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If books could kill, James D. Robinson HI would be long gone by now. The courtly chief executive of American Express Co., once the darling of the business press, has suddenly become its favorite villain. In March came House of Cards: Inside the Troubled Empire of American Express (272 pages. G.P. Putnam's Sons. $24.95), a compendium of managerial incompetence, vicious backbiting and botched opportunity at the financial-services giant, by Business Week writers Jon Friedman and John Meehan. Then, on the day of AmEx's annual meeting last week, up popped Vendetta: American Express and the Smearing of Edmond Safra (494 pages. HarperCollins. $25), in which Wall Street Journal reporter Bryan Burrough all but accuses Robinson of approving a dirty-tricks campaign against Safra, a financier and onetime colleague. An excerpt from the book in the Journal that morning prompted Robinson to open the meeting with a denial. "Let me state for the record," he told shareholders, "I was not aware of, did not authorize, did not condone the spread of false rumors about Safra."
At the very least both books raise worrisome questions about Robinson's judgment and his continuing ability to lead the company he has piloted since 1977. Complaints about his hands-off management style are hardly new. Robinson, who declined to be interviewed, is known as the "Teflon Executive" for his uncanny ability to survive unharmed costly missteps at AmEx and its subsidiaries. For example: $450 million in losses during 1982 and 1983 at Fireman's Fund; a $30 million accounting gaffe at the Boston Co. in 1988; a failed $250 million stock offering in 1990 to bail out Shearson Lehman, and a $265 million write-off to cover 1991 Optima card delinquencies. Then there were last year's card-cutting protests by Boston restaurateurs, who balked at paying AmEx's high commissions. Throughout, divisional heads toppled; Robinson's neck suffered nary a nick.
It was still intact last week, after Burrough's book failed conclusively to pin the Safra affair on Robinson. "Hey, the big bomb dropped and we're still standing," says a spokesman. "Where's the smoking gun?" Indeed, "Vendetta," for which Burrough-a coauthor of "Barbarians at the Gate"--was paid an advance of $1 million, doesn't provide one. But it leaves a powerful scent of cordite: at the least, Robinson failed to police the work of advisers who were out of control.
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"Vendetta" posits a conspiracy originating in the chairman's office to discredit the Lebanese-born Safra, who sold his Swiss bank to AmEx in 1983 for $550 million and bailed out less than two years later in a cloud of acrimony. Fearing intense competition, Burrough alleges, AmEx tried discrediting Safra, to prevent his re-entry into the Swiss banking business. The project, allegedly led by Robinson's lieutenant, Harry Freeman, an AmEx executive vice president, first sought to corroborate a New York Times story suggesting links between Safra and the Iran-contra scandal. Failing that, Freeman allegedly authorized Susan Cantor, a former ABC News reporter, and Antonio Greco a sometime government informer reputedly with underworld ties, to contact reporters. The stories that resulted in the international press falsely accused Safra of laundering drug money and maintaining ties to the Mafia and the CIA. Only after Safra threatened a massive lawsuit, Burrough writes, did AmEx own up to what its operatives had been doing.
AmEx doesn't dispute its legal attempts to block Safra's Swiss banking license-or the libelous shenanigans of "certain persons acting on behalf of American Express." It does take issue with the idea that senior executives knew about the dirty tricks, much less authorized them, claiming that an internal investigation cleared AmEx's top brass. In July 1989, the company agreed to pay out $8 million to Safra's favorite charities and Robinson apologized for the episode. Freeman, conceding the incident happened "on my watch," resigned in November 1989, but insisted he had no prior knowledge of the effort to defame Safra. He blames Greco, who, he claims, "picked up and ran with the ball a lot"--not his former boss. "I'd be very, very surprised if Jim knew there was a smear campaign," says Freeman, who has filed a $50 million libel suit against Burrough and The Wall Street Journal. "Two mistakes were made. I should've supervised Susan Cantor more carefully, and Robinson might've supervised me more carefully." Cantor declined to be interviewed; Greco could not be reached for comment.
Meanwhile, Robinson has other problems. The Teflon executive may be running out of time: AmEx earnings, erratic at. best, haven't approached their 1989 peak. Another bad year may inflict more damage on Robinson than a book ever could.
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