(FORTUNE Magazine) – There are mistakes, of course, and then there are mistakes. Boners. Wowsers. Plain dumb moves. Like babies, the worst mistakes look innocent at birth -- lustrous, even, with the promise of success. Some reveal themselves right off, from their first uncoordinated gesture. Others take longer to mature. A big, husky goof -- one worthy of the name -- shouldn't need more than a year. So it is with those that follow, the biggest business blunders of the past 12 months, ranked in descending order of egregiousness. Boldness launched some, timidity others, fraud at least one. A few had their fuses lit in 1990, but all exploded in 1991, filling the heavens with a cautionary glow.

1 SALOMON BROTHERS' LITTLE JOKE What -- he couldn't pick up the phone? That was the question on many an outraged Wall Streeter's lips when it was revealed in August that Salomon CEO John Gutfreund had sat silent for four months, his whistle-blowing organs impaired, after being told his traders had made improper bids on Treasury securities, one as part of an in-house ''practical joke'' (as the company later called it). Regulators failed to see the rollicking good fun and launched painful probes. Prestigious clients, including the World Bank and several state pension funds, shunned the firm, at least temporarily. Solly stock rapidly fell 40%. Gutfreund paid for his silence, losing his job, reputation, and limo, in which interim chairman Warren Buffett was later seen to tool. Verily, it will have been easier for Gutfreund and wife Susan to have winched a 22-foot Christmas tree through the eye of their co-op than it will be for him, now, to stay out of court.

2 AT&T WANTS YOU BACK (SAFELY ON THE GROUND, GOD WILLING) AT&T discovered that the road to hell -- by way of the FCC chairman's anteroom -- was paved with good intentions. Wishing to be a responsible corporate citizen, the company had agreed with New York City's Consolidated Edison that whenever demand strained the utility's grid, AT&T would unplug some of its facilities, drawing power from internal generators. That's what happened on the morning of September 17. Con Ed asked, and AT&T threw a switch, putting its station at 33 Thomas Street in lower Manhattan on its own. The generators kicked in. A power surge kicked out vital rectifiers -- vital because they supported not just phone calls but also a communications system linking air traffic controllers at LaGuardia, Kennedy, and Newark airports to aircraft ready to land or take off. Backup batteries kept this system functioning, temporarily.

For six long hours alarm bells rang inside 33 Thomas Street. No one heard them. Lights flashed. No one saw them. The personnel who would have were away at a seminar on how to handle emergencies. Those batteries began to tucker. Finally, around 4:30 P.M., an AT&T serviceman saw the problem. But the system had begun to die. The Federal Communications Commission smelled trouble when it had problems placing calls to New York City. As communications between flight controllers and pilots faltered, traffic at all three airports came to a standstill. About 100 planes sat idle on the runways for four hours. Across the nation, 1,174 flights carrying 85,000 passengers had to be canceled or delayed. Some 4.5 million domestic calls and 470,000 international ones didn't get through. In a scathing report, the FCC later laid much blame on AT&T's ''inadequate management.'' Asked if the commission planned to fine AT&T, a spokesman said no: The company had harmed itself enough. For the moment, its claim to being the Right Choice had sunk, in credibility, to the level of Cliff Robertson's hairline.

3 PRESIDENTIAL SPONTANEITY ^ If, as John Sununu maintains, President Bush's November comment about credit card rates being too high was really a policy ad lib, then the President's first New Year's resolution ought to be: Don't leave home without it (a prepared text he can stick to). The President's remark was harmless, in the sense that the Titanic's nemesis was a little cake of ice. Senators took his wish as their command and rang full-ahead on the legislative engine, pushing through a (doomed) rate-cutter bill. Banks inhaled deeply. The Dow began a sickening 120-point plunge. And over at American Express, it's said, musicians standing on the afterdeck of the Optima division began softly playing ''Nearer, My God, to Thee.''

