After a career that included writing the “Heard on the Street” column for The Wall Street Journal for six years, reporting at the New York Herald Tribune and New York Daily News, writing New York magazine’s “Bottom Line” column and then the “Full Disclosure” for Esquire, business journalist Dan Dorfman became a household figure in the 1980s and early 1990s.
Dorfman wrote a column twice a week for USA Today about Wall Street and appeared on CNN and CNBC as a commentator. In 1994, he left USA Today for Money magazine. His annual salary at the height of his career was estimated at approaching $1 million, and he was considered the best-known business journalist.
Dorfman’s comments were closely followed by traders. Stocks would move sharply as soon as a stock pick by Dorfman would be announced on CNBC. The Chicago Board of Options went as far as to instituting a “Dorfman Rule,” where trading would be halted in a stock that Dorfman referred to on television.
“The reason Dorfman rose so rapidly in recent years to become the highest-paid and most influential business reporter in the United States isn’t because he’s a market genius,” wrote Newsweek business columnist Allan Sloan in 1995. “…It’s the hunger for the simple way to make money, the quick hit, seven stocks to buy now, 10 mutual funds for the ’90s, the 12-step computer program that guarantees you won’t have to live on cat food when you retire.”
In the mid-1990s, however, Dorfman’s career took a hit. Two articles in BusinessWeek questioned the sources he used for some stories. Federal prosecutors in Brooklyn examined Dorfman's friendship with Donald Kessler, a Long Island public relations consultant. According to Business Week, Kessler represented several companies that Dorfman mentioned favorably on CNBC, raising the question of whether the relationship had been used for insider trading or market manipulation.
Though Dorfman never profited by mentioning stocks in his writing, he was deemed guilty by his association with Kessler, who later pled guilty to two counts of securities fraud.
Dorfman was fired from Money in early 1996 for failing to reveal news sources. After a stroke, he made a comeback, reporting for Jagnotes, a market Web site, and also writing Wall Street columns for Financial World magazine and the New York Sun, which folded in 2008. Dorfman is now looking for a publication to write for.
Now 77, Dorfman talked about his career with UNC journalism professor Chris Roush on Dec. 27, 2008. What follows is an edited transcript.
Q: How did you first get interested in journalism?
A: It goes back to my Army days when I was overseas in Germany. They started a newspaper in a local area and I was asked if I liked to do some driving for the editor. So I drove the editor around while he talked about stories. This was not Stars and Stripes. The idea was to start a newspaper to sell advertising to German merchants and distribute it to the GIs. I knew nothing at all about journalism. After a while, the idea that they were interviewing interesting people, I thought that was a fun thing to do. So I asked the editor if I could do some reporting. I had no background in English, so I was really a bum when it came to journalism. But when I came back to the United States, I took an evening course in journalism at NYU. At that time, the professor was a reporter at the New York Times. He told me, “Journalism is not for you. I don’t think you have the ability.”
Q: What did you learn when you worked for Fairchild and Women’s Wear Daily?
A: That was a very exacting place. The publisher and owner of the time was a guy by the name of John Fairchild. He was demanding as hell. You had to be very accurate and sharp or you didn’t last. Working in that kind of environment helped me with being very accurate and being fair. Some people on Wall Street with axes to grind will tell you I have never been accurate.
Q: Is this when you got interested in business journalism?
A: I never was really interested in business journalism. When I was with
Fairchild, the major breaking news stories were broken by me. I asked for
a raise. I couldn’t get a raise, so I decided to leave. I went to
John Fairchild, and I told him I was leaving, he told me I was the best
reporter there and he was sorry to see me leave. I told him I was sorry
I got friendly with a guy by the name of Myron Kandel, who was covering he same area I was covering, the apparel industry, for the New York Times. He became the business editor of the Herald Tribune. He asked me if I wanted to join the Herald Tribune. My claim to fame is I was the last person to get a bonus at the Herald Tribune, of $150, before it closed. The paper closed about a month and a half later.
When I was there, I was writing about apparel, but then starting writing about food and liquor, but from a business standpoint.
Q: You wrote the “Heard on the Street” column at The Wall Street Journal for six years. What was that like?
A: Very demanding. Very powerful. Everyone had a stock they wanted to tout. It was a column that everyone read. It required a lot of work and checking. The thing about the column is that it made me somewhat famous. Or some people would tell you infamous.
I left because I bought a new issue, something that I had never written about. The Journal thought that was grounds for dismissal. It was a very minor amount.
Q: How was it different writing about business for New York and Esquire magazines?
A: I always had the same approach. Whatever I was writing about had to be clear to everybody. I wrote very simply and backgrounded anything. I made things very simple so I could understand them. I figured if I could understand them, the readers could understand them. But the overarching thing for me was breaking news stories.
Q: Why breaking news?
A: It’s like being in the Olympics. You want to beat everybody else. In journalism, you want to have the story first. That was the determination. Some people will say it’s how much money you make, but to me it was who got the story first. It made me feel good about my work and that I had the right kind of sources. That was the most fun, beating everybody else, beating The Wall Street Journal and every other paper. It’s competition. You want to win. But you had to be right.
