Enemies in the Boardroom

On June 25, the 15 directors of Vivendi Universal, the world’s second-biggest media company after AOL Time Warner, gathered for a pre-board-meeting lunch in the company’s Paris headquarters, overlooking the Arc de Triomphe. The room was buzzing, since just that morning Bernard Arnault, the chairman of LVMH, the French luxurygoods conglomerate, had resigned from the board. It was the fourth such resignation in six months, during which time the stock had plummeted nearly 70 percent. That afternoon, everyone knew, Edgar Bronfman Jr., the suave, bearded Seagram heir, whose family held the largest single block of Vivendi Universal shares, would call for a vote of confidence in Jean-Marie Messier, Vivendi’s 45-year-old French chairman and C.E.O. The two men had breakfasted together hours before to discuss it, but Messier had been unable to dissuade Bronfman from his course of action.

At the meeting the five North Americans on the board—Bronfman; his father, Edgar senior; Samuel Minzberg, a lawyer representing Edgar senior’s brother, Charles; MarieJosée Kravis, the wife of Kohlberg Kravis Roberts founding partner Henry Kravis; and Richard H. Brown, chairman of Electronic Data Systems—were set to lobby hard for Bronfman Jr.’s motion. After lunch Minzberg approached the lone Englishman present, Simon Murray, the former C.E.O. of the book publisher Hutchinson and co-founder of the Orange phone network. By all accounts Murray appeared somewhat startled as Minzberg clasped him tightly and, in a voice quavering with emotion, apologized for having yelled “Fuck you” at him twice during a heated exchange at a board meeting in May. “Will you vote with us?” Minzberg asked. Murray said he’d listen to the presentations and decide.

During the previous few months Minzberg, whom a fellow board member describes as “ordinarily rather quiet,” had been growing increasingly belligerent as the stock declined. He started sending daily “insulting” E-mails to Messier, says a source. The board member recalls, “Minzberg sounded like one of those lawyers in the courts who screams at everybody. . . . They [the North American board members] went into overdrive with Minzberg leading the charge and Edgar being charming and trying to pretend that Minzberg was some wild boar out of control.”

“They turned it into a personal vendetta,” says one of the European board members of the North Americans’ attempt to oust Messier. Board meetings grew increasingly hostile, with people shouting at one another. However, Messier was not worried—he knew he still had the support of the eight Frenchmen on the board and the French banks.

First up for discussion at the June 25 board meeting was the appointment of a new board member, Dominique Hoenn, the chief operating officer of BNP Paribas, a major French bank. Messier argued that his appointment would quell the critics who were arguing that Vivendi Universal was facing a cash-flow crisis. But Minzberg at first refused to vote, stating that Hoenn had not been approved by Vivendi’s human-resources committee. Messier retorted that the human-resources-committee chairman, Edgar Bronfman Sr., had been unavailable the previous day, when the motion had been put before it. “Clearly, Messier thought the inability of the board to meet was deliberate,” says a board member.

A vote took place at Messier’s insistence, and Hoenn was voted in: 10 Europeans for, five North Americans against.

Next up for discussion was a Goldman Sachs report that Edgar Bronfman Jr. had commissioned after the previous board meeting, on May 29. It concluded that Vivendi would be in serious financial trouble if it could not sell off a number of assets, such as a portion of Vivendi Environnement or Telepiu, the Italian pay-TV business, or if the ratings agencies downgraded Vivendi’s debt again.

“Goldman Sachs sounded alarmist,” says one board member, “but it was remarking on the obvious. No one disagreed with it.” Then Bronfman Jr. raised the question of confidence in the C.E.O. He used a phrase, “the Messier discount,” claiming it was the presence of the C.E.O. that was driving the share price down. Serge Tchuruk, the C.E.O. of Alcatel, a French telecommunications company with a stock performance nearly as bad as Vivendi’s, and Simon Murray argued that Messier should stay. Murray speculated that removing Messier would create instability and hurt the share price further. Bronfman’s motion was voted down. The North Americans were with him, the Europeans against.

The meeting was adjourned. Messier felt sufficiently optimistic to tell analysts on a conference call that he would be happy to remain C.E.O. for the next 15 years.

That weekend, while on business in Japan, Murray got a phone call from Edgar Bronfman Jr.: Messier was resigning. The French directors had suddenly—and inexplicably—changed their minds.

Henri Lachmann, the chairman and C.E.O. of Schneider Electric, who had been among Messier’s biggest fans in the boardroom, was apparently the key turncoat. Lachmann and another French board member, Jacques Friedmann, had gone to see Messier and told him that the French banks were threatening to refuse further credit lines to the company if Messier stayed. When Simon Murray heard this, he resigned as well.

That hot Sunday night in Paris, Messier sat stunned in his office with his chief financial officer, Guillaume Hannezo, and two Lazard Frères bankers. “He was like a guy in the boxing ring,” says a person who was there. “I’ve never seen him like this. He always smiles, he always talks. That night he was not talking or smiling. . . . It was as if he’d been hit by a bus.”

Why did his French colleagues turn so suddenly on Messier, who in just five years had transformed Vivendi from a stodgy utility company into an international colossus? He had been hailed as the savior of modern French capitalism, a mold breaker, an expansionist of Napoleonic proportions. He was spoken of in the same breath with News Corporation mogul Rupert Murdoch, with whom he was obsessively competitive. But whereas Murdoch started with a family fortune and spent a lifetime building his empire, Messier, with no family money, rose to the top in less than a decade. After he moved to America last September, his renown became international. He was the C.E.O. of the moment—sought after for press interviews, museum boards, speaking engagements. Part of that, it’s true, was Messier’s doing. He loved publicity, never seemed happier than when he was sharing the stage with the rock stars his company represented.

But all that was over in a single weekend.

In France, Messier’s failure is considered a national disaster. “He was going to help the French economy move towards a globalized world. . . . In that sense the French business establishment and also to some extent the political establishment had a stake in his succeeding. . . . He was the poster boy for all that stuff,” says La Tribune’s New York correspondent Thierry Arnaud. “Which makes the fact that he failed all the more painful.”

In truth, the summer was a mean season for media-company executives of all stripes, who seemed to collapse like dominoes. “Did you notice Koogle, Levin, Messier, Pittman, Middelhoff left. . . . There may be something happening in the media industry—no?” Messier asked V.F., referring to the sudden departures of Yahoo’s Tim Koogle, Time Warner’s Gerald M. Levin, AOL’s Bob Pittman, and Bertelsmann’s Thomas Middelhoff. But Messier’s professional demise remains the most startling because it happened with such extraordinary suddenness. “Other C.E.O.’s survive when their share price is low,” says a former colleague of Messier’s, adding, “but that’s because they are either owners or they have friends.”

Messier, it seems, has few friends.

“Messier thinks there was a conspiracy,” says a close friend. “He blames three things for his downfall: [French president] Jacques Chirac, Claude Bébéar [the chairman of the French insurance monolith AXA, who would join the Vivendi board after Messier’s resignation], and the Bronfman family,” says a source. (When asked about this, Messier says, “No comment,” but claims he harbors no “paranoia.”) Right after he stepped down, Messier told the newspaper Le Point that “the lobbies” had moved against him—in particular, he believes that the French business elite, many of whom are Freemasons, were responsible. His closest allies don’t disagree, but they think that’s not the whole story. “Il a creusé sa propre tombe,” says one, which translates as: “He dug his own grave.”

Until November 2001 “the little Frenchy,” as Messier once referred to himself (he is only five feet seven inches tall), seemed to possess a gift for empire building. In France, everyone knew his tale: Messier, the son of an accountant in Grenoble, attended all the right schools and married his childhood sweetheart, Antoinette. Working in the French finance ministry under Edouard Balladur, he privatized many state-run businesses; then he entered the private sector as one of the youngest partners ever at Lazard Frères, the French investment bank. There, he shone: “He’s the one guy I’ve met in my career that you would say of, ‘Even if I’m lucky, even if I work hard, I’m not playing in the same league,’” says a former colleague.

Messier worked so hard he acquired the nickname Robocop. Because of the large number of lucrative deals he brought in, his superiors forgave him idiosyncratic work practices, such as not returning E-mails—even to Michel David-Weill, the head of the firm.

Messier was making a name for himself outside the company as well. He became the equivalent of a boldfaced name in a country that doesn’t really have them. For his 10th wedding anniversary he held a party that got written up in all the gossip columns. “He was only 34,” says the French writer Nazanine Ravai. “All the yaya people were there.” The guests included Cabinet members as well as colleagues from Lazard Frères.

In November 1994, Messier left to work for one of his clients, Guy Dejouany, the 75-year-old head of Compagnie Générale des Eaux, the giant 150-year-old water company that also owned Canal Plus, Europe’s leading pay-TV station. In 1996, at only 39, Messier took over from Dejouany. He renamed the company Vivendi and made it plain that his ambitions had to do more with the Canal Plus part of the company than the sewers and purification plants. He bought the Havas media group; 44 percent of Cegetel, which controls SFR, one of the leading mobile-phone operators in France; as well as 24 percent of BSkyB, Rupert Murdoch’s satellite-television company. He also joined forces with Vodafone, the mobile-phone company, to start an Internet portal known as Vizzavi, which he intended would become his main means of content distribution.

Then he turned his attention to America. In June 2000, in what was a clear attempt to echo the AOL Time Warner merger, he acquired Seagram, the liquor company founded by the Bronfman family, by giving the Bronfmans $34 billion worth of Vivendi stock. (In 1995, under the stewardship of Edgar Bronfman Jr., Seagram had acquired Universal Studios and MCA, which became the Universal Music Group, the largest music company in the world. These were the assets Messier had coveted.) The new, merged company was rechristened Vivendi Universal, and, as a group, the Bronfmans became its largest shareholder. Bronfman Jr. became C.O.O. of the new company, with direct responsibility for the music group.

That deal had barely closed when Messier invested $372 million in MP3.com, the music Web site, then $1.2 billion in Elektrim, a Polish telecom company; this was followed by $2.2 billion for 35 percent of Maroc Telecom, then $2.2 billion for the American book publisher Houghton Mifflin. Then he invested $1.5 billion in the American satellite-television company EchoStar Communications Corporation. In November 2001, shortly after he’d moved himself, his wife, and four of his five children—Claire-Marie, JeanBaptiste, and twins Nicolas and Pierre—to New York City (Anne-Laure remained in France), he spent $10.3 billion to buy USA Networks, run by Barry Diller, 43 percent of which was already owned by Vivendi. Diller, who had once run the Paramount and Fox movie studios, was an executive revered by Wall Street. It was thought he would never again work for anybody. But now he was working for Messier.

In one year Messier had spent $50 billion. He promised investors that 2002 would be the year of consolidation.

Messier’s strategy was not just one of senseless acquisition. He had a genuine interest in bridging the gaps among cultures. Michael Jackson, the chairman of Universal’s entertainment units, recalls how Messier liked to show his employees a video of Khaled, an Algerian singer, and Noa, an Israeli, performing John Lennon’s “Imagine” together at the World Economic Forum in New York in January. “Every time, he was in tears by the time the tape was finished,” says Jackson. “There was something romantic about him. . . . You know, that badge he wore with the Tricolor and the Stars and Stripes on it.”

That was partly why at the World Economic Forum he was hailed as a hero by celebrities and business leaders alike as he staged a concert with, among others, Bono, Quincy Jones, Peter Gabriel, and India Arie. The overarching message was unity, but the event undeniably served to put him in the headlines as one of the event’s main attractions, on a par with Bill Gates.

Many who worked with Messier say that his other driving force is a love of publicity with perhaps a touch of megalomania. Though he signs himself “J2M” in E-mails, he sometimes goes by “J6M,” short for Jean-Marie Messier, Moi-Même, Maître du Monde (Jean-Marie Messier Myself, Master of the World)— which was from the immodest title of his 2000 autobiography, j6m.com. Colleagues complained that he accepted far too many speaking engagements and that he was indiscriminate with press appearances. Rupert Murdoch recently described Messier to the Financial Times as “never having met a journalist he didn’t give an interview to.” Messier was featured in Paris Match three times in 18 months. Last lawyers went batshit,” says one of the executives, who had to scramble back to New York and set up press conferences before the market opened the following day. Messier believed that the announcement involved merely “a question of confidence and trust with your main managers,” as he puts it.

Increasingly, Bronfman felt there was little or no logic behind Messier’s continuing acquisitions. He could barely conceal his dismay when Messier announced that he was buying the 35 percent stake in Maroc Telecom for almost $2.1 billion. In private, Bronfman told Messier he thought that it was a nonsensical deal, that it sent the wrong signal to the market. “All of Asia is opening up, and we’re going into North Africa!” an executive close to Bronfman says.

Messier’s relationship with Bronfman continued to decline. A former Vivendi employee says Messier planned all along to cut Bronfman loose from his executive capacity, playing him and Lescure against each other. At any rate, his discourteous behavior toward Bronfman may have served to harden professional doubts into a personal dislike.

After relocating to New York, Messier tried to move a Bronfman-family Rothko, hanging in a reception area on the fifth floor of the Seagram Building, into the $17.5 million Park Avenue apartment he’d rented from the company, until someone told him this was simply unacceptable. So he brought it into his office instead. An executive recalls how he sent an assistant marching into Bronfman’s office to discuss where other pieces of Bronfman art could be moved to. (When asked about this, Messier replies, “[That is a] crazy question. I had no time for that.”)

In June 2001, Steven Spielberg asked Bronfman for an introduction to Messier. Bronfman set it up in his suite at the Hotel Bel-Air because he felt it was more conveniently situated for the film director than Messier’s hotel, the Beverly Hilton. When told of the location, Messier booked a suite at the Bel-Air himself and insisted the meeting take place there. In the end he arrived late, and the group, which included Universal Studios president and C.O.O. Ron Meyer and DreamWorks co-principal Jeffrey Katzenberg, had assembled in the restaurant.

In March 2001, Bronfman was asked by Messier to attend the opening of Vivendi’s theme park in Osaka, Japan. The theme park had been an idea formulated, funded, and executed by Bronfman before the merger, but when he looked at the itinerary he saw there was no role for him. He ended up not going. The final breakdown with Bronfman occurred in December of 2001 when he resigned from his position as executive vicechairman—he claims he had always planned to find something else to do. In June he announced that he was buying 40 percent of Asprey and Garrard, the British jewelers and silversmiths, and assuming the position of co-chairman.

But it was hard to see it as mere coincidence that on December 17, less than two weeks after the resignation, Messier announced what he no doubt saw as his pièce de résistance: the $10.3 billion merger with Barry Diller’s USA Networks, and the hiring of Diller as chairman and C.E.O. of Vivendi Universal Entertainment. Bronfman had sold Diller the USA and SciFi cable networks and Universal’s television-production division in 1997, with Bronfman keeping 43 percent of the stock. Though at one point the two men had been sufficiently close for Bronfman to consider making Diller his child’s godfather, they had subsequently fallen out when Bronfman helped thwart Diller’s ambition to buy NBC. Vivendi insiders claim that right from the start Bronfman told Messier that he did not want Diller running his company. (Bronfman and Messier say this is not so; Bronfman points out that two years before the USA Networks deal he, Diller, and Gordon Crawford, a director of the Capital Group, a leading institutional investor, had gotten together to see whether they could figure out a way to work more synergistically. “There’s always ups and downs with Barry,” says Bronfman, “but I’ve known him for 30 years. I haven’t known Messier for 30 months.”)

To Bronfman’s way of thinking, there was no rush to purchase USA, since Vivendi already owned 43 percent of it and would be given first dibs on the rest if Diller ever wanted to sell. There was also the sobering fact that Bronfman would be buying back a company at two and a half times the price he had sold it for four years before. “There was this great myth out there [that] Barry was really clever,” says one Vivendi employee, but the reality was “Barry got really lucky.” To Jean-Marie Messier, who was eager to win over the Hollywood establishment at apparently almost any price, the deal was evidently worth it. “He imagines that one day he will be at the same level as Murdoch,” says another former employee.

According to an insider, the biggest price that Messier paid in terms of the deal with Diller was that Edgar Bronfman Jr. became more active in the boardroom.

Bronfman says it was not the Diller deal so much as two others that happened around the same time that led the entire North American contingent on the board to voice their extreme unhappiness with the C.E.O. First, in December, without the approval of the board, Messier spent $1.5 billion for 10 percent of EchoStar, which Murdoch had previously tried to buy and failed. “What was the rush?” Bronfman and the others asked. It wasn’t as if EchoStar was going to turn down the option of distributing Universal’s movies on its television stations. Many thought that Messier had done the deal simply to spite Murdoch. (Messier says the deal was “approved unanimously during a board meeting in November subject to finalization and review of documentation.”)

Then, after having announced in November to the market that he would cancel 33 million treasury shares, in January Messier instead dumped 55 million Vivendi shares on Goldman Sachs and Deutsche Bank in a “bought deal,” meaning they would be stuck with the stock if they couldn’t sell it. With AOL Time Warner’s earnings warning, issued later that same day, the market was worried, and, in fact, the banks could not unload almost one-third of the shares. Vivendi’s stock in turn dropped 24 percent by the end of January. The North Americans on the board were furious. “No C.E.O. is obliged to lie to the market,” says Bronfman of Messier’s flip-flop. “You say, ‘We haven’t decided’ or ‘We might’ or ‘We have several alternatives.’” (Messier says, “Everything was rightly stated and disclosed at the right time.”)

The situation got worse. In March, amid calls from analysts and investors for greater “transparency” with regard to accounting methods, Vivendi took a goodwill write-down of $13.6 billion, the biggest loss in French corporate history; this was an acknowledgment that it had overpaid egregiously on its acquisition binge. By the end of April the stock was down 43 percent from the start of the year.

