A disastrous business career leaving chaos and scandal in her wake, followed by political failures.
I would like to pay a special thanks to Brian Frydenborg, who did the majority of the research for the business aspects of this profile. Rather than me paraphrasing his research I have simply cribbed word for word large sections of his work. I will link this page to his full research when it becomes available. I have edited it in order to make the material easily digestible, even though the end result will likely make you want to throw up and bash your head against the wall. Any typo’s, or typos, grammatical errors will likely be because of me—not Brian.
WHO IS CARLY?
“Character is revealed under pressure, all will be revealed in time….we have to remember who we are”
Carly Fiorina has evidently performed well in the debates. That is what the media is reporting, oblivious again to actually discussing substance (which to be fair is never on display during these clown debates, but the media loves the ratings this Ringling Brother’s circus bonanza creates). But soon the shallowest of media love-ins will be forced to report the actual facts. The façade will be removed and Fiorina’s real vulnerability will soon be front and center, and this is the main reason why her winning the nomination and especially the presidency is a long shot.
Fiorina tries to portray herself as a political outsider, only Fiorina isn’t a political outsider by choice, but by defeat. Forbes reports “But people shouldn’t forget the mistakes she made when she first got involved in politics, as John McCain’s economic adviser in his failed 2008 presidential bid and her work as fundraising chair for the Republican National Committee. At the time she made several gaffes, saying in a radio interview that Sarah Palin didn’t have the experience to run a major company like HP, and neither did McCain. She went silent for some time after that. In 2010 she failed in her bid to oust California Senator Barbara Boxer and was caught calling Boxer’s hair “so yesterday” when she thought a mic was turned off.”
The New York Times added “And before McCain picked for his running mate that disaster of a person who was governor of Alaska, The Washington Post’s Dana Milbank wrote of Fiorina’s ambitions: “Fiorina, for her part, couldn’t be any more plain about her vice presidential ambitions without taking out an ad.”
In 2010, Fiorina decided to try her hand at running her own campaign by trying to unseat California Senator Barbara Boxer, she lost by ten points—even though Boxer was considered beatable and 2010 was the Stupidparty wave election.
Fiorina has one core strength, that being to promote herself, a can-do optimism, an ability to ignore reality, (i.e. when people reported to her that her business targets were not achievable—they would be dismissed as pessimists). A former colleague was amazed at her ability to “manage up” i.e. an ability to ingratiate herself with higher-ups and always make herself look good. “Carly can market the tar out of herself. That’s what she was known for,” says one former Lucent manager. (Source: Backfire by Peter Burrows.)
So as we will soon see, Fiorina is great at self-promotion, but also great at leaving business catastrophes and scandals in her wake. Therefore it’s fair to mention the opinion of her first husband as reported by Bloomberg: Todd Bartlem, a Stanford classmate who’s told other reporters that in the years they were together, she had no political opinions and considered Dress for Success* her bible. When reached by phone recently, Bartlem said only, “You’re wasting your time, and I don’t want you to waste mine. In the clown car that is the Republican Party, she’s the ultimate clown.” (Click.)
*Around 1980, when Fiorina would have been beginning her career, the workplace environment would have been significantly more sexist than it is today. It would appear that Fiorina would have been strategically cognizant of the fact that cutting edge research at the time would have have indicated that women who “Dressed for Success” would be four times more likely to be viewed as successful by male managers (who all went into exercise saying that they did not judge by appearance) compared to women who did not dress well.
CARLY THE BUSINESS TITAN
Carly the trailblazing self-made secretary-to-CEO global business leader who could play hardball with the boys and lead major corporations to dazzling success.
Even at the second debate, most candidates, save for Trump and Christie, stayed away from attacking Republican presidential hopeful Carly Fiorina. That will likely change now that she poses more of a serious threat.
I am talking, of course, about what is the main premise of her campaign and how Fiorina has defined herself for years: her narrative that she is a trailblazing self-made secretary-to-CEO global business leader who could play hardball with the boys and lead major corporations to dazzling success.
The problem with this narrative is that one of its two pillars is blatantly false and the other is only true if you look at the first few quarters of financials following the cooking of the books, before the turkeys are hurtled back to be roasted: she seems, by all reasonable metrics, to have been a terrible CEO and senior executive in her two big stints at that level, at AT&T/Lucent and Hewlett-Packard.
