John Whitehead, the Wall Street banker who led Goldman, Sachs & Co.’s first forays overseas in the 1970s and 1980s and later oversaw the redevelopment of Lower Manhattan after the Sept. 11 terrorist attacks, has died. He was 92.
He died Saturday at his home in New York, according to a person close to his family.
In 37 years at Goldman Sachs, eight of them as co-head, Whitehead developed a sales team to market the firm’s services, laid out a code of ethics and spearheaded international growth. From 1976 until his retirement in 1984, he ran the Manhattan-based firm, then a private partnership, with John L. Weinberg, an unusual arrangement that became known as the “two Johns.” They nurtured future leaders such as Robert Rubin, the Treasury secretary under President Bill Clinton, and Stephen Friedman, who served as director of the National Economic Council under President George W. Bush and chairman of the Federal Reserve Bank of New York.
“We grieve the loss of John Whitehead and honor his achievements and contributions in service to his country and Goldman Sachs,” Chief Executive Officer Lloyd Blankfein said in a statement. “He was a man of enormous grace and integrity and his legacy will endure in the institutions he led and in the lives of those he cared for and mentored.”
John Weinberg focused on continuing the client relationships begun by his father, Sidney, who had led Goldman Sachs for 39 years, and directed the firm’s earliest expansions into Europe and Asia.
In the 1960s, as competitors such as Morgan Stanley and Merrill Lynch, Pierce, Fenner & Smith Inc. opened offices in Europe, Goldman’s international presence consisted of an office in Toronto, Whitehead wrote in his 2005 memoir.
Whitehead said he realized the firm needed to start expanding abroad after it was forced to turn down an assignment advising General Foods Corp. on an offer to buy a French food company because Goldman Sachs didn’t have offices in France. He oversaw office openings in London, then Tokyo.
The London office lost money for its first several years, and Whitehead, who was named to Goldman Sachs’s management committee in the early 1970s, said he had to persuade fellow members not to close it down.
“We were behind all the other major firms in international expansion because we were doing so well domestically that people said, ‘Why spend our good money to get into countries we didn’t know anything about?’” Whitehead said in a 2006 interview. “But we realized that if we didn’t internationalize we wouldn’t keep our domestic clients, because they were all internationalizing.”
Whitehead also pushed the firm to become aggressive in seeking out new business in the U.S., proposing a sales department within the investment banking division, a radical departure from what Wall Street firms did at that time.
Within a few years, every one of the 4,000 U.S. corporations with at least $1 million in earnings had an assigned Goldman Sachs investment banker contacting them to seek their business. According to a 1971 article in the New York Times, Whitehead used a computerized list to keep track of these new-business development efforts.
“The unusual aspect of his department is the application of modern marketing techniques to get corporate investment banking clients,” the Times said.
Determined not to let rapid growth transform Goldman Sachs’s culture, Whitehead compiled a 12-point list of the firm’s business principles, later expanded to 14 and featured on the firm’s website. They include, “Our clients’ interests always come first,” and “Our assets are our people, capital and reputation.”
Whitehead rarely commented publicly about Goldman Sachs in his later years. He made an exception in 2010, after the firm agreed to pay $550 million to settle a lawsuit brought by the U.S. Securities and Exchange Commission alleging it had misled investors in collateralized debt obligations linked to subprime mortgages.
“There is a lot of work ahead for the management to recover its reputation,” Whitehead told the Wall Street Journal. He said the SEC lawsuit, which targeted the firm’s trading side, showed a need to pay more attention to “the investment-banking business of raising money for firms and advising private-sector companies.”
John Cunningham Whitehead was born on April 2, 1922, in Evanston, Illinois, where his father, Eugene, was training to be a telephone lineman for Western Electric. Whitehead and his younger sister, Margaret, grew up in Montclair, New Jersey, where Whitehead raced pigeons with his friends and became a committed Boy Scout.
He graduated Haverford College in Pennsylvania in 1943 before joining the U.S. Navy, where he participated in the invasions of Normandy, Iwo Jima and Okinawa during World War II.
Whitehead joined Goldman Sachs in 1947, after receiving a master’s degree in business administration from Harvard Business School. His desk was in a former squash court that had been converted into office space for the investment-banking division.
