The Last Tycoons

I was skimming, recently, through a book off one of my shelves, called The Last Tycoons (2007) by William D. Cohan. The book takes us in an unexpectedly compelling way through the history of Lazard Freres & Co., the investment banking partnership founded back in the late 1840s, just in time to benefit from the flow of gold out of California -- and that continued as a partnership until 2005, when it succumbed to the logic of the corporate form and an IPO.

Anyway, I found a tidbit in this book that rather diverted the flow of my own stream of consciousness. Lazard was deeply involved in the ITT/Dita Beard scandal of the Nixon years, a matter discussed here in some detail.

When the SEC's investigation of that was finally resolved in a settlement, in October 1976, The New York Times took note of the fact in a brief inside story (p. 78) by Judith Miller.

Judith Miller? This appears to be the same Judith Miller whose more recent career is associated with "weapons of mass destruction" and imprisonment to protect Scooter Libby.

At any rate, back in '76 she wrote a 408 page story about a twenty-six page settlement agreement. Her story said that the document sheds "new light on one of the most complex and controversial mergers in corporate history," but her story doesn't say anything about what if anything that light revealed.

What that light revealed was a series of confusing machinations that apparently allowed Lazard to pull well over $4 million in fees out of this one transaction, by structuring it as several transactions and charging separately, so that the deal became as Cohan calls it "the gift that keeps on giving."

It is all under the bridge now, but Miller's involvement, and her much recent headline-worthiness in her own right, makes it intriguing.