Friday, December 22, 2006

'I Would Have Loved to Work For You'

Former Crazy Eddie chief financial officer, convicted fraudster Sam E. Antar, originally attempted to post this as a comment to a previous item but was cut off by the Haloscan system.

With his permission I've posted it in full below:

"Dear Patrick Byrne:

As an ex-felon and admitted fraudster, I really have to admire you and the way you handle yourself. Being that I feel a special bond with you because you remind me of my youth. I hope you can take some of my advice as a person who has “been there, done that.”

About you as a CEO, I would advise you that your job should be focused on the underlying business and not the stock price.

In short I would summarize my point from someone who tried to teach me but I was too stupid to follow.

He said to me, “It’s all about the business stupid, and not the stock price.”

If you believe as an educated man you are that markets are efficient and rational as many high esteemed scholars say it is, than the stock price will ultimately follow the fundamentals of your business.

I know Pat (if I may call you that because I feel a close kinship with you) those evil short sellers, negative journalists, and other analysts are distorting the market’s perception of you and your company for their own evil ends.

Well, you must fight back.

Your choice of Judd Bagley as the Director of Social Media for is a wise one. According to Gary Weiss in his blog he quotes Judd as saying:

“I do PR mostly. I’m especially good at strategic messaging.”

You need a guy like this as Gary Weiss said who uses “strategic messaging” meaning “code to embarrass the opposition in the press.”

It is especially thoughtful that he does not post comments in his real name but uses “writerjudd” as his internet handle. May I suggest that you employ an army of anonymous handles to put your spin across on the blogs?

I have found that an effective tool as a criminal is that a strong offense is the best defense. When you cannot respond to the substance of someone’s criticism it is best to attack their intentions even if you have to create some theory. American’s love conspiracy theories anyway. It is a great way to deflect criticism about you and to change the focus of the debate. You are artful at that.

Find some issue like naked short sellers and blame them. Take a seeming legitimate tangential issue and blame it for your perceived low stock price. We both know that the press loves negative news. Continue blaming them as self interested journalists trying to sell copy.

Another thing you are correctly doing is that you have taken steps to increase your stature in the eyes of the public. As a criminal myself I always tried to build walls of integrity around me by showing my interest in good causes. It makes your attacks on others appear more legitimate. I admire your work on education issues.

As a criminal I understood how to exploit the gratitude of others. The recipients of your largess make a great support group for you. They will defend you to the bitter end. Many such persons are great sources of helpful letters to a sentencing Judge should you need it at a future date.

An important item is that you must appear to be a “stand up guy.” Continue offering apologies for your company’s recent weak performance. At the same time you must continue your attack on the skeptics through your surrogates to show you have a large base of support.

Another area that I admire you and your company is its compensation and selection of members for your so-called independent Audit Committee. It’s a great move to have your buddy Gordon Macklin on that important committee. As a criminal I learned that an effective tool is to keep your friends close and your enemies closer. Is he a real friend or does Gordon just think he is your friend?

Another great thing is that you award stock options to Audit Committee members. It is a completely legitimate way to defeat their professional skepticism and objectivity and align their interests in a high stock price and aggressive accounting.

Do not worry Pat, no one will question your great credentials if you follow the herd as other companies have done in your compensation and selection of Audit Committee members. I like how you use people who majored in economics rather than people with educational backgrounds in accounting and fraud to be on the Audit Committee. They have great resumes but at the same time do not have a real clue about fraud. After all look at the great work you have done in education. You are beyond reproach in many people’s eyes.

Your recent successful placement of about $40 million in stock with some very astute institutional investors shows the great stature you have built for yourself. I can tell you from my own experience that they are not a smart bunch anyway. My cousin Eddie would tell me that “people live on hope” and therefore it was our duty to feed such hope with spin and lies. You are just as good as Eddie in getting the masses to drink “Kool-Aid.”

One constructive criticism I have for you if I may. When the spinning stops working it may be time to shut up. You don’t want to be accused of making false statements and manipulating your company’s stock price. Remember, everything you say will be used against you if those self serving ambitious prosecutors decide one day to go after you.

It is best to have them on your side as I said earlier “keep your friends close and your enemies closer.” Give them conspiracy theories to investigate. Let them investigate your enemies and not you. You are artful at that.

I wish you were around years ago. I would have loved to have worked for you instead of my cousin Eddie.

One last thing, Pat, do you stay up late at night like me. Try not to let the guilt get to you. It’s not worth losing sleep over. I learned that losing sleep does not solve anything. However, such advice about guilt and sleeping is easier said than done.

My hopes for your continued success,

Sam E. Antar (former Crazy Eddie CFO & ex-felon)"

This is a terrific letter, but I have one quibble. Based on my lengthy experience with people like him, I strongly doubt that Patrick Byrne feels guilt or remorse about any of his vile behavior.

Bagley later confessed to running's smear site. See this subsequent post.

© 2006 Gary Weiss. All rights reserved.


Wall Street Versus America was published by Penguin USA on April 6.
Click here for its listing and here for more information on the book, from my web site.

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