- Not Self Made: As a young Stanford graduate, she enjoyed a romantic adventure in Italy, then demanded special treatment when she failed to turn her application to business school in on time. The fact that she had such a powerful and prominent father would hardly have been ignored at the time, either. Thus, the idea of Fiorina as a self-made woman is hardly an accurate story: she was a child or privilege, born into wealth and power, attended one of the great American universities, got special treatment to get into business school, and got recommended for a fast-track at AT&T by her school’s dean.
- Turns Lucent into an Enron: From AT&T came born as Lucent in 1996 and it had the biggest IPO in American history at the time ($3 billion), and Fiorina would eventually head its largest division over a period of time that would see Lucent, in many ways, become the Enron of the telecommunications industry. As the law firm of Dinker Biddle reported:
“The massive losses suffered by participants in the Enron and Lucent 401(k) plans raise questions regarding fiduciaries’ responsibilities with respect to employer stock as an investment in 401(k) plans. How Congress or the courts answer those questions will affect all companies offering company stock in their 401(k) plans…. The Lucent and Enron lawsuits involve tens of thousands of participants, hundreds of millions of dollars in lost benefits, and claims that range from a conspiracy to hide offshore debt instruments (in the Enron lawsuit) to misrepresentations regarding “business problems” that would inevitably result in stock value declines (in the Lucent lawsuit).”
- Creates $500m in losses: One venture she oversaw was a joint project with Phillips that began in 1997; it was abandoned in 1998 after suffering $500 million in losses. The details of this story can be found in a report by Forbes Magazine titled “What Carly Fiorina’s Multiple Career Screw-Ups Say About Her Leadership Skills”
- One of the Worst deals in Business History: for her advice on a deal that went forward in January 1999 after a long buildup to buy Ascend Communications for somewhere between $20 to $24 billion—a significant portion of Lucent’s assets—that is one of the worst deals in business history; she carried a lot of weight at the time and failed to advise against this disaster. Within a year of the deal, most of Ascend’s “management and talent” had abandoned ship and left Lucent, creating difficulties for product designing and basically destroying the main rationale and premise for the entire deal. The Ascend people, used to a quick pace at a small company, found Lucent overly-procedural and stifling and not to their liking… Thus, the deal was questioned at the time as being too short-sighted as this was essentially Lucent backing what was soon to be an obsolete wrong horse. Even before the end of 1999, Lucent quickly realized that it had made a huge mistake.
- Crooked Accounting: Fiorina herself took over the division at Lucent (the company’s largest) that would sell equipment to the booming and emerging service provider companies laying fiber-optic cables, wireless networks, and other infrastructure that would lead to the Internet as we know it today. Lucent’s sales along these lines went from $15.7 billion in 1997 to $19.1 billion in 1998 (when Fortune named her the most powerful woman in business) to $23.6 billion in 1999. But there was a big bubble happening here, and in the process Lucent even made loans to these companies so they could afford to buy even more equipment, far more equipment than they actually needed to create far more infrastructure than was needed. In what can only be described as a pretty crooked accounting scheme, money from the loans to these clients was counted as revenue, the debt being actually categorized as a firm asset. In its reports to the S.E.C., Lucent used the excuse “but everybody else was doing it.”
One should also consider that the pay of executives like Fiorina was linked to revenue increases, including such fake revenues. So Fiorina is to creative accounting what Madoff is to investing genius.
But we have only just begun, because like any incompetent Junky, the longer one goes without an intervention and rehab, (getting caught) the worse the crisis, the bigger the bubble.