At Goldman Sachs, Whitehead became a trusted lieutenant to Sidney Weinberg, the legendary senior partner who had helped rescue the firm after the 1929 stock-market crash and whose descendants still hold top positions at the firm.
As Sidney Weinberg got older, Whitehead recognized the firm was too reliant on the chairman’s contacts and needed a system to win future business. That was the inspiration for creating the sales force to call on clients around the country, which today is Goldman Sachs’s Investment Banking division.
The unit allowed Goldman Sachs’s bankers to become specialists in areas such as mergers and acquisitions before their competitors, giving the firm a lead that it rarely relinquished, according to Lisa Endlich’s 2000 book, “Goldman Sachs: The Culture of Success.”
When Weinberg’s son, John, joined the firm in 1950, he was seated directly across from Whitehead in the former squash court. The two became close collaborators as their careers moved in parallel: Both became partners in 1956 on their way to becoming members of Goldman’s management committee.
When Sidney Weinberg’s successor, Gus Levy, died in 1976, the two Johns took over as co-chairmen and co-senior partners.
In his memoir, Whitehead said he initially proposed taking over as chairman, with Weinberg as vice chairman, an idea Weinberg rejected. Instead, they agreed on the “entirely novel solution” of a two-person chairmanship as being best for the firm. “No one wanted to see the two of us fight it out,” he wrote.
Over the subsequent eight years, Whitehead said, the two men had no significant disagreements.
“All of our decisions were joint decisions,” Whitehead said in an interview after Weinberg’s death in 2006. “We talked to each other once a day or by phone at night if we didn’t talk during the day. We each kept a little card in our pocket to note down things we needed to tell each other.”
Endlich wrote in her book: “Their strengths meshed perfectly. Whitehead was the planner, the man who focused on the firm’s long-term direction, shaping its business, some of its major clients and its budget. Weinberg focused on the clients and on drumming up new business. The pairing was a complete success.”
One highlight of their joint tenure was the acquisition in 1981 of the commodities trading firm J. Aron & Co., which became a division of Goldman Sachs. Blankfein, who joined J. Aron in 1982, became the bank’s CEO in 2006.
Whitehead left Goldman in 1984 to become deputy secretary of state under President Ronald Reagan, recruited to the post by the then-Secretary of State George Shultz. Whitehead focused on relations with Eastern Europe at a time when the U.S. was negotiating arms-control agreements with Soviet leader Mikhail Gorbachev, who was implementing his policy of perestroika.
Weinberg, meantime, remained as Goldman Sachs’s sole senior partner and chairman until 1990, and senior chairman until 1999.
When Reagan’s term ended in 1989, Whitehead re-entered the private sector as chairman of AEA Investors LLC and took on a variety of roles, including chairman of the Federal Reserve Bank of New York.
He thought Goldman Sachs should remain a private partnership and opposed the firm’s decision to sell shares in an initial public offering, which took place in 1999. He later said he thought the sale was a success because it provided the capital necessary to grow and remain competitive. The firm changed its name to Goldman Sachs Group Inc. with its IPO.
Following the Sept. 11, 2001 attacks by al-Qaeda terrorists that destroyed the World Trade Center, Whitehead became chairman of the Lower Manhattan Development Corporation and the World Trade Center Memorial Foundation.
As point man until 2006 for Lower Manhattan’s recovery, Whitehead helped guide rebuilding at Ground Zero, waging a rocky effort to include a memorial and museum at the site. He also oversaw efforts to lure companies, residents and cultural institutions back downtown.
“The new Lower Manhattan will not operate just at the hours of the Stock Exchange, but around the clock, seven days a week,” he wrote. “It will be thriving and vibrant, just like the rest of this city I love.”
Joe Daniels, CEO of the National September 11 Memorial & Museum, said in a statement: “In the wake of 9/11, amidst devastation and loss, our great city and nation needed a true leader to help guide the recovery and revitalization of lower Manhattan. We were blessed to have John take on that charge.”
Whitehead was married four times, most recently to Cynthia Matthews, whom he married in 2007. He had two daughters and a son from his first two marriages.
(An earlier version of this story corrected the spelling of Matthews in the last paragraph.)