Money and Power (111 page)

50.
“I don’t speak Russian”:
NYT,
November 16, 1967.

51.
“business and financial monopoly”:
WSJ,
February 1, 2010, Amity Shlaes.

52.
“FDR saved the system”: Terkel, pp. 72–74.

53.
“unsound”:
NY,
September 15, 1956, p. 49.

54.
“I did not support him”: Terkel, p. 73.

55.
“for a great many years”: WSOH, 1956, p. 12.

56.
“a man of great charm”: Ibid.

57.
“in which he thanked me”: WSOH, 1964, p. 154.

58.
“I remember telling people”: WSOH, 1956, p. 14.

59.
“Not that I didn’t realize”: Ibid., p. 15.

60.
“maybe it was partly”: Ibid.

61.
campaign buttons: Letter from Sidney Weinberg to Franklin Roosevelt, January 30, 1942.

62.
“Every time I went”:
NY,
September 15, 1956, p. 52.

63.
“resented”: Ibid., p. 54.

64.
“stabbing his old friend”:
Fortune,
October 1953.

65.
“I have just learned”: Letter from Franklin Roosevelt to Sidney Weinberg, August 31, 1944.

66.
“There was less and less”: Charles D. Ellis,
The Partnership: The Making of Goldman Sachs
(New York: Penguin Press, 2008), p. 45.

67.
“Jock, if they cut us down”:
NY,
September 15, 1956, p. 49.

68.
“I didn’t have any clear idea”: Ibid., p. 50.

Chapter 4: The Value of Friendship

1.
“was the greatest outfit”:
NY,
September 8, 1956, p. 40.

2.
“His lips characteristically pursed”: Ibid., p. 39.

3.
“Sidney had done his homework”:
Time,
December 8, 1958.

4.
“That, as Bobby Lehman”: WSOH, 1956, p. 56.

5.
“flat on his back”:
Fortune,
October 1953.

6.
“Sidney is a wizard”:
NY,
September 8, 1956, p. 47.

7.
“The Jew is the world’s enigma”: Henry Ford, “The International Jew: The World’s Foremost Problem,” originally published in
Dearborn Independent,
May 1920.

8.
“The big problem”:
NY,
September 8, 1956, p. 64.

9.
he created an alphabet soup of names: Ibid., p. 66.

10.
“How could you keep anything confidential”: Charles Ellis,
The Partnership
(New York: Penguin Press, 2008), p. 58.

11.
“John, John”: Ibid.

12.
“Without you”: Ibid., p. 60.

13.
“financial Alexander the Great”:
NYT,
September 10, 1958.

14.
“ultra-modern”:
NYT,
April 1, 1957.

15.
The involvement of Goldman Sachs in the antitrust suit is from the Corrected Opinion of Harold R. Medina, United States Circuit Judge, civil action no. 43–757, filed February 4, 1954.

16.
“ ‘the cream of the business’ ”: Medina opinion, p. 8.

17.
“The best description”: WSOH, 1956.

18.
“the older firms”: Medina opinion, p. 170.

19.
Medina’s chart: Ibid., p. 171.

20.
The material on Goldman and Pillsbury is from ibid., pp. 329–46.

21.
The material on Goldman and Lehman Brothers is from ibid., pp. 312–16.

22.
“in a rather conceited way”: WSOH, 1956, p 92.

23.
“My own position”: Ibid., p. 90.

24.
The information on trial costs is from
NYT,
September 23, 1953.

25.
“absolutely firm”: Ibid. p. 91.

26.
“highly intelligent”: Ibid.

27.
“I think there’s a realization”: WSOH, 1956, p. 103.

28.
“You have to maintain”: Ibid., p. 104.

29.
“turned away from”: Ibid., p. 105.

30.
“It’s a wonderful field for young men”: Ibid., p. 106.

31.
“the next ten years”: Ibid.

32.
“reason for 1929”: Ibid., p. 109.

33.
“If you have a lawyer”: Ibid., p. 95.

Chapter 5: “What Is Inside Information?”

1.
“new brilliant genius”: WSOH, 1956, p. 68.

2.
“His father was a middle-class doctor”: Author interview with L. Jay Tenenbaum.

3.
“She wanted to show”: Ibid.

4.
“He was unsupervised”: Judith Ramsey Ehrlich and Barry J. Rehfeld,
The New Crowd: The Changing of the Jewish Guard on Wall Street
(Boston: Little, Brown & Co., 1989), p. 30.

