Silicon Valley Banded Together To Protect Abusive CEO Before Company's IPO
In April of 2014, Gurbaksh Chahal was fired as the CEO of the tech company RadiumOne, amid fallout from a domestic violence case. Chahal had managed to escape felony charges despite being caught on camera striking his girlfriend over 100 times, according to prosecutors. But before Chahal was axed, a new Wall Street Journal report shows, power players in Silicon Valley were working overtime to protect him and his company’s upcoming IPO.
The Journal’s Jeff Elder reviewed documents prepared by one of Chahal’s attorneys for a mediator during settlement negotiations with RadiumOne stemming from his firing. Those papers show the lengths to which Silicon Valley is willing to go to protect the money, regardless of what the human toll may have been.
According to Elder, in December of 2013, five months after Chahal was initially charged with 45 felony counts for beating his girlfriend, Steve Westly—a RadiumOne board member, venture capitalist and ex-politician who is considering a run for governor—suggested to Chahal that he seek the help of Willie Brown, who was mayor of San Francisco from 1996 to 2004. Westly reportedly told Chahal that Brown “believes that he can help you” because he is a “very good deal broker” who is friendly with the district attorney and “may be able to ‘back him off.’”
Six days later, Elder writes, Chahal sent an email to Westly with the subject “Willie Brown.” In that email, Chahal wrote that the ex-mayor of San Francisco was willing to help bury a gruesome domestic violence case for a mere seven figures:
“Just met him. Wants $1 million if he can make this go away. Just gave him a $250K retainer. If you meet him tomorrow. Apply some pressure on him to make this go away in 2013.”
“Wow. That’s pricey, but probably worth it if he can make it happen. I suspect he will pull out all the stops to get this done.”
Though $1 million may indeed be “pricey,” Chahal sold his ad company BlueLithium to Yahoo for $300 million in 2007.
Chahal and Westly weren’t the only two members of RadiumOne seeking Willie Brown’s help in disappearing the domestic violence case that would undoubtedly bring bad PR to a company looking to get its mouth up to the Silicon Valley cash hose. In a January 2014 email to Brown via Brown’s assistant, Westly wrote that the rest of the board was begging the ex-mayor to “do whatever it takes” to make the case go away:
“we can’t move forward with the IPO until we resolve [Mr. Chahal’s] legal issues. The board has asked me to work with you and [Mr. Chahal] to do whatever it takes to get this behind us.”
According to Elder, emails from Westly and Brown’s assistant show that Westly attempted to get Brown face time with the district attorney on the case, but there is no evidence that those meetings ever took place. RadiumOne, Westly and Brown all denied comment to Elder, and George Gascon, the district attorney, said in a statement that “my office is not for sale.”
In the end, it turned out that Chahal would not need any strings pulled. The security video taken from his apartment that prosecutors say showed him kicking and punching his girlfriend was ruled inadmissible, and 45 felony counts became a plea deal of three years probation, 52 weeks in a domestic violence program, 25 hours community service and a $500 fine. After the judge on the case decided that the video footage could not be entered as evidence in the trial, Brown refunded Chahal $198,400.
Chahal was fired by RadiumOne just ten days after accepting the misdemeanor plea deal, and in the wake of being thrown overboard he said he was betrayed by the company’s board. He was right.
After the guilty plea, Chahal was inundated by congratulations from members of RadiumOne’s board. Elder writes that Bill Lonergan, the company’s CFO and eventual CEO, told Chahal that the board “has your back completely” in anticipation of the company selecting its IPO bankers in a process referred to as a “bake-off.”
Bill Lonergan, then chief financial officer of RadiumOne, first texted Mr. Chahal not to heed the public criticism, according to screengrabs in the legal brief by Mr. Chahal’s lawyer. “I know this is terrible but you just have to ignore this,” Mr. Lonergan told Mr. Chahal. “The board has your back completely.…I don’t want to lose the bake-off.”
Money rules everything in Silicon Valley, though we already knew that.
Despite the great efforts of rich shitheads and politicians alike, there is no happy ending to this story. RadiumOne’s IPO plans “fizzled,” Elder writes. Chahal, meanwhile, will appear in court this Friday as a judge seeks to revoke his probation after a separate domestic violence incident in which he was arrested but not charged.
[image via Getty]