In particular, Fiorina orchestrated a deal for a client company named PathNet in which Lucent agreed to lend PathNet more money than the worth of the equipment it was buying from Lucent. That meant PathNet would not be putting any money down for the Lucent equipment up front and that PathNet would even get extra money from Lucent in the loan. Using “generous” accounting, PathNet had roughly $100 million in equity (stock holdings); it also owned $350 million in junk bonds that were supposed to pay out 12.25% interest. On top of this, Lucent was loaning it $440 million (expanding to as much as $2.1 billion! in the future). This gave it a leverage ratio—the ratio of debt to equity—of 8/1, or 8.0, and that was if Lucent did not loan PathNet any additional money; in general, if this number is higher than 2.0, the investment is considered risky. So, yeah, Lucent’s loan was creating a situation at PathNet where the company risk was four times greater than what was generally considered acceptable. The company also just had about 100 employees and only $1.6 million in yearly revenue…
Nothing to worry about here, right, Carly? Full steam ahead! As Forbes also kindly pointed out:
“The Lucent that Fiorina walked away from, taking with her $65 million in performance-linked pay, was not at all what it appeared.” Meanwhile as she attempt to become president Fiorina gets to say ‘All Of The Rest Of Us Are Getting Crushed’ By A System That Benefits The Wealthy. Perhaps she should be reminded of is who is doing the crushing:
What have we here, check out what the consequences for Lucent shareholders (and later employees) were, once the extent of accounting malfeasance had been recognized,
Fiorina’s culpability did not stop with PathNet. Just after Fiorina left Lucent in 1999, the company filed reports to the S.E.C. that stated it had guaranteed some $7 billion in loans to companies—many of them brand-new and structured financially in risky ways similar to PathNet—and had already given out $1.6 billion of that $7 billion. If any of this sounds familiar, these financial dealings are similar to the antics of the sub-prime mortgage loaning schemes that caused the 2008 Global Financial Crisis and the Great Recession. Soon, the bubble burst, the industry imploded, and PathFinder filed for bankruptcy in 2001.
Shortly after Fiorina left Lucent in July 1999, Lucent collapsed: by early in the fourth quarter of 2000, Lucent’s stock was already down 70% and its CEO fired; it’s stock would tumble even further, to less than $1 a share; it chose to settle with the S.E.C. in 2004 on charges that it committed over $1.1 billion in accounting fraud in 2000, when much of the direction of Lucent would still have been a product of Fiorina, who had chaired the company’s biggest division only months earlier, and though she was not tied directly to any of the fraud, some of the people who were fined were her close associates, promoted and supported by her— at the very least raising serious issues about her judgment.
Several sources have her pushing aggressively for these client loaning deals and being very concerned about the press releases detailing them (some loyalists to her and Fiorina herself claim she tried to reign in the scale of these out-sized deals, but that would still have her pushing for what would have been just slightly-less super-risky moves). In any event, the press coverage and the seeming miracles of the short-term numbers her company was putting up attracted the notice of tech giant Hewlett-Packard (HP), which gave her $65 million in restricted stock to partly compensate for some $85 million in Lucent stock she would leave behind to entice her to come on board; Fiorina likes to take credit taking $20 million less that she could have asked for from HP, but value of her Lucent holdings as well as the rest of the $85 million would have been worth almost nothing not long after had she relinquished her shares.
While Fiorina has escaped direct linkage to the accounting fraud the New York Times reported:
“One of those executives was Nina Aversano, a senior executive at Lucent who played a role in the company’s aggressive sales and accounting tactics. Ms. Fiorina, somewhat famously inside of Lucent, literally kissed the feet of Ms. Aversano on stage in front of hundreds of employees after a particularly good quarter.”
So one would normally blame the guy in charge right?
“But Rich McGinn was widely considered to be an empty suit by those that knew him best, and Carly Fiorina was known as a demanding, slam-dunking shark most focused on self-promotion.”
At best Fiorina was clueless and ignorant or unable to control or influence the people around her, at worst she was complicit in wholly irresponsible practices. This is the reality of Fiorina’s time at Lucent during its meteoric rise and just before its meteoric fall as it failed to adjust to a dramatically but predictably changing landscape and engaged in wildly inappropriate and unethical accounting practices (the accounting practice used in the 1999 Ascend and other acquisitions was outlawed in 2001 by the Financial Accounting Standards Board).
