by Daniel Lyons
Yeah, it’s just like that. Either the dog thing or the terminally ill hospital visit thing. Or maybe a mix of both.
“Steve,” Sonya says, “we’re not punking you. I promise. Do you know what it means when the SEC says it wants to investigate you?”
“As a matter of fact,” I say, “I don’t. But let me ask you something. Do you know the rule about interrupting me when I’m meditating?”
“I’m aware of the policy,” Sonya says.
“You’re aware. Okay. Good. So here’s what I’d like you to do. I’d like you both to leave this room and go back to your offices and fire yourselves. Okay? Thank you.”
They leave. I go back to the Tassajara room and resume meditating. Within ten minutes I’ve forgotten that I ever spoke to them.
But that evening, after dinner, as I’m doing my digestion yoga, I get a call from Tom Bowditch, our biggest shareholder. Tom is also a member of our board of directors. He says we’re having an emergency meeting of the board on Sunday to discuss this situation with the SEC.
“I’m pretty sure you’re supposed to ask my permission if you want to have a board meeting,” I say.
He growls. I’m not kidding. Like a dog. He says, “Just be there, you fuckwit,” and hangs up.
I’m not sure, but I’m guessing from his tone that maybe there really is something to be concerned about.
“Sure I know about the SEC inquiry. They’re going after everybody,” Larry Ellison says. “It’s a witch hunt. A hundred companies got letters.”
We’re at his Japanese Zen palace in Woodside, walking along a carefully raked gravel path beside the man-made pond in the Japanese garden. We both wear formal tea-ceremony kimono, in black, and wooden sandals. Birds are whistling in the trees. These are special teeny-tiny bonsai birds that Larry imports from Japan. They don’t fly away because he feeds them special Japanese bird food.
“Some U.S. Attorney wants to run for governor, and now the asshats from the SEC are jumping in too. These are pygmies, Steve. These are guys who spent all that money to go to law school and now they’re making a hundred and fifty grand and they can’t afford to buy a house in the Bay Area. Meanwhile they see all these freako engineers with Asperger’s syndrome driving Ferraris. For this they blame guys like you and me, because we’ve committed the great sin of creating jobs and generating wealth. We’ve spawned a valley full of obnoxious nerd millionaires, and the lawyers hate us for it. And you know what? I don’t blame them. Look at us. Thursday afternoon and we’re dressed like Japanese warlords and having a tea ceremony. I’d hate us too.”
This is one area where Larry and I disagree. I agree that people hate us, but I don’t believe the hatred is justified. Larry, on the other hand, is a very insecure guy. He’s way too nice. His company, Oracle, has been in business for thirty years, and during that time its software has done more to improve the world than almost any other product I can think of. Plus Oracle has enriched its business partners and gone out of its way to treat its customers with care and respect.
To be sure, Larry doesn’t pull too many eighteen-hour days at Oracle anymore. But that’s because he’s so busy helping out in soup kitchens and animal shelters and halfway houses for homeless disabled kids born to crack-addicted mothers. Don’t look for any stories on that stuff, though.
Nobody knows about Larry taking in stray cats and dogs and giving them a home on his compound in Woodside. Nobody knows about Larry’s philanthropic work. He just shows up at the soup kitchen, dishes out the food, and disappears. He doesn’t go looking for praise. He doesn’t need it. The good karma has come back to him, however. He’s the eleventh-richest guy in the world, a mega-billionaire. Naturally the money is the only thing the media ever wants to talk about. They just love to reduce people to caricatures.
In my case it’s different. First of all I’m only the one hundred and thirty-second richest person in the world. Moreover, my wealth is deserved. Name one person from the past hundred years who has made a bigger contribution to the world than I have. See what I mean?
We’re strolling past a shallow part of the pond, admiring Larry’s exotic koi fish, when Larry begins telling me some ancient Japanese fable about some warlord who was this great and gifted leader and yet his kingdom was destroyed because he had this single tiny flaw. He rattles on and on and on and finally I tell him, “Larry, for the love of Buddha, would you please get to the point?”
