Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer (37 page)

“The Budweiser guys,” as they became known around town, usually ate dinner in private rooms at the Fourth's two favorite restaurants, Shula's on the Beach and Benihana, running up bills of $5,000 to $6,000 a night. They threw parties on the
Big Eagle
that cost “a couple hundred grand,” according to a local business owner who helped provision the boat. “They would send people out to get them cases of Cristal champagne and Opus One wine. Big-ticket items. Sometimes they'd have people drive to Miami and buy it all out,
magnums
of Cristal. There'd be none left anywhere, all the way up the coast to Ft. Lauderdale.”

They once sent someone on an emergency helicopter flight to Joe's Stone Crab Restaurant in Miami after the Fourth complained that the crab claws that were about to be served at a large dinner party were too small. When the bigger ones arrived in time, he instructed that they were to be served “only to my guys,” not the other guests. “He took care of his boys; he showed them a good time.”

The Fourth's first sojourn to Key West resembled one of his grandfather Gussie's booze-and-broads cruises—on steroids. But when the Budweiser guys came back to town a few months later—and on subsequent biannual trips—the nightly entertainment program would have shocked the old man. The A-B men no longer had to pick up women in the bars because unbeknownst to company higher-ups, women were provided for them through several local escort agencies. According to a Key West business owner who was involved in the supply chain, a midlevel manager in A-B's St. Louis office made the initial contact with the escort agencies and then arranged for a local distributor to write checks to “cash” in the amount of $20,000 upon request. The distributor gave the checks to an intermediary, who cashed them and paid the women directly. The distributor then billed A-B $20,000 for “models.”

How much the women were paid depended on whether they were “good girls” or “bad girls.” As one participant explained, “Good girls were arm candy, pretty and intelligent.” They worked the early shift. They attended dinner parties, mixed with guests and business clients, were generally charming, and then went home with $400 or $500 for their night's work. The “bad girls” worked the late shift. The A-B executives jokingly referred to them as “the finishers.” They were expected to provide sexual services, for which they received $1,500 to $2,000 per night. “All the girls were very high class. That's what they liked, even for bad girls.” They would request six to eight women a night. “Some nights they'd go through the entire $20,000.”

One year, Yusef Jackson, Jesse Jackson's son, joined in the fun. Having met the Fourth at one of Ron Burkle's Green Acres soirées, Yusef and his brother Jonathan had been allowed to purchase a successful A-B distributorship in the section of Chicago that was home to both the Bulls and the Blackhawks. The 1998 deal raised eyebrows in the city because of the brothers' ages, twenty-eight and thirty-two, respectively, their lack of business experience, beer or otherwise, and the fact that they appeared to have paid far less than market value for the company. Their father, who once threatened a national boycott of Anheuser-Busch over its minority hiring policies, reacted angrily when the media questioned the deal, saying it amounted to “racial profiling” of his sons.

Typically, the Fourth “fell head over heels in love” with one of the escorts in Key West. “She looked like Audrey Hepburn. He wanted her to meet his family. He said, ‘Leave your job and come to St. Louis with me.' He seemed to be looking for something he could never find.”

According to the intermediary, escorts who worked for different agencies and didn't know one another “all told the same story” about their experience with the Fourth. “He had some deep-seated stuff going on, a sexual dependency that went way, way,
way
beyond Tiger Woods.”

For all the money the A-B executives spread around town, they did not make many friends among the serving class in Key West. “They were like cowboys coming off a cattle drive,” said one former bar employee. “People were like, ‘Oh, great, here come the Budweiser guys again,' and they'd roll their eyes because they were the cheapest sons of bitches. They wouldn't tip. They didn't feel that they had to. No one would want to wait on them.

“The bellhops at the Hilton hated it when they came down. [The Fourth] was never expected to pay for anything. They'd always say, ‘I got this. I got this,' and they'd shoo him away. And then we got stiffed.

“We hated the Budweiser people. They thought the whole town should stop because they were there. We were working for a living, and they would treat us like shit.”

The former workers drew a sharp distinction between the Fourth and his guys, however. “They were obnoxious pricks who acted like everyone was beneath them. He wasn't that way. He was always smiling, asking people how they were doing. His guys didn't give a shit.”

“He was the nice, easygoing, mellow, fun-loving one who never asked for anything. He worked out every day. He'd party until three a.m. and be in the gym at five a.m. I never seen him drunk or high or anything. The other guys were drunk all the time, staggering, trashed.”

Amid the bacchanalia, August apparently tried to maintain a level of control. “He made sure no one brought drugs on the [
Big Eagle
],” said one observer. “It was a big thing with him. You were not allowed to be on drugs or possess them.” Once, when he learned that one of the escorts had called a cabdriver to bring her some coke, “he had her removed from the boat.” The removal was effected by local police officers that worked off-duty security details for the Fourth. One of them was assigned to wrangle the escorts. He “made sure the girls got where they were supposed to be or got rid of a girl if [the A-B executives] decided they didn't like her.” He also made sure they didn't carry any recording devices or cameras after one escort obtained pictures of the Fourth “in a compromising situation, and she was made to leave town.”

The Fourth's concern about people bringing drugs on board may have sprung from the fact that both boats belonged to Bernie Little, A-B's longtime distributor in north-central Florida, and one of his father's closest friends. And it could have been because he was on thin ice with his father for flunking one of the company's random drug tests. According to the story he told to at least one of his closest associates, he tested positive for cocaine, and the results were relayed up the line from the human resources department to Pat Stokes's office to his father and the board of directors. But he'd managed to avoid the usual consequences—company-ordered counseling and subsequent dismissal—by vehemently denying that he had knowingly taken the drug. “He claimed that somebody spiked his drink; that he was at a party and someone must have given him something without his knowing it. He didn't report it because he didn't know it had happened.”