Furthermore, the North American board members were appalled to discern from the annual report that the company stood to lose up to $770 million in an options deal that Messier negotiated when the stock was much higher. “If you read the notes, you saw it, but [with something like this] you expect the C.E.O. to come forth and say, ‘We’ve made a huge mistake,’” says one board member. (Messier says it was “normally disclosed as recommended by . . . auditors.”)

But the North American board members felt that their complaints were falling on deaf ears. When the French did not understand something, they either broke into side conversations in their own language (which some of the North American members could not understand) or said nothing at all. Marc Viénot, who heads the audit committee, once told Bronfman Jr. he was “overreacting” about the company’s cash situation, according to a board member; at a board meeting earlier in the year, another of the North American members noticed the French “joking” throughout a presentation. “Can’t we discuss serious things rather than numbers all the time?” one of the French board members asked.

Meanwhile, though he did sell some small assets to try to shore up liquidity, Messier continued to spend money on what many considered superfluities. In February, during the Winter Olympics, he’d held a company retreat in Salt Lake City. “He paid to have Bill Clinton address him. . . . I don’t want to know what that cost,” one employee grumbled. Then, in March, he held a meeting in Deauville, France, where senior executives spearheaded groups ordered to come up with new strategies. Many thought that no original ideas had been forthcoming. Michael Jackson told colleagues that “people came away from that, unfortunately, feeling worse about the organization they work for, that it was chaotic. . . . Although what did come over was just how impressive the group of assets were.”

Adding to the directors’ irritation was Messier’s seemingly never-ending love affair with the media. In February he gave an interview to Paris Match, for which he was photographed ice-skating in Central Park. “It was a two-hour shoot, when he should have been attending to business,” says one former Vivendi staffer. “JeanMarie hates skating, because he had an accident when he was a child. The whole thing was so contrived. It made him look like he was giving the finger to France.”

At least one major French institutional shareholder rang up journalists at La Tribune and told them he’d been so sickened by the Paris Match story that he sold every Vivendi share.

In March, Messier gave yet another interview, this time to La Tribune, in which he issued an ultimatum to Canal Plus C.O.O. Denis Olivennes and Pierre Lescure, who had been pushed from his perch atop Vivendi’s television and film division when Diller assumed the chairmanship (Lescure claims not to have minded—he and Diller go way back, he says): they had two years to turn Canal Plus around or else . . . Lescure and Olivennes were totally unprepared for this front-page admonition. Messier E-mailed Lescure that he was sorry for the headline, but he did not apologize for the crudeness of letting him know his job was on the line through the media.

“The way he handled this showed chronic misjudgment,” says a member of the board. “He already had problems with the U.S. contingent—why did he go out of his way to alienate the French too?”

Messier had started his French problem with a throwaway comment at the USA Networks merger announcement in December that the French “cultural exception”—the large slice of funding that the government gives each year to the French film industry—was dead. Some people thought he meant that the Canal Plus part of the exception— the company is required to commit 20 percent of its revenue to the production of French films—would be terminated. Chirac and the French entertainment industry were alarmed. Messier says now that he doesn’t regret the comment, because it was intended “entirely around cultural diversity.” Why did he say it? Those who were at the meeting thought that Messier had “looked like he couldn’t quite believe he’d hired Diller,” and had simply gotten carried away.

Lescure felt that the La Tribune article deserved a direct response, since one of the main reasons for Canal Plus’s losses was Telepiu, the money-losing Italian payTV company. Messier initially refused to relinquish it, some thought, because Murdoch wanted it and would gain a monopoly in Italy if he got it.

Lescure and Olivennes sent out an E-mail to all Canal Plus employees saying that they should not be disheartened; certain financial indicators were up. Messier saw this as a flagrant breach of his authority. He told the staff at the Deauville retreat that what Lescure had done was “totally inappropriate.”

Olivennes resigned soon after in protest, and on April 16, Messier fired Lescure. The reaction in France was electric, serving to emphasize Messier’s political isolation. There were demonstrations in the streets; Lescure supporters stormed Canal Plus’s television studios and disrupted live shows. Now, when asked if he wishes he’d handled Lescure’s firing differently, Messier says, “Yes, much earlier.”

Despite the hubbub, it is possible that Vivendi’s French board members might never have been stirred to rid themselves of Messier had not the firing of Lescure wakened a sleeping giant in the form of the venerable French businessman Claude Bébéar, who decided that urgent intervention was needed.

Bébéar, 67, a passionate lion-hunter renowned for keeping rifles in his office, is the “godfather” of French business; the chairman of AXA, he is considered, along with Gucci owner François Pinault and Arnault, one of the nation’s greatest entrepreneurs. “He is from the old, serious school,” says Nazanine Ravai, “the school that frowned on Messier as an upstart who came too fast too soon. Bébéar took years to build his business.”

As a founder of the prestigious club Entreprise et Cité, whose members include Friedmann, Lachmann, and Arnault, to name a few, he has an octopus-like reach into French political and business spheres. When Bébéar set out to take over Friedmann’s insurance company, UAP, according to a French investment banker who knows both men, Bébéar told him, “Here is my offer, and you have three days to accept it or I crush you.”

In April, Bébéar let it be known that he was worried that Vivendi’s plight might have wider repercussions for the French economy. Neither he nor Jacques Chirac, a friend, wanted to see any of Vivendi’s key assets in foreign hands. Bébéar quietly started to lobby each of the French board members to consider finding a replacement for Messier. In May, Vivendi’s share price fell further, and Bébéar turned up the heat. At the end of a radio interview, he said that Vivendi had a “strategy and a decision problem.” That brief statement was as lethal as a guillotine. “Basically, Messier was toast from then on,” says a French investment banker. But Messier continued to fight. He assured Bronfman that Bébéar was going to retract what he’d said. The retraction never came.

To raise cash, Messier negotiated to sell Vivendi’s stakes in BSkyB and Telepiu. At the eight-hour board meeting on May 29 he took up Bronfman’s initiative to let the board form its own corporate-governance committee in an attempt to show the market he was creating greater transparency. This only caused his French detractors to give him a new nickname: J.P.L.M.—Juste pour le Moment.

If anything, Messier’s precariousness seemed to spur his defiance. When Le Monde journalist Martine Orange wrote that there were whispers suggesting Vivendi had liquidity problems, she says Messier called the paper and demanded to have her fired. They refused, so Messier pulled Vivendi’s ads. Messier says this anecdote is “a galéjade—it’s ridiculous and false.” Yet Orange stands by the story.

Meanwhile, an insider claims Messier asked Bronfman about deferring dividends that were owed to the Vivendi shareholders, in order to avoid $350 million in taxes in France. Bronfman says he asked him outright if there was a cash shortage, and was told no. So Bronfman said that, if he deferred, it would send terrible signals to the market.

“Essentially,” says one board member, “Messier had his back against the wall— and he wouldn’t tell us the truth: that he was running out of money.”

On June 17, Messier announced that he would be selling a stake of a little over 15 percent in Vivendi Environnement (the original, water-company assets)—in direct contradiction to what he’d said a month earlier.

In an indication of how desperate Vivendi’s need for cash had become, it emerged on June 21 that Deutsche Bank had already received almost 13 percent of Vivendi Environnement as security for a $1.48 billion short-term loan. It was hard to escape the conclusion that Messier had been hastily attempting to justify something he had already been forced to do. The market feared the worst.

Bernard Arnault was furious: since April he had been asking to see financial documents and had been turned down. Someone close to him says that this was the last straw—on June 25 he quit. (Messier points out that in the previous few months Arnault had often been absent from board meetings.) Murdoch turned the situation to his advantage and it was leaked that he was going to renegotiate his deal for buying Telepiu from Vivendi.

After Messier survived the June 25 board meeting, he says, he knew that Claude Bébéar had a replacement for him waiting in the wings: JeanRené Fourtou, the retired C.E.O. of the pharmaceutical company Rhône-Poulenc. Very few people know exactly what pressures were exerted to get the French board members to change their minds. Almost certainly Bébéar, who has known both Marie-Josée Kravis and Charles Bronfman for many years, had formed a secret alliance with the North Americans. In the preceding few weeks, Minzberg had paid several visits to Bébéar. Some speculate Messier’s sale of a stake in Vivendi Environnement alarmed the French business right, which has a heavy concentration of Freemasons. A source close to Messier says, “My feeling is a lot of money flows to politics and the Freemasons, and that they feared a sale of Vivendi Environnement could stop the flow.”

Whatever happened, it worked.

Once it was set in motion, the machinery of the old-boy network worked quickly. Lachmann and Jacques Friedmann reportedly went to see the two bank presidents who were extending credit to Vivendi—Michel Pébereau, the chairman and C.E.O. of BNP Paribas, and Daniel Bouton, the chairman and C.E.O. of Société Générale, both members of Bébéar’s business club.

A few hours later both bankers allegedly told Messier that they would not extend him credit lines—unless there was a change of management. Then Lachmann and Friedmann—“two exceptional men,” sneers one of Messier’s confidants—went to see Messier and told him that he would lose if there was a vote of confidence.

Messier played the only card he had left—one which has exposed him to charges of gross hypocrisy. According to French bylaws, only the chairman has the right to call board meetings within 60 days of the previous one. Messier told the board that if it did not come up with a suitable severance package he would defer the board meeting—required to elect Fourtou—for 60 days, by which time the company would be bankrupt.

This from the man who in his memoir had criticized Philippe Jaffré, the president of Elf Aquitane, the French oil company, for taking a golden handshake of almost $19 million. Messier had vowed in his autobiography never to do the same. When the news broke that he’d been promised around $18 million, TV anchors around the country opened the evening news quoting from the relevant passage.

Messier cried as he exited the Vivendi building in Paris on July 2, after having sent an emotional company-wide E-mail that said he had run out of time. His board didn’t see it quite that way. “He didn’t run out of time, he ran out of money,” says one member.

A confidant of Messier’s says now that Bébéar, Fourtou, and Lachmann, three key players in Messier’s undoing, rotate in using Messier’s old office: “They’re all semi-retired, they take turns . . . because there are weekends and hunting parties and golf courses to play. . . . They’re like little boys playing Monopoly.”

Bébéar has joined the board, as has Gerard Kleisterlee, the president and C.E.O. of Royal Philips, the Dutch electronics company. Bronfman says he thinks the new C.E.O. is “honest” and “strong.” Even so the stock price continued to tumble, hitting an all-time low of $9.76 on August 16, amid grave reports that the company was dangerously close to bankruptcy.

An unexpected by-product of Messier’s fall was that it has reunited Barry Diller and Bronfman. The two men flew together from New York to Paris for the board meeting at the end of July. Afterward, Diller made a press statement praising Bronfman as “one of the unreported heroes of this process . . . who, potentially, has not slept for a month while he has worked to stabilize [Vivendi] financially.” In August, according to a former Vivendi employee, Bronfman offered to buy 10 percent of Vivendi Universal’s entertainment assets, with the right of first refusal on the rest. The French board members turned him down. The Bronfmans deny this. Messier, a source says, feels that the new friendship is purely opportunistic on Diller’s part.

And despite having lost over $4 billion, thanks to his investment in Vivendi, Bronfman does not seem to have lost the respect of his peers. Viacom chairman Sumner Redstone reportedly called him just before the Herb Allen Sun Valley conference and said, “Don’t let these guys get you down. . . . You’ve got value you can recapture here.”

After his fall, Messier went on vacation to Colorado and then Montana. For the first time in years, he did not attend France’s elite annual Aix-en-Provence music festival—a venue which is de rigueur for all “classy French businessmen,” according to Pierre Lescure. Languishing in America, Messier was evidently homesick. “He was on the phone wanting to know how it was, who was there,” says Nazanine Ravai.

This was just the first item in a long list of hasty social retreats on both sides of the Atlantic. Messier’s keynote address at the Allen conference, to which six years earlier he’d lobbied for an invitation, was quickly canceled. “No one [at the conference] even mentioned him,” says a conference participant. “Suddenly a Frenchman’s not there . . . So what?”

Messier’s exit from Establishment circles didn’t quite go as seamlessly as he might have hoped. The week after his resignation people around the world received invitations from the Appeal of Conscience Foundation for a black-tie dinner on October 1, co-chaired by Paul Fribourg, chairman and C.E.O. of ContiGroup Companies, philanthropist John C. Whitehead, and former Federal Reserve chairman Paul Volcker. They were invited to pay up to $100,000 to honor Messier, who was receiving an award. (The office of the foundation’s president, Rabbi Arthur Schneier, quickly confirmed that Messier would in fact no longer be attending.)

The New York Public Library’s staff congratulated itself for scheduling its annual corporate-sponsor dinner, at which Messier was the guest of honor, for June 10. “We would have had to give a lot of money back [if it had been two weeks later],” said a spokesperson.

In August, Messier relocated to the South of France, from where he wrote that he was “taking the sum of holidays I’ve missed over the last 20 years.” There were rumors that he might be personally bankrupt due to a $25 million loan he’d taken out to buy Vivendi stock before it slumped. A close friend said it was true; Messier’s self-confidence was such that he was “prepared to bet on himself.”

“For sure I do believe in V.U. and V.U.’s strategy,” Messier responds. “That being said, the information [about the bankruptcy] is wrong.”

When asked what his long-term plans are, he says, “I will stay [in America]. I have some unbelievable stories,” he says, “and one day I will tell them.” However, he refutes press reports that he is currently writing a tell-all memoir called How I Was Betrayed.

I ask him if he has reconsidered the merits of his dream to unite content and distribution across two continents. “The future will say for V.U. as for many others. . . . It wasn’t a dream but a vision, and it’s still the right one, even in a different time frame,” he says.

It’s a view he wasn’t keeping to himself. Among those receiving regular correspondence from the fallen mogul, according to one board member, was Jean-René Fourtou, the new chairman of Vivendi Universal.

Fourtou, meanwhile, wrote an open letter to Vivendi employees and investors on August 18, discussing his effort to save the company from drowning in $18.6 billion in debt. While he is trying to secure a $2 billion loan in order to avoid a fire sale of assets, he has already arranged to sell $9.8 billion worth of them, including Houghton Mifflin and EchoStar Communications. For the time being he has decided to hold on to Cegetel, Canal Plus, Universal Music, and Vivendi Environnement, to maintain the option of reviving the company as an “international media group” in some form. Vivendi stock finally edged up in response to the moves.

Rupert Murdoch didn’t comment publicly on Messier’s demise, but few people doubted he was happy about it. After all, Messier used to joke that Murdoch was just a smiling dinosaur. But after it was all over the dinosaur was still roaming the world—alone.

The Battle for Hewlett-Packard

At around 8:45 A.M. on Tuesday, March 19, Carly Fiorina, the 47-year-old chairman and C.E.O. of Hewlett-Packard, the $45.2 billion computer company, took the stage at the Flint Center in Cupertino, California, before 2,000 company shareholders. She wore her uniform—a dark pantsuit, heels, a pearlpendant necklace, pearl earrings, clear nail polish—and had on bright-red lipstick, and her hair was shorter and blonder than usual. From the back of the auditorium, she looked cool and in control. But close-up one could see pouches protruding under her eyes and an uncharacteristic pallor that blush could not mask—signaling that it had been a long night. A handful of people, hidden backstage, knew the truth: that Fiorina was a hairsbreadth away from the biggest fall of her career, a fall that would have repercussions for women throughout corporate America. As the first-ever female head of a Dow 30 company, she has been celebrated by the business press the way Madonna is by the tabloids. Was she now going to flame out from an even greater height than had two of her former highprofile women peers—namely ex–Warnaco chief Linda Wachner and Mattel’s Jill Barad—who were ousted after they failed to build on promising starts?

Onstage that crisp, sunlit morning Fiorina did not know the answer. As she introduced the Hewlett-Packard executive management team, sitting beneath her in the front row, she managed a little black humor, asking the audience to please “restrain” their applause. She knew there would be none.

The last hope for her career as H-P’s C.E.O. lay with one of the company’s investors, Deutsche Bank. All the night before, Fiorina and H-P’s proxy solicitors, under the watchful eye of Silicon Valley’s “celebrity lawyer” Larry Sonsini, had been on the phone, trying to persuade the institution to change its mind on how to vote its shares in the proxy fight over H-P’s proposed merger with Compaq, the struggling computer company. Fiorina was arguing that the merger would give H-P the scale it needed to compete with IBM and Dell in a market demanding increasingly complex systems and services. It was a dicey bet. No previous technology merger had ever worked. Conventional wisdom held that you couldn’t integrate two companies quickly enough to avoid crippling losses in the production line. There was also the strong argument that H-P’s valuable $19.4-billiona-year imaging and printing (computer printers and components) business, which brought in 43 percent of its revenues, would suffer debilitating dilution. Deutsche Bank had already voted its 25 million shares against the merger.

But Fiorina was determined to get the bank to change its mind. The week before, as a sweetener, H-P had opened a credit line there, which could facilitate the merger if it went through. Relations were friendly. Right now, the urbane Sonsini, corporate lawyer also for Apple’s Steve Jobs, Sun Microsystems’ Scott McNealy, and many other big Silicon Valley names, was backstage, headset on, ready to radio Ann Baskins, H-P general counsel and secretary, who was seated onstage near Fiorina, if Deutsche Bank switched.

In the audience, all around Fiorina, was evidence of why it might not. About halfway back in the auditorium was Walter Hewlett, 57, eldest son of Hewlett-Packard’s late co-founder Bill Hewlett and the leader of the opposition to the merger. A small man, with a bit of a stoop and an uneven, slightly spiky haircut, he looked more like a character out of Lord of the Rings than a corporate hero. In an ill-fitting gray suit, he peered through thick glasses and read a prepared speech haltingly off white cards, as if he were a little unsure of some of the sentence constructions. (In fact, as a close friend of his later confided, he is both farsighted and dyslexic.) But he received a hysterical ovation from the crowd, which stood, clapped, whistled, stamped, and waved green fluorescent glow sticks. Many were also wearing green T-shirts to match the color of the opposition’s green ballots.

