The analyst and the gay porn affair

Every now and then, something happens that reminds you the world is a curious place. Morgan Stanley Dean Witter's handling of the Christian Curry affair is one of those events.

Last year, Morgan Stanley fired Mr Curry, an analyst in its real estate banking division. The US brokerage said the analyst had cheated on his expense reports. Mr Curry threatened to file a civil rights lawsuit asserting that he was fired because he was black and presumed gay following the publication of his naked photos in a gay porn magazine.

In August the Manhattan District Attorney announced that Mr Curry had been arrested for allegedly hiring a computer hacker (actually a New York police detective posing as one) to plant racist e-mail in Morgan Stanley's computer system.

Last month, the DA, having discovered that Morgan Stanley had paid a putative friend of Mr Curry's, Charles Luethke, for the information that Mr Curry planned to plant the electronic messages, announced it was dropping its charges.

Mr Curry promptly filed a lawsuit against Morgan Stanley seeking $1.35bn in damages. Meanwhile, Morgan Stanley admitted that it had programed its computers to block employees from a website called VaultReports.com. VaultReports.com serves as a place where disaffected employees of companies like Morgan Stanley can air their complaints without fear of retribution from their bosses.

The hottest topic on the VaultReports.com site was what Morgan Stanley had done to Christian Curry. Many of the messages attacked Morgan Stanley and defended Mr Curry.

But Mr Curry must know perfectly well that black, homosexual property analysts who appear naked in gay porn magazines are not fired from Wall Street firms because they are homosexual or black but because they are naked. White male investment bankers have been fired for just being quoted in magazines.

There are few people who take jobs as securities analysts whose naked bodies excite sexual passion. Fewer still have the time to divert from their careers to disrobe for pleasure. (Where do you put your beeper?) And none of them would expect to be allowed to moonlight for a porn magazine.

If anything, his indiscretion was more likely to be treated lightly because he was black for the very good reason that Morgan Stanley, like every big company, works hard to avoid discrimination lawsuits.

But no matter how Mr Curry emerges from this affair, Morgan Stanley comes out worse. The casual observer can understand how a company might pay an informant in a lawsuit. That act, while stupid and wrong, is at least understandable. What is impossible to understand is its behaviour toward its employees. In seeking to prevent them from reading the VaultReports.com website, Morgan Stanley's decision-makers made fools of themselves.

Of course, the web censorship had exactly the opposite effect to the one intended. It turned a possibly spurious internet complaint session into a legitimate one. If the messages posted early on the website read suspiciously as if they were written by Mr Curry himself, or a few of his friends, the messages posted later sound like the outcry of an oppressed corporate population.

Last week, the young web-heads who run VaultReports, sensing that Morgan Stanley's management had just put them on the map, set up shop on the pavement outside the firm and passed out their backdoor address to Morgan Stanley employees.

Over the next couple of days, the rarely used backdoor at VaultReports.com ushered in more than 1,000 visitors, most Morgan Stanley employees. To judge from their energetic postings, most of them now feel deeply distrustful of their employer. At a stroke, Morgan Stanley created a meeting place for employees with a gripe and journalists who want to air those gripes.

Of course, all this was pretty much inevitable once the Morgan Stanley bosses decided to block their employees from the website. That Morgan Stanley didn't understand this suggests more than mere venality. It suggests deep stupidity. They underwrite all those internet deals and yet fail to understand the power of the thing!

n Michael Lewis is the author of 'Liar's Poker' and 'The Money Culture', and a columnist for Bloomberg News.