The Stack April 21, 2011, 5:00PM EST

Book Review: Tangled Webs: How False Statements Are Undermining America by James Stewart

Are we living through a sustained bull market for well-heeled liars?

By David Kamp

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Editor's Rating:

The Good: Stewart brings to life four very familiar news stories through extraordinary reporting.

The Bad: His assertion that false statements and perjury are becoming the norm seems slightly hyperbolic.

The Bottom Line: It's hard to argue that America is mired in some sort of bull market for white-collar liars.

Reader Reviews

Tangled Webs:
How False Statements Are Undermining America:
From Martha Stewart to Bernie Madoff
By James B. Stewart
Penguin Press; 496 pp; $29.95

Eight years ago, before he became a senator and full-time serious person, Al Franken published a book called Lies and the Lying Liars Who Tell Them. This would actually make a better title for James B. Stewart's engrossing new book than the drab, finger-wagging one it's been assigned. For what Stewart has put together is less a fretful rumination on this country's moral failings than it is an extraordinary forensic analysis of the high-stakes American liar.

Stewart's CV already includes two masterworks about executive-suite hubris: Disney War and Den of Thieves, the latter an appraisal of the Boesky-Milken era of insider trading. Here, Stewart takes four oppressively familiar news stories from the last decade—Martha Stewart's ImClone (IMCL) stock caper; I. Lewis "Scooter" Libby's complicity in blowing the cover of the CIA operative Valerie Plame; Barry Bonds's involvement with Balco, a Bay Area business that distributed steroids; and Bernard Madoff's epic Ponzi scheme—and reconstructs them afresh by reporting the dickens out of them.

In Stewart's view, these stories are proof that we're living through a sustained bull market for liars, and "that the broad public commitment to telling the truth under oath has been breaking down, eroding over recent decades." Current headlines suggest he's on to something. Both Bonds, the former slugger, and Raj Rajaratnam, the former hedge-fund guru, have just stood trial for alleged untruth-related misdeeds: Bonds for perjury and Rajaratnam for insider trading. Even Warren Buffett, the conscientious grandpa of American investing, has been saying things lately that strain the bounds of credulity, if not legality. Can he be serious that the resignation of his putative Berkshire Hathaway (BRK.A) heir apparent, David Sokol, came as "a total surprise"? This, after it came to light that Sokol had in January purchased a $10 million stake in a company that Berkshire bought outright just weeks later?

Much will be made of the bombshells contained within Tangled Webs—particularly Stewart's contention that Karl Rove lied to President George W. Bush when asked if he was a source for the Robert Novak column that outed Plame. Stewart further reveals that State Dept. official Richard Armitage was as culpable as Libby in leaking Plame's name, and, like Rove, only narrowly avoided indictment. On the Madoff front, Stewart documents how a young Securities and Exchange Commission lawyer came within one phone call of uncovering the Ponzi scheme in 2006. Alas, between the lawyer's inexperience and her supervisors' indifference, she wasn't prepped to ask the right questions of the body she was calling—the Depository Trust Co., which Madoff said cleared his "trades"—and the matter was let go.

The book is most impressive, however, on the granular level. Drawing upon transcripts of grand jury testimony and notes taken by FBI agents and other federal investigators—information unsealed in the course of judicial proceedings or through the author's own Freedom of Information Act requests—Stewart is able to get up close to his protagonists to provide, he says, "a rare look at the very moment these people made the fateful choice to lie."