Inc Magazine's article "Blind Ambition" serves as a poster child for the lack of ethics and professionalism in modern day journalism. Similar to Dan Rather's rush to publish the fraudulent and undocumented assertions against President Bush during the previous election, writer Edward O. Welles published numerous statements from a management team led by a convicted felon in order to discredit his quarry. His target in this article was Brett Kingstone, the then founder of FiberView who has since founded Super Vision, one of the Top 50 Fastest Growing Companies in the State of Florida, Top 500 Fastest Growing Technology Companies in America and Top 100 Companies for Working Families, which is traded on the NASDAQ stock exchange.
Edward O. Welles is a unique journalist. He has carved out a niche for himself writing articles on entrepreneurs and how to start a business while never having started a successful business himself. In a previous article, "Lost in Patagonia", Welles similarly leveled his literary hatchet at Yvon Chouinard, one of the clothing industry's greatest success stories and philanthropists, again based largely on the assertions of former employees who were terminated by the company. In both articles, Welles took liberty to opine on these false statements to weave together a story based on gross misrepresentations and lies. One of the many letters to the editor that were published in response to Welles article is listed below:
"I was appalled by your article on Patagonia ("Lost in Patagonia," August). What a hatchet job! Is the author, Edward O. Welles, another one of the ex-employees the article quoted so extensively? What's wrong with having high margins and good prices? I envy Patagonia for those. Especially if they allow it to have things like day care centers. My company was voted one of the best companies to work for in Washington State by Washington CEO magazine, but I'm sure my ex-employees get together once a month, put my picture on the wall, and throw darts at it. It depends on whom you talk to. And Welles just talked to people who flunked out of Patagonia.
Mary Baechler
President
Racing Strollers
Yakima, WashingtonPerhaps the most interesting of the cast of Characters in Welles' article was his hero, Steve Sedlmayr, the man Welles credits as the original inventor of the technology allegedly stolen by Kingstone. Mr. Sedlmayr has had a storied career of assembling companies and a long list of investors and creditors that later tried to find our where their money went shortly thereafter. In ADTI, the one Sedlmayr venture chronicled by Welles, Mr. Sedlmayr's staff reported to Forbes Magazine that he claimed that his idea for both the new fiber optic product and patent came from a car accident "where his head was severed entirely from his body and sewn back on by an angel who infused him with divine creative fire." The Forbes article presents the FiberView/ADTI story in an entirely different light.
Welles must have bought this version of Sedlmayr's story because he completely ignored Dr. William Glenn's assertion that Sedlmayr outright stole his invention which he patented and legitimately licensed to Kingstone. Years prior to establishing ADTI, Sedlmayr visited Dr. Glenn's laboratory in Dania, Florida, viewed his invention and took notes on the manufacturing processes and assembly methods to create the device, a thin panel fiber optic television display. Dr. William Glenn, one of our nation's leading inventors, was selected by BusinessWeek in its "Innovation in America" cover story as one of the "Top Ten Scientists in America." In a sworn affidavit Dr. Glenn testified that the Judge's decision against Brett Kingstone and FiberView was "an unfortunate result of false testimony provided by ADTI's management to the court and the Judge's inability to understand the technical aspects of either the technology or the case. Specifically I testified at the hearing that what the plaintiff was purporting to be their trade secrets stolen by Mr. Kingstone were actually processes developed by my laboratory and information disclosed in my patent. I personally taught these processes to develop the fiber optic display screens to the founder of ADTI, Steve Sedlmayr under the expectation of a licensing agreement while he visited my facility a few years prior to the founding of ADTI."
Another group on individuals that Welles relied on heavily for his article was the investment team that operated and managed ADTI. One of the leaders of this team also served on the Board of Directors of what became the largest single savings and loan bankruptcy and fraud case undertaken by the U.S. Attorneys Office. More than $100 million was stolen from shareholders. In describing these men and their fellow co-conspirators actions in the Dallas Morning News, U.S. Attorney Jennifer Bolen was quoted: "Everybody knew, everybody got paid and nobody asked questions." Among the myriad of charges of which they were convicted were money laundering of $1.5 million used in illegal stock transactions which included his investments in ADTI in addition to tens of millions in fraudulent real estate transactions.
