Sep 242010

I’m a big believer in social media, both for personal use and as a channel for achieving business objectives. I’ll admit to rejoicing that my clients don’t always need to go through the “media filter” to get their message across anymore. And like many others, I despair at the declining quality of media coverage.

BUT — if the traditional media continues to wither, who will uncover scandals? Who will do the muckraking, and “comfort the afflicted, while afflicting the comfortable?”

I thought about this when I read the appalling story about Prudential Insurance withholding benefits from the families of fallen service members. I (and everyone else) heard about this thanks to Bloomberg News, in my case via the Washington Post. This was first reported in July.

Now, to make the story even more disgusting it turns out that the VA sanctioned the change in policy that allows Prudential to offer so-called retain asset accounts rather than delivering requested lump sum payments. From this past Sunday’s story by David Evans:

The Department of Veterans Affairs failed to inform 6 million soldiers and their families of an agreement enabling Prudential Financial to withhold lump-sum payments of life insurance benefits for survivors of fallen service members, according to records made public through a Freedom of Information request.

The amendment to Prudential’s contract is the first document to show how VA officials sanctioned a payment practice that has spurred investigations by lawmakers and regulators. Since 1999, Prudential has used retained-asset accounts, which allow the company to withhold lump-sum payments owed to survivors and earn investment income on the money for itself.

It’s not surprising this revelation comes from the traditional media, and not social media.  Who else has the time and the resources to devote to months of investigative work to uncover scandal? Social media can certainly help spread the story, but for the most part it can’t break major stories. The recent move to hyper-local coverage can’t do the job either, except maybe on the community level.

Recently I wrote about a terrible piece of reporting in USA Today, a sloppy piece of work that verged on negligent. A friend of mine took a hard look at the side of the Rapid Advance/Lee Jundanian story the Washington Business Journal left unreported, and my colleague Marc Hausman looked at the rise of misinformation in his blog. If you want to bash traditional media, you can find plenty of ammunition.

But we also get stories like the one broken by Evans. This former political science major never doubts the value a healthy and free press delivers to society. And I fervently hope a new business model gets figured out, before it’s too late.

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