Barbarians at the Gate by Bryan Burrough, John Helyar Read Free Book Online Page A

like clockwork, changing people’s jobs, creating and dissolving divisions, reversing strategic fields. To outsiders it seemed like movement for movement’s sake. Johnson framed it as a personal crusade against specialization. “You don’t have a job,” he told the Merry Men, “you have an assignment.”
    “To Ross,” said Paul Kolton, a former Standard Brands director, “the nature of any organization was that it got fat, dumb, and happy. He never took the line, ‘If it ain’t broke, don’t fix it.’ To him, something’s always broke.”
    Through the rough times, the Standard Brands board never rapped its young chief’s knuckles. Johnson, mindful of Weigl’s fate, treated the directors like kings, making certain to throw some of the stardust from his jock stable their way. (“Hey, meet my friend Frank Gifford!”) “One of the most important jobs a CEO has is the care and feeding of the directors,” Johnson said. He had always been good at flattering older men, and he was a genius for putting the best spin on bad news or dissolving a tense situation with a bon mot. When Standard Brands auditors complained to the board for two years running about questionable accounting procedures at their Mexican joint ventures, the board demanded an answer from Johnson. The real answer was that jawboning his Mexican partners into following U.S. accounting rules had been impossible, and Johnson had given up trying. What he told directors was, “Did you ever try steering a motor boat from water skis?” The board dissolved in laughter and pursued it no further.
    Only occasionally would his loud wardrobe or blue language push the board’s limits. Johnson once brought the board word of a new wine he thought would be terrific. It was called French Kiss, Johnson announced. The directors recoiled. Couldn’t we try something a little less explicit? they wondered. Johnson had his way, and when the wine was brought to market, French Kiss lasted about as long as Reggie!
    The party at Standard Brands went on like that for four years: constant upheaval, a string of marketing disasters, ho-hum profits, but lots of fun, money, and perks for Johnson and his friends. Finally, in 1980, the free-spending environment he fostered got Johnson into serious trouble. One of his senior officers, Bob Schaedler, discovered a stream of unexplained payments flowing from the company’s international operations towhat appeared to be a dummy corporation. The shell company, Schaedler learned, was headed by Martin Emmett’s chauffeur and seemed to be billing Standard Brands for thousands of dollars of Emmett’s personal expenses: food, clothes, furniture, carpets, and televisions.
    Schaedler, a rival of Emmett’s, quietly took the matter to Howard Pines, the company’s personnel chief, and Les Applegate. Applegate, who had fallen from Johnson’s favor, was about to step down from the presidency to make way for none other than Emmett himself. The trio agreed the matter couldn’t be taken to Johnson, who would probably bury it—and maybe them as well—to protect his best friend. They decided to go directly to the board.
    Johnson was in fine spirits as the board’s audit committee convened a day before the July directors meeting. Emmett’s promotion to president was to be approved the next day, and Mike Masterpool had already leaked it to Business Week to make the magazine’s early deadline. A pair of directors, Pat Patterson of Morgan Guaranty and Paul Kolton, came in late, grim faced. They had just met with Schaedler, who had shown them a suitcase full of the Emmett receipts. They turned to Johnson. Could he explain it?
    Johnson appeared shocked. He didn’t know what had happened, he told the directors, but he damn sure intended to find out. The next day he reported the beginnings of an answer. For one thing, Emmett’s chauffeur wasn’t a typical chauffeur, but a former Central Intelligence Agency operative who had set himself up in