Honoré de Balzac is often misquoted as having written, "Behind every great fortune lies a great crime."
That's not quite an accurate translation of what the famous French author wrote, but there's a kernel of truth in it, as evidenced by the early histories of some famous U.S. businesses. It's well known that the robber barons of the Gilded Age -- the men who built empires like U.S. Steel (X), Standard Oil and the great railroad companies -- used stock manipulation, bribes, union busting and violence to achieve their goals. For example, Jay Gould, one of the nastier tycoons, reportedly once said this about unions and the thugs he employed against them: "I can hire one half of the working class to kill the other half."
And recent decades have seen their share of outrageous malefactors, too: Bernie Madoff,Ken Lay and Jeffrey Skilling and Dennis Kozlowski spring to mind. But the five subjects we've picked have earned their places in business history with successful enterprises and classic brands -- which is why the tales of their unsavory behavior may surprise you.
To be fair, most of these tycoons and companies had their softer sides, too -- donating huge sums to charity in their later years, or treating employees with paternalistic kindness. It's the contrasts that make them such fascinating bastards.
5 of the Biggest Bastards in the History of Business
5 of the Biggest Bastards in the History of Business
According to "100 Great Businesses and The Minds Behind Them," Charles Revson, founder of Revlon, once chided an employee: "Look, kiddie, I built this business by being a bastard. I run it by being a bastard. I'll always be a bastard and don't you ever try to change me."
The beauty business as run by Revson was ugly. He spied on competitors, eavesdropped on employees, and encouraged underhanded sales tactics such as sabotaging competitor's displays, bribing manicurists, and unscrewing nail polish bottles so the contents would dry out and ruin rivals' sales. Andrew Tobias' biography, "Fire and Ice," is filled with juicy anecdotes about his toxic behavior.
One of the most admired men in American history is inventor Thomas Alva Edison. He brought electric light to the world, but as a businessman, he had a dark side: greed.
One telling anecdote: Edison offered Nikola Tesla (who would later invent the alternating current electrical system) a deal: If Tesla could redesign Edison's direct current generators to solve their problems, Edison would give him $50,000 -- a fortune back in 1885. After months of grueling work, Tesla succeeded. Edison then reneged on the offer, reportedly saying that it had just been a joke, and telling the Croatian native, "You don't understand our American humor."
But his mistreatment of Tesla was small potatoes compared to how he treated other firms. Edison's RCA exacted exorbitant charges for the film camera technology that Edison invented, which drove the early film industry to flee to California, where it could escape the thugs whom RCA hired as collectors.
And on the other side of the coin, for decades RCA refused to pay royalties to other inventors to license their patents, often driving them to bankruptcy by burying them in legal paper. Philo T. Farnsworth, credited as the inventor of television, held out for almost a decade until RCA buckled and paid him $1 million.
You may wonder how a business can be a bastard. Well, wonder no more: The popular image of Coca-Cola -- the company of jolly Santa Clauses, playful polar bears and sweet, refreshing drinks -- glosses over a history of strong-arm legal maneuvers that put 7,000 soft drink competitors out of business. From 1916 to 1926, Coke sued -- and destroyed -- almost every drink maker with a vaguely similar name, that used red imagery in its ads, or even sold a similar-colored soda.
Among the few that survived was Pepsi-Cola (PEP), which managed to endure the standard trademark violation suit. But even after a settlement in which both parties agreed to respect their U.S. trademarks, Coca-Cola tried again by suing Pepsi-Cola internationally.
According to "How the Cadillac Got its Fins" by Jack Mingo, during World War II, Coca-Cola used its considerable political pull to get the drink named a "war priority item," thus spreading its product worldwide. It was even bottled in Nazi Germany.
John Patterson founded National Cash Register in the early 1900s. It became a huge success, but more enduring than the business Patterson built was a term he inspired: "firing" an employee. But when this nightmare of an employer used the term, it was meant nearly literally.
Yes, Patterson directed that underperforming salesmen's desks and chairs be carried outside headquarters and be torched as the signal that their employment with him was at an end. (At least they weren't still sitting in the chairs when they were set ablaze.)
As for job security even for good employees, forget it. Patterson's motto was, "When a man gets indispensable, let's fire him." The slightest infraction of his many lifestyle rules, such as consuming pepper, was grounds for dismissal.
NCR acquired or sued into destruction most of its competitors until the company was found guilty in 1912 of being a monopoly and violating the Sherman Antitrust Act. And eventually, some of that bad karma caught up with Patterson: One of his fired executives, Thomas Watson, went on to launch a company which became a perennial thorn in NCR's side, and would utterly eclipse it in business history: International Business Machines (IBM).
Real-life candy company chicanery inspired the backstory of Roald Dahl's beloved children's book "Charlie and the Chocolate Factory." In the early 1940s, Hershey (HSY) and Mars Inc. were allies, with Hershey supplying chocolate to Mars for its M&Ms. But after the war, the company led by Forrest Mars and the one run by Milton Hershey entered their own Cold War phase. They spied on each other, sabotaged each others' displays, and poached employees to gain trade secrets. Mars, the headquarters of which are just down the road from the CIA, even finagled some satellite imagery on cocoa crops to gain the edge on Hershey with the aid of the agency.
In "The Emperors of Chocolate," Joel Glenn Brenner details many more anecdotes about the secretive, eccentric Forrest Mars and the company he founded. And the battles continue: Mars initiated a trademark violation suit against Hershey just this spring over alleged infringement of its Maltesers candy.