JIMMY'S PARADISE LOST

New York IT IS not much remembered now that Jimmy Goldsmith went into exile twice in his life. He went to America in the early 1980s, where he felt truly liberated by this `last frontier', but it ended with him fleeing to Mexico, a refuge where he spent the last 15 years of his life as an ecological and political Jeremiah.

It is instructive now to speculate on what Goldsmith might have become had Ameri- ca returned the enormous belief he invest- ed in its pervasive myth of free enterprise capitalism. At one point it appeared he was close to achieving the self-affirmation of both wealth and political eminence in America which was always beyond his reach in Britain or France. Yet it was the United States' political system rather than the marketplace which rebuffed him most cruelly. It was Washington, not Wall Street, which rejected him. He came away with billions, but never quite recovered his old spark. Goldsmith's American adventure did not last long. His meteoric rise from being rela- tively unknown to being a national celebrity ran from 1981 to 1986. By the summer of 1987 he was a national pariah, judged the worst of the green-mailing corporate raiders who had panicked both Wall Street and Washington. In the summer weeks which followed, he astutely cashed in his share investments just before the catas- trophic Black October market crash. There- after he was public enemy number one. Within three short years he had sold off most of his ventures, left the United States for good and was ensconced in his virtual paradise in Cuixmala, Mexico.

The quick exit, like the invasion that preceded it, was pure Goldsmith. From 1974 until he headed for New York in 1981, he had been content to fight his cor- ner against increasingly unpleasant odds, but Britain was becoming played out as a place to do business and France appeared even less promising. There were market crashes, scandals that engulfed friends, ludicrous feuds with the press and, worst of all, people of influence still treating him as a wide boy.

Americans seemed different. He could talk world affairs with Henry Kissinger. William Simon, the investment banker and Nixon's Treasury Secretary, listened to Goldsmith's monetary advice. Even in the post-Watergate years of Jimmy Carter, he found an expanding horizon for his business ambitions and for himself. In 1980 two important events propelled him to America: one was his successful bid for Diamond International, a sluggish, undervalued forest products company, the other was the elec- tion of Ronald Reagan as president.

When Goldsmith moved to New York at the end of 1980, he left behind in Britain only a small interest in his friend John Aspinall's casino, and his wife, Lady Annabel Birley, who had refused to move their children from London. Gone were Bovril, which he sold to Beecham for a £35 million profit, and most of his hold- ings in France, Sweden, Spain and Bel- gium. In all, he had stockpiled a huge campaign chest of cash worth £1 billion for use in America.

His enthusiasm at the move was extraor- dinary. As he later told his biographer, Ivan Fallon, 'I was 47 and discovered this won- derfully exciting new world. I remember an absolutely fantastic sense of excitement. I was . . . arriving in New York to begin with the immense luxury of total anonymity . . . There was free enterprise, conservatives in power, and it was a new world to conquer.' In fact, Operation New World was the code name for his operations file for planned acquisitions in the United States.

`Jimmy really loved America. I cannot fully tell you how excited he was and how much charisma he generated in those early years,' recalled Al Dunlap, who is now the managing director of Sunbeam, the Amer- ican electrical goods maker. A tough ex- West Pointer, Dunlap already had a record of taking control of sleepy con- glomerates, cutting away the deadwood

`Let's see how fast we can get him sacked.'

subsidiaries and ramming through worker and cost cuts until the bottom line began to respond. Goldsmith found the younger man a willing protégé and dubbed him 'my Rambo in pinstripes'.

For a while Goldsmith could not put a foot wrong. His takeover of Diamond Inter- national and its profitable revival made him a public star. Strangers stopped him in the street to express their admiration. This was something which had never happened in London. In a hotly contested fight for Crown Zellerbach, another sluggish forest products company, in 1985, Goldsmith unexpectedly found himself hauled before a Senate investigating committee. The grilling turned into something of a triumph. His questioners were so impressed by his homily on free enterprise that one of them invited him to apply for United States citizenship and to run for public office.

However, times were changing the poli- tics of capitalism in America; the country had not for a long time been the bastion of free enterprise which Goldsmith believed it to be. Corporate chief executives were as adroit at summoning help from Washing- ton as any bureaucrat. Goldsmith would get his painful lesson in American real- politik in the year to come, when he made his ill-fated attempt to take over Goodyear Tire & Rubber Co. The company was huge, badly managed and lumbered with oil and aerospace businesses it did not know how to run, but it did understand American politics. At the first scent of a Goldsmith tender, the Akron-based man- agement put together a coalition of unions and Ohio politicians such as the astronaut Senator John Glenn, and — this is what hurt — Reagan administration anti- monopoly officials were recruited to open up a second front in Washington, while the brokers fought it out in Wall Street. Buses of old-age pensioners began to arrive on Capitol Hill to beg their lawmak- ers to protect them from 'this foreigner', `this pirate'. Schoolchildren posted anti- Goldsmith posters, while union leaders hinted darkly at a national strike if he pre- vailed. The House began to move towards unprecedented legislation which would bar him by name from taking control of Goodyear or any other company large enough to be deemed a national treasure.

In a tumultuously hostile Senate hearing, before many of the same lawmakers from the year before, Goldsmith was stunned to find himself being shouted at by his ques- tioners and booed by the audience. The deal quickly fell apart and, with the arrest of Ivan Boesky and the burgeoning scandal over many of the other corporate raiders, Goldsmith saw that it was useless to try to go any further in his adopted country.

As he said later, 'It was clear to me that we were not living in the real world. We had now entered the post-Reagan period with the triple alliance of big business, big government and big unions fighting back.'

Few know this even today, but Gold- smith could also blame himself largely for misunderstanding American political rules as well as the nuances of United States capitalism. Early in 1986, he undertook to give advice to Senator Robert Dole, who was to make his first ill-fated run at the presidency. Dole intended to directly chal- lenge the Republican nomination of Presi- dent Reagan's anointed successor, Vice- President George Bush. Dole welcomed the financier's insights, but Goldsmith was too naive to keep the counselling secret. After all, he had given his judgments to Edward Heath and Harold Wilson just as freely, wasn't that the way the game was played?

No it wasn't. Friends such as Kissinger and Simon were in no position to help him when the hounds caught his scent in the Goodyear deal. When the noise got too loud, even Dole faded into the background.

`The Goodyear deal killed Jimmy's love for America. He sincerely believed that free enterprise was the key to democracy and that this country was great because it was so free. Soon after, he began to say to me, "Dear boy, America has lost its way. I don't think we can do business here any more",' Dunlap remembered recently.

There was a final American indignity. When Goldsmith tried, in 1989, to come back to London with a bid for BAT Indus- tries Inc., objections by Californian state bureaucrats to his control over an insurance subsidiary scuppered the deal. By then, though, he was safely in Mexico. Within the year he would be out of the venture capital- ism career he had loved so well, confounded not so much by competitive rivals as by civil servants. He would never be so interested or alive again, say his friends.