Business versus business

Title

Creator

Cook, Fred J.

Language

English

Source

Panorama Volume XV (No.9) September 1963

Year

1963

Rights

In Copyright - Educational Use Permitted

Fulltext

■ An expose of trickery, venomous subtlety and com plete lack of ethics at the top — shades of Stonehill? BUSINESS VERSUS BUSINESS The collapse of ethics in our time nowhere is more devastatingly expressed than in the utter lack of principle at the top. The knifing and in-fighting among Organiz ation Men would have done credit to the conspirators at the court of Caligula. A business magazine, Modern Office Precedures, asked its readers: “Is it possible for a man to move up through the ranks of management solely by honest, decent me thods?” An overwhelming majority answer: "No!” The nature of this inter necine war of businessmen ranges from almost wholesale throat-cutting in the scram ble up the ladder to the exe cutive suite to all kinds of espionage, bribery and connivery in the attempt to filch a rival’s trade secrets. In both areas, in an atmos phere of intense combative ness in which only the end result is important, almost anything and everything goes. The battle for the heights of corporate power leads to the kind of suave, Organiz ation Man throat-cutting that is as lethal to careers as the lash of a jungle cat’s extend ed claws to a beast of prey. Norman Jaspan has pointed out repeatedly that the at mosphere in the executive suite inevitably seeps down and affects all the lower le vels of business. In this con nection, probably no conduct has a more widespread or deleterious effect on em ployee morale than the spec tacle of the bosses stabbing each other in the back with gangland professionalism. Yet, as Jaspan has noted, such back-stabbing and throat-cutting comprises "a rite being practiced by thou sands of executives in hun dreds of businesses.” It is a rite so widely prac ticed, indeed, that The Wall Street Journal last year be came concerned about it and conducted a survey to dis September 1963 49 cover just how prevalent is this ungentlemanly mayhem. In interviews with fifty exe cutives in twelve cities, it discovered an unlovely lot. The trickery ranged from the spikng of a rival’s drink just before an important meeting (thus guaranteeing that he would disgrace him self), to more * complicated and really Machiavellian plotting against a competitor. The vice president of one Eastern corporation, facing a rival for power in a rising new executive, went to the trouble of plugging the car buretor of his rival’s auto mobile. This made the new man late for his first execu tive meeting and started him off under a lowering, black cloud. In another instance, an elevator company execu tive waited for a colleague’s pet project to flop; then he submitted to his boss a file of memos — carefully back dated to indicate he had op posed the venture all along. Almost as telling as these examples was the uncons ciously revealing remark of the executive of a Southwest oil company. After faithfully denying that there was any throat-cutting in his business, he turned around and com mented ruefully: "Of course, some people in this company will do just anything to get ahead.” This attitude that a man is justified in doing "just any thing to get ahead” spells, of course, the death knell of ethics. Such an atmosphere, as Jaspan has noted, "forms a natural breeding ground for white-collar crime. Its chief elements consist of trickery, venomous subtlety and complete lack of ethics.” The Amorous Executive All three elements were illustrated by a case that ties together back-stabbings in the executive suite and in dustrial espionage — a new, multi-million-dollar postwar industry. This case involved three partners who were shar ing in the lush profits of a multi-million-dollar business. One of the partners was a fine business executive well liked and capable. The other two had no reason to be dis satisfied with him, except that they began to figure that if they could find a way to eliminate him they could gobble up his share of the profits. 50 Panorama Thus motivated, they adopted a common tactic of today, hiring detectives to “get” something on their partner. They had no idea what they might get; almost anything that could be used for leverage would do. Tak ing the quickest route to the source of secrets, the hired investigators promptly wire tapped the unsuspecting vic tim’s home and office phones. The result was a great dis appointment. No black and nefarious and usable tidbit of information came over the wires. Desperate, the two partners instructed the de tectives to bug their pal’s own private office. Nothing could be easier. A minute gadget — a wall socket microphone — was in stalled, and this faithfully monitored every conversation that was held in the office. Included was the chit-chat between the executive and his private secretary. The pair, the wall microphone revealed, were in the habit of staying late several nights each week — and it wasn’t just business that kept them. Armed with the irrefut able records of executive suite dalliance the two con niving partners at once drop ped their mask of friendship and lowered the boom on their onetime pal. “Resign,” they told him bluntly, “or we’ll play these records to your wife and children.” The indiscreet partner^ whose own office walls had con cealed the ears that were his undoing, had no choice. He resigned within the week. The downfall of the amo rous executive represents lit tle more than a minor inci dent in the new and growing field of industrial espionage, or IE, as business calls it. IE itself is Big Business to day. It keeps literally thou sands of detectives in bread and butter, trying to filch industrial secrets that may be worth millions, and it keeps another army of thou sands of counterespionage agents actively trying to thwart their designs. So im portant and so sensitive has the whole issue