4 NO, NOT ROBERT MAXWELL When Robert Maxwell died in November, leading lights of labor, finance, and government worldwide struggled to out-eulogize one another. At Maxwell's The People, staffers seemed actually to hold out hope the boss might be coming back: ''((His)) final resting place is high on the hillside. It was from the Mount of Olives . . . that Jesus ascended into heaven after his resurrection.'' But when it was discovered that the old fraud had pledged the same collateral for different loans and stolen millions from employee pension funds, a sea change swept the mourners. They began belaboring his wraith with crowbars. The Mirror called him ''a thief and a liar.'' Son Kevin agreed that ''crook'' was fair. Maxwell's New York Daily News expanded that to ''Captain Crook.'' And a tipster from the Mirror reportedly supplied the details behind a headline that ran in London's non-Maxwell Sunday Sport: HE PAID MIDGET GIRLS (pounds)200 A TIME FOR SEX. The fervidness of this assault suggests its authors were angry at more than Maxwell: They were angry at themselves. And rightly so. For the past 20 years Maxwell was a sandwich board for chicanery. Anyone who did business with him, let alone lent him money, after an English court in 1971 found him guilty of book cooking and pronounced him unfit to run a public company, had been suspending disbelief with a derrick. To the victims belongs this goof.

5 TIME WARNER'S WRONG RIGHTS Time Warner, you may know, owns FORTUNE, so we could not help but notice the hail of ill will our parent called down upon itself in June when it unexpectedly announced an innovative equity rights offering. It envisioned what may have been the world's first reverse volume discount: The more shares subscribed, the higher the price per share. Individual investors seemed blind to the merits of this plan. So did pension funds. So did the SEC. For a while, as its stock plunged, Time Warner hoped this antipathy might spring from a lack of understanding. So the company explained the deal some more. That scotched it. Recast as a fixed-price offering, it sold out immediately, raising $2.6 billion.

6 TOO TIMID TAURUS Here, admittedly, we're going out on a limb. Ford's Taurus continues to be a highly popular car. Sales are holding up nicely at around 300,000 units annually. But for several years now Ford has been coasting on the old bull's vim. The company had planned to redesign the standard model in 1991 for the first time since it was introduced in 1985, and did -- but put off a stem-to- stern redesign until 1995 and instead fiddled with details (to the tune of $650 million). Result: a nice car that looks a lot like the previous nice car. Reaction from automotive reviewers was a resounding ''Eh?'' Management consultant Tom Peters thinks Ford's timidity may cost it, since its competitors aren't exactly standing still. ''With the original Taurus, Ford leapfrogged the competition,'' he says. ''Here they had the chance to do it again, and they just polished the apple. Where's their big leap? Where's an Infiniti? Where's Lexus? They failed to risk a little of the baby with their bath water. And that, in my books, is the No. 1 sin.''

7 POWERMASTER Sales of ordinary beer (3.5% alcohol) have slowly been going pffffft for years now, while sales of some higher-proof beers have risen 25% to 30% annually. So the decision by G. Heileman Brewing to extend its Colt 45 malt liquor line with PowerMaster, a new high-test malt (5.9% alcohol), wasn't prima facie dumb. But malt liquor is consumed primarily by blacks. And targeting black consumers with anything less wholesome than farina has become politically risky, as R.J. Reynolds discovered in 1990 when it tried to market its Uptown cigarette to black smokers. Public outcry killed Uptown. Even McDonald's takes flak for promoting its fare (high in fat and sodium, say critics) to low- income blacks. Heileman nonetheless rushed in where a smarter company might reasonably have hesitated. As the trade journal Beverage World said later in its obituary, PowerMaster became ''a magnet of controversy from the moment it reared its alcohol- enhanced head. Federal officials, industry leaders, black activists, and media types weighed in with protests that PowerMaster . . . was an example of bad product, bad marketing, and, essentially, a bad idea.'' The only way Heileman could have hastened its demise would have been by naming it Blotto. Weeks after its planned July debut, it was just a malty memory.

