"My children are scared all the time, because they see me falling apart," Mr. Eichenwald tells New York. "My wife holds together. But that doesn't keep her from sobbing in the middle of the night, 'I wish to God we'd let him die.'"

"Kurt never told me that he suffers from memory loss, and to the best of my knowledge he didn't tell any editor here," wrote Times business editor Larry Ingrassia--who oversaw Mr. Eichenwald's controversial child pornograpahy story--in an email to The Observer.

Mr. Eichenwald revealed in an interview today with NPR that he has long-term memory loss due to a battle with epilepsy.

Mr. Eichenwald did inform Portfolio editor-in-chief Joanne Lipman that he has memory disruptions, but only in one of their final conversations together, two sources said. He later resigned from the glossy magazine.

NPR reports:

In the interview, parts of which are available now on the NPR Web site, Eichenwald said he did not previously come forward about the effect his condition has had on his memory because he wanted to be judged on the basis of his work, not his challenges.

"There are reporters who are stupid," he said. "There are reporters who are lazy. There are reporters who are drunk… I'm none of those things."

Kurt Eichenwald, a senior writer and investigative reporter, has resigned, according to a source with knowledge of the situation.

For two decades, Mr. Eichenwald worked as an investigative reporter at the New York Times before joining the Conde Nast start-up in September 2006.

It was in Dec. 2005, while at The Times, that Mr. Eichenwald wrote an award-winning investigative piece on online child-pornography that continues to generate controversy. This past March, The Times revealed that Mr. Eichenwald paid $2,000 to the story’s subject Justin Berry—which although repaid, violated the paper’s ethics guidelines, according to executive editor Bill Keller. And two days ago, The Times reported that Mr. Eichenwald made additional payments totaling $1,100 to Mr. Berry via PayPal, under pseudonyms.

Back in February 2007, Mr. Eichenwald was very excited about his new position at Portfolio, telling The Observer that “very few startups have the kind of bankroll behind it that this one does."

Regarding the simultaneous print and online launch, he added: “Portfolio is a magazine being born in the 21st century. Any magazine coming out now cannot look at the Web as just something to put an article on; it has to be viewed as part of the whole.”

When contacted by The Observer today, Mr. Eichenwald declined to comment.

It’s been a tumultuous week over at 4 Times Square.

On Tuesday, The Observer first reported on the firing of deputy editor Jim Impoco—regarded among staffers at the magazine’s number two, next to editor Joanne Lipman. The widely-admired Mr. Impoco brought in many of the magazine’s top staffers, and his firing occurred at a difficult moment, right as the magazine shifts to a monthly schedule.

Mr. Impoco was an advocate of an investigative piece on terrorism that Mr. Eichenwald wrote for the first issue, but which was held by Ms. Lipman.

Although Mr. Eichenwald wrote another piece for the forthcoming September issue, the terrorism story remains held. Several Portfolio staffers, who read the terrorism piece, praised it, and told The Observer that they did not know a specific reason why Ms. Lipman wouldn't run it.

A Portfolio spokesperson had no comment.

UPDATE: Portfolio staffers now tell The Observer that was Mr. Eichenwald was on leave at the time of his resignation. A Portfolio spokesperson declined to comment on personnel matters.

On Jan. 31, Janet Robinson, chief executive of the New York Times Company, opened an earnings conference call by addressing the bad news first: a $648 million loss in the fourth quarter of 2006.

The Times Company wrote down the value of its New England Media Group—which includes The Boston Globe—by $814 million, resulting in the substantial quarterly drop.

“Despite this charge,” Ms. Robinson said on the conference call with analysts, “we continue to view these properties as important assets of our company, and we remain acutely focused on improving their performance and value.”

That takes care of jittery investors. But what about The Globe’s rank and file, which has endured speculation that its parent company is slimming the place down in preparation for a sale—possibly to a moneyed suitor like Jack Welch, who has, according to reports, expressed interest in buying?

That’s the agenda for a couple of “town meetings” that Ms. Robinson has scheduled with Globe employees on Feb. 8 and 9.

