Rogers Shuns Goldman Glare to Gain Power While Outlasting Corzine, Paulson
John F. W. Rogers is known on Wall Street for four initials and an enviable fact of corporate geography. The F. and W. stand for Francis and William, though why Rogers uses them both is one of several mysteries he has either gone out of his way to cultivate or never seen fit to explain.
“Why does he have that extra initial that everybody else doesn’t have?” asks Lloyd C. Blankfein, the chairman and chief executive officer of Goldman Sachs Group Inc. (GS)
If Blankfein truly wanted to find out, he could walk three feet and ask. Rogers’s office in Goldman Sachs’s lush, $2.4 billion downtown Manhattan headquarters is right next to Blankfein’s and a few steps away from that of Goldman Sachs President Gary D. Cohn, Bloomberg Businessweek reports in its Sept. 5 edition. Prior to Blankfein and Cohn’s arrival at the top of the Goldman Sachs food chain, Rogers sat next to Hank Paulson, the previous CEO (1999-2006) whose appointment as U.S. Treasury Secretary Rogers helped grease. Prior to Paulson, Rogers sat next to Goldman Sachs CEO Jon Corzine (1994-99).
“He is an extraordinarily loyal person,” says former Goldman Sachs colleague Jud Sommer, who is now the senior adviser to government affairs at UnitedHealth Group Inc. “But that is a pretty extraordinary segue for any human being in any setting, anywhere, at a professional level.”
Beyond Rogers’s ability to adapt, the inference is that Goldman Sachs is not made up of ordinary human beings in an ordinary setting or profession. It’s made up of incredibly competitive people in one of the world’s most cutthroat businesses.
Not a Dealmaker
The average partner serves just eight years. Unlike Blankfein, Cohn, Paulson, Corzine, and dozens more at Goldman Sachs whom he has served and outlasted, Rogers is not a dealmaker or trader. He has no revenue-generating responsibilities and strives to have virtually no public profile.
Yet many of those who follow Goldman Sachs’s Kremlinology describe Rogers, 55, as the single most powerful person at the firm over the past decade. One Goldman Sachs partner, who asked not to be named because he fears damaging his relationship with Rogers, describes him as Colossus bestriding the globe.
In April 2011, Blankfein promoted Rogers to be one of 11 “executive officers” at Goldman Sachs, a title without much substance other than that it forced Rogers for the first time to share in the pain of public disclosure. (He has Goldman Sachs stock worth around $30 million and options worth several millions more.)
The press-shy Rogers’s work portfolio includes responsibility for press and public relations and the firm’s government affairs office in Washington. He also oversees Goldman Sachs’s considerable philanthropic efforts, which the firm has not been shy about using to try to counter the barrage of criticism levied against it in the wake of the financial crisis.
“He’s a major fixing agent" in a "chemical sense,” explains Lucas van Praag, a former British naval officer and current Goldman Sachs partner who heads press relations and reports to Rogers. “He makes sure that the DNA Goldman knows and loves stays in place.”
When he’s not globe-trotting with Blankfein, Rogers commutes every week between Washington, where he owns an $8.4 million home on Embassy Row, and New York, where he stays in a suite at the Ritz-Carlton Hotel on Central Park South. His wife, Deborah Lehr, a former senior negotiator on China trade policy in the Clinton Administration, lives in Washington with the couple’s two young children.
Rogers is of average height, doughy, and a year or two away from needing a full comb-over of his flaxen hair. He can be charming and witty, but seldom conspicuously so. His passing resemblance to the late Sir Alec Guinness in the actor’s portrayal of John le Carre’s ueber-spy, George Smiley, is widely remarked upon within Goldman Sachs.
Others find a more modern, less sinister analog: Michael Clayton, the George Clooney character who called himself a corporate “janitor.” (Full disclosure: Without Rogers’s approval in 2010, it is unlikely I would have been permitted access to Goldman Sachs’s current and former senior executives for my book about the firm.) Rogers is unfailingly described by friends and foes as a master tactician with a long record of behind-the-scenes accomplishments, yet his indispensability stems in large part from how little he cares about being recognized for those accomplishments.
