TO KAI

PO01

05-17-93 10:30AM

# U.S. Is Unmoved by Bosnian Serbs' Referendum

By STEVEN A. HOLMES
Special to The New York Times

WASHINGTON, May 16 — The Clinton Administration appeared to be hun- kering down today in the face of taunts from the leader of Bosnia's Serbs, ad- hering to its position that a referendum this weekend on the peace plan for Bosnia and Herzegovina would make little difference in United States policy.

Indications that the Bosnian Serbs had overwhelmingly rejected the plan drew little comment from the Adminis- tration. And statements by the Bosnian Serbs' leader, Radovan Karadzic, that the plan was "dead" elicited little more than derision.

"If Vance-Owen is dead, who killed it? He did," said a State Department official who asked not to be identified.

Since it took office, the Clinton Ad- ministration has shown indecision on what role the United States should play in deterring Serbian aggression.

President Clinton said last week that he would defer any decision on the options he has mentioned — from air strikes on Serbian artillery positions to

allowing arms to reach Bosnia's out- gunned Muslims — until after the re- ferendum. But he made clear that he was deferring to Western European allies, who fear that air strikes could endanger United Nations peacekeeping troops or the ground.

There were no officially scheduled meetings at the White House today on Bosnian policy, though President Clin- ton and his aides conferred on health care proposals.

The State Department official de- clined to comment on Mr. Karadzic's proposals for new negotiations on Bos- nia that would involve Henry A. Kissin- ger, the former American Secretary of State, and Mikhail S. Gorbachev, the former Soviet President.

Now that the voting is over, the offi- cial sać, the Clinton Administration will consult with its European allies to determine what steps can be taken to halt Serbian aggression.

In addition to air strikes, the Clinton Administration has talked of partly lift- ing an arms embargo to allow Bosnia's outgunned Muslims to receive weapons and of sending peacekeeping troops to

Macedonia.

"Now the point comes where we have to get in touch with our allies and decide if it is the time to do more," the official said.

In Moscow, Russia and two interna- tional mediators reaffirmed their support for the peace plan today and called on other nations to keep strug- gling to put it into effect despite the obstacles.

After meeting with the two interna- tional mediators, Lord Owen of Britain and Thorwald Stoltenberg of Norway, the Russian Foreign Minister, Andrei V. Kozyrev, did not call for using out- side military force to impose the plan itself. The peace proposal calls for di- viding Bosnia and Herzegovina into 10 largely autonomous provinces, and it would roll back some of the Serbs' territorial gains.

Mr. Kozyrev said the Security Coun- cil should rather keep up pressure on President Slobodan Milosevic of Serbia to cut off arms and other supplies to the Bosnian Serbs by stationing United Na- tions monitors on the country's border.

## Balkan Update

Serbs across BOSNIA apparently rejected a referendum on a peace plan. In PALE, the Serbian nationalist leader in Bosnia, Radovan Karadzic, declared the plan dead.

Russian officials and two international mediators, meeting in MOSCOW, reaffirm- ed support for the pact.

In MOSTAR, Croatian forces attacked Muslim areas, and Serbs continued an attack on Muslims in BRCKO.

Officials in the Croatian capital, ZAGREB, faced growing pressure to restrain their surrogates attacking Muslims in Bosnia.

In SARAJEVO, Serb and Croat commanders of forces in Bosnia signed a nationwide cease-fire to take effect on Tuesday. The accord is similar to others that have quickly collapsed.

# Vanities

New York Diary

Big Nix-on **Henry's** party; **Stephanopoulos** gagaga for Gumball; **Kathie Lee's** Bella casa

Party boys: Gerald Ford, Conrad Black, Rupert Murdoch, and Mort Zuckerman arrive at Henry Kissinger's party.

So many former presidents, so few R.S.V.P.'s. All four Republican ex-presidents were invited to **Henry Kissinger's** 70th-birthday party at the Colony Club, but only **Gerald Ford** showed up. **Richard Nixon, Ronald Reagan,** and **George Bush** all sent regrets, claiming prior engagements. **Pat Buckley,** **Brooke Astor,** **Jim Robinson,** and **Anne Eisenhower Flottl** were at Kissinger's table; **Henry Kravis** and **Carolyne Roehm** arrived together, but were seated separately. Another telling detail was the order of the limousines during the all-important arrivals. Press lord **Conrad Black** (owner of London's *Daily Telegraph*) and his wife, conservative columnist **Barbara Amiel,** alighted just ahead of press lord **Rupert Murdoch** and his wife, **Anna.** Who tumbled out of the next limo? None other than presslord-in-the-making **Mort Zuckerman** (*the Daily News*), who didn't bring a date.

CLOSING THE BOOK ON CAP'N BOB

The final chapter on former *Daily News* owner Robert Max-

well is being written at last. *A Mind of My Own*, by Maxwell's wife, **Elisabeth**, has just been sold to HarperCollins—ironic, since the publishing house is owned by Maxwell's lifelong rival, Rupert Murdoch. Elisabeth Maxwell's agent, **Owen Laster**, spent months quietly shopping her autobiography around, forcing editors to read the 23-page proposal in the confines of his William Morris office. It seems unlikely that the widow will be making any excuses for her late husband's dubious business practices. “His ascendancy in the 80s also marked the beginning of real and irreparable tension between us,” she writes. “I lived at our home in Oxford and he in his lavish apartment in London.” Ultimately, the couple communicated almost solely by mail. “Even then I knew that he sometimes chose to ignore my letters. On the rare occasions that I visited his apartment, I would find them in his bedroom, unopened, unread, cast aside.”

THE STEPH THAT DREAMS ARE MADE OF

**Bill Clinton** isn't the only one in the White House whose brother lives for rock 'n' roll. **George Stephanopoulos's** younger brother, **Andrew,** manages a band called Gumball.

ALEXANDER JONES

VANITY FAIR/AUGUST 1993

trial world. The U.S. would be especially
hurt: the GATT agreement contains protec-
tions for “intellectual property” (patents,
copyrights) that American exporters sorely
need but do not now have.

In Mexico defeat of NAFTA could pro-
voke an anti-gringo backlash that would se-
verely hamper President Carlos Salinas de

support for election, are against NAFTA.
Clinton has the unenviable, but vital chal-
lenge of proving that he is enough of a New
Democrat to break free of union domina-
tion, and that he can bring enough Demo-
crats along with him and forge a strong
bipartisan coalition.

As recently as the first week of Septem-

paigned hard for New York City Mayor David Dinkins and New Jersey Governor Jim Florio, but both lost. That may cause many Democrats to ask, in effect: Why should I buck anti-NAFTA sentiment in my district to please a President whose ability to help me win re-election is suspect? One Congressman who admits he found the re-

sults "unsettling" is Robert
Torricelli of New Jersey, a
state where labor is strong
and every other Democratic
Representative has come out
against NAFTA. Torricelli says
he will stay uncommitted
right now, but others expect
him eventually to vote no.

Republicans too have
been subjected to intense and
conflicting lobbying pres-
sures. Congressman Paul
Gillmor of Ohio tells of re-
ceiving two letters from loyal
activists who had worked
hard for his election. One
warned that he would never
vote or work for Gillmor
again if he voted for NAFTA;
the other made precisely the
same threat if the Congress-
man voted against the agree-
ment. Republicans, however,
have an extra problem: mem-
bers of Perot's United We
Stand America organization
have been pushing hard
against NAFTA in their dis-

tricts, and Perot himself has been calling on
them in Washington. William Goodling, a
Pennsylvania Congressman, told the Texan
the only time he could spare was at 7:30
a.m. Fine, said Perot, who showed up and
launched into a 40-minute monologue.

Gillmor, Goodling and other Republi-
cans say Perot has made no explicit threats
to them. Nonetheless, they and others are
seriously worried that the Texan and his
followers will try to defeat them at the polls
next year if they vote for NAFTA. That, says a
White House official, is another reason
why Clinton chose to take on Perot—or
have Gore do it—in debate. If the White
House can knock Perot down a peg, it will
win the gratitude, and maybe the pro-
NAFTA votes, of Republicans who would be
afraid to tangle with Perot all alone.

Given Perot's prowess as a debater,
however, that is a very big if. The White
House strategy of taking him on headfirst is
risky in the extreme. But not doing so
might have been even more chancy. And
far too much is riding on the NAFTA
vote—for Clinton, Perot, Mexico, Latin
America and the world—for the President
not to give it his best shot.
—Reported

by Laurence I. Barrett and Michael Duffy/
Washington, Laura López/Mexico City and
Joseph R. Szczesny/Detroit, with other bureaus

DENNIS COOK—AP

Setting aside politics as usual, Clinton huddled with Republican former Secretaries of State Kissinger and Baker. But it took the debate with Perot to get the public interested.

BIG-NAME BOOSTERS

Clinton had signed up squadrons of bipartisan supporters. He even showed off some of them at a media event; so far as the public noticed, he might as well have convened a meeting of stamp collectors.

Gortari's efforts to open up its markets and
move toward fuller democracy. C. Richard
Neu, the CIA's National Intelligence Officer
for Economics, has told Congress that a
NAFTA defeat "would be widely seen in
Mexico not just as a U.S. repudiation of
NAFTA but as a rejection of Mexico itself,"
with severe damage to U.S.-Mexican rela-
tions in many areas.

Most important is NAFTA's symbolic
value. Diplomatically, the vote is being
viewed as a severe test of whether the U.S.
will maintain a policy of active engagement
in the world or take an inward-looking,
protectionist turn. Politically, Clinton's
leadership is on trial. A majority of House
Democrats, heavily dependent on labor

ber, nose counts in the House showed Clin-
ton falling 80 votes short of the 218 needed
to be fairly sure of victory; by last week he
was still down 30 votes. That reckoning
gives Clinton eight or so legislators from
sugar-producing areas who are expected to
be won over by a special agreement grant-
ing sugar some extra protection from Mexi-
can competition but who for tactical rea-
sons are staying officially uncommitted
right now. The sugar agreement is an ex-
ample of a White House strategy to essen-
tially buy votes by working out special
deals for special interests.

The President's chances of making fur-
ther gains, however, were not improved by
last week's off-year elections. Clinton cam-

TIME, NOVEMBER 15, 1993

LABOR STANDS OPPOSED

Why the passion against NAFTA? Partly because in a
recovery that has left many Americans still fearing
layoffs, any further threat to employment, real or
fancied, hits a raw nerve.

owners even think of moving to
Mexico, will many try to use the
threat of doing so as a means of hold-
ing down American wages? Owen
Bieber, president of the United Auto
Workers, suggests this will happen
so often if NAFTA passes that the Ad-
ministration will have to set up an
800 number for unionists to call
with their complaints.

