Another Life_ A Memoir of Other People - Michael Korda [210]
The scene during which Bluhdorn had made confetti of the Times for our benefit was prophetic. Seymour Hersh’s investigative reporting was the opening salvo in an attack on G+W, most of which was aimed personally at Bluhdorn—who took it personally, of course.
Hersh’s charges stemmed from a defection that Bluhdorn regarded, perhaps correctly, as a personal betrayal, comparable to that of Judas—Joel A. Dolkart, a partner at Simpson Thacher & Bartlett, and G+W’s chief legal adviser, had been indicted on many counts of fraud, including the theft of $2,500,000, in the face of which, being disinclined to spend several years in prison, he agreed to cooperate, providing the feds (and The New York Times’s Seymour Hersh) with a rich harvest of allegations with which to torment Bluhdorn. It was, one of Bluhdorn’s advisers put it, “as if Henry Kissinger had defected to Moscow.”
Increasingly, Bluhdorn began to resemble a Spanish fighting bull—snorting, angry, bloody, and unbowed, reacting to pricks from the picador. It was not that any of the allegations were, in themselves, all that startling—they included “questionable tax practices,” “questionable corporate payments abroad,” “unreported use of company resources for the private gain of company officials,” the “mishandling” of the company’s annual financial statements, “a pattern of transactions … designed to conceal the true financial condition of the company,” and “inadequate public disclosures about the administration of [the company’s] employee pension fund,” but nevertheless the company’s innermost financial secrets had been exposed, in an invidious light, by a long-term insider, something that happens rarely in corporate America.
Many of the charges were spurious, or exaggerated by the press, or made more dramatic in the telling by Sy Hersh; others were pretty much the norm in high-flying conglomerates like G+W. After all, nobody had ever pretended that G+W was AT&T or IBM; it was a company in which executives were expected to think on their feet, to take risks, and to do everything they could to keep the stock price going up. Certainly, it wasn’t the kind of company in which people spent a lot of time worrying about whether X or Y was really entitled to use one of the corporate jets, or pause to ask whether the financial people should be spending their time working on Bluhdorn’s personal taxes. It was understood by everyone—certainly by the shareholders and the executives—that in a certain sense Bluhdorn was G+W. When you invested in the company, you were investing in Charlie Bluhdorn’s smarts, instincts, daring, and ambition. It was Bluhdorn who had collected this odd group of companies, Bluhdorn who bought and sold them, Bluhdorn who was not just the spokesman for the company, but its very reason for being. There simply was not, in his mind, a difference between himself and the company, they were one and the same thing.
This was not, alas, a position with which Sy Hersh sympathized, or Stanley Sporkin, the crusading chief of the Enforcement Division of the Securities and Exchange Commission. What seemed to most people within the G+W “family” that revolved around Bluhdorn merely interesting management idiosyncrasies, perhaps even lovable eccentricities on the part of the company’s founder, appeared to Sporkin as gross illegalities. The truth, one suspects, is that Sporkin’s ambition and Bluhdorn’s clashed—for Sporkin was a deeply ambitious man, as ambitious as Bluhdorn himself, and in Bluhdorn he doubtless saw an opportunity for endless stories in the press for himself, as a crusader for corporate justice and responsibility. “This will be war!” ran one headline, quoting one of Bluhdorn’s lawyers, which more or less set the tone for the dispute.
The endless wrangle and the publicity that surrounded it—for Sporkin turned out to be a master at getting