Wednesday, July 03, 2002
Tuesday, July 02, 2002
Kann Eases Stranglehold on The Wall Street Journal
House Advances. Nepotism? You Decide.
Until today, Kann was chairman of the board, chief executive officer, and chief operating officer of Dow Jones, as well as publisher of The Wall Street Journal, and editorial director of all Dow Jones publications, including Barron’s and the Dow Jones News Wires.
Dow Jones today announced that Kann will be giving up two of those titles, namely, chief operating officer and publisher of the Journal.
Taking over the position of chief operating officer is Richard F. Zannino, who previously had been chief financial officer of Dow Jones.
Zannino joined Dow Jones in 2001 after a career at Liz Claiborne Inc., including executive vice president, finance and administration.
Assuming the role of publisher of all print editions of the Journal is Karen Elliot House, previously president of the company’s international group.
House joined the Journal as a reporter in 1974 and, including the promotion announcement today, has been elevated at least six times since then. House was promoted to diplomatic correspondent in 1978, assistant foreign editor in 1983, foreign editor in 1984, vice president of the international group in 1989, and was named president of the unit in 1995.
Joining Kann, Zannino, and House on the newly formed seven-member executive committee, which will help Kann run the company, are Peter G. Skinner, executive vice president and general counsel; L. Gordon Crovitz, senior vice president, electronic publishing; James H. Ottaway Jr., senior vice president and CEO of the shrinking Ottaway Newspapers subsidiary; and Paul E. Steiger, managing editor of the Journal.
The executive changes at Dow Jones -- including the promotion of Christopher W. Vieth, most recently vice president of finance and comptroller, to the CFO slot -- were approved by the corporation’s board of directors last month.
The Dow Jones board of directors
For the record, as we say, the board of directors at Dow Jones is perhaps the quintessential example of the governance by the “old boys’ club.”
In addition to the aforementioned Kann and Ottaway, the board includes: Rand Araskog, former chairman of ITT Corp.; Harvey Golub, former chairman and chief executive officer of American Express Co.; Irvine O. Hockaway Jr., former president and chief executive officer of Hallmark Cards Inc.; William C. Steere Jr., chairman emeritus of Pfizer Inc.; Frank H. Newman, chairman emeritus of Bankers Trust Co.; David K.P. Li, chairman and chief executive office of Bank of East Asia Ltd.; Dieter von Holtzbrink, chairman of Verlagsgruppe George von Holtzbrink GmbH; Vernon E. Jordan, senior managing director at Lazard Frères & Co.; Roy A. Hammer, partner at Henneway & Barnes; and M. Peter McPherson, president of Michigan State University.
The board also includes three members of the Bancroft family, which owns a majority stake in Dow Jones: Christopher Bancroft, Leslie Hill, and Elizabeth Steele.
Exactly how independent this board is from management is open to debate. Many of these gentlemen have been palling around for years and some of them have so many other commitments that the amount of time they could possibly devote to the affairs of Dow Jones is questionable. Li serves on the boards of nine other corporations, Jordan sits on eight other boards, Hockaway on four, Steere on three, and Golub on two. Again, these are directorships these men hold in addition to their seats on the Dow Jones board.
Draw your own conclusions
Oh, and by the way, Peter Kann and Karen House are husband and wife.
For official documentation of this relationship, see the most recent proxy statement filed at the Securities and Exchange Commission by Dow Jones. For a less than flattering look at the relationship of Kann and House and its effect on operations at the paper and the rest of the company, read The Power and the Money: Inside the Wall Street Journal, by Francis X. Dealy Jr., which while out of print is available used. And for a review of Dealey’s book see Chris Welles’s piece in the July/August 1998 edition of the Columbia Journalism Review.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Monday, July 01, 2002
Rosie O’Donnell: Dated and Dull
How about that? It turns out Rosie O’Donnell is just another mediocre potty-mouthed comedian, and a cranky one at that.
That’s the conclusion at which we arrived after reading Village Voice columnist Michael Musto’s write-up of the party celebrating the newly expanded Mohegan Sun Casino in Uncasville, Conn.
“It turns out [O’Donnell] loathes Sharon Stone (pretentious), Michael Jackson (‘a pedophile’), Joan Rivers (‘does not look human’), [former President Bill] Clinton (a big liar who ‘really [expletives deleted] me off ’), and Anne Heche [unprintable],” reports Musto, whose name apparently didn’t crop up among O’Donnell’s many objects of scorn, at least this time.
Jokes about President Clinton, Jackson, Rivers, and Heche? This is mid-2002, for crying out loud. O’Donnell, who has made no secret of the fact that she watches an inordinate amount of lousy television, ought to be a little more up-to-date than this. And, according to Musto, O’Donnell worked herself up into such a frenzy of rage that a member of the audience yelled out, “Jealous!” To that O’Donnell offered this hilarious retort: “I have better people to be jealous of than Sharon Stone.”
She gets paid for this stuff?
Rosie, the magazine
MediaWeek, in a piece by Lisa Granatstein published today, reports the obvious: “Rosie: My Mag Is Not Riveting.” (We can only hope, for her own sake, that O’Donnell didn’t pay a consultant to arrive at that earth-shattering conclusion.)
Turmoil in the upper ranks -- editor Catherine Cavender and publisher Sharon Summer both have been shown the door within the past seven months -- together with declining news stand sales, uneven ad pages, and repetitive covers, have left some in the magazine publishing business wondering about the magazine’s mission.
O’Donnell “is clearly disappointed with the year-old magazine’s editorial direction, and with its cover choices in particular,” writes Granatstein. The magazine’s namesake says she would prefer to appear on just one cover each year, a goal toward which even the most casual observer cannot fail to have noticed O’Donnell is falling far short.
Although O’Donnell was pleased with the first few issues, Granatstein reports, the comedian observes, “Then we just took a left down the safety zone. And I don’t want to live there. It’s boring. It’s not what I do.”
Really? Since when? “The Rosie O’Donnell Show” was the very definition of “the safety zone.” We recall O’Donnell once telling her audience she would never publicly criticize a Broadway show because that wouldn’t be nice, and the actors and crew worked so hard, and it would be a shame if people didn’t go see the performance. If O’Donnell can’t even stick her neck out with respect to some lame Broadway musical (ah, but we’re being redundant), what risks would she take?
O’Donnell maintains that her much ballyhooed and thoroughly predictable “coming out” has had no effect on the magazine’s performance.
“I think if I came out and said, ‘Look, I got my nipples pierced and I’m joining a separatist movement and all men should rot in hell,’ it might have come across a little different,” O’Donnell remarked in an observation that, try as we might, has us unable to stop thinking about cyber scribbler Andrew Sullivan, at least with regard to her comments about the piercings and the Republican Party, uh, we mean the separatist movement.
“I never want to be on another cover. . . . Having me on the cover is against the manifest [sic] of what I'm about. I didn’t make my fame and fortune by selling me. I made it by observing and celebrating other people.”
Celebrating other people? Including President Clinton, Michael Jackson, Joan Rivers, Sharon Stone, and Anne Heche?The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
New York Times News Alert
Just seconds ago we received a News Alert from the New York Times: “Airliner and Another Plane Collide Over Germany,” reads the e-mail’s subject line.
“A Boeing airliner and another plane collided over southern Germany, a state official said early Tuesday. There was no immediate word on casualties.”
We’re willing to be there were at least a few.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Militarist, Colonialist, Imperialist
Jeff Jacoby, not known as a voice of reason or restraint when it comes to matters respecting, well, anything, went all out in his Friday column, “Prerequisite to Mid-East Peace,” in which he advocates subjecting the Palestinians to “pulverizing defeat . . ., occupation[,] and transformation.”
The essay, which begins with the obligatory quote from George Orwell and ends with thoroughly unwarranted self-satisfaction, seethes with contempt -- hate, even -- toward the Palestinians, a condescending smugness, and a patronizing tone of unabashed imperialism.
“As a prerequisite to peace, Palestinian culture must be drastically reformed. The venom of the Arafat era must be drained. Persons implicated in terrorism must be punished and ostracized; democratic norms must be instilled; the virtue of tolerance must be learned. There is only one way to effect such wholesale changes: The Palestinian Authority has to be dealt a devastating military defeat, one that will crush Arafat and his junta and shatter forever the Palestinian fantasy of ‘liberating’ Israel and driving the Jews into the sea.
Although we find Jacoby’s remarks highly disturbing, we hope his newfound appreciation for the ability of the Palestinians to create and sustain a genuinely democratic polity -- the first in the entire region -- will take hold among the chauvinistic, ethnocentric, and xenophobic neoconservatives with whom he has so often made common cause.
Jacoby’s model for this dramatic and, for Israel at least, painless transformation: the post-World War II U.S. occupation of Japan. Yes, Palestine is the new Japan. Of course, no matter that Japan at the end of the war was an isolated island nation with a well-educated and homogenous population and a pre-war history of considerable relative prosperity, whose nearest neighbors, particularly those with reason to take a suspicious view of Japan, China and North Korea come to mind, were economically devastated and spent decades in self-imposed hibernation.
Jacoby concedes “there are differences, of course,” the most notable of which he asserts is that “no one proposes to drop an A-bomb on Gaza,” implying, we think, that it should be easier for the Palestinians to recover from their decimation at the hands of the Israelis than it was for the Japanese to rebuild their country after the war. Oddly, however, Jacoby neglects to mention that the unidentified “no one” in his observation has the capacity to attack its soon-to-be colony with nuclear weapons should it choose to do so.