Then there were the increasingly hostile questions from the audience, composed mostly of current and ex-employees—who’d watched the value of their stock sink from $30 to under $20 over the past year—many of whom either had been fired from H-P or would be if the merger went through. Although Fiorina responded with her normal fluency, many felt their questions went unanswered, or else they did not believe her.

Perhaps the most poignant moment of the entire meeting came when Dan Dove, a stocky, dark-haired engineer from H-P’s Procurve Network Management division, took the microphone. He spoke softly and clearly: “I love this company,” he recalls telling Fiorina. “Twenty-two years ago I was unemployed, my wife was pregnant, and I was fortunate to get a job with H-P as a production assembly worker. I worked my way through college, obtained a degree in electrical engineering, and subsequently got a job in the lab, and since then have obtained eight patents, and I have two pending. Those patents are broadly used throughout the industry, even by our competitors like Cisco, on whose board you sit. I totally agree with your statement that the trust and respect between employees and management is crucial to the success of the merger, and I totally agree that layoffs should be a last resort. However, I disagree with the way layoffs were done last year, and I work in a division where we were growing at twice the market rate, and we needed more people to succeed. . . . [Over the years] I had friends who left for startups, who are now multimillionaires. I never took advantage of those offers, because I love working at H-P, but I don’t trust the management that is pushing the merger, and if this merger is going through, I don’t see how I can continue to work for this company.”

The crowd went berserk. Fiorina looked defeated. “I am sorry you feel that way,” she said, and she seemed to mean it. But it wasn’t enough to buy off this mob. “She’s a witch,” said one man, who did not want to give his last name. A woman employee wearing jeans, sneakers, and a floral shirt whispered, “I actually met her when she first arrived. I introduced myself to her in the rest room, and she started fixing her hair, even though nothing was out of place. I mean”—and here the woman rolled her eyes—“that tells you everything, doesn’t it? Someone who fixes their hair when nothing is wrong with it!”

Later, sources confided that the outside directors on H-P’s board—represented at this meeting by Sam Ginn, the former chairman of the mobile communications company Vodafone AirTouch—had been “shocked” at the level of employee dissension over the merger; in the H-P 401(k) plan, the only place in which employees were guaranteed confidentiality, they voted two to one against the deal. One had to wonder how, if it got voted in, this most audacious, complicated merger could really work in the face of such passionate antipathy from employees.

Amid the sea of geek clothes—jeans, sneakers, and checked shirts—Fiorina’s army of corporate-communications women (some of whom she’d imported from the East Coast) stood out like an alien tribe from Star Trek; wearing headsets, they ran around in shiny black pantsuits and designer shoes. “New H-P meets old H-P,” cracked Chris Nolan, the Silicon Valley gossip columnist.

Given the fractious environment, it was not altogether surprising that, when Ann Baskins finally handed Fiorina a note saying that Deutsche Bank had voted 17 million of its 25 million shares for the deal, Fiorina looked less than ecstatic. H-P lawyers reckoned she had gotten just enough votes, although it would be weeks before they knew for sure. Sonsini later confided that he thought then they would win by a 2 percent margin. The opposition thought it had lost by under 1 percent—an irony, since as part of a diversification program in the previous six months the William and Flora Hewlett Foundation, on whose board Walter Hewlett sits, had sold 6.3 million shares (0.39 percent of those voted), some of which H-P had snapped up.

But in the end the whys and wherefores were immaterial. For now, even though Walter Hewlett would sue nine days later, citing improper “coercions” of Deutsche Bank and “deceptions,” Fiorina hung on as the world’s top female C.E.O. She left the stage as she’d entered—through a side door. “Her slipping in and out of side doors was very typical,” says a former member of her communications team. “Like a rock star.”

“That’s what her nickname is,” another former employee confirms: “Rock Star.”

Three years ago, when Fiorina went from being president of the Global Service Provider business at Lucent Technologies, at the time a white-hot telecom- equipment provider, to C.E.O. of HewlettPackard, the gray lady of Silicon Valley, she was greeted with perhaps the noisiest fanfare in the history of any incoming chief executive. And since she was an outsider, the Valley looked with interest to see what innovations she’d bring to an engineering culture that had grown cumbersomely huge as it entered its third generation of management. Only H-P’s printer businesses remained the leaders in their sectors. Its P.C., server, management software, storage, and consulting divisions lagged badly.

So she set about rebranding the company. Within just a few months, she’d replaced H-P’s mundane advertising with images of herself standing in front of the single-car garage in Palo Alto where the two founders, Bill Hewlett and Dave Packard, started it all in 1938 with a device to test sound equipment. She was constantly on the covers of business magazines; since Fortune first published its annual “50 Most Powerful Women in American Business” issue, she has graced that cover three times out of four, once all by herself. In November of 1999, at Comdex, the industry’s biggest annual trade show, in Las Vegas, her speech about her vision for H-P was so powerful that people cried; when she spoke at Herb Allen’s 2000 Sun Valley mogulfest, a line formed to meet her afterward.

Fiorina started well at H-P, living up to all the heady expectations; after a successful first year, in which she’d exceeded her own 15 percent revenue-growth prediction, she surprised people by predicting, in a slowing market, that she would repeat the achievement, but in November 2000 she missed analysts’ fourth-quarter earnings targets by a hefty 10 cents (20 percent), and her credibility with Wall Street crumbled. As a direct consequence, an attempted merger with the consulting division of PricewaterhouseCoopers—which she’d hoped would help bulk up H-P’s equipment services and consulting business—was abandoned (H-P says it was merely “the wrong time and the wrong price”); in January 2001, H-P laid off 1,000 workers. Last summer nearly all of the 88,000 employees took voluntary pay cuts. It was not enough. There were 6,000 further layoffs.

Many of the high rollers in the Silicon Valley community—men who pride themselves on being meritocratic to their fingertips—started to whisper that had Fiorina been a man she would have been out. In the two years since she’d taken over, the stock price had tumbled 77 percent.

Then there were the complaints about the “rock star” behavior. Fiorina, it was rumored, had an entourage of bodyguards, plus a personal trainer and a personal hairdresser on call. One of her first administrative moves was to buy a new Gulf stream IV jet, for which a carpenter from Marin County custom-made shelves; her office had three personal assistants, whereas her predecessor, Lew Platt, had only one; she refused to pose with some long-term employees for pictures. (Referring to a “Carly myths sheet,” H-P spokeswoman Rebeca Robboy denies the trainer and the hairdresser; Fiorina does have security, she says.) These gestures might have rankled anywhere, but they looked even worse at a company known for its egalitarian approach. Its example had sparked the famously relaxed style of Silicon Valley office life: the casual clothes, the flexible hours, the low-key personal style of C.E.O.’s. “This is an extreme analogy,” says one employee, “but in Silicon Valley, messing with the H-P culture is like the Taliban destroying the Buddhist statues in Afghanistan.”

“Management by walking around” was the modus operandi of Dave Packard and Bill Hewlett. Even when they’d made their billions they drove to work in their old cars—Hewlett’s was a Ford Taurus—and they paid themselves no more than $125,000 apiece in annual salaries. Though their land was worth millions, their homes were simple and without staffs. They cared far more about the environment than about their executive perks, and they im plemented a company diversity policy and employee health insurance long before such things were widespread. At the annual H-P picnic, they rolled up their sleeves and barbecued the meat themselves.

One former executive assistant recalls how Bill Hewlett once begged her to sew a button on his jacket. She says, “Mr. Hewlett would come around and sit down and say, ‘What are you doing?’ He would listen. He knew people—you know, when their dog died.”

It wasn’t just the good manners and personal involvement, though, that earned Hewlett and Packard the respect of their employees; it was also that at heart both men were engineers. One former employee recalls Hewlett stopping by in the late 80s and asking him all sorts of questions about what he was working on. “It astounded me that someone with the types of things that he needed to be thinking of would still have the ability or the interest,” he says.

Many employees recount how the company supported them in difficult personal times. Scott Peterson, who worked at H-P for 20 years, recalls how management helped him through an alcohol problem, when he was still new to the company. Dan Dove says he knows of no other firm that would have paid his tuition at Sacramento State University 22 years ago. Dove says everyone benefited. “H-P allowed me to adjust my work schedule around my class schedule . . . so I think I came out much better educated than your average college hire.”

“Bill and Dave”—as they were known—officially handed over the reins of the company in the late 70s; they then came back in the early 90s to help H-P counter the recession. Their successors were men who had worked their way up at H-P and who had known the founders intimately. They were therefore readily accepted by the employees. When John Young, Bill and Dave’s immediate successor, hit a rocky patch and an article in Fortune magazine was generally critical, Donna Trombly, an executive assistant at the time, felt so badly she wrote him a letter of support. It ended up with a mass of signatures on it.

Lew Platt, Young’s successor—and Fiorina’s predecessor—was considered an empathetic man, if not a visionary. Under him the company’s bureaucracy grew heavy and sluggish. Joel Birnbaum, now on the H-P payroll as a consultant, then head of research and development, points out, for example, that the ink-jet and LaserJet printers were competing with one another—as was the case with products in many of the other divisions, since H-P was composed of 83 autonomous units. One of Birnbaum’s biggest gripes is that H-P had elements of Internet technology years before its competitors did, but risk-averse attitudes prevented early exploitation. In addition, the marketing was terrible. “One of the local wags said that if H-P ever went into the sushi business it would hang out a sign selling ‘cold, dead fish,’” says Birnbaum.

In 1999 the board decided to spin off the test-and-measurement business (i.e., all the non-computer-related engineering components), viewed by many as the heart of H-P. The new company was called Agilent, though many thought it was the one truly meriting the H-P name. Of the founders’ children, only David Woodley Packard, 61, an eccentric philanthropist and former classics professor, whose passions include black-and-white movies from the 30s and 40s and writing computer code, showed any dissatisfaction with the turn of events. He resigned from the H-P board.

Around the same time, Platt decided he was not the man to lead H-P through the Internet era, and he suggested to the board that it hunt for a new C.E.O. A small selection committee was headed by Richard Hackborn, the venerated strategist who’d founded the company’s valuable ink-jet printer business in 1984, and who himself had turned down the C.E.O. job, preferring a less stressful existence in Boise, Idaho. The Hewlett and Packard families, represented on the board by Walter Hewlett, his brother-in-law Jean-Paul Gimon (an engineer turned banker), and Susan Packard Orr, Dave Packard’s daughter, backed him in his choice of Fiorina.

Fiorina would perhaps not have been considered for the job had it not been for her appearance in 1998 on the cover of Fortune as No. 1 on the list of the world’s top women in business. Until that moment, recalls Pattie Sellers, the Fortune journalist who wrote the cover story and was on the team that prepared the ranking, “there’d only been one story written about her, in Investor’s Business Daily.”

Fiorina was not even the most highly remunerated or highest-ranking woman executive at Lucent—that role belonged to Patricia Russo, then the executive vice president of corporate operations, now the company’s C.E.O. Fiorina also lacked relevant experience—although she was the sales chief of the $19 billion service provider division, she did not have profit-and-loss responsibility. It was said within Lucent that Fiorina never stayed in one position long enough to prove herself; in the previous four years, she’d changed jobs five times.

But what impressed Sellers was the fact that it was Fiorina, together with her mentor Rich McGinn, then Lucent’s C.E.O., who took the company public in 1996—at $3 billion, the biggest I.P.O. up to that time. “She was so much Rich McGinn’s star, at a time when Rich McGinn was still a star,” says Sellers, adding that at one point Lucent’s stock had increased almost fivefold since the I.P.O.

Fiorina’s powerful charisma charmed Hackborn and his committee. An insider remembers, “She talked this good talk about needing to innovate, but keeping to the H-P way. She seemed to understand the company.”

But soon after her arrival, doubts set in—not about her intellectual abilities but about her cultural sensitivity. One source, speaking anonymously, puts it this way: “I think what Carly failed to do was to be one of the employees for a while, get out among them and find out who they are and what they think. Instead she came in with an attitude that this is a country club, and I’m going to shake it up. And she began to do things without a strong knowledge of how even the company works. That, I think, caused employees to become very suspicious, and what started as a rousing welcome, an incredible outpouring of support for her and a cheering of what she might be able to do to lead H-P in the future, turned into disillusionment and ultimately disbelief in the way that she handles employee relations.”

The problem with the ads featuring Fiorina wasn’t just that they were seen to be egomaniacal—part of the cult of the “East Coast celebrity C.E.O.”—but also that she had made assumptions about the company’s history without checking. “It was grotesque,” says Jean-Paul Gimon. “Did she not ask anyone? Bill and Dave hated that garage. . . . They used to joke that the only thing that got invented there were toilet seats.”

Other small missteps also created tension. Fiorina frosted the glass doors of her office and conference rooms, thereby destroying the famously open, democratic nature of the executive space. And while Bill and Dave used to frequent the cafeteria, Fiorina has yet to be seen there.

Fiorina set about chopping down the company’s 83 divisions to 17 product categories, thereby reducing autonomy. Engineers, who are perfectionist by nature, found themselves being barked at to deliver equipment before it was ready. Many began to feel isolated: they could not talk to their new manager, they felt; and they could not talk to Fiorina. Scott Peterson, who worked in the research-and-development labs, among other divisions, found it suffi- ciently upsetting to quit after 20 years with the company. Peterson says, “When you ask a good engineer to put out a product— half of a product—in a year because it will meet a political goal . . . that is insulting. . . . It is just not the H-P way.” He is now at Agilent.

Given her lack of technological expertise, many thought it bizarre that Fiorina did not promote anyone around her who did have such knowledge. “One of the problems at H-P,” says a former employee, “is that there is a dearth of talent at the top.” More worrisome, says a former salesperson, was an innovation made in 2000 known as “channel-stuffing,” used to inflate earnings—i.e., products are shipped to retailers and distributors before they are actually sold. (Fiorina has categorically denied channel-stuffing.) Still, the anxiety at H-P was kept below the surface until late fall 2000, when Fiorina missed the earnings that she had projected as late as the week before. One former high-level employee remembers the all-day Saturday conference call the weekend Fiorina realized she was going to have to do a U-turn: “The call was endless. Six, seven hours. And she was rattled. . . . We had done all these dotcom deals. . . . They blew up. . . . And while she was out promoting 15 percent growth . . . what was clear to everybody was that the eye was off the ball. This came as an almost complete surprise. . . . And that doesn’t happen at H-P.”

People outside the company in Silicon Valley also started to worry about Fiorina’s stewardship. This is a tiny community, where everyone’s business connects with everyone else’s. The big players get together at Chantilly, a restaurant near Fiorina’s home in Atherton with an ambience so clubby that there are no menus for regulars. It is strange, say many C.E.O.’s, that Fiorina has shown little appetite for mixing socially with them. She failed to appear at Bill Gates’s annual C.E.O. summit in Seattle her first year, which went down as a snub.

Others noticed that she turned down their invitations for dinner. “Networking is the Silicon Valley way,” says one insider. “The fact that she didn’t want to do that made us think she was insecure—that she couldn’t hold her own because she didn’t understand the technology sufficiently.”

One of her early meetings with Bill Gates was a bust. Fiorina went to see him after he’d given the opening speech at Comdex, in which he unveiled his blueprint for the “personal web.” In his room backstage, a source says, she gave him a hard time for mentioning her competitors but not H-P in his talk. “She was pretty intimidating.”

Reese Witherspoon

In the fall of 2000, something else happened to intensify the doubts in people’s minds: the S.E.C. began an investigation of Lucent, after the company informed it of previously misreported earnings. That year its stock price had fallen by 76 percent from $75 to $18. In an alarming foreshadowing of the Enron debacle, it was mostly the company’s smaller shareholders who suffered. Many of its corporate executives— for whom a $40 million golf course in Gladstone, New Jersey, had been built at the behest of C.E.O. Rich McGinn—had sold their stock the previous year. (Fiorina had appropriately swapped her options for $65.6 million of H-P stock in 1999.)

Some on the H-P board started to wonder openly about their so-called prodigy. The former H-P C.E.O. John Young, now on the Lucent board, told a friend that he and the board attended a two-day, off-site meeting to analyze step-by-step what had gone wrong at Lucent. Apparently, Young said, after six or seven hours of this he had an epiphany. “It was like, ‘Oh my God, this is chapter and verse of what’s happening at H-P.’”

Fiorina joined AT&T’s Network Systems division—now Lucent—in the late 80s, when she was in her early 30s. “It wasn’t the most visible arm of the business,” says Bill Marx, an executive vice president of AT&T at the time. “It was predominantly male; I was looking to shake it up.”

“Most people thought she’d take a job in telecom services, because that was what was visible and political,” says Kathy Fitzgerald, now Lucent’s senior vice president of communications.

Fiorina’s path to AT&T had been just as unorthodox. After leaving Stanford, where she’d majored in medieval history and philosophy, she toiled at U.C.L.A. Law School for a few months to please her father, Joseph Sneed, now a senior court-of-appeals judge in San Francisco. She hated it and quit, flying to San Francisco to explain to her father, who told her he was worried she would never “amount to anything.”

Back then, according to her first husband and fellow Stanford graduate, Todd Bartlem, 48, now a computer consultant in the hospitality industry, Fiorina was not yet fixated on a high-flying career. The couple soon headed to Italy, where Fiorina taught English, and Bartlem went to graduate school. Then Fiorina was a “tagalong,” according to Bartlem.

“We had great friends. And we did all sorts of fun things. And we were poor as church mice,” Bartlem says.

