Wild Ride

The Book of the Week is “Wild Ride” by Ann Hagedorn Auerbach, published in 1994. This is a long story largely similar to many others in which one person acquires and abuses too much power in an organization that eventually comes to a bad end.

The horse racing industry is largely a playground for the wealthy, as it costs big bucks to purchase, stable and train horses for racing. There is only a tiny probability of profiting, considering all the different risks, and the factors required to produce a winning horse.

Major racing sites are located in Louisville and Lexington, Kentucky; New York City, Saratoga Springs in New York State, and Hialeah in Florida.

Calumet Farm was the site of the training and spawning of racehorses. It was owned by the Wright family, whose patriarch’s goal in the 1980’s was to turn it “… into a bustling assembly-line style breeding operation, hellbent on producing winner after winner.”

In the early 1980’s, J.T. Lundy wed a Calumet heiress with the aim of inheriting the large horse farm. He inherited it at 41 years old.  He  immediately engaged in excessive spending on farm renovations, the purchase of a corporate jet and additional horses, and paying more workers. In the industry in general, new systems were created by financiers to cash in on the horse-racing boom.

Lundy spent other people’s money (namely the Wright family’s) to fund his wheeling and dealing, while also commingling personal and business funds. The family (who knew nothing about horse racing) trusted him and his colleagues (who had numerous conflicts) to run the business and do what was in the family’s best interest.

The chief financial officer of Calumet attempted to duly inform Lundy of the farm’s mounting debt service, the unpaid insurance premiums and dwindling resources, etc. at the end of the 1980’s.

By November 1990, Calumet had approximately two hundred thoroughbreds and one hundred employees. Its fifteen-year-old stud Alydar, accounted for a large part of its revenue.

Sadly, the industry would reach its saturation point within a decade of Calumet’s soaring reputation as the premier place to breed winning horses. Read the book to learn the details of how the farm had gone from owing not a cent with the death of an heir prior to Lundy’s takeover, to the largest instance of debt explosion in the history of bluegrass.

A Death… – Bonus Post

This blogger skimmed the ebook, “A Death in the Lucky Holiday Hotel” by Pin Ho and Wenguang Huang, published in 2013. This is a story whose details get tiresome after a while, about the downfall of two powerful politicians in China in 2012.

One politician was Wang Lijun. To compensate for his lack of a college education, he added laughable lies to his resume, such as the entry for “a master’s degree in business administration through a one-year correspondence education program at something called ‘California University.” This blogger recalls that that was the fictional school attended by the characters on the late 1980’s American TV show, “90210.”

Wang Lijun also purchased an eMBA from the diploma mill of China Northeastern Finance University. During a ceremony, the president of Beijing University of Post and Telecommunications publicly announced that Wang held a PhD in law. He was frequently called professor, and certain media disseminated propaganda that he was a researcher, author, inventor and fashion designer. His real job was police officer and later, police chief.

In addition to his making myths about himself, Wang used the usual techniques of dictators to amass a tremendous amount of power. Unsurprisingly, “…Wang had gone through fifty-one assistants during his two-year tenure in Chongqing…” He wrongly accused businesses of engaging in organized crime, used illegal surveillance techniques, denied suspects due process in the extreme, and embezzled public funds. You get the picture. Bo Xilai was Wang Lijun’s rival. According to Bo’s intimates, as of March 2012, Bo’s family had larcenously obtained 100 million yuan; in April 2012, that figure was 1 billion yuan.

“Suicide from depression is common among leaders at all levels of the Chinese government” especially when they are “…under investigation on corruption related charges.” Read the book to learn: whether Wang Lijun used this way out, and about the international incident that he staged; what prompted Bo Xilai to act similarly to Richard Nixon in delivering a “Checkers speech;” about the governmental infrastructure in China that provided the means for Wang’s and Bo’s outrageous conduct; and here and there, about Chinese history– such as Mao Tse Tung’s anti-intellectual campaign of May 1966.

The Billionaire’s Apprentice

The Book of the Week is “The Billionaire’s Apprentice” by Anita Raghavan, published in 2013. This ebook describes the investigation into the activities of a few Wall Streeters who were accused of insider trading in the past several years. Most of the accused happened to be of South Asian descent–from  Sri Lanka and India.

One concept the book conveys to readers is that it is unknown how many American securities-industry professionals are benefiting from insider trading, but the people in this book just happened to get caught because there was sufficient evidence against them to prompt the SEC, US Attorney’s office and FBI to go after them, rather than other possible offenders. The departments involved included the SEC’s Market Abuse Unit and the Department of Justice’s Securities and Commodities Fraud Task Force in the legal jurisdiction of the Southern District of New York (covering Manhattan and the Bronx, according to the author).

Another concept is that the investigating organizations and the securities industry are staffed with many people who, during their careers, switch allegiances. They might go from being a prosecutor to being a defense attorney, or from brokerage executive to government regulator, or vice versa. In this book the “old boy network” is alive and well. Arguably, conflicts abound.

Read the book to learn, among other extremes, about wiretapping (not the NSA’s), about one of the accused who “had several phones– at least thirteen– and he used them all” and a $30 million legal bill.

The Hoax

The Book of the Week is “The Hoax” by Clifford Irving, published 2006.

This is a personal account of an incredibly talented, savvy phony and writer, who, starting in 1969, with a co-conspirator, Dick Suskind, proceeded to write the autobiography of reclusive businessman Howard Hughes; phony, because he had never met Hughes.

McGraw Hill, Irving’s publisher, believed Irving when he told them he had actually spent time with Hughes. McGraw wanted to believe that it was going to produce an exclusive work on a billionaire businessman who, up to that point, had refused to let anyone publicize significant information on his personal life.

Irving and Suskind perpetrated their deception because: trying to get away with preying on the gullibility and greed of the publishing industry was a challenge that would make them feel alive.

Pursuant to the writers’ scheme, the book was “…based on fact and yet we had the freedom and power to infuse fact with the drama of fiction.” The writers did extensive research– spent hours poring over old city telephone directories, old maps, surveys, society columns and classified documents in order to perfectly embody Hughes’ voice in print. When they were concocting anecdotes, they inserted (real) people who were dead because dead people couldn’t sue for libel.

Incidentally, a whole other book could be written on the name for the marital anguish: soul-vomit, that Irving caused his wife with his adulterous behavior– that has so much female appeal on the big screen and in books.

Read the book to learn what was becoming of Irving and Suskind when Irving was heard to say, “You know, I’ve had a lot of experience in this past year burning manuscripts. It takes a long time and it’s not easy.”