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Sorkin: Felix Rohatyn Looks Back, and Sighs
October 18, 2010, 9:29 pm
In his DealBook column, Andrew Ross Sorkin writes about a conversation with Felix Rohatyn, the veteran investment banker who helped save New York City from bankruptcy in the 1970s, advised RJR Nabisco on its sale to Kohlberg Kravis Roberts in the 1980s and sold Columbia Pictures to Sony in the 1990s.
About to publish a memoir about his major deals in finance, Mr. Rohatyn reveals some uneasiness about his own industry and its effect on society. “No matter how much I try to be really objective, the financial community has not covered itself with glory in these last 50 years,” he said.
Deal Maker Looks Back, and Sighs
By ANDREW ROSS SORKIN
“I’m terrified of having people think that I’m lecturing them.”
Felix G. Rohatyn, one of Wall Street’s last old wise-men, was sitting in his office at Lazard overlooking the Empire State Building on Monday morning.
At 82, Mr. Rohatyn has quite a history: he helped save New York City from bankruptcy in the 1970s, advised RJR Nabisco on its sale to Kohlberg Kravis Roberts in the 1980s and sold Columbia Pictures to Sony in the 1990s before becoming ambassador to France under President Bill Clinton. In the last decade, he returned to Wall Street, first to Lehman Brothers and now to his longtime home, Lazard.
Mr. Rohatyn, whose revealing memoir, “Dealings: A Political and Financial Life” (Simon & Schuster), comes out in two weeks, is a proud man and has a lot to be proud of.
But, surprisingly, he has also grown uneasy about his own industry and perhaps himself.
“No matter how much I try to be really objective, the financial community has not covered itself with glory in these last 50 years,” he said, betraying a sense of apprehension. “It’s a subject that is difficult for me to deal with because I’ve lived in the milieu for the last 50 years.”
Mr. Rohatyn’s self-aware views about the economy and Wall Street’s effect on society are the sort that are often left unspoken. And I got the sense that he was worried about saying it himself.
“No matter what anybody says, there is a maldistribution of wealth in this country that I think is very unhealthy,” he said, leaning back in his chair. “It’s very easy to fall into the mode of saying, well this whole thing is casinos and paper money.” But he added, “I don’t think everyone in the financial community is a rogue — it’s just that that’s the way the world is.”
I asked him to explain why he thought this happened.
He paused for a moment, before indicting himself and the world he inhabits.
“The leveraged buyouts, the takeovers — and questionable behavior,” he said matter-of-factly.
He said that for much of his career, he, like so many in the financial industry, didn’t spend much time reflecting on the larger implications of his work. But he said he had an awakening in 1986 as he was working on the sale of RJR Nabisco. It happened at an RJR board meeting.
“One of the directors was talking about stakeholders’ rights. That got me,” he said, referring to William Anderson.
“The experience with RJR had caused me to rethink my traditional bankers’ calculus. The bottom line was no longer simply the bottom line — the ultimate cost of the profit had to be considered,” he wrote in his book. “The issues Bill Anderson had raised at RJR’s board meeting about laid-off employees, damaged communities and cutbacks in employee benefits necessitated by higher corporate debt needed to be addressed.”
Still, almost 25 years later, he is grappling with how to fix a system built upon selling to the highest bidder.
“The trouble with this is that it is very difficult to quantify,” he said of valuing the impact on all the other constituents. “I am very troubled by my difficulty in trying to determine which was the better of the two deals.”
His book is filled with tales of deal-making and prominent names: the time Frank Sinatra came to meet with him; when Michael Ovitz told him over lunch that Matsushita wanted to buy MCA; and the scandal over ITT that plagued him for years.
For the most part, however, he does not use the book to settle scores. Surprisingly, he makes no mention of Steven Rattner, his former protégé who, some say, pushed him out of Lazard. In 1996, Mr. Rohatyn uncharacteristically said Mr. Rattner was “social climbing without doing any public service.” Mr. Rattner went on to oversee the Obama administration’s overhaul of the auto industry before becoming the subject of a pension fund fraud scandal, which he is in the process of trying to settle.
The closest Mr. Rohatyn comes to a swipe is his retelling of the time he was a candidate to become vice chairman of the Federal Reserve Board.
“I began to hear that Alan Greenspan at the Fed and Bob Rubin at Treasury were unwilling to support my appointment,” he wrote. “I decided there was little point in trying to join a club where even your friends don’t want to admit you.”
Mr. Rohatyn, who may be a bit of relic, seems to yearn for a different time, when deals were done over lunch and business wasn’t a zero-sum game.
“The crisis of New York City was resolved by mutual respect. You don’t see this very much in the present,” he said. He explained how he was able to work with the unions because everyone had an interest in saving the city. “We’d fight like hell during the day and then Victor and I would take our kids and go to a Chinese restaurant,” he said of Victor Gotbaum, the municipal union leader.
He blames a cultural shift in business and politics. Of President Obama, for whom he voted, he says he is now disappointed. “It’s rather frightening mostly because of the collapse of the ability to communicate with other people in a civilized way. The world demands a relationship of mutual civility.”