The Sneed family, which hailed from Texas, Bartlem recalls, was not particularly wealthy, but they had a beautiful house in San Francisco, of which Fiorina’s mother, the late Madelon Sneed, a housewife who painted in her spare time, was extremely proud. There were three children: Joseph; Carly, whose real name is Cara Carleton, so called because every Sneed generation, going back to the Civil War, had had a Carleton; and Clara, who later wrote an article for a historical journal about John Beale Sneed, a great-uncle who became a local Texas legend by virtue of having shot his wife’s lover and the lover’s father.

According to Bartlem, some of this aggressive energy remains a family characteristic. “You just couldn’t get through the dinner before somebody had gotten mad and stomped out of the room,” he says.

Bartlem and Fiorina were married for almost seven years. After Italy they returned to Washington, D.C. She went to business school in Maryland and then to work at AT&T. He says that as she flung herself into the job, working around the clock, he noticed that on weekends she was tired, depressed, rather like a “wounded animal.” He knew that he was losing her, that she’d decided upon a fast-track career—not for the money, but for “the power,” he says. Not the corporate type himself, he took a job at the World Bank and started to travel. A few times when he called home at night, there was no answer.

The reason, according to Bartlem, was that Carly had begun an affair with Frank Fiorina, a divorced man with two children. She moved out and filed for a divorce. Bartlem says he asked her to go for counseling; she refused. She ceased all contact. About a year later, just after the divorce went through, he says, she pulled up in the driveway of their home and calmly said, “‘I will never see you again.’ I said, ‘Isn’t that a little’ . . . how would I say? . . . ‘extreme?’ Given, you know, we’d had no battles. There was no animosity.

“She had found out from business school that you . . . weigh your decisions, and then you make the hard choice. And she has extended that to her entire being, and that includes work, that includes play, that includes marriage. If you don’t fit in the plan, you don’t fit,” says Bartlem.

Frank Fiorina, now 52, however, did fit. A technician at AT&T who rose to vicepresident level, he was willing to have a commuter marriage when Carly accepted the job with Bill Marx, which was in New Jersey. Frank told her that he could see she would run a company one day, and he wanted to be there to support her. It must have been music to her ears. He could not get transferred out of D.C. for four years, but, apparently, this did not matter.

“A large part of the job was on the road, traveling,” Marx explains, so employees didn’t have much of a home life during the week anyway. Contrary to what many people believe, Carly and Frank did want to have children of their own, says a close friend: “When she was named C.E.O. of H-P . . . people started talking about why she didn’t have children, which was horrible. Because there is nobody who likes children better than Carly and wanted to have children more.”

Very quickly Fiorina rose up the ranks at AT&T. “She just had leadership qualities—that was very obvious,” says Marx. “She won people over very quickly, and she was an outstanding salesperson.”

Fiorina was so enmeshed in the corporate culture that even on casual Fridays she wore her dark suits—which, as all H-P employees know by now, are generally Armani or Versace. At 35 she was Network Systems’ first-ever female officer; at 40 she was heading sales for North America. “She seemed to be about three inches above others in being recognized as politely, quietly ambitious,” says a former president of Bell Atlantic, Jim Cullen.

As a strategist, she achieved a coup—or so it seemed then—in 1996 when the global networking marketplace opened up and she and Rich McGinn, a colleague in Network Systems, presided over the highly successful spin-off and renaming of the network division—now Lucent. Fiorina selected the logo—a ring of red brushstrokes—saying it reminded her of one of her mother’s abstract paintings. Even when she stumbled— as, for instance, when she orchestrated a joint venture with Philips Electronics N.V., which turned into a fiasco because the Philips management was viewed as weak and also because, says a former colleague, “she didn’t focus on it, she went on to the next thing”— she got away with it.

People in the industry started to talk about a fiercely analytical mind, a photographic memory, a persona that never wavered from being “on message.” Analysts were at once impressed and intimidated by the energy. “She can’t sit still. She’s always walking around the room,” says one. When Cisco president and C.E.O. John Chambers later put her on his board, it was, he reportedly told friends, because she beat him in every sales pitch she made.

Fiorina was also popular among her colleagues. At office gatherings she was the life of the party. “Carly is very funny,” says Fitzgerald. Even her former hairdresser Marlo Ricciardelli, now of the Bloom Studio in Morristown, New Jersey, remembers Carly always had time to chat about her dogs, her stepgrandchild, her boat, and her life with Frank. After the first Fortune article, however, coworkers noticed that she grew “aloof.” “You had a hard time getting to see her,” says one.

Amra Tareen, the former director of product marketing for Access Networks at Lucent, says that everyone thought Fiorina might be C.E.O. one day, but that day seemed very far off, since McGinn was only in his early 50s. “Rich . . . had no intention of going anywhere,” says Fitzgerald.

Enter executive-search consultant Jeffrey Christian, who’d read the Fortune article and who approached Fiorina about the H-P job. What he—or indeed anyone outside Lucent—could not have known was that Lucent’s finances had been stretched perilously thin by a series of measures adopted to reach increasingly ambitious projected earnings. Says Lehman Brothers equity research analyst Steve Levy, “They started to do things that . . . were showing up on the company’s balance sheet, but weren’t necessarily showing up on the income statement. . . . They were trying to meet some fairly aggressive sales goals. And when you try to grow a company a little faster than it’s capable of doing, you ask people to do unnatural acts. So they started giving out things like vendor financing [i.e., lending customers the money to buy Lucent’s products]. Now, if your product was good enough, they would buy it. . . . Rich McGinn, without any question in my mind, should take the majority of the responsibility. However, Carly was right there with him, and, in my view, whenever she was asked a difficult question, certainly by me, there was always some smooth, slick answer.”

An example of the pressure applied by McGinn on his staff was revealed when Nina Aversano, a former president of Lucent’s North American operations, alleged that in 2000—the year after Fiorina left—she was forcibly “retired” because she had told McGinn his revenue target for the fiscal year 2001, 20 percent growth, was hopelessly unrealistic. She is suing Lucent for wrongful dismissal; among other episodes, the court papers cite an instance on August 15, 2000, when in an internal conference call McGinn yelled that she would “take down the whole business if she didn’t ‘make the numbers.’”

Thanks to McGinn’s excesses, it is tempting to bracket Fiorina with the other Lucent executives of that era and see her as greedy. Yet Fiorina, say colleagues, was never after personal wealth per se.

Larry Sonsini adds that when she was offered the H-P job she never haggled about the terms, leaving it to her husband and her representatives. “What she wanted to do was start acting like a C.E.O.,” he says.

And, indeed, her house in Atherton, purchased for $1.3 million, though large and pleasant, is not outstandingly large and pleasant. It sits at the end of a row of others just like it; it’s gated, the driveway is gravel, and an S.U.V. is parked in front. “

If Carly was greedy,” says a friend, “she could have cashed out years ago.”

Which invites the question: How could someone so respected on one coast turn into the wicked witch of the East on the other? One answer, which is perhaps what John Young saw when he analyzed what had happened at Lucent, was that at both companies Fiorina overpromised and underdelivered.

Walter Hewlett surely never expected to be anyone’s nemesis—least of all that of the management of the firm his father had co-founded. Quiet, like his younger brothers, Jim and William junior, and two sisters, Eleanor Hewlett-Gimon and Mary HewlettJaffe, Walter has sought most of his life to focus on his chief passions: music, technology, and athletics. He may have inherited $25 million in H-P and Agilent stock, but he drives a $17,000 red EV1 electric car and a Ford minivan; one of his friends says, “Walter wears clothes that you think you probably saw in somebody’s closet 5 or 10 years ago.” He plays 10 instruments, his favorite being the cello.

Each year Hewlett puts himself and friends through a punishing 129-mile, one-day bike tour known as the Death Ride—in the Sierra Nevada Mountains. The event takes place in July, and Hewlett’s family co-sponsors any H-P or Agilent employees who wish to participate (last summer there were 120). There is a party for them at his family’s estate on Lake Tahoe. Hewlett doesn’t hire caterers or outside help; he is the first one to leap into his car and drive to the supermarket to get the provisions.

Though at college Hewlett majored in physics and got advanced degrees in music, operations research, and engineering from Stanford, he, like his siblings, chose not to work at H-P; instead he formed a musictechnology company—the Center for Computer Assisted Research in the Humanities. The decision not to join H-P was not made because of lack of interest. Rather, says his niece, Nathalie Farman-Farma, the younger generation “would bend over backwards to avoid the perception of nepotism.”

Bill Hewlett took special care not to spoil his children. When as a student Jim Hewlett took a summer job at H-P, a former executive assistant remembers, he asked for an advance on his salary. She recalls, “He told me, ‘My father pays for my education, he pays for my library, and he pays for family travel. And I’m responsible for everything else.’”

“As children, it was one outfit, one pair of shoes per year,” says Farman-Farma. When Bill Hewlett finally did start to hand out his billions, his children were well into adulthood, and then it was done largely to teach them—as they in turn taught their children— how to deal with charitable giving. The family’s main charitable trust, on whose board Walter and two of his siblings sit, is the Hewlett Foundation, the sixth-largest private foundation in the U.S. It owns 5.6 percent of H-P’s stock—worth $3.4 billion last June, $2.2 billion in April 2002. Significantly, however, Walter is not on the stock committee, since Bill Hewlett intended to keep the board independent of familial interests.

But it was not some sentimental attachment to his father’s memory that drove Walter Hewlett to fight the H-P/Compaq merger so much as the opposition of H-P employees and shareholders—and the thousands of people who receive grants from the Hewlett Foundation. A friend says, “There is probably no one in the entire region of Santa Clara County who does not benefit in some way from the Hewlett and Packard foundations.” As Walter would say time and again as he conducted his campaign, “I don’t take the criticism personally, but I do take the fall of the stock personally.”

Relations between Fiorina and Hewlett started to get tricky in May of 2001, when, according to one colleague, Michael Capellas, chairman and C.E.O. of Compaq, telephoned her and suggested that their two companies merge. (Capellas is more cryptic, saying, “You will never know” whose idea it was originally.) From Capellas’s point of view, it was probably a no-brainer: Compaq, primarily a personal-computer company, had been struggling since its disastrous merger with the computer-technology firm D.E.C. in 1998; given Dell’s supremacy in the computer-systems market, Capellas was running out of options.

Fiorina saw the idea as a potential godsend, something that would turn around her company’s recent sluggish performance. Yes, it was hellishly risky, but she feared that standing still was worse. The merger fitted into her beliefs that the future of H-P lay in being not a hardware company but a “solutions business.” Inevitably H-P jobs would be lost—15,000, Fiorina suggested—and there would be a revenue dip in the short term— 5 percent, H-P said—but if she could pull it off, she would revolutionize H-P, making it into a market leader for the future. As Dan Niles, a senior Lehman Brothers electronics analyst who was originally skeptical but is now a fan, puts it, “I came to see that if it worked it could be huge.”

First, though, Fiorina had to win over her board. Between May and the deal’s announcement on September 4, the H-P board held nine meetings. Walter Hewlett, who of all the board members was the largest shareholder— he owns 109 million (or 6.8 percent of the voting) shares personally—said right from the start he was against the merger. It wasn’t just the job losses—which were unprecedented at H-P—but also that Compaq’s main business— P.C.’s—was a losing venture that could dilute H-P’s printer business, he believed. The rest of the board, including Richard Hackborn, to whom many looked for guidance on this issue, was also leery. But over the course of the summer Hackborn seemed increasingly to move in favor; if he had reservations, he also had a duty to support Fiorina, who, after all, had been his choice for C.E.O.

The same went for Sam Ginn, the retired chairman of Vodafone AirTouch. And the others came around: Boeing’s Phil Condit, Patricia Dunn of Barclay’s, former White House science adviser George A. “Jay” Keyworth II, chairman of Internet Access Technologies Robert E. Knowling Jr., and H-P C.F.O. Robert P. Wayman. It was an impressive lineup, and that they were in favor ought to have assuaged Walter Hewlett’s fears.

But like all Hewlett and Packard children, Walter was raised to be an independent thinker. He was not afraid to admit that he still felt uncomfortable—and increasingly out of the loop. “You can easily see,” says a friend of Hewlett’s, “that Carly probably didn’t pay a dime’s worth of attention to Walter. And said, ‘This guy has no business experience, wouldn’t be on the board if his name wasn’t Hewlett, and doesn’t really have much to offer.’”

On July 12 he was preparing for the annual Death Ride, telling H-P to conference him in for a planned board meeting; he says the call never came. (H-P says a board assistant made numerous attempts to reach him.) Hewlett also claims that after giving months of warning that he’d be playing the cello on July 19 at the Bohemian Grove—a summer retreat for the Bohemian Club, a social fraternity for the rich and powerful which has such august members as former president George Bush and Henry Kissinger—H-P scheduled a twoday board meeting to begin that day.

It was later reported that when he sat down on the second day and said, “I don’t know why you guys want to make a crisis out of [H-P’s situation],” various members of the board rolled their eyes.

On the last day of August, a hot Friday afternoon, the board gathered in Larry Sonsini’s gleaming offices in Palo Alto. The deal, Sonsini said, was going to go through. This meant that either Hewlett would have to resign or the clause that the board needed unanimously to support the deal would trigger renegotiations that could hurt H-P. Hewlett said he was in a fix. Given that the only other term left to debate was price, it was fair to assume that if Hewlett did not resign Compaq would use the lack of unanimity as a bargaining chip to make the deal more beneficial for itself. Sonsini asked Hewlett to step outside. Sonsini told him that he would be within his rights to vote one way as a board director and another as a shareholder. Hewlett said he wanted to take the weekend to think it over.

On Tuesday, Hewlett came back and, reluctantly, said he would vote for the deal; his reasoning was that he did not want H-P shareholders to lose out financially—and he did not want to resign. At this point Fiorina’s focus was on Wall Street; she knew it would react skeptically to the merger—but even she underestimated just how skeptically. The day of the announcement, September 4, the stock price went from $23.21 to $18.87—a decrease of 18.7 percent. But she reckoned she’d have plenty of time to sell the deal; after all, sales were what Fiorina excelled at.

What she could not have foreseen were three enormous obstacles looming ahead of her: the terrorist attacks of September 11, which, Fiorina says, delayed her pitch to Wall Street for a month; the collapse of Enron; and the determination of Walter Hewlett.

On September 14, Fiorina and C.F.O. Bob Wayman visited the Los Altos of- fices of the David and Lucile Packard Foundation, a trust on whose board Dave Packard’s three daughters sit. Since Susan Packard Orr was a noted fan of Fiorina’s, and one of the board members who had been on the H-P committee that had hired her, Fiorina was optimistic that the foundation would vote her way. It hired the consulting firm Booz Allen Hamilton to produce an independent report on the proposed merger.

What Fiorina did not know was that David Woodley Packard, who had left the Packard Foundation in 1999 to devote himself to the Packard Humanities Institute (a nonprofit organization which has 1.3 percent of H-P’s voting shares), was receiving hundreds of letters from employees outraged about the merger. The most private member of all the Hewlett and Packard families, David Woodley, as he is known by the Hewlett family, has also been the most openly passionate about what he sees as the heart being ripped out of H-P. Bill Taylor, the organist who plays twice a week at David Woodley’s beloved Palo Alto movie theater, was let go from H-P last summer.

On November 6, David Woodley announced that he was against the deal; earlier in the day the Hewlett Foundation—whose stock committee had also commissioned an independent report—had come out against it as well. H-P stock went up 17 percent as a result. A few weeks later, before the Packard Foundation met to review Booz Allen Hamilton’s report, David Woodley sent the letters to its of- fices. On December 7, the Packard Foundation announced that it, like the Hewlett Foundation, would be voting against the merger.

Fiorina realized that with both foundations against her she was minus 18 percent of the votes she needed to get the deal done. On December 12, Walter Hewlett wrote her and the board a letter asking them to reconsider the merger; he described “enormous unhappiness” on the part of analysts and shareholders.

Fiorina turned again to Sonsini for help. She knew now that it wasn’t just a race to woo investors but also a public-relations battle. Sonsini called corporate-P.R. specialist Joele Frank. Petite, with short, jet-black hair, Frank had the pit-bull reputation you want when things get rough. He was too late. Frank said she appreciated the call, but she had already been hired by Walter Hewlett.

It was at this point, Sonsini says, that he knew things were going to get ugly: “I knew right away, having been in proxy contests, where they could go. And there is a little bit of tabloidism in the world today. And I think that this thing unfortunately had some of those elements.”

But it was Fiorina who fired the first salvo, in January, when she sent a letter to shareholders calling Walter Hewlett a “musician and academic.” The implication was that he did not have the business acumen to give advice to a board which, as Fiorina liked to repeat, had more than 300 cumulative years of executive experience among its members.

“Oh, the mud is flying,” Hewlett reportedly said to his family that weekend. Meanwhile, David Woodley Packard entered the fray, taking out ads in The Wall Street Journal, one of which concluded with the phrase “There is now a real danger that H-P will die of a broken heart.” He also commissioned three independent telephone polls of current and former H-P employees in Corvallis, Oregon, Boise, Idaho, and Fort Collins, Colorado; the results were more than two to one against the merger.

Hewlett-Packard branded the polls unscientific. Board members, including Richard Hackborn and George Keyworth, announced that the board would resign if the deal did not go through (a position they later reversed). Most troubling personally to Hewlett was that Keyworth, presumably under pressure from Fiorina, had allegedly misled The Wall Street Journal about what had gone on in a special executive-board meeting called in January, in which the outside directors had graded Fiorina’s performance as C.E.O., giving her A’s and A-pluses, but Hewlett had abstained. Keyworth insisted to the paper, which decided not to run the story, that Hewlett had participated in the grading process. (H-P and Keyworth say the account is absurd.) “Walter felt that George and Richard were being manipulated,” says Joele Frank. “That was personally upsetting to him.”

