What’s interesting about Dennis Kozlowski—and what makes him different, let’s say, from Al Capone, who was also nailed for tax evasion—is that the authorities wanted to lock up Capone and came up with the penny-ante crime of tax evasion in order to do it. I don’t think anyone wanted to lock Kozlowski up for the things he’s truly guilty of, like earning $300 million and lying about the fact that he wasn’t dumping his stock when he was. Those fabulous examples of American corporate culture seem to be things that people shrug off. In Ken Auletta’s fascinating piece about the New York Times in TheNew Yorker, it’s almost sweet to read how much Times Editor Howell Raines believed that Enron was a huge story that was going to galvanize the public. But the Enron story was just a blip. Populism is dead, and even the editor of the New York Times may not be able to reverse one of the most permanent effects of the ‘90s—the belief that people are entitled to make as much money as they feel like and spend it openly and lavishly.
Just around the corner from my house in the Hamptons is a house that really ought to have been in The Hamptons. It is huge. How many square feet is it? I have no idea. Square feet are a recent invention, as far as I’m concerned. They were invented in the ‘90s, in Los Angeles. But it’s a monster house, a bigger house than anyone could ever need. And while it’s not as repellent as the famously repellent house in nearby Sagaponack built by the Humvee billionaire, it’s definitely the ugliest house in our nabe. We drive past it every day and sigh and shake our heads and remark on its tastelessness. But of course, on some level, we love this house: Like all wretched excess, it allows those of us with significantly less money to feel virtuous. That’s part of what you’re thinking when you see those Monets hanging in a living room.
Why does old money hate new money? Someone asked me that question a couple of years ago. Thinking about it made me nostalgic for the days when rich people rode around in station wagons and wore old sweaters with holes in them, even though I once lived with a guy who wore old sweaters with holes in them and I thought it was a ridiculous affectation.
Incidentally, in today’s Wall Street Journal, Michael Useem writes that it’s now up to the Tyco board to straighten things out. Ha, is all I can say. I was on a corporate board for the last three years, and it was a truly shocking experience. The company went bankrupt, by the way. “With all due respect,” one of my friends said to me, “what were you doing on a board?” (I’ve noticed that when people say, “With all due respect,” they usually don’t mean it.) Well, it’s true that I had no real qualifications to be a member of this board, if by qualifications you mean the ability to, say, read a balance sheet. On the other hand, I at least showed up at almost every board meeting, which made me unique among the board members, many of whom rarely attended, probably because the board meetings were so mind-numbingly boring you could not believe it. When Jeffrey Skilling of Enron testified recently that he didn’t remember the details of a crucial Enron board meeting he attended in Palm Beach, I knew he was telling the truth.
Anyway, no one on the board, not one person—not even the “qualified” ones who could read balance sheets—had a clue the company was on the verge of bankruptcy. And when they heard, when the president of the company told them—about an hour into an otherwise excruciatingly boring board meeting—that the company was about to go bankrupt, and he’d known about it for several weeks and hadn’t bothered to pick up the telephone and call any of them, they went nuts. And then they all went back to their offices and let the investment bankers and lawyers clean up the mess. For which the investment bankers and lawyers were paid more money than the total profits of the company in the previous 20 years. I’m exaggerating slightly, but not by much.
What is my point here, anyway? My point is that anyone who thinks boards of directors solve problems has never served on a board. (And anyone who thinks audit committees audit has never been on an audit committee.) And this Tyco board that’s supposedly going to solve everything is the very group of people who—even if they were barely paying attention—had to have known that Kozlowski was earning several hundred million dollars a year. Had to have known.
I think, anyway.
Apropos Israel—did you see Ron Rosenbaum in this morning’s Observer?