“Pulverizing defeat followed by occupation and transformation,” Jacoby concludes, apparently with a straight face. “It would be a blessing to all the peoples of the Middle East -- to the Palestinians above all.”
We wonder how many Palestinians will have to die during Jacoby’s proposed devastation and occupation before they grow to appreciate the blessings he has in store for them.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
So Very Confused
From: Joshua Galen
Dear Mr. Capozzola (or whomever [sic] else is reading this),
I just read your site for the first time, and was confused immediately by one of the recent postings, the June 27 “Self-Parody Watch: Andrew Sullivan: Dispeptic, Diasporic Brit Hits a New Low.” In that posting, you say that Sullivan’s analysis “is simplistic, faulty, illogical, and plainly wrong.” How so? It seems to me that since the polls are showing that a majority of Americans support the words “Under God” in the pledge, and see this as liberal San Francisco judges meddling again where they shouldn’t, how is Sullivan wrong?
I am not trying to attack your site, I just don’t understand. You say that Sullivan is wrong, but his analysis seems like the obvious analysis to me -- and you have offered no reasons why his analysis is wrong or why an alternate analysis would be correct.
Sincerely, Joshua Galen
James Capozzola, editor of The Rittenhouse Review, responds:
Dear Mr. Galen:
Thank you for visiting The Rittenhouse Review and for taking the time to write.
I certainly understand your confusion. Shifting from the shallow, ill-considered, off-the-cuff observations all too often on display at the “The Daily Dish” to the rigorous analysis that characterizes The Rittenhouse Review has proved disorienting to several readers weaned on Andrew Sullivan’s lactations. The explanation, however, is really quite simple.
We wrote on June 27 that Sullivan’s observation that the June 26 decision by a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit analysis is “God’s gift to Republicans” was “simplistic, faulty, illogical, and plainly wrong.” In so doing, it is true that, in your words, we did not fully explain “why his analysis is wrong or why an alternate analysis would be correct.”
This is why.
Once upon a time Sullivan was interesting, thoughtful, original, and provocative. However, in recent months, and particularly since the horrific events of Sept. 11, Sullivan has become tiresome, careless, and thoroughly predictable. And more often than not, at “The Daily Dish” assertion is a sufficient substitute for argument. Thus, our terse response to Sullivan’s tract, in which the word “analysis” was used in jest, was intended in the spirit of imitation, the sincerest form of flattery.
Sullivan offered no explanation for his observation that the three-judge panel’s decision was “God’s gift to Republicans.” In making this statement, Sullivan overlooked or disregarded abundant evidence, most of which could have been surmised or predicted, that it will prove extremely difficult for Republicans to deploy the decision for political gain.
Yes, polls show that a majority of Americans support keeping the words “under God” in the pledge of allegiance. But even a cursory examination of recent media reports demonstrates that congressional Democrats are nearly unanimous in their support for keeping the pledge as it stands.
Perhaps Sullivan didn’t notice that the U.S. Senate voted 99-0 in favor of a resolution, sponsored by leaders of both parties, expressing their support for the pledge’s reference to God and instructing the Senate’s counsel to intervene in the case.
Perhaps Sullivan didn’t see the photographs of House members from both parties gathered on the west side of the Capitol for a public recitation of the pledge of allegiance, “under God” and all.
Perhaps Sullivan overlooked criticism of the panel’s decision from Sen. Joe Lieberman (D-Conn.), Sen. John Edwards (D-N.C.), Rep. Richard Gephardt (D-Mo.), Sen. Robert Byrd (D-W.Va.), and so many others, in language no less hostile than that used by Republicans.
Perhaps Sullivan missed the June 27 report in the Washington Post in which one of Justice Antonin Scalia’s former clerks said the panel’s decision was not only defensible but the logical outcome of decisions previously issued by the conservative-dominated Supreme Court.
With the reaction of Democratic lawmakers virtually matching that of their counterparts across the aisle, it strikes me that anyone who asserts the issue is “God’s gift to Republicans” has just one thing on his mind: demagoguery.
In the absence of further explanation from Sullivan, I can only conclude that he joyfully anticipates a campaign season characterized by Republicans accusing their Democratic opponents of atheism and disloyalty to our flag and our country, debates in which Republicans demand their opponents say the pledge for any and all to hear, or the spectacle of Republicans insisting their Democratic opponents sign promises to employ any means necessary to keep the pledge in its current form.
I hope you will forgive me if I thought we had all outgrown the juvenilia that President George H.W. Bush and his advisers injected into the 1988 presidential campaign.
Saturday, June 29, 2002
Ann Coulter Returns
Apparently, rumors of the demise of AnnCoulter.org were exaggerated.
The ultra-vanity site (IMAGES!) of right-wing “manly woman” Ann Coulter was only temporarily offline this afternoon.
We’re pleased, believe it or not.
Why should the Democratic Party be deprived of its best weapon during the upcoming mid-term elections?
Our favorite Coulterisms from this week’s promotional activities:
I thought I was here to talk about my book.
I thought I was here to talk about my book.
I thought I was here to talk about my book.
I thought I was here to talk about my book.
My book has 35 pages of footnotes!
Is that your question? . . . What is your question? . . . Are you finished with your question? . . . Do you have a question? . . . Can I answer your question? . . . Are you going to ask me a question? . . . Can I make up a question? . . .The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
AnnCoulter.org is either dead or wounded.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
trr at TRR
“A Slander on France,” François Bujon de l’Estang, the Washington Post, June 22.
Friday, June 28, 2002
We're Proud to Say, Ours is Smaller
Look, we’re normally not in the habit of comparing measurements, but as Andrew Sullivan brought it up today by whipping out the tape measure to brag about his “32-inch waist,” we thought we would add, for purposes of further elevating political discourse in this country, that our editor’s waist measures 28 inches.
And, since Sullivan’s physician is our editor’s former physician, he can check.
Oh . . . and so, frankly, can we.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Thursday, June 27, 2002
Dispeptic, Diasporic Brit Hits a New Low
Was that the final straw we just saw over at “The Daily Dish”?
“GOD’S GIFT TO REPUBLICANS: The pledge ruling won’t last. But it’s a great political issue for Republicans. Notice how the most liberal judges are the oldest. Notice also how [Sen.] Tom Daschle [D-S.D.] immediately ran for cover. This is the issue [President George W.] Bush’s dad rode to the White House. His son must be loving it.”
The only word for Andrew Sullivan’s latest outburst is sad.
Not only is this paragraph brazenly partisan, revealing Sullivan for the Bush administration toady he claims not to be, but the analysis upon which it relies is simplistic, faulty, illogical, and plainly wrong.
One can only wonder about a man who watches with glee as both patriotism and religious faith are debased to serve the aims of not just one thoroughly inadequate president, but two.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
The “Liberal Bias” Delusion
Perhaps the greatest victory won by American conservatives in the past 20 years has been to make the Big Lie stick. The Big Lie we’re referring to is that which holds that this country’s media is defined by a persistent and pervasive liberal bias. Frankly, we have difficulty imagining the wing nuts actually believe their rants about this purported injustice, as the premise is laughable on its face.
Even more amusing is when some thoroughly uninteresting scribbler -- let’s say, oh, Norah Vincent -- complains that conservatives have no voice in the American media and proceeds to write those words not in an obscure, small-circulation outlet like Human Events or Southern Partisan, but during a regular appearance in the Los Angeles Times, the country’s fourth-largest newspaper. Vincent, we can only suppose, is pursuing the time-honored strategy of “boring from within.”
Bernard Goldberg has turned the media’s alleged “liberal bias” into a veritable cottage industry. And Ann Coulter, who apparently labors down a rabbit hole, has written an entire book on the delusion -- a volume we can’t wait to get our hands on, in a revolting kind of way. [Ed.: In the meantime, Scoobie Davis has written a devastating critique of Coulter’s self-referentially entitled Slander that readers may peruse at their leisure.]
But moving on the higher forms of life . . . Rep. Bernie Sanders (I-Vt.) today has an essay in the Fort Worth Star-Telegram [Ed.: No, we don’t know how it ended up there either.] that speaks the truth to the Big Lie currently being peddled by Vincent, Coulter, Goldberg, and the rest of hallucinating right wing.
Sanders’s essay, “Corporations Have Chokehold on U.S. Media,” makes several important points that rarely find an outlet beyond a few “little magazines” of the American left. His language is a bit more Nation-esque than what we would use, but Sanders’s arguments are persuasive nonetheless.
“One of our best-kept secrets is the degree to which a handful of huge corporations control the flow of information in the United States,” he begins. “Whether it is television, radio, newspapers, magazines, books or the Internet, a few giant conglomerates are determining what we see, hear and read.”
Beyond the concentration of ownership of media outlets in the hands of a shrinking (sometimes foreign) few, Sanders rightly laments the narrow fare offered to American audiences.
“The essential problem with television is not just a right-wing bias in news and programming, or the transformation of politics and government into entertainment and sensationalism,” he writes. “It’s that the most important issues facing the middle-class and working people of our country are rarely discussed. The average American does not see his or her reality reflected on the television screen.”
And radio? Forget it.
