Straight Talk

Dec. 21, 2004
Good leaders aren't silent about sinners

I first met Vernon Jordan at a dinner party at the home of Robert G. Bottoms, president of DePauw University in Greencastle, Ind. It was May 1993. Jordan, a DePauw graduate, was the commencement speaker at the following day's ceremonies, and I was scheduled to receive an honorary degree from my alma mater. Among the guests was James B. Stewart Jr., another DePauw alumnus. Stewart is a former front-page editor of The Wall Street Journal and a 1988 Pulitzer Prize winner for his reporting of the October 1987 stock-market crash and insider-trading scandals involving Michael Milken, Ivan Boesky, Martin Siegel, and Dennis Levine. He also is the author of Den of Thieves (1991, Simon & Schuster), the book that described the Milken/Boesky incident in vivid detail. That evening Stewart recounted to those at our table how, in a heady climate of champagne and limos, big deals and big scores, Wall Street wallowed in greed and glory. Later in his remarkable book, Stewart told the full story of the insider-trading scandal that nearly destroyed Wall Street. Most of you are aware of Vernon Jordan's much-publicized reputation as a Washington insider and his longtime, loyal friendship with President Clinton. You also know about his role in the Monica Lewinsky saga. These two individuals, both attorneys, both graduates of my alma mater, and both with distinguished national reputations, played significant roles in two highly visible historic events that focused America's conscience on incidents involving business and political ethics. In that same country town 60 years ago, I sat in a business-ethics class and made this note of a quotation from my professor, which I have kept all this time: "Dr. Hildebrand quote: In life, conduct yourselves like the person who aspires to build the Taj Mahal instead of the one who connives to sell it to some naive tourist." In his book, Stewart reported that Ivan Boesky agreed to pay $100 million in forfeitures and penalties for his crimes. Milken admitted to six felonies and agreed to pay more than $600 million in penalties, an amount larger than the entire yearly budget of the U.S. Securities and Exchange Commission. Stewart told how a "small fish" named Dennis Levine, who made a cool $12.6 million in illegal profits, forged the first link in a long chain that eventually led to Milken. Milken, whose salary and business dealings in a single year totaled over $1 billion, was found guilty despite the efforts of his battalion of public-relations superstars. These were not isolated incidents, but they were more complex, imaginative, and ambitious than most. According to Stewart, financial crime was commonplace on Wall Street in the '80s. He wrote, "Many of the guilty escaped because the code of silence was never lifted to expose their guilt." Companies such as Carnation, Beatrice, General Foods, and Diamond Shamrock, according to Stewart, disappeared in takeovers that spawned criminal activity and violations of security laws. That same code of silence muffled the Monica Lewinsky scandal that involved Vernon Jordan and others. A quotation from Abraham Lincoln comes to mind: "To sin by silence when they should protest makes cowards of men." Those of us who are entrusted with the responsibility for our companies' value systems and their public images can benefit from the recent revelations in the tobacco-company lawsuits. The chief executives of the seven tobacco giants perjured themselves when testifying about their knowledge of the addictive powers of tobacco. The blanket of silence was lifted. No matter whether you are president of a 10-person company, or president of a 100,000-employee giant, or even President of the United States of America, what is, is. And silence won't make it any different. Sal F. Marino is chairman emeritus of Penton Media Inc., an IW contributing editor, and the author of the recently published book Management Rhymes and Reason. His e-mail address is [email protected].

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