Barbarians at the Gate (64 page)

Carbonell explained that he had just returned from being questioned by a squad of Dole executives at The Plaza as part of Forstmann Little’s
due diligence. From their questions, it was obvious that Dole had somehow gained access to a wealth of Del Monte confidential information: shipping schedules, production forecasts, everything. Del Monte’s competitive position, Carbonell concluded, had been seriously compromised.

Both men realized the slip must have come from the special committee. Its vaunted security procedures hadn’t worked and, as a result, Dole had been allowed to snoop into Del Monte’s most secret files. For the first time in a month, Johnson lost his temper. He could put up with fighting Kravis or Cohen. Those were fair fights. But to suffer a blow from pure laziness, pure incompetence—that was too much.

Hugel had flown to Russia the day before, but that didn’t stop Johnson. John Martin called Roone Arledge at ABC and had a call patched through to the network’s office in Moscow. In Moscow, Hugel hustled out of his hotel, through the dark, winding streets, and up to the ABC office to take Johnson’s call. Even in Russia Hugel hadn’t been able to escape RJR Nabisco. He ran into a senior Pepsi executive in the lobby of his hotel and discussed ways Pepsi might enter the bidding. At the Kremlin, Hugel met with several top deputies, including the chairman of the USSR’s committee of commerce. All wanted to know about the big battle on Wall Street.

Now Hugel listened as Johnson vented his fury at the special committee. “Now I know they’re all complete fucking idiots!” Johnson ranted over the transatlantic line. “Here they are getting paid twenty-eight million dollars to jump all over our ass. To not even do the due diligence right. This really, really hurts, Charlie. They don’t need all that information to understand whether the goddamn company is right or wrong. You’re going so goddamn hard to pump up these people that you’re killing the company! It’s not fair.”

Hugel said he would look into it, and later a committee aide apologized to Johnson for what he termed a “technical mixup.” There was a postscript to the episode. Several weeks later Carbonell received a Federal Express package apparently misrouted by a clerk at Dole headquarters. Inside he found photocopied sheets of Del Monte financial data. To Johnson it was clear Dole was sending the data to its executives around the world. By then, of course, it was too late to do anything about it.

Thursday, November 10, was a special evening for the library, the eighth annual Literary Lions dinner, a fund-raiser that also honored twenty of the literary world’s most luminous lights. Between the lions that evening filed the upper crust of New York society, names like Astor and Trump and Bass, as well as the honorees, gifted writers like Art Buchwald, George Higgins, and Richard Reeves. Cocktails were to be served, then dinner in three of the reading rooms, followed by the actor Christopher Plummer reading a Stephen Leacock short story.

As the moon rose, guests and honorees gathered in tuxedos and sparkling dresses in the McGraw Rotunda, a long stone hall running the length of the building’s third floor.
Everyone
was there. Nancy and Henry Kissinger strode by. Jacqueline Onassis, looking ravishing in a white-over-black ensemble, was there. John Gutfreund, who served as the library’s treasurer, appeared with his wife, Susan, who was stunning in a dress of vintage Balenciaga. Gutfreund waved when he saw Kravis walk in with Carolyne Roehm at his elbow.

Suddenly a murmur trilled through the room. Cameras flashed, and heads craned to see what the commotion was all about. There, amid the revelry, Kravis was talking with, of all people, Peter Cohen.

Smiling for the cameras, the two men strained to make small talk. “This thing’s terrible,” Kravis said, one eye on the gathering crowd. “You know, it’s too bad things didn’t work out between us.”

Cohen said something about keeping their options open.

“I don’t know what we’re going to do,” Kravis said. “I honestly don’t know.”

They stood there for a minute, both on their best behavior, frozen in the headlights of New York society.

“It’s just too bad things came out the way they did, but so be it,” Kravis said. “You do what you have to do. We’ll do what we have to do.”

Kravis broke from Cohen and, with Roehm on his arm, headed into dinner. On the way he spied Billy Norwich, society columnist for the New York
Daily News.
In September, Norwich had been left off the guest list for the Kravises’ Metropolitan Museum party and, in a pique, Norwich had accused the financier of “loathing the press” in his column. Kravis had had all he could stand of the press and particularly didn’t like Norwich,
whom he thought enjoyed taking potshots at his wife.

Roehm saw the confrontation looming and attempted to steer her husband away. “Come on, Henry,” she whispered. “Let’s go eat.”

It was too late. Seeing Norwich, Kravis grew flushed. When the columnist walked up to him, he and Kravis exchanged words. First Kravis called Norwich an asshole. Then Kravis, raising his voice, said, “I’m going to break both your kneecaps.” Several people clearly heard his words and turned their heads.

Just at that moment, socialite Brooke Astor walked up. “Have you had a drink?” she asked.

“Yes, I have,” Kravis said.

“I wasn’t asking you,” said Astor. “I was asking Billy.”

