Bryan Burrough, coauthor of the best-selling "Barbarians at the Gate," has struck gold again after mining the most embarrassing episode ever to besmirch the corporate name of American Express.
The Wall Street Journal reporter weighed in Sept. 24 with the longest story in the paper's history -- 180 inches spread over a front-page column and two full inside pages -- about a smear campaign mounted by American Express. Publishers quickly took note. HarperCollins has just bought the saga for $1 million and is still negotiating the foreign rights at the Frankfurt Book Fair, sources said yesterday.
Burrough dug into the story behind American Express's extraordinary apology last year for what its chairman, James D. Robinson III, called an "unauthorized and shameful effort" to smear international banking competitor Edmond Safra -- an apology that included an $8 million payment to Safra and charities he selected.
The piece resounds with cloak-and-dagger details of how American Express officials circled the globe and allegedly spread negative stories about Safra, falsely linking him to the Mafia, South American drug traffickers, the CIA and the Iran-contra scandal.
While there is "no concrete evidence that Mr. Robinson knew of the smear campaign," the Journal story said, it was "overseen" by a top aide, Harry L. Freeman, whose office was "only steps away from Mr. Robinson's." One company official who hired private detectives to pursue the Safra matter was quoted as saying, "I told Jim what we were doing."
American Express spokeswoman Toni Maloney would say only that the piece was "old news colorfully repackaged."
Burrough, 29, declined to discuss any book plans. The Journal has been winning kudos in journalism circles for publishing such a tough piece on a major advertiser, particularly since Robinson and his wife, Linda, are known to socialize with Journal Managing Editor Norman Pearlstine. Barney Calame, the Journal's senior editor, said the paper began digging into the matter from the day of the American Express apology because the official announcement "left unanswered so many questions."
Burrough's earlier HarperCollins book, "Barbarians," told the story of how American Express's Shearson Lehman unit botched the RJR Nabisco takeover deal. It has been on the bestseller list for 37 weeks and has been sold to Columbia Pictures.
Deceived at Dartmouth
When Washington Post reporter Michael Specter walked into the controversial Dartmouth Review in Hanover, N.H., last week, he got what he thought was a pretty good quote from someone in the office. "Did you know that our valedictory speaker last year was a homosexual?" the young man, wearing a blue shirt and khaki pants, said. He identified himself as Hugo Restall, the paper's executive editor, and left after a few minutes of conversation.
The only problem, as Specter learned after his story was published in The Post's Style section Tuesday, is that Restall hasn't been in Hanover since early last month. Restall called Specter and explained that he has been working as an intern at the National Review in New York.
Restall, 19, said yesterday it was "an understandable mistake," but that he is concerned because "the quotation seemed to be used almost as an example of intolerance." He noted that the Dartmouth paper was itself the victim of sabotage last week when someone inserted a quote from Adolf Hitler's "Mein Kampf" into its masthead. "It very well could be the same person who identified himself as me," Restall said.
"This was obviously very shocking to me," Specter said. He said he has given Review editors a description of the imposter, adding: "I could probably pick him out of a lineup."
It's hardly unusual for lawmakers to receive copies of an ad by a lobbying group such as the U.S. Council for Energy Awareness, which is funded by nuclear utilities.
But when U.S. News & World Report mails copies of the ad to 535 members of Congress, along with a letter from its publisher extolling the virtues of nuclear power, well, that may qualify as news.
In a "Dear Legislator" letter, Publisher Richard C. Thompson, citing events in the Persian Gulf, wrote: "The U.S. Council for Energy Awareness has been addressing this crucial subject for years... . It states that one way to help reduce our dependence on foreign energy supplies is with nuclear energy. And because nuclear energy generates electricity cleanly, it is congruent with America's environmental movement."
That started fax machines whirring across town at the Safe Energy Communication Council, a coalition of environmental groups. In a letter to U.S. News Chairman Mortimer B. Zuckerman, Director Scott Denman complained that the magazine "has sold its journalistic integrity ... to the highest bidder."
Embarrassed U.S. News officials admitted the magazine had suggested the promotion and had done a similar mailing for the group two years ago. Spokeswoman Kathy Bushkin says the advertising staff devised the plan.
"The word has gone out loud and clear that it was a terrible mistake on their part and won't be done again," Bushkin said. "You don't want any question of an appearance of conflict or appearance of impropriety. I don't know how to describe what they thought they were doing."
'We Were Wrong'
The front-page story in the Montgomery, Ala., Advertiser reverberated loudly in the midst of the state's gubernatorial campaign. The story said that Republican Gov. Guy Hunt, who has a history of large campaign and personal debts, had somehow managed to repay $650,000 over the last four years, despite the fact that he earns about $80,000 a year.
Four days after the Sept. 9 piece, the Advertiser said in a Page 1 retraction: "We were wrong... . We apologize to Gov. Hunt and to our readers." The paper also fired political reporter Amy Herring, who wrote the earlier story and a follow-up.
"It's the most egregious mistake that any paper I've been involved with has made in my years in the business," said Executive Editor William B. Brown. "It was a pretty bad screw-up... . Our story had erred by about a half-million dollars... . I concluded the only fair thing to do was to say we were wrong and do it on the front page of the newspaper."
Brown said Herring was fired because she made faulty assumptions about ambiguous figures on the governor's financial disclosure forms. While the story was approved by top editors, he said, "when you have a senior reporter ... you obviously cut them more slack than you would a rookie reporter who couldn't find the courthouse."
Herring, 34, said, "I think they fired me for political purposes and it was the easiest thing for them to do under the circumstances."
Brown denied the paper had been pressured by Publisher Richard Amberg, a Republican named by Hunt to the University of Alabama's advisory board. Amberg also serves as the Naval Reserve's liaison to the governor's office.
But tongues began wagging when an Advertiser editorial declared that Hunt "has been exceptionally honorable in continuing to repay debts he and his wife could have avoided" and "has said he would rather live in a dirt-floored shack with his wife than repudiate his debts."
Said one Alabama reporter: "It was groveling toward Hunt. It was uncalled for, unseemly, undignified."