It is interesting to note that both the author, Ed Welles and the Inc. management were warned in advance that the information that they were provided was false. Furthermore the author's description of events that took place at the FiberView manufacturing facility should have seemed entirely impossible to anyone who would have visited it. Much of Welles' interview was conducted in the FiberView facility and it should have been obvious to him that no one, not even the famous Sedlmayr, could have "shown a flashlight through a window in FiberView's building" to see "a host of parts and assemblies", since no such window existed in the manufacturing facility. Affidavits from fellow tenants Donald Schaper and Rory McFarland stated: "The manufacturing facility is comprised entirely of concrete block construction with two solid and windowless steel bay doors. It would be impossible for someone from the outside to see inside the manufacturing area both during the time that FiberView was a tenant and at the present."
Edward O. Welles did however do some original research on his own in his effort to discredit Mr. Kingstone. He found a fine from NASDAQ that ultimately resulted in the revocation of his broker's license long after Mr. Kingstone had left the brokerage business. Unfortunately, Welles accused Mr. Kingstone in his article of entirely the wrong offense. Mr. Welles also conveniently left out the fact that the only reason for the revocation is that Mr. Kingstone never received notification from NASDAQ of the hearing on the matter. All the mail related to this notification was sent to the wrong address and was returned to NASDAQ. NASDAQ subsequently reviewed the matter and reinstated Brett Kingstone's license after the fact.
Ed Welles and Inc Magazine's publishing philosophy seems to be: if you can't find any interesting news, just make it up. But even reporting false information and manufacturing new "facts" did not seem to be enough for Mr. Welles and his fellow staffers. In their campaign to try to substantiate the false claims in their article, Inc. management even went so far as to publish a false "letter to the editor":
"As far as I'm concerned, Mr. Kingstone is nothing but a con artist. Three years ago, I ordered his book on entrepreneurship. I never received the book and got no response when I tried to contact him. Now I have some idea where my money went."
Randall K. Russell
Dean, School of Business
Southwestern State University
Weatherford, OklahomaAfter the publication of this alleged "letter to the editor", Dean Randall K. Russell sent a letter to Mr. Kingstone to prove that he never sent a letter to the editor and would have never authorized the publication. Dr. Russell stated: "needless to say I am most disturbed about what has happened and offer my apologies."
As of this date Edward O. Welles is no longer employed by Inc. Magazine and most of the management who approved his article have long since been fired or replaced when their publication was sold. Before leaving Inc./Gruner + Jahr Publishing, the old management had a few lawsuits to answer to themselves, one from a disgruntled publishing partner who felt she was cheated in her business dealings. Despite several written requests, the former Inc./Gruner & Jahr management refused to print a retraction or remove the article's posting from their website. They continued their refusals despite knowledge of the facts and the criminal convictions of the individuals that they championed. Mr. Sedlmayr's whereabouts are unknown, but still desired by several investors in New York. Brett Kingstone's company, Super Vision, continues to manufacture fiber optics and provide jobs and exports for Central Florida. His real estate company, Max King Realty, was selected by Governor Jeb Bush as one of "The Top 100 Privately Owned Companies in Florida." Max King Realty recently donated several 30 ton air conditioning systems to the Orange County School District and continues to support charitable organizations throughout Florida.
Verne Harnish, President of YEO, Young Entrepreneurs Organization, issued a statement supporting Brett Kingstone and lashing out at Inc.'s irresponsible reporting: "I believe that Mr. Welles's article in Inc. was highly biased and unfair." One wonders if the Inc. Magazine's new management, Mansueto Ventures LLC, will one day provide a retraction. Other journalists who have read the Inc. article on Brett Kingstone, and initially took it as gospel, at least later felt the moral obligation to print a retraction.
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