become that the protectors have a society, the American Society for In dustrial Security, ana when it held a convention last fall, some 2,490 members from chapters in fifty-eight cities attended. September 1963 51 In this new war between the forces of IE and counterIE, no trick is considered too low; nothing that succeeds is beyond the pale of ethics. Time was when such indus trial spying was a gentleman ly game played over a cock tail at a Madison Avenue bar. Rivals would try to pump information out of one another; each knew, of course, what the others were trying to do, and the whole affair had a somewhat sporting as pect. But today all the fant^ntastic gadgets of the twen tieth century are used as wea pons. The wire tap, the minute microphone planted in the padding of the execu tive chair, the spying air plane, the searching of waste baskets by hired detectives, the bribing of engineers and key' employees, the deliberate baiting of a rival with a se ductive Mata Hari — all of these are accepted techniques that are being practiced to day on a phenomenal and ever-increasing scale. Stealing Formulas The most coveted loot in this game of fraud and de ceit consists of the new dis coveries, the new processes, that are being developed constantly by American in dustry through the expendi ture of nearly $20 billion an nually on research. In a typical case last October, a federal grand jury indicted eight men in an internation al drug pirate ring for the theft of secret formulas from the heavily guarded Lederle Laboratories at Pearl River, N. Y. Two former employees of Lederle, using their passes to get by the. protective screen, had entered the labs at night, ostensibly to work, and had stolen research data and bacteriological cultures. Down the drain, according to Lederle, went work on new antibiotics it had taken a decade and more than $10 million to develop. When the stakes are so high, no trick is ignored that may lead to financial advan tage. On one occasion the board of directors of a multimillion-dollar East Coast corporation held a secret meeting in the president’s office to discuss new plans and processes. They were unaware that they were under the constant observ ation of a little man station ed on the roof of an apart 52 Panorama ment building half a block away. Through binoculars the observer, an expert lip reader, kept his eyes focused on the president’s lips, and as the corporate president talked, the spy dictated into a handy tape recorder every word that he said. The depths to which busi nesses will stoop in this anything-goes world of IE are illustrated by some of the cases in the files of Harvey G. Wolfe, of Los Angeles, who heads his own industrial counterespionage firm. Fa vorite methods Wolfe has un covered include the planting of agents in sensitive jobs, the purchase of employees already on the payroll, the use of listening and record ing devices, the liberal ex ploitation of sex and, in some extreme cases, the blackmailing of executives. The Sex Trap Planning a coup, IE agents study minutely the executive dossier of their target. Wolfe says: "They find out whe ther he likes blondes or bru nettes. What kind of liquor the man drinks. And the agent — blonde or brunette — is told to be sure she has plenty of it when she enter tains him. She’s told to be friendly — make herself at tractive, and develop this man.” One oil company execut ive, thoroughly scouted in this fashion, fell all unsus pecting trap. The setting was a lonely road; the props, a racy sports car, a flat tire — and a beautiful girl, fas hioned and tailored to the executive’s taste, standing helplessly beside it. Before the executive had stopped playing gentleman by chang ing the tire, he was hooked — and his company’s secrets were ready to take wing in to the ears of a competitor. Of all Wolfe’s cases, one stands out unforgettably in his mind. The head of a large construction firm was being constantly underbid by a competitor. If he bid P300.000 on a project, his rival bid $285,000; if his figure was $100,000 on a job, his rival bid $95,000 — and got the contract. This happened so often that the construction executive real ized there must be a leak. Wolfe assigned one of his best agents to the case. The 53 investigator worked diligent ly for weeks. Every suspect person and situation in the construction firm’s setup was checked and cleared. Baffled, the investigator reported to Wolfe: “We’ve investigated everybody but our client.” Reluctant though he was, Wolfe decided they had no choice but to bug his own client’s . home. “The client had a beautiful two-story Tudor-type home,” Wolfe recalls. “We managed to get four of our miniature broadcasting stations into the house. We found what we wanted.” The electronic eavesdrop pers revealed that before every job on which he bid, the construction man’s wife asked him, just casually of course, what his bid was go ing' to be. Naturally, he told her. “We had recording of five such instances, but we want ed more before going to the client,” Wolfe says. "We put a'tail on the wife — twentyfour hours a day.” It wasn’t long before the husband left town on a busi ness trip. The wife dutifully drove him to the airport, kissed him goodbye. Then she drove to a hotel and'met a man — her husband's com petitor. Watching the pair, Wolfe’s detectives established that every time the husband left home, his wife and his competitor spent the time playing house together. Wolfe hesitated to tell the husband of his sordid dis covery, but of course he had to. "We showed him the movies and played the re cordings,” Wolfe says. He was, he recalls, prepar ed for almost any reaction but the one he got. The husband merely watched, grunted and said: "Well, I guess we plugged that leak, didn’t we?” Then he wrote out a check for Wolfe, with a fat bonus. — Fred J. Gook in the Cor rupt Society, The Nation, June 1-8, 1963. 54 Panorama

pages

49+

Media