“The point,” he says, “is that maybe there’s no truth to any of these charges, but it doesn’t matter. It’s a shakedown. It’s one big ass-fucking gangbang, and you’re the pivot man, sitting in the middle, getting three hundred and sixty-degrees of corn-holing.”
“You know what I love about you, Larry? You always cheer me up.”
“It’s the lawyers. They’re evil. They’re bloodsuckers. They’re parasites. We create wealth, they live off our scraps. They see guys like us with money, and they say, ‘Okay, let’s invent some law that fucks this guy up. Let’s create some rules about accounting that are tricky and complex and arcane that nobody can possibly comply with them. Then let’s bribe some Congressmen to pass the law, and we’ll shake these rich bastards down.’ That’s what it is. You pay to settle the case, and the lawyers split the money. They’re all in on it together—not just the plaintiff lawyers but your own defense lawyers too. At the end of the day it’s no different than if they put a gun to your head and robbed you in an alley. It’s a mugging. Same damn thing. Like it or not, this will only end one way—you will write a huge check, and these fuckers will fight over it like a pack of hyenas tearing at a deer carcass.”
“Dude,” I say, “I’m pretty sure hyenas don’t eat deer. I don’t think they even have deer in Australia or whatever.”
“Doesn’t matter. The point is, in a perfect world we wouldn’t have to deal with this shit. If we were living in feudal Japan, guys like you and me would command our own armies. We’d have these bastards from the SEC strung up by their nuts and we’d shove hot pokers up their poop chutes. And isn’t this the way things should be? Shouldn’t society recognize that people who are able to amass great fortunes have proven themselves to be superior, and therefore should be allowed to rule?”
“I have to admit, it makes sense when you say it.”
“Sure it does. And I’ve got more bad news for you. You’ve got a leaker. Everyone in the Valley is talking about this. Everyone knows you got a letter. Just thought you should know. You also should know how much people are loving this. I mean loving it. I had no idea how much people out here hated you. Did
you? They hate you a lot.”
“That’s nice to know.”
“It is nice to know,” Larry says. “Means you’re doing something with your life. You want to be remembered as a nice guy? A guy everyone liked? No thanks. You’re the guy who saved Apple when nobody believed it could be done. That pisses people off. Great. Wonderful.”
Larry knows all about being hated. People think he’s just some narcissistic super-obnoxious nouveau riche asshole. It’s easy to see him that way, with his gigantic yachts, the World Cup sailboats, the fighter jets, the Zen palace. And sure, he’s had too much plastic surgery. Not as much as that lady who looks like a giant cat. But too much. He’s addicted to it. He’s had two face lifts and nobody knows how many eye jobs.
But the fact is that beneath all that Larry is a kind and generous soul. He is probably the closest thing I have to an actual friend. For one thing we’re both orphans. We’ve both got that orphan gene that says, “You think you can abandon me? Well, I’ll make you pay attention; I’ll make you regret giving me up.”
“Here’s my advice, take it or leave it,” Larry says. “Remember your Sun Tzu. Avoid confrontation with a strong opponent. To win without fighting is best. Come on. Let’s eat.”
Larry’s teahouse sits on an island in the center of the pond and is an exact replica of the seventeenth-century Shokintei teahouse in Kyoto, only slightly larger than the original. (Ah
em.) There are tatami mats on the floor, paper window screens, a wall that slides open to a view of the pond. Larry’s imported tea servants, these very hot Japanese geisha girls, show us in and begin the ceremony.
At Larry’s place the tea ceremony takes four hours. It’s the full hoo-ha, with crazy food and ten kinds of tea, plus geisha girls doing song-and-dance numbers. After the meal, Larry gets up and shows off his karate moves, which scares the shit out of the geisha girls. They all go running from the room screaming.
By the time we’re done it’s five in the afternoon. From Larry’s driveway we can see out over the entire Valley. Low black clouds are massing overhead, getting ready to pour. Up here in the hills a few fat drops have started splattering down.
“All those poor bastards,” Larry says, nodding toward Route 280, where the traffic is jammed up and inching along. “They have no idea what’s about to hit them.”
