Caught in the Webb: just the facts, ma'am--to be read with care.

• Author: Kaback, Hoffer
• Position: QUIDDITIES - Dan Webb

IN THE 1950s TV series "Dragnet," most episodes contained an early scene in which a crime witness (or victim) tried to explain to the main character, LAPD Det. Sgt. Joe Friday, what had happened. Almost invariably, that citizen rambled in the telling.

And so Friday, played by Jack Webb, would issue a laconic instruction, which quickly became a catchphrase in popular culture. Webb would drily tell the witness (almost always a woman) to report "Just the facts, ma'am."

Fifty years later, we consider a different Webb report--this one by Dan Webb to the New York Stock Exchange.

This Webb report pertains to Richard A. Grasso, exchairman of the NYSE. In late September 2003, the exchange, a not-for-profit entity, retained Webb's law firm, Winston & Strawn, to investigate how it came to pass that Grasso had received a payout of some $140 million in deferred compensation and benefits and was to receive an additional $48 million in deferred comp and benefits through 2007.

The disclosure about Grasso's comp occasioned a palpable amount of disquietude. In mid-2004, New York Attorney General Eliot Spitzer filed suit against Grasso and NYSE director Ken Langone. (For further background and commentary, see my column "Lord Black and Duke Dick," DIRECTORS & BOARDS, Third Quarter 2004.)

With trial approaching, lawyers for Grasso and Langone requested a copy of the Webb report (upon which Spitzer relied for his complaint against their clients). The exchange resisted, since the report had been created by Webb's law firm for its client the exchange (and not for the benefit of Grasso and Langone) and was, accordingly, entitled to legal privilege. A lower court state judge disagreed and ruled in favor of Grasso and Langone. The exchange decided in early February 2005 not only not to appeal but to make the report public.

D & B readers--and, in particular, current board and comp committee members--should get hold of the Webb report and read it with care.

The power of the Webb report lies not in its literary style (far from Hemingway or Red Smith) nor in its conclusions (which, interspersed irregularly throughout, don't really get going until the last 20% of the document), but, rather, in what Jack Webb always said he wanted: Just the facts. Like:

* "Grasso's executive assistant was paid approximately $240,000 per year for the last three years."

* "Grasso used two drivers on the NYSE payroll who each earned approximately $130,000 per year."

* Grasso "had the...