In this regard, Rogers appears to have internalized an aphorism that his hero and former boss, Ronald Reagan, had on a small plaque in the Oval Office: “There is no limit to what a man can do or where he can go if he does not mind who gets the credit.”
Rogers serves on the board of the Ronald Reagan Centennial Commission and is treasurer of the Ronald Reagan Presidential Foundation and Library. He also helped organize Reagan’s state funeral and gave $250,000 to help underwrite the cost of the Reagan statue that stands in the rotunda of the U.S. Capitol.
Within Goldman Sachs, though, he rarely discusses politics, his personal life, or what he did before arriving at the firm in 1994. A Goldman Sachs partner, who asked not to be named because he was not authorized to speak about Rogers’s motivations, says invisibility is part of a master plan in which Rogers hopes to achieve absolute deniability.
Separate CEO, Chairman
This deniability is not always used for benign purposes. After Paulson announced his departure from Goldman Sachs in June 2006, Rogers, according to a former senior executive close to him, led a brief push to prevent Blankfein, Paulson’s chosen successor, from filling Paulson’s roles as both CEO and chairman of the board.
A Bloomberg News report at the time noted that “some board members” considered “naming a separate chairman” such as Stephen Friedman, the former senior partner at Goldman Sachs who had been an merger-and-acquisitions guy, to complement Blankfein’s sales and trading background. The same former executive says Rogers is so good that Blankfein didn’t even know that Rogers was behind it. Blankfein concedes as much.
“It wouldn’t have occurred to me that John would’ve initiated that,” he says. “But I’m not in a position to deny it. I just don’t know.”
Van Praag, the Goldman Sachs spokesman, says Rogers was not the person who suggested splitting the roles and that “John flatly denies having suggested the idea to anyone.”
Given his preference for invisibility, it’s no surprise that Rogers declined multiple requests to be interviewed for this story.
Many of the dozen or so friends and colleagues who did agree to be interviewed pointed out that Rogers’s absence from a profile about himself is typical. Several noted that their inability to speak on the record for fear of reprisal is a perfect example of how Rogers doesn’t need recognition to be powerful. One former Goldman Sachs colleague, after conceding that he’s afraid of Rogers, added that Rogers has an old-school sense of omerta. If wronged, his vengeance can kill careers.
When David Gergen arrived at the White House in 1975 as director of communications to President Gerald R. Ford, he found his Old Executive Office Building office empty. A bureaucrat told him he could speak with the General Services Administration and wait two months to get a chair or he could call John Rogers.
Rogers was then an 18-year-old student at George Washington University with an internship in the White House’s speechwriting and research office. Gergen called Rogers, and the next day he had a desk, a couch, a TV and some artwork. Gergen was so impressed that he asked Rogers to be his research assistant while Rogers remained in college. “He became a legend within the White House,” says Gergen, who claims credit for discovering “the phenomenon of John Rogers.”
It’s now almost impossible to imagine Rogers outside of Wall Street or the Beltway, but he was not born to power. He was raised in Seneca Falls, New York, near the Finger Lakes, where his father owned a wholesale frozen foods business and his mother was a dental hygienist. Throughout high school, Rogers worked in the family business as a salesman. But his passion was politics, as it’s played inside the Beltway. Thanks in part to a scholarship from his high school, Rogers attended George Washington. After meeting Gergen, his career path was set.
Gergen, then exclusively a Republican, returned to the White House as director of communications and an assistant to President Reagan in 1980. Rogers followed, and at age 24 he was handed responsibility for the administrative management of the White House. In June 1983, at 27, Rogers became the youngest person ever to be named an assistant to the president.
A New York Times profile that year described Rogers as the White House’s “Perq Meister” and “an affable man of boundless self-confidence” who “thrives in the shark-infested waters of White House politics.”
