SEX AND DRUGS AND THE WORLD'S RICHEST MAN

Renowned for its ruthless business practices, Bill Gates's Microsoft is
embroiled in a long war against the US Justice Department, accused of using
devious means to establish the global software empire . But in a new book
the impossibly squeaky-clean embodiment of the American dream is shown to
be human after all with a taste for expensive prostitutes and cannabis.
Daniel Jeffreys reports from New York

The Amsterdam bar was full of dark corners and small groups of people
wreathed in pungent smoke. Most had eaten so many powerful marijuana cakes,
legal in these `space clubs', that they no longer knew where they were.
There was a feeling of anarchy in the air.

It was September, 1992. In one corner sat an intense American man dressed
like a poorly-paid bank clerk, squinting through thick glasses at a
beautiful blonde. The couple behaved as if they had once had a sexual
relationship which was now over.

The man looked at his female companion wistfully. He had been in this
situation many times before: falling in love with a attractive woman who
was at first drawn to his intense intelligence, only to have her leave
eventually for a man with looks more in her league. Uneasy at first, the
couple soon began drifting off to faraway places in their minds as the
drugs took effect.

No one in the bar realised they were being joined in their narcotic haze by
Bill Gates, billionaire chairman of the computer giant Microsoft, a company
that had grown to dominate many facets of our everyday lives.

He was with senior Microsoft employee Stephanie Reichel, deputy head of his
German operations, with whom he had fallen deeply in love. She had just
told Gates she was leaving him for Bill Neukom, the booming company's
in-house lawyer, who had long had a stormy relationship with the computer
mogul.

The news made Gates sick inside in part because he was depending on Neukom
to defend him against serious business malpractice charges that might
include criminal indictments, yet could not bring himself to trust the man
who was effectively his number two and knew where all the Gates skeletons
were buried.

More than that, Gates could not stand to be beaten not in love, not in
business, not in sport and his friends were beginning to fear that his
desire to win had moved from being a passionate trait to an unhealthy
fixation.

The Amsterdam scene is described in a fascinating new book about the man
who bestrides the world's most important industry. The Microsoft File The
Secret Case Against Bill Gates, by Wendy Goldman Rohm, reveals the dark
side of computing's King Midas, rated by many as one of the most
influential men of the century.

Now 43, Gates is apparently happily married to a former employee,
34-year-old Melinda, with whom he has a three-year-old daughter. But in the
early 80s, when he was trying to fry every competitor in sight by fair
means or foul, his behaviour had all the trappings of a despotic potentate.

Rohm's picture shows Gates to be a self-obsessed man who, after his love
for Reichel was repulsed, would stop at almost nothing to defeat his
business rivals, pausing from squashing the competition only to relax with
high-priced prostitutes.

In Rohm's account, Gates found his favourite hookers in Las Vegas,
headquarters of America's computer trade shows. Rohm believes Gates's use
of prostitutes is akey part of his character: he is a man who acknowledges
no boundaries in morals or business, when it comes to getting what he
wants, but who suffers from chronic insecurities about his appearance and
lack of social graces.

Although Rohm concedes that Gates built much of Microsoft's IEP70bn empire
on his own genius, she also reveals for the first time how much may have
been stolen from others, as he ruthlessly knifed competitors in the back
while pretending to be their friend or potential partner.

Gates treats business like war and sees his industry with the eyes of a
dictator, as territory to be conquered at all costs, except that in place
of deadly weapons he uses allegedly unfair business tactics, which all but
strangle any potential competitors at birth.

In the 21 years since he dropped out of Harvard, finding academic studies
``less relevant'' than starting Microsoft, William Henry Gates III has made
the computer that secondary brain which so many of us now use think exactly
like him, in the form of software he has designed to run the programs and
tasks that make desktop PCs so valuable.

Much of the way in which billions of people do their work is dictated by
what Gates believes is the best way to organise information.

