ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Sunday, January 5, 1997 TAG: 9701070042
SECTION: EXTRA PAGE: 5 EDITION: METRO
SOURCE: FRANK ELTMAN ASSOCIATED PRESS
When Peter Canning left Reader's Digest in 1988, he had seen everything from the glory days to the greedy days.
Canning, who ascended to managing editor during 25 years at Reader's Digest, was there when founders DeWitt and Lila Acheson Wallace ran the magazine as an extension of their family.
And he was there after the Wallaces died, when corporate hot-shots moved in and proceeded to slash and cut to satisfy Wall Street's voracious appetite for profits.
Yet Canning had no plans for a book, despite his bitterness over his perception that the benevolent, family-run company had turned 180 degrees. ``A lot of people were writing books about that in the '80s,'' he said. ``There was `Barbarians at the Gate,' `Den of Thieves,' all these books, so I thought I wouldn't bother to get involved.''
Then he ran into the Wallaces' former servants, who described intimate details of neglect that trusted aides inflicted on the ailing couple in their final years. And he heard allegations that some of the Wallaces' closest advisers tricked the senile couple into amending their wills to redirect their billion-dollar fortune to charities the couple barely supported.
Canning heard enough to write ``American Dreamers, The Wallaces and Reader's Digest: An Insider's Story'' (Simon & Schuster). The journalistic effort, released as Reader's Digest prepared for its 75th anniversary, weaves a novel-like story of power, greed, incest (though no real sex), jealousy, ambition, politics, espionage, heartbreak and betrayal.
From its founding in 1922, the Wallaces' ``cooperative reading service'' was an overwhelming success, Canning says.
``His father wanted him to be a teacher, and he thought this was a way of teaching. It just grew and grew and grew and grew and grew,'' Canning said. ``And they spent a large part of their lives trying not to let that money come to them, to give it back.''
Because the modest Midwestern couple had no children of their own - in part because of a World War I injury DeWitt suffered in Europe - they either turned the profits back into the company through generous paychecks and lavish working conditions or shared their wealth with a variety of charities.
But ``after Lila died [in 1984] and new management took over,'' Canning said, ``the magazine was seen by hard-headed businessmen, quite rightly, as a device for bringing in new readers, new names, to add to our mailing lists to whom we could sell all these other products that we are producing that have a much greater profit margin.''
Canning contends that an emphasis on selling ancillary Reader's Digest products such as books, videos and compact discs has affected the quality of the magazine.
Reader's Digest responded through its spokesman, Craig Lowder. ``Peter's book is very selective and highly subjective in what he chooses to write about. It's disappointing, but not surprising,'' he said.
Nonetheless, Lowder concedes that Canning's book is well-written. ``Why not?'' he said. ``He's a great editor.''
For his part, Canning concedes that the Wallaces were not perfect. His book points out that DeWitt and Lila, sometimes with petty motives, often went behind each other's backs on personnel or other policy matters affecting the magazine.
Canning writes that Lila was a fiercely self-centered woman capable of downright nastiness; her niece accuses her of sending dead flowers to a hospitalized sister-in-law during one tiff. And the same niece claims to have had an incestuous, though never consummated, relationship with DeWitt.
But whatever their faults, Canning writes, it's still not right that the Wallaces' wishes for disbursement of their fortune have not been honored. He claims that 60 percent of the Wallaces' Digest stock - worth approximately $3 billion - was transferred from their own charitable funds into funds supported by Digest director and trustee Laurance Rockefeller.
``The Wallaces had spent most of their adult lives determining how they wanted to give away their money,'' Canning said. ``They wrote very specific guidelines.''
DeWitt wanted to provide educational opportunities, especially for disadvantaged young people in the country, and Lila looked to enhance the cultural life of small-town America, Canning said.
The author has no quarrel with the worthiness of Rockefeller-supported charities such as the Bronx Zoo, Metropolitan Museum of Art, Lincoln Center and Hudson Highlands, which now benefit from the Wallaces' wealth. He contends, however, that it was unethical for some of the Wallaces' closest advisers to have the elderly couple agree to changes to their wills without a clear understanding of what they were doing.
Fraser Seitel, a spokesman for Laurance Rockefeller, said the Wallaces' wealth is benefiting causes that are ``very laudable and eminently worthwhile.''
``What Canning seems to be saying is that Laurance Rockefeller used the Wallace moneys for frivolous purposes. It strikes me, as somebody who knows Mr. Rockefeller, such purposes as Lincoln Center and the Museum of Art and cancer research hardly seem to be frivolous purposes,'' Seitel said.
But Canning's greatest regret is what has happened to the Wallaces' magazine.
``In their minds, the most important thing was the magazine that was a reliable source of useful information for 100 million readers. And the magazine is, I think, a pale shadow of what it once was.
``I don't think you can change that. It's gone beyond where it is changeable.''
LENGTH: Medium: 99 linesby CNB