To Rogers fell the tasks of deciding who got to use the White House tennis court, who received parking spaces in the lot on West Executive Drive, and who got television sets in their offices. An unnamed colleague explained to the Times that Rogers was “in love with this place and knows how to make the little things work. He can talk to the telephone operators, the guy at the Xerox machine, and the Big Four” -- the president’s top aides.
“He had the tough job in the White House of dealing with all of the things that determine status,” says James A. Baker III, who was then Reagan’s chief of staff and took Rogers with him to Treasury in 1984. “Nothing is fought over more vigorously in the White House than office location, parking spaces, titles, and things like that, and John was just an extraordinarily fine hand for me in all of those various roles, whether it was at the White House or the Treasury or the State Department.”
By this time, Rogers had matured into an opera buff, a collector of Russian art, a ballroom dancer, a member of the Advisory Council on Historic Preservation, a member of the board of trustees of the National Building Museum, the presidential representative to the board of trustees of the U.S. Capitol Historic Society, and the director of the Committee for the 50th American Presidential Inauguration. He’s also on the board of the Smithsonian Institution and almost single-handedly pushed through restorations of the Old Executive Office Building and the historic Cash Room at the U.S. Treasury. In 1985 he was awarded the Presidential Citizens Medal, which he keeps on his desk at Goldman Sachs.
After a brief stint in the private sector with Washington commercial real estate firm Oliver Carr, Rogers served as Under Secretary of State for Management in the George H. W. Bush Administration before moving to Houston with Baker in 1992 to help establish the James A. Baker III Institute for Public Policy at Rice University.
His relationship with Baker was characteristic of Rogers’s deft touch with powerful mentors. When the Soviet Union dissolved on Baker’s watch, it was Rogers who had the idea of giving him the Soviet flag that had flown for 40 years in the State Department.
“He has what I’d call an exquisite attention to detail,” says Baker.
Rogers was trailed to Houston by allegations that someone at the State Department had rifled through Bill Clinton’s passport file before the election to determine whether he had ever contemplated renouncing his citizenship. Rogers denied authorizing any such search and told investigators he reported the incident to Lawrence Eagleburger, the acting Secretary of State.
Seeking a Job
Baker says Rogers would have been happy to stay at Rice in a senior administrative job, “but with the administration in power at that time at Rice it just didn’t work out.” (Rogers remains on the Baker Institute Advisory Board.) So the Texas political brain trust went to work to find Rogers a new group of powerful people to serve.
Robert Strauss founded the law firm of Akin Gump Strauss Hauer & Feld in 1945. Now 92, he’s been a member of the Washington elite for so long that his political activity dates to 1937, when he volunteered for fellow Texan Lyndon B. Johnson’s first congressional campaign. It was natural for Baker to call Strauss in 1994 while casting about for new positions for his favorite aide -- just as it was natural for Strauss to know exactly how to engineer a soft and remunerative landing for Rogers.
Call to Corzine
Strauss had served as a longtime political mentor to Robert Rubin, the former co-senior partner at Goldman Sachs. When Rubin left the company in January 1993 to become the senior economic adviser to President Clinton, his co-partner, Steve Friedman, took over running the firm. But in 1994, Friedman unexpectedly decided to retire. Concerned that he’d become a lame duck if he announced his decision widely, Friedman told only two people: Rubin, during a private meeting at the White House, and Goldman Sachs’s general counsel. Knowing that the firm’s leadership was about to change dramatically, Rubin recommended that Strauss call Corzine, then Goldman Sachs’s co-head of fixed income, to see about a job for Rogers.
At first blush, the pairing of Rogers and Corzine seemed odd. Rogers is a devout Republican, Corzine an avowed Democrat. Also, Rogers didn’t have the first clue about debt markets or trading.
Still, Corzine seemed like a good horse to back, and there was precedent at Goldman Sachs for top government officials joining the firm, starting in 1969, when Henry Fowler, Lyndon Johnson’s Treasury Secretary, joined Goldman Sachs as a partner. (Sidney Weinberg, the firm’s longtime senior partner, had recommended Fowler to Johnson. While at Goldman Sachs, Fowler introduced Rubin to Strauss.)
