Overdrawn At Amex


Jon Friedman and John Meehan

Putnam's -- 272pp -- $24.95

The real focus of House of Cards is American Express CEO James D. Robinson III--his meteoric rise and the erosion of his once-pristine reputation. Robinson, who didn't talk to the authors, is shown as an empire builder driven by vanity and ego. That led to a flawed strategy to create a financial-services powerhouse through acquisitions, write Jon Friedman, a former BUSINESS WEEK investment banking editor, and John Meehan, BUSINESS WEEK's banking editor. "In the end, AmEx was a collection of purchases and personalities, not a cohesive corporation," they conclude.

Image--Robinson's and the company's--came first. The book opens with Robinson losing his cool over a photo in a Boston paper showing a butcher knife stabbing an AmEx card. The story is about restaurants protesting AmEx's merchant fees. Robinson blasts two execs not only for letting the underlying problem fester, but also for jeopardizing the corporate image.

Other fly-on-the-wall accounts detail Robinson's shopping spree. Buying firms such as E. F. Hutton & Co. was a disastrous distraction, as were his battles with executives from acquired companies. Most damaging was his feud with Edmund Safra, head of Trade Development Bank. After Safra quit, AmEx operatives planted unsavory articles about him. AmEx later apologized and gave $8 million to Safra's favorite charities. Robinson received a stern warning from his directors. But, the authors say, so many are Robinson loyalists that his tenure is assured.

Robinson's personal life is also scrutinized. Eager to escape the shadow of his father, a prominent Atlanta banker, Robinson came to New York and, using family connections and hard work, rose quickly at J. P. Morgan & Co., then won the helm of AmEx. After divorcing his first wife, he dated heiresses, actresses, and his secretary before wedding public-relations dynamo Linda Gosden in 1984. They were the power couple of the moment. But by the '90s, the authors note, the results of a decade of ill-fated acquisitions caught up with Robinson--and his image.

Before it's here, it's on the Bloomberg Terminal.