What the fierce partisans never
mention is that the immediate eco-
nomic effects are likely to be rela-
tively small. The Administration, for

example, projects a net gain of 200,000 American jobs in the next two years. That sounds impressive, but it is not much more than the 150,000 new jobs the U.S. domestic economy is creating every month, even at the present sluggish rate of employment growth. On the other side, Perot keeps talking about a "giant sucking sound" of factories, money and jobs being vacuumed into Mexico from the U.S. He is almost the

only one who can hear it. Some treaty op-
ponents have been kicking around a figure
of 500,000 jobs that might be lost, but
NAFTA proponents consider that projection
grossly exaggerated.

Why then the passion? Partly because
in a recovery that has left many Americans
still fearing layoffs—or fearing they will
never be recalled from layoffs—any further
threat to employment, real or fancied, hits
a raw nerve. That effect is aggravated
because the workers who might lose out to
low-wage Mexican competition know who
they are, or think they do, while the 12
additional people who might be hired next
year by a computer maker to put together
more PCs for export to Mexico have no
idea that might happen. Then too, there
is a vague feeling that the U.S. has
often let itself be played for a sucker in
trade deals. Perot has harped on that,

charging that “dumb” negotiations in
the 1980s cost millions of U.S. jobs.
The Administration did not help itself
by choosing initially to fight on narrow eco-
nomic grounds (read: jobs) rather than in-
voke the foreign-policy considerations that
actually are more important. It also has
been somewhat hampered in making what
could be one of its strongest arguments: to
the extent that NAFTA promotes prosperity,
job growth and wage increases in Mexico,
it should keep at home some of the illegal
immigrants now flooding into California,
Texas and other states. In fact, it is hard to
see anything else that might stanch that
flow. Secretary of State Warren Christo-
pher and Attorney General Janet Reno
have begun to make that argument, but
gingerly. The subject is a very touchy one to
Mexicans and Mexican Americans, and
Clintonites dare not sound like nativists
warning about a Brown Peril.

NAFTA is important, however, primarily
for reasons going beyond its own economic
effects. Its rejection by the U.S. could top-
ple a much bigger domino: a proposed
agreement to promote freer trade among
the more than 100 members of the General
Agreement on Tariffs and Trade could die.
That would abort an expansion of world
trade that many nations are counting on to
help end the recession afflicting the indus-

pools. *Maquiladoras* are blamed for the
noxious brown cloud that often overhangs
El Paso, Juárez and other cities, as well
as for the foul wastes that flow into the
Rio Grande.

Pollution-free service industries have
also begun flocking into the expanding
Mexican marketplace. The Principal Finan-
cial Group, a concern based in Des Moines,
Iowa, last month won the first new insur-
ance license Mexican authorities have is-
sued to a foreign firm in more than 50 years.
Principal has a 30% stake in a Mexican ven-
ture that markets insurance and pension
plans. "The Mexican insurance industry
needs a dose of marketing expertise," says Camilo Salazar, vice

president of international operations for Principal.

Many of these market openings could prove to be irrevers-
ible as Mexicans develop a growing taste for American goods.
Procter & Gamble first exported Pringles potato crisps to Mexi-
co in 1991 and expects to sell more than $5 million worth of the
snacks there next year. When Dell Computer began assembling
personal computers in Mexico 18 months ago, its new plant
promptly shattered the company's record for sales growth. Dell
expects annual sales of the Mexican unit to continue to grow by

KEITH DANNEMILLER / ABA

Fisher Price's assembly plant in Mexico: that "sucking sound" of jobs moving south is likely to continue whether or not NAFTA is approved by Congress.

at least 50% over the next few years. "The Mexican economy is
becoming more robust and information-focused," says Brian
Wood, Dell's vice president for global operations. "The automa-
tion of business is still 18 months behind the U.S., so there
is a big demand to upgrade technology. You will not see the per-
sonal-computer market dry up if NAFTA does not pass." For
Mexico's consumers and companies, as well as America's, there
looks to be no turning back.

—By John Greenwald.
Reported by Tresa Chambers/New York, Deborah Fowler/Houston and Richard Woodbury/Laredo

TIME, NOVEMBER 15, 1993

41

ASIAN WALL STREET JOURNAL

HONG KONG, HK
DAILY 32,914

TUESDAY

JAN 26 1993

BURRELLE'S

1

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......

fc...1.

# Military Cutbacks Will Crimp U.S. Foreign Policy

8:20

BRUSSELS - In 1982, former Secretary of State Henry Kissinger told a Washington group that "the 1980s are the first decade in which the United States has to conduct foreign policy as other nations have had to conduct foreign policy throughout their history." The U.S. because of its diminished economic and military strength would have to be foxier. It should draw lessons from Britain, which protected itself for centuries by siding with one country or another to keep a "balance of power" in Europe.

Let's leave aside some political scientists' criticisms of Mr. Kissinger's "balance-of-power" theories. Suffice it to say that even a foxy Britain didn't head off World War I and its 1939 sequel. The more interesting point is that Mr. Kissinger was merely premature-by about a decade. President Clinton and Secretary of State Warren M. Christopher should dig up a yellowed copy of what Mr. Kissinger said at the Georgetown Center for Strategic and International Studies in 1982. They might get some pointers on how they will have to conduct foreign policy if the U.S. continues on its current path of unilateral disarmament and withdrawal of military forces from postings abroad. For the world as a whole, there is another question: Would U.S. foxiness be an adequate substitute for real power?

The Kissinger remarks were premature in 1982 because Ronald Reagan already had embarked on rebuilding U.S. military strength. Defense spending climbed to a peak of nearly 26% of the federal budget and 6.3% of gross domestic product by 1986. While 6.3% doesn't look like much, it revitalized U.S. forces and yielded up new weapons and military technologies that were far superior to anything that could be fielded by the Soviet Union, a military state that collapsed under the weight of its efforts to keep up with the U.S. It seems likely that President Clinton and Secretary Christopher soon will find themselves forced to conduct foreign policy more in the manner sketched out by Henry Kissinger a decade ago than with the ways and means avail-

able to George Bush in 1991. The U.S. already has begun a sharp drawdown of its military forces. Given the likely social-spending bent of the new Congress, that process seems likely to accelerate. Congressional staff estimates put the fiscal 1997 U.S. defense budget at only a little more than 3% of GDP, less than half the percentage of a decade earlier and by far

## Global View

By George Melloan

the lowest spending since World War II. The previous low was 5% in the Carter era.

Even the 3% estimate may prove to be high. With former Rep. Les Aspin now Secretary of Defense, the House Armed Services Committee is in the hands of notorious defense-budget cutters, such as Ron Dellums of California. Judging from the Senate testimony of new federal Budget Director Leon Panetta, he may be looking at defense for still more of those "savings" the president hopes to find as he attempts to spend more on social and "infrastructure" programs and cut the federal deficit.

It already is clear that budget cuts will reduce U.S. NATO forces deployed in Europe well below previous targets. The Bush administration had hoped to maintain 150,000 troops in Europe, but estimates now are that their numbers will fall below 100,000, perhaps to 70,000. NATO's future troop deployments are also problematic. It had hoped to retain about half the strength it had before the Warsaw Pact collapse. As one NATO official puts it with an eye on the Persian Gulf and the Balkans, "We are facing broader responsibilities with fewer and fewer means for meeting them."

The raw numbers of the U.S. defense cuts tell only part of the story. Congress is wary of creating too much civilian unemployment through project cancellations. Defense cutbacks already have cost some

one million jobs, including the spinoff effects of direct layoffs. So congresspersons are trying to protect defense contracts in their districts. That will mean what it always means. The military will have to get its budget savings from operations and maintenance, and that means that the readiness of U.S. forces will decline.

As this process continues, it will increasingly limit the ability of the U.S. to mount the equivalent of another Desert Storm the next time some aggressive power decides to test the will of the U.S. and its allies. Indeed, Saddam Hussein may yet prove to be the aggressor who conducts that test a few years hence after rebuilding his forces and assessing the strength of NATO. The oil that he failed to seize in 1990-91 will still be there should he decide to try it again in 1995.

What are the chances for Messrs. Clinton and Christopher for successful "balance-of-power" diplomacy once U.S. military strength has been reduced? A few clues are currently available. Both China and Russia, two of the five permanent members of the U.N. Security Council, went along with Desert Storm. But now they are criticizing the U.S. for what they describe as a "unilateral" decision to fire cruise missiles at a Baghdad nuclear bomb plant last week. France's foreign minister, Roland Dumas, also joined in, fulfilling his self-appointed role as Europe's chief critic of U.S. policy.

The Chinese and Russian statements are evidence of a new assertiveness. Russia remains a heavily armed country and China is in the middle of a big arms buildup. Russia's hard-liners are demanding that Foreign Minister Andrei Kozyrev conduct a foreign policy independent of the West. China, for its part, wants to suggest to the new U.S. president that it is prepared to repay him in kind if he pursues his campaign promise to take a tougher line than George Bush did toward Chinese human-rights abuses.

Does the U.S. want to remain a superpower or just be one of the guys? A look at the numbers suggests that the choice already has been made.

Chief Named
At American
Express Co.

Furlaud Is Picked
To Succeed Robinson

By Jay Mathews
and Brett D. Fromson
Washington Post Staff Writers

NEW YORK, Feb. 1—Richard M. Furlaud, a director of American Express Co., was elected today to succeed James D. Robinson III as chairman of the financial services company.

Furlaud, 68, the former president of Bristol-Myers Squibb Co., was chosen during a conference call board meeting after some directors complained about the effect on their reputations, and the company's image, from a topsy-turvy management shuffle at the company, according to sources close to the board.

RICHARD M. FURLAUD
...considers role permanent

Robinson announced his resignation last week after an investor and employee uproar over his plans to remain active in the troubled company. Furlaud told a telephone press conference this afternoon that he considered his

See AMEX, D2, Col. 1

Furlaud Named American Express Chairman

AMEX, From D1

role as chairman, effective Feb. 22, to be permanent.

Furlaud and American Express's new chief executive, Harvey Golub, told reporters they would move quickly to buttress investor and employee confidence and find someone to replace Robinson as chief executive of the firm's money-losing brokerage subsidiary, Shearson Lehman Brothers Inc. The board's announcement a week ago that Robinson, whose management skills are suspect on Wall Street, would run Shearson sparked the investor revolt that led to his decision to cut all ties with American Express.