The story was not credible, as anyone familiar with the properties and effects of cocaine would know. But August III and the board apparently bought it. “After some kind of negotiation, an agreement was reached in which the Fourth signed an affidavit swearing that he did not knowingly consume drugs and did not have a drug problem. He said it was an isolated incident and that he would never be involved in anything like it again.”

In the 1997
Fortune
magazine article, August III explained his philosophy on employee discipline. “Make sure your standards are high,” he was quoted as saying, “and if someone doesn't meet those standards, take them out. I don't care whether it's family or not.”

In 2002, in the wake of the failed drug test, he approved the Fourth's promotion to president of Anheuser-Busch, Inc., the position once held by Denny Long.

On June 16, 2002, August III turned sixty-five. He'd promised to be retired by then, telling
Fortune
magazine in 1997, “At that point, this is a younger person's game.” Having seen what happened when his father stayed in the job too long, he always said he would never put the company or his successor through something like that again.

When the time came, however, he reneged. Rather than retire, he simply relinquished the title of CEO and stepped away from the day-to-day duties of running the company, while retaining chairmanship of the board. To no one's surprise, Patrick Stokes was named CEO, marking the first time in the company's 126-year history that a non–family member was placed in operational control. August IV was elevated to president of Anheuser-Busch, Inc., the brewing division of the company.

Business Week
magazine called it “a succession process as tightly orchestrated as any in the House of Windsor,” with the Fourth in effect being given five years—until the sixty-year-old Stokes retired at sixty-five—to get his act together, while his twenty-five-year-old half brother, Steven, worked at their father's side to learn the business in case he didn't.

The Fourth was thirty-eight, the same age his father had been when he ousted Gussie and took over the company. With the possible exception of the Fourth and his team, however, no one thought he was ready to run the company.
Business Week
credited him with “showing an instinctive understanding of the kind of advertisements that stirred young men,” but noted that “he hasn't made a name for himself in any other way”: “He has never operated the company's network of a dozen breweries, managed its complex relations with independent wholesalers or run its international and theme park units.”

August III declined to talk to
Business Week
for the November 2002 article about the management changes, leaving it to the Fourth and Pat Stokes to speak for the company and assure the financial community that all was well within the beer kingdom. The reporter pretty much ignored whatever Stokes had to say and pressed the Fourth about his reputation as a “hard-partying guy,” pointing out that it could prove a “hindrance” for a company supposedly trying a promote the responsible use of its products, and asking him to respond to stories about his frequent business trips with “female companions.”

It's unlikely the Fourth had ever been confronted so directly by a reporter about his private life, and it apparently caused him to lose his affable cool momentarily. Claiming that he paid for the expenses of any guests who traveled with him and always engaged in “responsible consumption of our products,” he snapped, “I didn't get where I am today without performing.”

Besides, he argued, his vaunted partying was actually a valuable form of research. “I think I have benefited from my lifestyle [by] being able to be very active in the marketplace,” he said. “That has allowed me to understand our customer better and, hopefully, do a better job of creating products and images that are attractive to that customer.”

The Fourth always dreaded the inevitable questions from reporters about his Tucson accident and the death of Michele Frederick. “Why do they keep bringing that up?” he often complained to his colleagues. “Why do you keep doing the interviews?” they sometimes replied. This time, he responded to
Business Week
with a spin that could only have been crafted by A-B's public relations department.

“That's a chapter that's never gone, that I will always remember,” he said, apparently forgetting that he'd long claimed total amnesia about that night. “But I honestly believe that, as painful as the memory is, that experience will make me a better keeper of responsibility for our products.” He seemed to be saying that some good had come from the tragedy after all, that Michele had not died in vain.

Business Week
rubbed more salt into the Fourth's wounds by pointing out that his father apparently shared a closer bond with his younger half brother Steven and that his stepmother, Ginny, “has made no secret of her wish to see her son Steven take over the company.”

“[Steven] spends a great deal of time with my father,” the Fourth acknowledged. “He is a very smart guy and he does a great job for my father. Other than that, I can't really comment.” Asked what he thought Steven's next job with the company might be, he replied tersely, “I don't know.” Of his own future, he would only say, “I don't take anything for granted in this company. It's not a foregone conclusion that I'll go any farther.

“I love my father,” he said. “Take a walk through my house and it looks like a father museum. Every picture on the wall is of my father, or me and my father—to the point where Mom comes over and says, ‘where are all my pictures?'” (One Father's Day, he gave his dad a twenty-minute video he'd commissioned, showing moments they'd shared over the years, and he told friends that his father had cried when he viewed it.) “But he's been extremely tough on me,” he told
Business Week
. “Maybe you can call it tough love.”

Or indulgence. After all, his father had spent millions of dollars and an enormous amount of time and energy shielding him from the consequences of his actions. And now, with three strikes against him—Tucson, the St. Louis police chase, and a flunked drug test—he was getting yet another swing of the bat in a position that paid him nearly $2 million a year (in salary, bonus, and stock), with a ridiculously generous expense account and the use of a helicopter and a private jet. His father had even helped him acquire a new $3 million mansion on ten wooded acres in Huntleigh Village, where his grandfather Gussie and great-grandfather August A. once rode after the foxes in the Bridle Spur Hunt.