The Times fended off speculation about Mr. Welch buying the paper at the end of 2006, when Ms. Robinson addressed a conference of Boston leaders. But since then there’s been that giant write-down, which had been preceded by other ominous signs.

On Jan. 11, the Times Company announced 125 jobs would be cut at The Globe and the Worcester Telegram & Gazette, first through voluntary buyout packages. Two weeks later, The Globe announced that three foreign bureaus—Jerusalem, Berlin and Bogotá—would be shuttered.

And this past week, 10-plus-year staffers were notified about the buyout packages, with 90 days to decide whether to stay or go.

“There’s no question that these sorts of things can be distracting, but I think people are focused on their work, on their journalism,” said Martin Baron, The Globe’s editor in chief, by phone on Feb. 6. “Ultimately, that’s what matters.”

The upcoming “town meetings” will be run as Q&A sessions, with Globe staffers “welcome to attend and ask Janet about issues or topics of interest relating to our business,” according to a staff memo.

Such obvious distractions—buyouts, layoffs, outsourcing of classified jobs to India, closing of foreign bureaus and rumors of an impending sale—will provide plenty of Q&A fodder.

“I expect we hear her say that there are some reasons for hope, especially in the Boston economy,” said a Globe staffer.

(Indeed, if Ms. Robinson’s speech to analysts is any indication, there will probably be an emphasis on an expected rebound in print advertising in the region.)

But outside Boston, there are lingering concerns.

“Obviously, [the closing of foreign bureaus] limits the kind of jobs that young reporters aspire to,” said a Globe staffer. “Nationally, it arguably diminishes our stature.”

“I think there’s going to be a lot of questions about where The Globe fits into the Times portfolio,” said another staffer.

The New York–Boston relationship was somewhat strengthened last December, according to one Globe staffer, when The Times sent up its research and development staff to give a presentation on technologically advanced ways to spread the news—iPods, cell phones and various electronic devices. Michael Rogers, The Times’ futurist in residence, was among the presenters.

But not everyone is convinced that the Times Company will continue its stewardship of the newspaper it bought for $1.1 billion in 1993.

“The fear, as you probably know, is that The Times will unload The Globe, given its poor recent performance,” said a Globe staffer. “I suppose the first thing we’ll be listening to Janet R. for is assurances that we’ll remain in the Times family. Developments at the Philly Inquirer have soured people on the notion of private ownership by a rich-guys consortium.”

And long-time Globe columnist Alex Beam also isn’t convinced that said rich guys are the answer to quandaries in the newspaper industry.

“Jack Welch and David Geffen’s idea of journalism is like a Charlie Rose interview,” said Mr. Beam. “‘Gosh, Mr. Welch, tell us more about your fabulous career.’ That’s not our idea of journalism.”

Portfolio Launch Nears, Staff Atwitter

“Very few startups have the kind of bankroll behind it that this one does,” said Kurt Eichenwald, a senior writer and investigative reporter at Portfolio.

Mr. Eichenwald was speaking by phone on Feb. 5 from Dallas, Tex., a safe distance from the magazine’s perch on the 17th and 18th floors of the Condé Nast building.

There, Si Newhouse’s much-hyped new business magazine and Web site are getting off the ground, with prototypes circulating and staff writers currently under deadline for the inaugural issue, scheduled to hit newsstands on April 24.

But the glossies on the stands will only be part of the launch. What appears to be emerging is a test case for Condé Nast, which has struggled to make its presence felt on the Web.

Portfolio will follow the path laid down by Glamour, Men’s Vogue and Vanity Fair (which relaunched in October with significant Web-only content). As with those sites, Condé Nast has teamed up with Avenue A Razorfish to develop Portfolio’s Web site.

But once it’s set up, it’s the editorial staff from the magazine that will be keeping things moving.

“Print writers are definitely writing for the Web,” said a source with knowledge of Portfolio’s Web strategy; however, “not every single writer is going to have a blog.”

“Portfolio is a magazine being born in the 21st century,” said Mr. Eichenwald. “Any magazine coming out now cannot look at the Web as just something to put an article on; it has to be viewed as part of the whole.”

