the attention of Connecticut Senator Lowell Weicker, a member of the Senate Commerce Committee, who called on the Justice Department to investigate. Concerned by what we had uncovered, he sent a letter to Attorney General Edward Levi, requesting that Levi look into allegations of “highly questionable, if not fraudulent transactions between the government and the shipping industry.” Senator Weicker said that other elements of our reports deserved scrutiny as well, particularly “subsidies, both direct and indirect, which the industry has been receiving over the years, and certain relationships between the industry and members of the Senate and House of Representatives.”
In the course of our investigation, we found that while the U.S. demonstrated its loyalty to American shipping interests, the maritime industry didn’t always show its loyalty in return. Over a period of several years, $6 billion in taxpayer money was shelled out in building and operating subsidies to shipping companies—some of which, data showed, then abandoned the U.S. flag and registered their vessels in foreign countries like Liberia to avoid U.S. taxes and exploit cheap labor.
As I Saw It Page 16