“If television largely ignores the reality of life for the majority of Americans, corporate radio is just plain overt in its right-wing bias,” Sanders observes in a breathtaking understatement. He adds:
“In a nation that cast a few million more votes for Al Gore and Ralph Nader than for George W. Bush and Pat Buchanan, there are dozens of right-wing talk show programs.
Conservatives get away with the Big Lie because it hangs in the air unchallenged: Who among the dirty dozen cited in the previous paragraph would allow Sanders to make his argument -- uninterrupted and treated with respect and civility -- on his or her program? Who among the dirty dozen could present a coherent argument -- rather than a collection of shouted shopworn slogans -- that would refute Sanders?
We’re waiting.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Schedule for July 27, 2002
Armed with her latest tome, ironically entitled Slander, Ann Coulter is hitting the airwaves this week with her one-woman crusade against the omnipotent and omnipresent “liberal media.”
We hope Coulter has recovered from yesterday’s verbal fisticuffs with left-wing revolutionary Katie Couric because she will need all the strength she can muster to withstand the vicious assaults she’s sure to receive from the tough gang of mostly super hostile, bleeding-heart radio and television personalities she’s scheduled to face today:
1:00 p.m.: The Dennis Prager Show
3:00 p.m.: The Howie Carr Show, WRKO, Boston, Mass.
5:00 p.m.: The Big Story with John Gibson, Fox News
7:30 p.m.: CNN Crossfire with James Carville and Tucker Carlson
Check Local Listings: The Laura Ingraham Show
The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Wednesday, June 26, 2002
Prosecutors Shift Focus From Waksal
to Stewart, Bacanovic
Yesterday we made the observation that coverage of the insider trading allegations in the stock of ImClone Systems Inc. had devoted far more attention to Martha Stewart than to Sam Waksal, the biotechnology firm’s founder and former chief executive officer, who was arrested June 12 on federal securities charges for tipping off family members and friends about an impending adverse decision by the Food and Drug Administration.
Now we come to find that prosecutors are taking the same tack.
In today’s Wall Street Journal, Charles Gasparino and Jerry Markon report federal prosecutors have expanded their investigation of Stewart “beyond insider trading to include possible obstruction of justice and making false statements.” [Ed.: Link requires registration and/or subscription.]
The latest controversy concerns whether Stewart, or her broker, Peter Bacanovic of Merrill Lynch & Co., or his assistant, Douglas Faneuil, or all three, lied to investigators about the much-discussed purported prior agreement between Stewart and Bacanovic that Stewart’s ImClone holdings be sold when the price of the stock fell below $60, an event that occurred on Dec. 27, the day before the FDA’s decision was made public.
But here’s the surprising -- and disturbing -- twist to the story: “[F]ederal prosecutors are now boring in on Ms. Stewart . . . and Mr. Bacanovic . . . so intently that the broader investigation of Mr. Waksal and his family members who sold stock is on hold.” [Ed.: Emphasis added.]
This is strange.
Waksal has been arrested and his daughter, Aliza Waksal, and father, Jack Waksal, reportedly took in several million dollars by dumping shares of ImClone stock after getting the heads up from the former CEO that the FDA would soon announce its rejection of ImClone’s cancer treatment Erbitux, which the agency did on Dec. 28.
But instead of investigating the Waksals, and who knows how many other people they might have contacted before Dec. 28, prosecutors have assigned a higher priority to going after Stewart in an effort to determine whether or not the notorious “control freak” allowed a standing order to sell 4,000 shares sit in a computer at Merrill Lynch ready to fire automatically if the price of the stock fell below $60, even if she were on vacation.
As we have said from the beginning, we could be completely misguided in our interpretation of events. But we have emphasized that our comments are simply that, an interpretation, one that offers an alternative scenario to that which so much of the media has adopted as gospel truth in this matter.
Nonetheless, it strikes us as odd that an obstruction charge based on little more than the word of a 26-year-old sales assistant with limited experience working with his broker’s clientele would take priority over one of the most flagrant violations of insider trading laws in recent memory.
Waksal, after all, not only sought to sell some of his own shares of ImClone, but when objections to that maneuver were raised by the firm’s attorneys, he attempted to transfer the shares to his daughter so that she could complete the transaction on his behalf. And Waksal provided material non-public information not only this daughter, but his other daughter and his father, and an as yet undetermined number of relatives and friends -- a list of which should be fairly easy to reconstruct by taking a look at his telephone records and some brokerage order tickets.
Faneuil changes his story
The widened probe apparently was sparked by statements Faneuil made to prosecutors this week According to the Journal, Faneuil, who has worked at Merrill Lynch for less than a year, has retracted his previous account of the Stewart transaction. (By our reading of today’s article, it’s clear that Faneuil or his attorney is the source for the story.)
Faneuil now says he misled lawyers at Merrill Lynch and the Securities and Exchange Commission when he supported Stewart and Bacanovic’s account of the trigger for the sale of ImClone stock. Faneuil, according to the Journal, told Merrill Lynch attorneys that he was not aware of such an arrangement. That statement is not in and of itself damaging, but Faneuil also reportedly said “he concocted his initial account after being pressured by Mr. Bacanovic.”
That could prove to be a major blow to Stewart if it is proved to be true -- what we know of his story now cannot be corroborated by anyone -- and if it can be determined that Bacanovic and Stewart came up with their stories in collusion with each other. On the other hand, if Stewart and Bacanovic can produce the notes they each claim to have about a prior agreement (their accounts of the notes vary as to the time of the conversation) it would suggest that Bacanovic simply didn’t tell his assistant about the agreement but later sought support that would back him up.
In today’s Journal, Gasparino casts doubt on the ability of Bacanovic and Stewart to depend on a verbal agreement to protect themselves. “Merrill [Lynch] officials say they believe Mr. Faneuil would have known about the arrangement if one had existed,” Gasparino reports. By way of explanation, Gasparino offers, “[V]erbal stop-loss agreements are uncommon on Wall Street to avoid confusion; most brokers officially log such arrangements into the firm’s computer system to keep a detailed record of the trade.”
However, Gasparino, appearing this morning on CNBC’s “Morning Call,” equivocated on this very point, calling verbal agreements “a gray area” in the securities trading business.
Faneuil is to meet with prosecutors again, possibly today, to discuss the matter, according to the Journal.
It’s in Bacanovic’s hands
In order to charge Stewart with insider trading, prosecutors would have to show that Stewart’s sale was sparked by knowledge of specific details regarding the FDA’s unannounced adverse decision, rather than rumors in the market, vague comments from her broker, or the observations of the biotechnology analyst at Merrill Lynch.
The only person who can provide that information is Peter Bacanovic. He and Stewart reportedly spoke on the phone for 11 minutes on the morning of Dec. 27. We have not heard nor been given reason to believe the conversation was recorded, but notes may have been taken by either or both parties.
Martha Stewart and Peter Bacanovic
Summing up, then, that call is the crux of the matter. The conversation could have taken any number of directions:
Bacanovic told Stewart ImClone shares looked like they might decline and he sought confirmation that she wished to sell at the predetermined trigger of $60.
The common link between all of these scenarios is that the determination of Stewart’s guilt or innocence depends largely on Bacanovic’s account of the conversation.
Two things of note happened after the call. First, Bacanovic directed Faneuil to place the order to sell Stewart’s shares, mentioning or not mentioning the prior agreement with his client. Second, Stewart called Sam Waksal, leaving a message, “Something’s going on at ImClone and I want to know what it is.” Waksal did not return the call.
We may be placing far too much emphasis on that remark, but if Stewart were seeking Waksal’s advice why did she call him after she gave the go-ahead for the transaction? And if she had been tipped off to the FDA’s decision, why would she ask Waksal what was happening at ImClone?
Call us confused.
Appearing yesterday on the CBS program “The Early Show,” Stewart said she believes the entire matter will be resolved “very soon” and added that she expects to be “exonerated of any ridiculousness.”
In her inimitable manner, Stewart, while determinedly chopping cabbage with a very large knife, deflected continued attention to the subject by saying, “I want to focus on my salad.” Until we read or hear something more substantial than that which has been presented so far, we suggest prosecutors and reporters do the same.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Minding the Store:
The Board of Directors at WorldCom Inc.
Now that we’ve learned the former managers of WorldCom Inc. engaged in what may turn out to be the largest case of accounting fraud in history, placing the future of the firm in jeopardy, we thought it would be interesting to take a look at the board of directors, the illustrious group of men and women elected by shareholders to oversee management’s performance.
Our quick take on the board: A disaster in the making.
The board includes far too many WorldCom insiders and executives of firms acquired under the direction of former chief executive officer Bernard J. (Bernie) Ebbers.
The independent directors included a law professor, a former hotel-industry executive, two investors of some sort, and Gordon Macklin, a former president of the National Association of Securities Dealers Inc. (NASD) and former chairman of Hambrecht & Quist.
According to the company’s latest proxy statement, the board includes:
James C. Allen, a director of WorldCom since March 1998. Allen is currently an investment director and member of the general partner of Meritage Private Equity Fund, a venture capital fund. Allen was vice chairman and chief executive officer of Brooks Fiber Properties from 1993 to 1998, when it was acquired by WorldCom, and president and chief operating officer of Brooks Telecommunications Corp. from April 1993 until it merged with Brooks Fiber Properties in 1996.
