Thursday, December 30, 2004

Was Angleton Right After All?

James Jesus Angleton

When the Cold War ended, I decided to change my investigative interest from the spy war to venue of even more subtle intrigue-- Hollywood.
Nevertheless, how could I resist reviewing the memoirs of the KGB officer who had managed the recruitment of two of the great successes in the war of the moles--- Aldrich Ames, from the CIA, and Robert Hanssen, from the FBI. My review of Spy Handler appears in today's Wall Street Journal.

Victor Cherkashon, the spymaster-turned-memorist, it turns out apparently maintained a continuing interest in meeting his former rivals. A group of former American officers are invited to meet with him in Virginia in January 2005. The invitation from the Spy Museum in Washington advises:

"Legendary senior KGB officer, Victor Cherkashin, is flying in from Moscow for a dinner date - with you. Be one of only 20 guests at the table with the man whose incredible KGB career spanned thirty-eight years, from Stalin's death in 1953 to the fall of the Soviet Union in 1991. It was
Cherkashin who handled two of America's most dangerous traitors, Aldrich Ames and Robert Hanssen; Cherkashin who tracked Oleg Penkovsky for spying for the U.S.; and Cherkashin who holds the secrets about KGB undercover operatives and operations to this day! Following his opening remarks, you'll toast to the end of the Cold War with wine and then share a delicious three-course meal from Zola. This is truly a once-in-a-lifetime
opportunity to dine and dish with an extraordinary spymaster."
In his book, Spy Handler, this ex-KGB recruiter clearly enjoys taunting the CIA. According to him. James Jesus Angleton, the CIA's long-time counterintelligence chief, suffered from"paranoia" because he suspected that the CIA’s Soviet Russia division had been deeply penetrated by a KGB mole. The irony in this accusation is that Cherkashin himself had recruited a mole in the CIA's Soviet Russia Division-- Aldrich Ames-- who had compromised over 100 CIA operations in Russia. To call Angleton paranoid for suspecting such a possibility is the equivalent of a stalker accusing his victim of being paranoid for believing he is being stalked. Cherkashin's memoir demonstrates of course that Angleton was right after all.

Unfortunately, Jim Angleton is not around to enjoy the exquisite irony of this memoirist (or, for that matter, suspect his motives in arranging a dinner with ex-CIA intelligence officers.) For all his shortcomings, Angleton remains the most extraordinary intellectual I ever met in Washington. My encounters with him can be read in my cyber diary.

While on the subject of historic vindication, there is an extraordinary cover story on Michael Milken in Fortune (November 23, 2004) by Cora Daniels. In it, Rudy Giuliani, the man who helped send Milken to prison, now says "I realize now that I didn't know him then. The man I now know is able to do tremendous things. He took the tremendous talent he had in business and is using it to fight prostate cancer. What more could you ask for?"

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Tuesday, December 21, 2004

Re-Crossing the International Date Line

Lost In Translation

The first night back in New York I stayed up watching Sofia Coppola’s Lost In Translation in my screening room. While I had greatly admired this movie before going to Tokyo, the alienation it depicted now seemed less to proceed from a communication gap in Japan than from a career anxiety disorder (CAD) in Hollywood. Its hero Bob Harris (Bill Murray) is a waning movie star, who, like other has-been Hollywood people, uses what remains of his celebrity recognition to promotes Japanese booze. The arc of his character begins with him arriving in a limo in Tokyo and ends, after an appearance on a humiliating TV program, with him back in the limo returning to Hollywood. The unemployed girl he meets at the bar (Scarlett Johannson) is also a CAD case. She is married to a Hollywood photographer who is much more interested in some Cameron Diaz-type celebrity than he is in her. If these two CADs weren’t both jet-lagged in the Park Hyatt in Tokyo, they presumably would be just as angst-ridden about their failing status in Los Angeles. So what does Japan have to do with the movie, other than the laugh-getting jokes in the movie mock the Japanese command of English (e.g. A Japanese prostitute mispronounces "L" for "R" when she says "Rip my stockings) or height stereotype.

My recent Tokyo experience at the Grand Hyatt couldn’t have been more different than of those lost-in-translation characters. When, for example, I casually asked a tall desk clerk about the stone used in the hotel's lobby, she answered in perfect English "I don’t know but will find out." When I returned to my room later that night there was a two-page message under the door. It began: "We would like to inform you that the wall you inquired about is made of Granite imported from the U.S. Its actual name is Rocky Mountain Quartz Site. The importer in Japan is Timex (03-3776-8310) and the US brand is DNG" and went to lucidly describe the qualities of this particular stone as if some Shinto spirit resided in it. I found the same precision with words when I interviewed executives at Sony, Toshiba and Forma for my book. If they did not know an answer, they said so, and then emailed a lucid answer to me.