5.
“His mother was a real flake”: Author interview with Betty Levy Hess.

6.
“I had two dollars in my pocket”: Author interview with L. Jay Tenenbaum.

7.
“It was the thing to do”:
NYT,
June 4, 1961.

8.
“I didn’t have any money to lose”: Ibid.

9.
“With a friend’s help”: Ibid.

10.
“Arbitrage as a form of trading”: Ehrlich and Rehfeld, p. 31.

11.
“The classic example”: Celler Commission Report, Conglomerate Merger Investigations, 1969.

12.
“Despite a distinctive lisp”: Charles D. Ellis,
The Partnership
(New York: Penguin Press, 2008), p. 74.

13.
“and the opportunities”:
NYT,
June 4, 1961.

14.
“had collected a group”: Roy C. Smith,
Paper Fortunes: Modern Wall Street; Where It’s Been and Where It’s Going
(New York: St. Martin’s Press, 2010), p. 86.

15.
“None of it was from trading”:
NYT,
November 16, 1967.

16.
“The war came”: Author interview with Salim B. “Sandy” Lewis.

17.
“I didn’t have enough experience”:
NYT,
June 4, 1961.

18.
“built one of the most active”: WSOH, 1956.

19.
“Gus was very smart”: Ellis, p. 75.

20.
“were seeking the assistance”:
NYT,
June 4, 1961.

21.
“We’ve got a policy”: Levy interview with Gilbert Kaplan,
Institutional Investor,
November 1973.

22.
“a heap of du——”:
NYT,
May 3, 1973.

23.
“The Murchison-Kirby relationship”:
NYT,
May 24, 1961.

24.
Information on the Young suicide:
NYT,
January 26, 1958.

25.
“quiet, powerful role”:
NYT,
June 4, 1961.

26.
“Pride. Family pride”:
NYT,
July 5, 1963.

27.
“I offered the job”: Author interview with L. Jay Tenenbaum.

28.
Biographical details are from ibid.

29.
“I was in combat”: Ibid.

30.
“But don’t forget”:
Institutional Investor,
November 1973.

31.
“He was smart, quick”: Smith, p. 86.

32.
“My mother never got”: Author interview with Peter Levy.

33.
“Hey you, you”: Author interview with Sandy Lewis.

34.
“33-man group”:
NYT,
May 25, 1965.

35.
“To be perfectly honest”: Ibid.

36.
“Gus was very proud”: Ellis, p. 91.

37.
“As long as I am a governor”:
Institutional Investo
r, November 1973.

38.
“I say my prayers”: Ibid.

39.
“[T]hey were kept short”: Ellis, p. 80.

40.
“Gus was always”: Ibid., p. 78.

41.
“I can’t say”: Author interview with Betty Levy.

42.
“Well, we do demand”:
Institutional Investor,
November 1973.

43.
“The thing about Goldman Sachs”: Author interview with L. Jay Tenenbaum.

44.
“If you found out”: Ibid.

45.
“I don’t know how I found them”: Ibid.

46.
“If there were tax cases”: Ibid.

47.
“That’s shooting fish in a barrel”: Ibid.

48.
“The question is what is inside information”: Ibid.

49.
“Gus brought him in”: Ibid.

50.
“L. Jay, I know you’re working with Dowler”: Ibid.

51.
“Gus suddenly becomes furious”: E-mail from Robert Lenzner to the author.

52.
“Which was
really
good money”: Author interview with Bruce Mayers.

53.
The description of Mayers’s experience in Goldman’s arbitrage department: Author interview with Bruce Mayers.

Chapter 6: The Biggest Man on the Block

1.
“There’s only one problem”: Author interview with L. Jay Tenenbaum.

2.
“I was an odd choice”: Robert E. Rubin,
In an Uncertain World: Tough Choices from Wall Street to Washington
(New York: Random House, 2003), p. 37.

3.
“As a young Jew”: Ibid., p. 45.

4.
“He quickly made a good deal of money”: Ibid., p. 46.

5.
“a lawyer, an investor”: Ibid.

6.
“You’d like to dance”: Ibid., p. 48.

7.
“The people in the town”: Ibid., p. 49.

8.
“Robbie Rubin”: Ibid., p. 50.

9.
“My grades were good”: Ibid., p. 52.