Judith Areen, a director of WorldCom since September 1998. Areen has served as executive vice president for law center affairs and dean of the Georgetown University Law Center since 1989. She has been a law professor at Georgetown since 1976.
Carl J. Aycock, a director of WorldCom since 1983. Aycock was secretary of WorldCom from 1987 to 1995 and was secretary and chief financial officer of Master Corp., a motel management and ownership company, from 1989 until 1992. Since 1992 Aycock has been self employed as a financial administrator.
Max E. Bobbitt, a director of WorldCom since 1992. Bobbitt has been a telecommunications consultant from 1998 to the present. Bobbitt was president and CEO of Metromedia China Corp. from 1997 to 1998 and president and CEO of Asian American Telecommunications Corp. from 1996 to 1997, when it was acquired by Metromedia China.
Francesco Galesi, a director of WorldCom since 1992. Galesi is chairman and CEO of the Galesi Group, which includes companies engaged in real estate, telecommunications, and oil and gas exploration and production.
Stiles A. Kellett, a director of WorldCom since 1981. Kellett has been chairman of Kellett Investment Corp. since 1995.
Gordon S. Macklin, a director of WorldCom since September 1998. Macklin has been a corporate financial advisor since 1992. From 1987 through 1992, he was chairman of Hambrecht & Quist Group, an investment banking and venture capital firm. Before that, Macklin was president of the National Association of Securities Dealers Inc. from 1970 to 1987. He was also chairman of the National Clearing Corp. from 1970 to 1975 and was a partner and member of the executive committee of McDonald & Co. Securities Inc., where he was employed from 1950 to 1970.
Bert C. Roberts, chairman of the board and a director of WorldCom since September 1998. Roberts was chairman of the board of MCI Communications Corp. from 1992 to 1998, CEO of MCI from 1991 to November 1996, president and chief operating officer of MCI from 1985 to 1992, president of MCI Telecommunications Corp., a subsidiary of MCI, from 1983 to 1992.
John W. Sidgmore, vice chairman of the board and a director of WorldCom since late 1996. Sidgmore was chief operations officer of WorldCom from 1996 to 1998 and previously held executive positions with MFS Communications Co. and UUNet Technologies Inc. He is currently CEO of WorldCom.
Also on the board of directors of WorldCom, until they were separately fired this year:
Bernard J. Ebbers, a director of WorldCom since 1983. Ebbers was president and CEO of WorldCom from 1985 to 2002.
Scott D. Sullivan, a director of WorldCom since 1996. Sullivan was chief financial officer, treasurer, and secretary of WorldCom from 1994 to 2002.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Tuesday, June 25, 2002
Today’s “News” Adds Nothing to the “Story”
Although we haven’t pulled out the tape measure, it’s a safe bet the column inches devoted to Martha Stewart’s December trades in the common stock of ImClone Systems Inc. have exceeded by a factor of at least five those given to the actions of company founder and former chief executive officer Sam Waksal.
And Waksal has been arrested on federal insider trading charges involving ImClone!
As we wrote yesterday, we believe the facts so far presented in the media, some of which have come from investigators in the House of Representatives, regarding the Dec. 27 sale of ImClone stock by Stewart, chairman and chief executive officer of Martha Stewart Living Omnimedia Inc., will amount to nothing.
But, having made so a fuss, diving into the “story” with furious overkill, the media last night found itself moving into “maintenance mode,” the period just after a non-story peaks during which reporters, seeking to save face, attempt to keep the issue alive by reporting and exaggerating even the most inconsequential news.
Today’s reports in the New York Times, The Wall Street Journal, and the New York Post, to name just a few offenders, clearly fall into this category. And yesterday’s piece in the Post by histrionics-prone Christopher Byron, author of the monumentally unsuccessful Martha Inc., bordered on hysteria. That Byron stands to gain financially -- despite his book’s failure -- from any controversy surrounding Stewart is a fact the paper’s editors either failed to notice or thought readers need not be made aware.
Appearing today on the CBS television program “The Early Show,” Stewart said she hopes the controversy surrounding her sale of just under 4,000 shares of ImClone Systems will be resolved “very soon,” adding the she fully expects to be “exonerated of any ridiculousness.” Stewart has maintained her innocence since the matter first reached the media earlier this month.
Hays grasps at straws
Constance Hays, writing in today’s Times (“Panel Focuses on Martha Stewart Call”), quotes Ken Johnson, a spokesman for the House Energy and Commerce Committee, which is investigating several trades in ImClone Systems stock, as stating that the committee “is focusing on a call made to Martha Stewart by her stockbroker on Dec. 27…in which the broker left a message saying that the price of ImClone was about to fall.”
An assistant in Stewart’s New York office, according to Hays, noted the call in Stewart’s phone log. It reportedly reads, “Peter Bacanovic thinks ImClone is going to start trading downward.” The time of the call from Bacanovic was not written down, but Stewart’s lawyers said it was between 10:00 a.m. and 11:00 a.m., Hays reports. As has been reported, Bacanovic counts not only Stewart among his clients but also Waksal and his two daughters.
Bacanovic and his sales assistant Douglas Faneuil were placed on paid suspension by Merrill Lynch & Co. following an internal investigation that found discrepancies related to “factual issues regarding a client transaction.”
Citing “a person close to the investigation,” the Times reports that the transaction in question is Stewart’s sale of ImClone shares, not those of the Waksal family members. Moreover, the source maintains, Merrill’s “findings seem to contradict” Stewart’s assertion that she had a standing order with Bacanovic to sell ImClone if it fell below $60, which it did on Dec. 27, the day before ImClone announced that the Food and Drug Administration rejected its application for approval of Erbitux, a treatment for certain forms of cancer.
Hays and the investigators appear to be reaching rather hard with the following:
“The wording of the message could raise further doubt on whether Ms. Stewart and her broker had agreed in advance to sell her ImClone shares when the stock hit $60….The message from Mr. Bacanovic did not refer to the stock hitting Ms. Stewart’s target but rather that the broker felt it was going down, something it had already been doing for weeks. Moreover, if the call from Mr. Bacanovic came between 10 and 11 a.m., it would have been soon after Dr. Waksal’s daughter Aliza had sold all her shares, according to the criminal complaint filed against Dr. Waksal by the United States attorney in New York.”
Hays quotes Johnson as saying, “It’s another strange coincidence in a story filled with strange coincidences.”
Speculation is a one-way street
So again we have speculation headed exclusively in one direction, against Stewart, a conclusion completely un- warranted by the facts at hand. Bacanovic, who has a fiduciary relationship toward Stewart, attempts to reach his client to inform her that one of her stocks may be headed into a decline, and Hays leaps to the assumption that Bacanovic’s intention was to tell Stewart that his call was prompted by material non-public information, i.e., from a member of the Waksal family. This despite no supporting evidence whatsoever, and even less evidence that Stewart would have acted on this kind of advice had Bacanovic provided it to her.
Now, it’s fair to assume that Bacanovic was fairly busy on Dec. 27, what with the Waksals badgering him to sell their stock and, presumably, fielding calls from any number of other clients and colleagues who -- watching the stock sag on heavier-than-normal volume -- knew that the Waksals were Bacanovic’s clients and that he had worked for ImClone for two years in the 1990s.
Thus, it’s a safe bet that Bacanovic didn’t feel he had a great deal of time to chat with Stewart’s assistant. Moreover, the topic under discussion was obviously a personal financial matter, suggesting an element of discretion was appropriate.
In addition, Bacanovic certainly knew as well as anyone that Stewart is difficult to reach on the phone given the tight schedule she maintains even when not working. There is no reason to believe Bacanovic expected to reach Stewart immediately. By the time the two did talk, several hours later based on the time line provided, the stock had declined precipitously on Dec. 27, sparked in large part by Aliza Waksal having dumped her shares and aided by cautious remarks about ImClone from Merrill Lynch’s own biotechnology industry analyst.
Hays seems to think she is onto something when she points out that ImClone’s stock had been declining “for weeks.” Yes, it had, and Stewart may already have been aware of this, and may already have conveyed her concerns to Bacanovic, who as we know has said he and Stewart spoke in mid-December, the time period upon which Hays puts so much attention.
In her own report Hays says Congressional investigators expect to meet with Bacanovic later this week, but adds, “It is unclear whether he will do so.” Why Hays declined to speculate on this aspect of the story -- the logical direction being fairly obvious in our minds (Hint: It has something to do with the Fifth Amendment.) -- we cannot explain.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
From Washington, New York, and London
“YESTERDAY’S speech left much to be desired. Mr. Bush does not seem to expect anything immediately from the Israelis, and he appeared to rule out much improvement in the lives of Palestinians until Yasir Arafat is ousted….
“[M]aking Mr. Arafat’s fate the be-all and end-all of the Mideast peace process makes him look far too significant, and makes it all the harder for the Palestinians themselves to show him the door….Mr. Bush seemed to be telling Prime Minister Ariel Sharon that he is free to reoccupy the entire West Bank until a new, democratic Palestine emerges. How the Palestinians can be expected to carry out elections or reform themselves while in a total lockdown by the Israeli military remains something of a mystery.
