Tuesday, May 17, 2011

Book review: James B. Stewart's Tangled Webs

Oh what a tangled web we weave,
When first we practice to deceive!

Sir Walter Scott.

"Liar," one of Isaac Asimov's first short stories, is about a robot that becomes nonfunctional after realizing it had lied. With people it doesn't happen that way. For the most part, they just keep lying. Some of them become successful by cheating and lying about their cheating.

Lying under oath is called perjury and that crime is the subject of James B. Stewart's new book, Tangled Webs: How False Statements are Undermining America: From Martha Stewart to Bernie Madoff.

In his introduction, Stewart, who was the recipient of a Pulitzer Prize in journalism for his coverage of the 1988 stock market crash, tells us that "Mounting evidence suggests that the broad public commitment to telling the truth has been breaking down, eroding over recent decades, a trend that has been accelerating over recent years."

James B. Stewart
While making occasional references to such infamous perjury cases such as Bill Clinton lying about the Monica Lewinsky affair, Stewart zooms in on five recent incidents involving lying to government officials or perjury, part of that accelerating trend he describes, in Tangled Webs: The Martha Stewart insider trading case, Scooter Libby's role in Plamegate, Barry Bonds' steroid abuse, and the Bernard Madoff Ponzi scheme.

The biggest lie of course is Madoff, who used his charm and false veneer of success to mislead investigators who were oh so close--just like the Milwaukee police officers who were in Jeffrey Dahmer's apartment shortly before he killed one of his 17 victims.

Charm was a veneer for the privately-vicious Martha Stewart, who is not related to author of the book.

After being reluctantly tipped by a brokers's assistant, Doug Faneuil, that the CEO of ImClone Systems and his family were furiously trying to sell all of their stock in the firm ahead of an announcement that the FDA would not approve the firm's most important drug, the home and style guru ditched her stock--saving herself $45,000.

But Martha, a billionaire, lost millions more when her reputation and that of her eponymous empire was damaged by the adverse publicity of her trial and conviction involving the sale of those shares--and her obfuscation regarding why she sold them.

Once it became clear that there were no weapons of mass destruction in Iraq, the Bush White House went into a defensive posture. One of the rallying cries from the president was his claim in the 2003 State of the Union address that Saddam Hussein had purchased yellowcake uranium in Niger. But Joe Wilson, a former diplomat who had worked in Niger, was sent by the CIA in 2002 to check out the story, which he debunked. By the summer of 2003, the media was claiming the Vice President Cheney had sent Wilson to Niger. Stung by the justified criticism of the absence of WMD's in Iraq, the White House attempted to spin the Wilson trip as a junket promoted by his wife, Valerie Plame, a covert CIA agent. But Niger is an impoverished nation with few tourist amenities. Although few people were aware of this at the time, it's a crime to reveal the identity of a covert agent. The late Robert Novak was tipped to this by Karl Rove and Richard Armitage, who was second-in-command of the State Department. But it was Scooter Libby, Cheney's chief of staff, who was indicted and subsequently convicted of perjury and obstruction of justice. President Bush commuted his prison sentence, which Stewart decries in his conclusion.

And for what? Who-sent-whom to Niger was the ultimate "inside-the-Beltway" stuff most voters don't care about. Plamegate was not a big issue during the 2004 presidential campaign.

As with Madoff, Barry Bonds, for at least the last seven years of his career, was a walking lie. Obnoxious, like Martha Stewart, Bonds was a successful baseball player who felt compelled, some think it was pent-up rage over racism, to become even more successful. He eventually became Major League Baseball's all-time home run king. Stewart wants Commissioner of Baseball Bud Selig to return the homer crown to it's "rightful owner," Hank Aaron." Bonds has so far avoided prison, he was found guilty last month of a single count obstruction of justice--Stewart finished his book before the Bonds' trial began. On three counts, the jury failed to reach a unanimous verdict, but Bonds was found guilty of one count of obstruction of justice. The now trimmed-down Bonds is the eleventh person--and fourth athlete--to be found guilty as part of the BALCO steroid investigation.

Bonds' trainer, Greg Anderson, lied to protect Bonds. He went to prison. Troy Ellerman, an attorney for some of the BALCO defendants, lied about illegally leaking grand jury testimony. He went to prison.

Lying creates collateral damage. Stewart describes one of the heroes of his book, broker's assistant Faneuil, as someone with a "shattered" life. New York Times reporter Judith Miller was jailed for not revealing her source, it was Libby, when she reported on the Niger case. Lance Williams and Mark Fainaru-Wada, the San Francisco Chronicle reporters who received Ellerman's leaked documents, at one time feared they would be jailed.

Lying clearly has consequences, and in the case of the Madoff scam, very costly ones. Had Madoff's crimes been uncovered during his 2006 investigation, the losses would have been $20 billion. When his house of cards collapsed two years later, the losses totaled $65 billion. Wall Street investor Harry Markopolos warned the SEC about Madoff in 2000. Another hero of this book, albeit one who didn't succeed in minimizing a tragedy. And oh yes, it's an afterthought now, but Madoff committed perjury while he was being investigated.

Tougher prosecution, Stewart reasons, is one way to battle perjury--which is why he opposes the Libby commutation. But in my opinion, the situation will get worse before it improves. Did you know that Corporate Compliance and Ethics Week was earlier this month? Even if you did, does it matter? For many organizations, ethics is a hollow marketing slogan. If you are successful while cheating, you can count on admiring throngs, including bosses, to look the other way. That's the way it is.

But I hope Stewart's book pushes society in the right direction.

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1 comment:

trish said...

It seems like the motto for most companies and many people in the public eye is lying is only wrong if you get caught. I'm not normally a pessimist, but this is something I don't know will ever get better.

Fantastic review! Thanks for being on the tour!