Deborah Hill Cone: Seeing nobody but themselves

Stephen Versalko. Photo / Herald on Sunday

The hookers are a bit of a clue.

Call me Junior Freud but it is pretty obvious that Stephen Versalko, the ASB fraudster who nicked $18 million from investors and spent more than $3 million on prostitutes, is a textbook narcissist.

Narcissists find it easy to use call girls as they see sex simply as a way of getting a fix; what is known as narcissistic supply.

But I mean narcissist in the strict sense. The classic narcissist is more like an addict than someone who thinks they are the bee's knees.

The defining feature of a narcissist is not that they love themselves, but that they lack empathy. Other people are like objects - just a means of getting narcissistic supply, that is, adoration, admiration, approval, applause, or any other kind of attention.

Awful to admit, but I imagine thinking of other people as objects can be a great advantage in business - it permits one to be austerely objective without getting fussed with details like how staff or customers might feel. Taken to an extreme, this attitude leads to crime - Versalko presumably managed to ignore the pain he was causing to the victims of his fraud.

Many white-collar fraudsters would qualify for a diagnosis of narcissistic personality disorder and I imagine Versalko is one of them. This isn't unusual in business circles.

Ever since Professor Jay Conger's influential 1990s essay, The Dark Side of Leadership, there has been an awareness narcissism is widely found in the boardroom. The intriguing thing is whether the string of corporate conmen who have recently come to our attention after the global financial crisis is a sign narcissism can be learned or developed.

Is our business community providing an environment where narcissistic behaviour is rewarded and allowed to flourish? Management gurus think so.

"It happens every decade; the proportion of these cases increases during times of market euphoria," says Professor Conger. Researchers say few fraudsters set out initially to break the law.

It is more common they become lost in a "narcissistic fog" of self-delusion in which they imagine the rules no longer apply to people as grand as themselves.

David Gerson is another business management researcher who argues that, in a conducive corporate culture, adults "can learn to be narcissists".

"Rather than thinking that these businesspeople were evil to start with," Gerson said of a generation of rogues like Tyco's Dennis Kozlowski and Worldcom's Scott Sullivan, we should recognise "they were in a system that encouraged that behaviour".

So did ASB's culture encourage Versalko? The bank is at pains to say no. At least that seems to be the message behind its billboard campaign: "It is not up to people to understand banks. It is up to banks to understand people."

It is surprising the bank didn't identify Versalko's offending earlier, but according to mainstream medical thinking about narcissism, they can't be blamed for creating a monster.

The clinical view is that narcissists are formed by age 4, influenced by factors including childhood abuse and a lack of boundaries. Those afflicted start off life as hurt toddlers and don't progress from the me-centrism of early childhood.

I don't know enough about Versalko's childhood to know if he fitted this picture. But the hard-nosed comments of his family - seeing themselves as victims - certainly did not make me wish I were part of their clan.

There may be little sympathy for the view that fraudsters rip off people because they didn't get cuddled enough as kids - but when it comes to narcissists, it could well be true.