“In broad terms, Mr. Bush told Israel the right things….But the president set no timetable. This means that settler leaders and military hard-liners, including those in the government, may take this waiting period to grab all they can and establish ‘facts on the ground.’” -- Editorial, New York Times
“AFTER months of fits and starts, President Bush yesterday distilled his Middle East policy to a simple proposition: Peace depends almost entirely on the Palestinians.
“Bush made no mention of an international conference. He did not repeat his demand for an immediate withdrawal of Israeli forces, which shortly before Bush spoke announced they were headed into Gaza….
“[W]hile Bush suggested a three-year timetable for the establishment of a Palestinian state, the clock doesn’t start ticking until Palestinians elect new leaders and build new political, economic and security institutions. And Bush made the creation of a Palestinian state conditional to a series of tough yardsticks that could be impossible to achieve….
“[I]n other ways, the speech represented a purposeful abandonment of neutrality by the administration, which now has largely adopted the stance of Israeli Prime Minister Ariel Sharon that Arafat is no longer relevant to the peace process, and that security and political reform must precede negotiations about a Palestinian state….
“[B]y writing Arafat out of the picture, Bush may have left Arafat no incentive to cooperate -- and Bush has yet to explain whom the United States or Israel would negotiate with in the coming months. Currently, there is no functioning Palestinian government that can stop the terrorist attacks or replace the Israeli army, and there is no leadership that has the authority or respect to negotiate with Israel.” -- Glenn Kessler, Washington Post
“BEYOND Washington’s focus on the removal of Mr. Arafat, the U.S. president’s vision went no further last night than a vague promise of a provisional Palestinian state, to be redeemed within three years -- by which time Mr. Bush may no longer be in the White House.
“He held out no details on the borders of the state that will emerge three years from now, the location of its capital, or the future of millions of Palestinian refugees -- all vital concerns for the people of the West Bank and Gaza.
“Mr. Bush also freed Mr. Sharon of his few remaining constraints. While Israel does not yet have licence to expel Mr. Arafat -- as Mr. Sharon’s hardline allies demand -- after last night’s speech that day may not be far off.
“In addition, Mr. Sharon was handed additional pretexts to delay a withdrawal from Palestinian lands, or the reopening of negotiations with the Palestinians. As Mr Bush made clear, Mr. Sharon is now within his rights to demand not only an end to Palestinian violence, but a total overhaul of the judiciary in the West Bank or Gaza, before embarking on peace talks.” -- Suzanne Goldenberg, The Guardian
“GEORGE BUSH finally gave his long-awaited speech on the Israel-Palestinian conflict last night. The document had created acrimonious divisions between the administration’s hawks and the State Department. The hawks won.
“There was little in the speech that looked like a remedy to a conflict that has claimed more than 2,000 lives, and appears to be getting steadily worse….
“There was little to suggest this speech will make much difference to the nightmare on the ground. Mr. Bush talked of the need for Israel to withdraw to the positions before the start of the intifada in late September. But the withdrawal should be made ‘as we make progress toward security.’ One suicide bomber attack would allow Israel to argue that progress has not been made.
“Israeli settlement activity in the occupied territories must end but this should be ‘consistent with the recommendations of the Mitchell report,’ he said. This, too, ensures that Israel can stall -- as it long ago re-cast the recommendations to include a timeline….
“Exactly where the new leaders will come from is not clear. Elections today would deliver a strong showing for Hamas, classed by the U.S. as terrorist.” -- Phil Reeves, The Independent
“TRANSLATION: Yasser Arafat and his blood-drenched henchmen must go. Indeed, Bush's speech was a barely camouflaged call for a coup d’etat against the PLO leader [sic], and his replacement by a leadership ‘not compromised by terror.’
“Which likely also explains Israel’s new, aggressive campaign to destroy the Hamas infrastructure and its latest military offensive, which has once again penned Arafat in his compound -- and which Bush endorsed.” -- Editorial, New York PostThe Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Monday, June 24, 2002
Insider Trading Chatter Strains Logic
One of the biggest stories of the past two weeks has Martha Stewart, invariably termed “the doyenne of domesticity” or some other such nonsense, embroiled in an insider trading scandal at ImClone Systems Inc., a biotechnology firm that was headed by her friend Sam Waksal until he was arrested on insider trading charges on June 12.
This is the stuff tabloid editors dream of, and true to form, the New York Post and the Daily News (New York), among others, have been reporting even the most minor bits of new information while tracking and tailing Stewart’s every move. The Wall Street Journal also have been actively covering the story, albeit with considerable restraint. Stewart has strongly denied any wrongdoing.
There is scant evidence so far that would lead a reasonable person to reach the conclusion that Stewart’s sale of fewer than 5,000 shares of ImClone Systems on Dec. 27, 2001, was based on material non-public information, that being the basic definition of insider trading.
The facts so far
Let’s look at what we know. According to published reports, Stewart purchased 4,910 shares of ImClone on the open market at some unknown date “several years ago,” in a transaction that may represent a goodwill gesture (toward her friend Waksal) as much as it did an investment in the true sense of the term.
Stewart pared her holdings in ImClone in late October 2001 -- two months before the date in question -- when Bristol Myers-Squibb Co. conducted a tender offer for 20 percent of the outstanding shares of ImClone, a firm with which the beleaguered pharmaceutical company had signed a strategic agreement.
Stewart’s participation in the tender offer establishes an intent to sell that clearly precedes any exchange of information, by anyone, about the Food and Drug Administration’s pending decision regarding Erbitux, ImClone’s as yet unapproved cancer treatment.
Because the tender offer was oversubscribed, Stewart, like every other ImClone investor involved in the transaction, was able to sell only 20 percent of her stake in ImClone, or roughly 982 shares. Thereafter, in November according to Stewart, or in mid-December according to Peter Bacanovic, her broker at Merrill Lynch & Co., and never according to the Journal’s account of Bacanovic’s assistant Douglas Faneuil, Stewart placed a “stop-loss” order, apparently informally (that is, not in writing), directing that her shares be sold when the price of ImClone dropped below $60.
And indeed, Stewart’s remaining 3,928 shares were sold on Dec. 27, the first day on which the price of ImClone dipped below $60 since Nov. 12. (Both Bacanovic and Faneuil have been placed on leave from Merrill Lynch.)
We do not know, yet at least, the price at which Stewart purchased the shares of ImClone. However, Stewart tendered her shares to Bristol Myers at $70, implying that this price represented, to Stewart, an acceptable return on her initial investment. Thus, it doesn’t require too great a leap to conclude that four to six weeks later Stewart came to the conclusion that $60 also provided an acceptable return, taking into account the potential gain sacrificed when the volatile stock traded above that price and its recent decline.
Stewart’s reported proceeds from the December transaction totaled $227,824 before taxes. This is not an inconsequential sum of money, but we find it extremely difficult to believe that this is an amount for which Stewart would risk her career and her company, though certainly other people of similar means have done similar things.
A reasonable explanation
So what happened? We know only what is in the public record, which we note is growing by the day. However, we think there are many perfectly reasonable scenarios that could account for Stewart’s trade, though one could be forgiven for not knowing this given the newspaper coverage of the matter so far.
We outline one such scenario below:
After the Bristol Myers tender offer, during which she was unable to sell all of her ImClone shares as desired, Stewart instructed Bacanovic to sell her remaining holdings when the stock dropped below $60.
To us this is an entirely plausible chain of events, particularly if we consider what Bacanovic may have said to Stewart during their telephone conversation. Keep in mind that the dialogue below is entirely fictional and hypothetical, Noonanesque if you will.
Bacanovic: “Martha, I’m glad you called. ImClone has dropped below 60. You asked me to sell your shares when it crossed that level. I just wanted to confirm that you still would like to do that.”
Even if we assume the stop-loss order is an invention at which both Stewart and Bacanovic independently arrived, one could just as easily presume -- and we emphasize this is not an accusation, only a hypothesis -- that Bacanovic, a scheming parvenu (at least according to the papers), sought to place himself in Stewart’s good graces by getting her out of ImClone in front of disastrous news about which he previously had been informed. If so, Stewart’s only offense was being taken by a less than entirely honest stockbroker, a type hardly unknown in the industry.
The call to Waksal
Stewart’s Dec. 27 telephone call to Waksal is telling. First, we note that Stewart called Waksal at 1:41 p.m., after giving Bacanovic the order to sell the stock. We have to assume this is true as Stewart surely is aware that the timing of events could readily be established through phone records, thereby eliminating any reason to lie.
Second, Stewart was telling Waksal something was going on at ImClone, not vice versa. This strikes us as the type of exchange two friendly CEOs might have with each other. Again, Noonanesquely entering Stewart’s brain, we hear: “Hmm. I wonder what’s going on at ImClone. I should call Sam. I’m sure he’s aware the stock is tanking. Maybe he could use some support. I’ve probably panicked. I hope he doesn’t take this personally.”
Much has been made of the fact that Waksal didn’t take Stewart’s call since he was in the office -- “writing letters” -- that day, the suggestion being that Stewart’s account of an unanswered phone call is implausible. Hardly. Waksal may have alerted others to the adverse decision coming from the FDA, and yes, it’s conceivable that he told Stewart this on Dec. 27 (or to Bacanovic who told Stewart). But it is at least equally plausible that Waksal, not knowing Stewart already had sold her shares, declined to take the call from his friend for fear of drawing her into the sordid mess he had created.
