With the first half of 2005 in the books, the Five Dumbest Things Laboratory pauses to take a look back at the second quarter. Boiling three months' worth of company doings down to five truly Dumb Things is no easy feat. After all, this quarter we were graced with the antics of

Morgan Stanley's

(MWD)

Phil Purcell,

Merck's

(MRK) - Get Report

Ray Gilmartin and

Elan's

(ELN)

Kelly Martin, just for starters.

Fortunately, we here at the Five Dumbest research lab have been working around the clock, using our exclusive Dumb-o-Meter -- the finely calibrated, 100-point scale that weighs each item for sheer Dumbness. The result of our toil is the list below.

As always, feel free to share your responses and your own Dumb Ideas with

the lab's research staff

.

1. Serious Suds

Updated from May 27

Anheuser-Busch

(BUD) - Get Report

can't quite finger what ails it.

While the maker of Budweiser and Bud Light isn't exactly staggering, sales aren't quite hopping, either. So execs at the St. Louis-based brewery are pondering bigger questions.

President August Busch IV admitted as much at a second-quarter investor conference. Busch told Wall Street that the company is heading into the second half of the year with renewed focus on its marketing priorities.

That sounds like a good idea, but we have to admit we were a little surprised to learn what the priorities actually were.

"First, while beer is America's favorite beverage with 58% of overall alcohol servings, we must continue to improve the image and desirability of beer," Busch said. "Second, we must keep beer fun and social. Third, we must grow beer occasions and, fourth, we must continue to improve our retail execution."

That last priority, retail execution, we get. That's where people come into the store and you try to make sure they leave with a case or two of

Budweiser Select or

B-to-the-E, whatever that is.

But improving beer's image? Keeping it "fun and social"? Trying to "grow beer occasions"?

Beery-Eyed
Woke up this mornin', got myself a B to E...

Sounds like it might be time to cut someone off.

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Dumb-o-Meter score: 93. Fortunately, Berkshire Hathaway (BRKA) chief Warren Buffett had already made his decision to buy Anheuser stock before Busch's goofy speech.

2. Googling Eliot

Updated from April 8

We'll admit that the twists and turns in the AIG case have left us befuddled at times.

Reinsurance treaties. Offshore affiliates. Cross-ownership arrangements. Who can keep it all straight?

It's tough. In fact, judging by an advertising mishap last quarter, even Eliot Spitzer's office has had its problems.

Of course, Spitzer is New York state's crusading attorney general. He and other authorities have been investigating AIG's business and accounting practices for some time. Spitzer is also running for New York state governor next year.

But in April, it seemed like someone in Spitzer's campaign office got his signals crossed, and confused Eliot the state prosecutor with Eliot the political candidate.

One day,

Google

(GOOG) - Get Report

users who typed AIG into the search engine were treated to a sponsored ad reading "Spitzer for NY Governor" and directing them to

www.spitzer2006.com.

Now, everyone understands that the attorney general has political aspirations. But isn't it a little overboard to take out an ad capitalizing on a sensitive investigation?

To its credit, Spitzer's office admits it has egg on its face. Spokesman Darren Dopp says the ad, which ran on Google only one day, "wasn't appropriate." He emphasizes that a low-level campaign staffer made a mistake in adding AIG to some campaign advertising keywords. Dopp says Spitzer himself immediately insisted the ad be removed.

The attorney general's office learned of the ad after a reporter called for comment, Dopp notes.

"Mr. Spitzer was like, huh?" Dopp says.

After spending hours stumbling over the details of AIG's dealings with outfits like Union Excess, we couldn't have said it better.

Eliot Net
Crime-busting AG's AIG online campaign ad

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Dumb-o-Meter score: 90. If you didn't know any better you'd think someone in the prosecutor's office was playing politics!

3. Advise and Consent

Updated from May 6.

You know the worst thing about this accounting mess at

AIG

(AIG) - Get Report

? It's making Hank Greenberg feel like he's being ignored.

New York-based AIG last quarter

restated earnings to the tune of $2.7 billion. The company said it had found deals that took place solely to boost earnings, and fingered a financial setup that let top execs flout internal controls. The problems occurred during Greenberg's nearly 40-year reign as the insurer's iron-fisted CEO.

The announcement came as new CEO Martin Sullivan works with regulators to iron out the kinks in AIG's books. "We now know that there were serious issues with our internal controls, and that it is necessary for us to address those issues and strengthen our controls," Sullivan said.

Greenberg, of course, left AIG in March after investigators started probing his role in a questionable reinsurance deal with General Re. He refused to answer regulators' questions, complaining that the government failed to share documents with his lawyers. AIG's former financial chief, Howard Smith, was fired as well after he also declined to answer questions.

