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His co-founder bugged the boardroom
Two founders, two goals
Truman Anderson and Raymond Plank founded the oil company together, and their differences ran deep. Plank wanted to build the business over the long term. Anderson was impatient to become a high roller and wanted his own fortune and fame. As the split widened, the arguments got louder, and staff cowered when a wastebasket was thrown or an ashtray smashed.
The bugging
The two fought for control of the company. Anderson was trying to get rid of his partner when he made a Watergate-type blunder: he bugged the offices and the board and conference rooms. The blunder came from an ego that had quickly outstripped his competence. Anderson was the one who got kicked out, and the other founder took control of the company.
The stretch that followed was rough, with plenty of ups and downs. For several months he wrote the board a daily report on his activities, so the board was never surprised, and the practice proved worth keeping between board meetings.
Where Anderson ended up
Anderson's next ventures fell apart. He started a car wash business that quickly fell from grace, went broke, and left the area, selling his fortress-like estate and moving with his new wife to Denver and then to California. There he put together oil deals and brought a son into the business, and that business sank. Anderson had a heart attack and died, and his old partner missed the funeral.
Why did Watergate become shorthand for scandal?
In June 1972, five men were arrested after breaking into the Democratic National Committee offices in the Watergate complex in Washington, D.C. Reporting and congressional hearings later revealed that President Richard Nixon had recorded conversations in the Oval Office. Those tapes helped force his resignation in August 1974, which made him the only US president to resign. Journalists soon began attaching the suffix gate to later scandals, and the habit has lasted for decades.
Why do founder fights sink young companies?
Noam Wasserman of Harvard Business School studied thousands of founders for his book The Founder's Dilemmas. He found that conflict inside the founding team is among the most common reasons high-potential startups fail. Founders often disagree about how fast to grow, how to split ownership, and who should lead, and those questions get sharper once outside money arrives. He also found that founder-CEOs are frequently replaced as their companies scale.
How did US law come to restrict private bugging?
In 1967, the Supreme Court held in Katz v. United States that the Fourth Amendment protects conversations in places where people expect privacy. Congress then passed Title III of the Omnibus Crime Control and Safe Streets Act in 1968. It set up a warrant process for law enforcement and generally barred private parties from intercepting oral communications without the consent of at least one participant. A federal law enacted in 1986 extended similar rules to electronic communications.
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