10.
“I looked around”: Ibid., p. 53.

11.
“seemed a potentially fruitful area”: Ibid., p. 55.

12.
“with no job”: Ibid.

13.
“I imagine you track”: Ibid., p. 57.

14.
“dropping out anyway”: Ibid.

15.
“perhaps the dean”: Ibid.

16.
“The trouble with boys”: Ibid., p. 58.

17.
“I spent most of my time”: Ibid., p. 59.

18.
“I didn’t necessarily want”: Ibid., p. 61.

19.
“a sense of curiosity”: Ibid., p. 64.

20.
“it had a more comfortable environment”: Ibid.

21.
“the pay was slightly higher”: Ibid., p. 67.

22.
“get on the phone”: Ibid.

23.
“The first order of business”: Ibid., p. 41.

24.
“Having Gus Levy”: Ibid., p. 45.

25.
“took naturally to being”: Ibid., p. 44.

26.
“More growth occurred”: Lisa Endlich,
Goldman Sachs: The Culture of Success
(New York: Touchstone, 2000), p. 64.

27.
“It was the only firm”: Author interview with Robert Rubin.

28.
“At some later point”: Ibid.

29.
“Sidney looked down his nose”: Endlich, p. 63.

30.
“He preached mandatory retirement”:
NYT,
July 11, 1971.

31.
“Sidney was a little jealous”: Author interview with George Doty.

32.
“Gus was much more aggressive”: Author interview with Alan Stein.

33.
“Sidney and Walter Sachs”: Author interview with George Doty.

34.
“It was a cause for celebration”: Author interview with Sandy Lewis.

35.
“became senior partner”: Author interview with Peter Weinberg.

36.
“Sidney, until the day he died”: Author interview with George Doty.

37.
“Mr. Weinberg,” he said: Charles D. Ellis,
The Partnership
(New York: Penguin Press, 2008), p. 71.

38.
“Those are very nice thoughts”: Ibid., p. 71.

39.
“attitudes about the role”:
NYT,
December 1, 1968.

40.
“Since Mr. Sidney Weinberg’s death”: Gustave L. Levy testimony in
Welch Foods Inc., etc. v. Goldman, Sachs & Co
.
,
September 23, 1974.

41.
“assorted crackers”: From a copy of the menu for one-hundredth anniversary dinner, December 15, 1969.

42.
“There is no gainsaying”:
NYT,
April 23, 1969.

43.
“Our position is that Goldman”:
NYT,
September 23, 1970.

44.
“to avoid the time and expense”:
NYT,
July 11, 1971.

45.
“Everyone hunkered down”: Author interview with George Doty.

Chapter 7: Caveat Emptor

1.
“Levy is where the money is”:
New York,
May 6, 1974, p. 8.

2.
“Bob Rubin wanted to get out”: Author interview with Sandy Lewis.

3.
“I liked what I saw there”: Robert E. Rubin,
In an Uncertain World
(New York: Random House, 2003), p. 75.

4.
“I never in a million years”: Author interview with Robert Rubin.

5.
“wasn’t happy about”: Author interview with L. Jay Tenenbaum.

6.
“Gus, Hallingby offered”: Ibid.

7.
“his pedigree of law”: Ibid.

8.
“I was, to say the least”: Rubin, p. 75.

9.
“I thought to myself”: Author interview with Robert Rubin.

10.
“to what extent are commercial paper dealers”:
NYT,
November 17, 1970.

11.
“fraud, deception, concealment”: Ibid.

12.
“For the commercial paper holders”: Author interview with Dan Pollack.

13.
“[T]here is absolutely no merit”:
NYT,
November 17, 1970.

14.
“the worst of the paperwork”: New York Stock Exchange,
1969 Annual Report.

15.
“topped $20 million”:
WSJ,
March 17, 1971.

16.
“which rips with action”:
NYT,
July 11, 1971.

17.
The James Cofield reporting is from
WSJ,
June 1, 1972, plus an author interview with James Cofield and author review of relevant documents, letters, and EEOC filings.

18.
Cofield’s brother: E-mail exchange between James Cofield and author.

19.
“There was real fear”: Author interview with Robert Rubin.

20.
“As a private partnership”: Rubin, p. 71.

21.
In his memoir: John C. Whitehead,
A Life in Leadership, from D-Day to Ground Zero: An Autobiography
(New York: Basic Books, 2005), p. 115.