"I look forward to working with Harvey to implement the strategies in place to build the American Express brand franchise, restore Shearson Lehman Brothers to profitability and strengthen the company's balance sheet," Furlaud said.

Analysts and investors said they were pleased that Golub, respected as an aggressive cost-cutter, would not have Robinson at his elbow while he attempted to make the famous travel and financial services company profit-

able again. Golub acknowledged today that institutional investors had said with Robinson still involved "they had concerns about whether or not I was really in a position to run the company." The stock market offered a vote of confidence in Golub today, with American Express up $1.37½ to close at $24.62½,

But Furlaud strongly defended Robinson for acting with "courage, honor and selflessness."

As an indication of continued divisions on the board, one source close to Robinson said some directors suggested during the conference call meeting today that Robinson be asked to remain to help the rescue of Shearson. Other sources said that former secretary of state Henry A. Kissinger, an American Express director, made the suggestion and that it was seconded by another director, Drew Lewis, Neither Kissinger nor Lewis could be reached for comment. A company spokesman declined comment on the report.

Company spokesmen also declined to comment on reports that directors expressed unhappiness with the image of a company in turmoil and a board uncertain of its direction, Furlaud began this afternoon's press conference

with a review of the board's four-month effort to find a replacement for Robinson, who had indicated he wished Golub to succeed him. He said the board's search committee pared an initial list of 4,000 candidates down to 130, and then 12, and then "a smaller number" who were interviewed.

Once Golub had been confirmed as "the best choice," the board decided to have Robinson remain as chairman and also run Shearson so that Golub could devote all his energies to the companies well-known, but financially anomie, credit card business.

Golub told investors at a breakfast meeting Thursday that the company planned, as a model, to select one foreign country for a complete overhaul of American Express operations. The emphasis, Golub said today, will be on quality of service, not quantity of card holders, for "with fewer card members, we can in fact serve those card members better and earn more money in the process."

He said he did not plan to cut fees or put the familiar green and gold cards on a revolving credit system. He also said there were no plans to sell Shearson.

WASHINGTON, May 16 — The Clinton Administration appeared to be hun-kering down today in the face of taunts from the leader of Bosnia's Serbs, ad-hering to its position that a referendum this weekend on the peace plan for Bosnia and Herzegovina would make little difference in United States policy.

Indications that the Bosnian Serbs had overwhelmingly rejected the plan drew little comment from the Adminis-tration. And statements by the Bosnian Serbs' leader, Radovan Karadzic, that the plan was "dead" elicited little more than derision.

Since it took office, the Clinton Ad-ministration has shown indecision on what role the United States should play in deterring Serbian aggression.

allowing arms to reach Bosnia's out-gunned Muslims — until after the ref-erendum. But he made clear that he was deferring to Western European allies, who fear that air strikes could endanger United Nations peacekeeping troops on the ground.

There were no officially scheduled meetings at the White House today on Bosnian policy, though President Clin-ton and his aides conferred on health care proposals.

The State Department official de-clined to comment on Mr. Karadzic's proposals for new negotiations on Bos-nia that would involve Henry A. Kissinger, the former American Secretary of State, and Mikhail S. Gorbachev, the former Soviet President.

Now that the voting is over, the offi-cial said, the Clinton Administration will consult with its European allies to determine what steps can be taken to halt Serbian aggression.

In addition to air strikes, the Clinton Administration has talked of partly lift-ing an arms embargo to allow Bosnia's outgunned Muslims to receive weapons and of sending peacekeeping troops to

Macedonia.

In Moscow, Russia and two interna-tional mediators reaffirmed their support for the peace plan today and called on other nations to keep strug-gling to put it into effect despite the obstacles.

After meeting with the two interna-tional mediators, Lord Owen of Britain and Thorwald Stoltenberg of Norway, the Russian Foreign Minister, Andrei V. Kozyrev, did not call for using out-side military force to impose the plan itself. The peace proposal calls for di-viding Bosnia and Herzegovina into 10 largely autonomous provinces, and it would roll back some of the Serbs' territorial gains.

Mr. Kozyrev said the Security Coun-cil should rather keep up pressure on President Slobodan Milosevic of Serbia to cut off arms and other supplies to the Bosnian Serbs by stationing United Na-tions monitors on the country's border.

## Balkan Update

Russian officials and two international mediators, meeting in MOSCOW, reaffirmed support for the pact.

S&M

B7

# KISSINGER PROTEST CHANGES REPORT

## Panel Tones Down Criticism of Nixon on Missing in Vietnam, Lawyer Says

By STEVEN A. HOLMES

Special to The New York Times

WASHINGTON, Jan. 10 — A Senate committee investigating the handling of missing American servicemen in Southeast Asia toned down its criticism of former President Richard M. Nixon and his Secretary of State, Henry A. Kissinger, after protests from both men.

In an interview today, Mr. Kissinger's lawyer, Lloyd N. Cutler, said that he and Mr. Kissinger read portions of the draft report on Dec. 28 and succeeded in having some of the document's conclusions changed. The report is scheduled to be made public on Wednesday.

The issue was first reported in recent days in Newsday and The Los Angeles Times.

## Memo From Nixon

The two papers said the Senate panel, the Select Committee on POW/MIA Affairs, had criticized Mr. Nixon and his top aides for failing to get a full accounting of American military personnel at the end of the Vietnam War.

The Times quoted Mr. Nixon as writing in a memorandum to the committee, "To convey the impression to the hundreds of families of M.I.A.'s that an American President deliberately left behind their loved ones and that some of them might still be alive can only be described as obscene."

Allowing Mr. Kissinger access to the report before its public release and changing some of its findings as a result of his comments enraged some M.I.A. advocates. Many of these people have for years accused Mr. Kissinger and other Government officials of participating in a cover-up to keep the public from learning the truth about the 2,264 Americans who have never been accounted for.

"As a family member, I cannot understand why these people are being allowed to negotiate the truth," said Dolores Apodaca Alfond, an official with the National Alliance of Families for the Return of America's Missing Servicemen. "If the truth is to come out, why should it be negotiated?"

From the beginning of its work, the committee has been plagued by bickering and infighting among its members and staff. Today, in response to the latest disclosures, Senator John Kerry of Massachusetts, the committee's chairman, released a harshly worded statement condemning unauthorized release of information to reporters.

"It has been clear from the start that this emotional issue brings out those who wish to advance their own agendas," Mr. Kerry said. "The premature and selective release of information throughout our yearlong investigation has been designed to divert attention from the committee's exhaustive work and through deliberations."

Mr. Cutler said today that at Mr. Kissinger's request Senator Kerry allowed him and Mr. Kissinger to view parts of the 1,000-page report that dealt with the Paris Peace accords and the follow-up to the peace plan. Mr. Cutler said he and Mr. Kissinger inspected the report in the presence of a committee staff member.

"There was a lot of concern that it would have been a Monday morning quarterbacking operation 20 years after the fact," Mr. Cutler said, referring to the report.

Mr. Cutler and former aides to Mr. Nixon say it is true that Mr. Nixon and Mr. Kissinger did not get a full accounting from the Vietnamese of American servicemen who were missing in Vietnam, Cambodia or Laos. But these aides say Congress must shoulder some of the blame by pulling the rug from underneath the Nixon Administration.

For example, Mr. Cutler said, the draft report was silent on testimony by Senator Bob Dole, Republican of Kansas, about a May 1973 effort by Republicans to moderate a Senate prohibition on the use of force in Vietnam. The measure, called the Dole amendment, would have allowed American military action if the North Vietnamese failed to comply with the provisions of the peace accords related to prisoners or men missing in action. The amendment was defeated in the Senate.

NEW YORK TIMES

JANUARY 11, 1993

tious throughout the meeting:

KHO How many of our listening de-
they find in their offices?

IKOV One. So the ratio in our favor is

Gorbachev then discussed how to go
about American "lying and cheating"
Reykjavik summit.

CHEV Yes, Reagan appears a liar.
to find an appropriate formulation

Agence France-Presse

Reykjavik, Iceland, 1986: Ron-
ald Reagan and Mikhail S. Gorba-
chev during their meetings.

Moscow, 1993: The cover of a
secret Communist Party document.

Using Sakharov's Wife
or Influence Over Him

Earlier Politburo meeting, on Aug. 29,
Gorbachev and his colleagues dis-
playing the dissident physicist Andrei
arov's wife, Yelena Bonner, to go
or medical treatment. The conveys-
sed the perception among Commu-
nit Dr. Sakharov was controlled by his
wife, whose mother was Jewish.

Proposal to let Miss Bonner travel was
by Mr. Chebrikov of the K.G.B.: "But
not release Sakharov abroad. Min-
sh [the Ministry of Medium Machine-
l, which made nuclear weapons] is
this, since Sakharov knows in detail
to steps in the development of our atomic
s. In the opinion of specialists, if
ov is given a laboratory, he could
the work on military research. The be-
f Sakharov is formed under the influ-
Bonner."

CHEV "That's what zionism is."

and Khrushchev Meet
e of 'Kitchen Debate'

Assessing Kissinger:
Eudrige, Intelligent and Vain

July 24, 1959, Vice President Richard
n and President Dwight D. Eisenhower-
other, Milton Eisenhower, met with
iet leader, Nikita S. Khrushchev. The
g was on the eve of the celebra-
d debate" at an American exhibition
cow. It also came on the heels of a
on adopted by the United States Con-
critical of Soviet policies, a resolution
emed to infuriate Mr. Khrushchev and
ted much of the conversation.

KHRUSHCHEV Your arrival in the Sovi-
n is seen as a step toward achieving
understanding and establishment of
s with Soviet leaders. But in connec-
h the resolution adopted by Congress
e publication of a declaration by the
ent, you received a sendoff that com-
your situation in the Soviet Union.
course, guarantee you against any
but we cannot safeguard you against
from Soviet people.

KON Perhaps that's for the better.

KHRUSHCHEV You want an escalation?
you need to orchestrate a cats' con-
nd thus provide an excuse for your
to say that you are badly received in
iet Union?

KON I have some experience in that

KHRUSHCHEV I know what you are
at. But I do not want a repeat of that
Soviet Union.

or a long discussion, Mr. Nixon tried to
be talk away from the resolution, argu-

ing that neither he nor the President were so
"stupid" as to orchestrate such a measure on
the eve of his trip.

N.S. KHRUSHCHEV You said that Eisenhower and you are not so stupid as to push such a resolution. I would like to ask you in this connection, what is your opinion of a Congress that would adopt such a resolution? You said that I give the resolution too much attention. Please forgive me, Mr. Nixon, but I would like to use a strong peasant's word to elucidate the situation. Fresh manure always smells more. You laid it and the stench is spreading through the whole world. More attention is paid to it now. But time will pass, the stench will dissipate, the manure will cover with a crust and less attention will be paid to it.