But in May, Greenberg renewed his protest against the "vile accusations" being made. He added that he and Smith really are in a sharing mood -- if only someone would ask.

"AIG's announcement that it is issuing a restatement of its financial statements was made without consulting former management or providing an opportunity for them or their counsel to provide relevant input," Greenberg bridled in a Thursday letter to AIG's board.

"How a conclusion can be reached that unsupported 'top level' adjustments allegedly were made, without soliciting information on this subject from the prior chief financial officer or his counsel, is beyond my comprehension," he wrote.

Maybe someday Hank will comprehend that no one at AIG needs his permission anymore.

Hey, Are You Listening?
Greenberg says he's ready to share

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Dumb-o-Meter score: 88. Even rich guys can protest too much.

4. Terms of Endearment

Updated from June 24

The sober-minded fellows who run

Cablevision

(CVC)

have had it up to here with the demanding Wall Street types.

The Dolan family that controls the Long Island-based company announced plans last quarter to spin off Cablevision's sports holdings and

take the cable operations private. The move will shield the company and its tender-hearted executives from the klieg lights wielded by impatient stockholders.

"We strongly believe that a long-term, entrepreneurial management perspective -- not constrained by the public markets' tendency to focus on short-term results -- will better enable the cable company to meet its competitive challenges," Chairman Charles Dolan and his son CEO James Dolan said in a mid-June press release.

That's swell, guys. One problem: It's hard to recall when the Dolans have

ever

shown any regard for what investors think.

Impatient stockholders didn't keep Cablevision from showering hundreds of millions of dollars on a

money-losing high-definition satellite TV operation called Voom years after

EchoStar

(DISH) - Get Report

and

DirecTV

(DTV)

had more or less cornered that market. Nor did they keep Charles Dolan from firing some impudent directors who finally moved to shut Voom down, or from

replacing them with his buddies.

For that matter, the gnats on Wall Street didn't keep the Dolans from pursuing a high-pitched public relations campaign against a Manhattan football stadium. And we don't recall the money-grubbing hordes keeping Cablevision from

throwing fistfuls of dollars at over-the-hill talent at basketball's Knicks and hockey's Rangers.

No, the sky should be the limit once those downtrodden Dolans finally slip the surly bonds of Wall Street.

On the Dolans
Cablevision hides from Wall Street's glare

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Dumb-o-Meter score: 78. Something may be constraining these guys, but it's not the public markets.

5. Whistle Stop

Updated from April 15

When it comes to the song and dance that is corporate public relations,

Wal-Mart

(WMT) - Get Report

still has two left feet.

Take the flap over former exec Tom Coughlin. The well-compensated vice chairman left the board in March after Wal-Mart said he padded his expense account by hundreds of thousands of dollars.

Coughlin's lawyers claim he sought reimbursement for work on the company's secret antiunion campaign. Wal-Mart says that's not true and strenuously denies it has illegally hindered union organizing drives.

In April,

The Wall Street Journal

ran a story that seemed to confirm the company's account. The paper said that it had reviewed documents detailing how Coughlin, who made more than $6 million last year, had goodies such as alligator boots and steel dog pens paid for with checks from Wal-Mart. In those cases, Coughlin had underlings submit false invoices, the

Journal

reported.

Wal-Mart used the episode to stress its ethical standards. "If someone asks you to do something that you know is wrong -- whether that is a buddy or a supervisor or Lee Scott -- you must have the courage to say, 'No,'" CEO Lee Scott said in a companywide broadcast, the

Journal

reported. "We all have to do this, no matter our role or position within the company."

With Wal-Mart going to great lengths to show that it cares about workers and communities and ethics, you'd think Coughlin's demise would make an in-house celebrity of Jared Bowen. He's the 31-year-old Wal-Mart vice president who flagged his superiors on Coughlin's alleged misdeeds.

After all, it's not everyone who has the guts to blow the whistle on his powerful boss.

But as usual with Wal-Mart, you'd be wrong. Bowen, who didn't return a call seeking comment, was fired the day after Scott's companywide speech.

Wal-Mart declines to comment on personnel matters, but the

Journal

reports that Wal-Mart told Bowen it had "a general lack of confidence" in him.

You can kind of see why some people feel the same way about Wal-Mart.

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Dumb-o-Meter score: 75. Wal-Mart has since rescinded Coughlin's $12 million retirement package. With any luck the company won't funnel that money into another classy political advertising campaign.

Got your own idea for the dumbest thing of the quarter?

Let us know.

We'll share the best submissions.

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