8 MCDONNELL DOUGLAS: ALL OUT! You have to break a few eggs to make an omelet. And to reconfigure an airliner, maybe you have to break a few legs. That, at least, was the position McDonnell Douglas and the Federal Aviation Administration took in October after two evacuation tests of an MD-11 jetliner left 50 volunteers injured, some with broken bones. First came a morning test: The goal was to see if, in a federally prescribed 90 seconds, 410 passengers could pile out of an MD-11 originally configured to hold 381. They couldn't. This exercise left 28 people injured; 18 went to the hospital. Then, in the afternoon, McDonnell did it all over again, repeating the test with some new volunteers, including 54 oldsters recruited from local senior citizen centers (at $49 a head). The second group wasn't told what had happened to the first. This evacuation injured 22, 14 of whom went to the hospital. One injury was terrible: A 60-year-old woman came whizzing down an inflatable slide headfirst and was paralyzed from the neck down. In the storm of criticism that followed, McDonnell pointed out that the incidence of injury had been no worse than the historical norm for such tests. The company and industry groups nonetheless pledged to seek alternatives to human testing. Where's the animal rights movement when you need it?

9 PROCTER & GAMBLE'S GAMBLE Angry over leaks of what it considered proprietary information from employees to a reporter from the Wall Street Journal, Procter & Gamble (armed with a subpoena and police cooperation) set out in June to find the leaker by combing phone records of citizens around its headquarters city of Cincinnati. Eight hundred thousand of them. In a bow to municipal efficiency, the police detective put in charge of the investigation also happened to be a (part-time) P&G employee. Chairman Edwin Artzt later said of this coincidence: ''There is no impropriety here, but I am concerned about the appearance.'' If P&G was gambling that it could silence the leaker before word of these tactics leaked out, it lost. The source remains unknown. Faster than you can say Oil of Olay, the company found itself immersed in a sitz bath of opprobrium. P&G was denounced not just by privacy-loving local residents but by every beneficiary of First Amendment freedoms, with the possible exception of the Utne Reader and Grit. The Cincinnati Post said of P&G, ''After years of working to improve its reputation as a corporate bully and impenetrable fortress, this incident paints that picture all over again.'' Adweek's Marketing Week used the phrase ''determined bunglers'' to describe the company's top executives. And the Economist predicted, ''Procter & Gamble's vaunted ability to recruit top university graduates will not be helped by the knowledge that their telephone calls might be monitored by their employer.'' P&G's chairman, finally, said uncle: ''We created a problem that was larger than the one we were trying to solve,'' that is, how best to preserve and protect Crisco's and Citrus Hill's right to privacy.

10 PEBBLE BEACH: INSCRUTABLE? Buying California's most famous, most beautiful, most historic golf course -- the one where Crosby kidded Hope and knocked out ashes from his pipe against the cypress trees -- must have seemed the coup of coups to Minoru Isutani, owner of Cosmo World, a Japanese golfing conglomerate. True, the price he paid in September 1990 -- said to be somewhere between $800 million and $1 billion -- seemed high. But Isutani had a plan. He would transform Pebble Beach into a private club, with memberships (at $740,000 each) sold primarily to wealthy Japanese. Golfers of lesser means protested. Under existing rules, anybody willing to endure a waiting list and pay a $200-per-person greens fee could play the course. But if Pebble Beach went private, the best hours would be reserved for members. Enter the California Coastal Commission, all powerful in matters of coastal access: Did the new owners have a commission permit for this conversion? Er . . . no, they didn't. They didn't think they needed one. The commission ruled they did, and withheld it. In Japan the stock market crashed as Isutani was closing the deal, thinning the ranks of would-be members. Since then, varied observers have suggested, darkly, that Japan bashing was the root of Isutani's problems -- a suggestion that a Coastal Commission spokesman vehemently denies: ''If Santa had come to us with that proposal ( -- if it had been Bob Hope -- he'd have gotten the same treatment. Having to have a permit wasn't something hidden down in the fine print of the law. I mean, they've got zoning in Japan, haven't they?''