We are also confused by the unwillingness or inability of some commentators to recall that Stewart once worked as a stockbroker at the now departed Paine Webber, a position at which she presumably would have picked up the basic underpinnings of what constitutes insider trading.
Moreover, Stewart’s firm, Martha Stewart Living Omnimedia Inc., is a publicly traded corporation listed on the New York Stock Exchange. In exchange for her services, Stewart earned nearly $3 million last year, and Stewart owns 63 percent of the firm’s outstanding Class A shares and 100 percent of its Class B shares, giving her not only substantial paper wealth but 94 percent of the voting power concerning company affairs.
The notion that Stewart, having created this company and attained this position, was either unaware of securities law on this matter or willfully disregarded such law -- thereby jeopardizing herself and her eponymous firm -- is difficult for us to accept.
We emphasize that we have outlined only one of many alternative scenarios in the Stewart-ImClone matter and we concur that there many more that could be written casting Stewart in a bad light. Moreover, we concede that we may be thoroughly misguided in our hypothesis. Our point here is to demonstrate that rushing to judgment about Stewart’s actions in this matter is pointless and unfair, not least of all because insider trading, when it does occur, is extremely difficult to prove.
Until we see or hear more convincing evidence, we’re behind Stewart.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Photo Galleries for the Hard-Core Fans
For the thing which I greatly feared is come upon me, and that which I was afraid of is come unto me. (Job 3:25, KJV)
Ann Coulter has launched her long-awaited eponymous vanity web site, AnnCoulter.org. It’s worth a look and is certain to get the middle-aged frat boys of right-wing talk radio salivating, perspiring, breathing heavily, and who knows what else. (Readers may wish to stick with FM today.)
Coulter’s timing is fortuitous and not a matter of happenstance: Her second book is due out tomorrow. This week, then, we will be treated to the bizarre sight of yet another conservative pundit ranting and raving about the media’s egregious “liberal bias,” all the while appearing as a guest of same, and laughing all the way to the bank.
As one would expect, the home page at AnnCoulter.org has her latest column, something about President Bush and his fetishes, as best we could make out, though, to be honest, we weren’t really paying that much attention.
But the good stuff, or the “goods,” as it were, is on the inside. Coulter’s hard-core fans will be delighted to find not one, but two photo galleries, “images” she unselfconsciously calls them, photographs certain to disprove, once and for all, that Coulter’s success as a right-wing pundit (she prefers the term “public intellectual”) has anything to due with her carefully cultivated “babe” image.
More interesting, though, is that Coulter carries the fetish theme she tackled on the home page into her galleries.
See Ann model black vinyl!
See Ann in pumps!
See Ann shoot!
See Ann work the dunes at dusk!
See Ann get drunk!
See Ann battle anorexia! (Noteworthy: The dress in this photograph appears to have a stain on it.)
Naturally, the site is blatantly promotional.
“[B]uy Ann’s new book”!
“Read the book jacket”!
See and hear Ann take on the “liberal media” (beginning with the home-field advantage): “Sean Hannity”! “Hannity & Colmes”! “Politically Incorrect”! With the obligatory “Today Show” appearance and promises of “more events to be added.”
God help us, every one.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Sunday, June 23, 2002
The Celebrity Top 100
Forbes last week published the magazine’s annual Celebrity Top 100, a list that purportedly “combines earnings with media exposure to calculate the relative status of a vast array of stars.”
In the number-one spot, Britney Spears, a woman who until today we couldn’t pick from a lineup if our lives depended on it.
We’re “out of it,” as they say. We’ve lost our touch with the popular culture.
But, no matter, we’re content to leave the really important and complicated stuff like that to Lloyd Grove.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Donate Your Necktie to a Needy Gossip Columnist
Be sure to stop by Washington Life for a classic shot of sartorially challenged Washington Post gossip columnist Lloyd Grove sporting his finest at the National Gallery of Art’s Summer Celebration last September. (Or just look at it here.)
Lloyd Grove and Amy Holmes
Donations to Grove’s painfully deficient necktie collection may be sent to:
Mr. Lloyd Grove
You could qualify for a tax deduction. Please consult your tax adviser.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Saturday, June 22, 2002
Lloyd Grove Goes On The Record
The Rittenhouse Review yesterday, Friday, June 21, 2002, received an e-mail from Lloyd Grove, the Washington Post’s unabashedly partisan gossip columnist.
Graciously, Grove informed us that his missive was “on the record ONLY if published in full.”
Thus, we herewith publish, unadulterated and in its entirety -- Who would want to miss a word? -- Grove’s correspondence:
“with all those [sic]s, you remind me of my 6th grade grammar teacher, mrs. mcintyre. anyhow, thanks for the plug.”
Copy editors of the world, unite!The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Friday, June 21, 2002
Finding the Reticent Gossip in His Work
Lloyd Grove, the Washington Post’s resident gossip, last week tried to get the fur flying when, venturing far outside his area of expertise, he wrote a few strident and partisan paragraphs about an error The Rittenhouse Review made while discussing an article in the June issue of Commentary magazine.
As has been reported, TRR apologized for the error as soon as it became apparent, the mistake was duly and prominently noted at this site, and the original article was retracted. The error, as we wrote then, while regrettable, was made in good faith, based as it was on three different sources. Nonetheless, we have come to learn that Grove is characterizing the mistake in e-mail to TRR readers as “a doozey.”
The editor of TRR has telephoned Lloyd Grove five times in an effort to discuss his June 14 column and to offer Grove the opportunity to comment on apparent discrepancies in his account. None of those calls has been returned.
Grove did, however, send TRR one e-mail message, prominently labeled “OFF THE RECORD AND NOT FOR PUBLICATION,” thereby preventing us from sharing with readers the lame remarks Grove offered in his defense.
Grove’s Friday Chats
In the course of research for a possible article about Grove, TRR this week happened upon the transcripts of the gossip’s weekly “chat” with readers of his column.
Now, we’re as surprised as you are to learn that there are indeed people willing to “listen” to Grove expound on the various and sundry for an entire hour, but we’re willing to concede that everyone has his guilty pleasures.
Since Grove refuses to speak with us, we decided we would “catch up” with Grove through the transcripts of his program. These precious gems are available on their very own page at the Post’s web site, going back to April 5. (We presume earlier transcripts are available somewhere, certain as they are to be a valuable resource for future historians documenting the complete and utter debasement of the American political culture around the turn of the century.)
As most of the chatter is worthless jetsam and flotsam, with Grove making desperate and pitiable attempts at humor, we decided to limit the pain of TRR’s readers by beginning our acquaintance with a fairly recent performance, that of May 31. Join us now as we meet the inimitable Lloyd Grove in his own element.
The May 31 Chat
For his sake, we hope Grove’s May 31 “appearance” was a fleeting dud. Surely there is not a single editor at the Post who believes this chat was worth the time, money, and effort that went into it.
We quickly learn that Grove is meeting and greeting his fans not from the offices of the Washington Post, but instead from in front of his PC at home. Upon learning this we mustered all the strength we could not to derive a mental image of the scene chez Grove that fine morning. Valiantly, we press on.
Shortly thereafter we are struck by ready evidence of Grove’s erudition. For example, he manages to employ the term “learned pensees” while discussing his hate mail. No matter that he means -- we think -- “learned pensés,” or more properly, “learned penseurs,” we admire the effort.
On matters pertaining most strictly to his profession as a gossip, Grove surprised us by revealing he hasn’t a clue what’s going on in the Lizzie “Mow the Trash Down” Grubman case in East Hampton, N.Y., perhaps the best thing to happen to the gossip business in years.
Despite this knowledge gap, we learn Grove is a veritable Renaissance man, able to expound upon virtually any subject that arises from the dim-witted do-nothings that constitute his audience.
Thus, in the same program we find Lloyd Grove, Fashion Maven: “I would never say that Harrison [Ford] is having a mid-life crisis of thermonuclear dimensions and I think the earring looks cute.”
Then Lloyd Grove, Sports Prognosticator: “My intrepid producer Eleanor…advises me for some reason not to pick France. But despite the recent state [sic] of French bashing from everyone from Howard Stern to President Bush, I can’t get over my deep love of everything French. Vive la France! (Oh, they lost?)”
And even Lloyd Grove, Budding Economist: “Somebody should an expose [sic] of this secretive economic cabal,” he said in response to an inquiry from an unusually misguided fan about, of all things, the Consumer Confidence Index. True to form, Grove reveals he has no idea who compiles and publishes the monthly report and then throws in a meaningless aside about Federal Reserve Board Chairman Alan Greenspan.
Much to our amazement, Grove apparently was a bit of a rake in his day, shuttling as he did, between his childhood homes in Greenwich, Conn., and Los Angeles -- bi-coastal! This emerges after a chat participant asks Grove whether he has the inside scoop about the Clinton family’s alleged problems with alcohol. Tossing in a gratuitous swipe at the former President’s daughter, Chelsea Clinton, Grove writes:
“I’ve been reading as well about Chelsea’s alleged drunken misadventures in Europe. I have to say that when I was her age -- if any tabloid reporters had been paying attention -- it would have made for some rather ugly double-truck spreads.”
Our assumption is that Grove is referring to youthful mornings spent praying to the porcelain god. That’s our Lloyd Grove, party animal!