This morning my editor, Bob Loomis, said I could put a sample chapter of my coming book, The Big Picture, on my web site. Why not?
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Sunday, December 19, 2004

Flight From Reality-- To Seoul

The big news in Seoul today is the launch of FreeStyle, the first of a new generation of role-playing games that have become a national craze in South Korea. Thousand of role-playing Koreans may play on a single team via a computer network. The fantasy combat can take the form of anything from hip hop basketball (as Freestyle does) to inter-galactical space probes (as CR Space does). After paying a subscription fee to join a team, an individual chooses a role– for example, a basketball guard with a hook shot in Freestyle or a ninja cosmonaut with a ray gun in CR Space-- and then customizes his on-line persona by selecting his costume, accessories, hair style, tattoos and, in the newer games, facial features. He often spends a great deal of time perfecting his computer-skills for that particular role. Indeed, some role-players become good enough to go professional, charging teams for their specialized services, (such as a hook shots or sword slices) As a result of this frenzied pastime, many Koreans have dual lives. For example, by day a guy might be as computer program for Samsung but by night (on his computer console) he might be a world class space assassin.
This penchant for role-playing may assume a more sinister form in South Korean politics, according to Dong-Bok Lee. DB himself is a serious man with equally serious credentials– former Director-General of the North-South Dialogue, Special Assistant to the Prime Minister, and Special Assistant to the Director of the National Security Planning Agency. He has become increasingly apprehensive about corruption games being played at the highest levels of the South Korean government. One example he cites during our breakfast at the Shilla Hotel involved ex-President Kim Dae-jung. DB explained how Kim had successfully used the South Korean national intelligence service to bribe the Norwegian Nobel Committee into awarding him the 2002 Nobel Peace Prize for his summit meeting with North Korea dictator Kim Jung II. Kim prepared this coup in June 2000 by secretly having $400 million of government funds funneled into North Korea to get Kim Jung II to agree to stage a summit meeting. The Hyundai executive who diverted part of the money from a loan from the state-run Korean Development Bank committed suicide when the diversion was revealed.
According to DB, Kim then had governmemt agents bribe, or otherwise compromise, enough Norwegian parliamentarians to get him the Peace prize.
I was not surprised by this claim that the Nobel Peace Prize could be bought. While researching my book on Armand Hammer, I had been told by Hammer’s close associate John Tigrett that Hammer had spent over $20 million in cash in the 1980s to buy the Nobel prize. Hammer was nominated for it in 1988 but he evidently had not paid off enough parliamentarians: he lost out by a few votes to a living god, the 14th Dali Lama of Tibet.
Later that afternoon I meet Iris Moon at Starbucks-- a popular dating venue in downtown Seoul. She is a highly perceptive cultural reporter for the Korea Herald, who asks me all the right questions about the movie business. This is my first interview about my new book, The Big Picture.-- and Seoul is about a good a place as any to begin the process.

Thursday, December 16, 2004

The Kamakura Platform

Outside the abandoned Kenchouji temple in Kamakura-by-the-sea, I am seated on an extraordinary piece of "land art." It is a tatami-covered six foot square platform which has a cozy opening for my legs. The rocks around the platform create an eerie microclimate: a layer of green summer foliage floating just below the more normal autumnal red foliage. I came here this morning with Kyoco Taniyama, a Tokyo sculptor, and Femke Bjir, a Dutch architect, to meet the land-artist Ken Kageyama. We found him seated on the platform in a zen robe in front of a hi-tech laptop, and he invited us to join him.
Ken call the platform "Here and Now," since it is intended to create a unique ephemeral experience each time. His most famous ephemeral art was a giant heap of blue chopsticks in the entranceway of the Fuji bank in Tokyo. He explained how he and his disciples collected used chopsticks from restaurants, washed them, painted them blue, tied them into pentagons with rubber bands, and flung them together. Because of the fire code in Tokyo, the stack had to be dismantled every night, and recreated every morning.
Femke, Kyoko and then walk to the town of Kamakura, stopping at the beach to watch surfers catching waves. After a root vegetable lunch, we visit a popular shrine that has a 1,200 year old Gingko tree.
Back in Tokyo, I have a wonderful dinner with Yu Serizawa at Aso, which is an extremely trendy and imaginative Italian restaurant. Yu is a phenomena in Japan: she used a board game, Dilemma, to teach top corporate executives how to deal with embarrassing situations in the West, served as a liaison for Japanese delegates to the Davos economic summit, and now has organized the World High Tech Summit in Kyoto. She also serves as Mr. Mori’s international advisor. After meeting her in New York, she was extraordinarily helpful in arranging the access I needed with Japanese executives for my book, The Big Picture. We discuss the transformation of Hollywood into a child-based, global entertainment economy.

