CJR: When News Organizations Abet a Scam

From the Columbia Journalism Review:

What should news outlets do when it becomes clear they’ve treated scams as legitimate stories?

On September 15, 2011, executives of Arevenca, an Aruba-based oil company, and Avic Xac, a Chinese state aircraft company, signed the biggest oil deal in history in Madrid. The agreement promised $200 billion a year in trade over 10 years at a total value of $2 trillion. Francisco Javier González, the president of Arevenca, spoke at the signing about plans to supply not only fuel but also ports and railways.

Within hours, the news was out. Scores of news websites around the world carried a wire story from EFE, Spain’s biggest news agency. Viewers could also see a Spanish-language video news report on EFE’s own page or on its YouTube channel; an extended English-language version promptly appeared on González’ YouTube channel.

EFE had been played. Arevenca was little more than a website full of lies and an office in Aruba. The money involved, $200 billion, was comparable to the annual revenue of global corporations like Chevron. Avic Xac has nothing to do with ports. There was barely anyone at the signing ceremony—no ambassadors, no bankers, and, notably, no oil reporters. Despite enough red flags to stock a Communist Party parade, EFE ran its story, both in print and video. Commenters on YouTube quickly said the event was a fraud, but the video is still there. (The article and video have been removed from EFE’s website.)

The screwup would have been long since forgotten, like an unfunny “Yes Men” prank, except that González is a prolific con man. He and his front men have consistently referred back to the EFE coverage as proof of the company’s seriousness as it convinces victims to wire advance payments for oil products which then never arrive—the type of fraud often referred to as a Nigeria scam. A civil court in Puerto Rico judged González liable for stealing $7.8 million from an asphalt company there, and he is now facing criminal complaints in Spain.....MORE