By Harold Meyerson
Wednesday, December 10, 2008
At moments like this, it's worth remembering that Illinois gave us both Abraham Lincoln and Al Capone. Plainly, some sort of karmic balance controls the destiny of that heartland state. For every inspiring leader that Illinois produces, it must also turn out a scoundrel or two -- petty thieves in governmental office, egomaniacal monsters in corporate suites -- who share an indifference to the idea of a public trust.
So when Chicago experienced the rapture of election night in Grant Park last month, any Illinois-ologist could have told you that the state was headed for a fall. Over the past 48 hours came the collapse.
On Monday, Sam Zell, the nation's only newspaper mogul who genuinely detests journalism, placed Chicago's signature Tribune Co. into bankruptcy -- effectively wiping out his employees' equity in the company and a share of their pensions, while still managing to come out pretty well himself. Yesterday, Illinois Gov. Rod Blagojevich was indicted for allegedly trying to dispose of what had been Barack Obama's Senate seat in a private auction, with all proceeds to go to the care and feeding of Rod Blagojevich.
By arresting Blagojevich and releasing the mind-boggling transcripts of his pea-brained conversations, federal prosecutor Patrick Fitzgerald did Zell a favor: knocking him off the front page. At their core, however, the stories of Blagojevich and Zell tell essentially the same tale -- that of men in positions of great power who believed that their only real responsibility was to themselves. The Senate seat, Blagojevich opines in the transcript, "is a [expletive] valuable thing, you don't just give it away for nothing."
It's been a great week for resurrecting stereotypes: Not only does Blagojevich come off as machine pol straight out of "The Front Page," but Zell has more than a passing resemblance to the guy who gets hired this time of year to play Scrooge.
But Dickens never contemplated a Scrooge with so much power. Zell disparaged and to a considerable degree dismantled the staffs of the major newspapers he owned, one of them (the Los Angeles Times) a great national paper. He did so to pay down the debt he incurred when he bought Tribune last year -- debt he incurred by refusing to put much of his own money into the paper. Instead, he paid for the company with the $8.2 billion employee stock ownership plan (a move in which Tribune employees had no say whatsoever), against which he borrowed massively from banks to keep the company going.
Once Tribune entered bankruptcy, the employees' shares in the company became, and will remain, valueless. On the other hand, Zell stands to recoup a decent share of his own $315 million investment because he structured it in such a way that a bankruptcy court must treat him as a creditor. Smart guy, that Zell. As for the multitude of reporters, editors and other laid-off employees who are still collecting their severance payments, Tribune has announced that their payments will come no more.
Zell isn't the sole culpable party in the disgrace that is Tribune.
The board members who sold him the company could have sold it, in disaggregated parts, to buyers who were willing to put up their own money. Hollywood mogul David Geffen offered to pay a cool billion for the L.A. Times, but the people who had run the company for decades preferred to sell to a fellow Chicagoan with no background in media, in a deal that brought them millions and put no one except their employees at risk.
It's been a rough week for employees in Chicago. Last Wednesday, the workers at Republic Windows and Doors were informed that their factory would close last Friday and that they would not receive the 60 days' pay mandated by federal plant-closing statutes. Republic's workers occupied the plant, pledging to stay until either their employer -- which seems to have bought a lower-wage plant in Iowa -- or its lender, Bank of America, paid them what they were owed. Yesterday, Bank of America agreed to do just that.
Good for the sit-downers. Blagojevich may be a throwback to a cruder age, and Zell may be the boss from hell, but in their lack of responsibility to the people who vote or work for them, they are emblems of the same moral fecklessness that the Republic workers fought -- fecklessness that has depressed the prospects of ordinary Americans throughout the long age of Reagan that is now, one hopes, coming to an end. Barack Obama means to build a more equitable nation, but it would help him in that task if more workers sat down, or hauled the Sam Zells of the nation into court. It's not just Illinois' karma that could use some upward balancing.