9 Mouthy Executives and How They Suffered

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Mark J. Terrill/APLos Angeles Clippers owner Donald Sterling

By Jenn Gidman

Los Angeles Clippers owner Donald Sterling has been banned from the NBA for life and fined $2.5 million after a secret audio recording of him making racist comments surfaced. In announcing the ban, NBA Commissioner Adam Silver said that he would encourage other NBA owners to vote to force Sterling to sell the team and that Sterling's views "simply have no place in the NBA."

It's fascinating to watch people in power implode from chronic foot-in-mouth disease, but it's disturbing when their unsavory statements transcend run-of-the-mill idiocy and venture into hate speech and discrimination. The Sterling case has rebooted the national conversation about racism, misogyny and homophobia, but he's far from alone in his transgressions. Subtle and (not-so-subtle) denigration of people based on race, gender or sexual preference is alive and well in professional sports, the business world and in the media.

Are any or all of these business folks below in the same league as the Sterlings, Cliven Bundys and Don Cathys of the world? Is ignorance ever a valid excuse? The lines may appear blurred, but keep in mind that the "elegant racism," Hollywood-style homophobia, and online misogyny we encounter every day may be a tougher, more insidious enemy to fight than the more obvious ones.

1. Robert Benmosche, CEO of American International Group (AIG)

The blunder: In September, Benmosche addressed public and governmental outrage over $165 million in bonuses paid to employees in the AIG Financial Products unit (the same unit that almost brought down the country's financial system) just a few months after the company took a $182 billion government bailout. "[The uproar over bonuses] was intended to stir public anger, to get everybody out there with their pitchforks and their hangman nooses, and all that -- sort of like what we did in the Deep South [decades ago]," he told the Wall Street Journal. "And I think it was just as bad and just as wrong. ... It is a shame we put [the employees] through that."

The aftermath: Not everyone agreed with Benmosche's comparison of the torture and murder of African-Americans during the civil rights era to his bonus-receiving employees. Even though Benmosche issued an email apology a few days after his comments were publicized, Rep. Elijah Cummings (D-Md.) called for Benmosche's resignation, stating: "As the leading critic of AIG's lavish spending before and after its taxpayer-funded bailout -- and as the son of sharecroppers who actually experienced lynchings in their communities -- I find it unbelievably appalling that Mr. Benmosche equates the violent repression of the African-American people with Congressional efforts to prevent the waste of taxpayer dollars."

Benmosche and Cummings met privately in October, and Cummings accepted the CEO's apology. Benmosche issued a statement after the meeting that said, "When I referred to the South, I unintentionally trivialized a horrible legacy of our country. That was the opposite of my intent."

2. Guido Barilla, Chairman of Barilla Group

The blunder: Barilla, head of one of the world's most well-known pasta brands, told an Italian radio station in September that his company would never use a gay family in its ads. "Ours is a classic family where the woman plays a fundamental role," he said, adding that he also opposed gay adoptions and that "[if gays] like our pasta and our advertising, they'll eat our pasta; if they don't like it, then they will not eat it and they will eat another brand."

The aftermath: Fair enough. Shortly after the interview aired, gay and lesbian groups took Barilla up on his invite and called for a consumer boycott of his company's wares.

Blatant disrespect to an entire demographic aside, Barilla's choice of words was also ill-advised from a business standpoint: A Nielsen study cited in Forbes found that same-sex-partnered households make 16 percent more shopping trips than heterosexual households, and average annual spending on consumer packaged goods is 25 percent higher than the average U.S. household. The company wouldn't say if the boycott hurt sales, but it's worth noting that Barilla's net profit in 2012 fell more than 21 percent during Italy's worst economic downturn in 60 years. So, yeah, it wasn't exactly smart business to alienate an entire community of consumers (Julia Roberts says it best).

Barilla responded with a written apology and a video mea culpa. The company has also since claimed that its new ad campaign will be more inclusive, created an advisory board to promote diversity, and it announced a "diversity challenge," which asks entrants to submit videos that celebrate diversity.

3. Marijn Dekkers, CEO of Bayer (BAYRY)

The blunder: Dekkers was miffed after Natco Pharma was awarded a license from the India patents office to make a generic form of Bayer's Nexavar cancer drug -- a drug that was out of reach for India's poorest citizens. Dekkers, who called the license "theft," elaborated on his feelings at a December conference in London. "We did not develop this medicine for Indians," he said, according to Bloomberg News. "We developed it for Western patients who can afford it."

The aftermath: That was an incendiary statement, but there was a problem: Columbia Journalism Review discovered that Bloomberg News had messed up the quote. Dekkers' actual complete quote was: "Is this going to have a big effect on our business model? No, because we did not develop this product for the Indian market, let's be honest. We developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product."

