Chichikov and Charlie Javice

 

The story of Charlie Javice, one of Forbes 30 under 30 – along with Sam Bankman-Fried – was unrolled at length in the NYT's Sunday section. How she was a poor girl, the daughter of Didier Javice, who has worked on Wall Street for more than 35 years, with 11 years at Goldman Sachs and three at Merrill Lynch, and a mother who the NYT could not contact or find on Linked in. You know the type – her Mercedes was a hand me down from Dad, the private school she attended did not vote her prom queen, etc. She had a revelation – from God above, the ultimate billionaire – before she was out of that school, however:
"Ms. Javice’s career helping others began, in her telling, on the border of Thailand and Myanmar. She spent time volunteering there one summer, between terms at her private high school in Westchester County, N.Y.”
God, perhaps, directed her to Wharton.
It is the Wharton that throws me off. It is a top business school, like Harvard School of Business, and it discourages its students from ever reading literature by throwing business inspiration books and CEO biographies at the students. Once suitably dimmed, they are made to squander the gift of reading on, for instance, studying case studies from the Harvard Business Journal and making them their own. How to clean out the deadwood, how to leverage borrowing to purchase a small publicly traded company and, after emptying it of any valuable properties, rolling it back into the market as a hollowed out brand. Top notch stuff, to make America's CEO class top notchiest! Things which make America, or that part of it found on business tv cable channels, sit up and take notice!
What I think it is when she was volunteering. Some volunteer left behind, in her hut, Gogol’s Dead Souls. And it gets boring in the jungle night...
Dead Souls chronicles an entrepreneur named Pavel Ivanovich Chichikov. Because he lived in the benighted 19th century, before Forbes magazine even existed, he never managed to be one of the 30 under 30 – but nonetheless, he saw the sweet fortune to be made by getting in the middle of the trade between the serfowner and his tax liabilities, the dead serfs who are still exist on the property lists. Like Michael Milikan of blessed memory with his junk bonds, Chichikov realizes that the dead souls can be borrowed against – you can leverage that dead weight up – and they can, of course, be purchased for a song. Except that the owners out there in the sticks are all suspicious and shit.
I am thinking that this book hit Charlie Javice like the best case study ever made – like that Harvard Business article about how Hedge Funder Eddie Lampert was going to squeeze value out of Sears Roebuck by screwing its pensioneers – really, old trash when you think about it – thinning the work force to a muscular few and spinning off those urban properties like crazy! But Ms. Javice had a true appreciation of business as art, conceptual art. Lampert was good, but his scam, perfectly legal of course and shipshape, was so, well, grossly material. Properties for god’s sake! Javice saw that the Chichikov path was so conceptually superior! So she, according to the NYT, started a company, Frank,  that was almost perfectly useless. The company was to step in  to “help” students get funding – student loans and shit – by “simplifying the process.” Like Bankman-Fried, her activity was noticed by the beneficent country-clubbers in our fine, fine media:
“All along, Ms. Javice was making frequent media appearances. In December 2017, she wrote an opinion piece for The New York Times with the headline “The 8 Most Confusing Things About FAFSA.” The piece contained so many errors that it required an eight-sentence correction.”
The problem with her company, Frank, was, frankly, the cash flow. The cash was supposed to come from students availing themselves of a service that cost way more than doing it yourself. What is an entrepreneur to do? Or, to put it in bumper sticker form: “what would Chichikov do?”
He’d instruct his underlings to just find names of students and put them down on a long computer list and pretend that they were clients of Frank, that is what he would do!
Of course, in Imperial Russia and in the U.S. of the 21st century, the great way to wealth is dishonesty on a massive scale. So, her company of the equivalent of dead souls – fictitious students engulfed in debt, how great is that! – Javice made her bold move. Although as a creative it was hard to let go, when J.P. Morgan threw 150 million dollars her way, she, well, decided to take the money. No doubt animated by the thought that this pile of money, used properly, could really effectively altruize those poor people on the border between Thailand and Myanmar. Or something like that. But first the penthouse!
Unlike Chichikov, however, Javice did make one teensy weensy error. For along with the company, Javice had turned over her email account. Perhaps she forgot it as she was signing the 20 million dollar retention contract with J.P. Morgan, the euphoria of the moment and all that.
The email account turned out to be a  fascinating snapshot of how today’s 30 under 30 take lemons and turn them into lemonade!
Problem: Company’s useless services were not attracting gullible rube parents and their throw away kids.
Solution: “The messages, according to the bank, included copious evidence that she had hired a data science professor to create fake information to prove to the bank that the millions of customers Frank claimed to have were real.”
Chichikov, alas, did not have a date science professor that he could buy for 15 thousand rubles to do the hard lifting. We can laugh now at that earlier age, but remember: they came up with the dead souls idea first! Hat tip where hat tip is due!
One person does come out of the Javice story badly:
“Highlights from the emails also included a Frank engineer’s questioning of Ms. Javice’s data manipulation request. She responded that she didn’t think anyone would end up in an “orange jumpsuit” over it, according to JPMorgan’s complaint against Ms. Javice and Mr. Amar.”
News does get around in the industry. An engineer that won’t get on board when a higher up demands action to create a massive fraud – why, this is not a guy you want in the ranks of your middle managers! Not a can-do guy, but a nattering negativo. I hope he or she  is suitably ashamed, whereever he or she is.
At the end of the day, though, what is 150 million between friends?
“For there’s no good in them now whatsoever – they’re all dead folk. All a dead body is good for is to prop up a fence with, as the proverb says.
“Why of course they’re dead,” said Sobakevich, as though he had come to his senses and remembered they were dead in reality, but then added: However, it may also be said, what good are the people who are now numbered among the living? What sort of people are they? They are so many flies, and not people.”
This is where the landowner Sobakevich is wrong, as Javice has decisively proved – for even flies, if they have, somehow, a social security number, can borrow money to go to school in order to find a lowlevel job paying off the loan that put them through the school! It is as plain as the nose on your face – living souls are now as good as dead ones!