Feeding the Beast: How Wedtech Became the Most Corrupt Little Company in America.

Feeding the Beast: How Wedtech Became the Most Corrupt Little Company in America Feeding the Beast: How Wedtech Became the Most Corrupt Little Company in America. Marilyn W. Thompson. Scribner's, $22.50. Over a period of roughly 10 years, beginning in 1975, an inconsequential South Bronx machine shop, Welbilt Electronic Die Corporation, later renamed Wedtech, managed to gather and utterly dissipate approximately $150 million of public money and private capital. Its founder-promoters early battened on to the possibilities afforded by well-meaning "set-aside" legislation designed to give minority-owned businesses a leg up in government contract work. By the time the sorry "saga" had run its course, Wedtech or, more properly, the relatively small public and private money sources to which it provided special access, had become a schooling ground for as rich and greedy a variety of shark as ever gathered in one place in the history of American business.

It is this quality of concentration, this extraordinarily high per-dollar ratio of peculative diversity and creativity, that gives the Wedtech story its particular flavor. This is not, as the publisher's blurb suggests, "the worst domestic scandal of the Reagan administration." That laurel surely belongs to the still-unfolding savings and loan crisis, the criminous underpinnings of which are only now beginning to become visible.

Nevertheless, Marilyn W. Thompson, a New York journalist and an early digger into the Wedtech scandal, has delivered a smoothly written, frequently intriguing, and just as frequently maddening account of the scam's brief life and flush times. Within the dimensions of the story as she has chosen to tell it, surely nothing has been left out. Indeed, incipient mulcters of the public purse could do worse than to take her version (I believe at least one other "big" book on Wedtech is in the wings) as textbook and Cicerone.

The problem with Thompson's book is as much a matter of taste as anything else. She is almost exclusively concerned with the processes of fraud. These may by turns be fascinating, outrageous, even bloodcurdling, but in business, even of the shadiest sort, process must inevitably boil down to meetings, conversations, and the preparation of documents. Wedtech was a tale played out by some of the most florid characters a novelist could wish for; it would embrace a vast cast of suborning and suborned: street-smart "dese, dem, and dose" types, a congressman, a goodly portion of the backchannel operators of the Reagan White House and associated executive departments, assorted New York politicos and, at the end, financial exotics of the sort only California seems capable of spawning. Closer, continuous, and more imaginative focus on some of these characters would have enlivened the narrative even as the coils of complication drew tighter. Thompson tends, in my opinion, to concentrate too closely on the "deal" side of Wedtech; she follows too hard on the money, too closely and too doggedly, and after a while the changes rung on a single theme become monotonous and wearisome.

Not that fatigue wouldn't, to some extent, be inevitable. Basically, what built Wedtech up and tore it down was overrepetition of a business strategy as honored by time as it is worn: If someone is in your way, make him an offer. What is truly astonishing about Wedtech is how receptive to co-option one "obstacle" after another was. Someone like convicted and disgraced ex-congressman Mario Biaggi is easy to understand: he arrives on the scene with his hand out. But as one servant/guardian of the public weal after another sells out for ready cash or bargain-priced (or gratis) Wedtech stock and fastens another tarnished star to the tail of this rising comet, it really makes one think about what sort of polity we have become. Finally, of course, it must be remembered that nothing gets as far as Wedtech did without the participation of "respectable" elements of society, persons of standing at the bar and on the exchange. What Uncle Sam pumped into Wedtech was peanuts compared to the sums extracted from the investing public, which would not have happened without the highly commissioned sponsorship of the most esteemed names in law, investment banking, and public accountancy.

Thompson's account neglects an inferential side of the story that also needs to be addressed. When the company finally collapsed, it employed over 1,000 people in several plants. Presumably, while the boardroom shenanigans were being played out, the company was actually making something. Presumably, while the sharks tore at the carcass, other principals, like co-founder Joseph Mariotta, who all but disappears from Thompson's account, were busy on the factory floor.

I would like to have learned more about this. Thompson's version focuses too greatly on the financial fun and games, making Wedtech seem as if it existed solely as a shell, a boiler room invention through which one money malefaction after another could be concocted and implemented. That this was to a great extent true, I have no doubt, but it took 10 years to kill this company; those 1,000 employees must have been doing something during that time, and very possibly doing some of it right.

It is to be hoped that Wedtech is merely a curious and singular bit of brigandage and not a symptom of the general degradation of our commercial culture. I fear not, however--which brings me to my final quarrel with Thompson's approach. Like most contemporary business journalism, Feeding the Beast is relentlessly non-judgmental. Thompson is resolute in avoiding questions of "larger significance." Or is Wedtech just another glittering rhinestone in the diadem of the American genius for financial duplicity, rating somewhere alongside Fisk, Gould, and Vanderbilt's Erie Railroad caper?

Yes and no. As a tale, it is certainly full of sound and fury, peopled by a cast whose contempt for "values" verges on the breathtaking. As a cautionary tale? Ah, there's the rub. My own guess is that investigators looking into exactly how now-defunct thrifts were looted--with complaisance if not connivance on Uncle Sam's part that obscured the boundary between mere dereliction of duty and outright corruption--could profit as much as any would-be swindler from a close study of Marilyn Thompson's exhaustive study.