Historians tell us that "history repeats itself." What they don't tell us is how quickly it repeats, or how precisely.

Remember Dennis Kozlowski? He of "whizzing Cristal" fame? The ex-CEO was sentenced to eight to 25 years in prison for his part in pillaging the Tyco (NYSE:TYC) industrial conglomerate for $600 million worth of salaries, bonuses and perks earlier this year (in conjunction with ex-CFO Mark Swartz). But what made the man truly infamous was not the looting, but his profligate spending of the loot on a $2.1 million birthday party for his wife on the island of Sardinia.

In a column I penned on the subject last June, I opined that Kozlowski would be "a hard act to follow." As it turns out, it hasn't been that hard at all.

Kozlowski lives
Last week, we learned that another infamous CEO, body-armor manufacturer DHB Industries' (AMEX:DHB) David H. Brooks, made headlines for actions that seem borrowed nearly line-for-line from the Dennis Kozlowski playbook.

For well over a year now, we've tracked the fortunes of Mr. Brooks' company. DHB was a Watch List stock of our Motley Fool Hidden Gems newsletter, and an (ill-advised) recommendation of our crystal ball-gazing Stocks 2004.

What's gotten our attention, mostly, has been Brooks' pattern of apparent self-enrichment at the expense of his firm's outside investors. For example, at the tail end of 2004, as DHB's stock was flying high on news of strong body armor sales to the U.S. military in Iraq, Brooks reported to the SEC that he had sold off $186 million worth of stock. DHB's board of directors subsequently issued him warrants to buy 5 million more shares at $1 per stub.

Investors naturally wondered why DHB's CEO was selling off so many shares. Was the company poised for a fall, or did Brooks just need to raise some cash? As it turns out, the answer could be "yes" to both questions. First, the company started changing audit firms faster than some people change their socks. DHB lost its fifth auditor, Grant Thornton, when that firm resigned in 2003. Its replacement auditor followed suit in April of this year. Soon after, the firm's stock price collapsed on the news that a synthetic fiber used in DHB's "bulletproof" vests was defective, and that the firm would need to take up to a $60 million charge to replace vests already sold.

In addition, it seems Brooks did need the cash. His daughter's bat mitzvah party was looming.

50 cents, and a little more
Here's where the story gets good. (Or sordid. Or both, depending on your perspective.) Last weekend, Brooks threw a monster coming-of-age party for his daughter (name suppressed to protect the innocent) at New York's Rainbow Room, the self-described pinnacle of "New York style, glamour and sophistication."

The guest list reportedly included 150 of Brooks' closest friends and business associates, and another 150 friends of the young debutante. Nothing too over-the-top there. Yet Brooks somehow managed to spend a total of $10 million on the fiesta, which works out to an average of $33,000 per head. At that rate, this party easily topped the per capita cost of Kozlowski's wife's birthday bash. ($2.1 million divided by 75 guests equals $28,000 per head. Imagine the chewing-out Kozlowski will receive from the missus when he returns from the Big House. "That little Brooks girl got $33,000 per, and all I got was a measly.")

As for how Brooks spent all this loot, part went to purchase gift bags for the guests, stuffed with digital cameras and the trendy gift du jour: Apple (NASDAQ:AAPL) iPods. But the bulk of the cost went to hire the entertainment, which ranged from the formerly famous (Don Henley, Stevie Nicks, and Kenny G), to the newly famous (50 Cent and Ciara), to the still pretty well known (Aerosmith and Tom Petty).

Is the party over?
As with Kozlowski, it's not the apparent stock profiteering that gets the press in the Brooks debacle. True, Brooks is being investigated by the SEC, but that doesn't make for nearly as compelling a headline as something like "War Profiteer Throws $10 Million Bat Mitzvah."

As a result, although throwing a bodacious party is not an indictable offense, DHB investors can still hope that its publicity will pressure the SEC to develop an actual prosecution out of its investigation. Even failing that, the bad press garnered from Brooks' profligate spending of his capital gains could finally convince DHB's board to develop a spine and boot Brooks from the CEO chair.

Either result, one suspects, would give DHB's stock a boost, and provide some recompense to investors who -- like us -- mistakenly lent their trust to this CEO.

Morality tale
Which brings us to the moral of this story: Management matters. We recommended DHB in Stocks 2004 back in December of 2003, before the full extent of Brooks' cupidity was apparent. At the time, with the Middle East conflict set to continue for years, DHB seemed perfectly positioned to "do well by doing good" -- producing armor for our troops and profits for its shareholders.

But as we've seen since, a bad manager can transform even a great business into a lousy investment. To date, DHB has been the absolute worst performer among all stocks on our Watch List -- down 76% over the past year. At the same time, we've seen how ethical managers can turn seemingly mediocre businesses into stellar performers. RV parts supplier Drew Industries (NYSE:DW) and oven maker Middleby (NASDAQ:MIDD), for example, have generated returns of 55% and 338%, respectively, since earning official recommendations from Motley Fool Hidden Gems, helping our portfolio rise 30% since its inception vs. the S&P's 12%.

If you want to see what makes these two companies better investments than DHB turned out to be, take a 30-day free trial to Motley Fool Hidden Gems, and read their write-ups for free.

Fool contributor Rich Smith does not own shares of any company named above. The Fool's disclosure policy may never make the New York Timessociety pages, but it's worth reading nonetheless.