Right before I left his office, I began to say, “The world you inhabited — .” Before I could finish my sentence, he jumped in with, “is gone.”
http://dealbook.blogs.nytimes.com/20...back&st=Search
October 18, 2010, 9:29 pm
In his DealBook column, Andrew Ross Sorkin writes about a conversation with Felix Rohatyn, the veteran investment banker who helped save New York City from bankruptcy in the 1970s, advised RJR Nabisco on its sale to Kohlberg Kravis Roberts in the 1980s and sold Columbia Pictures to Sony in the 1990s.
About to publish a memoir about his major deals in finance, Mr. Rohatyn reveals some uneasiness about his own industry and its effect on society. “No matter how much I try to be really objective, the financial community has not covered itself with glory in these last 50 years,” he said.
Deal Maker Looks Back, and Sighs
By ANDREW ROSS SORKIN
“I’m terrified of having people think that I’m lecturing them.”
Felix G. Rohatyn, one of Wall Street’s last old wise-men, was sitting in his office at Lazard overlooking the Empire State Building on Monday morning.
At 82, Mr. Rohatyn has quite a history: he helped save New York City from bankruptcy in the 1970s, advised RJR Nabisco on its sale to Kohlberg Kravis Roberts in the 1980s and sold Columbia Pictures to Sony in the 1990s before becoming ambassador to France under President Bill Clinton. In the last decade, he returned to Wall Street, first to Lehman Brothers and now to his longtime home, Lazard.
Mr. Rohatyn, whose revealing memoir, “Dealings: A Political and Financial Life” (Simon & Schuster), comes out in two weeks, is a proud man and has a lot to be proud of.
But, surprisingly, he has also grown uneasy about his own industry and perhaps himself.
“No matter how much I try to be really objective, the financial community has not covered itself with glory in these last 50 years,” he said, betraying a sense of apprehension. “It’s a subject that is difficult for me to deal with because I’ve lived in the milieu for the last 50 years.”
Mr. Rohatyn’s self-aware views about the economy and Wall Street’s effect on society are the sort that are often left unspoken. And I got the sense that he was worried about saying it himself.
“No matter what anybody says, there is a maldistribution of wealth in this country that I think is very unhealthy,” he said, leaning back in his chair. “It’s very easy to fall into the mode of saying, well this whole thing is casinos and paper money.” But he added, “I don’t think everyone in the financial community is a rogue — it’s just that that’s the way the world is.”
I asked him to explain why he thought this happened.
He paused for a moment, before indicting himself and the world he inhabits.
“The leveraged buyouts, the takeovers — and questionable behavior,” he said matter-of-factly.
He said that for much of his career, he, like so many in the financial industry, didn’t spend much time reflecting on the larger implications of his work. But he said he had an awakening in 1986 as he was working on the sale of RJR Nabisco. It happened at an RJR board meeting.
“One of the directors was talking about stakeholders’ rights. That got me,” he said, referring to William Anderson.
“The experience with RJR had caused me to rethink my traditional bankers’ calculus. The bottom line was no longer simply the bottom line — the ultimate cost of the profit had to be considered,” he wrote in his book. “The issues Bill Anderson had raised at RJR’s board meeting about laid-off employees, damaged communities and cutbacks in employee benefits necessitated by higher corporate debt needed to be addressed.”
Still, almost 25 years later, he is grappling with how to fix a system built upon selling to the highest bidder.
“The trouble with this is that it is very difficult to quantify,” he said of valuing the impact on all the other constituents. “I am very troubled by my difficulty in trying to determine which was the better of the two deals.”
His book is filled with tales of deal-making and prominent names: the time Frank Sinatra came to meet with him; when Michael Ovitz told him over lunch that Matsushita wanted to buy MCA; and the scandal over ITT that plagued him for years.
For the most part, however, he does not use the book to settle scores. Surprisingly, he makes no mention of Steven Rattner, his former protégé who, some say, pushed him out of Lazard. In 1996, Mr. Rohatyn uncharacteristically said Mr. Rattner was “social climbing without doing any public service.” Mr. Rattner went on to oversee the Obama administration’s overhaul of the auto industry before becoming the subject of a pension fund fraud scandal, which he is in the process of trying to settle.
The closest Mr. Rohatyn comes to a swipe is his retelling of the time he was a candidate to become vice chairman of the Federal Reserve Board.
“I began to hear that Alan Greenspan at the Fed and Bob Rubin at Treasury were unwilling to support my appointment,” he wrote. “I decided there was little point in trying to join a club where even your friends don’t want to admit you.”
Mr. Rohatyn, who may be a bit of relic, seems to yearn for a different time, when deals were done over lunch and business wasn’t a zero-sum game.
“The crisis of New York City was resolved by mutual respect. You don’t see this very much in the present,” he said. He explained how he was able to work with the unions because everyone had an interest in saving the city. “We’d fight like hell during the day and then Victor and I would take our kids and go to a Chinese restaurant,” he said of Victor Gotbaum, the municipal union leader.
He blames a cultural shift in business and politics. Of President Obama, for whom he voted, he says he is now disappointed. “It’s rather frightening mostly because of the collapse of the ability to communicate with other people in a civilized way. The world demands a relationship of mutual civility.”
Right before I left his office, I began to say, “The world you inhabited — .” Before I could finish my sentence, he jumped in with, “is gone.”
http://dealbook.blogs.nytimes.com/20...back&st=Search
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