“It’s just a rain storm.”
“I’m talking about the SEC thing. You remember the quake in ’89? You remember where you were right before everything started shaking?”
“All they’re doing is sending out letters.”
“Just wait until people start getting arrested. Wait till stocks start getting slaughtered. You’re going to see market caps cut in half. You’ll see billions of dollars wiped out overnight. We’re not talking about a few rich assholes paying some fines. We’re talking about all these poor bastards out there on the highway having their retirement funds wiped out and their savings destroyed. Then come the layoffs. This is bad, Jobso. This is big and bad and scary and endemic. This is going to hurt everyone in the Valley. It’s like the war on terror, and we’re the terrorists.”
“Larry,” I say, “I love you, but I think you’re being a little melodramatic here.”
He takes me by the shoulders. He looks me straight in the eyes, and he’s not smiling.
“Listen. Listen to me. Don’t mess around with these guys. Don’t fight them. Just settle. No matter how much money they want, just pay the bastards and move on. Sign a confession, do whatever you have to do.”
Tom Bowditch has a seat on our board because ten years ago, when we were almost dead, he bought a huge chunk of our stock and got himself elected to a director’s position. He’s seventy-three years old and has spent most of his career as a corporate raider. He’s obnoxious, abrasive, and almost universally hated, especially by people on the Apple board. He also happens to be about the size of an eighth-grader, which is why behind his back we call him “boy’s dick.” He has jet-black hair slicked straight back and wears Old Spice aftershave. He went to Yale and never fails to mention this. Many years ago he was deputy something or other at the CIA, and he’s wired in with all sorts of shadowy people in Washington. He lives in Las Vegas in a penthouse on top of a casino, and flies a Gulfstream IV, which is not quite as sweet as my Gulfstream V, but still plenty nice.
Having Tom on our board is like owning a Rottweiler. He’s great protection, but you never know when he might lose his marbles and turn on you. Basically, Tom scares the crap out of me. Especially when he’s yelling at me, as he is right now, in front of the entire management team and board of directors, saying, “Jesus fucking Christ, kid, every time I turn my fucking back you end up sticking your dick in a fucking blender and I gotta fly out here and get you un-fucked. You know who you’re like? You’re like fucking Rain Man. You ever seen that movie? With the retard who’s also a genius? That’s you, kid. You’re a genius, in your own way, I’ll give you that. You’ve got immense fucking gifts. But godfuckingdammit you are also one hell of a fucking retard sometimes, you know that?”
I’m not even kidding. This is exactly how Tom talks. To make it worse, there’s spit spraying out of his mouth, and his breath smells like a tub of something you might find sloshing around on the bottom shelf in a morgue.
It’s Sunday morning and Tom is running the board meeting. He’s flown in from Vegas wearing a black satin track suit. Supposedly he owns fifty of these, plus fifty navy blue suits. He has them custom-made by some famous tailor in Hong Kong.
“Ladies and gentlemen,” Tom says, “let me introduce you to the enemy.”
He clicks a button on his Apple remote—small, sleek, perfectly balanced—and boom, like that, without a pause, a photo appears on the wall screen.
It’s a big fat-faced Irish-looking guy with thinning hair, no neck and moronic eyes. Staring straight into the camera, not smiling. I hate him already.
“This is Francis X. Doyle. He’s the U.S. Attorney for the Northern District of California. He wants to put all of us in jail.”
Tom waits a moment to let that sink in. Everyone stares at the screen, at that big fat stupid Irish face.
“And here’s his top assistant,” Tom says, pulling up a photo of an Asian dude who looks like a fourteen-year-old in a suit and a pair of black nerd glasses. “William Poon. That’s right, Poon. As in the word that goes before tang. Don’t be deceived by his appearance. He’s a fucking animal. First in his class at Harvard Law, clerked for a Supreme Court justice, and has a total hard-on for Apple ever since his iPod battery crapped out after ten months and you dickheads refused to replace it under warranty.”
