Lazard’s Rohatyn, ‘Shocked’ by Lehman, Blasts ‘Rampant Greed’
He was “shocked,” he says -- shocked! -- when he picked up the New York Times on Sept. 15, 2008, and saw the banner headline, “Lehman Files for Bankruptcy.”
“I sat in stunned silence at the breakfast table, unable to do much more than look out my apartment windows and gaze at the wide, leafy canopy of Central Park’s trees stretching into the distance,” he writes in “Dealings,” a charming yet slippery memoir of his life in finance and politics.
Shocked? Rohatyn, 82, was then acting as a consultant for Lehman Brothers Holdings Inc. He himself had battled to avert a Wall Street meltdown in the 1970s, a struggle that presaged that of Henry M. Paulson Jr. and Ben S. Bernanke.
No one should have been less stunned than Rohatyn, the deal wizard who negotiated some of the biggest acquisitions in history; helped Harold Geneen stitch together the conglomerate International Telephone & Telegraph Corp.; and steered New York City away from bankruptcy. Yet that’s how he presents himself throughout this book -- as naive, overly idealistic and caught in the maws of fate.
“I was a pinstriped lamb being led to the slaughter,” he says of his appearance in 1972 Senate hearings on whether the Nixon administration had dropped an antitrust investigation of ITT in exchange for a $400,000 donation to the Republican National Committee.
‘Felix the Fixer’
Rohatyn had met Deputy Attorney General Richard Kleindienst to try to head off the probe. A Washington Post columnist dubbed him “Felix the Fixer.” Still smarting all these years later, Rohatyn cites Watergate tapes that show how Richard Nixon ordered Kleindienst to back off the day before Rohatyn’s appointment.
“I had been window dressing,” he says.
Rohatyn attributes much of his success in life to luck. When he was 12, his family slipped through a German checkpoint outside Marseilles -- and on to freedom -- because a soldier was too busy lighting a cigarette to stop them. After a poor showing in physics at Middlebury College in Vermont, he wound up tutoring chanteuse Edith Piaf in English. Out of work in 1949, his stepfather offered to help by approaching an acquaintance, Andre Meyer, the senior partner at Lazard.
“I had no idea what an investment bank did,” he says. “But I did need a paycheck.”
Behind the Scenes
Throughout this account, Rohatyn exudes boyish enthusiasm and offers peeks behind the scenes: We see Meyer surrounded in his apartment at the Carlyle Hotel with paintings by Gauguin, Picasso and Renoir, for example. And Jack Welch of General Electric Co. exploring a merger with RCA Corp. boss Thornton Bradshaw in Rohatyn’s library one cold November evening in 1985. When Bradshaw rose from his armchair, his tuxedo was covered with white hair from a family cat, Figaro.
Writing in brisk declarative sentences, Rohatyn draws lessons from his life and deplores what has happened to capitalism. This is, as he puts it, the story of a man who became an investment banker in a simpler era and now laments how “rampant greed” has undermined the purpose of Wall Street --to funnel money from investors to productive companies.
He seems blind, though, to the role he himself played in this transformation. He pooh-poohs the conglomerate craze of the “go-go” 1960s, yet he himself was flying around the country as a corporate matchmaker. He expresses distaste for hostile takeovers, yet he initiated an early one: ITT’s bid for Hartford Fire Insurance Co. in 1968. And then there’s the role he played in the bailout of Lockheed Aircraft Corp., which became a blueprint for future government rescues.
Those seeking glimpses of Rohatyn’s romantic life will be disappointed. Ever the diplomat -- he served as U.S. ambassador to France from 1997 to 2000 -- Rohatyn draws a veil around his personal life, making only passing references for example to his first wife and children. For a less sanitized account, try William D. Cohan’s Lazard history, “The Last Tycoons.”
Still, one can only admire Rohatyn’s tenacious work in pulling New York City back from the brink in the 1970s. His account brings the Big Apple’s self-inflicted mess to life, from the roughly $6 billion in short-term debt and striking sanitation workers -- “Welcome to Stink City,” read the signs -- to President Gerald Ford’s opposition to a federal bailout.
“Ford to City: Drop Dead,” screamed the Daily News headline.
In joining the rescue, Rohatyn says he hoped to expunge the stain of the ITT affair -- to “restore my own wrongly tarnished reputation.” Felix the Fixer became Mr. Fix-It.
“Dealings: A Political and Financial Life” is from Simon & Schuster (292 pages, $27). To buy this book in North America, click here.
(James Pressley writes for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)
To contact the editor responsible for this story: Mark Beech at email@example.com.