In fact, Lucent’s entire setup was a disaster that should have been obvious beforehand from the information anyone could see in its financial statements: in general, it is bad to have your inventory and your receivables (revenue from sales that a client does not pay out right away but promises to pay in the future) grow faster than your actual sales; for all of 1999, for example, Lucent had dramatically higher inventory and receivables growth than sales growth. This meant that they were making/acquiring a lot of products that were sitting in warehouses, losing value, while the actual money they were bringing in was a lot less than promises made by companies to pay in the future, promises that could—and in this case, often were—not kept. Thus, while these inventories and receivables were reported as assets and revenue, respectively, in reality, they might more accurately thought of as risky liabilities, as you cannot pay employees or invest with either. But the rewards for sales performance at Lucent—including for executives like Carly Fiorina—were based on numbers that included the promised receivables, further incentivizing the creation of poorly-structured, dishonestly reported deals. Too many people were making too much money off of these declared revenues, though, to be bothered to even look at the sales vs. inventory vs. receivables growth ratios, but all the information was right there in the public financial statements at the time. This was all also being done while the company was also taking on a massive amount of debt. In January 2000, only six months after Fiorina left, the company declared that its earnings would fall far short of expectations for the first quarter of 2000; it was a sign of much bigger problems to come. Fiorina was in the middle of all of this, either on the wrong side or not advocating for the right side, and thus bears a significant amount of responsibility as one of the company’s top executives, even if she was not the top executive.
However, if HP had known in 1999 what was known later—that much of the “success” of Lucent at that point had to do with fraudulent and creative accounting rather than Fiorina’s leadership of its largest division—it is unlikely that HP would have tapped her to be CEO.
Rakesh Khurana, a Harvard professor who studied the dynamics wrote:
“It’s unlikely she would have been considered for the HP job once it became clear that Lucent’s success had more to do with loose credit terms and creative accounting than any reinvention of the company as the Second Coming of Cisco.”
But bigger disasters await. But before we get into even bigger business embarrassments let’s take a break and have some fun.
Fiorina launches herself into the the Mitt Romney, Paul Ryan Ted Cruz stratosphere—a place where serial liars get to look down upon their gullible flocks with a wry unperturbed amusement. But if you have zero substance the ability to lie is the only way you can breathe, the only way to strive.
Courtesy of Wonkette.com Fiorina said, at the second Republican debate, that she saw video of a Planned Parenthood medical provider leaving an aborted fetus on a table—to die!!!—while discussing how to harvest its BRAINZZZZZ! Asked to provide this alleged video she says she saw, that she could not have seen because it does not exist, her campaign instead pointed to old stock footage that has nothing to do with fetus-snuffing at Planned Parenthood and said, “See? It’s a video, it’s got a fetus in it, DEFUND PLANNED PARENTHOOD.”
Fiorina Joins Mitt Romney, Paul Ryan and Ted Cruz in the Mile high serial lying club:
“Interestingly, no one has denied that babies are being butchered for their body parts at Planned Parenthood clinics and elsewhere,” she said as supporters clapped. “They’re trying to have a conversation about a technicality about a video tape. The character of this nation cannot be about butchery of babies for body parts.”
Being a serial liar means one does not actually even understand the concept of a lie. She feels Hillary Clinton was liar for saying that no abortions take place after the 20-week mark except in cases where the life of the mother is at risk.
“That is a lie,” she said.
Here are the facts on that Hillary statement:
Nearly 99 percent of abortions occur before 21 weeks, but when they are needed later in pregnancy, it’s often in very complex circumstances—the kind of situations where a woman and her doctor need every medical option available. Abortions later in pregnancy may involve rare, severe fetal anomalies and serious risks to the woman’s health.
I think Hillary’s statement is pretty damn accurate, but I guess a politician should never say never. So Democrats make statements that are 90-99% accurate and that equates to Stupidparty statements that are 0-1% factual yet they get treated the same? This is the very definition of the false equivalency that destroying democracy – the dumbing down of America. Clearly in certain circumstances to ban abortions after precisely twenty weeks could only be proposed by a truly uninformed and sick individual, as my guest blogger Angie Brill explains:
“They are done out of necessity, not on a whim. Women have these procedures because they have been determined necessary by the doctor and the patient after having discussed health concerns. Many birth defects cannot even be detected until 20 weeks with an ultrasound. And most insurance companies will not even pay for ultrasounds until 20 weeks so the line is drawn right there, isn’t it? What if you can’t have a doctors appointment until the very day of your 20 weeks? What if you cannot get in until the following week? What if the doctor tells you on the day of your 20th week that your child has a birth defect and you have to decide immediately? Do you have time to go home and discuss options with your family? Will the doctor perform the surgery that very day? The obvious answer is: NO. Of course, no intelligent person is having this discussion and only irrational people are screaming about nonsense meant to distract anyone from having meaningful reflection on the human beings (those which are already actually alive) who are left in these situations and what we would be allowing them to go through if this bullshit passes Congress.”
