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The Best Ambassador Money Can Buy? 

Republican mega-donor Howard Leach is reportedly headed to France. At least we're not sending him to an important country.

Wednesday, Mar 21 2001
Late in the summer of 1993, Laurent Fignon, a French cycling champion known for his stylish blond ponytail, urbane granny glasses, and clumsily arrogant manner, announced to the world that he would quit racing following the Grand Prix Ouest-France. The race was so obscure as to be meaningless, a fact that made this great man's early retirement at a youngish 33 seem all the more banal. He told the press he owed his fans one last race before quitting, but his fans didn't care anymore; though he had once sailed through two victories in the Tour de France, one in the Giro d'Italia, and two in Milan-San Remo, Fignon was that year ranked 201st in the world. Befitting a man who would later be remembered as the Last Great Frenchman, Fignon still, touchingly, considered himself a fan attraction.

During the era between 1975 and 1985, Frenchmen won all but two editions of Le Tour, the world's greatest sporting event. They haven't won since. The 1985 victory coincided with the last French Nobel Prize in literature, a competition the French had likewise dominated. France's once-fashionable relativist philosophers became regarded as ignorant noodlers, French painters were ignored, and the idea of internationally renowned French writers became more abstract by the year.

All of which, from an American point of view, just may be for the good, because hometown San Francisco boy Howard Leach, a California Street financier, has every appearance of becoming our next ambassador to Paris.

Were France still an important country, this could be a disaster: Leach, one of the biggest soft-money contributors to the Republican National Committee and either president or chairman of a dozen agricultural companies, has shown a tendency in his public and business lives to conduct himself in a way that creates an appearance of conflict of interest and bad judgment.

But Howard Leach's appointment to Paris may not matter; France has become irrelevant in the world: The once-unbeatable Laurent Fignon is now the out-of-shape director of a French race called Paris Nice, won last week by an Italian.

Perhaps the most important thing one can know about San Francisco's Howard H. Leach is that he is a Pioneer. Leach is not a Pioneer in the manner of Lewis and Clark; he is a Pioneer in the manner of Dallas rancher Louis A. Beecher Jr. and Fort Worth speculator Lee M. Bass, who have likewise earned the honorific by raising $100,000 or more for George W. Bush. An even more important thing to know about Leach is that he is a Regent. Leach is not a Regent of the University of California; he stepped down from that post at the beginning of the year. Rather, he is among 180 Republican National Committee "Regents," the additional title granted $250,000-plus donors to the GOP. In all, Leach, an agribusiness investment banker and former finance chairman of the RNC, has donated $282,000 to Bush and other Republicans.

A woman answering the phone at the Leach Capital Corp. office on California Street said her boss is not giving interviews. She referred questions about the ambassadorship to the White House, saying matters were at "the rumor stage." A White House press officer wouldn't comment. But the International Herald Tribune, the New York Times, the Washington Post, and UPI have all tapped Leach as our man in Paris.

Had France not fallen from its status as a titan among nations, Leach's likely posting might be a sorry turn of events indeed. Until now, Leach's most prominent contribution to public life was to read an announcement to the press on Oct. 28, 1999, which said that a 1997 merger of the UC San Francisco and Stanford University medical systems would be dissolved. Leach had been a central architect of the disastrous merger, and a board member of the merged entity known as UCSF-Stanford Health Care.

If it had been successful, the new health-care institution would no longer have been subject to the conflict-of-interest rules that apply to purely government-owned institutions such as UCSF. That would have theoretically allowed for a profitable synergy between UCSF-Stanford and the interests of regents such as Leach, whose 1990 UC Regent financial disclosure form showed him astride a diversified empire worth many billions of dollars: He was president or chairman of 12 corporations, director of six corporations, limited partner of two investment firms, and general partner of three agricultural firms.

But the merger nearly immediately turned out to be a fiasco, which was at least in part the fault of co-architect Leach.