That’s certainly true for Mr. Eichenwald.

He spent two decades covering the business world for The New York Times before joining Portfolio this past October.

In December 2005, Mr. Eichenwald wrote an investigative piece on child pornography for The Times that included a video segment. “It really added a lot for people to actually see the person I was writing about,” he said. That video segment was later nominated for an Emmy, and sparked Mr. Eichenwald’s interest in thinking beyond print.

Shortly after arriving at Portfolio, he pitched a video supplement for his first piece. In December, Mr. Eichenwald delivered the demo video, which, he said, is tentatively scheduled to be released for the April launch.

(Already on the Portfolio.com placeholder up now, there is a sample video interview between Portfolio editor in chief Joanne Lipman and Google chief executive Eric Schmidt.)

Last October, Chris Jones, managing editor of the Portfolio Web site, gave a presentation to the Portfolio staff and provided “very early impressions” of the Web site, according to a staffer present. The Web editor attends each staff meeting, providing updates and answering questions. Also, a voluntary editorial meeting specifically for the Web site was initiated this past week.

Another staffer added that the site would look vastly different from the Big Three business titles: Fortune, Forbes and BusinessWeek.

Matt Cooper, Portfolio’s Washington editor and previously Time.com’s political editor, has been rumored among possible bloggers when the site launches.

“We’re all going to do a lot for the Web and print edition,” said Mr. Cooper, declining to confirm the rumor. “It’s a seamless garment.”

And recently, Web editors have made the rounds of the office, according to a staffer, inquiring about which staffers are interested in blogging on swanky side interests—such as art and travel.

But even Portfolio’s seamless garment has had a few tears along the way.

On Jan. 30, the New York Post’s Page Six column reported that the startup was in shambles and that Mr. Newhouse was losing faith.

In that morning’s editorial meeting, to dispel any rumors of chaos, Ms. Lipman said that advertisers were “banging down the door,” according to a staffer present.

Multiple editorial sources have said that the business side of the operation has made reassurances that ads are selling very well, and that the first issue can be expected to run about 250 to 300 pages.

And certainly Si Newhouse, in his usual fashion, will be upstairs counting ad pages and charting the progress of his team—several of whom have a lot riding on Portfolio’s success.

Print, schmint, right?

“We have really ambitious aspirations,” said a Portfolio staffer. However, there is one caveat: “The first magazine that is going to be published is not going to change the face of magazine publishing.”

—M.C.

The New Yorker Will Run Your Correction, Not Its Own

In its Feb. 5 issue, The New Yorker published a message describing factual errors in a Jan. 29 “Talk of the Town” piece by Nicholas Lemann about the trial of I. Lewis (Scooter) Libby. Mr. Lemann had mistakenly claimed that “Joseph Wilson was dispatched by ‘the White House’ to Niger … (he was sent by the C.I.A.)” and that Mr. Wilson had “published his Times Op-Ed piece ‘five months’ after his return (it was a year and five months).”

The message appeared not in an editors’ correction but in a piece of reader mail, a letter from James Currin of Stamford, Conn. Mr. Currin, 75, is a retired physics professor from SUNY Purchase. He has been reading The New Yorker for more than 50 years. Mr. Lemann is the dean of the Graduate School of Journalism at Columbia University.

“I was surprised that he was so careless,” Mr. Currin said by phone on Feb. 4. “He’s a good writer.”

By legend, the factual infallibility of The New Yorker is both assumed and presumed. Its fabled team of fact-checkers—16 of them at present—vets every detail of the magazine before it reaches the reader. And if the errors that get through are rare, acknowledgements of those errors get through even less often.

The result is the meta-erroneous belief that The New Yorker has a policy against printing corrections at all—a belief that has made it all the way to the Columbia journalism department. “As I understand it, for many, many years they didn’t even run letters to the editor,” Mr. Lemann said. “It’s fairly recent—I can’t remember when they started—that they run letters. They still, since 1925, have not run corrections.”