Astor’s intervention, intentional or not, killed the brewing argument. Kravis stepped away and continued into dinner. Dick Beattie, overhearing the conversation, thought Kravis was joking. Not so Norwich’s companion, a British writer named Meredith Etherington-Smith, who told
Women’s Wear Daily
of the incident.

“I was absolutely shocked,” she said. “You would expect that kind of behavior at a low-life party but not at the Literary Lions.”

“This asshole Hill, as you call him, has got the number-one merger department on Wall Street,” Chaz Phillips reminded his colleagues one day. “Need I remind you that his department was substantially smaller than Sally’s four years ago.” The bankers looked at Phillips as if he were crazed.

The Sausages were a constant source of consternation for Cohen. “Do you know who all these people are?” he asked Andrea Farace one afternoon as his office filled with Salomon people. “Where are they from? What the hell do they do?” Cohen would take Gutfreund aside and ask, “Can we have a small meeting?” It was impossible.

Johnson was also amazed by the endless procession of advisers. Cohen seemed to trail aides like a wedding train. “Geez, Peter,” he said at one point, “no wonder you people took a wrong turn at the Red Sea.”

Gutfreund was growing irritated with Steve Goldstone’s handling of the special committee. Goldstone remained the group’s sole conduit to Peter Atkins, and Gutfreund was exasperated by his inability to get any guidance out of the Skadden lawyer. Gutfreund had his people look into Goldstone’s background; they found he had little reputation to speak of. On several occasions Gutfreund suggested to Cohen that Salomon’s counsel, Peter Darrow, be allowed to speak with Atkins. Nothing came of it. The Salomon executives, in fact, were disenchanted with Johnson’s entire team. They blamed Johnson for the management agreement fiasco. And as coverage of the greed issue mushroomed, some grumbled that Johnson was more trouble than he was worth.

For Johnson’s seven-man management group, life at Nine West was fast approaching the surreal. Johnson, always a security fanatic, was having the offices swept for bugs daily; he turned down an offer to bug Kravis’s office. Meetings were often interrupted by high-pitched pings: John Martin’s aide, Bill Liss, had insisted that all top executives wear beepers, as did a dozen or so reporters with whom Liss kept in constant touch.

For all the bustle, many of Johnson’s aides felt strangely isolated, as Shearson and Salomon took over preparations for the following week’s bid. “When a banker is talking about raising money, he’s your employee,” Sage would say. “When he starts writing the checks, you become his.” Sage felt so out of touch he brought a television set into his office to idle away the hours.

Johnson, meanwhile, was growing despondent. Nothing about his Great Adventure had gone as planned: the Kravis ambush, the failed peace talks, the uproar over the management agreement, the Del Monte imbroglio, his daily pillorying in the press. And more and more, Shearson was calling the shots. Nothing about this fight was fun. “Nothing happens until the sun goes down,” Johnson groused. “Then in comes all this horseshit food and everybody has dinner and talks and talks. The last place I want to eat is in my office at night.”

Most of all, it was the bidding level that bothered Johnson. Even if they won, his great Ferrari would be stripped down to the chassis to pay down debt, and he would be handcuffed to the steering wheel for years to come. Johnson’s moping became so tiresome that, during one strategy session,
an investment banker took Ed Horrigan aside and suggested he give his boss a pep talk. It simply wouldn’t do, the banker suggested, for the group’s spiritual leader to give up the fight.

“We can’t walk away from this,” Horrigan told Johnson. “I’d rather go back beaten, bloody, and bowed than walk away. If anybody knows how to run this company at a higher level, in a way that minimizes the pain, it’s you and me. If we have to lose, I want it to be in a pitched battle, not a concession. You gotta win, Ross. You’ve got too good a reputation to lose.”

But if “Battlin’ Ed” Horrigan was rising to the fight, Johnson was sinking fast. “You don’t understand. We don’t have to win at all, Ed,” he said. “It’s poker. You can’t put your pride in front of your mind.”

On Thursday, November 10, Johnson left New York for the condo in Jupiter, where he looked forward to a quiet weekend. He didn’t bother to stop in Atlanta for the grand opening of the new hangar at Charlie Brown Airport. In fact, the gala celebration they had planned was anything but. Hardly any of the invitees showed up: not city officials, not workers from nearby hangars, not even RJR Nabisco’s own top brass, who only wanted to lick their wounds. No one, it seemed, wanted anything to do with Johnson. The evening was cut short and employees took the leftover food home to eat themselves.

That weekend Johnson took a call from Hugel, who was just back from Moscow. Hugel had seen a copy of a new SEC filing made by RJR Nabisco. There, in the fine print, he learned that Johnson had boosted Andy Sage’s compensation to $500,000 a year from $250,000. He had grown angry as he read the filing. Hugel was certain the board had never approved the raise.

“The board approved that in July,” Johnson said. Hugel checked the notes of the July meeting and didn’t find anything. He called Johnson again. This time Johnson explained that the raise had been approved in September, retroactive to the July meeting.