iBusinessreporting promises transparency, but is it just conflicted?

Bill Lobdell made quite a name for himself in this newsroom writing about faith gone wrong. He called out crooked ministers, fraudulent faith healers and abusive priests.

Now Lobdell has launched a new journalism website with a partner who once was convicted and sent to prison for a multimillion-dollar swindle. The veteran religion writer hopes to do to crooked businesses what he did to ministers who did not live up to their calling.

What has many traditional journalists agog is not just that Lobdell threw in with onetime ZZZZ Best con man Barry Minkow, but what the duo, operating as iBusinessreporting.com, proposes to do to make a buck. They will short-sell many of the companies they investigate, in effect betting that they can drive stock prices down, simultaneously pushing iBusinessreporting’s bottom line up.

This notion of a profit-motive near the heart of journalism has a lot of reporters shaking their heads. But what I find at least as intriguing as the website’s novel funding model is the proprietors’ argument for deserving as much credibility as any other news organization -- transparency.

Full disclosure has become a mantra for many media companies, but the full power, and limits, of laying your identity and values on the line may be tested by few newcomers like iBusinessreporting.

After spending seven years in prison for defrauding investors of more than $26 million, Minkow turned Christian preacher and gained praise from the FBI and others for helping expose investment fraud. Like Frank Abagnale of “Catch Me if You Can” fame, the scoundrel morphs into all-knowing sleuth.

Lobdell and Minkow formed the new website to bring more attention to those kinds of investigations and to lend the credibility the journalist built working for years in the mainstream.

But the newfangled business model flies in the face of traditional journalism’s conflict of interest codes. At most major news outlets, including this one, reporters can’t own stock in industries they cover. Rules often forbid speculation and short-selling stocks under the theory that those practices would give journalists incentive to accentuate a company’s negatives.

But Lobdell said that readers will know, from the get-go, if his outlet has a business interest in a stock crashing. And they will be able to judge his work with Minkow accordingly.

My former colleague argues that investigative journalism has withered so badly as mainstream news outlets contract that it’s worth trying unorthodox business models.

More and more people in the news business are promising to disclose their conflicts and motivations, but very few are doing it in a meaningful way. As editor of the Idaho Falls Post Register a few years back, Dean Miller took a worthy swipe at the issue. He laid out the small newspaper’s ethics guidelines and listed his employees’ potential conflicts of interest right on the website.

When reporters broke the rules -- in one case, plagiarizing material from another source -- the paper detailed the transgressions and punishments.

“If you pay attention like that, most people are going to recognize it and say, ‘Wow, you are really trying,’ ” said Miller, now a journalism professor and ethics fellow at the Poynter Institute, a school for professional journalists. “ ‘You spelled out your rules and you are trying to follow through.’ ”

Kelly McBride, who heads Poynter’s ethics faculty, said that after lengthy study she found audiences really want to know more about how stories are reported than about a reporter’s background.

“People assume you have an agenda anyway, whereas if you tell them what your agenda and plans for a story are it takes some of the guesswork out,” said McBride.

Readers also appreciate it when a news outlet offers a succinct index of stories on a topic so they can see how a story has evolved.

Politifact.com and FactCheck.org have enhanced the sense that they keep the government and politicians honest. No person or party seems to catch a break and a long list of findings can be found in a click or two.

“What people really want,” McBride said, “is more reliable information not more information.”

So reporters and outlets build credibility not via biographical sketch -- a website bio noting their hometown, university or party affiliation -- but based on their body of work.

In one description of iBusinessreporting, Lobdell bemoaned the lack of transparency in many traditional news organizations. He described how newspapers have subjected Republicans and conservatives to liberal reporters and editors without admitting to readers the biases of those doing the reporting.

“I don’t think these reporters set out and say ‘Let’s get this guy’ or specifically try to do people in,” Lobdell said. “They just have blind spots and it should be acknowledged.”

The liberal bent of most journalists, at least on social issues, may be the worst-kept secret in American journalism. It’s hard to tell what is a more persistent myth -- that the political bias creeps into every story or that it creeps into none of them.

Lobdell’s solution is for journalists, or at least political reporters, to disclose their party affiliation and voting record in recent elections. “The more information the reader has about the reporter and their motivations, the better.”

But just how transparent should journalists be? If a reporter voted for Barack Obama but now thinks he has fouled up healthcare reform or stumbled with the troop increase in Afghanistan, must all that also be noted? Is a critique of the president’s stand on cap-and-trade a must?

Many savvy political reporters have long since registered to vote under neither major party. To get the rest to declare their allegiance would do more to wedge journalists into categories -- a favorite in this cable television-ready age -- than to cast light on the topics they are writing about.

“Things are partisan enough as it is,” said Greg Mitchell, a journalism critic who edited the trade magazine Editor & Publisher. There is a suggestion, he added, that journalists’ personal identities are more important and “there are no such thing as facts.”

So as Lobdell and Minkow go about their new business, I’ll be looking on skeptically, but with no hostility. Full transparency: More than 20 years ago, I was working at a tiny daily newspaper when a friend of a friend, Bill Lobdell, told me the L.A. Times had just opened a new program and was hiring young reporters.

I have been working here almost ever since. Still a bit opaque, but getting more transparent by the day.

james.rainey@latimes.com

Twitter: latimesrainey

On the Media also appears Fridays on Page A2.