Fiorina called on her celebrity acquaintances to endorse her position: Citigroup’s Sanford Weill, AOL Time Warner’s Steve Case, DreamWorks’ Jeffrey Katzenberg, and the New York Stock Exchange’s Richard Grasso appeared in a promotional video for the merger. H-P’s spokespeople repeatedly quoted then G.E. head Jack Welch, who had said that it was “unpardonable” for a board director to vote for the merger and then lead the opposition.

E-mails flew back and forth among merger opponents, speculating that H-P had hired a private investigator to compile a file on Hewlett. (Two P.I. sources confirm they’d been retained by H-P.) Reporters were told by H-P’s media department that Hewlett had a shortlist of who should go and who should remain if the deal collapsed, and that not a single woman would be left at the executive level. Hewlett, when asked about this by an analyst, brushed it off in a monotone. “I don’t take any of that personally.”

At a lunch in Manhattan, the family— Walter Hewlett’s brother-in-law JeanPaul Gimon, his eldest daughter, Nathalie, 34, a former New Yorker editorial assistant, and his son Eric, 31, a physicist at the Institute for Advanced Studies in Princeton—was aghast at how their relative was being portrayed. “Either Carly Fiorina has not read those ads, in which case she is not managing the company as closely as she should, or she has read them, in which case she is much, much worse than we had ever expected,” said Gimon. (H-P’s Rebeca Robboy later confirmed that Fiorina had approved all the proxy-related ads.)

To the frustration of both Joele Frank and Hewlett’s lawyer, Steve Neal, Walter Hewlett would not reciprocate in kind. “If we could have used all the tools at our disposal, we would have won by miles,” says Neal, “but Walter said, ‘We either win by the high road or not at all.’” He adds, “Come back and see me in two years’ time and I’ll tell you what his options really were.”

On February 19, Hewlett introduced his plan for H-P, a strategy that would focus on the company’s imaging and printing business—maybe even spinning it off—and would build up the corporate computer business with niche-filling acquisitions. Fiorina breezily dismissed it as a “press release”—but then Hewlett delivered his most wounding assault yet. The night preceding H-P’s analyst meeting in New York, he released details of a proposed compensation package for Fiorina and Capellas—totaling $117.4 million in salary, bonuses, and stock options, with $69.8 million of it for Fiorina—should the merger go through. Fiorina was visibly angry as she leaned over the lectern at the New York Hilton and told analysts that “shareholders have every right to know” what the compensation of the C.E.O. would be, and that the figures had not been released earlier because the conversations had been only preliminary, and the amounts would need to be adjusted to the market when the time came.

Nonetheless, the information affected Institutional Shareholder Services (I.S.S.), which was preparing a report on the merger and which both sides were fiercely lobbying, since it was estimated the report could sway more than 20 percent of the shares held by large investors. Though I.S.S. came out in support of the merger in March, its report stated that to have omitted the details of discussions on compensation “falls far short of the good governance ideal.” With Enron’s cloud looming overhead, this was exactly the kind of P.R. Fiorina did not need.

By March, no matter how much Fiorina declared, “This is not a sport,” the contest was looking more and more like one—a blood sport. Each day a new institution came out and announced whom it was voting for. TALLY IN THE VALLEY, ran a local headline. By March 19, the day of the special shareholder meeting, it was, everyone knew, too close to call.

The morning of the vote, Walter Hewlett, Joele Frank, and Steve Neal knew that Deutsche Bank was being lobbied by H-P. “We knew a little before seven that starting at seven Deutsche Bank was going to be talking to the company. They told us that,” says Neal. Still, when the anti-merger team, accompanied by Hewlett’s wife, Esther, his son Ben, his brother Jim, and Pam Packard, David Woodley’s wife, arrived at the meeting, any feelings of anxiety were momentarily overcome by the rush that greeted them.

“It was like a wave,” said one H-P employee. Inside the auditorium, people ran to shake Walter’s hand and thank him.

From the second it was announced the meeting would be delayed, Hewlett’s camp says, they knew it was because H-P was negotiating with Deutsche Bank. “A little after 10, we received word from our proxy solicitors that Deutsche Bank was changing its vote, for the merger,” says Neal.

When it was all over, Fiorina closed the meeting, later saying that no one would know for sure for a few weeks while the votes were counted in Delaware, but that H-P had won by a “slim but sufficient” margin. Walter Hewlett did not look dismayed—far from it. At a press conference he read—awkwardly—from his notes and joked that he would now be returning to his life as “an academic and a musician.”

The board knew it needed to mend fences; in the next few days Sam Ginn met with Walter Hewlett to discuss the possibility of his renomination to the board. Hewlett, he thought, was amenable to the idea. The following Monday, Hewlett gave a speech to the Council of Institutional Investors, advocating that, in the future, boards across America retain legal and financial counsel independent of company management; Fiorina had been scheduled to speak the next day but canceled, citing fatigue.

Then, on March 28, Hewlett sued H-P for both using improper coercion of Deutsche Bank and misrepresenting expected job losses and the levels of revenue gain. H-P claimed that his arguments were “baseless,” but some analysts and lawyers were not so sure. Jesse Choper, a law professor at the University of California, Berkeley, says, “Even the judge has said that if Hewlett can prove what he alleges, there’s a possible course of action.” The board said it was “shocked” by the lawsuit and decided not to renominate Hewlett after all. A court date was set for April 23.

Fiorina’s colleagues say that she is unrattled—that she is at her very best with her back against the wall. “She is so calm and decisive,” says one. “She thrives on this,” says Lucent’s Kathy Fitzgerald.

Meanwhile, dissent grew within H-P. There were leaks from the so-called “clean team”— the integration body preparing the merger— that no way could as few as 15,000 jobs be lost and that Fiorina’s targets were way offbase. An E-mail went around the H-P alumni Web site suggesting that H-P would potentially spend $727 million on the merger ad campaign and the compensation packages, almost as much as it hoped to save with the layoffs. A memo surfaced from Ann Livermore’s Services department saying that targets had been missed for H-P’s second fiscal quarter, due in part to the disruption caused by the proxy fight. A voice-mail message of March 17 was sent to the San Jose Mercury News; on it Fiorina could be heard telling Bob Wayman that they may need to do “something extraordinary” to persuade Deutsche Bank and Northern Trust Corp. to switch their votes. The turmoil was enough to cause the S.E.C. to start investigating whether Fiorina had used improper methods to influence institutional shareholders to vote for the merger.

On April 17, H-P announced that the vote count by an independent company had been completed, determining that the merger had passed by 45 million votes—a margin of 2.8 percent. This meant that even without the 17 million Deutsche Bank votes, Fiorina would have won. However, if the court finds that improper tactics were used to sway shareholders, it could order a re-vote. Meanwhile, Fiorina launched a hunt to find the employees who had given memos and E-mails to the press; one who admitted to leaking two memos was fired by her. Her voice mail seeking “something extraordinary,” she

Meanwhile, Back on Capitol Hill …

It’s 10:30 p.m. on the first Thursday of the fall congressional term, and Diana Davis, staff assistant to Representative Mike Rogers (R-Mich.), is networking in the dark depths of Politiki, a Capitol Hill bar. She holds her cigarette aloft while repeatedly pushing back her bright blond hair. Wearing a little white tank and jeans, she sports a startlingly deep tan—“fake ’n’ bake,” she calls it, the result of weekly $4.30 tanning-bed sessions. Amid the sea of pasty faces and dark Banana Republic suits she stands out like a foil-wrapped candy in a box of chocolates. If Mattel ever makes a “Washington Barbie,” 22-year-old Diana would be the perfect model.

Beside her, Beth Stesanchik, her best friend and fellow Fordham graduate, looks on. She’s strawberry blond and wide-eyed. It’s Beth’s second week in town as an intern with Mobile Medical Care, a nonprofit agency that provides health care to the Washington area’s homeless and indigent. Beth, also 22, wants a nightlife that is the antithesis of her day; she wants connections. She has turned to her friend for help. No one is better than Diana at making connections.

Beth remembers that when Diana got her congressional staff job in June she E-mailed jokingly, “Maybe I’ll bag me a senator.” That hasn’t happened yet, but it’s been only eight weeks. And Diana’s been hit on by a married congressman, only she didn’t realize who he was until afterward. “She’s told me about some pretty freaky evenings,” says Beth.

Tonight, Diana’s priority is Liam Lynch, the press secretary to Representative Ander Crenshaw (R-Fla.). Liam is only 24, but rumor has it he is up for the job of press secretary to the House Ways and Means Committee, a post Ari Fleischer held before becoming White House press secretary. “Liam is brilliant,” Diana whispers, drinking vodka. Her little chest is puffed with pride. Liam is close enough to hear, but doesn’t, or pretends not to. “He is very modest,” says Diana.

Typical of the men in this yuppie D.C. tableau, Liam looks 10 years older than his actual age. He is tall and thin with blond hair and dresses in the Republican mold. His top button is done up, he wears glasses and a tie. He is chatting with his male friends, doing little to suggest there is anything between him and Diana, even though they’ve been on a couple of dates. It is going to be almost dawn before he makes his move.

Diana has the patience of a lioness. In the hours it takes Liam to get his act together, she can make four or five useful contacts. “The path to success on the Hill is not what you know, it’s who,” she says her boss has told her. She does not care if she does not sleep. Often she gets just two hours. The daytime, after all, brings only the humdrum routine of opening constituent mail and answering the phone. But Diana isn’t there for the work, she’s there to “get a little power, make a few connections.”

Tonight the main topic of conversation is, as usual, politics. Diana does not mind this. “When I lived in New York, I was a movie freak,” she says. “But here no one goes to the movies. You can’t talk at the movies and you can’t mingle.”

Diana loves to talk shop. Like her boss she is a conservative Republican, disagreeing with him only on abortion—she is pro-choice. This difference in opinion is not something she would discuss in public. “The epitome of unprofessionalism on the Hill is speaking your own mind. You’re out there to represent your congressman and that’s it,” she says.

Diana is confident about her intellectual abilities. She cuts through the group’s debate on the Bush tax cut with a pithiness her superiors might envy. “All anyone is concerned about is P.R. control. It’s shit! How’re we gonna pay for all those taxes?” The guys look at her fondly when she says things like this.

Beth thinks Liam’s roommate Mike Donohue, a Ways and Means Committee staff member, is cute, but she fears he is too right-wing. She corners Diana, her brown eyes anxious. “I told him about my job, and he said, ‘Huh, you know what another phrase for social security is? Go out and get a job.’ I can’t believe he said that.”

Unlike Diana, Beth does not come from a home where politics is fiercely debated around the table. She’s a Republican because her father, a metals chemist, is a Republican. She says he’s worried that hanging out with Washington’s homeless for a year will turn his daughter into a liberal. If Beth meets many more guys like Mike, it just might.

Diana thinks Beth’s annoyance is merely frustrated attraction. To her friend she says, “Omigod,” and looks sympathetic. To others she says, “I think she likes him, really.” She does not share her friend’s liberal social instincts.

“If you’ve studied economics, it just makes sense to be a Republican.” She drags on her cigarette. When Beth goes to the bathroom, Diana confides conspiratorially, “Beth is a little naïve, but she is very idealistic in such a good way. So you worry for her.”

This night, there is no need for further anxiety, since when the clock nears midnight, Beth, Cinderella-like, has to leave. She has to catch the last Metro to the house she shares in Bethesda, Maryland, with four other nonprofit interns, all sponsored by the United Congregation of Christ church.

Diana, who lives with her parents, Washington psychologists, in Annandale, Virginia, feels no pressure to do the same. She knows that, on the rare occasions when she actually sleeps, somehow, somewhere fate will provide a bed. Tonight she ends up at Liam’s apartment, which is near the bar. By five a.m. it’s time for the drive back to her parents’ house, to shower, change, and then head back to the office.

Friday morning she calls Beth. For once Diana’s bottomless fuel tank has run dry. After work she needs to go home and go to bed, something for which her concerned parents are extraordinarily grateful. She tells Beth the interruption in their social schedule does not matter much, as networking nights are Tuesday through Thursday. Weekends are for house parties and downtime.

Was the all-nighter worth it? asks Beth, worrying that if her friend does not get more sleep she is headed for a breakdown.

“Omigod, definitely,” says Diana.

In the wake of the Clinton and Condit intern scandals, you’d think Washington men would be wary of chasing young women, even ones as charming and alluring as Diana. You’d be wrong.

The Capitol buildings ooze sexual tension. The excitement begins once you pass the security guards. The windowless white marble corridors are a labyrinth in which you are isolated from the outside world. A “bubble” is how Diana puts it.

In the corridors you can hear little pump heels tap-tapping for miles, so predators know when the prey is coming; suddenly a congressman swings out from his office, dressed and groomed like a James Bond villain, usually flanked by an assortment of aides, all clutching files with the congressional logos firmly facing out, to remind you you’re in the presence of power. The congressman stops and stares up, down. He takes his time.

“Hey,” he says in a soft drawl.

This happens again and again, even on the second floor of the Rayburn building, where Gary Condit’s office is located, a chair and a handful of media outside. But the office sits sepulchral and empty, its occupant has long since been moved to a secret location.

Diana gets checked out all the time. “It’s just blatant. They don’t make any effort about hiding it,” she says. “They’ll start out conversations in elevators in the morning: ‘How are you? Who do you work for? Oh, you’re new around here. What are you doing for lunch?’ It’s just very bizarre and very forward.”

Diana Davis graduated in June with good grades, but zero political experience. Still, she says, she thinks she leapfrogged over thousands of applicants to a job on the Hill because the first man to interview her liked her looks.

“As an attractive young woman, you are easily able to manipulate certain situations,” she says.

Her interview—“more of a chat”—was at the office of an East Coast Republican representative. She says the chief of staff there was bummed when he was told there could be no vacancies for anyone outside his district, so he referred Diana to his friend Chris Cox, Rogers’s chief of staff. In Rogers’s office they were prepared to make an exception for the fact that Diana lives in Annandale, and not Michigan. The day after interviewing with Cox she had the job.

A few weeks later, she says, the man who first interviewed her tried to kiss her after driving her to her car from the Capital Grille, another congressional hangout. Diana’s small face crinkles as she remembers it. “I got a little bit tipsy and basically spilled my heart out to him … just because he looks like a teddy bear, just totally harmless … plus he’s 35. Did I ever think? No … I don’t know, it’s too close to my dad’s age. I was in absolute shock.”

Despite her joke about “bagging me a senator,” she does not quite have the stomach to “cross the line,” as she puts it. Both an innocence she tries to hide and a deep-rooted fear of being out of her depth prevent her from becoming the next national scandal. “Girls who are confident, well rounded, and basically have their shit together, they are not in those situations,” she says.

Still, she knows that her looks give her access to the highest echelons of power. Her world is a nonstop haze of crowded bars and cheap drinks paid for, mostly, by men in cheap suits—congressional staff aides in their late 20s and early 30s—and lobbyists, the ones with the better suits and longer bar tabs. Congressmen and senators flit in and out. Some time spent navigating the incestuous, hectic social whirl of young D.C. shows that it takes Diana just days to build a Rolodex that is the envy of her bosses.

On Monday night Diana outlines their plans for the week. This evening will be low-key. Tuesday will bring a drag bingo game with Liam and friends at a bar in Dupont Circle; Wednesday she plans to go to the Capital Grille, because it will be educational for Beth. If you want to catch a congressman, says Diana, go hang out at the Cap Grille bar. This is something she’d never do herself; the few times she’s visited the restaurant, she has been escorted. There are other women, she whispers, who go on their own. “They are looking for one thing,” she says.

It’s 12 hours before the terrorist attacks on the World Trade Center and Pentagon, although she doesn’t know it, and Diana is lecturing Beth and another Fordham graduate, Patrick Power, on the etiquette of Hill life. She has met them at “Cap Lounge,” the nickname for Capitol Lounge, a bar down the street and indistinguishable from Politiki. Pat, from Brooklyn, has just turned down a job at J. P. Morgan Chase in hopes of securing an internship or staff job that could pay as little as nothing and no more than $20,000. Diana was a half-hour late because she had to go to a fund-raiser for Representative Rogers, who’d suddenly been called away by the House majority whip, Tom DeLay. She is high on adrenaline, nicotine, and the buzz of having just mingled with a group of lobbyists from the airline industry. She’s wearing a cropped Ann Taylor sweater, pants, and little heels. She looks like a child dressed up in her mother’s clothes. She says she had some wine at the party, and also made some useful contacts, including Congressman Fred Upton (R-Mich.) and Sarah, another junior aide. “She’s a congressman’s daughter,” says Diana importantly, “but she doesn’t tell anyone that.”

Diana basks in the euphoria of her recent social triumph like one who has just aced a school exam. “You will do well on the Hill if you are good with dealing with people,” she instructs Beth and Pat. People who can’t function socially, she says, “simply won’t get on.… It’s all about P.R.—P.R. and networking.”

Her chief of staff’s extensive Rolodex, she says, is what got Representative Rogers, a freshman congressman elected by just 111 votes, onto Tom DeLay’s deputy-whip team. “Mike is now on the deputy-whip team, which is unheard of for a freshman—but Chris [Cox, the chief of staff] knows Tom DeLay and all the big boys. He has a reputation for picking freshman congressmen and keeping them in office.”

She has already told Chris—who is only 31—that she’d like to be groomed to be Rogers’s press secretary. She thinks this may help her achieve her ultimate goal, landing a job as a television journalist. Representative Rogers was profiled prominently in The Washington Post recently. “The press secretary can make the difference between the congressman getting local or national coverage,” says Diana.

Most congressmen, she says blithely, are just puppets. The chief of staff sets the agenda, while the legislative director and the legislative assistant write the bills and research the issues. “The congressman kind of just puts the vote in,” she explains.

This does not worry Diana. She is “in love” with this system of government, although she has no desire to run for office herself. She considers female politicians a different breed. “They don’t go out and drink with the boys. It’s all business, let’s do business.”