It is now possible to see for the first time how this dominance was
achieved, between 1990 and 1994 with a ruthlessness that would have
appealed to Napoleon although, like Bonaparte, Gates made mistakes. These
could still conceivably land him in jail if a US Justice Department case
beginning next month can prove that Microsoft's founder lied, stole and
bugged his way to America's second largest fortune.

In 1990 there were many competing operating systems on the market and
Microsoft's dominant product, Windows, had not yet been released. IBM had
the biggest share of the personal computer industry and believed it was
working with Bill Gates to develop a new operating system, the OS/2.

Within a few months IBM's chief strategist, Jim Cannavino, heard rumours.
Gates was telling IBM he had OS/2 as his main project but was telling
customers he was concentrating on MS/DOS (Micro-soft's own operating
system) and Windows, which he told them would soon become the industry
standard.

Enormous stakes were involved. With personal computing just taking off, any
company which had the lion's share of the software market would have a
licence to turn base metal into gold. Cannavino convened a crisis meeting
with Gates and Microsoft at a Las Vegas hotel. Businessmen who were there
testified that there were two odd aspects to the event. One was Gates's use
of call girls.

No one ever observed Gates having sex with any of these prostitutes but,
according to many witnesses, the girls were often his companions, in public
and at more discreet meetings behind closed doors.

By 1992, even as Gates looked for other forms of expansion, America's
business police had homed in on Microsoft's core activities, claiming the
firm had used commercial intimidation and predatory tactics to stifle
competition.

To keep Gates focused on obliterating competition and away from anxiety
about Federal probes, Gates's senior staff began to increase the number of
beautiful and paid young women they pushed his way. Company lawyer Bill
Neukom and head of sales Steve Ballmer, Gates's closest friend, knew all
about the billionaire's yen for women and made sure he was taken care of.
At the same time Gates was conducting an affair with a low-level employee
at Microsoft.

Gates did not seem to mind that the women he was seen with were paid for.
He was getting revenge for when, seeing him as a scruffy `computer nerd',
lovely women would never give him a second look. Now he could drape them
around himself like arm candy, sweet reminders that he could have any
beautiful woman, except one.

In April, 1992, Gates spotted Stephanie Reichel, her figure and silky
blonde hair made more striking by a beautiful red suit. They were at a
computer sales meeting in Monte Carlo and Reichel was part of a classic
Gates strategy in Germany.

Her job was to make the country's top computer manufacturer Vobis switch
entirely to Microsoft as its operating system, then penalise it every time
it used a competitor's product. At their first encounter Gates couldn't
take his eyes off Reichel. He cancelled his flight back to the US for a
chance to take her to out to dinner that evening.

By August, at Microsoft's annual board meeting held in Britain at the
Cliveden estate, famous for the Profumo scandal orgies Reichel was on
Gates's arm. They had met the day before at the Sheraton Heathrow Hotel,
continuing to central London's Park Hyatt and taking in the show Miss
Saigon before having dinner at one of Michael Caine's restaurants.

Gates seemed to be in love. Reichel appeared more enamoured of the power
than the man not surprisingly, as Gates treated her rudely in business
meetings, despite having sent her a stream of e-mail love letters since
their April introduction.

He may have been distracted. The Federal investigators had discovered that
Microsoft was shipping the computer equivalent of terrorist devices in its
Windows software. If the programs were run on the company's MS-DOS
operating system, they worked fine. If run on the competing DR-DOS system,
they would frequently send up error messages, making the panicked operator
think his computer was about to crash.

As the investigators probed deeper, evidence began to emerge that Gates and
others might have destroyed documents that could prove how Microsoft had
sought to kill all companies who could remotely been seen as competitors,
using industrial espionage to steal their secrets and Micro-soft's huge
market share to sell the stolen ideas at prices the competitors could never
improve on.

The US Justice Department is continuing its investigation of Microsoft, as
Bill Gates in private dismisses its work, laughing at its recent attempts
to fine him $1m a day and saying the government should realise he makes a
million every 15 minutes. Micro-soft also denounces claims that Gates used
prostitutes as `fiction' but has made no attempt to sue Wendy Rohm or
others who have repeated the story.

Checked-by: Mike Gogulski