Wednesday, December 15, 2004

The Japanese Edition

Dinner with Hiroshi Hayakawa and his lovely wife Yuko at the Hyotan Soba House. Hayakawa is Japan’s leading publisher of mystery books in Japan. He has also published the Japanese editions of two of my books: Legend: The Secret World of Lee Harvey Oswald and The Rise and Fall of Diamonds. This restaurant not only has a private room, sealed off from view by Shoji screens. but a private entrance way. The Japanese concept of dining is very different from that of (my) New York, where a restaurant is a venue to see–and be seen-- by other people.
Hayakawa has good news for me: he has decided to publish my book The Big Picture: The New Logic of Money and Power in Hollywood. This especially heartens me because I see the new–and future Hollywood– as being very much a product of Japanese enterprise.
Consider just three examples. First, the VCR, which was developed by Sony and Matsushita. Even though the Hollywood studios, led by MCA’s Lew Wasserman, resisted with a law suit (Universal vs. Sony), Sony prevailed in American courts. The result of the VCR victory was that the profit center of Hollywood moved from the box-office to home consumption of videos.

Next, came the DVD in the late 1990s, spearheaded by Sony (which now owned the Columbia Tristar studio) and Toshiba (which was now a partner in Time Warner). The success of the DVD not only further expanded the world home audience but contained random access unavailable on video. This new capability to navigate a disc allowed the studios to create new products by adding"extras"– including games to the disc

Finally, beginning this year, there will be a blue laser DVD from Sony and Toshiba that will quadruple the DVD’s storage capacity. The first effect of this additional storage will be high definition picture quality at home. The Sony version will also allow consumers to customize their DVDs by directly downloading and recording extras from the Internet. Movies can thus be supplemented and fused with interactive games.

For better or worse, these Japanese interventions have helped transform Hollywood– a point I will expand on in the Japanese edition of The Big Picture.
When I return to the Hyatt Grand, more good news according to my agent Tina Bennett’s email: Publishers Weekly (Dec 13th) has come out with a starred review– whatever that means.

Tuesday, December 14, 2004

The Blu-ray in Tokyo

The Grand Hyatt's revolving doors have been replaced by sliding doors since my visit here in June . Indeed, I learn that all revolving doors in Japan are gone. The cause of the demise of Japanese revolving door was the tragic death of a 6 year old boy, an only child no less, in a revolving doors at the hyper modern Mori skyscraper last March. The Tokyo media quickly turned the death into a national scandal. In a symbolic gesture of atonement, Minoru Mori (who was blameless) resigned as CEO of the building company and, just as symbolically, suddenly all the revolving doors in Japan were locked shut as if some malicious child-killing spirit lurked inside them. Fearing a public outcry if they were reopened, buildings began replacing them with sliding doors. Aside from the expense involved, it was a technological step backwards.
The genius of revolving doors is that the outside and inside panels of the doors are never opened at the same time. So gust of winds can't gush into buildings and disrupt the air pressure. Sliding doors, on the other hand, allow the higher-pressure cold air to enter, create wind storms inside the building.
But Japanese technology was very much back on track when I later went to Sony headquarters in Shinagawa. I went there to interview its executives about their next generation DVD, the Blu-ray. Outwardly, the disc looks exactly like a conventional DVD– same circumference, same thickness, same silvery surface. The difference is that it holds 54 gigabytes of ones and zeroes, which more than five times as much as a conventional DVD– and when Sony adds another two paper-thin layers next year, it will hold 100 gigabytes or ten times as much data. This quantum leap proceeds from substituting a blue for a red laser in the player. Since the blue laser has a much shorter wave length and beam spot than the red laser, the information can be more densely packed on a DVD's surface. But the real issue here is not technology but purpose.

