A new ethical paradigm for the sailing club

September, 2002

By Dodge Morgan

If I were to run a sailing club in the style of those guys who have been running companies such as Enron, Tyco and Adelphia I would:

Change the name to “World Dominance Yacht Club,” incorporate, and appoint a board of directors composed of beautiful people who really don’t give a shit.

• Raise money for operating expenses from stupid, innocent people by telling them their investment will increase their personal net worth by an astounding multiple.

• Create a public mission statement: “WDYC is passionately dedicated to deliver the sailing experience to kids, cripples and homeless people the world over for the ultimate financial benefit of our precious investors.” My personal mission statement would remain in a locked drawer for my great-grandchildren: “Shut up, you little bastards, if it wasn’t for my arrogance and greed, you wouldn’t have the droppings found in that trust fund of yours.

• Buy an overnight in the Lincoln bedroom with a club election fund donation.

• Purchase a half-dozen very elegant sailboats for show and several thousand pieces of nautical wrecks for the balance sheet.

• Personally own all the WDYC assets and lease them to the club at rates yielding full write-off in less than one week.

• Hold frequent board meetings in faraway exotic places with agendas composed of 16-course meals, private yachts, Italian suit fittings, sex services, and anecdotal reports on how precious and important the dumb masses indicate directors are.

• Intensely avoid any references to actual sailing or sail training issues as being insignificant to directors’ lofty concerns.

• Retain Johnnie Cochran and F. Lee Bailey at quadruple their standard rates for PR purposes and just in case I get caught in some infraction of a small rule only other people are supposed to follow. Retain ex-Arthur Andersen auditors who will accept being lured by lucrative consulting contracts and being paid in stock options.

• Hire our lowly direct labor people on the pretense of prestige and promised wealth from stock options. Stock options to labor would be priced at twenty-two thousand times those to me and my top managers and directors.

• Interview jailed ex-chief financial officers to identify one of their peers still outside because he/she has managed to avoid indictment and then I’d hire the son-of-a-bitch.

• Create many wholly owned subsidiaries and sell the fleet to them, one wreck to one subsidiary at a time. I would account these capital sales as straight revenue on WDYC books and as assets on the subsidiary books. Asset values (or sales revenues depending on which set of books one uses) for each boat must be adequately overstated in increasing percents as transfers continue from one division to another and another. I would get bank financing on each asset at each transfer, over and over again. It would help to have several competing bankers who do not talk to each other and who are impressed by our public mission statement, by the integrity of our auditors, by the impressive reputations of our directors and by the fact I have slept in the Lincoln bedroom.

• Put on lavish cocktail parties for influential, well-placed guests and eavesdrop on their gossip to see how well I was getting away with my ploys.

• At the first sign that the skin of my bubble was thinning, certainly before it burst, borrow money from the club to exercise my cheap stock options, unload my equity position to those stupid, innocent outside investors and award myself a bonus of all the (borrowed) cash on the balance sheet.

• Go into hiding in Brazil. No friggin’ way am I going to don striped overalls for a lousy sailing club.

Dodge Morgan broke all sorts of records when he single-handed American Promise around the world without stopping in 1985 and ’86. He lives on Snow Island in Harpswell, Maine.