She hands Pat a copy of that day’s Roll Call newspaper, D.C.’s equivalent of Variety. There’s a feature on the 50 most influential staffers in Congress. Pat has a friend, Dick Armey’s chief of staff, who is ranked. Diana is impressed. “Pat’ll get a job immediately,” she says to Pat and Beth. Pat is not comforted. “I’m worried about who I’ll work for,” he says.

Diana nods sympathetically. She knows people so desperate for jobs on the Hill they’ll even lie about their political loyalties. “They can’t ask you in the interview what your allegiance is,” she says. She reckons that if she had had to she could—and would—have swung a job in a Democrat’s office.

Beth is horrified. “How could these guys live with themselves at night? Are they so desperate to work on the Hill they are prepared to give up their souls, their entire individuality?”

Diana is amused: “You have to be able to defend every side and see every point of view. Honestly, your wholehearted convictions, they don’t come into the game until you are way up there.”

Beth looks the other way. She fingers Diana’s cigarettes. Ordinarily, she does not smoke. “I might have one,” she says.

‘Things always work out for Diana,” Beth says when Diana is out of earshot. When they were at Fordham “she did an internship at ABC but stopped going because it was too much for her. She had to keep a journal for it and hand it in to the dean … so she just made it up. And her little irresponsibility is contagious because once I was working during the holidays to get money … One day I decided to just keep driving. I went back upstate, I didn’t go back to my job. I never called. And Diana was like, ‘That’s the sort of thing I would totally do!’ Diana helped me come up with a fabrication; she told them [Beth’s employers] I’d gotten mono and could no longer come in—she’s so good at speaking to people.”

The two girls became friends partly because they were the only Republicans in a dorm of eight women—“We were the only ones cheering on Bush during the campaign,” recalls Beth—and partly because they both rowed crew for a year, until Diana got tired of getting up at 5:30 a.m. each day. “We are [both] very concerned about staying in shape,” says Beth. “She’s a little bit more extreme on the vanity side than I am.”

Last Saturday the two friends went shopping at Bloomingdale’s. There was a sale on. Diana is delighted just thinking about it. “We bought out the store, $110 shoes down to $30—great,” she says, wiggling her feet in the air. Diana thinks that Beth, whose monthly stipend leaves her $140 spending money, is well-off. Beth thinks that Diana, who makes $22,000 a year, is extravagant.

Diana would prefer to be overdrawn than skimp on her monthly Vidal Sassoon highlights, her bikini wax, and her fake ’n’ bake tan. “I hate being pale with a passion,” she says.

Today, Diana found herself diving behind a desk in her office when Scott, a persistent lobbyist, came by. “Do you have the number?” she asks Beth. Beth searches for a bit of paper. On it is the number of a losers’ hot line—callers’ messages are screened by a radio station, and the most pathetic ones are read on the air. Diana is going to give the phone number to Scott, telling him it is hers. The girls giggle, fantasizing about the embarrassment Scott will suffer when he tries to call Diana.

Diana thought Chris Cox was cute until she discovered he was married with kids. Her crush has morphed into the same adulation with which she regards her congressman. “Mike is amazing,” she says. “He is the one person I am not cynical about. He used to be an undercover F.B.I. agent in Chicago and fought against organized crime. He got into politics because he really wants to make a difference. He deserves everything he gets.”

Like so many potential “low-key evenings” in D.C., Monday does not end as early as planned. Coming back from the bathroom, Beth is hit on by some men from the office of Senator Conrad Burns (R-Mont.). Soon Diana, too, is at the bar, muscling in on the most powerful one in the group, a baby-faced 25-year-old named Ryan Thomas.

Ryan works for the Senate Appropriations Committee, where he gets to shuffle around up to $19 billion, allocating funds for various projects. Ryan was put up for this job by Senator Burns, who is the ranking Republican on his subcommittee, Interior. Now his former colleagues—all under 30, a staffer named Benjamin Good, 25, tells Beth proudly—are furiously lobbying Ryan. It does not seem like they have to try too hard. Most of them grew up together.

Ryan focuses on Diana. He talks softly and quickly, sometimes in Hill jargon difficult to follow. He is one of those physically average guys who improves like a fairy-tale frog-prince with every word he utters. Diana is mesmerized.

“People—and that includes senators and congressmen—need to talk to me, partly to try to twist my arm about the delegation of money, but also because they want to know about timing,” Ryan explains in a phone call later in the week. “We don’t publish when bills come before the appropriations committee, and if you need to go into battle for or against a budget cut or gain, you need to be ready.”

Ryan is self-effacing about his responsibilities. “There’s a saying: ‘You can’t go above your pay grade’ in terms of acting on your authority. I keep going, shuffling funds until I come up against a member or senator who vehemently disagrees. Then it goes to a vote.”

Diana brings up an issue they have in common. Last term Mike Rogers voted for the controversial energy bill which advocated drilling in the Arctic National Wildlife Refuge in Alaska. Ryan tells her he is worried. Due to pressure from Democrats and moderate Republicans, the anwr funds had been removed from the Interior appropriations bill for 2002. Ryan says this has left him and his committee peers in the hole. They will have to find the money elsewhere.

They move on to the dispute between the General Accounting Office and the White House, which erupted when Vice President Cheney refused to release the names of business executives and lobbyists who met with administration officials about energy policy. Ryan has been sitting in on tense negotiations about it. He looks tired.

Beth absorbs much of this mutely. “I don’t have anything to add when they talk about politics in this detail,” she says.

Once again, as the clock nears pumpkin time, Beth must go. As she and Diana walk to the Metro stop, Diana says she considers Ryan the evening’s chief trophy. “He has a huge job—huge—and he’s only 25,” she says. She skips along the sidewalk waving his card in the air. “Yay, good contact,” she sings.

On her way out, Beth had asked Benjamin Good why it was that every person in Senator Burns’s office is under 30. He smirked. “If outsiders knew the truth about government, they’d be shocked,” he said.

Diana’s journal entry of that week:

As a young woman, let’s say that people tend to be a bit friendlier towards you than they might otherwise be inclined.… The dating scene is going strong and it was odd to be thrust in the middle of it. The old saying that power is an aphrodisiac rings true in DC. Everyone is viewed as a potential, and while this brings a good deal of free drinks, it likewise establishes a guarded nature. The trick to being a young woman here is keeping it friendly without encouraging the overstepping of any boundaries. It’s a game that everyone here plays and I won’t pretend I don’t enjoy it.

Due to the terrorist attacks, Diana’s plans for the night of Tuesday, September 11, are aborted; this does not mean that she gets an early night. Rather, she stays on the phone until four a.m. with Liam. Later she admits that this was the one positive outcome from the nightmare. Liam told her how nice it was that he could share the stress of the situation with her. Diana flushes when she recalls this.

Diana writes in her journal:

The congressman was so pale, white and grim, for some reason this frightened me more than anything. Mike is not invincible after all. People were running in and out of the offices, shock, terror but still there was the constant whisper—‘they’d never hit DC, no one ever hits DC.’ Moments later the Pentagon was engulfed in flames.

Diana is not the only young woman on Capitol Hill to keep a journal. Unbeknownst to her, three floors down from her office in the Cannon building, Caroline Chatterton, a voluptuous, dark-haired, 21-year-old English intern in the office of Representative Mike Ferguson (R-N.J.), has been scribbling away for four weeks. She has one week left on the Hill before returning to Britain and her final year at Sheffield Hallam University. Alone, probably, of the thousands of people who work in Congress, Caroline is not chiefly concerned the day after the attack, she says, with “P.R. and damage control.” She is too junior to have much input. So while the others fuss about getting photographs onto Ferguson’s Web site of him handing out doughnuts to rescue workers, she worries about the fate of a constituent, a cancer patient with only four months to live. He had written to the office some days before to see if Representative Ferguson could facilitate his getting access to a non-F.D.A.-approved drug on a compassionate basis. As is the case with much of the mail received, Representative Ferguson never sees the letter. The volume of mail is too enormous for him to deal with, but Caroline feels that the attitude of a senior aide in the office, and of the other twentysomethings, is less attentive than it could be. “Someone even said something like ‘Well, he’s a goner,’” she says. Today she asks the aide if she has managed to get the drug for the dying man. The aide’s response is “Oh, I completely forgot about the dying guy. Thanks for reminding me.” Caroline writes furiously in her journal, “This is people’s lives we’re talking about.”

On Wednesday night Diana looks unusually tired. Not even the fake ’n’ bake tan can hide the huge circles under her eyes. As planned, she takes Beth to the Capital Grille. It’s empty. Outside, people stream to an eight p.m. vigil at East Front Pond. Diana does not want to go. “The congressmen and senators are having their own vigil inside the Capitol. It’s not open to staff. I’d rather eat,” she says.

She sits down at the table and looks wearily around the room. The turmoil of her office is forgotten. For once, she asks Beth about her day.

Matter-of-factly, Beth says that she examined a woman whose uterus has been falling out. She also interviewed a former political prisoner from Ethiopia who could not hear because his ears had been mangled by torturers. She speaks very fast and lucidly. At the end, she says, “I needed to get that out. I’ve been thinking about it all day.”

Diana is aghast. “Omigod, this is what Beth does,” she says. “It makes me feel so small in comparison.”

Diana’s cell phone rings. It’s Liam. They arrange to meet after dinner. Diana orders a round of Kir Royales; Beth has never had a Kir Royale. Diana was introduced to them in Paris, “the same place where I made the acquaintance of Vidal,” she says, pointing to her hair. Yet Paris did not quite give her the full Sabrina-style makeover: “What’s ‘filet mignon’?” she sweetly asks the waiter.

She looks dreamily around the room. “The first time I came here it was packed, and it blew me away,” she says. She is back in the Capitol Hill version of Melrose Place.

Her first dinner—just days into her job—was like the first kick of the most intoxicating cocktail she’d ever tasted. “There is something about the marble halls, the high ceilings, the state flags, news cameras, and men walking that took my breath away,” she says.

Her date had been a 29-year-old southerner who opened car doors for her and picked up the tab. “He was powerful,” she says. “He knew Tom DeLay.”

She says she developed a “crush.” She catches herself. “It was a little more than a crush.” She envisioned herself Mrs. So-and-So and dreamed about meeting his parents.”We came here and I ordered lobster,” she says. “I was so impressed I slept with him that night. I wish I hadn’t. It was too fast. He stopped E-mailing me. The last time we came here after a party he left with a legislative aide.

“It was after this that the guy who first interviewed me found me, consoled me, and tried to kiss me.”

Diana shrinks into her clothes. “So I’m taking it real slow with Liam,” she says.

After dinner Beth finds Ryan Thomas sitting at the bar with a man he introduces as Benjamin Cline, the chief of staff to Representative Bob Goodlatte (R-Va.). With them is Brett Scott, a lobbyist, and an older man, Bill McSweeney, his client.

Diana is eager for gossip, and Ryan has plenty. There is an overriding feeling of guilt, since the House felt the attack had been avoidable. “The meltdown is the breakdown in communications between the agencies, the C.I.A. and the F.B.I.… Everybody apparently had little snippets of something like this happening. But nobody was communicating, so they could never put together a full picture,” Diana reports afterward.

While the House had spent the day looking for answers from the F.A.A., C.I.A., and F.B.I., Ryan and his peers were coming up with the recommendations they’d need for the following day’s debate about how to fund the country’s extra security and defense requirements. “The $40 billion aid package? We don’t have that money free and clear. We’ll have to dip into something else.… It’s clearly changed the structure of the debate—before, it was thought we must not let the normal bills dip into Social Security, but it’s highly likely that, now, this big emergency will dip into the, quote unquote, ‘surplus,’” he says later. In his sector he expects to have to put aside more money for domestic oil production. “It may mean less money for purchasing more land for the Forest Service or for the U.S. Fish and Wildlife Service.”

Around 11 a news report flashes on the television over the bar. People strain to see what it says. Brett’s gaze is elsewhere. “I was looking at you and was wondering which of you would be least offended if I hit on you,” he says.

Bill McSweeney tries to put his arm around Beth. “I’m experiencing all of the seven deadly sins tonight,” he says. Someone adds, “It’s lust, lust, and lust.”

Senator George Allen (R-Va.) enters and makes a beeline for Ryan. In this crowd, the senator looks like a parent picking up his kids from school. He does not give Diana a second glance. For 10 minutes he listens intently to what Ryan whispers into his ear and then goes to drink with his aides.

“He wanted to know the mood of the Democratic senators, members of the House, et cetera,” Ryan explains later. “The senators and members are just too busy to deal with the minutiae of every bill and every issue. They have to delegate.”

Beth thinks it strange that a senator should have to ask a 25-year-old for news of the House on the second day of the biggest American crisis since World War II.

Ben Cline is annoyed. “Just because the people who are running the government are young, it doesn’t mean they are unqualified,” he says primly.

It’s after midnight, and Diana goes on to meet Liam. As far as her career prospects are concerned, this is something of a false move.

The next day she E-mails: “Ryan from Appropriations came over to say hi at Politiki and actually hung out very late as well. He was a little less friendly though when Liam put his arm around me … Oh, well.”

No one could have predicted that the Thursday after the attack Diana would inadvertently pull off the networking coup of her career.

She and Beth are introduced to the English intern Caroline Chatterton at the Capital Grille. The place is empty save for a couple of young women at the bar. Their hair has split ends and they wear suits that strain against the flesh. “Those girls are Chandra Levy types,” says Diana. Her own size-2 frame looks in no danger of denting her crisp blue shirt and dark pants.

Caroline has dressed in a shorter suit than usual, in case she finds a congressman to flirt with for an article she has planned on writing for the British newspapers. Her office colleagues have told her this is the place to come. She doesn’t really believe it will happen. No one important is dining out this Thursday. The gaze of the restaurant’s few patrons is fixed on TV screens by the bar. america at war, reads the banner headline on every set.

Caroline has never seen anyone like Diana on the Hill. “Did you ever model?” she asks. Diana shakes her head no and wriggles about. The effervescence of youth and the promise of budding romance—Caroline has her eye on Brandon Waters, the 25-year-old press secretary in her office—mean that their spirits cannot be dampened by external events for long.

“I must come by and check out Brandon,” Diana tells Caroline. In return Caroline volunteers to inspect Liam. In the comfortable confines of the almost empty Cap Grille the idea of international conflict seems very far away.

“I’ve always been a conservative Republican,” Diana tells Caroline. “This is a time to back the government.”

That morning Chris Cox held a strategy meeting on damage control, briefing them all on what to say to the huge numbers of angry constituents calling in. Mike Rogers had been there listening.

“We were told to be confident, talking to constituents, told to tell them everything is under control, it’s business as usual,” Diana recalls.

Caroline says she, too, had been inundated with angry callers: “I didn’t know what to say to them. One woman was demanding to know the number of the F.B.I. because she had seen a white van full of Arabs yesterday on a street she couldn’t remember the name of.” She says she’s gotten some sympathy from her office colleagues, who told her that each month each legislative correspondent has to bring a “crazy constituent” letter to entertain the rest of the group.

“We often forge our congressman’s signature,” Diana says with a shrug. “And we hand over constituency mail requiring answers to the district office. They can sort out what is valid against what is not.”

The conversation moves inevitably back to men. Diana is in the middle of explaining how Liam romanced her with champagne and dinner in a restaurant overlooking the White House when 11 middle-aged men trickle past.

Diana immediately sits up, antennae alert.

One waiter, Cliff, apparently well known to the men, shuts the swing doors on either side of their table, transforming the space into a sealed room. Every 10 minutes or so the women can hear the high-pitchedchink, chink of cutlery being hammered against glass; they can see through the window that one by one, cigars in hand, the men stand to give toasts before drinking deep into the red wine and breaking into fits of loud laughter.

Diana thinks one is giving her the eye. She thinks she recognizes him. “I’m sure he looks like a senator,” she says.

One bursts through the doors, clutching his cell phone. His bald patch is shining from overexertion as he exclaims in the direction of the women, “If people knew how the government was really run … “

He asks the table to join the men for a drink when they have finished dinner. The women look at one another, startled.

He leaves them alone with their dessert and their deliberations. Even Diana looks uncertain about actually venturing into the “boys’ club” sanctuary. “Not a woman in there,” she remarks.

Then Caroline, the aspiring journalist, feisty and hungry to taste everything Washington has to offer before returning to Britain, settles it. Leaning back, she taps the balding guy on the arm as he returns from the men’s room. “What’s going on in there? Why are you all having so much fun?” she asks.

The man grins. “Those are a group of congressmen who are friends of mine. I thought they were hungry. They needed to kind of let themselves go.” He pauses. “And they are doing that.

“Come in and meet the rowdy crew,” he says. And with a toss of her hair, Caroline stands up and goes in.

The women are heckled as they enter. “Tell us your name and where you are from,” says one of the men. As if on a game show the women comply, one by one. When Caroline says she is an intern, the largest of the group, a white-haired man with a big belly and big laugh, roars, “We’re afraid of interns.” He throws his knife at a lean man named Mike, at the other end of the table. Mike is unamused. He threatens to throw it back. Another guy, rotund and jolly-faced, stands up and does an impression of Marlon Brando doing Don Corleone. The others think it’s hysterical.

Diana whispers that there is no way they can be congressmen. She figures they are businessmen. She wonders how she is going to get out.

They are congressmen—although at first they pretend not to be. One, the youngest, with a tiny goatee, introduces himself as Anthony, an auto-parts salesman. The others call him “the Jewish kid” and make fun of his beard. Their real names and states are as follows: the auto-parts salesman is Anthony Weiner (D-N.Y.); the lean Mike is Michael Capuano (D-Mass.); the jolly guy who imitated Brando is John Larson (D-Conn.); the man who was worried about interns is Robert Brady (D-Pa.).

