Authors: M. G. Lord
"Ruth was an incredible woman . . . a great marketing person and a great finance person," Kalinske told me at Toy Fair in
1993. "But she had these years of success where everything went correctly for her. Every quarter, earnings would be up, sales
would be up—and it just kept going that way for years and years. Then she had a quarter where that didn't occur. So she ended
up relying on some inside financial and sales people who basically advised her, 'Don't worry about this. . . . This is a momentary
problem, a calendarization problem.' Well, needless to say, after three quarters of it not getting any better, she had committed
fraud—or the company had, and as the leader of the company she had. So there were extenuating circumstances, but nevertheless
she was responsible for having reported sales and earnings that didn't exist."
Ken Handler sees it differently. "[My mother] was hated because she was a strong, powerful woman," he told me. "Men that work
in these kinds of organizations . . . bring a tremendous amount of unresolved sexual energy to the workplace. These men were
not able to sit back and take that much strength from a woman. And my mother wasn't very diplomatic always; she could be very
tough. So they resented her deeply, and they conspired against her in her absence."
Whatever the true cause of the nightmare, it dragged on. On September 6, 1974, Mattel requested that trading in its stock
on the New York and Pacific stock exchanges be suspended; it had "discovered" enormous misstatements in its financial reports
for fiscal 1971 and 1972. Then, on October 2, 1974, Mattel consented to the SEC's request that it make people outside the
company a majority of its board of directors—an unprecedented move that, when Mattel agreed to it, overturned the traditional
stockholders' right to a voice in the selection of their company's directors.
Mattel also agreed to appoint a special counsel and a special auditor to investigate its financial statements. On November
3, 1975, when the special counsel filed a report confirming that Mattel had cooked its books, the company settled its shareholder
suits out of court for more than $30 million. Ruth and Elliot got the boot, but, as part of the settlement, they agreed to
contribute two million shares of Mattel stock and to reimburse the company for $112,000 in attorney's fees. Rosenberg also
agreed to pay back $94,000 in attorney's fees, cancel his severance agreement, and contribute $100,000 cash.
On February 16, 1978, Ruth Handler and Seymour Rosenberg, comptroller Yashuo Yoshida and two other employees were indicted
by a federal grand jury for conspiring to violate federal securities, mail, and banking laws by preparing false financial
records. The crimes spelled out in the indictment are chilling. It says that the bogus data was used to inflate the market
price of Mattel stock, which in turn was used to acquire bank loans. Then the stock was sold by the defendants for their own
benefit. In 1972, Rosenberg allegedly realized $1.9 million by selling 80,300 shares of Mattel stock, and Ruth, acting as
a trustee for her children, took in $383,000 from the sale of 16,600 shares. The two were also accused of hiding real data
from Arthur Andersen and of altering royalty statements, inventory records, and tooling costs. And in one of its most unsettling
passages, the indictment stated that to increase 1970 profits, Rosenberg and Ruth actually discussed withholding $2.6 million
of Mattel's contribution to its employee profit-sharing trust, though it doesn't say whether the two implemented their devious
plan.
"I . . . will exert every ounce of strength at my disposal to prove my innocence," Ruth vowed when indicted, but ten months
later she pleaded no contest. In December 1978, U.S. District Court Judge Robert Takasugi sentenced her to a forty-one-year
prison sentence and a $57,000 fine, both of which he suspended. He did, however, require that she devote five hundred hours
per year for five years to community service and pay $57,000 in "reparations" to fund an occupational rehab center for convicted
felons. Ruth does not seem to be the sort of woman to run away from a fight. But she did.
"I did fight it for years and years," she told me, "but what happened is I went into retirement in 1975 and I hated it. I
was as low as a person could get emotionally, psychologically. And I was having trouble finding a breast prosthesis. So I
got into the business. In 'seventy-six, I was designing the product and in 'seventy-seven, I was marketing the product—running
around the country doing promotions. And my lawyers kept calling and saying, 'You have to appear in court.' I'm on a crusade
to correct the world— to change the world as it relates to the mastectomy—and every time I turned around they wanted me."