Moving on to political gossip, Grove admitted, “Neither of the Clintons seem [sic] to want to touch me with a barge pole, let alone sit down for an interview with me,” an understatement that we assure him encompasses far more people than former President Bill Clinton and Sen. Hillary Rodham Clinton (D-N.Y.).
Former Vice President Al Gore comes in for criticism as well. A reader draws attention to the vast disparity of wealth in this country, a gap once personified by the now all-but-forgotten master of greed, Walt Disney Co. chief executive officer Michael Eisner, by observing, “These folks make up a sliver of one percent of the US population, but own and control almost everything. The next world war will be a class war, not anything to do with terrorists. And the super duper rich, well, they should worry.”
Presumably looking for yucks, Grove responded, “I hope this is not Al Gore test-marketing some new Bob Shrum populism for 2004. In fact, I’m sure it isn’t. Might be possible house [sic] candidate Karenna.”
Grove’s cluelessness pops up again when asked what happened to long-time PBS television personality Mark Russell. Remarked Grove: “He’s a Washington political satirist who makes up funny lyrics to old standards and then belts them out while standing at the keyboard -- usually in buffalo [sic], where he tapes a show for PBS. or [sic] has taped. don’t [sic] know if it’s still on the air.”
Here’s a tip, Grove. Next time you peek at your column in print, turn a few pages forward to the TV listings in the same section. You’ll find ample evidence that Russell is still among the quick.
Finally, we found an explanation -- sort of -- for the bizarre potpourri style of Grove’s semi-weekly column: “Well, I write about a lot of stuff that could appear in any and every section of the newspaper....I like to do a whole bunch of different things in the column and keep you guessing.”
That’s right, Grove keeps us guessing. As if he weren’t as thoroughly predictable as his newfound political allies.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |
Wednesday, June 19, 2002
Discredited Author Finds a New Audience
One of the unfortunate consequences of the terrorist attacks of Sept. 11 and the continuing Israeli-Palestinian conflict is that public debate about the Middle East has been enlarged to such a degree that it now encompasses viewpoints previously regarded as beyond the pale and has created a place at the table for observers and commentators whose previous work on the subject has been discredited.
Such is the case with Joan Peters, author of From Time Immemorial: The Origins of the Arab-Jewish Conflict.
The perpetration of a fraud
Peters’s book, published by Harper & Row to great acclaim in 1984, put forward the preposterous claim that Palestine was virtually devoid of Arabs when Jews began aggressively settling in the area in the mid-20th century. Peters asserted, to the delight of the American intelligentsia, that Palestinian political, territorial, and historical claims to the land that is now Israel are based on a collection of myths. Any Arabs that were in the area in 1948 were drawn there, according to Peters, by the economic activity fostered by Jewish immigration.
In the face of massive evidence to the contrary, Peters argued that Palestinian Jews are the only continuous residents of Palestine. “Contrary to Arab propaganda, Arabs or Arabic-speaking migrants were wandering in search of subsistence all over the Middle East,” Peters wrote. She added, “The land of ‘Palestine’ proper had been laid waste, causing peasants to flee. Jews and ‘Zionism’ never left the Holy Land, even after the Roman conquest in A.D. 70.”
And in a wholly unoriginal conclusion, Peters believes the Arab states are using the Palestinian refugees to promote their own political agenda. She trots out the old sawhorse that the “refugee problem” [Ed.: Her scare quotes, not ours.] was created by Arabs as a public relations weapon to justify “annihilating Israel.”
Among those praising the book upon its publication were Barbara Tuchman (who called the notion of the Palestinian people “a fairy tale”), Theodore H. White, and Martin Peretz, among many others. Positive reviews were published in the New York Times, the Washington Post, the Los Angeles Times, the New Republic, and Commentary, among many other newspapers, magazines, and journals, and Peters received the National Jewish Book Award for her work.
However, not long after being showered with congratulations, Peters, who is not a historian and who had not previously written anything more substantive than articles for general interest magazines, watched as critics and historians meticulously documented her distortions, exaggerations, selective omissions, falsehoods, and general mendacity. Critical and highly detailed analyses of From Time Immemorial were soon published in The Nation, In These Times, the New York Review of Books, the London Review of Books, and London’s Observer. The issuance of the book in paperback in 1986 had the same effect, albeit with an interesting twist.
By 1986, the criticism was merciless and broad-based. In one of the most widely discussed “second-look” reviews, Yehoshua Porath, the Israeli historian, writing in the New York Review of Books, attacked the book with unusual ferocity. His conclusion warrants repeating at length:
I am reluctant to bore the reader and myself with further examples of Mrs. Peters's highly tendentious use -- or neglect -- of the available source material. Much more important is her misunderstanding of basic historical processes and her failure to appreciate the central importance of natural population increase as compared to migratory movements. Readers of her book should be warned not to accept its factual claims without checking their sources. Judging by the interest that the book aroused and the prestige of some who have endorsed it, I thought it would present some new interpretation of the historical facts. I found none. Everyone familiar with the writing of the extreme nationalists of Zeev Jabotinsky’s Revisionist party (the forerunner of the Herut party) would immediately recognize the tired and discredited arguments in Mrs. Peters’s book. I had mistakenly thought them long forgotten. It is a pity that they have been given new life.
Other critics on the second go-around included Anthony Lewis of the New York Times; Jesse Zel Zurie, writing in Jewish World; and Rabbi Arthur Hertzberg.
If Peters expected her allies to offer a strong defense, she was sorely mistaken. Several reviewers who initially praised From Time Immemorial distanced themselves from the book after other writers did the requisite legwork exposing her fraud.
Daniel Pipes, now a ubiquitous talking head, initially gave From Time Immemorial a glowing review in Commentary. In fact, Pipes bought Peters’s arguments by way of the proverbial hook, line, and sinker. “[T]he ‘Palestinian problem’ lacks firm grounding. Many of those who now consider themselves Palestinian refugees were either immigrants themselves before 1948 or the children of immigrants,” Pipes wrote. “This historical fact reduces their claim to the land of Israel; it also reinforces the point that the real problem in the Middle East has little to do with Palestinian-Arab rights.”
Two years later, however, while continuing to express support for the central premise of Peters’s work, Pipes sharply criticized her methodology and scholarly abilities in an exchange published in the New York Review of Books in 1986. In that piece Pipes discovered faults and errors in From Time Immemorial that earlier escaped him entirely or that apparently appeared magically in the paperback version of the book:
From Time Immemorial quotes carelessly, uses statistics sloppily, and ignores inconvenient facts. Much of the book is irrelevant to Miss Peters’s central thesis. The author’s linguistic and scholarly abilities are open to question. Excessive use of quotation marks, eccentric footnotes, and a polemical, somewhat hysterical undertone mar the book. In short, From Time Immemorial stands out as an appallingly crafted book.
Similarly, Ronald Sanders, who gave the book a favorable assessment in the New Republic in 1984, retreated in the same NYRB exchange:
Mrs. Peters has brought this upon herself to a large extent, for, as I wrote in my review of the book in [t]he New Republic of April 23, 1984, “many of its valuable points are buried in passages of furious argumentative overkill,” and too much of its more than 600 pages is given over to very conventional polemics. Since then, some patient researchers have found numerous examples of sloppiness in her scholarship and an occasional tendency not to grasp the correct meaning of a context from which she has extracted a quotation. All in all, her book is marked -- and marred -- by an over-eagerness to score a huge and definitive polemical triumph, which has caused her too often to leave prudence and responsibility behind.
By 1986, Peters’s defenders were few and far between. True to form, Commentary, in a obvious display of damage control, published an article by polemicists Erich and Rael Jean Isaacs, “Whose Palestine?” The Isaacs did their best to shore up what remained of the book’s reputation -- and that of Peters.
The Isaacs had their work cut out for them and it shows. Yet, assigned the task of salvaging Peters and her severely flawed study, even the Isaacs aren’t willing to swallow each and every bit of her tendentiousness. They criticize Peters’s “ability to evaluate evidence,” her “grandiose claims of ‘proof,’” and her “carelessness.” And the dreaded Norman Finkelstein earns two backhanded compliments from the Isaacs, including this one: “Even some of Finkelstein’s specific criticisms, setting aside his accusations of deliberate deception, are well taken.” The Isaacs’ criticism surely stung:
[D]espite all the faults of Miss Peters’s critics, her book does indeed deserve some of the criticism it has received. Her handling of materials, particularly in the central section dealing with demographic issues, is flawed. . . .
But perhaps the most serious problem with Miss Peters’s book is not any of the errors picked up by Finkelstein but her apparent inability to use judiciously the material at her disposal. At times she goes so far as to ignore evidence that does not bear out a specific point she wants to make even when that evidence actually strengthens her case.
Paul Blair demolishes Peters
More recently, Capitalism Magazine in April published a devastating and meticulously documented six-part analysis of the book by Paul Blair. Blair minces no words in his conclusions, which warrant extensive quotation:
From Time Immemorial is work of propaganda, with all the bad connotations that term carries. Peters’[s] case rests upon distortion and fabrication. Time and again, she misconstrues sources in a tendentious manner. She cribs uncritically from partisan works. She conceals crucial calculations, and draws hard conclusions from tenuous evidence. She speculates wildly and without ground. She exaggerates figures and selects numbers to suit her thesis. She adduces evidence that in no way supports her claims, sometimes even omitting “inconvenient” portions of the citation. She invents contradictions in sources she wishes to discredit by quoting them out of context. She “forgets” undesirable numbers in her calculations. She ignores sources that cast doubt on her conclusions, even when she herself uses those sources for other purposes. She makes baseless insinuations and misleading claims.
