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Vendetta: American Express and the Smearing of Edmond Safra – Book Review

Vendettaby: Bryan Burrough

Publisher: Harper Paperbacks

Copyright: 1992. ISBN: [0060167599]

Type: Paperback

reviewed by: Lynard Barnes, September 5, 1994

 

Summary: How to create a “big lie” without really trying. This book is an engrossing plunge into corporate American business tactics. Must Read.

Reprinted from Crushies Book Review, September 1994 Volume I, Issue No. 4:

 

If you absolutely, positively must smear someone who is an international banker

and who comes from a family of international bankers and who just happens to be your chief business rival, you can start rumors that they are in the drug business.

 

VENDETTA is a big book with a lot of information (663 pages). The information is incidental to its main purpose however. The book tells how American Express’s chief operating officer (CEO) James D. Robinson III and Edmond Safra, owner of the Trade Development Bank (TDB) of Geneva which included the Republic National Bank of New York, merged their two enterprises and then, two years later, de-merged–split, as in asunder, as in parted ways.

 

Burrough makes a strong case that the de-merging went a step beyond merely disassociating their enterprises. Even before Edmond Safra decided to pull out of the merger deal, rumors began circulating that his vast, international banking empire was built upon the proceeds of the illicit drug trade–money laundering. This despite the fact that the Safra family had been making money in the banking business long before becoming international in the 1950’s by opening TDB in Geneva, Switzerland.

 

The author is careful to point out that not a shred of evidence has ever been unearthed to show that Safra ever wittingly or un-wittingly participated in any illegal activities. But as for the rumors, allegations and falsified documents–there is a story there and Burrough tells it well.

 

In January 1983, Safra sold his interests in TDB for $550 million dollars to American Express. For the first time in his life, he was to become an employee. His relationship with his new employer deteriorated from that realization on. He thought, for instance, that he could graciously donate to the American Red Cross a $500,000.00 bonus granted him by American Express for selling his company. But American Express had already contributed its quota to the American Red Cross so Safra was told to pick another charity if he really had to give money away. More significant “style” disasters accumulated over the next eighteen months. American Express was a bureaucracy. Safra knew nothing of bureaucracies. He decided to buy back his business. He did so. At a profit of $100 million, Safra regained control of TDB, paying American Express $450 million. With money like this flying around, there are bound to be hurt feelings somewhere.

 

The CEO of American Express sanctioned an attempted to discredit Safra because Safra posed a competitive threat to American Express’s banking business. By discrediting Safra, American Express could prevent Swiss authorities from granting TDB an operating license.

 

So, how do you start a rumor to discredit someone?

 

Basically, you use the age-old formula of telling a big lie in a small place where it will be amplified and repeated ad nauseam. The small place can be a face with a small mind attached to it, or a small extremist newspaper or newsletter. American Express operatives used the later–planting stories in small newspapers in South America and Europe.

 

Reading Vendetta will definitely heighten your sense of discernment. It could also turn you into a cynic.

 

Safra was attacked by rumor because his business fate rested on the decision of a committee in Switzerland which based its decision on an evaluation of his character. Any public issue in which someone’s character is mentioned–whether it’s Ronald Reagan and hair coloring or Bill Clinton and romantic encounters with your cousin Polly, your instinct is to look for the big lie. This is good and healthy? No, it’s wasteful and distracting. In a democracy, it can also be debilitating.

 

In this information age in which there are information merchants very adept at peddling the big lie and information consumers a bit blurry on the distinction between a made-for-TV movie and real life, cynicism has almost become a patriotic duty.

 

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