Ruth and her staff, mostly women who had lost breasts to cancer, held fitting sessions at department stores. They played tapes
of Ruth on television, opening her shirt and asking interviewers if they could tell which breast was real. "We were dignifying
the fitting process," she said. "Women would see dozens of other women milling around waiting to be fitted, and they'd have
their own little jam sessions. . . . They'd talk to each other and it became a party to these gals, a fun experience. By the
time they got fitted, they were walking with their chest out; they were feeling each other; they were laughing. Imagine women
going around and feeling each other's breasts—publicly— and laughing and kidding around."
But, she continued, "I had to come home to this other life of fighting the lawyers. . . . So one day I said, 'Do something.
Get it changed. . . . There's got to be another way.' "
Her lawyers suggested that she plead nolo contendere, but warned that it was the equivalent of pleading guilty, except that
it couldn't be used against her in subsequent civil suits. "I won't plead guilty," she told them, "I'd like to plead nolo
contendere. . . . I'll accept [the court's] version of guilty, but I want to say when I plead that I'm innocent." You can't
do that, one lawyer said, but a second thought it was possible. "And sure enough they looked it up and there was a precedent,"
Ruth said. "I could plead nolo and at the same time protest that I'm innocent
and get away with it."
Which she did.
Ruth's biography is so much larger than life that over the course of our interviews, I felt as if I were in a TV movie—some
sort of courtroom drama, or HBO's
Barbarians at the Gate.
The tone and direction, however, changed from scene to scene. Ruth was a sentimental Frank Capra heroine one minute, a John
Waters character the next. Part Leona Helmsley, part Joan of Arc, Ruth is an almost impossible blend of acquisitiveness and
idealism.
Words often came to Ruth in the form of slogans and catchy product names, which gave our talks the flavor of a TV commercial.
She is proud of her three best-selling prostheses—the "Nearly Me Three," her "classic best breast"; the "So-Soft," an all-silicone
breast for "women who need the softer, more hanging look"; and the "Rest Breast," an all-foam breast that can be worn while
swimming. Nor did she manufacture breasts merely as a service; as early as 1977, Nearly Me, a privately held company (no messy
filing with the SEC), which she sold to Kimberly-Clark Corporation in 1991, did a million dollars' worth of business.
"There are breasts and there are breasts," she told me between bites of an egg salad sandwich at Beverly Hills' Hillcrest
Country Club in 1992. "Some breasts are much softer and some breasts are much firmer. Some have a tendency to lift up and
be full; others have a tendency to lift up and hang down. It depends on the muscles and the age and the construction and the
body."
Ruth tends not to look at the whys of things; but she misses no detail when it comes to the hows. She figured out what male
prosthesis makers had overlooked: breasts, like feet, come in "rights" and "lefts," as must prostheses. To implement her discovery,
Ruth formed Ruthton, the precursor of Nearly Me, with Peyton Massey, a Santa Monica-based prosthesis maker. "After he gave
me all the reasons why it wouldn't work, he agreed that he would do it," she told me. "We cleared out an old storeroom at
his place . . . and he sculpted the breasts and I did all the other stuff to make it happen."
Ruth was unhappy with Massey's materials—the early prostheses had "a very peculiar odor," she recalled—so she brought in a
half-dozen retired Mattel toy and doll designers to revise them. She wanted the breasts to be "lightweight" and to have "a
swoop on the top and a fullness on the bottom." She also wanted "some kind of a 'skin' to wrap around—to hold all of this
together." Within a couple of hours, the toymakers determined that Ruth's needs could be met by a model with a foam back,
a silicone front, and a polyurethane "skin."
"Thirty years of working at Mattel had trained me to know what is needed if you want to design a product," she explained.
It also taught her how to sell one. In January 1977, she arranged her first department store promotion at Neiman Marcus in
Dallas. Her goal was to get out of Los Angeles and see how the breasts played in a less trendy part of the country. The merchandise
manager was at first taken aback. But after Ruth delivered her pitch face-to-face, Neiman Marcus opened its doors.
"I don't want all the stores," Ruth told the merchandise manager. "Pick the one in your most affluent Jewish neighborhood,
because there's a high degree of breast cancer among Jewish people . . . and get me some publicity."
"Some publicity" quickly turned into appearances on talk shows across the country. While her staff sent handwritten invitations
to mastectomy victims near each host store, she stripped off her shirt for
People
magazine and invited a
New York Times
reporter to feel her breasts. Nearly Me became a phenomenon. Although some mastectomy patients in the mid-eighties chose to
have their breasts surgically remade, their numbers weren't large enough to affect her business. "I was negative as hell on
breast reconstruction at the beginning," she explained. "Because they reminded me of the early prostheses. They didn't match
the other side. Women showed me . . . their own breast down here and the artificial breast up here—hard as a rock up here."