As CJR points out, this may be splitting hairs, but while the difference in content isn't terribly significant, the difference in tone and context is. The tone of the original Bloomberg quote comes off more insensitive, and Dekkers was simply answering a question about how the ruling would affect Bayer's business in India. This doesn't let Dekkers off the hook. As CJR notes, the Bloomberg mistake still doesn't "excuse the CEO's Kinsley gaffe or, for that matter, Big Pharma's business practices."

4. Justine Sacco, Former Executive at IAC/InterActive (IACI)

The blunder: Sacco became infamous in December for posting what's now known as "the tweet heard round the world." Right before a long flight to Cape Town, she tweeted, "Going to Africa. Hope I don't get AIDS. Just kidding. I'm white!"

The aftermath: The tweet went viral, spurring a #HasJustineLandedYet hashtag and social media parody accounts -- all while Sacco (who was born in South Africa) was still in the air. By the time she disembarked from the 12-hour flight, Twitter users were poring over other questionable tweets she had previously made and her employer (a media company) issued its condemnation of the tweet. IAC "parted ways" with Sacco the next day, and the former head of corporate communications issued an apology saying she was "ashamed" and insensitive toward people who had the virus.

5. Brendan Eich, Former CEO of Mozilla

The blunder: When Eich was appointed CEO of Mozilla (best known for its Firefox browser) in March, not everyone was thrilled. The reason: In 2008, Eich donated $1,000 to California's Proposition 8 campaign, a ballot initiative trying to ban same-sex marriage.

The aftermath: Gay rights activists started calling for Eich's resignation, and at least one Mozilla development company pulled its app from Firefox. But the final nail in Eich's coffin came courtesy of dating site OkCupid, which implored its members to use any other browser but Firefox. Eich posted a message about inclusiveness on his personal blog, and Mozilla issued a statement that said, in part, "Mozilla supports equality for all, including marriage equality for LGBT couples. No matter who you are or who you love, everyone deserves the same rights and to be treated equally." It was too late for Eich: He stepped down as CEO in April after just two weeks in the job.

6. Michael Fowler, former CEO of Solid Gold Bomb

The blunder: Fowler thought he had hit the algorithmic jackpot after he wrote a computer script in 2011 that took the phrase "Keep Calm" (from "Keep Calm and Carry On") and randomly paired it with a noun and verb. Some examples of available T-shirts that made their way onto his Amazon.com (AMZN) seller's page: "Keep Calm and Knife Her," "Keep Calm and Hit Her," and "Keep Calm and Rape a Lot."

The aftermath: The idea initially seemed solid: According to CNNMoney, the company's catalog jumped from 1,000 to more than 10 million and there was no inventory risk, since Fowler only made the T-shirts after a customer ordered. However, after the offensive T-shirts were discovered (Fowler said he didn't go over the computer-generated list closely enough), Amazon shut down Fowler's accounts; Fowler was forced to shutter the company in June 2013.

One could argue that it's indeed possible Fowler didn't greenlight the outrageous T-shirts and discovered them too late, but a) some of the supposedly randomly generated phrases seem suspect ("rape a lot"? Really?), and b) a company owner (especially one who owns a small business) should have better oversight of the product he's selling.

7. Bernardo Hees, Former CEO of Burger King (BKW)

The blunder: In 2011, less than a year into his stint as Burger King CEO, Hees spoke to a group of students at the University of Chicago and tried to strike up a rapport by filling them in on what he thought of British food -- and British women. "The food is terrible and the women are not very attractive [in England]," he said, according to the Chicago Maroon, explaining why it was so easy to concentrate on his studies while he was at the University of Warwick. "Here in Chicago, the food is good, and you are known for good-looking women."

The aftermath: Burger apologizing for Hees' comments, saying it was "intended as a humorous anecdote to connect with his audience." Charli Fritzner, women's campaigns officer at Warwick University's student union, didn't take it that way: "If he views women as potential distractions in academia, I wonder how he views them in the workplace. It doesn't make Burger King an attractive employer for women." British chefs weren't happy, either. Michelin-rated chef Marcus Wareing proclaimed, "It's an insult to British gastronomy."

8. Michael O'Leary, CEO of Ryanair (RYAAY)

The blunder: The colorful CEO of Ireland's low-cost airline has been called the "duke of discomfort" for his off-the-cuff, provocative remarks (The Guardian has even compiled a list of his "33 daftest quotes").

%VIRTUAL-article-sponsoredlinks%But while some outlets portray O'Leary as a goofy, "unusual" clown, there's a more objectionable subtext to some of his antics. For example, Ryanair annually publishes a calendar showing its female cabin staff in underwear and bikinis. In October, O'Leary held his first Twitter "chat" under the #GrillMOL hashtag. "Inappropriate" and "misogynistic" is how PR Daily described some of his interactions, which included commenting on profile pics of female questioners and extending the chat time "to allow the pretty girls [to ask] questions."