After the comment was translated, Mr.
Nixon continued: "I also grew up on a farm.
They used to say that pig manure is worse
than horse."

On June 12, 1969, President Nixon's national security adviser, Henry A. Kissinger, asked to meet with the Soviet Ambassador, Anatoly F. Dobrynin, before the Ambassador left for Moscow. In a long report to the Politburo, Mr. Dobrynin said that Mr. Kissinger had used the unofficial channel to urge a new, "constructive" phase to American-Soviet relations. Among other proposals, Mr. Kissinger urged that summit meetings be held regularly to avoid the heightened expectations of occasional meetings.

In the course of the conversation, Mr.
Dobrynin reported, Mr. Kissinger said,
"President Nixon takes into account the Sovi-
et Union's special interests in East Europe
and does not intend to do anything there that
would be assessed in Moscow as a 'challenge'
to its position in this region. That is Nixon's
basic approach to this question and there is
no need, affirmed Kissinger, to pay great
attention to separate public critical state-
ments by the president on one East European
country or another, since this is only tribute
to some layers of the U.S. population which
play a role in American elections."

The conversation ranged over agreements
on antiballistic missiles, on the Middle East
and on Vietnam, on which Mr. Kissinger
urged the Soviets to take a larger role in
breaking the deadlock in peace talks in Paris.

Mr. Dobrynin concluded his report with
"Several words about Kissinger":

"Observing the work of Nixon and his main
foreign-policy advisers (and I know practi-
cally all of them by now), one can say with

some certainty that at present the basic,
actually dominating influence on the President
in the field of foreign policy comes from
Kissinger.

"Kissinger himself, an intelligent and erudite man, is at the same time vain and prone in conversations with me (we have formed decent personal relations), especially when we have dinner alone, to brag of his influence. At our last conversation, for example, he declared without excess modesty that in all Washington only two people can answer precisely at any given moment about the U.S. position on this or that issue: President Nixon and he, Kissinger."

Sanatorium for Party Leaders
Gets Special Treatment

In January 1971, the chairman of the
K.G.B., Yuri V. Andropov, later briefly
the head of the party, proposed to build a sanato-
rium outside Moscow for "the rest and cure
of leaders of the Communist Party and Soviet
Government."

The request was approved, and resulted in
a detailed three-page list of orders to various
ministries on urgently supplying everything
necessary.

The list ended:

"11. To authorize the use of limited quantities of nonferrous metals to fabricate nonstandard equipment, and also hardwoods, marble and granite for the sanatorium in question.

"12. The Ministry of Health is to prepare the necessary services and medical personnel for the opening of the sanatorium no later than the fourth quarter of 1972.

"13. The Ministry of Defense is to appropriate from May 1, 1971, to Dec. 15, 1972, 150 soldiers to work on the construction of the sanatorium, and to house them in the region of Semyonovskoye.

"14. Control over the project and construction is to be placed on the Committee of State Security of the Council of Ministers (K.G.B.)."

"Politics of Terror":
Secret Lenin Documents

In December 1990, long after the Commu-
nist party had shed its "leading role" and
several months before the abortive putsch,
the director of the Institute of Marxism-
Leninism, Georgi Smirnov, sent a note to the
deputy head of the Soviet Communist party,
Vladimir Ivashko, urging him against pub-
lishing about 3,000 documents attributed to
Lenin, part of 7,000 that had never been
published.

"Reference is above all to documents of

have been expedi-
eral there would no
my which Khrusci-
to Stalin. Stalin, who
is our history. Not or
grief as Khruschev
tion to the history of
in relation to Stalin.

TIKHONOV Yes, if
would not have been
He dirtied us and ou
them before the wh

CHEBRIKOV (the H
that, under Khrus-
people were rehabi-
of the matter is t
entirely justly. Tak
tysn."

The Propaganda
Deals With 'Pra-

After Mr. Gorbac
sandr N. Yakovlev
dedicated advocate
time of the "Pragu-
acting head of the
of the Central Com-
veloping propaganda
in Czechoslovakia.
report to the Centr-
nine days after the

"The propagand-
actives of the Centr-
the following work
August: prepared
leaflets, of which 2.
distributed, publisli
(1 "Rude Pravo,"
24-hour radio broa
two television cha

Mr. Yakovlev we
als for further F
Czechoslovakia an

"2. Organize in
government orga-
n (preferably East
dio station of a se-
would broadcast i
workers of Czech-
ed to socialism, in
ganda and counte
actionary antisoci-
kia.

"8. The K.G.B. (U.S.S.R. should print of articles in the f
between the ant
Czechoslovakia
above all with
U.S.A. and F.R.G.

"The Czechos
any means to blu
paign, glorifying
Slovaks killed wh
their hands again
almost to the ro
martyrs (leaflet
graphs; around p
orated with flow
24-hour watch w
several cities m
raised, etc.).

"In this connect
the memory of o
who gave their
counterrevolution.

"Soviet Archives Provide Missing "(NYT 2/8/93)
"Pieces of History's Puzzles"

the West Side Highway for the twenty-minute trip to Wall Street.

In one form or another, the chairman and chief executive officer of American Express Company had followed this routine unfailingly for years. But on this particular day there was a difference—a story in the newspaper in his hands. The paper was the *Wall Street Journal*, and the story carried the following headline:

DEFEATING BOARD FOES,
ROBINSON, GOLUB WIN
AT AMERICAN EXPRESS
*Chairman Keeps Job, Adds*
*New Tasks as Understudy*
*Moves Into the CEO Post*

No business executive is too big to feel a quiet sense of triumph at reading his name in such a headline. And Jim Robinson knew that others would read that headline and vicariously bask in his glory. As head of one of the largest diversified financial companies in the world, he was, after all, an important man in business, and he had plenty of important friends. His wife, Linda, headed what was quite possibly the most plugged-in public-relations firm in New York—Robinson, Lake, Lerer & Montgomery. There was virtually no one on the A-list of business, politics, and media who wasn't happy to return the Robinsons' calls.

Ron Perelman was a friend of Jim and Linda's, and so was Ron's wife, Claudia Cohen. Henry Kissinger was a friend of the Robinsons', and so was Henry's wife, Nancy. Diane Sawyer was a friend, and so was Diane's husband, Mike Nichols. Joe Flom was a friend, and so was Arthur Liman. So were Larry Tisch, Vernon Jordan, Georgette Mosbacher, Gerald Ford, Mort Zuckerman, Saul Steinberg, and on and on and on.

In fact, Jim Robinson expected all these people and more to be turning up the very next evening for a fortieth-birthday surprise party he was giving for Linda in the grand ballroom of Webster Hall, the newest techno-rock nightspot in the East Village. And he also knew, thanks to that headline in the morning papers, that scarcely would he arrive at American Express's world head-

bizarre climax of a struggle that had consumed the American Express board for the previous five months, as Robinson and his boardroom allies campaigned to outflank and neutralize a cabal of his enemies who wanted to oust him from his job. In practical terms, Robinson held all the cards—mainly because he commanded the loyalty of the overwhelming majority of the board itself—and his opponents, never more than three or four in number, didn't, in fact, have a chance.

Indeed, only the day before—Monday—it had looked, as the headlines said, as if Robinson had finally defeated his enemies once and for all. Thus, American Express had announced that Robinson would be turning over the company's chief-executive office to his handpicked successor, Golub—with, however, Robinson staying on as chairman to watch over him. More than that, it looked as if Robinson would actually be *expanding* his own day-to-day involvement in the firm by taking on the job of running its Shearson Lehman Brothers brokerage-and-investment-banking subsidiary.

This "triumph" by Robinson in fact held the rapidly germinating seeds of his defeat. His continued presence at the top of Amex angered some of the company's biggest and most important institutional investors on Wall Street. Their disappointment over the company's sagging stock price—a consequence of chronic weakness in its credit-card and Wall Street brokerage operations—had been eased by press leaks supportive of Robinson's boardroom enemies; the leaks intimated that he was about to be ousted, which encouraged the media to hail him for having staged a successful countercoup.

LATER, AFTER IT WAS ALL OVER AND ROBINSON FOUND HIMSELF out of a job, he conceded to me that he had expected there to be at least some "disappointment among the shareholders" over the fact that he wouldn't be leaving. Unfortunately, what neither Robinson nor his allies seemed to appreciate was just how intense that disappointment would be.

"They just didn't get it," said McKinsey & Company consultant MacLain Stewart, who has worked on a number of projects for American Express over the years. "Why they missed it is a mystery. I just can't explain it."

## Robinson says he tried to stay at Amex eve

quarters at 200 Vesey Street and ride up to the fifty-first floor when the phone in his office would begin ringing off the hook with congratulations from all these people and many more besides.

Unfortunately for Jim Robinson, there was also something he didn't know: The apparent triumph proclaimed in that headline was barely a day away from turning into the most catastrophic and humiliating disaster of his life. In fact, by the end of the week, the man who had ruled unchallenged and (until recently) without much criticism at the very pinnacle of American business would be ignominiously hounded from power. In the process, the job he had made the work of his life would be divided up between a boardroom graybeard who joked publicly about the shadow of approaching senility and a Robinson subordinate in whom no one—Robinson included—had unqualified confidence.

One of the men was Richard Furlaud, 69, the former president of Bristol-Myers Squibb Company. An outside director on the American Express board for the past 22 years, Furlaud would now become American Express's chairman of the board.

The other was Harvey Golub, 53, for the past two years Robinson's handpicked second in command and heir apparent. Though Golub held the title of president of American Express, both Robinson and the board felt he needed more seasoning before moving up. Yet, seasoned or not, Golub would now become American Express's chief executive officer.

For Robinson, all this and more lay just ahead as the dizzy and

Too bad for all concerned, for within a day of that headline in the *Journal*, American Express's stock price was crumbling on Wall Street, and some of the biggest and richest institutional investors in the market began howling for Robinson's head. Two days later, Robinson was gone from the company, quitting in what looked to some to be a fit of pique and bruised feelings and to others to be a statesmanlike gesture of self-sacrifice for the good of the company. Either way, he was destined to be remembered not simply as the man who had led American Express through its acquisition campaigns of the eighties but as a casualty of one of the roughest and ugliest board fights of recent times.

