Annals of white-collar crime, James Altucher edition

By Felix Salmon
February 28, 2011
phone hacking in the UK, and Roger Ailes allegedly suborning perjury in the US.

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Rupert Murdoch is one of the most successful businessmen in the world. But his company is being buffetted hard by ethics scandals — phone hacking in the UK, and Roger Ailes allegedly suborning perjury in the US. It’s right and proper this should be the case: the allegations are extremely serious, and involve people very high up in the corporate structure. News Corp might still carry its founder’s aggressive and entrepreneurial DNA, but that’s no excuse, and in any case there are lots of aggressive entrepreneurs who never commit these kind of crimes.

James Altucher isn’t one of them. An admitted criminal, he posted “10 Confessions” yesterday, including these:

6) In a year I won’t specify but more than five years ago I had a surefire technique for breaking into just about anyone’s email. Anyone who was potentially a threat to my business at the time had their emails read by me. And if they were really disruptive to my business I would disrupt their emails enough that they never bothered me again.

8 ) I had a car accident when I was 18 years old. I ran a redlight and almost killed someone. In the court case the lawyer encouraged me to lie and say the brakes didn’t work. So I did.

9) When I was at HBO I was helping to decide which companies would do which websites within the company. I had started a company on the side that was making websites for entertainment companies. I hired my own company in almost every instance.

These crimes are just as serious as those being alleged at News Corp. Hacking email is worse than hacking voicemail: Altucher didn’t just read his rivals’ email but also “disrupted” it, whatever that means. Perjury is worse than suborning perjury. As for self-dealing, it turns out that Murdoch has been accused of that, too, again in a less egregious manner.

If I were ever found to have hacked someone else’s email in an attempt to gain an advantage over the competition, Reuters would quite rightly fire me on the spot. And my crime would in no way be absolved if Reuters found out through me confessing to such a thing in public. Someone who’s honest about his criminal behavior is still a criminal.

In the comments to his post, Altucher says that his crimes “helped me ultimately to look forward and be a better person,” whatever that’s supposed to mean. His readers are lapping it up: one of them writes that “Your blog has skyrocketed to among my top 10 within 3 weeks of subscribing. Mostly because of how insanely honest you are.” Altucher replies, without any visible sense of irony, “thanks. I’m afraid that honesty is a scarce quality in the financial community.”

Oh, and he helpfully informs another commenter what the statute of limitations is “for most federal crimes.”

It’s common to see people like Altucher fall back on the “everybody does it” argument in cases like this — Altucher’s basically saying that all entrepreneurs behave this way, and he’s just being more honest about it. I don’t believe him.

There’s also the “let he who is without sin” defense — essentially saying that no one can criticize what Altucher did unless they have never committed any kind of crime themselves. That’s just silly — but I do feel comfortable saying I’ve never done anything like this. Run a red light on my bike? Yes, I’ve done that from time to time. Lied under oath? Hacked into e-mail? No. Maybe that helps explain why I’ve never started a company, but I wouldn’t want to ever start a company if such flexible morals were in any way necessary.

The fact is that white-collar criminals are, in general, incredibly good at deluding themselves that they’re good people, even when they clearly aren’t. The classic example being Bernie Madoff:

He can’t bear the thought that people think he’s evil. “I’m not the kind of person I’m being portrayed as,” he told me…

He said to me, “I am a good person.” …

“Does anybody want to hear that I had a successful business and did all these wonderful things for the industry?” he continued. “And got all these awards? And so did my family? I did all of this during the legitimate years. No. You don’t read any of that.” …

He sees himself at this stage as a kind of truth-teller…

Bernie Madoff is still keeping his own moral ledger, adding things up in his own way, telling himself that someday, he’ll come out ahead.

The point here is that self-forgiveness is incredibly close to self-delusion. Altucher is currently basking in the attention of people who are reading his confessional blog entries in a fascinated manner, much as they might read a crime-filled memoir. But that doesn’t mean he’s forgiven.

In one of Altucher’s last FT columns, he wrote this:

My friend told me: “Sometimes you confuse friendships and business. You need to stop that.” Then he added: “Look into the mirror and ask yourself if you are a trustworthy person. If you can do that three days in a row then let me know and we’ll get together.”

We haven’t spoken since.

The obvious message here is that Altucher isn’t trustworthy. But the subtler message is that so long as you’re trustworthy in friendship, you don’t need to be trustworthy in business. I will never believe that to be true. And I certainly wouldn’t ever trust Altucher if he proposed doing business with me.

Update: Altucher responds in the comments. After calling this post “grossly inappropriate and unprofessional”, he adds:

All of these things I wrote about, mentioned in Felix’s article, are 15-35 years ago or more. Not sure where your anger is at, Felix. You would be hard-pressed to find anyone professionally or personally who has a single complaint against me.

Update 2: As a tipster reminds me, Altucher reckons that maybe insider trading should be legal. Which would be handy indeed for anybody with the ability to hack into others’ email accounts.

Update 3: Altucher has now taken the post down.

Update 4: Commenter Bill Andivey presents the James Altucher rap.

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