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Billionaires Behaving Badly: Meg Whitman


The former eBay chief and recent candidate in California's gubernatorial race had been accused of hypocrisy and abuse even before the illegal maid crisis erupted.

Editor's note: The original text for this article was updated November 4th, 2010.

Meg Whitman, former eBay (EBAY) CEO turned defeated Republican nominee for governor of California, was given a textured characterization in a Delaware court last year. Jim Buckmaster, CEO of Craigslist, was testifying about his troubled business negotiations with Whitman's firm when he claimed that one of eBay's executives warned him about the dangers of butting heads with the eBay leader.

"He told me there were two Meg Whitmans. We had met and enjoyed working with ... what he described as the 'Good Meg.' But there was another Meg, an 'Evil Meg'...and we would be best served if we got with the program or we were going to meet 'Evil Meg... [who] could be a monster if she got angry and got frustrated."

The executive said to have made the comment later alleged that Buckmaster's testimony was false.

But the duel personality hypothesis does explain a few things. Perhaps it was the 'Evil Meg' who overpowered her mild-mannered counterpart in a spat with an eBay underling two years prior. That argument could only be rectified with a confidential six-figure payoff, er, apology.

What happened? In June 2007, while communications executive Young Mi Kim was briefing an unprepared Whitman for an interview with Reuters, the pressure apparently stirred 'Evil Meg' awake; she proceeded to yell expletives at the woman before shoving her out of the office. After the matter was settled, with Kim's pockets becoming $200,000 deeper, the employee remarked, "Yes, we had an unfortunate incident, but we resolved it in a way that speaks well for her and for eBay."

This month the voters of California decided not to elect Whitman as governor of their financially troubled state, despite her many promises to bring sound business principles to government. She had certainly proven her business savvy. As head of the online auction company, Whitman wisely acquired Sykpe, served on the board of directors at Goldman Sachs (GS) -- where Henry Paulson called her "one of the most dynamic and forward-looking leaders in business today" -- and, last but not least, amassed a billion-dollar net worth that gave her plenty of money to burn on a campaign.

Edging out Michael Bloomberg's record-breaking mayoral bid, Whitman spent some $140 million of her personal fortune on the California gubernatorial race, making her campaign the priciest non-presidential run in history. Whitman spent six times as much as Brown, or $160 million to his $24.8 million.

But the methods by which Whitman made her mad campaign money could be construed as unseemly. Just before golden parachuting out of eBay in 2008, the company laid off ten percent of its workforce. According to a brief profile of Whitman in The LA Progressive:

"Whitman has chalked up quite a record of eliminating jobs and arranging big bonuses for herself and other management personnel. The California Labor Federation calls her a 'serial outsourcer' who sent 40 percent of eBay's jobs to low wage areas abroad. Between 2002 and 2007, Whitman increased the number of overseas workers at eBay by 666 percent, rather than keeping jobs in California."

Using the strategy of globalization as the rule rather than the exception, Whitman has routinely taken food out of the mouth of the American worker and sent company products to be manufactured overseas by Asian children in sweatshops. While serving as a general manager of Hasbro (HAS) in which she oversaw global operations, young Chinese workers plodded through 13.5 hour shifts, seven days a week, making holiday toys in a mosquito-infested factory.

When she led the Stride Rite Corporation's (PSS) Stride Rite Division, which owns the Keds sneaker brand, Whitman played hardball with the labor unions of South Korea. As soon as the workers got too demanding, she moved the sneaker factory to China where the country's relaxed child labor laws allowed 16-year-old kids to handle toxic adhesive without protection for 42 cents an hour. And under her publishing strategy as Senior Vice President of Marketing of at the Walt Disney Company (DIS), Chinese workers were forced to use machines without basic safeguards while enduring oppressive heat and forced overtime for which they were not compensated. This to produce books about Mickey Mouse.

Cutting costs while outsourcing or eliminating jobs was also part of her plan for the state of California. During her campaign, she proposed a big budget balancing act that included firing 40,000 state workers, restructuring pensions and raising the retirement age. But it appears that certain public workers were able buy their way out of Whitman's wrath of employment and benefit annihilation. In a move that prompted the infamous "whore" slur from the Brown campaign, Whitman made a lucrative backdoor deal with Los Angeles Police Protective League to protect the pensions of public safety employees in return for a $450,000 contribution and an endorsement.

If the Hooker heel fits.

Although Whitman's enormous success as a businesswoman was largely made possible because of cheap labor, she is a vocal anti-immigrant candidate, standing in staunch opposition to those workers illegally coming to this country to be underpaid -- except perhaps when they are hired to clean her own toilets. Having provided the very sanctuary she opposes for illegal aliens by employing undocumented Mexican housekeeper Nicky Diaz for nine years, Whitman looks to be the pallid face of hypocrisy. While Diaz committed fraud on her employment agency paperwork, she claims Whitman was aware of her status and ignored a government request to confirm her Social Security number.

Did 'Evil Meg' return and fire the longtime household help she considered "a member of the family" in order to save political face?

If the huarache fits.

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