At its most discussed-- albeit least interesting-- level, the increase in storage capacity will allow movie companies to reissue their old movies in the high-definition(HD) format, which has far superior picture quality to conventional DVDs. To this end, Sony has teamed up with Disney and Fox to release movies for the Blu-ray . Sony is not alone in this business. Its arch rival Toshiba has also announced a new format called HD-DVD . Both the Sony and Toshiba devices use blue lasers and both have the minimum capacity (15 gigabytes) for a HD movie. The Toshiba format requires less
costly changes for DVD manufacturers than the Sony format--but the Sony format can store about 50 percent more data.

Sony will move ahead with the Blu-ray, no matter what the cost of competing formats, because it needs the Blu-ray's additional storage to realize the grand strategy of its chairman, Nobuyuki Idei: transforming Sony from a hardware-based company (like Toshiba) to a software-based company. To do this, Sony needs a disc which has room for consumers to continually add material to their DVDs from Sony's Internet web site.

The big market here would be games– which is far more profitable than movies for Sony. With the Blu-ray, A teenage boy could stop a movie in the midst of an exciting car chase in a movie and instantly download and record a game based on it on the same DVD.

The crucial element in this strategy, which is to be unveiled at the Los Angeles E3 show this May, is the Playstation-3. The P-3, as Sony executives call the new console, is anything but a child’s plaything. It is based on a new chip set called "grid," which will deliver more teraflops of processing power than the famous IBM Deep Blue supercomputer. At its heart is– you guessed it– the Blu-ray laser, with its ability instantaneously acquire from the Internet games, movies, HDTV and other digital products and add them to 50 to 100 gigabyte discs. By the time I left Sony headquarters, I was convinced that the Blu-ray is an indispensable part of Sony’s plan to move its software from cyber space.

I ended the evening at site of the famous revolving door accident, the Mori building. On its 51st floor is Mr. Mori’s marvelous Roponggi Hills Club. It has three kitchens– Japanese, Californian, and Chinese. I had been graciously invited for dinner there by Sophie de Talliac and her husband Riku Suzuki. Both the view of Tokyo from this vantage point– and company– was spectacular and enchanting.

Thursday, December 09, 2004

December 9:Across The International Date Line

I know of no better way than escape the accumulated stress of New York City than to fly All Nippon Airlines across the international date line to Tokyo. Fourteen hours of total freedom from emails, phone calls, google and breaking news, with no options other than to succumb to the temptations offered by kimono-clad hostesses that included a bento box Kai-seki banquet, complimentary ANA pajamas, and magically reclining my seat into a perfectly flat bed with a down comforter and Japanese pillow. She then offers further separation from reality in the form of a gauze a face mask, eye shades, and ear plugs, making me feel like the comatose crew in Kubrick’s 2001/
At Narita Airport, alas, I get fewer Yen at the Citibank ATM machine for my dollars than I received on my last research trip in June– a consequence of the Bush administration’s misguided policy of devaluing the dollar.
Since Treasury Secretary John W. Snow proclaimed in May 2003 that the U.S. government would no longer measure the dollar's strength by its market value against the Yen and other leading currencies, the dollar has lost almost one-fifth of its value against the Yen. Underlying this snow job is the fallacy that a devalued currency necessarily results in a more favorable trade balance. If that was the case, all the African countries that periodically devalue their currencies by adding zeroes to them would have massive trade surpluses instead of continuing massive trade deficits. But the sad reality is that politicians can no more change the terms of their trade with the rest of the world by changing the numerical values of their accounting units– whether the Congolese Franc, the Mexican Peso, or the U.S. dollar– than they can increase life expectancy by devaluing the number of minutes in an hour or increasing average height by devaluing the inch.
What happens when the U.S, reduces the value of the dollar is that Americans have to spend more to buy the same amount of foreign goods, and foreigners have to spend less to buy the same amount of American goods. The devaluation may increase the number of items Americans export, but since the dollar value for each is now less. they may wind up with less money. Similarly, a rise in price of foreign goods –such as oil– may result in fewer units being imported, but the trade deficit can still grow larger because the price is higher for each unit imported into the US. And, as the numbers now demonstrate, this is exactly what has happened. Since Bush first became President in 2001, the Federal Reserve Bank's Major Currency Index, the trade weighted dollar, has fallen by 22 percent while the U.S. trade deficit, rather than also decreasing, has increased by 33 percent.
Because of this sad devaluation, an airport taxi to Tokyo now costs $210. So I take the convenient bus service, which costs only $28, and goes from the terminal to the Grand Hyatt Hotel, my favorite hotel in the world.