Sitting silently at the head of the table is John Baldacci (D-Maine), now running for governor; also there are Bart Stupak (D-Mich.), Tim Holden (D-Pa.), Bill Pascrell Jr. (D-N.J.), and Mike Doyle (D-Pa.). The hosts are Paul Magliocchetti, a former member of the Appropriations Subcommittee on Defense, now a lobbyist, and his colleague Daniel Cunningham. “Normally,” says Magliocchetti, “there are four Republicans in this group. They just couldn’t make it tonight.”

The evening glides along in a gently tipsy manner. “You are very beautiful girls,” one man keeps repeating. Their jokes are old and hoary. “I just want you all to know, today we’ve been through a very classified briefing,” one says. “We watched CNN.”

Larson leads the others in song—Motown, the Beatles, Frank Sinatra, and the Rolling Stones. Mick Jagger might not have been disappointed by the energy with which they infuse a somewhat tuneless version of “Satisfaction.”

Caroline, inevitably, is treated to a rendition of Neil Diamond’s “Sweet Caroline.” Diana is wooed with “Oh Diane,” by Fleetwood Mac. They try to think of a song for Beth, but by then both their enthusiasm and memories are waning.

Toward midnight Caroline slips out to the bathroom. The restaurant’s lights are low and the waiters look like they want to go home. One man sits alone at the bar nursing a drink and a cigar. It is Caroline’s boss, Representative Ferguson. He is pale and tired. “I’ve been in the district today,” he says. “So many of my constituents have died.” She tells him she is in the back with a rowdy bunch of his peers. “I don’t think many of my colleagues from elsewhere round the country completely get what has happened,” he says sadly. “I think you really have to be in New York to feel it properly.… That’s why I had to come here and have a drink. It’s so awful.”

He pauses when she tells him some of the names of her hosts. She expects him to grimace, perhaps grumble, about Democrats. Instead he says, “Bart Stupak is a really great guy. I love him.” It is a remarkable moment, encapsulating the unity that not just Washington but America feels in a new climate of fear and uncertainty.

Ferguson joins the group, his face fixed in a frown halfway between unease and alarm. But the high jinks are over. Everyone stands and sings the national anthem and “America the Beautiful.” There is a round of patriotic toasts and then the men kiss the girls good night—chastely. The girls are ecstatic at the contacts they’ve made. “Mr. Baldacci said he’d write me a reference for medical school,” trills Beth. Diana clutches a wad of business cards. Her face is pink. “Do you know how many people would die for this?” she says. Caroline has taken photographs; she is focusing on the article she’ll write. She waves her camera and mouths, “A successful evening.”

Caroline’s journal, Thursday, September 13:

Dinner was fabulous and to cut a long story short we ended up in a private room with 9 congressmen! How weird is that. They all wanted us to introduce ourselves but they wouldn’t stop being rowdy so I had to stand up and shout at them to be quiet. How often does a 21-year-old English intern get to boss around the US government!! They’d been voting all day and in classified meetings so they were in desperate need of a good old singsong and some laughter. We sang lots of songs and had a really good laugh. They were a real collection of characters and we had such a good time! Everyone proposed toasts to the dead people, to America and to revenge and the people who will be giving their lives in the next week. That part freaked me out. We really are having a war.… It was totally amazing to be in a room in the biggest crisis in American history with the elected leaders of the country and to see their strong spirits, their hope, and their union as a team. It was a very touching experience that I will never forget. They were so hospitable, genuine, and truly lovely. It was very reassuring to see that the country is led by some of the kindest, most down to earth guys you could meet. What a fantastic and totally random night!

The next day, New York’s Anthony Weiner finds the time to hunt down Diana’s E-mail address. He writes that he hopes they might meet again. Diana is overwhelmed that he’s managed to think of her on a day that must be heavy with import and emotional intensity. Last night he mentioned that he’d be going to Manhattan to inspect the World Trade Center wreckage with the president. They’d be traveling together on Air Force One.

Caroline records: “Went for lunch with Diana. Anthony Weiner has emailed her and she didn’t know he was a member of Congress. She died when I showed her his card! It was so funny!! I think she likes him, but she doesn’t want to admit it. In fact, I know she likes him ’cos she’s been on his website this afternoon looking at the photo gallery.”

A week later, two nights before Caroline will leave for England, the girls return to the Capital Grille. Now they know the drill, and they capture their prey with ease. “Three more congressmen,” Diana gloats. “Republicans—got their cards and everything.”

She has left Anthony Weiner dangling, after he E-mailed her that she should come and visit his office “in person.” “I thought that was kind of cheesy,” sniffs Diana.

A few weeks later Diana is evacuated from Congress, following the discovery of anthrax in Senate majority leader Tom Daschle’s office. Diana is not entirely displeased. After all, it’s a five-day weekend, she says. “This is great … I mean, not great obviously … But I’m getting so much sleep. My body’s in shock. It’s wonderful.” The previous Tuesday, however, 24 hours after Daschle’s office had received contaminated mail, there was a lot of hostility among her colleagues, she says. At a briefing by Dr. John Eisold, attending physician to Congress, “they [the doctor] didn’t even say they were going to be screening for anthrax from now on—they said they were gonna be screening for biological agents. People asked did that include anthrax, and they said, ‘We can’t answer that.’”

Diana’s main concern about returning to work is the mountain of mail she will have to open, since it has all been put on hold while the offices and mailroom are being inspected. “Couriers are not allowed in,” she says. A further thought occurs. “You cannot accept flowers.”

Vicky Ward is a Vanity Fair contributing editor.

How to Marry a Royal (without ending up in therapy)

Unlike her future sisters-in-law, the Princess of Wales and the Duchess of York, Rhys-Jones was profiled by all the glossy magazines months before Prince Edward had even proffered her a ring. Unlike any other outsider to marry into the Windsors, she has long been considered their only hope of rehabilitation.

“Can Sophie Rhys-Jones save the Royal Family?” asked the cover of Harpers & Queen magazine in February last year. It is what we are all wondering.

When she finally ties the knot, Rhys-Jones, 31, will be the only “outsider” married to one of the Queen’s sons. Given that the other children’s first marriages have all broken down so publicly and in such tawdry circumstances, Rhys-Jones knows that for the sake of the Windsors’ public perception, she and Prince Edward cannot afford to make the same mistakes.

Considering that a large percentage of Britons find marriage an insurmountable challenge in itself, without the additional pressures that being a princess must bring, Rhys-Jones must feel as if she is embarking on a monarchical version of Pilgrim’s Progress.

The Queen, we know, is aware of all this. That is precisely why she has encouraged Rhys-Jones to stay at Buckingham Palace and Windsor when she wants to and why she has slowly absorbed Rhys-Jones into family events in front of the cameras, such as the visit to the Queen Mother near Balmoral in the summer of 1995.

She has also relied on Prince Edward to guide Rhys-Jones in matters of royal etiquette; he has taught her where to stand (behind the royal) when the paparazzi are about, how and when to address his mother (ma’am and only when spoken to) and what to wear on different occasions (even on holiday the royal men always wear black tie for dinner – which often means long dresses for the women).

After the Princess of Wales’s public confession on Panorama that on her honeymoon she had desperately needed someone to show her what to do, to say, to wear, for her first public appearance in Australia, the question presents itself: should the Queen break with tradition and appoint somebody to nurture Rhys-Jones, to break her in to the ways of the royals? Or, like many a trembling bride before her, should she simply watch and listen, picking it up (or not) as she goes along?

Both the Duchess of York and Dame Barbara Cartland, the Princess of Wales’s step-grandmother, agree that it would be most helpful to have a teacher. “In my day,” says Dame Barbara, “if you were gentry, you were taught how to behave. That just doesn’t happen any more. At some public schools, for instance, boys are not even told to open doors for women and staff. It’s shocking.”

Although both Sarah Ferguson and Lady Diana Spencer came from more upper- class backgrounds than Rhys-Jones, both also came from broken homes. Rhys-Jones comes from a secure family environment; her father was in the import/export business and she went to Kent College, a minor public school. According to the Duchess of York’s private secretary, she blames the absence of a guardian-figure for many of her own subsequent mistakes.

“It is not the etiquette that is hard, but the protocol,” says Judith Kark, principal of the Lucie Clayton finishing school. “Imagine how hard it must be having to make an appointment just to see your husband during the day; of having secretaries conspire against you [if what the Princess of Wales said on Panorama is true]; of being parcelled around from agent to agent; it could break anybody.”

Nigel Evans, editor of Majesty magazine, thinks these hardships have perhaps been overplayed. “There is no doubt that the representation of the Royal Family as the exemplary middle-class family, initiated by Queen Mary and continued by the Queen Mother, is false. They are not a normal family; they are an institution. An indication of that is the fact that the people who marry into it acquire official duties. However, the number of times that the so-called court congregates in a year and family protocol comes into play is very limited.”

Christmas at Sandringham is one of those formal occasions, as is the Balmoral summer holiday. “At Sandringham,” says Evans, “the men all have breakfast together and the women are expected to lie in bed. Then the men go off shooting all day until 4pm and the women can either follow them or do their own thing. But they nearly always spend all of their free time outside.”

Seeing very little of her husband, particularly when on holiday, is therefore perhaps the toughest lesson the newly-wed princess will have to learn. Other more minor rules include knowing who is who in the various individual retinues (the Prince of Wales has an entourage of about 40); never barging in on the private apartments and constantly changing her clothes. A post- shoot tea requires a change of clothes from outside gear. But it is necessary to change again before the cocktail hour.

As for learning how to behave for formal duties, Evans suggests that she gets herself a decent lady-in-waiting. “That is what they are there for,” he says. “In that respect I am amazed that no one helped the Princess of Wales.”

Rhys-Jones does have a head start, however, over both her future sisters- in-law. At 31, she is considerably older and wiser than they were when they wafted down the royal aisle. She has already had a high-profile PR job for which she was headhunted and which involved meeting and dealing with a wide range of people. And she seems remarkably relaxed about her appearance.

She has already shown that she carries herself well; her short hair is easy for her to groom herself (it even looked all right when she emerged from the cold waters of the Solent, having fallen off her windsurfer), and it seems unlikely she will have to smarten up her clothes much. (Though she is neat, it is obvious that she does not share the Princess of Wales’s love of high fashion and the complicated sartorial decisions that involves).

Then there is the added bonus that the man she is marrying is only seventh in line to thethrone. “She will not have the pressures on her that the Princess of Wales had,” says Judith Kark. “She will have a life that is far more akin to that of the Linleys or LadyHelen Taylor.

“And this time there is no danger that a fairy-tale image will be created. Sophie Rhys-Jones comes across as exactly what she is: quiet, demure and solid. Perfect, in fact, for what is going to be demanded of her.”

From getting out of a car to wearing an evening gown: dos and don’ts for a would-be royal

Generally speaking it is important for a royal wife to conduct herself with decorum and dignity and to dress with elegance while remaining conservative. The Duchess of York has come in for much criticism on both counts, and the press once famously captured her behaving in a most unladylike fashion with an umbrella at Ascot. “It is necessary to blend in with the background and match the standards of other members of the Royal Family,” says Judith Kark, principal of London’s Lucie Clayton School. Above all, future princesses and duchesses should learn:

To tow the family line. The House of Windsor, despite the recent scandals, is associated with traditional values, and airing one’s personal views might be damaging. The Duchess of York caused consternation in the US in December 1994 by speaking out in support of cohabitation before marriage.

How to carry oneself properly in a long evening gown.

How to get out of a car and protect one’s modesty in the glare of paparazzi flashbulbs. Exposure of hemline, knickers or too much leg is to be avoided. During one of her early public appearances with the Prince of Wales, Princess Diana drew attention to a plunging neckline by getting out of a car without due care and attention.

That in the presence of royal personages, and on taking leave of them, men should bow and women should curtsey (though women may also bow if they prefer). “It is not what is done that counts, but the acknowledgement of royal presence,” explains Judith Kark.

That on first being introduced to the Queen and the Duke of Edinburgh, one is expected to address the Queen as Your Majesty and the Duke as Your Royal Highness. Thereafter one addresses them as “ma’am” (pronounced “mam”, with a flat vowel sound, not “marm”) and “sir”.

How to deal with the Union Jack-waving crowds lining the streets on public engagements – how and where to walk, and what kind of contact to make.

All that said, the new royal bride will not be surrounded by an entourage of ladies-in-waiting, advisers and image-makers with the task of making a princess out of a PR girl. According to Nigel Evans, editor of Majesty magazine: “We are witnessing a great royal experiment” with Sophie Rhys- Jones. “She will not be thrown into the deep end, as Lady Diana Spencer and Sarah Ferguson were,” he says. The responsibility for coaching her in her new role will fall mainly to Edward, says Evans, and she will probably share her husband’s private secretary, Sean O’Dwyer. There may be a lady- in-waiting, but other than that, her induction into royal business will be a gradual process that has already begun.

Should her adeptness at handling the media and notable public figures suddenly fail her, a finishing school such as Lucie Clayton might come to the rescue. Courses in “grooming” (business and social etiquette) start at pounds 295 for two weeks.

Scott Hughes

How Many Pizzas Does It Take to Save a City?

Twenty-one years ago Peter Boizot, the chairman of Pizza Express, came up with the idea of donating a portion of the profits from one of his pizzas to the Venice in Peril fund. The pizza was, and remains, the Veneziana, a hybrid of onions, capers, sultanas and pine kernels, and 5p was donated for each one sold (it has since risen to 25p).

Last October, Peter Boizot was the guest of honour at an Italian Embassy reception. Everybody was eager to shake his hand and clap him on the back; a cross-section of Britain’s great and good, Viscount Norwich, Lady Thorneycroft and Lady Hale among them, could not thank him enough. Boizot’s pizza had raised more than pounds 500,000.

That money comprises a large part of the entire funds raised for Venice in Peril, the British appeal for the preservation of the city. The charity was set up by the late Sir Ashley Clarke, Britain’s longest-serving ambassador to Rome, as the Italian Art and Archives Rescue Fund, after horrific damage to Florence and Venice in floods in 1966. By 1971, Florence had more or less been salvaged. Sir Ashley’s attention turned to Venice, which needed help on every conceivable front – from living conditions to architectural restoration.

The Venice in Peril committee, now chaired by the art historian Viscount Norwich, has concentrated on restoring churches, paintings and statues. The money that has not come from pizzas has been raised partly at events such as glittering private receptions at the Royal Academy, concert trips and opera outings, but mainly in donations from the charity’s patrons – whose names read like a condensed version of Who’s Who – and the 1,000 names on its British mailing list.

The committee stresses that it keeps its social events to a minimum, to avoid unnecessary expense on anything that is not a Venetian artefact. “We do not have any single annual event,” says Nathalie Brooke, the Hon Secretary. “We only organise a charity gala when funds are needed for a new project.”

But given that Venice is supposedly “in Peril”, aren’t funds for new projects needed all the time?

“Venice is no longer in peril. We all know that,” says Lady Sheila Hale, an American-born writer who is on the committee. “The town’s new mayor, Professor Massimo Cacciari, has made a concentrated effort to implement the canal-dredging and improve pollution, and the Italian government has realised that it needs to give more to the arts and their upkeep.

“The real problem now in Venice is massive depopulation. Just before the opera house burnt down, we had decided to stop restoring churches and concentrate on striking a deal with the municipality whereby we would restore the old artisan houses if the Venetian government would in turn rent them out at an affordable price.”

If those houses are made affordable, the charity argues, then young professional couples can afford to stay in Venice rather than leave and the city’s metamorphosis from tourist trap to theme park can be prevented.

Lady Hale says that Venice in Peril’s influence is so strong now that the municipality listens hard to whatever it suggests. “The American charities may have more money to give than we do,” she says, “but we are the oldest.”

When, three years ago, it was mooted that Venice might hold a grand carnival for the millennium – Expo 2000 – the wear and tear of which, experts suggested, would finish the city off, Lady Hale wrote an article in the Times to complain. “The Italians didn’t like that at all,” she chuckles. “They have enormous respect for the British. I think you can safely say that it was our influence in the end that polished off Expo 2000.”

That, and the pizzas.

Not Like It Was In Mrs. Danvers’ Day

The plot sounds like something by Daphne du Maurier. A large country house containing an elderly widow goes up in flames in the middle of the night; the housekeeper of six years is found dead. Another member of the household’s staff is charged with murder. The employers come from one of Britain’s leading aristocratic lines. Echoes of the infernal end of Mrs Danvers, fiction’s most famous housekeeper.

Yet this is no fiction. Last week, a 58-year-old housekeeper, Marion Addy, died in just such circumstances. She worked for Elizabeth Touche, widow of George Touche, a former senior partner of the stalwart British accountancy firm Touche Ross. Her head had been bashed repeatedly and her rooms set on fire. A former nurse to Mr Touche was arrested and charged.

The story highlights the hidden hazards of the job of housekeeping. The sad case of Mrs Addy is not an isolated one.

In January 1995, Lucy Middleton, 64, died protecting her employer’s farmhouse in Hampshire from burglary; in August, Maria Cerrato, 24, successfully sued her employer, Anna Nicole Smith, the model-actress of Naked Gun fame, for sexual abuse.

The modern housekeeper is more vulnerable to attack than her historical counterparts because she usually works alone.

According to Kate Parrish, who runs Domestic Solutions, an up-market domestic staff agency, the housekeeper’s role has changed considerably. “Because of the recession, the job has expanded to include everything from cleaning, washing and ironing to cooking and child-minding,” she says. In the old days, such as in the Forties, memorably portrayed by Anthony Hopkins and Emma Thompson in the film The Remains of the Day, a housekeeper’s job was supervisory. “Now,” says Ms Parrish, “apart from the very rich, most people who want a live-in help cannot afford to have a large number of staff. They want somebody who can do everything.

“This is partly because employers are no longer just the elderly or the very rich. They are young working couples with children. The result is that for the first time there is a gap in the market. Staff are either cleaners or live-in delegators. Very few want to be live-in factotums.”

