Kenneth Langone on Standing Up to Eliot Spitzer

The investment banker and former NYSE director on battling Eliot Spitzer and Andrew Cuomo over Richard Grasso’s $139.5 million pay package
Illustration by Jimmy Turrell

Eliot Spitzer held a huge press conference in May 2004. Not only was he suing [former NYSE Chairman Richard] Grasso, the attorney general was going after me for $18 million, claiming I’d misled everybody as chairman of the comp committee. On the Friday before, Spitzer called my lawyer to get a settlement. I wouldn’t do it. I thought Grasso was worth what we paid him. In 1982 the NYSE board had put in a pension system to encourage people to stay there as a career. Dick Grasso had started out as an $82.50-a-week clerk. He stayed 37 years. He’d been chairman for eight of them, and his record was flawless.

Spitzer was after everybody at that point. I kept assuring Dick that we’d win: The facts were on our side. Spitzer left office, and the case had not been adjudicated. Andrew Cuomo took over the job. So Dick and I meet in Cuomo’s office with our lawyers. Andrew starts by saying, “We’ve got to settle this.” By the end, I’m kind of emotional. “I don’t care what everybody else in this room does. You’re getting nothing from me. This may consume the rest of my life, but my children are going to know their father didn’t roll over.”

I go home. I get a call from Cuomo. He tells me the stock exchange, which is named in the suit, has offered $35 million to settle. I say, “It’s Dick’s money, but General—he didn’t like being called General—if he gives you a f–king nickel, I’ll never talk to him again. I’m in this fight for two reasons: that justice prevail and because I stand by my judgment.” Two months later, a court of appeals throws out the case. When Cuomo called, I said, “They did the right thing.” He said, “I know.”

This was never about greed. Dick Grasso never once came to me to ask about his pay. On the day he was fired, Carol Bartz, who was on the board, said, “Wait a second. All of us decided what he should be paid. If something bad happened here, it was us, not him. Should we resign?” She was one of seven directors [out of 20] who supported Grasso. When Hank Paulson was later asked why he fired him, he said, I don’t know.

I saw cowardice on the part of so many people in high positions. But the person I can’t forgive is Eliot Spitzer. I saw the evil of personal ambition blinding him to his responsibilities.  — As told to Diane Brady

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