Choosing a chief executive is, of course, the most important task a corporation's directors can perform. And by that standard, American Express's luminary-filled board—which includes such high-profile figures as Beverly Sills, Henry Kissinger, and former U.S. ambassador to Great Britain Anne Armstrong—had failed almost unbelievably. Yet it was also clear that the struggle for control of American Express would have repercussions far beyond the company itself.

"This is the start of a feeding frenzy," says Joe Flom, the M&A lawyer at Skadden, Arps, Slate, Meagher & Flom who worked with Robinson as counsel to American Express throughout the affair. "Where this now ends, no one can say. But I have little doubt that the period ahead will be extremely rough on the heads of companies. Investors will be reacting to a shorter and shorter time frame for performance."

If so, that is only because chief executives have had things

30 NEW YORK/FEBRUARY 15, 1993

their own way for so long. Now the market is playing catch-up as shareholders put pressure on long-dozing boards to wake up and do their jobs. Recent weeks have seen one CEO after another either quit or be driven from office by these suddenly energized boards of underperforming companies. There's been the ouster of chairman Robert Stempel of General Motors, the forced resignation of IBM chairman John Akers, the dumping of Sunbeam-Oster chief executive Paul Kazarian, and the departure of Westinghouse Electric's chairman, Paul Lego.

On top of all this has come the spectacle of American Express—colored not just by the high-voltage cachet of its chairman and chief executive officer but by the visibility and “brand name” recognition

of many of its board members. The press played the struggle as a coup in the making, but a peek through the keyhole into the boardroom itself reveals something else: nineteen men and women in what amounted to a lopsided showdown. At one end of the room could be found the anti-Robinson forces, rallying around an outside director named Rawleigh Warner Jr., the retired chairman of Mobil Oil. At the other end of the room, a much larger—though seemingly lethargic—group of Robinson's own supporters.

SENILITY JOKES: RICHARD FURLAUD, THE NEW CHAIRMAN.

to begin losing his focus, and, like many another B-school-trained chief executive, he eventually fell victim to the buzzword concepts of “strategic thinking.” In the late seventies, media takeovers were all the rage, so American Express made overtures (strongly rebuffed) to McGraw-Hill and, reportedly, Time Inc. Later, cable TV became the “in” concept, so American Express began chasing that business too.

Finally, “financial supermarkets” became the hot ticket, so the company bought a Wall Street brokerage firm, Shearson Loeb Rhoades. Thereafter came another Wall Street firm—Lehman Brothers—and eventually E. F. Hutton & Company.

In this, American Express was no different from companies ranging from General Electric (which bought Kidder Peabody & Company) to Sears (which acquired Dean Witter). But financial supermarkets turned out to be a mirage for all concerned, and though American Express never suffered as much from these distractions as its critics now suggest, the company's revenue growth during the eighties was not matched by a commensurate increase in profitability.

With the market crash of October 1987, American Express's stock topped out at just over $40 a share and thereafter began a

On though he knew shareholders would be disappointed.

It was this struggle—within the board itself and not simply between the board and Robinson—that led to the leaks that Robinson was on his way out. And those leaks, in turn, created expectations on Wall Street that both the board and Robinson failed to appreciate. Result: nearly a week of collapsing stock prices that sent fears of shareholder lawsuits rippling through every board member—as well as causing Robinson, as he put it to a reporter, “to pull up stakes and get out of town.”

A messier departure than Robinson's from American Express would be hard to imagine—especially considering the image-conscious management style that had characterized his rule. The son of a rich Atlanta banker, Robinson had glided through Georgia Tech and the Harvard Business School, then headed for Wall Street, where he went to work in 1961—at the age of 26— at Morgan Guaranty Trust Company.

A RMED WITH SELF-DISCIPLINE, COURTLY MANNERS, AND the coiled-spring drive of a workaholic, Robinson had scarcely passed 30 before he was assistant to the chairman. After that came a brief stint at White Weld & Company; then it was on to American Express, where he soon won the admiration of company chairman Howard Clark. After seven and a half years, Robinson himself was American Express's chairman and CEO, elevated to the post by Clark upon his own retirement in 1977.

Unfortunately, having once landed the job, Robinson seemed

slide that by the end of 1990 had Wall Street visibly alarmed. By the start of 1992, American Express's own board was growing worried, and one of its members—patrician-looking Rawleigh Warner—began agitating to oust Robinson from his corner office.

On Wall Street, at least, the prospect was plainly welcome. “The best thing that could possibly happen to American Express would be for Jim Robinson to leave,” investor Mario Gabelli told me last March. “The stock would surge.”

By last September, two more board members—an Oklahoma oilman named Joseph H. Williams and a business executive named John Byrne—had signed on with Warner. Finally, at a meeting before a dinner for the board members at the St. Regis hotel, the situation boiled over as Warner, with his small but committed band of supporters allied behind him, arose to attack Robinson and call for his ouster.

In fact, though the Warner side was soon whispering to reporters that the St. Regis meeting was the opening shot in a drive to dump the boss, Robinson himself had long since made known his desire to step down and had told the board as long ago as 1989 that he planned to leave as soon as a successor was found. Unfortunately, the man Robinson had in mind at the time—his second in command at the company, Louis Gerstner Jr.—soon left for RJR Nabisco, and Robinson had to start looking for someone all over again.

The man he eventually settled on—Harvey Golub—had headed up the company's Minneapolis mutual-fund subsidiary, IDS Financial Services. But Golub, a former McKinsey & Company

Photograph by John S. Abbott.

FEBRUARY 15, 1995/NEW YORK 31

consultant with a loud voice and a fondness for in-your-face suspenders, had little experience in international affairs and in Robinson's view would need considerable grooming before he would be ready to assume command.

S
O IN 1991, ROBINSON BROUGHT HIM BACK TO NEW YORK to serve as his No. 2. But Golub had a fleck or two on him that apparently rankled Rawleigh Warner. For one thing, scarcely had Golub assumed the job as head of IDS Financial Services in Minneapolis when he began construction of a garish, $7-million home that boasted show-off features like a "pet-feeding center" and an indoor car wash. When Golub was brought back to New York, American Express got stuck with the house and has been unable to sell it.

Thus, although Golub had already been designated by Robinson as his heir apparent, Warner wanted nothing to do with either man. Yet so far as Robinson was concerned, choosing a successor meant choosing Golub—only not just yet, or at least not without Robinson's hovering presence, as if Robinson were a stage mother preparing her child for that first starring role.

In fact, when the board formally voted the next day to appoint a committee consisting of Robinson, Furlaud, and two others to search for possible successors, everyone—including Robinson—knew that the committee would wind up recommending Golub. Robinson says he felt the search for an outsider amounted to little more than going through the motions: “The idea was simply to get a list together in case I got hit by a truck.” Yet Warner could barely contain himself when he announced in front of the other board members (according to one present), “Do what you want, just don’t recommend Golub!” A clash was inevitable.

The man selected to head the committee was Furlaud, recently retired as president of Bristol-Myers Squibb. To help him in his search, the committee brought in a firm of headhunters, Heidruck & Struggles, Inc., and before anyone knew it, the firm had assembled a list of 400 potential candidates. But one by one, the names peeled away, either because the committee didn't like them or the individuals weren't available or they simply didn't want the job.

"I know of at least one person who was offered the job and turned it down flat,"

Robinson sit on the board of Furlaud's old company, Bristol-Myers Squibb—where Furlaud himself still sat as an outside director. Similarly, whenever Robinson turned up at a meeting of the prestigious Business Roundtable—of which he was a director—he was likely to encounter several familiar faces from the American Express board who were also Roundtable directors: Drew Lewis, Frank Popoff, and Joseph Williams.

Indeed, whenever Lewis held a board meeting at his own company—Union Pacific Corporation, of Bethlehem, Pennsylvania—sitting across the table from him was likely to be an American Express board member he'd almost certainly encountered elsewhere recently: Henry Kissinger.

As for Kissinger, whenever he attended a meeting at, say, the International Advisory Committee of Chase Manhattan Bank, he was likely to bump into none other than Furlaud, himself a committee member. In fact, if Kissinger didn't see Furlaud at Chase, he could assuredly look forward to catching up with him soon enough at, say, the Council On Foreign Relations, which included among its members not just Kissinger and Furlaud but Robinson and yet another American Express board member, Charles W. Duncan Jr.

Likewise, if Robinson wanted to get a message to one or the other of his two female board members—Anne Armstrong and Beverly Sills—before the next board meeting, he could always pass it along by way of Kissinger. That's because Kissinger sat with Sills on the board of Macy's, and with Armstrong at the Center for Strategic and International Studies.

The effect of all these interlocks was to develop a cozy sense of belonging to a kind of corporate in-crowd—an arrangement that no one who was already “in” would want to disrupt with something so unseemly as a vote to oust one of the insiders.

N
OR DID ROBINSON'S CAMPAIGN STOP WITH HIS OWN personal lobbying efforts. According to one Robinson confidant, the American Express chairman and CEO used lawyers and investment bankers from everywhere—including Felix Rohatyn, senior partner of the Wall Street investment firm Lazard Frères & Company, and James Wolfensohn of the highly regarded investment bank of the same name—to buttonhole board members. There were additional, but unconfirmed, reports—which the company officials and Robinson strongly de-

It dawned on board members that they m

says a former top executive of Shearson Lehman Brothers. "It was like the word was out—the job had TROUBLE written all over it."

Understandably enough, the search was

supposed to be conducted in secret. But by December, rumors began to reach print that American Express was in the midst of a CEO search that really amounted to a boardroom coup in the making. And just as Gabelli had predicted, no sooner did that happen than American Express's languishing stock perked up on Wall Street.

But Robinson had hardly stood idly by as this clique of outsiders schemed to drive him from office. Instead, he began a behind-the-scenes counterattack of lobbying the other board members to ensure his survival.

In a sense, Robinson had created American Express's board for just this emergency. Since every board member except Furlaud and Warner had been handpicked over the years by Robinson himself, there was no question as to where its allegiance lay; the American Express chairman had instant rapport with—and could count on the support of—virtually every director ringed around him at the table.

Indeed, the clubbiness of the arrangement extended far beyond the fiftieth-floor boardroom of American Express. Just as Furlaud sat on the board of American Express, so, too, did Rob-

nied—that Robinson had even hired private detectives to follow Rawleigh Warner around to see who he was talking to.

Yet little of this intrigue was known to the public, as the press scrambled instead to find out just which candidate the search committee's outside headhunters would ultimately come up with as a replacement for Robinson. The media scramble gave weight to the notion that the search for a successor amounted to a coup in the making, but it failed to take account of the fact that Robinson totally dominated the board and that his enemies amounted to only a handful of the nineteen directors.