Janet Williams, 49, is a former nurse who advertises herself in the Lady as a housekeeper/carer. She is single and uses her parents’ home in the Sussex countryside as a base. She has been in service for 15 years, and has learnt the hard way that the job is too physically and emotionally demanding to hold one position for long.

“Two years is the average time anyone works in one job,” she says. “I find it easier to work shifts in weeks, because you need more than one day a week off to recover. It is much better to be fresh and do three weeks on, three weeks off, rotating with a partner.”

The most draining part of the job, Ms Williams says, is not the cooking, cleaning or shopping, but the unspecified task of acting as both emotional crutch and punchbag. “I once worked for an elderly married couple who advertised for a housekeeper but really wanted a shoulder to cry on. It was exhausting but happy. Yet after three years I suddenly heard them talking to each other disparagingly about the way I’d cooked the cauliflower. I think they said it almost to make conversation. But in our profession, employers always talk behind your back. You have to have a thick skin, but when the tittle-tattle starts in earnest, you know you must move on.”

Ideal employers are as hard to find, it seems, as ideal staff. The Smiths (not their real name), a married couple in their forties who work together as housekeeper and gardener, have certain standards. They advertise themselves as available for work in three home counties only, and for families without young children. The money has to be better than average into the bargain.

“Our first post was with a lovely titled couple,” says Mrs Smith, “but we left after five years because we weren’t paid enough.” According to Ms Parrish, the average wage for a live-in housekeeper ranges from pounds 180 to pounds 250 a week – more if the job is in London, but then the (free) accommodation is unpleasant.

“The second job was with a young family, and the nannies – seven of them – came and went in five years and undid all my work. No sooner had I cleaned up, than they cooked all over the kitchen or trailed soiled nappies over the floor. I found it heartbreaking.” The Smiths are not concerned that they are now unemployed. Perhaps surprisingly, their options as a working couple are greater than those of an individual.

“I probably place more couples than individuals in a year,” says Ms Parrish. “It has to do with cost. A top-rate housekeeper might cost pounds 300 a week, but a top-rate couple would only cost pounds 400 to pounds 450.”

It is impossible to assess how many people in Britain are now coughing up such sums for their domestic staff, but Ms Parrish places 300 housekeepers a year. “The market is continually expanding,” she says. “The aristocracy is no longer the exclusive employer of the housekeeper.”

But, still, perhaps her best. The Smiths want to work for a lord and lady. “Quite simply,” sniffs Mrs Smith, “the aristocracy are used to staff and know how to treat them well. The nouveau riche, on the other hand, just don’t know how to behave.”

Fortunately for the Smiths, a suitable vacancy has recently arisen. Dame Barbara Cartland, step-grandmother to the Princess of Wales, is seeking a replacement for her housekeeper, who is retiring at 84. An ideal post, except that prospective employees must share Dame Barbara’s love of pink interiors and Pekineses.

The Club that Just Won’t Have Him as a Member

It is chiefly De Savary’s flawless eloquence that has created his rags- to-riches success story. At Skibo Castle in Sutherland, Scotland, his beautiful home and the setting for his latest hospitality venture, the up-market Carnegie Club, he talks fluently to the guests about golf, horse- racing and Chicago. (Most of the guests that day are American.) They lap it up – especially the advice he gives them about how to hit the golf ball into the wind and which is the best course in the area (his). It is only after an hour or so of this that he confesses that he has never played the game. There is a stunned silence. “Gee, Peter,” says a woman from Detroit, “ya gotta be kiddin”.

De Savary, the son of a French-born Essex farmer, left school at 16 (he got kicked out of Charterhouse for sleeping with a master’s au pair). He immediately went off to Canada, where he began work as he meant to go on – on his own.

“At first I set myself up as a private tutor,” he tells me smoothly, seeming to forget until I remind him that his only academic qualification is one O-level, in Scripture. “Yes, well,” he roars with laughter. “Despite that, I managed to build up a small business. Having given the children tuition I would offer to mow their parents’ garden. After a little while I offered my services as a babysitter on top. So from one customer I got three businesses.”

After five years in Canada he moved to America; from there to the Far East, where he applied the same tactics to openings he saw in the oil and steel industries. By 1979 he was a multi-millionaire. He bought a chain of international premises, including one in St James’s, London, which he dubbed the St James’s Clubs. They were among the first clubs to be open to anyone of any sex so long as they could pay.

The clubs did not endear him to the British Establishment. Aside from a bit of casual sniping, it did not really take any notice of him until he staged a British challenge to the 1983 America’s Cup, the world’s biggest yachting event, considered at that stage to be well beyond the wealth and capabilities of the British yachting world.

De Savary’s venture was narrowly pipped at the post by Australia’s Alan Bond. That only reinforced the British upper classes in their belief that De Savary was a flamboyant, tasteless self-made man who did not play by their rules. He did not bank with the old family banks; he did not use traditional gentlemen’s clubs; he didn’t even go to St Moritz in winter. When he bought Land’s End and John O’Groats with the intention of developing tourism, eyesores were predicted. Both were subsequently sold, but De Savary mischievously suggested he might bid for them after they were put up for sale at the weekend.

Anyone bound by conventional English social niceties might find De Savary an embarrassment. He never stops selling. No sooner has he waved off one guest in his vintage Rolls than he is telling his staff to ensure that one of the other couples staying sign up as members. Yet despite his energy, 51-year-old De Savary has reached the end of the road. Skibo is where he wants to remain until the end of his days. He cannot afford for the Carnegie club to fail. It is a kind of continual houseparty in one of Britain’s most beautiful houses, with outdoor activities from golf to riding available on the doorstep. “The world,” he explains, “is no longer conducive to old-fashioned entrepreneurs like me. We relied on personal relationships; now everything is transaction-oriented and hi- tech. There will be a new breed of entrepreneurs, but they will be different from us. They will rely on technology to make money. I am sad about it; I would turn the clock back if I could, but since I can’t, I’m creating my own way of life at Skibo. Here at the club, I and my 400 members can ignore the rest of the world.”

Would he not be more suited to living in America? He looks pensive. “I love it here. I’m British and I’m fiercely patriotic,” he says. “But the Americans are more supportive of entrepreneurs and more forgiving of failure.” Isn’t it odd that someone so un-British, so disliked by the British Establishment, should have his name indelibly associated with the two bits of land that define the island? Not at all, it’s just part of De Savary’s campaign to be taken note of by the very people who appear to despise him.

Softly Softly Approach Gives Way to Shock Tactics

Department of Transport officials believe that recent advertisingcampaigns have been effective in reducing the drink-drive death toll. They point to a large drop in 1987 when the slant of the slogans and advertising shifted from warnings about getting caught to an emphasis on the fact that drivers who drink endanger lives.

In 1977, for instance, the slogan was “Think before you drink before you drive” and the accompanying advert showed the penalties of a conviction. Others that followed included “Don’t drink and drive – you’re asking to get caught” to “Stay Low”, which was controversial because, it was argued, it indirectly endorsed drinking a little and still driving.

But in 1987 the DoT introduced the “Drinking and Driving Wrecks Lives” slogan. Since then there have been variations on the same theme, including in 1992 a television advert that could only be broadcast after the 9pm watershed, showing a girl lying on the pavement covered with blood. The death toll had stayed constant at 660 for two years. But in 1993 it fell to 550. Also in 1992, the campaign was extended to the summer, and in 1994 and the summer of 1995 emphasis was laid on the effects of just a couple of drinks. The campaigns are targeted at young men in their late twenties, who are over-represented in accidents, particularly at Christmas.

But not everyone in advertising believes in shock tactics. “They work for the young male audiences at whom they are aimed,” says Merry Baskin, head of account planning at JWT, “but they can be so disturbing for the mainstream that the tendency is to shut them out.”

Diary – Monday 4 December 1995

This week sees Judge Stephen Tumim, the newly retired chief inspector of prisons, take his last curtain call, still defiantly getting up the nose of the man who so cruelly removed him from his post – the Home Secretary, Michael Howard. On Thursday, Tumim attends a final special tribute to his work and his guest will be Derek Lewis, the recently sacked governor of HM prisons.

The duo are to attend a gala performance of West Side Story at Wandsworth prison performed by inmates and Pimlico Opera. Since Lewis angrily accused Howard of unfair dismissal and interfering in operational matters this autumn, Tumim’s gesture of friendship is likely to go down like a lead balloon at the Home Office. Still, Howard may take solace in the fact that he can now pursue his “tough on crime” policies unimpeded by Tumim’s liberal interference. For how long, though, is a moot point. Methinks Tumim’s final words in office are ringing in the Home Secretary’s ears at night: “The pendulum will swing back again. It may not be until after the election, but remember, that is only a year or so away.”

Some interesting reading has fallen on to my desk concerning Ian McCartney, the shadow employment secretary. In May he issued a press release that vigorously deplored the half-year results of the Royal Bank of Scotland (the Tories’ bankers), which announced that pre-tax profits had increased by one-third to pounds 270m because the bank had made 200 staff redundant – part of a programme to shed 3,000 jobs by 1997.

The bank’s chief executive, George Mathewson, was unamused. He replied to Tony Blair, with a copy both to McCartney and the Labour spokesman for the City, Alastair Darling, stating that he was very “surprised” by McCartney’s press release.

McCartney interpreted the letter as a request for his sacking. He was livid. Now, though, the brouhaha seems to be over. McCartney is triumphant. Why? For two reasons: first, as he puts it, “I’m still in the job.” Second, those forgiving people at the Royal Bank of Scotland have just given him a mortgage.

Manchester University had a novel way of celebrating National Tree Week, last week – it cut down a pine copse on the land of The Firs, former home of the late vice-chancellor and editor of the Manchester Guardian, CP Scott, to create a car park. A nest of squirrels died in the process – and the sight of their bodies laid out on the university skip has greatly inflamed the university’s green brigade (virtually the entire student population). The axeman responsible, Mr Furser, head of estates and services, is being bombarded with furious calls. When I rang to speak to him, his secretary sighed, “About the trees, is it?”

It is not often that I meet convicted felons at drinks parties, so you may imagine my surprise when, at a literary do hosted by the Scottish literary agent Andrew Lownie last week, I was introduced to an elegant lady attired in black and pearls named Baroness de Stempel.

I’m afraid yours truly was quite nonplussed. My manners deserted me entirely – I stood and gawped, wondering how to start conversation. (Baroness de Stempel, for those who don’t know, was sentenced to seven years in jail for swindling her late aunt, Lady Illingworth, out of pounds 500,000 – she spent four years inside and was released in 1993.) What is a girl meant to say to such a person in the way of small talk? I could hardly say, “Aren’t you a criminal?” That would have been a bit rude. So, seeing as we were at a literary do, I opted for the tamer, “What have you written?”

The good lady saw my embarrassment and came to the rescue at once. “I have written a book about myself, but it has not yet been published.” Pause. “But the reason you’ve heard of me is because I was convicted of fraud and spent four years in jail.” Phew. After that we had a lovely long, perfectly normal conversation about the expense of renting London flats. … Baroness de Stempel is moving to Fulham.

I had a fascinating time last week visiting Gordon Medlicott, one of Britain’s last lighthousekeepers – they are all due to be replaced by automatic navigational systems by 1998. But Mr Medlicott, 54, who is head keeper at North Foreland lighthouse, near Broadstairs in Kent, was at great pains to debunk the myth (which I firmly believed in) that lighthouse keepers are meant to keep a look out for wrecks in the dark. “Unless the coastguard asks, then that is not, and has never been, one of our duties,” he told me patiently. “In fact, I had a friend at – I won’t say where – who only realised there was a ship aground outside his front door when he switched on his TV and saw the news.”

Whilst Fleet Street’s incestuous world is abuzz with the news that the Daily Mail’s features editor, Richard Addis, is shortly to become editor of the Express. Addis’s wife, Noonie, has her mind on more academic affairs. She is devising an Ancient Roman boardgame, due for completion in February. “The idea is that lots of different Roman characters go around a street map of Rome buying ingredients for a Roman feast,” she explains. “It is meant to be for all age groups – I thought of it because so many of my contemporaries were nostalgic for Latin lessons.”

But Mrs Addis has one problem which readers may be able to assist with – choosing the game’s name. “My last thought was ‘Cicero’,” she says. “And friends have suggested Caligula and Festina Lente.” Send your suggestions my way. In the meantime, I’ll start the ball rolling, cornily I’m afraid, with “Nil Desperandum”.

Diary – Monday 27 November 1995

A horrendous spectacle was in store for the nation’s cultured types last Monday night. No, I’m not talking about the Panorama interview, but the astonishing debut appearance of the F-word on the surtitles at the Royal Opera House. My friends in the audience (yours truly could not resist the Princess) nearly fainted. There it was, boldly inserted in the dialogue of the first act of the opening night of Paul Hindemith’s Mathis der Maler directed by Peter Sellars: “Any scum can have a fuck …”

The official justification is that Sellars wanted the dialogue to come over “in the raw”. But traditionalists present showed signs of being upset. Several seats became vacant before the opera’s four hours were up. But one who remained, smiling stoically until the end, was the Defence Secretary, Michael Portillo – which could explain why he was so supportive last week of his junior minister, Nicholas Soames, who was told to shut up by the Prime Minister on the subject of the royals. Unlike John Major, Mr Portillo hadn’t been at home to absorb Mr Soames’s insightful views on princessly paranoia aired on Newsnight.

What with postal disputes in Scotland and general strikes in France, the task of communication for all non-techy, non-Internet users like myself is not exactly easy. But last month Tony Wheeler, 47, founder of the ultra- successful Lonely Planet travel guides, made it even harder.

He faxed his London office asking for the name and address of his Swiss distributor, because he said he would be passing through Geneva on a walking holiday. He then disappeared off to Mont Blanc before receiving a reply. The London office racked their brains as to how to reach him. Eventually the manager, Charlotte Hindle, suggested that the distributor in Geneva, which does not have a shop window, hang a banner, bunting-style, in the street. Imagine Mr Wheeler’s surprise upon reaching Geneva to find “Welcome to Mr Lonely Planet” hanging on cloth above him.

“I couldn’t believe it,” he tells me. “In fact, I was so incredulous I even thought that perhaps there was a Swiss company called Lonely Planet.”

To the Ivy restaurant for the launch of Red Mercury Blues by the American journalist Reggie Nadelson. She told the assembled company how she had got this, her first novel, published. “I was having lunch with Robert McCrum [Faber’s editorial director] and had told him about my book. ‘It’s a thriller, Robert,’ I said, ‘it’s not sufficiently highbrow for you’.” McCrum, a gent, replied that he would happily look at it none the less. “Well, in that case,” interrupted Ms Nadelson, “I happen to have a proof right here in my bag …”

Moments later, I found myself inquiring after Edwina Currie’s next book, A Woman’s Place, due out in February. (You will recall that her first blockbuster, A Parliamentary Affair, was deemed a commercial, if not a literary, success.) Ms Currie immediately led me to a corner and, a la Nadelson, delved inside her bag. She presented me with three colour postcards: one had her own picture on it, another the cover of her first book and the third the cover of her second.

“I carry these with me at all times – and sign them for autographs,” she explained, busily signing one for me, although I did not ask for it.

Personally, I am a great admirer of Ms Currie’s go-getting style. But I’m not sure that on this occasion the sight of a small queue of autograph- hunters forming in Ms Currie’s corner greatly pleased Ms Nadelson.

I am glad to note that popular telly-programme awareness is one of the qualities that is looked for in prospective MPs. A barrister friend of mine, Edward Vaizey, has just been selected as the Conservatives’ prospective parliamentary candidate for Bristol East, a Labour seat. While waiting to be interviewed in the region’s Tory HQ, he loitered, naturally, in the public bar.

“This feels a bit like going on Blind Date,” he said, conversationally, to a woman supping next to him. She took a long, careful look at him (Vaizey is teddy bear-shaped). Up. Down. Round the sides. “Well,” she said at length, “it sure isn’t Gladiators.”

Vaizey, 27, later narrated the episode to his interviewers. It proved to be the meeting’s turning point.

“For some reason, they roared with laughter,” he says. “I actually think that’s why they gave me the job.”

Sad news, I’m afraid, about the fate of Baroness Thatcher’s loo. (You may recall that this particular water closet caught the nation’s attention 10 years ago when it was rescued by one Edemy Brougton-Aderley, who found it dumped on a Chelsea skip.) At the launch party for Lucinda Lambton’s newly expanded, authoritative book on the subject, Temples of Convenience & Chambers of Delight, Mrs Brougton-Aderley told me that the loo has pride of place as an ornament in her drawing-room.

However, according to her grandson Alastair, the artefact does not attract the attention one would expect of such an venerated water closet. Viewers do not crowd round it, touch it or even ask to clean it.

“Actually,” sighed Alastair, reflecting on the oddities now found in Chelsea drawing-rooms, “very, very few people even notice it is there.”

I am worried that my mind is turning to smut. While reading in a Saturday magazine excerpts from a diary written by the actress Emma Thompson during the filming of her screenplay of Jane Austen’s Sense and Sensibility, one line jumped off the page at me: “Saturday May 13 … Greg Wise (Willoughby) very energetic this morning.”

It is virtually the only mention in the lengthy extract that Ms Thompson gives Mr Wise, whom, as we now know, she was “seeing” at the time.

Ms Thompson is a clever writer. If one didn’t know better, one would assume that Hugh Grant was the object of her affections. She goes completely gooey about him. “Kissing Hugh was very lovely. Glad I invented it …”. But the single cryptic mention of Wise’s morning energy perhaps suggests that her dwindling relations with her husband, Kenneth Branagh, have not dampened her mischievous sense of humour.

On reflection, my guess is that Ms Thompson, who studied English at Cambridge, threw the double entendre in deliberately. In which case, phew, my mind isn’t turning to smut.