In fact, although the weekly “Mail” section is a relatively new addition, the magazine has printed letters since at least 1936. And under editor David Remnick, corrections have been appearing as stand-alone items, the industry standard. They are, however, easy to miss, as there have only been about two dozen corrections or editors’ notes since 1999. (A new one appeared in the Feb. 12 issue.)

Through the decades before the current era of regular corrections, the magazine ran occasional ones—a lengthy 1963 editors’ note, for instance, corrected three errors in part four of Hannah Arendt’s “Eichmann in Jerusalem.” And it ran dozens and dozens of letters pointing out errors, under the heading “Department of Correction” and variants thereof (“Department of Correction and Amplification,” “Department of Correction, Amplification, and Abuse,” “Department of Correction, Amplification, and General Pettifoggery”).

The handling tended to be arch: In 1940, after being corrected by the editors of Fortune, The New Yorker wrote, “Wrong was the New Yorker, and to the editors of Fortune our check for five dollars for discovering the error.”

The present approach is more measured. Corrections are presented as frank admissions of failure. But in the case of Mr. Currin’s letter, the concession was not quite straightforward.

Mr. Currin, who is the father of celebrated figurative painter John Currin, wrote in to question four assertions that Mr. Lemann had made. Two of his points were matters still under dispute, while the other two—about the provenance of Mr. Wilson’s assignment and the date of his Times Op-Ed piece—were verifiable facts that Mr. Lemann had gotten wrong.

In an e-mail to The Observer, Peter Canby, the head of the fact-checking department, wrote that the errors Mr. Currin pointed out could have been addressed in a formal correction notice. But Mr. Canby wrote that since he and letters editor Brenda Phipps “had a letter in hand that both set the record straight on the erroneous facts and also went on to some other widely debated points of interpretation,” they decided to let Mr. Currin’s letter speak for itself.

Except that Mr. Currin’s note, as written, did not set the record straight. The original draft, according to a copy supplied by Mr. Currin, merely quoted the parts that Mr. Currin thought were wrong. The parenthetical clarifications, explaining what the correct facts had been, showed up after The New Yorker edited the letter.

In other words, the editors wrote a functional correction after all—they just credited it to Mr. Currin.

“Maybe that’s the New Yorker way of correcting an error,” Mr. Currin said. “A graceful way.”

—Leon Neyfakh

The crux of the correction, regarding a piece by Debbie Nathan on Kurt Eichenwald's internet-child-porn reporting, is an amplification of the right of the Times—and of you!—, as per federal law, to inadvertently view kiddie porn. (Here we come a-trolling, XTube.com!)

Even though Salon is The Transom's sworn life-long enemy, we'll admit it's clear they nobly did the right thing. Still, ya just can't help but feel terrible watching such a legal beat-down. Watching the Salon-Times legal department match-up is sort of like watching Condoleeza Rice and Scooter Libby mash a bag full of kittens.

Conspiracy of Fools: A True Story, by Kurt Eichenwald. Broadway Books, 742 pages, $26.

The spectacular disintegration of Enron in 2001 left many shattered lives in its wake, both low-level workers whose pensions became worthless, and-at the other end of the culpability spectrum-executives, bankers and accountants who are now awaiting trial, sentencing or release. In between is a vast gray area filled with employees, advisors, regulators and politicians who have spent many of the intervening years providing depositions, justifying their choices and trying to reclaim their reputations.

One of the silent victims of Enron has been the book-publishing industry. Each year after 2001 brought forth a new batch of books on the subject, and these tomes all had one thing in common: They didn't sell well. The injury to the publishers, however, was largely self-inflicted. Most of the books were just plain bad or at least misguided. Many of the authors suffered from a disorder not dissimilar to that which animated the Enron scandal in the first place-a delusional sense both of their own importance and their ability to produce superior results simply by virtue of who they were. This is certainly true of Power Failure by Mimi Swartz and Sherron Watkins, a marginal player in the overall story who won 15 minutes of fame after Congressional staffers turned her into a highly unlikely Joan of Arc. The same goes for 24 Days by two Wall Street Journal staffers who seemed to believe that the details of their intrepid reporting in the days leading up to the bankruptcy was the most thrilling aspect of the whole episode.

