Money Angles

By Andrew Tobias

I have here three new books and an I.Q. score. The books concern Wall Street's fallen financiers. The I.Q. belongs to Nelson Peltz. It's not as titillating as, say, Dan Quayle's (now there would be a columnist's dream come true), but it does hold some interest when you consider that Nelson's net worth -- which 10 years ago was roughly the size of your own, give or take a few million -- is pegged in the just released Forbes 400 at $600 million.

The first book, Dennis Levine's Inside Out: An Insider's Account of Wall Street, is junk, bound. Don't waste your time. Instead, to learn about Levine and Ivan Boesky and particularly about Mike Milken, read James B. Stewart's spectacular Den of Thieves. I read it because, like most people, I wasn't entirely sure. Was Milken, though guilty, the victim of a witch hunt over largely technical violations? Were he and his faithful servants, like Arthur Liman (for the defense) and Ken Lerer (for the p.r. machine), the ones I should root for? Hah! For the first time, it all comes clear. And guess what: the crooks were the crooks, and the feds were the good guys after all.

After reading Den of Thieves, you may in fact wonder whether Milken, whose 10-year sentence made folks gasp, didn't get off easy. Sure it's a waste to have a genius cleaning toilets. But if the downside of crime is appointment to a Treasury post, or some other challenging job, then where is the downside really?

And then there's John Rothchild's delectable Going for Broke, due out next month. It describes how Robert Campeau, a flamboyant French Canadian real estate developer who had absolutely no retailing experience -- who at the time of his bid may have never even been in an Allied department store! -- managed to acquire first Allied and then Federated, ultimately controlling a U.S. retailing empire with $9 billion in sales -- and $11 billion in debt. A short time later, of course, Campeau's empire collapsed -- but this is my point! Campeau went bust; Trump's on a leash; the guy who rented the QE 2 for his son's bar mitzvah sank; Boesky, who arrived at that bar mitzvah in mid-cruise via friend John Mulheren's helicopter, went to jail; so did Mulheren, briefly (but not before setting out with an assault rifle to kill Boesky); the S&L boys are in the soup; major insurers are having their ratings lowered; M&A star Bruce Wasserstein looks a little silly -- and you mean to tell me that out of all this, unscathed, emerges Nelson Peltz?

The image of Milken scrubbing floors and Peltz presiding over hundreds of millions is remarkable, at the least. As described in Connie Bruck's exceptional 1988 best seller, The Predators' Ball, Milken made Peltz. He suggested Peltz buy giant National Can, and then American Can, among others, and then floated the $3 billion in junk bonds for him to do it. Previously, Peltz had had a minor, mediocre business career. But soon the can business entered a profitable cycle, and Peltz, and his more highly regarded one-third partner Peter May, would be lionized on the cover of Business Week. ("In your book," one of Peltz's advisers told Bruck at the time, "call him Nelson the Industrialist and make us all vomit.") In 1988 the can business would be sold to the state-owned French giant Pechiney, yielding Peltz, Milken et al. a nearly $1 billion profit (and spawning its own insider-trading scandal among French government officials).

CUT TO 1986 -- the famed Drexel Burnham junk-bond conference -- Peltz seated at a table with Boesky and T. Boone Pickens, among others. As Milken strides by, someone gushes, "Congratulations, Mike. You're a genius!" "No," Milken snaps back sarcastically, for all to hear. "Nelson Peltz here is a genius. I'm nothing."

CUT TO 1990 -- Chatting with a Wall Street veteran, I mention Peltz. "What?" he asks. "Is Nelson going to jail?"

"No! I don't know!" I say, alarmed he thinks I'm even suggesting such a thing.

"It would make everybody very happy," he grins.

Nelson Peltz has been charged with no crimes, and I'm not implying he has committed any. He has been indicted only by writer Benjamin Stein in Barron's. (Stein persuasively accuses Peltz of having skewered his fellow shareholders.) Now 49, and married to a former Ford model, he owns an $18 million Palm Beach estate, a 106-acre, 22-room Westchester summer place and, I was told by his public-relations chief, is deeply concerned with the plight of the homeless.

Nelson grew up on Park Avenue, heir to a frozen-food business in Brooklyn. In my brother's class at school, he acted richer than the other rich kids and was known more as a snappy dresser than a brain. Math was particularly tough for him -- an F in ninth grade and a D+ that summer; a C in 10th-grade algebra, but an F in geometry. In the 11th grade he pulled math up to C and C- (matching steady Cs in English), but failed citizenship. ("And that would eliminate. . .," his American history teacher paused, in a lecture about lurking communists . . . "YOU!" stage-whispered Nelson Peltz just a little too loud, in the incident that may have sealed his fate.) Nelson graduated from a different high school, then went on to, and dropped out of, college.

Needless to say, Einstein failed math, too, or so they say (actually, this almost surely is a myth), and any number of our most brilliant businessmen never finished college. But that would be overstating the case with Nelson. His I.Q., at 121, makes him brighter than 9 out of 10 boys on the bus, but still leaves about 500 million people on the planet even brighter than he. And perhaps more still who are nicer. But only a tiny, tiny few who are richer.