"Leach played such a critical role on the board of UC-Stanford and was always focused on the bottom line at the expense of staff and faculty, so he has to assume credit for the disaster," says Warren Gold, a UCSF professor of medicine. Gold is particularly critical of Leach's seemingly fanatical faith in the advice of the Hunter Group, a health-care consulting firm that recommended massive UCSF layoffs and facility closures.

"It was their plan at UCSF that led to laying off 2,000 people in the first phase, cuts that produced $170 million -- quote -- savings, and their second phase included closing Mount Zion Medical Center to supposedly save $100 million. We still haven't recovered. UCSF, going into the merger, averaged $25 million a year in the black, and the year prior to the merger over $30 million in the black. That's what our annual losses are now."

While the UCSF-Stanford merger is now widely accepted as a public-policy disaster, nobody has accused those involved of criminal racketeering. That allegation would have to be reserved for the legal fiasco surrounding the Fleming Cos., a food marketing and distribution company where Leach served as a director for 23 years. Fleming is one of the biggest food wholesalers in the world, serving one of every 11 grocery stores in the U.S. According to hundreds of millions of dollars' worth of lawsuits filed by grocery chains from Texas to Hawaii, Fleming covered up its fraudulent price gouging with phony invoices and two separate sets of books for financial record-keeping.

"I alleged, and a jury agreed, that Fleming had cost-plus contracts, contracts where they delivered groceries based on an agreed-upon markup. But their cost was a bogus cost. They kept two sets of books," says Bill Sims, a Dallas attorney who successfully settled a suit against Fleming alleging corporate violation of the Racketeering Influenced and Corrupt Organizations Act (RICO). Fleming has made two settlements of $20 million each related to the allegations, according to the publication Supermarket News. Similar lawsuits are pending around the country.

In the American style of corporate governance, it is possible for even such egregious malfeasance to go on unbeknownst to part-time directors. But in 1999 Fleming agreed to pay $860,000 to shareholders who had specifically named Leach as one of the Fleming officers responsible for failing to inform investors of the possible consequences of the pricing-fraud scheme, according to Supermarket News. The cost was covered by insurance policies carried by the company executives to protect them against such suits.

Still, these corporate and public-sector missteps don't necessarily mean Leach will run a casino out of our Paris embassy and skim the profits. After all, Reed Robison, an attorney for Fleming Cos., says, "We don't think Fleming or any of its officers did anything wrong in any of these cases, and you would expect that, because we are vigorously defending those cases." And Dick Wall, who led the Bush for President effort in San Francisco, says, "Howard Leach is an outstanding individual and will do a fine job of representing the U.S. in Paris."

But even if he doesn't turn the embassy into a bunco parlor, Howard H. Leach is certain to confirm Parisians' opinion that Americans are boobs, just as Bush's appointments to embassies elsewhere will cement our international reputation for gaucherie. That's because Bush's pool of ambassadorial candidates suffers a remarkable overlap with his list of 115 $100,000 "Pioneers." Which means that in Western Europe, the Caribbean, and anywhere else tycoons enjoy vacationing, we will be represented by the ignorant. Bush is no different from his predecessors in this regard. Recent administrations have given America's plum ambassadorships to campaign donors with zero diplomatic qualifications.

Which, thankfully, might not matter in the case of France, where the act of sending Howard Leach to Paris may become lost among the volley of insults we've been hurling its way. Didn't jug wine producer Robert Mondavi just buy 120 acres on the side of the Massif de l'Arboussas, near Montpellier? Doesn't the French language become more le weekendized by the day? Isn't Texan Lance Armstrong poised to win his third Tour de France this summer, without a viable French challenger in sight?

On second thought, does that poor, dear, much-abused republic really deserve Howard Leach?

A I cock my ear toward the Continent, I can almost hear the pitiful cry:
Where have you gone, Laurent Fignon?
A nation turns its lonely eyes to you.1

1 Adapted from "Mrs. Robinson," words and lyrics by Paul Simon, 1968.

About The Author

Matt Smith


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