Friday, September 25, 2009

Salt Lake Tribune 'Clarifies' Patrick Byrne's Bigotry


Byrne: Feeling the pressure

There's a "clarification" tonight on the website of the Salt Lake Tribune, at the top of this article in the Trib on Overstock.com's latest SEC investigation. I understand it's appearing in the print edition of the Trib tomorrow morning.

The clarification was prompted by a singularly repulsive glimpse we have into the bigot lurking below CEO Patrick Byrne's carefully coiffed and media-trained visage: his use of a Yiddish obscenity in referring to myself and white-collar crime fighter Sam Antar.

If you have any doubt that his "goniff" jibe is anti-Semitic, imagine for a moment if he referred to an Italian-American as a "Mafiosi" or to an African-American as a "Mau-Mau" or something like that.

In any event, this is all diversion, on the same gutter level as his "Giving Goldman traders blowjobs didn't work out?" taunt in a famous email to Bethany McLean. Yes, he is a misogynist as well as a racist, but that's beside the point. Byrne gives vent to his Inner Bigot when he is scared.

He's scared because he has has been using accounting tricks to make his quarterly numbers look better than they are, and he knows it, and so does the SEC.

Byrne can put on white robes and burn crosses in front of the Salt Lake Jewish Center, and it won't change that one bit.

A reader reminds me that Byrne's errand boy, a nauseating creep named Judd Bagley (right) who is on his personal payroll, used an ethnic slur -- "curry hole"-- in a message board posting a while back, in a sneering reference to my Indian-born wife.

For those unfamiliar with the terminology used by bigots like Bagley, "curry hole" is a racist term for an Indian's mouth. Definitely a careless use of an ethnic slur, as I'm not of Indian descent. Bagley needs to go back to his boss to be taught the proper use of ethnic slurs.

And of course there are the army of lowlifes who tag along, like the former penny stock broker who used to send me anti-Semitic emails, described here.

Still other readers remind me of his financial support for and decades-long friendship with a far-right militia leader named Bo Gritz, and his obsession with the Israeli Mafia and other Jewish subjects that some found anti-Semitic.

But no matter. This guy's prejudices, and the bigotry of his employees and his followers, are interesting, but not that important in the general scheme of things--unless the public looks beyond the p.r. at the character of the person running this company, and the passivity of its captive board of directors.

In both this article and a Deseret News profile, Byrne's excuses are given ample space. The latter summarized them as follows:
Byrne doesn't think Antar should get his hopes up as the restatements involve a trio of bookkeeping mistakes that when added and subtracted together decrease the company's bottom line by a mere $2 million against a total of $5 billion that was originally reported.
Byrne is obscuring the issue. All accounting errors cancel out over time (any forensic accountant can tell you about the double down effect-–you have to commit twice the fraud to maintain the fraud). It’s the timing of the accounting errors and their impact of quarterly results that counts – the "cookie jar reserve" that Sam has described in his blog. That's what has impacted the bottom line in several quarters.

For example, Overstock used smoke and mirrors to turn a fourth quarter 2008 loss into its "first quarterly profit in sixteen quarters." Didn't happen. Byrne's trying to portray this deliberate chicanery as "carelessness." Except that it was totally deliberate. Byrne has been on notice about these GAAP violations all along.

I now understand why lawyers counsel CEOs to shut up about ongoing investigations. Byrne has materially misrepresented the issues involved. If the SEC is serious about its investigation, which has yet to be demonstrated, it will explore public statements such as this.

Neither article expended the couple of sentences needed to go into the bottom line impact of Byrne's book-cooking, and Utah readers are poorer for it.

© 2009 Gary Weiss. All rights reserved.

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