Peters’[s] distortions apply, not simply to minor issues, but to the central pieces of evidence for the principal contentions of her book. Her claim that the majority of Arabs in pre-state Israel were recent arrivals is false, as is her related assertion about the vast majority of Palestinian refugees. Her contention that Arab immigrants were filling the places Jews had cleared for other Jews is untrue. Her view that the League of Nations Mandate was intended to make Palestine into a Jewish state has no valid basis, nor is it true that the British created the Transjordan in violation of the Mandate. Peters’[s] claim of a nineteenth-century Jewish majority is misleading at best; her thesis that the first Jewish settlements lured significant numbers of Arabs into Palestine is fiction.
As with all successful disinformation, the distortions are placed within a wider context of truth; not everything Peters says is a lie. Palestine was in fact sparsely populated when Jewish colonization began. Arab nationalism did not yet exist, let alone Palestinian nationalism. When the British took over they unjustly restricted Jewish immigration into Palestine while Arabs immigrated into the territory. After the Arab violence of the late 1930s, British appeasement slowed Jewish immigration to a trickle. Ultimately, Jews who sought to escape the Holocaust were turned away from the Jewish National Home, even while “emergency arrangements” were taken to bring in Arab immigrant laborers. Had Peters let the facts speak for themselves, she would have had a dramatic, compelling story to tell.
But Peters wishes to do more; she wants to destroy, definitively, the claims of Palestinian nationalism -- and she wishes to do so without rejecting Jewish nationalism. Thus her focus on demography; the essence of her case is: “The Arabs are latecomers to Palestine and so have less right to be there than the Jews.” But torture the numbers as she will, she cannot escape the fact that the Arabs in Palestine in the late nineteenth century outnumbered the Jews. Hence, she contends that those Arabs had no national “identity,” that they considered themselves Ottoman subjects or Southern Syrians, but certainly not Palestinians. And if today’s Arabs wish to live in a Palestinian state, they should move to Jordan. . . .
Peters’[s] book does not simply distort the facts, then; it is a philosophically repugnant enterprise from the start. Ethnic nationalism has produced most of the wars in the last half century; Arab opposition to Israel rests largely on the same foundation. The doctrine of ethnic self-determination has no valid intellectual basis; given the bloodshed it has caused it deserves not respect but unequivocal repudiation.
There is only one conclusion at which a reasonable observer of the Peters controversy can arrive: From Time Immemorial has been utterly and thoroughly discredited. After the critiques of 1986 Peters herself virtually disappeared from public view for more than 15 years. Yet the legend lives on.
A documentary in the works
Given the tortured history of From Time Immemorial, the remaining die-hard defenders of Peters, or at least those willing to go public, have been left with precious few arguments to bolster a book that is virtually in tatters. But that doesn’t stop them from trying, usually through sheer force of will.
We find ourselves baffled by those who continue to heap praise upon the book, a group that includes Benjamin Netanyahu, whose vanity web site normally gives From Time Immemorial a prominent place on the home page; Mona Charen, a nationally syndicated columnist, who recently published a fawning tribute to the discredited study; John Derbyshire, the virulently hostile contributing editor of National Review; Bridges for Peace, which includes the book among its “Recommended Reading”; the Israel Report, whish last year published a softball interview with Peters; and WorldNetDaily (WND), which last month published a deceitful article about the book.
Charen's April piece not only defended the book but promoted it. Concerned about the “myths” surrounding Middle East history, Charen -- with a straight face -- called From Time Immemorial “meticulously researched” and recommended it as “a one-stop shopping book [that] puts [Arab] myths to rest.” Whether Charen is completely unaware of the book’s history or is simply suppressing it, we are not certain.
Imagine our shock, then, upon learning that From Time Immemorial will be the subject of a documentary film project titled “The Myth,” produced by Isidore Rosmarin. A veteran television producer who has produced segments for “60 Minutes” and “Dateline,” Rosmarin told WND Peters’s book changed his entire view of the Middle East.
Art Moore, writing for WND on May 20, quoted Rosmarin: “I used to consider myself pretty well-versed in current events and the broad strokes of what goes on in various parts of the world. I didn’t have a clue about the truth of the situation until this book. Somebody handed it to me, and I read it, and it knocked my socks off.”
Rosmarin’s proposed documentary is “in the research stage,” and the project needs funding to move on to the anticipated six-month production schedule. The producer hopes “The Myth” will be shown on broadcast and cable television, as well as at schools, college campuses, libraries, and local civic groups.
It is clear from the WND article that no mention will be made of the controversy surrounding From Time Immemorial and the book’s inaccuracies, nor will the film make room for those whose interpretation of the source material on which Peters relied differ from hers.
WND has behaved like one of Peters’s co-conspirators, evidenced by Moore’s begrudging acknowledgement that From Time Immemorial was on the receiving end of some poor reviews. He claims, all evidence to the contrary, that the negative reactions “largely have come from left-leaning scholars,” including Finkelstein, willfully overlooking the trashing Peters received on both sides of the Atlantic, as well as the harsh criticism of the book in Israel. It appears Moore would have readers believe Finkelstein is Peters’s only critic.
The partisan historian
A consultant on the project, William Helmreich, professor of sociology and Judaic studies at City College and the City University of New York, emphasizes the film will not be “propaganda”:
The purpose is to present facts. That facts happen to swing one way or another does not make it a propaganda film. If we did a factual film about the Nazis, they wouldn’t end up being portrayed in a positive way. There is right and there is wrong. Not everything is relative. And the curse of relativism is one that has spread from the campuses of America to the government as well.
Moore makes clear that Helmreich has swallowed Peters’s claims writ large, and the professor certainly has a fixed view of the history of the Middle East. “I think that for too long the Bush administration -- as had been the case with previous administrations -- has pursued a policy of ‘You’re right and you’re right, you’re wrong and you’re wrong, you give a little, and you give a little,’” he told WND. “I think the purpose of the documentary is to demonstrate that if any wrong has been perpetrated it has been upon the Israelis and not upon the Palestinians.”
Helmreich, acting in a distinctly unscholarly manner, also fails to acknowledge the blistering criticism of Peters’s work. Along with grossly distorting the Palestinians’ historical claims, Helmreich speaks as if From Time Immemorial has satisfied every question regarding the history of Palestine:
I think that if the book is properly represented in this film, the issue of who really was on this land, and in what proportion, will be greatly clarified. Right now it’s as if the Israelis came to a land where millions of Palestinians were sitting, they were the interlopers, and they threw them off the land.
For her part, Peters hasn’t tempered her extremism during the past 18 years. The U.S., according to the writer, must abandon the notion that the support of Arab nations is required for its well being, the benefits to Israel of a disinterested American foreign policy completely escaping her.
Speaking about the Arabs, Peters says, through a haze of irrelevant hallucination:
They are a small part of the Muslim world, and by kowtowing to their impossibly monstrous demands we are leaving out all the millions of Indonesian and Malaysian Muslims and others who are not Arab. We need not be dictated to by monsters who keep their own people as human bombs instead of rehabilitating them, as they have had so many chances to do.
And Peters, who apparently hasn’t read a newspaper recently, believes U.S. foreign policy in the Middle East, which is based on a two-state solution, is predicated on Arab myths. In an interview with WND’s Moore, Peters asserted, “The problem is truth has taken a back seat, and all of the bogus claims of the Arabs have destroyed the context. It would be like the Germans saying the Jews had killed 6 million Germans during World War II.”
Peters seems completely unaffected by the controversy surrounding her book and disingenuously pretends no questions ever were raised about her shoddy scholarship and erroneous conclusions. She boasts that From Time Immemorial was a bestseller in Israel and takes pride in having taught Israelis a great deal about their own history. “Many (Israelis) were very shocked at this book,” she told WND. “There were a lot of things they said they didn’t know and some things they were sure of, and the documented evidence gave them proof.”
In a grotesque outcome that reflects poorly upon our culture’s collective memory -- and we are talking about memories that in this instance need go back not even 20 years -- Moore reports that Peters “has been in high demand for speaking engagements since Sept. 11 and [that] she is getting an ‘amazingly wonderful, overwhelmingly positive’ response from audiences.”
Still prone to self-aggrandizement, Peters says she hopes “The Myth” will be “a clone of me and my book.” She adds, hinting at the obloquy with which she is regarded among serious academicians, “There are a lot of colleges and other places that won’t have me, but will have a film.”
And so a spectacular fraud, which until very recently was relegated to the dust bin of the study of the history of the Middle East is to be rehabilitated. This development is frightening in its broader implications: The upcoming film, likely to be viewed by thousands of people who never would have made it past page 30 of From Time Immemorial, will find an audience of well intentioned individuals to whom the controversy described here might as well be medieval history.
The likelihood that the book’s remaining defenders -- whether they support Peters in all her erroneous details or simply in her misguided central thesis -- will be called to account for the deceit of From Time Immemorial is, sad to say, minimal. Indeed, we face the prospect of a new generation falling victim to Peters’s lies, an outcome that carries with it devastating implications for American foreign policy in the region. About this, no doubt, Peters will be well pleased.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |