Corporate chronicles [Enron, Wall Street, Disney]
If, as the late Philip Graham of the Washington Post said, journalism is the first draft of history, then three new books detailing the lives and times of Enron, Wall Street, and Disney might be considered second and third drafts. With last week's business news dominated by courtroom testimony in the fraud trial of ex-WorldCom CEO Bernard Ebbers, the books serve as helpful remindersof the glory--and not so glorious--days of the late-'90s boom.
Corporate chronicles [Enron]
If you think just a single whistle-blower heralded Enron 's spectacular fall in late 2001, then you may shrug at the fact that Sherron Watkins was ignored: Her infamous memo was just one person's word of doom. But after reading Kurt Eichenwald's Conspiracy of Fools: A True Story, you will wonder how it was possible no one heard the din of voices crying out in the wilderness of Enron's ruinous financial schemes.
Enron's chief risk analyst, Vince Kaminski, early on derided the off-balance sheet accounting of the chief financial officer (who pleaded guilty to fraud) as an idea "so stupid only Andy Fastow could have come up with it." Kaminski's whole staff was sickened by the phony hedges. One analyst quit in disgust while another, Kevin Kindall, produced a report predicting a company death spiral, Eichenwald writes, "as if an unknown engineer at the White Star Line had laid out the dangers of icebergs to the Titanic, months before the great ship's ill-fated voyage."
The hefty book, an outgrowth of Eichenwald's three years covering the scandal for the New York Times, offers a timely reminiscence as the trials of former Enron Chairman Ken Lay and Chief Executive Officer Jeff Skilling approach. The story cautions corporate executives, especially those proud of their creativity, to keep their ears open for the unpleasant sound of dissent. -Marianne Lavelle
Corporate Chronicles [Wall Street]
Someone should collect the seminal writings of the bubble years so prospective investors could visit the grim library. Included would be Henry Blodget's 1998 research for CIBC Oppenheimer, setting Amazon's price target at $400 per share, and Morgan Stanley star Mary Meeker's report that year on an Internet search engine: "Yahoo, Yippee, Cowabunga." And of course, Jack Grubman's advice to Salomon Smith Barney clients to load up on WorldCom.
It was all worthless shillery, as Newsweek 's Charles Gasparino recounts in Blood on the Street. He writes that from the very start, all three Wall Street analysts were dedicated not to giving sound advice to investors but to luring lucrative investment banking business to their firms. The book is kindest to Meeker, the only one whose career survived the investigations. Morgan's banking honchos viewed Meeker as not bullish enough, losing them deals. But she did her share of cheerleading for losers like Drugstore.com and HomeGrocer.com that netted big banking fees. She shows some remorse although had voiced exasperation with the investors who listened to her: "Where's the individual responsibility?" she asked. Since Meeker is still on the street--last seen pushing Google and Chinese Internet stocks--investor, beware. -Marianne Lavelle
Corporate Chronicles [Disney]
With Disney already airing enough of its dirty laundry to supply one of Christo's works of art, it's a wonder that author James B. Stewart could find much to add for his new tome, Disney War. That he did is a testament both to the former Wall Street Journal editor's prodigious skills--and to longtime Disney CEO Michael Eisner's Machiavellian rule over the Magic Kingdom.
In a juicy and often irresistible tale of corporate scheming, back-stabbing, and betrayal, Stewart chronicles Eisner's two-decade-long power trip at Disney and his seemingly pathological need to kill off every strong executive who might succeed him as he edges closer to retirement. And like one of Disney's famous character parades, all of Hollywood's brand-name elite are there, including Barry Diller, Jeffrey Katzenberg, and Michael Ovitz as well as a load of Hollywood stars and entertainment-industry powers.
The corporate catfights (Eisner vs. everyone) and courtroom battles (Eisner vs. Ovitz; Eisner vs. Katzenberg) are delicious. But with a betrayal on nearly every page, less Disney-obsessed readers might begin to suffer battle fatigue. That said, the book is an interesting and exhaustive--if unflattering--look at one of America's most influential CEO s. -Betsy Streisand
This story appears in the February 28, 2005 print edition of U.S. News & World Report.
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