“Our iPod batteries last longer on average than batteries in any other music player,” I say.
“I’m just saying,” Tom says. “The kid is tough. Don’t underestimate him. And whatever you do, don’t make fun of his name, unless you really want to piss him off. Apparently he goes nuts.
Took a lot of shit for it at Harvard. Okay. Here, meanwhile, are the other bad guys.”
He clicks through a series of photos of some dweebs in drab gray suits. These are lawyers from the SEC. From what Tom says they’re basically mindless, nameless, interchangeable bureaucrats, like the agents in The Matrix. They’re going to go through our books and look for mistakes, and most likely they’ll find something, because they always do, and we’ll have to pay a fine, and we’ll get hit with shareholder suits. The usual stuff. No big deal. The problem, Tom says, is Doyle. Doyle can do more than charge you a fine. He can put you in jail. And this is something he wants very much to do.
“He wants to run for governor,” Tom says. “He figures he can make a name for himself by putting a few big names behind bars.”
Tom’s idea is that we should conduct our own investigation. This makes us look like we’re taking this seriously and doing our best to get to the bottom of it. But it also lets us control the pace.
“We need to get out ahead of this thing,” he says.
Tom has retained a team of lawyers to do the job. He brings them in and introduces them. The one in charge is about sixty years old, with gray hair and very scary Paul Newman–style steel blue eyes. His name is Charlie Sampson, and according to Tom he’s an expert in securities law and also a former federal prosecutor.
“Best of all, he’s a Yalie,” Tom says. “After Harvard Law School, he clerked at the Supreme Court, and then spent fifteen years as a prosecutor, during which time he put a Congressman in jail. In other words, Charlie knows how guys like Doyle think. He’s a valuable quarterback to have on our team.”
Sampson gets up and thanks Tom for the kind words and then makes his presentation, introducing himself and the three guys who work for him and telling us about some past cases where they’ve helped companies deal with similar situations. His assistants are clean-cut Ivy League types with expensive haircuts and button-down shirts. Sampson tells us their names, but I’m unable to pay attention, because as Sampson is speaking, to my absolute horror, one of the young guys takes out a Windows laptop, which, at Apple, is about on the same level of etiquette as leaping up on a table at lunch and taking a crap in the veggie dip.
I’m staring at him, aghast. The guy stares back at me, as if to say, “So, what are you gonna do about it?” I believe he is doing this intentionally to provoke me. There’s a twinkle in his eyes. I want to walk down there and rip his head off. But I don’t. I don’t even say
anything. I look away and take deep breaths through my nose and silently chant my mantra until I can regain my composure.
When I’m finally able to speak I say, “Tom, dude, I appreciate you going to all the trouble to line up these fine lawyers and everything, but it really seems to me that having these guys around could become a significant distraction, and seriously, dude, I don’t see that some letter from the SEC actually merits such a big response.”
“First of all,” Tom says, “this is serious. Second, don’t call me dude. I’ve told you before. Don’t make me tell you again.”
“Whatever, dude. But just because you woke up with sand in your crack I don’t think you need to fly in here and hassle us. But whatever. You go ahead. I need to get my harmony back.”
Then I lean back in my chair and close my eyes and pretend I’m meditating, as if to say, Hey, asshole, wake me up when you’re done having your tantrum. It’s what I always do when people get angry. The crazier they get, the more I go Zen. It drives them nuts.To be honest I’m about this close to just getting up and leaving, because the last thing I need on a Sunday morning is to be sitting here getting sprayed with spit and seeing my own boardroom—which I designed myself, as a personal homage to Walter Gropius—being polluted by the stink of Windows laptops. Moreover, everyone here knows that Sunday morning is my Ultimate Frisbee league and nothing, I mean nothing, messes with my Ultimate. It’s sacred. To show that I am here under protest, I’m wearing the uniform of the Apple Ultimate Frisbee team—black shorts, black socks, black shoes, and a black mock turtleneck T-shirt with a tiny black Apple logo silk-screened on the shirt, a half shade darker than the shirt itself, so that you can barely see it. In other words, classy.