"When I look back on it now, if this opportunity came up again, knowing what I know now, I would never have done it," said David Horowitz.
The opportunity, as Horowitz described it, was known as the Better Book--a business phone directory patterned after the Yellow Pages.
The directory carried the picture, signature and ringing endorsement of David Horowitz--an endorsement for which Horowitz received $60,000 before Better Book Inc. declared bankruptcy Aug. 15, 1986.
Like the Yellow Pages, Better Book Inc. sold ad space to businesses on the promise that the directory would be distributed door-to-door throughout target neighborhoods. Unlike the Yellow Pages, Better Book was sponsored by the nonprofit Better Business Bureau, whose members were given first crack at ad space. The Better Book directories also carried 43 pages of consumer protection information, which Horowitz called the chief reason he decided to participate in the project in the first place.
"You know the road to hell is paved with many good intentions," Horowitz said with a sigh. "Actually, what I loved about the concept was that it had all this information in it. Which was going to be given free to the people. And then I was going to have control over saying we should put a guide to door-to-door sales in there or how to buy a solar heating system, and this would be given to people free. Supposedly the Better Business Bureau was screening out all the businesses that didn't measure up to their standards."
But, as things turned out, the Better Business Bureau was only tangentially involved. Better Book Inc. used the reputations of both the bureau and Horowitz to earn a profit, according to bankruptcy court records.
The directories did not get published and distributed as expected in several parts of California, including portions of Los Angeles. The backlash from the 11,392 businesses that bought ads was so severe in Southern California that Los Angeles members of the Better Business Bureau refused to continue paying their dues. Last November, the Los Angeles bureau shut down for lack of operating funds.
William Mitchell, president of the Better Business Bureau of Inland Cities located in Colton, told Calendar that his BBB branch merged with the defunct Los Angeles bureau to form the Better Business Bureau of the Southland serving four counties: Orange, Los Angeles, San Bernardino and Riverside.
An office serving Orange and Los Angeles counties opened a month ago at 6101 Ball Road in Cypress, Mitchell said. The new office has a staff of 14, according to Mitchell.
Mitchell does not blame Horowitz for the eventual downfall of the Los Angeles bureau. The idea of an authentic consumer information directory coupled with a large consulting fee would be a big temptation for anyone, he said.
"Everybody has to put meat on the table," Mitchell said. "With the benefit of hindsight, I don't believe he would do it again."
Bankruptcy court papers show that Better Book Inc. freely used Horowitz's endorsement to sell advertising despite the KNBC reporter's contractual condition that prohibited the company from doing so.
"I don't care how much money they paid me," Horowitz said. "I would have never done it because I really feel that I was exploited. Exploited beyond all the provisions of my contract. Because the contract for this was very specific: what they could and could not do. But unfortunately they used me and I didn't know that until after the fact."
According to bankruptcy records, the company declared $3.1 million in assets--chiefly uncollected payments for directory advertising--and its debts totaled $10.7 million. Nearly two years after the bankruptcy filing, the bankruptcy referee in San Francisco is still hearing from bitter advertisers like Daniel J. Sweeney of Pasadena.
"It was represented that there would be extensive pre-distribution TV advertising, including spots with David Horowitz," Sweeney wrote in a letter to the bankruptcy court earlier this year. "No such advertising was undertaken in the Los Angeles area. It was represented that the books would emphasize the sponsorship of the Better Business Bureau. No such emphasis has been conveyed to the general public."
In Los Angeles, Horowitz's rival at KCBS-TV Channel 2 delivered several reports delineating the Better Book debacle. Consumer reporter Tom Vacar, who moved from KCBS to its sister radio station KNX-AM (1070) three months ago, was sharply critical of Horowitz as much for refusing to publicly acknowledge his connection to Better Book as for his original judgment in contracting with the company.
"He has never admitted to his involvement on camera and he has refused to answer (Vacar's) questions about Better Book," Vacar said. "It would be a disgrace for any journalist to be involved in this thing. For David Horowitz to be involved is beneath contempt."
Horowitz doesn't see it that way.
"It's not that I trust blind faith. I mean if somebody comes to you and is selling you a set of Teflon cookware, you tend to believe that that cookware will perform in a certain manner because there's a guarantee or a warranty, which is a contract. And if it doesn't, that company will make good on it. Right? When you go into any business deal you make certain assumptions. When I distribute and syndicate my TV show, I deal with a major distributor, King Features. Right? I have a contract with them. If something happens and I don't find out about it until after the fact, does that make me a dummy? Does it?"
Horowitz now says that he was a victim who got ripped off. But he did not return his $60,000 fee because he says he doesn't know whom he would return it to and what good it might do if he did.
He vows he will not repeat the mistake.
"All I have to do is be burned once by somebody and I never forget it," he said. "It's etched into my mind like a brand on a cow. It doesn't happen twice."