Flamboyant Press Baron
TO an American, the story of a young East European immigrant who flees to the West to escape the Nazis, becomes a hero during World War II, founds a publishing empire, and serves several terms in government, would be an exciting but typical story - the American dream reenacted yet again.
But set such a story in Britain, and the story becomes rare indeed. There, the business and financial establishment - the City - has been far less ready to admit the newcomer or the immigrant, especially if he began as a poor Czechoslovakian Jew who had not attended the right schools and did not follow the City's rules.
Therein, according to biographer Tom Bower, lies the key to understanding the life of British press baron Robert Maxwell.
To many in North America, Maxwell burst on the scene in 1991, when he bought the venerable, if tattered, New York Daily News, "rescuing" it from a crippling strike. Or when, in November, his body was found floating in the Atlantic near the Canary Islands, an unsolved mystery. Britons, on the other hand, have known him as a flamboyant businessman and Labour politician for several decades.
This is a revised, updated version of Bower's 1988 "unauthorized" biography, a book that Maxwell spared no effort to suppress. He finally succeeded, because he owned Europe's largest publishing company, in intimidating most British booksellers into declining to carry the book.
In this gripping account, Bower traces Maxwell's behavior to his humble origins in an obscure shtetl in Carpo-Ruthenia, a poverty-stricken region of eastern Czechoslovakia later swallowed up by Stalin. There, he faced endemic anti-Semitism and learned Eastern European business methods - and ethics - from his cattle-trading and smuggling grandfather.
After the war, in which he won the Military Cross, Maxwell was a member of the military group that ran the British sector of Berlin. There, he made his first contacts in the publishing industry, forming alliances that later led to his successful scientific publishing business in London.
Maxwell experienced his first financial crisis in 1954, encountering the wrath of the City when he wriggled out of the collapse of book wholesaler Simpkin Marshall. Two decades later, his barely legal financial shenanigans involving one of his major companies, Pergamon Press, would result in a censure by the Department of Trade and Industry, which termed him "not in our opinion a person who can be relied upon to exercise proper stewardship of a publicly quoted company."
In the United States, such a finding by the Securities and Exchange Commission would have ended Maxwell's entrepreneurial career. Yet because corresponding British regulation is so lax, according to Bower, Maxwell was able to regroup, begin a bitter rivalry with Australian newspaper owner Rupert Murdoch, and end up with control of the popular Daily Mirror tabloid, a host of associated newspapers, several publishing companies in Britain, the US, and elsewhere, and finally the New York Daily News. Along th e way, Maxwell lived a life of luxury that reflected strangely on his political career as a Labour member of Parliament in the 1960s.
Bower sees Maxwell's career as the embodiment of his craving for acceptance by a society and City that worked constantly to exclude him; hence the book's title. The author notes, for example, that while Maxwell was censured in 1971, none of his City-based auditors, brokers, or financial backers received the same treatment, even though they must have been aware of some of the accounting tricks he used to make companies appear more profitable or solvent than they really were.
Maxwell operated from more than 400 privately held companies and a few publicly held firms. He would shift money around as necessary to make this or that company look profitable - often through "purchases" of the books or shares of a public company by a private one. Since some of the private companies were in Lichtenstein, which has rigorous privacy rules, it was often impossible for accountants and investigators to find out what was really going on. This allowed Maxwell to mislead some of the best inves tment firms in the US and Britain, including Goldman Sachs, Shearson Lehman Brothers, and Salomon Brothers.
Although Maxwell always skated on the edge of illegal dealing, Bower does not see him crossing the line until his 1988 purchase of Macmillan Publishing Company and the later buyout of the Daily News ran him out of money. Thus began Maxwell's final gamble - taking money from his various companies' pension funds to get the cash to keep operating.
In the last year of his life, Maxwell was outraged by American investigative reporter Seymour Hersh's claim that he had operated as an agent for Mossad, the Israeli intelligence service. Bower heaps scorn on this allegation, which rested on apparently flimsy evidence, and on Mr. Hersh for printing it. But he raises allegations of his own. Maxwell, Bower claims, actually operated as an agent of influence for the Soviet KGB for decades, perhaps going as far back as his Berlin days. He cites Maxwell's stran ge and unprofitable deals with Soviet and other East-bloc publishers. Nonetheless, Bower rejects claims that Maxwell was murdered.
While the book makes fascinating reading, it can be rough going for the reader who does not understand something about the way shares are traded and annual reports audited. Bower has a confusing tendency to skip around in time, sometimes making it a bit difficult to remember in exactly what year the events he relates occur. A chronology of Maxwell's career at the end of the book would have been most useful. And while Bower often footnotes exactly where he got certain information, other assertions he make s regarding Maxwell and his associates are maddeningly undocumented.
Despite this, readers who can wade their way through the material will find both an exciting review of the life of one of Britain's most eccentric - and influential - characters of the 20th century and a searing indictment of the postwar British financial community. It is sobering stuff.