"What everyone missed in this situation is that Jim's job was never really in jeopardy at all," says this same Robinson confidant, who conferred with him daily on the progress of the search.

On Monday, January 25, the board issued a statement announcing the results of that search. The public and Wall Street seemed amazed, but to boardroom insiders the announcement was what everyone had expected from the start: The company wouldn't be going "outside" for a new CEO but would be giving the job to Robinson's man, Harvey Golub.

There was, however, just one thing: Robinson's departure was going to come about more slowly than folks had been led to expect. In September, the board had voted unanimously to begin a search for a successor. But it now appeared that Robinson planned to be staying on at the company even after Golub took over. Specifically, not only would Robinson retain his title as

32 NEW YORK/FEBRUARY 15, 1993

HOMESTEAD: AMEX IS STUCK WITH GOLUB'S $7-MILLION MANSION.

chairman of the board of all of American Express, but he would also continue to exercise a great deal of day-to-day executive responsibility at the company.

How so? Frightened at the prospect of placing the entire company in Golub's hands alone—at least until he was a bit more seasoned—the board had decided to ask Robinson to stick around and assume the job of chairman of the company's most troubled operation, Shearson Lehman Brothers. The rationale? That the operation was crippled with such severe problems of runaway costs that only Robinson had the moxie to straighten the mess out.

There was, of course, more than a bit of irony in the situation, though once again the board seemed to sense none of it. For one thing, it was Robinson who had approved the reorganizational plan that had separated Shearson Lehman Brothers into two parallel operations—brokerage and investment banking—creating the overlaps, rivalries, and turf wars that had driven costs into orbit.

"It's incredible," the head of one of American Express's largest institutional shareholders said to me last week. "Think of just how out of touch that company's board really was! Here was all of Wall Street expecting Robinson to be tossed out on his ear, then suddenly here was the board of directors saying he wouldn't be going after all—and expecting investors to feel as if nothing had happened."

Golub himself got an earful on Thursday morning, when the company's investor-relations department invited a dozen of American Express's top institutional investors to a breakfast meeting with the new CEO to hear his plans for the future. All the irate Wall Streeters really wanted to hear was one good reason why they shouldn't think the whole reorganization was a ploy by Robinson to cling to power by using Golub as his foil.

Earlier in the week, a reporter had asked Golub who would be in charge of American Express, and Golub sounded eerily like Alexander Haig after the shooting of Ronald Reagan when he answered, "I'm the CEO, and I'll be running the company." Yet Wall Street hadn't bought the message; the money men at the meeting told him bluntly that they doubted he was in a position to assert control.

Nor did Robinson have much support inside the company itself. At one point during the week, he addressed a gathering of officials of Shearson Lehman Brothers, and, according to one source at the meeting, was stunned when one of Clark's top aides stalked out of the room muttering something about physically belting the boss. Robinson insisted to me last week that nothing of the sort ever happened and that his reception at the meeting was warm and appreciative.

Meanwhile, the board seemed on the verge of crumbling. Scarcely had the company unfurled Robinson's plan on Monday than Rawleigh Warner submitted his resignation and the two other anti-Robinson directors on the board—Byrne and Williams—announced they would not stand for reelection. Soon, rumors were flying that other directors were preparing to quit. The stated

ight be sued for the decline in the company stock.

Beyond that, by taking over day-to-day management of Shearson, Robinson was in effect demoting and shoving aside the very man he had installed to run the operation under the reorganized setup he had approved—Howard Clark Jr. And Clark—soft-spoken and unassertive—was, in fact, the son of the onetime American Express boss who had elevated Robinson to the top job in the company fifteen years earlier.

Clark junior was unavailable to comment on his ouster. But his father, Howard Clark Sr., was another story. Though retired from the company and not a board member, Clark senior had traditionally attended board meetings as an adviser, and he had been working with Rawleigh Warner all autumn to oust Robinson. Thus, tracked down to his home in Florida, Clark senior allowed that the demotion of his son was an outrage. "I don't like how he came out at all," said Clark senior, adding that in his opinion the board had gone along with Robinson solely because the members had "fallen in love with their positions as directors."

But Wall Street had little interest in the fate of young Clark—who was paid more than $2 million in salary and bonuses in 1991, the latest year for which figures are publicly available. Instead, the money men were far more agitated at the news Robinson wouldn't be leaving. In fact, no sooner was the word out than American Express's stock tanked, causing the market value of the company to decline more than $800 million in the next two trading sessions.

reason: fear that lawsuits were being prepared by big institutional investors against any and all directors who had backed Robinson's scheme and sent the stock into a nosedive.

ROBINSON, AS WELL, SEEMED SHOCKED BY THE REACTION. Having assiduously cultivated his board colleagues for months and indeed years, he had relegated relations with shareholders to a matter of secondary concern, only to see the issue now erupt in his face. Seemingly appalled at the discovery of just how disliked he apparently was on Wall Street, he began meeting on Friday morning with advisers in his office. Among them was Joe Flom, his counselor from Skadden, Arps.

"He was up and down," recalled Flom later. "But you could see that he was making up his mind to leave. He'd spent most of his professional life in American Express, and the last thing he wanted to do was hurt the company. Basically, he felt that staying on any longer could do more harm than good, and he wasn't going to take the chance."

Shortly thereafter, Robinson met with Golub and told him of his decision to leave. Then he telephoned Furlaud and repeated it. Then he went home and crawled into bed with what his aides said was the first bout of the flu he'd had in close to twenty years, leaving Furlaud, Golub, and the other board members to try to straighten out the mess.

Photograph by George Heinrich.

FEBRUARY 15, 1993/NEW YORK

33

and any delay might simply allow
and the religious right more time
forces.

Experience has shown that the en-
the military changes most posi-
sus forceful leadership. That can
be the very top. This is a chance for
how the anti-war student from
spine to be Commander in Chief.

are a brutal instrument of Serb-
cleansing. Serbian forces sweep
lages across Bosnia, snatch inno-
from their homes and haul them
camps — barns, factories, ware-
ll stadiums.

have been confirmed at a number of
rigence estimates that 3,000 Mus-
ered last spring at the Luka-Brko
reported that many bodies were
bian guards had stripped their
led gold fillings from their teeth.
Muslims is illusory, guaranteeing
ds of detainees have been re-
mysteriously disappeared.

to verify the number of camps and
ters often arrive at suspect sites
the detainees have been moved. But
has compiled a list of 170 camps,
run, in Bosnia and across the
and Croatia.

Notification by the Bush Adminis-
rative spared lives. It certainly would
pressure for military intervention,
bush was trying to avoid.

ing prompt U.N. action to obtain
less to the camps and protect the
nton can redress that wrong. As
the eve of his inauguration, "...
annot stand."

1

UP Legal Defense Fund, to assem-
ment and carry the attack on other
itions, both before and after Con-
ved to extend equality to public
loting. Then he personally deseg-
me Court itself.

hall never lost that innate shrewd-
easingly in dissent, he never tired
is colleagues the individual's per-
cases pitting people against the

In a Fourth Amendment search
a few years ago, he saw clearly
that could not see, that an intercity
is not legally free of coercion when
board and asked to search his

dissent before retiring in 1991, he
ming list of precedents the newer
oised to overrule. Yet he lived to
use to overturn its own embattled
cision. And he may have been
low Justices O'Connor and Antho-
who often voted the other way,

from a United States company or of
having to go through the demanding
and sometimes tedious labor certifi-
cation process.

It would seem that not only will
certain United States companies be

NYT

Kissinger Averted a Distortion of History

To the Editor:

"Authoritative Answers on M.I.A.'s," your Jan. 14 editorial on the Senate committee report on the fate of Americans missing since the Vietnam War, states that allowing Henry Kissinger's lawyer to review and comment on an early draft of the report "will damage the report's credibility." To the contrary, the decision of the committee chairman, Senator John Kerry, to allow me to review and comment on the portion of the draft describing Dr. Kissinger's negotiation of the 1973 Paris Peace Accords resulted in a substantially more accurate and balanced final report and increased its credibility.

The draft we were allowed to re-
view was an early staff draft that had
not yet been edited by the commit-
tee's senior staff or any senator. As is
often true of early drafts, it contained
factual errors and omissions and
drew highly speculative and unfound-
ed conclusions about events that oc-
curred 20 years ago. When we called
these problems to the attention of
staff and committee members, they
agreed with a number of our objec-
tions and made revisions. The final
report was adopted by the committee
unanimously.

You also state that more important
public issues than Dr. Kissinger's
reputation are at stake. That is true,
but when the official conduct of any

able to hire these talented scientists
with lower salaries, but they will also
be able to bring them to the United
States as immigrants on an expedited
basis.

DAVID J. HART
Miami, Jan. 11, 1993

former Secretary of State is called
into question in a draft of an official
report, it is natural for him to take all
reasonable steps to defend his reputa-
tion. That is all Dr. Kissinger and his
counsel have done. It is what I believe
you would do if your professional
reputation were attacked.

Your editorial on the signing of the
Paris Peace Accords in 1973 called
them "a diplomatic triumph." The
draft we saw would have distorted
that appraisal, based on Monday-
morning quarterbacking 20 years af-
ter the game.

LLOYD N. CUTLER
Washington, Jan. 14, 1993

Distinguished Others

To the Editor:

Your Jan. 5 graphic on the 103d
Congress identifies senators and rep-
resentatives of Asian-Pacific ances-
try under "Race and Ethnicity" as
"other." Japanese-Americans are
roud of Senators Daniel Inouye,
Daniel Akaka and Representatives
Norman Mineta, Robert Matsui and
Patsy Mink. We welcome to Congress
Jay Kim and the other unidentified
person of color, Ben Night Horse
Campbell.

LILLIAN C. KIMURA

National President

Japanese American Citizens League
Bloomfield, N.J., Jan. 8, 1993

Passing off Mr. Cohen's gross
statements as truth serves to
into the kind of vile stereotypes un
by "family values" bigots to deny
people their basic human rights to
a full place in society.

We are indeed a family, and
hope our children may grow up in
a world free not only from AIDS
also from the distorted views gay
straight alike must struggle to ov-
come.

BOB BING, TIM LA
New York, Jan. 12, 1993

Clinton Should Proceed

To the Editor:

In "Gays in the Military: Can
Reagan's Ban" (Op-Ed, Jan. 11)
James T. Bush appears to draw
distinction between declaring on
homosexuality and engaging in hor-
sexual acts. Such a distinction p
motes a double standard between
erosexuality and homosexuality.

