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I started a new book over the weekend — James B. Stewart’s “Tangled Webs — How False Statements Are Undermining America.”  

Tangled WebBased on my early reading, and the author’s recent interview on Charlie Rose, this is going to be a fascinating read with disturbing issues to consider.  Perjury and making false statements to investigators is apparently so common — epidemic levels — that law enforcement and financial regulatory agencies rarely prosecute these cases without other charges.  

Stewart is a former Wall Street Journal Page One Editor and reporter who won a Pulitzer in 1988 for his reporting on the stock market crash and insider trading. In this new work, he focuses on cases involving people at the top of their fields — Martha Stewart, I. Lewis “Scooter” Libby, Barry Bonds and perhaps the most notorious liar in the history of the financial industry, Bernard Madoff.  

These are interesting stories and that the subjects decided to lie when they did not have to — with the exception of Mr. Madoff whose fraud was beyond comprehension — is a disturbing commentary on American business. They were all rich, successful and well educated who were willing to cross the line and lie.

Why am I reading this book?  Mr. Stewart, who went to law school, is an accomplished story teller and promised to answer questions that puzzled many:

  • Why would homemaking trendsetter Martha Stewart have lied about a relatively small stock trade when she was, by all accounts, a billionaire?  What caused her seemingly solid alibi to fall apart?
  • Why was Mr. Libby, the chief of staff to the Vice President, the only high government official charged in the Valerie Plame-CIA leak scandal when he wasn’t even the person who leaked her identify to columnist Robert Novak?
  • Barry Bonds, a baseball star of epic proportions earning more than $15 million a year, was granted immunity from prosecution as long as he told the truth under oath about illegal steroid use in professional baseball? And yet he was convicted of obstruction of justice because there was a question of lying under oath.
  • Was Bernie Madoff, who kept a ponzi scheme going for more than 20 years despite repeated inquiries and investigations, “an evil genius, a brilliant liar or something far more complex?” Until his scheme fell apart, he was one of the most admired people on Wall Street.

In researching cases for the book, Mr. Stewart said there were numerous examples.  He ruled out sexual scandals and divorce cases because they were among the most common. Apparently spouses trying to conceal wealth or other information from the prying eyes of matrimonial attorneys and judges, believe lying is perfectly acceptable.  

That this common practice floods into business is something that should concern us all.

© 2011 John Gregory Self