Rogers likes to tell people that he endured 28 interviews before getting hired as Corzine’s chief of staff. Perhaps, but he hardly entered Goldman Sachs through the mailroom.
The idea, in 1994, of an important partner having his own chief of staff was unprecedented not only at Goldman Sachs but anywhere on Wall Street, and Rogers struggled to define the role.
That changed on Labor Day that year, when Friedman finally made his retirement public. After a week of frantic maneuvering involving Paulson, Corzine, Friedman, and the other partners on Goldman Sachs’s 12-person management committee, Corzine emerged as the new senior partner. Rogers, who had watched from the sidelines, became his consigliere, with Hank Paulson as Corzine’s second-in-command. Corzine declined a request to be interviewed for this story.
Early on, Corzine and Paulson determined that Goldman Sachs needed public-relations help. After Friedman’s abdication, huge trading losses prompted some high-profile partner departures -- and a pummeling of the firm in the media.
While Rogers remained on Goldman Sachs’s payroll, Corzine and Paulson arranged for him to be seconded to Gershon Kekst, the dean of Wall Street public relations who had Goldman Sachs as a client.
“Gershon really took him under his wing,” says Paulson.
Kekst, now 76, is famous for his Sphinx-like demeanor; what he delivers most for his clients is sophisticated silence in the face of press inquiries.
Soon enough, Rogers was proving himself indispensable to his patrons. One Goldman Sachs executive, who requested anonymity because he was not authorized to speak about Rogers, describes him as a great technocrat who’s particularly adept at workflows, systems, and efficiency.
Good fortune found Rogers again in 1999 after Paulson pulled off a coup that removed Corzine from power. Rogers, says a former colleague who was not authorized to speak on the record and asked not to be named because the two have a close personal relationship, thought he was going to get whacked, especially since, according to Paulson, he had been so closely associated with Corzine and did not know the power play was coming.
Instead, Paulson put Rogers on the management committee, made him secretary to the board after the firm’s initial public offering in May 1999, and encouraged him to wade into the most important aspects of Goldman Sachs’s future.
“He and I started talking strategically about the client business,” Paulson says. “Why was it important that I spend time in Japan? Why in China? Why in Germany? He made sure that I met Angela Merkel well before she became chancellor.”
Rogers also helped Paulson set up and execute the Chairman’s Forum, a long series of meetings that Paulson had with small groups of the firm’s managing directors around the world, as well as Pine Street, Goldman Sachs’s leadership training institute modeled after General Electric Co.’s Crotonville program. Then, Rogers helped recruit Steven Kerr, the head of Crotonville, to run Pine Street.
Guardian of Culture
After a mere five years at the firm, Rogers emerged as the foremost guardian of Goldman Sachs’s partnership culture.
“Our bankers travel on the same planes as our competitors,” he said as part of a 2006 Harvard Business School case about Pine Street.
“We stay in the same hotels. In a lot of cases, we have the same clients as our competition. So when it comes down to it, it is a combination of execution and culture that makes the difference between us and other firms,” he said. “That’s why our culture is necessary -- it’s the glue that binds us together.”
To that end, Rogers was the driving force behind hiring documentarian Ric Burns to make a film about Goldman Sachs’s history and culture. The film, for internal use only, should be finished within a year, at a cost the firm wouldn’t disclose.
Rogers is more than merely skilled at catering to people in power. He’s an artist. After Sept. 11, he arranged for Paulson, who was in China when the jets hit the World Trade Center towers, to be one of the last people to land back home, with U.S. Air Force escorts. Rogers encouraged Paulson to be the first CEO to visit China in the wake of the SARS crisis, a decision that led to a secret dinner with two Chinese leaders in June 2003 that gave Goldman Sachs early entree to China’s wave of investment banking business.
What’s less clear is whether he’s any good at the rest of his job. Under Rogers’s watch as head of press and government relations, Goldman Sachs has become known as both “Government Sachs” and “a giant vampire squid.”