She gestured to a spot near her shoulder. "I saw hundreds of those. Out of place. Crazy locations. If when you put a brassiere
on, the two sides don't match, what the hell have you got?"
For most of the sixteen years that Ruth ran Nearly Me, she traveled two weeks out of every four. During the five years after
her sentencing, however, she had to give community service at home—taking poor kids to her beach house in Malibu and setting
up the Foundation for People, an agency that enabled white-collar felons to help blue-collar felons learn skills and get jobs.
"After I got the swing of it, I turned that into a positive thing and we formed a positive group," she said. "We rented a
floor in an old rundown hotel and I got my personal decorator to do the whole floor for free. . . . I think white-collar offenders
in most cases have been punished enough by the time they get to the sentencing. The humiliation is worse than going to jail.
And the comedown from where they've been is so great—it's like you've already shot the guy, now stab him. What you need to
do to help society take care of itself is say, 'Okay, buddy, it's your turn now to turn society around—to devote your money
to it and help it.' "
Ruth's foundation enjoyed great success in the early eighties but was later disbanded. When Michael Milken and Ivan Boesky
were sentenced, public sentiment turned against the idea of permitting white-collar criminals to elude jail.
WHILE RUTH REHABILITATED FELONS AND CANCER PA-tients, the plastic doll she invented helped Mattel recover from its near collapse.
If Barbie was distraught during Ruth's run-in with the law, she didn't show it. There was no Day-in-Court Barbie or Barbie-for-the-Defense.
She kept active; her "Busy" incarnation had clawlike hands; she could pick up such leisure-time paraphernalia as a phone,
a TV, a record player, a serving tray, and a suitcase. She kept fit; her "Live Action" and "Walk Lively" versions twitched
and strutted. And in an incarnation that featured the Twist 'N Turn face with a dead-on stare, she celebrated her sixteenth
birthday.
Mattel also kept up its jibes at the women's movement. In 1968, feminists protested the Miss America Pageant; in 1972, the
company introduced an official Miss America doll. A year later, it came out with "Barbie's Friend Ship," a plastic airplane-cum-carrying
case that featured—lest girls get any inflated ideas about taking the controls—a painted-on male pilot. A similar plane was
issued with "Big Jim," a boys' line of Schwarzenegger-bodied, flannel-shirted, fire-fighting, construction-working, alligator-wrestling
male dolls, so cartoonlike in their virility that they resembled the Village People, the ultramasculine gay disco recording
artists. The cockpit of Big Jim's plane, however, was designed to hold Big Jim.
Then, in 1975, Skipper grew up, or, in any event, sprouted breasts. Growing Up Skipper, as the pre- and post-pubescent doll
was called, required two wardrobes: one innocent, featuring strapless Mary Janes and knee socks; the other sophisticated,
featuring grown-up, seventies platform shoes. It also required from its owner a taste for the macabre: Even in the Mattel
catalogue the child photographed with it looks wide-eyed and aghast. The doll squeaks and lurches as its bosoms pop out, then,
after another turn of its arm, snaps back into flatness. Growing Up Skipper slipped into production while men managed the
Barbie line. Earlier Barbie products had reflected a sort of sly, knowing, conspiracy-of-women approach to the mysteries of
femininity. But Growing Up Skipper is a male interpretation of female coming-of-age, focusing not on the true marker of womanhood—
menstruation—but on a tidy, superficial change.
Steve Lewis defended the doll as "educational," but because it sidesteps what Joan Didion termed "that dark involvement with
birth and blood and death," it doesn't teach biology. Rather, it is about signaling one's grown-up status to men through clothing.
For many real-life females, becoming a woman is a messy, bloody, harrowing event. It is also nonreversible; only a small minority
of anorexics and athletes manage to turn it back. But for the doll, the transition is a lark; no muss, no fuss, and an open
invitation to retreat. I was heartened, however, to learn that not all the men who worked on Growing Up Skipper approved of
it. "That thing was grotesque," said Mattel chief of sculpture Aldo Favilli.