The aftermath: While O'Leary has been routinely dressed down in the press for some of his actions, he continues to tread the hot water he's in with aplomb. A good number of people appreciate his irreverent style, and his comments don't seem to have hurt sales: Ryanair is set to record fiscal 2014 net profits above 500 million euros ($690 million). Standard & Poor's rates it the best investment in the airline industry.

However, O'Leary has (apparently) realized the airline's image needs a makeover. "We have been needlessly irritating people, from our creaking old website to our interrogation of passengers over the size of their purses," he told the Associated Press in March, announcing a new initiative that includes a revamped website, new TV ad campaign, and a partnership with Google (GOOG) to allow Ryanair fares to be searched online.

9. Pax Dickinson, Former Executive at Business Insider

The blunder: The Business Insider chief technology officer regularly spewed racist, homophobic and sexist tweets and comments on his own publication's stories, until they finally caught the virtual eye of the Valleywag blog. His defiant response: "It is not misogyny to tell a sexist joke, or to fail to take a woman seriously, or to enjoy boobies."

The aftermath: One day after Valleywag's post, Business Insider editor in chief Henry Blodget announced that the CTO was no longer with the company. Dickinson is now the CTO at Glimpse Labs, the startup he cofounded with Elissa Shevinsky, who has apparently forgiven him for his comments about women. Read his interview with NY Magazine shortly after he was fired from Business Insider and decide if you can.

9 Mouthy Executives and How They Suffered
As if his $65 billion Ponzi scheme and serving a 150-year federal prison sentence for it wasn't enough, prosecutors in January 2014 revealed an IRS analysis showing Madoff didn't report $242.9 million in federal taxes from 1993 through 2007. Some of his former employees are also accused of having unreported income, one as high as $3.5 million.
The billionaire creator of Beanie Babies was sentenced in January 2014 to two years of probation for tax evasion on $25 million in income that he kept in Swiss bank accounts. Prosecutors say Warner earned $3.1 million in gross income in 2002 through a secret offshore account starting in 1996. He has agreed to pay $53.5 million, half of the amount he had in a secret UBS account. The federal government has pushed for high-profile prosecutions of Americans concealing income overseas, often in Switzerland.
Wilson, the self-proclaimed "First Lady" of tax fraud, was sentenced in July 2013 to 21 years in prison, according to an IRS list of top cases it prosecuted focused on identity theft. Wilson, then 27, of Tampa Bay, Fla., was also ordered to pay $2.2 million. Larry was sentenced to 14.5 years in prison and ordered to forfeit $2.2 million. From at least April 2009 through their arrests in September 2012, the pair fraudulently obtained tax refunds by receiving U.S. Treasury checks and pre-paid debit cards loaded with proceeds from false tax returns they filed in the names of other people without those persons' permission or knowledge, according to the IRS. Wilson boasted on Facebook that she was untouchable and spent lavishly, including $90,000 on an Audi A8 and $30,000 on her son's first birthday party.
In May 2012 the leaders of a multimillion dollar fraud ring were sentenced to 334 months (Dale) and 310 months (Grant) in prison and ordered to pay more than $2.8 million in restitution to the IRS. From 2009 through 2010 they filed false tax returns using stolen identities. Dale admitted to filing more than 500 fraudulent returns that sought at least $3.7 million in tax refunds, using the names of Medicaid beneficiaries that Dale obtained while working for a company that serviced Medicaid programs.
While not the biggest tax fraud case with a $2.1 million refund through a fraudulent 2011 tax return, she may have been the most creatively stupid. She falsely claimed $3 million in income using TurboTax, which issued her a prepaid Visa debit card with $2.1 million on it after her home state of Oregon approved her claim. She went on a $200,000 spending spree and was only caught after she reported the card lost. That's right: She was caught after reporting a $2.1 million debit card lost that she only got because she filed a fake tax return.
In February 2014, Hilton, 68, was among 13 people indicted in Los Angeles and Riverside counties in California for using stolen identifies to file fraudulent tax returns. Hilton's tax scheme sought nearly $2.9 million in fraudulent tax refunds for the 2008 tax year. Hilton owns two tax preparation businesses
The doomsday prophet from Cincinnati was convicted in June 2012 of five counts of tax evasion for not paying more than $300,000 in taxes between 2005 and 2010. He funneled money into a foreign bank account, lied on his tax forms and wrote off personal expenses as church expenses, a grand jury found. Weinland has wrongly predicted the world would end a few times.
The former chief administrator of the small California city of Bell, Rizzo was sentenced in April 2014 to 33 months in federal prison for tax evasion. He also faces 10 to 12 years in prison on 69 corruption counts. He was ordered to pay nearly $256,000 in restitution to the IRS after pleading guilty in January to federal counts of conspiracy and filing a false federal tax return. Rizzo paid himself as much as $1.1 million as Bell's top administrator before he was fired in 2010. Federal prosecutors say that from 2005 to 2010 he claimed more than $770,000 in phantom losses on his tax returns. 
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