According to “The Promise,” by Bloomberg contributor Jonathan Alter, the “angriest” President Barack Obama got during his first year in office was when he heard Blankfein justify the firm’s $16.2 billion of 2009 bonuses by claiming “Goldman was never in danger of collapse” during the financial crisis that began in 2007.
Obama told a friend that Blankfein’s statement was “flatly untrue” and added, for good measure, “These guys want to be paid like rock stars when all they’re doing is lip-syncing capitalism.”
Says van Praag: “I’m not in a position to comment on Mr. Alter’s book, but on multiple occasions we have expressed our gratitude to the U.S. government and taxpayers for their action during the crisis.”
Goldman Sachs insiders marvel at how Rogers has retained his Teflon coating -- and Blankfein’s confidence -- in the wake of the firm’s vilification.
Rogers faced the greatest threat of his Goldman Sachs tenure in April 2010, when the firm was hit with twin crises: the Securities and Exchange Commission’s civil lawsuit over Goldman Sachs’s infamous Abacus deal, which accused the firm of misleading investors for failing to fully disclose the role of hedge-fund investor John Paulson, and the subsequent 11-hour public flogging at the hands of the Senate’s permanent subcommittee on investigations. It was a conflation of poor government affairs and horrible public relations.
At the least, Rogers could claim credit for having predicted it. According to van Praag, Rogers warned colleagues that the firm’s 2007 success -- it made $17.2 billion in pretax income while the rest of Wall Street was imploding -- followed by its 2009 performance -- nearly $20 billion, pretax -- made it literally too rich a target for Congress and the public to resist.
“He said there would be some investigations and we would likely be the primary focus,” says van Praag. “He was right.”
A consensus quickly developed among Goldman Sachs’s top executives, including Rogers, that the Abacus suit had to be settled.
“To be sued by our regulator was devastating,” explains van Praag. “What mattered was resolving it. We couldn’t be at war with our regulator.”
Goldman Sachs settled with the SEC in July 2010, paying a $550 million fine, the largest in Wall Street history. Goldman Sachs neither admitted nor denied the SEC’s allegations.
There was far less consensus about how the firm should handle the Senate investigation. According to several Goldman Sachs executives, van Praag and others thought the firm should engage in a massive, public mea culpa and explain to the senators that of course the company had regrets about its behavior and that in retrospect it would have done things differently. Moving forward, Goldman Sachs could make amends by firing the responsible people and donating $1 billion or so to charity.
In the other camp were executives, including Rogers, who preferred defiance. Rogers was convinced that Senator Carl Levin, the Michigan Democrat and subcommittee chairman, would use the April hearing and his investigation for theatrics -- he was right about that -- and Goldman Sachs would best be served by admitting little wrongdoing. Rather, it would hunker down and explain its role as a market maker by providing sophisticated investors the risks they wanted at prices they were willing to pay.
This, of course, was the message the world heard repeatedly during the Levin hearing. Throughout most of the proceedings, Rogers could be seen in the front row of the public gallery, just behind the testifying Goldman Sachs executives.
There’s now a fair amount of second-guessing about Rogers’s hard-line approach. One former Goldman Sachs executive, who still works with the firm and feared reprisals for speaking about Rogers on the record, says the company has lost the reservoir of goodwill it built up among the journalists who cover it and that the government now has a bias toward skepticism of its actions.
The tension over the firm’s punching bag status exists primarily between Rogers and van Praag. According to people familiar with both men and their relationship, van Praag advocated a more accommodating approach to Levin and his investigation -- and absorbed the public blame for the bad headlines when Rogers’s strategy won the day.
Jack Martin, the CEO of public-relations firm Hill & Knowlton, has been in meetings with both Rogers and van Praag and says he’s seen them “disagree aggressively, but that at the end of the day they come together as one.” A Goldman Sachs managing director calls it the greatest psychodrama he’s ever seen, while several former Goldman executives wonder why a firm that demands Olympian performance in so many areas has indulged a fractured message and poor performance in this one.
For his part, Blankfein says he has confidence in Rogers and van Praag and that dissent and disagreement is healthy.