Here’s another lie, told on two Fox shows, Hannity and Chris Wallace:
Fiorina maintained that even though Hewlett Packard goods were sold in Iran while she was CEO of the company, the SEC had performed a “thorough investigation” that “proved” she and other executives were cleared of having any knowledge of the matter.
There are no SEC documents clearing her and her executives, and then there is this little factoid: How could Fiorina claim that she didn’t know about HP’s deals with Iran, when the company named Redington Gulf, a Dubai-based company that sold HP’s goods in Iran, was HP’s “Wholesaler of the Year.”
She then claimed that this award happened after her time at HP, but again she lies: it happened in 2003. Fiorina was not fired until 2005.
Having been caught on that lie she then goes on to display a remarkable knowledge about that situation as she tries to invent a new story.
Fiorina, however, is staking her whole campaign on people believing that she’s not a politician, and that she had humble beginnings—we have already demonstrated that those notions are false.
Fiorina brags that she doubled revenues—but she cut value in half. She talks about doubling employment at HP when all she did was combine the employment of two huge firms—and then lay off 30,000 employees.
Here’s a question, if Hewlett Packard was wrong to fire her, and all the shareholders and employees also wrong, then why has Fiorina never been invited to head up another public company in the last ten years?
1. California has the worst rates of poverty in the nation;
2. California has the worst income inequality in the US; (it come in at # 9)
3. California has the 49th worst education system.
The reality is that California, from being virtually bankrupt under the Republicans, has since performed extraordinarily well from the moment the GOP was banished from having any meaningful power. Jerry Brown took over from a totally dysfunctional California—one that was sinking fast in 2007, and sinking significantly before the 2008-2009 Great Recession—and he has righted that sinking ship. A recent report from Standard & Poor’s, the Wall Street ratings agency, said Brown’s latest budget proposal could help the state “withstand weaker conditions.”
As The Los Angeles Times reports:
California is flush with cash. “We are in a much better position today to deal with that economic downturn whenever it occurs than we have been in the recent past,” said H.D. Palmer, a spokesman for Brown’s Department of Finance. California’s current economic rebound has lasted longer than the five-year average, said Gabriel Petek, who tracks the state’s finances for Standard & Poor’s. However, he said, that doesn’t mean a downturn is imminent. “An economic expansion doesn’t normally die of old age,” he said. “There’s usually a precipitating factor. And right now, we’re not really seeing that.”Technology companies in Silicon Valley have driven a lot of the state’s growth in the last few years. Facebook’s initial public offering in 2012 was so big that legislative analysts took the unusual step of including the company as a factor in their financial estimates. Other areas of the economy have also bounced back, and the state’s unemployment rate continues to fall. California is flush with cash.”
Fiorina, this self promoting albatross around every ones neck, wants to be allowed to spread her wings yet again, this time as President while being oblivious to her history of incompetent catastrophes, leaving poverty and misery in her wake. But it just keeps getting worse, she has now said that she is willing to go to war with Russia over Syria? This, in the seemingly intractable no win scenario where there are no good guys! Evidently the US can do whatever it wants in the region to counter radical Islam, but Russia who has had an even rougher experiences with Islamic fanatics, is not allowed to be active in the region. Why? Because an ignoramus says so.
“I believe we must tell the Russians that we will conduct [and] we will secure a no-fly zone around anti-Assad rebel forces that we’re supporting,” she said on Fox News’s “Hannity.”
“This is a tricky maneuver, it’s a dangerous maneuver, but it’s a maneuver we must undertake because we must make it crystal clear to Russia that they do not get to move into the Middle East and become the dominant outside power, which is clearly their intention,”
So Carly you are Serial Liar, dangerous empty suit, oblivious to reality or expert analysis, which you will trash as not positive enough—and just imagine what would have happened if you had been running California. You, America’s most incompetent business person, dreadful politician, dishonest, opportunistic and all round loser—you at the helm of California, any large Company, the US Government! You can only manage for the quarter, you can only promote yourself and you can only dress for the killing of actual critical thinking.
Yes you do have track record, you have a track record of being a loser. You are a loser.