A debit to Business Week and its business-celebrity interviewer Maria Bartiromo, for looking the other way in an interview with Richard Perle, an architect of the Iraq war and former director of Hollinger International Inc., the media company looted by former Chairman and Chief Executive Conrad Black (a friend of Perle’s).
This interview yields nothing of news value.
Bartiromo: What is the most important issue in the election?
Perle: It’s almost always the economy. But there is a much more difficult-to-define issue, and that is leadership.
Beyond begging the question of what it takes to be discredited in American public life, the journalism problem is that the story provides less than the minimum amount of required context in its introduction and is laughably circumspect with its celebrity guest. It attributes to “critics,” for instance, that which is plainly and simply a fact.
Critics have pilloried Perle as a leader of the neocons who took America into a disastrous war in Iraq.
The interview fails to ask obviously pertinent questions about Perle’s role in the Iraq war or, if that’s too much for a business publication, at least about his failure to protect Hollinger shareholders from a criminal fraud.
A 2004 investigation by a special board committee found that Perle’s “abject failure” as a director helped enable the “corporate kleptocracy,” the “self-righteous and aggressive looting” going on under his nose. Here is the relevant passage from a special board committee that investigated Hollinger:
Perle repeatedly breached his fiduciary duties as a member of the Executive Committee of the Board. Perle repeatedly signed Unanimous Written Consents without evaluating (or even reading) them, including several that “authorized” many of the unfair related-party transactions discussed in this Report in a manner that enabled Black and [former Chief Operating Officer F. David] Radler to evade full (or any) disclosure to the Audit Committee or the Board….Those transactions alone have to date resulted in well over $10 million in losses to Hollinger. Perle’s abject failure to fulfill his fiduciary duties as an Executive Committee member subjects him to personal liability for breaching his duty of good faith.
BW says merely that Perle “took a hit to his reputation.”
But when I talked with Perle, he was waxing optimistic from his vacation home in Provence.
BW is already reaching in using Perle, this “faithless fiduciary,” according to the report, for its “face time” business-celebrity feature. Then it goes overboard to provide a friendly forum, a bad habit among business publications dealing with conservative political figures, and in doing so, fails to meet its obligations to readers.
Portfolio’s Jesse Eisinger smartly reminds readers that there’s a whole other real estate bubble out there—this one in commercial property. And he says this one’s going to get messy, too.
Calling it “Wall Street’s Next Crisis,” Eisinger presents a compelling case for how the commercial real estate industry got itself into trouble.
Lending standards fell, starkly… it used to be that banks made loans for no more than 80 percent of the value of a property to ensure a healthy cushion of protection, but by the early part of 2007, loans were sometimes made for 120 percent of a property’s value.
We didn’t know that. And, it seems, Wall Street firms have been playing the same game of pass-the-bag-of-doo-doo with commercial-mortgage securities as they did with residential ones. In this case, large pools of securities are backed by just a handful of buildings; a couple of defaults will reverberate far and wide.