“In the context of what we just lived through at the firm, there were a lot of opportunities for very tense situations,” Blankfein explains.
“We managed to really avoid them, which, if you think about it, is pretty amazing,” he says. “There haven’t been a lot of people trying to push people off ledges.”
Firm Made Mistakes
Blankfein says he is not contemplating any personnel changes, though he concedes that the firm has made its share of public relations mistakes.
The political environment in which Goldman Sachs operates -- along with every major Wall Street firm -- has changed dramatically in the wake of the financial crisis and the 2008 election. It no longer works to Rogers’s advantage. Where once he had a surfeit of relationships across Republican Washington and easy access to his former boss and patron, Paulson, at Treasury, and his former partner, Josh Bolten, the White House chief of staff, things are chillier now.
Obama invited Blankfein and his wife, Laura, to a state dinner in April. Blankfein and Timothy Geithner chatted for 10 minutes on Jan. 10, according to Geithner’s calendar. No other official contact has been reported since March 31.
According to Jake Siewert, who just completed a two-year stint as an adviser to Geithner, other than attending the occasional financial services forum with Blankfein, Rogers is a nonentity at Treasury. Siewert added that Rogers’s relationship with Mark Patterson, Geithner’s chief of staff, is particularly strained, and with good reason: Patterson departed abruptly from Goldman Sachs in April 2008 after four years as its chief lobbyist.
Rogers’s job does not call for direct lobbying. To do that, he has put together a team of ex-government staffers including Michael Pease, a former aide to Representative Barney Frank, the Massachusetts Democrat; Russell Horwitz, who used to work for Gene Sperling, chairman of the National Economic Council; and Dina Powell, a former personnel director at the White House for George W. Bush and then an Assistant Secretary of State for Educational and Cultural Affairs.
Powell is now head of the Goldman Sachs Foundation, and her various initiatives -- 10,000 Women and 10,000 Small Businesses -- have won her and Rogers invites to visit with Secretary of State Hillary Clinton and Obama adviser Valerie Jarrett.
Goldman Sachs is clearly too big for Washington to ignore, whether it’s occasional visits with key players or, more substantively, trips to the SEC and U.S. Commodity Futures Trading Commission to help flesh out the new regulations still being written under the Dodd-Frank Wall Street Reform and Consumer Protection Act. But there’s no question that Goldman Sachs’s influence and swagger have been diminished.
What Rogers remains indisputably good at is keeping his garden well tended. In June 2006, Rogers played a big role in luring Robert B. Zoellick to Goldman Sachs as a vice-chairman and the chairman of the firm’s international board of advisers.
Rogers and Zoellick had known each other since 1985, when they both worked at Treasury. After a stint as deputy to Secretary of State Condoleezza Rice, Zoellick turned to Rogers, among others, to explore private-sector opportunities. Once at Goldman Sachs, Rogers also helped Zoellick figure out how to make the company work for him.
“John is somebody who is sincerely interested in helping people,” says Zoellick. “Not just in my case because I was a senior person leaving the Administration -- but frankly he’s helped a lot of little people as well.”
Dreams of Writing
At 17 years and counting in his Goldman Sachs tenure, Rogers has already been at the firm longer than he was in government. Friends say he was never motivated by money and has more than he could ever need. He’s mentioned an admiration for the writer Robert Caro and is said to dream of one day penning a presidential biography.
Others think Rogers is a prime candidate for a cabinet post the next time a Republican administration comes to town. Zoellick says Rogers is “sui generis” and would be that rare individual who would see opportunity in running an agency like the Internal Revenue Service.
Zoellick left Goldman Sachs in 2007 to become the 11th president of the World Bank. He and Rogers are currently working together to help Republican Senator John McCain set up an as- yet-unannounced public policy center at Arizona State University.
“John, in addition to being a student of organizations, is a student of power,” Zoellick explains. “But he’s learned one of the most important lessons that many students of power don’t learn, which is that part of being a master of power is using power with discretion.”
To contact the writer of this article: William D. Cohan at email@example.com.