Our society permits, even en-
ages heterosexuals to participate
sexual activity when both parties
consenting adults. To allow mem-
bers of the armed services to state
are homosexual without fear of di-
plinary action, while continuing
prohibit them from exercising the
sexuality by engaging in consen-
homosexual activity, is hypocritical.

President Clinton should stand
hind his campaign promise to sign
executive order overturning the 1
ban on gays in the armed serv-
Only such a high-profile act will se
the message that discrimination
no place in the Armed Forces.
Clinton's order should also revise
institutional regulations to provide eq
treatment for all servicemen to
women, regardless of sexual ori-
tion.

WILLIAM ANDREW LAUREN
San Francisco, Jan. 14, 1993

No Mutant Tomatoes
For Campbell Soup

To the Editor:

In "Tomato Gene Is Submitted for
Approval" (Business Day, Jan 6),
which reports that Calgene Inc. is
seeking Food and Drug Administra-
tion approval for its "FlavrSavr" to-
mato, you erroneously state that the
Campbell Soup Company in pro-
cessed forms."

Campbell does not market any
bioengineered products and has no
plans to do so. Further, we do not use
any bioengineered ingredients in any
of our products and have no plans to
do so. Before any such use would even
be contemplated, we would have to
be assured that such use has full govern-
mental approval and strong consum-
er acceptance.

JAMES H. MORAN

Group Director-Public Relations
Campbell Soup Company
Camden, N.J. Jan. 8, 1993

The Times welcomes letters from
readers. Letters must include the

Electromagnetism Is Effective for Fractures

To the Editor:

"U.S. Opens the Door Just a Crack
to Alternative Forms of Medicine"
(front page, Jan. 10) raises a serious
question about National Institutes of
Health criteria for inclusion in the
alternative medicine category. I do
not take issue with the need to seek
new and less costly methods for treat-
ing disease.

However, to include electromagne-
tism to heal ununited fractures in
this category suggests strongly that Joe
Jacobs, director of the Office of Alter-

native Medicine, and his staff ha
d not done their homework.

The therapeutic value of select
electromagnetic fields is recogniz-
as a mainstream method regular
used by more than half of the boar
certified orthopedic surgeons in
United States. The method has be
approved by the Food and Drug A
ministration since 1979.

In the case of electromagne-
tic fields, unlike most of the other me-
ods lumped under "alternative," be-
ic mechanisms of action have be
defined at the cellular level and a
appropriate to correct the patholo-
cal states for which they are used.

On the clinical level, elec-
netic fields have been proved high
effective by double-blind studies,
criterion not met by any of the oth-
ther therapeutic methods included in
the list considered at the N.I.H.

By any definition commonly ac-
cepted by mainstream medi-
electromagnetic fields cannot
called alternative. They are also s
or and less costly than curical me-

The New York Times
Company

229 West 43d St., N.Y. 10036

ARTHUR OCHS SULZBERGER, Chairman
and Chief Executive Officer

WALTER E. MATTSON, Vice Chairman
LANCE R. PRIMIS, President

B7

By STEVEN A. HOLMES

Special to The New York Times

Memo From Nixon

["6 VM", "DROG", "1993. március 6–7.", "# Gyorsjelentés\n## Drogügyben forradalmat", "Közrend elleni bűncselekmény nálunk\na kábitóser-fogyasztás, s még a szakember sem tesz\ntúlságosan nagy különbséget a másutt viszonylag\nártatlannak tartott marihuána és a Nyugaton már évek\nóta divátos „crack” között. Ugyanaz a bizonytalankodás\na törvényekben, az egészségügyben és az iskolásokat\njogosan félőt pedagógusokban. Munkatársaink minden\nesetre több oldalról igyekeztek körüljárni az igencsak\nsokoldalúvá vált hazai droghelyzetet.", "A kábitószereksekre kö-\nrében hírhedt 282. pa-\nragrafus szerint a köz-\nrend elleni bűncsele-\nmények csoportján be-\nlül közegészségügy elle-\nni bűncselekmények minősül, ha:", "— valaki a hatósági\nelőírások megszegése-\nvel kóros élvezetre al-\nkalmas kábitószert kéz-\nsít, megszerez, tart,\nforgalmba hoz, onnan\nkiviszag vagy az ország\nterületén átvisz, bűn-\ntettet követ el, és egytől\nöt évig terjedő szabad-", "ságszéssel bünteten-\ndő.", "Ez a paragrafus nem\ntesz különbséget a ke-\nkeskedő és a fogyasztó\nközött. A kereskedő\nszámára — aki ki- ló\nheiron elpasszolásá-\nval egész életében nyu-\ngodtan élet — őt cy\nnem minősül visszatár-\ntó érőnek. A drogos\nszámára sem, aki egy\nátszenvedett nap után\nvégre hozzájutathat\nadaghoz. Annak pedig,\naki először próbálja ki\negy bulin, s zippant", "mélyet a marihuánás\ncigarettából, a legrit-\nkább esetben jut eszébe\ntörvény, tiltás. Néhány\nhételt ezelőtt jelent meg\na budapesti iskolák,\naluljárók és kapualjak\nfalán egy drámai hangú\nplakát, amely kábitó-\nszerrel átitatott matri-\ncák és bélvegek vesze-\ndelmére hívta föl a fi-\ngyelmet, mégpedig a\nNew York-i rendőrség\nnevében.", "„Szerintem a helyzet\nnem ennyire vészes. Az\nelső jelek azonban min-", "dig figyelmeztetőek —\nveli dr. István Éva, a\nSOTE adjunktusa. —\n„90-ben fél évet töltőt-\ntem az Egyesült Álla-\nmokban. Drogambulan-\nciákon drogos tinédáz-\nrek kezelését tanulmá-\nnyoztam. A hazatérés\ndőbbenetes volt. Pá-\ncienseim, akik koráb-\nban csak gyógyszereken\nétek, ekkorra már\nmindannyian kipróbál-\ntak vállamilyen kemé-\nnyebb szerz. Fél év alatt\njelent meg a hazai pia-\nkocon az LSD és a ko-\nkain. Abban az évben\náttörés volt a magyar\ndropgiacon. A marihu-\nánának, az LSD-nek és\nak a amphetaminik ki-\nalakult vevőkore van. A\nkereskedőknek még\nnem érdekkük, hogy\nmegtalálják a gyereke-\nket. Ez majd a követke-\nző lépések lesz.", "ményiség is baromira", "működnek. Ez a szer\nakár az első alkalom\nután is okozhat psi-\nchés tünetekot.", "A hasis szintén erő-\nteljes, durva hatású. A\nmarihuánával más a\nhelyzet. Ha valaki sta-\nbil, akkor azt is megen-\nhedgett magának, hogy\nidőnként elszivjon egy\nmarihuánás cigaretett.", "Hárman ülünk a fél-\nhomályos szobában: két\nfiú és Dóra, a legfiata-\nlabb. Ó eresztette le a\nredőnyöket. Mellette\nülő, zöldes sünihajú ba-\nrátját zavarta a nap-\nfény. A srác komótosan\ntisztogatja sötét Len-\nnon-szemüvegét. Álla-\nmig gondozásban nőtt\nföl, őt éve „szabadult”,\nazóta drogozik. Ciga-\nrettával nem kínálha-\ntom öket, mindhármán\nfüstölnek. Dóra szóta-\nnel efogad egy rágót. A\nszemélyesebb kerdések\nelől elázárózik. Meg-\ngyült már a baja a\nrendőrséggel receptha-", "misítás miatt. Fél, hogy\nfölismérik. Annyit meg-\ntudok, hogy gyógysze-\nreket szed, de kipróbált\nkemény drogokat, he-\nroint, morfiumot is.\nNem volt tőlük eragrad-\ntatva: ...tul sok mel-\nlékhatásuk van, körül-\nményesebb és drágább\nhozzájutni a napi adag-\nhoz. Még a »korrekt«\nmennyiség is baromira", "közel van a halálos dö-\nzishoz. A gyógyszereket\nismerem, megbízom\nbennük és olcsó meg\ntudom szerezni...\" A\nhosszú hajú, fekete Dó-\nra nem sokkal szülei\nbotrányokban bővelke-\nd válasája után próbálja\nki először a kábitószert.\nA társaság befogadta a\nmagányos újoncot —\nkésőn kapott észbe.", "HOSSZÚ FORRÓ NYÁR, A TENSI ÖNRE VÁR!", "CIPRUS", "EVA HOTEL — LARNACA", "2 csillagos szálloda Larnaca központjától kb. 8 km-re.\n14 900 Ft-tól", "BEAU RIVAGE HOTEL — LARNACA", "3 csillagos tengerparti szálloda Larnaca\nközpontjától 8 km-re.\n27 900 Ft-tól", "ATLANTICA HOTEL — LIMASSOL", "3 csillagos szálloda Limassol turistaközpontjában,\negy csöndes utcaban, a tengerparttól 100 m-re.\n27 900 Ft-tól", "MARATHON BEACH HOTEL — LIMASSOL", "Modern, ez évben felújított, 4 csillagos tengerparti\nszálloda Limassol idegenforgalmi központjában.\n31 900 Ft-tól", "ANONYMUS BEACH HOTEL — AYIA NAPA", "Az idén felújított 3 csillagos szálloda\na kristálytsizva víz és vakító febér homokos\n„Sandy Bay” öbölneł.\n34 900 Ft-tól", "ADAMS BEACH HOTEL — AYIA NAPA", "Ayia Napa egyik legszebb szállódája ez\na 4 csillagos, a elegáns hotel, közvetlenül\naz aranyhomokos „Nissi” öböl partján.\n47 900 Ft-tól", "Repülőjegy Budapest-Larnaca-Budapest 24 000 Ft", "Utazás: 1993. május 16-tól folyamatosan, hetente a TENSI Tours különrepülőgépével. Ciprusi áraink a szállást és a reggelit tartalmaznak.", "TÖRÖK RIVIÉRA", "HOTEL PRELUDE — KUSADASI", "Idén megnylt 4 csillagos szálloda Kusadasi\nközpontjától 5 km-re,\nkövetlenül a tergerpart\n29 900 Ft-tól", "PINE BAY HOLIDAY RESORT — KUSADASI", "Luxusigényeket is kielégítő üdülőklub Kusadasi\nközpontjától 6 km-re, követlenül\naz Égei-tenger partján.\n35 900 Ft-tól", "IMBAT HOTEL — KUSADASI", "5 csillagos, luxusszálloda, a homokos parttú\n„Holgyek strandja” mellett, Kusadasi\nidegenforgalmi központjában.\n46 300 Ft-tól", "Repülőjegy: Budapest-Izmir\n(Kusadasiítól 60 km) - Budapest: 18 000 Ft", "Utazás: 1993. június 16-tól folyamatosan,\nhetente a TENSI Tours különrepülőgépével.", "PALMARIVA", "HOLIDAY RESORT — ANTALYA", "Luxuskivitelek üdülőklub a népszerű antalyai\ntengerparton, Kemer központjában.\n39 900 Ft-tól", "Repülőjegy: Budapest-Antalya-Budapest:\n19 000 Ft", "Utazás: június középítő folyamatosan, hetente,\na TENSI Tours különrepülőgépével.", "A török Riviérára vonatkozó részvételi díjak\nszállást és félpanziós ellátást tartalmaznak.", "A CIPRUSI ÉS TÖRÖK ÜDLŐTÚRÁKNÁL 5000 FT KEDVEZMÉNY\nA MÁRCIUS 31-IG TELJES TÜRAÁRAT IRODÁNKBAN BEFIZETŐT UTASAINKNA!", "RENDKÍVÜLI\nAJÁNLATUNK:", "CIPRUS", "május 10–16.", "Pihenés a szerelem szigetén.", "Utazás: repülőgéppel.", "Elhelyezés: 3 csillagos szállodában,", "félpanziós ellátással.", "Részvételi díj: 47 000 Ft.", "TAVASZI SZÜNET\nEGYIPTOMBAN", "KAIRÓ—ALEXANDRIA", "április 5–10.", "Piramisok, szfinx, katakbák,  \nzigai hang - és fényjátékok.", "Utazás: repülőgéppel.", "Elhelyezés: 3 csillagos szállodában,\nfélpanziós ellátással.", "Részvételi díj: 49 900 Ft/fő", "KAIRÓ—LUXOR—ASSZUÁN", "április 2–10.", "Piramisok, szfinx, királyok völgye, karnaki és\nluxori templomok, Phiala templom.", "Utazás: repülőgéppel és vonattal.", "Elhelyezés: 3 csillagos szállodában,\nfélpanziós ellátással.", "Részvételi díj: 83 900 Ft/fő", "A TAVASZI HÍRNÖKEI", "GÖRÖG SZIGETEK/CIPRUS", "május 3–16.", "Egyhetes luxus hajótul az Égei-tenger", "gyöngyszemei körül", "(Rhodos, Patmos, Mykonos, Santorini, Kréta

