Barbie’s founder jests about IRS trouble in ‘Barbie’ film. Here’s the true story.

Barbie's founder jests about IRS trouble in 'Barbie' film. Here's the true story.

The Scandalous Story of Barbie’s Founder, Ruth Handler

In Greta Gerwig’s “Barbie” movie, the fictional Ruth Handler jokes about getting in trouble with the IRS. But the real-life experience was far from a laughing matter for the woman who invented the iconic plastic doll. Ruth Handler’s financial scandal left her desperate to hide from the public eye and feeling like she had lost everything.

From Success to Scandal

Handler, along with her husband Elliot, founded Mattel. She was the driving force behind the launch of Barbie in 1959, which quickly became a global sensation. However, in the 1970s, Handler’s life took a turn for the worse when she faced a significant financial scandal.

Ousted from Power

After undergoing a mastectomy, Handler struggled to regain control over her life and the reins of Mattel. In 1974, the company admitted to overstating revenues and income. As a result, Handler and her husband were ousted as co-chairs of Mattel’s board and eventually resigned as directors in October 1975.

Shareholder Suits and Settlement

In November 1975, Mattel, along with the Handlers and the company’s outside auditors, reached a settlement with five shareholder suits. These suits accused Mattel of issuing misleading financial statements, including overstatements of income. The settlement involved a payment of around $30 million to shareholders and the surrendering of two million Mattel shares by the Handlers.

Indictment and Charges

Ruth Handler’s financial woes continued when, in February 1978, she and three other former Mattel officers were indicted by a federal grand jury. They were charged with conspiracy, mail fraud, and making false financial statements to the Securities and Exchange Commission (SEC).

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The indictment alleged that Handler and former executive VP Seymour Rosenberg falsified internal business records to influence Mattel’s stock price and acquire other companies. They also submitted false information in a loan application to the Bank of America. Mattel was accused of creating fake documents to inflate sales figures.

The Aftermath: Shame and Humiliation

Handler later revealed that she initially considered the indictment as a mix-up, which nearly led to her being placed in a jail cell on the day of her indictment. However, the realization of the seriousness of the charges left her overwhelmed with shame and humiliation.

News articles about the scandal sent Handler spiraling downward. She started taking the freight elevator in her apartment building to avoid the stares of other residents and stopped visiting her country club. The once esteemed businesswoman was desperate to hide from the public eye.

Plea Change and Sentencing

Handler initially pleaded innocent but later changed her plea to no contest, citing a loss of zeal to fight amidst the physical and emotional pressures of endless legal meetings and her work in her prosthetic-breast company, Nearly Me. In December, she and Rosenberg were ordered to pay $57,000 in “reparations” and were sentenced to 2,500 hours of community service over a five-year probation period.

Gender Bias Allegations

Convinced that the aggressive pursuit of the US Attorney’s Office came as a result of her gender, Handler believed she had become a target because she was a successful and ambitious woman who had dared to climb to the top. In her autobiography, she expressed her belief that they wanted to make a name for themselves by bringing her down.

Conclusion

The scandal surrounding Barbie’s founder, Ruth Handler, took her from the height of success to the depths of shame and humiliation. Although her joke in the “Barbie” movie may elicit laughter, the real-life consequences left Handler wanting to hide from the public eye. However, amidst the scandal, Handler’s legacy as the creator of the iconic Barbie doll remains intact, forever shaping the toy industry and inspiring generations of children.

• Mattel
• Ruth Handler
• SEC