Q: You were known for breaking the story that Time and Warner Communications were going to merge, and later that Paramount was going to make an offer to buy Time Warner. How did you do that?
A: In the first case, I got that story from an investment banker. Investment bankers are one of the very best sources . I began to slowly but surely try to meet as many investment bankers as I could, go out and have dinner with them, not because they would pay for them, but because they would drink and talk about their work.
In the case of Time Warner acquisition, I kind of had an understanding with the head of Paramount Communications, a guy named Marvin Davis, and he and I had an understanding in which he suggested that I come to him and ask him if what I was about to publish was a bad story instead of talking to people on Wall Street. He said, “I’ll never lie to you.” My source on that was so good. Davis said to me, “I’m not going to comment.” I asked him to tell me if I twas a bad story, and he said, “I’m not going to comment,” so I knew it was a good story. And I got three or four more sources to confirm it.
I took a lot of flack on that story. I said there was going to be a bid on the stock, and the price went up. People thought my story was ridiculous. There was a lot of incredulity, but I knew it was true.
Q: You started appearing on television in the 1980s, first on CNN and then CNBC. How was that different than covering business and Wall Street for print?
A: I treated TV like I treated newspapers. The idea was to be very simplistic, but I got more simplistic when I went on TV. I was criticized for talking too fast. I did what I always did in journalism -- I explained things. And I broke a lot of stories. To me, there was no difference. Many more people saw me, but if I had to choose between two , I would have had newspapers. You’re on TV, people see you and they misinterpret what you say. I wasn’t a natural for TV. I was a natural for newspapers.
Q: How did USA Today further your career?
A: When I went there, I knew I had to enforce the idea of writing even more simply. When you wrote someone was shorting a stock, I had to write that they were betting the stock price was going to go down. It was the idea of being very simple, and explaining in a language anyone can understand. I think that was one of my great strengths.
Q: What was your reaction to the BusinessWeek stories in 1995?
A: They would never admit it, but that was a bogus story, and they now know it. I told them I had never been contacted by the Justice Department. Thirteen years later, no one has ever contacted me from the Justice Department. It happened to me before in 1989, when US News & World Report ran a story about an SEC investigation of me, but here again, the SEC never contacted me. The SEC never called me. I broke a lot of SEC stories, but when I broke them suggesting someone had done something wrong, I checked and re-checked. I made sure the story was unerringly accurate. In 13 years, I have never been contacted. How come? It very nearly destroyed my career.
I knew a PR guy, and the PR guy was under investigation. I knew the guy, so I was a natural target. But the fact you know someone doesn’t mean you’re under investigation. If you call the Justice Department today and told them you were writing a story about Dan Dorfman, they would tell you no one ever contacted me. At least check it out.
I told Business Week I had never been contacted by the Justice Department, but that's not what they wanted to hear and never included that in the story. If you asked them about it today, they would simply use the old phony standby and say they stand by their story. What else could they say? Since 13 years have passed and no one has ever contacted me from the Justice Department before or after that story, what does that tell you about the accuracy?
The interesting thing that no one writes about is when BusinessWeek did that story, I was on CNBC, and they retained a firm called Shearman & Sterling LLP, and they did an investigation. They had a lawyer, a former federal prosecutor, who wanted to know everything. I gave him my complete financial and tax records going back 10 years. In the end, CNBC gave me a complete bill of health, concluded there was no wrongdoing and issued a statement to that effect. This fact has been omitted from just about every story written about me.
When all the stories appeared about me across the country, that was conspicuously missing.
Q: Even after that episode, you continued to cover Wall Street even though you were well into your 60s. Why?
A: I love the idea of competing, and I think I’m pretty good at what I do. The frustrating thing right now is I’m not writing for any publication, and I have stories. I have stories. I have a couple of newsbreaking stories, each of which, I'm convinced, would make the front pages of many newspapers.
I’m having some exploratory conversations with a few publications. But everyone is telling me how bad things are. It’s a very frustrating experience, not being able to write.
Q: Is there anything about your career that you regret?
A: I regret buying that new issue when I was at The Wall Street Journal. That was stupid. But at that time, I didn’t think that was wrong. I think going from USA Today to Time Warner (Money magazine) was also awful. I shouldn’t have done that. I regret those things. I also regret the fact that there’s so much jealousy in journalism.
Q: You were once considered the highest-paid business journalist, making close to an estimated $1 million a year in the 1990s. What did that mean to you?
A: I'm not trying to keep up with Bill Gates. I don't spend money on expensive things like luxury cars or fancy duds. Everyone wants to make a good salary, but to me, beating the competition by breaking a hot news story is much more meaningful.
Q: How would you like to be remembered?
A: On my tombstone, I would like it to read, “Here lies Dan Dorfman, a reporter who cared.” All that I’ve tried to do is to give to the masses what was known to a chosen few. That was my contribution. I heard information, like the Time Warner offer, by a relatively few people, but after I reported it, it was known by everybody. “Dan Dorfman, a reporter who cared and who tried.” I think that’s good enough.