BUSINESS

LOUIS PSIHOYOS—MATRIX

The new guard: John Smale (left) is now running GM's board and CEO Jack Smith answers to him. Former Johnson & Johnson chief James Burke (center) is leading the charge to revamp management at IBM and Robert E. Denham, chairman of Salomon Inc., pushes directors to be 'self-critical.'

SHONNA VALESKA

on Sears, have been agitating for change.

Some companies didn't need such prod-
ding. Dayton Hudson, which runs stores
like Marshall Field & Co., is in some ways
a model; it has term limits for directors and
meets regularly without the CEO, to raise
hard questions in private. But even Day-
ton Hudson's innovations aren't enough
for reformers. The board of the '90s, they
say, should do more:

**Tell 'em who's in charge.**
The CEO runs the company. But the CEO should answer to directors, and directors to shareholders. This has been more theory than reality because many CEOs recruit good friends. One answer is to separate the jobs of CEO and chairman, and make the latter an outside director.

**Crash the old boys' club.**
The ideal director is "not a brother, not a lawyer who could get business from the company," says Hansen. Companies have always had both "inside" directors—including the CEO—and "outside," or so-called independent directors. But they aren't always so independent. Director Henry Kissinger, for example, has served on at least one board of a company that has also awarded his company lucrative consulting contracts. And many directors serve on each other's boards. Such cozy relationships get much of the blame for boards' passivity.

**Ask more of your board.** Headhunter Paul McKinnis says that companies used to ask questions like, "Is he free the second Tuesday of the month?" Now he gets more specific requests like, "We want a CEO with real-estate experience, who competes in global markets and has made radical changes in manufacturing."

Even with careful recruiting, tenure is
an issue. A board position shouldn't be "a
sinecure for someone who's 80 years old

and dozes through meetings, even if he
doesn't snore," says consultant David
Swinford. Older directors may not under-
stand the latest in technology or customer
demands, say consultants. One answer:
term limits. Dayton Hudson requires di-
rectors to retire after 15 years, or when
they reach 65. Byrne, the former AmEx
director, recommends a seven-year limit.

RANDY BAUER—RON GALELLA, GERARDO SOMOZA—OUTLINE, MARTIN KEENE—PRESS ASSOCIATION

The old guard: Directors like Sills (left) and Reagan are often chosen for their marquee value. At one company where Kissinger is a director, his company has been given lucrative contracts.

**Skip the stargazing.** Companies that indulge in "what Hollywood calls 'stunt casting,'" says activist Nell Minow, get more marquee value than expertise. Critics howled, for example, when Revlon chief Ronald Perelman named Nancy Reagan to its board, even though the company is private. AmEx's Robinson once told Dale Hanson, the head of Calpers, the California pension funds, that he had to have a big-name board "because we're a world-class company." Hanson retorted, "What we want is a hardworking board." Not everyone agrees on who is a merely decorative director. Diva Beverly Sills, now on the boards of AmEx and R.H. Macy, among others, did get management experience running the New York City Opera. But critics say that isn't enough.

**More women and minority directors.** Traditionally, women and minorities were big names or came from nonprofit organizations, universities and government. Even

if they could contribute, they were often
treated as tokens. But now more women
and minorities have had real management
opportunities and are able to offer more.

**Pay for performance.** Directors in the biggest companies fetched an average of $38,000 in 1992, not including travel expenses or stock grants, says Spencer Stu-art, a consulting firm. They may get even

more, as companies require them to attend more meetings and serve on fewer boards. Also popular is re-warding them with more stock to inspire responsible actions. Sears now requires directors to hold at least 1,000 shares. But Salomon Inc. chairman Robert E. Denham says the number of shares isn't what counts; the stake has to make a "meaningful" difference to the director's net worth.

Many experts believe that change is accelerating. "There was a time when it wasn't considered nice to discuss another board and its failings," says Millstein. These days peer pressure works in reverse. If you aren't tough, you get a black eye. But some are less optimistic. There's plenty of resistance; the Business Roundtable, a CEO group, objects to some of the new Securities and Exchange Commission rules giving shareholders more power. Even those who believe in change aren't crazy about taking action. Take John Byrne, the former AmEx director who calls himself a "convert" to the new wave in. What about his own company, Fund America? Byrne admits that he is both chairman and CEO and has five directors, "all of whom are good friends." Will he follow his own advice? "No," says Byrne. "I like it just the way it is."

JOLIE SOLOMON with ANNE UNDERWOOD and ANNETTA MILLER in New York, KAREN SPRINGEN in Chicago, CAROLYN FRIDAY in Boston and FRANK WASHINGTON in Detroit

NEWSWEEK : MARCH 1, 1993

Four-Bark Hotels

WHEN MANHATTAN'S DOG-
owing elite leaves town,
it inevitably faces a
woofer of a crisis: where
to leave precious Spot.
Joni Evans, for one,
sends terrier T.K. to cozy Paws Inn,
where he frolics with Messalina,
Michael (New York magazine)

scene

Gross's fashion-
able white terrier.

Meanwhile, uptown at the
Manhattan Pet Hotel, Chuck
Scarborough's Burmese, Farrah,
parties with model Scott Benoit's
boxer, Tyson. (One room away,

Regis Philbin's cats are toying with
Diane Keaton's). For kennelphobic
canines, Pet Get-Away sends a fully
bonded walker to your house—not
even Jerry Zipkin can match that.
Petscorts will even stay the night.
Come daybreak, only the doorman
will know.

But for accessories queen Marcia
Sherrill, leaving her Boston terrier
Dixie Belle behind is out of the
question: "Oh, those eyes!" she
moans. Apparently, Valentino knows
them well: when it comes to his
pugs—Oliver, Maggie, Tobia, and
Rupert—he won't leave home

without them.

Of course, not everyone needs an
entourage. Just ask Marvin Ham-
lisch, whose hectic life prompted
him to give up Phoebe, his Maltese.
"It was the best thing for her," he
sighs. "All that traveling was
madness." Perhaps he should have
checked into the Hotel Pierre,
where doggy amenities include
room service, spa cuisine, and
personally inscribed biscuits. Or he
could have packed Phoebe off to
the Preppy Pup Country Club in
Summit, New Jersey, which boasts a
masseur, swimming pool, and

12 AVENUE / JANUARY 1993

The
A
List

A Rust Read

Pampered pooches prefer the Pierre, above. When traveling, agent Lionel Larner, top right, indulges Wallis at the Preppy Pup Country Club, Henry Kissinger, top left, sends Amelia to his Connecticut home, and designer Marcia Sherrill takes Dixie Belle on the road.

shuffleboard—and Charlie (Good Morning America) Gibson’s cairn terrier, Dexter, as a member. Reports one fan, “Last summer I couldn’t get away, so I splurged on my dogs with a two-week vacation. Oh, they came back so relaxed.”
—*Justin Spring*

Paws Inn, 370 W. 35th St.;
Manhattan Pet Hotel, 312 E. 95th St.;
Pet Get-Away, Third Ave. at 91st St.;
Hotel Pierre, Fifth Ave. at 61st St.;
Preppy Pup Country Club, 38 Morris
Turnpike, Summit, NJ.

THE SCENE: AN OREGON commune, 1972. Some children are playing Indians, painting themselves with charred wood. Their parents join in, whooping and screaming, and the kids, *read* mortified, wash their paint off in the creek. A

failed social experiment? Not exactly, but Marina Rust's favorite scene from her first novel *Gatherings* (February, Simon & Schuster), is based on a similar experience. "It just didn't work," she says of the commune her mother, great-granddaughter of department-store magnate Marshall Field, started in 1969. Which may explain Rust's eventual and problematic return to the trust-fund fold. "My cousins' table manners were better than mine. They were older and they knew what was going on and I didn't," she confides in her cozy East 70s pied-à-terre. *Gatherings* draws heavily on Rust's family history for its tales of wealth and rebellion, which could be why it took ICM superagent Binky Urban (who signed Rust and Donna Tartt the same week) only three days to sell the book. Despite warm praise from Bret Easton Ellis and Pat Conroy, *Gatherings* might not be the Field family's favorite bedtime story.

—Deborah Treisman

KEVYN MAJOR (TOP RIGHT)

AVENUE/JANUARY 1993 13