Yet even the best of the books produced during this period have failed to generate any excitement among bookstore customers. The Smartest Guys in the Room (2003), by Fortune reporters Bethany McLean and Peter Elkind, is still the definitive book on the subject. Ms. McLean and Mr. Elkind effectively detail the culture, characters and context that created Enron. The book's failure to capture the public imagination could reflect our apparent preference for morality tales with a single villain who's vanquished at the last moment so that we can all go back to what we were doing before. In The Smartest Guys, however, everyone and every institution is guilty of something, and there's enough ethical and legal ambiguity to ensure that no one has to take any responsibility.

Just when it looked like the publishing industry had finally given up on the subject, here comes New York Times reporter Kurt Eichenwald with Conspiracy of Fools. Weighing in at 742 pages, it's almost as big as any two of the previous major contributions to this genre put together. Mr. Eichenwald appears to have talked to everyone more extensively and scoured the documents more exhaustively than anyone else. The book is organized chronologically in a sequence of short but powerfully vivid scenes, complete with dramatic dialogue and detailed descriptions covering everything from what people were wearing or eating to the décor. And the book even has a clear villain: Enron's chief financial officer, Andy Fastow, whose crimes-engineered for personal financial gain-ultimately caused the company's collapse. The result is that Conspiracy of Fools, despite its length, is an irresistible read and will no doubt one day make a highly entertaining film.

Yet there are aspects of Conspiracy of Fools that make one pause before declaring it an unqualified success. Some of it feels almost too good to be true. Although the extensive notes and sources look solid, there are moments when the quotes and descriptions of what a character is thinking at a given moment seem, well, a little too pat, even puzzling. For instance, why would Dick Cheney describe himself as from Texas when he's famously from Wyoming?

The entire subtext relating to Enron's broader political and business connections never has the payoff that the internal corporate intrigue does. A number of brief vignettes involving everyone fromRupertMurdochtoArnold Schwarzenegger come across as gratuitous name-dropping. There are multiple scenes at fund-raisers and Washington parties at which small talk is exchanged, but it never seems to go anywhere. Mr. Eichenwald makes much of the fact that President George W. Bush unsurprisingly tried to distance himself from Enron chairman and C.E.O. Ken Lay after the scandal broke, but he never convincingly makes the case that the two were particularly close. Mr. Lay was clearly on intimate terms with Bush père, but Mr. Eichenwald is reduced to citing Ann Richards' comments on Larry King Live as evidence that he was close to the son as well.

Finally, for all of the new texture provided, when I finished Conspiracy of Fools, I didn't feel as though I'd gained any fundamentally new perspective on the Enron fiasco-nothing I couldn't have gathered almost two years ago from The Smartest Guys. Some of the detail in the new book, particularly with respect to Jeff Skilling-who's remained something of an enigma until now-is genuinely riveting. But I don't know that it adds much to our understanding of the big picture.

By casting Mr. Fastow as the unambiguous old-fashioned scoundrel at the center of the disaster, Conspiracy of Fools may unintentionally give readers a false sense of security about the likelihood of so spectacular a meltdown ever occurring again. I'm not suggesting, by the way, that Mr. Eichenwald whitewashes the behavior of Messrs. Skilling and Lay, or indeed of others. But the extraordinary access to them enjoyed by the author allowed him to paint a more nuanced picture of their behavior and motivation. As the stock market and merger activity begin to approach pre-meltdown levels, we can take some comfort in the structural protections that have been put in place since Enron. But it would be a mistake to presume that these are enough to combat the underlying hubris, greed and ambition that still lurk in the financial, corporate and governmental sectors. Continued vigilance is needed to ensure that this combustible mixture doesn't explode again and precipitate the next market meltdown.

In the meantime, enjoy the book-the movie will be coming soon to a theater near you.

Jonathan A. Knee is a senior managing director at Evercore Partners and director of the media program at Columbia Business School.