Money and Power (52 page)

Another message was how special they were and how fortunate they were to be working at Goldman. “It’s sort of like being around the Sun King kind of thing,” remembered one former Goldman senior banker. “It’s the center of everything that’s going on, the nexus of so much that’s going on on Wall Street.” What made the firm special, in his mind, and different from other firms on Wall Street was “[t]he people are so bright, so driven, and just unbelievably consistent. At a lot of places, you have ninety-nine-percentile people, but you also have eighty-two-percentile people and seventy-four-percentile people. At Goldman, the bell curve sort of centers around ninety-five and one tail goes to ninety-nine and the other tail goes to ninety-one. The consistency of the people is extraordinary. The recruiting, the talent management and retention is probably one of the great strengths they have. Then, the information flows are extraordinary. The information that courses through that place is like nothing you’ve ever seen before. Then, thirdly, I think there are relationships that they have with boards, with governments, with key
decision makers and what qualifies as being important there versus at other places is just a whole other level of discourse that they’re having with their clients. They are able to sort of turn their head away from the immediacy of a trade, or a piece of business that doesn’t have all of the things they’re looking for and really focus on the biggest, most important deals and stay really disciplined along those lines. They’re always whale hunting. They’re not out to catch fish every day. They go days without hitting or harpooning a whale while other guys are filling the boat with little bitty fish. But then when they start bringing in the whales, people’s heads turn. That’s an interesting metaphor. They are definitely whale hunters and they’re not really fishermen.”

There was also something known around Goldman as “Le Concierge,” which can accomplish for Goldman’s employees (or clients) pretty much anything they want, including taking shirts to the cleaners or getting hard-to-get restaurant reservations. The service was less a reward per se than recognition by Goldman of how hard the firm expected people to work and that they probably wouldn’t have time to take care of basic chores. “You literally did work one hundred and ten hours a week,” explained one former banker. “You have to sort of try to do the math as to how that’s possible. There was a long period of time for me where if I got four hours of sleep a night, I actually felt well rested. Often, if you had a couple of hours of spare time during the day, people would go down to the nurse’s office downstairs and pass out in one of the beds down there for two hours to get some sleep. I met my wife actually at Goldman. I remember her first day at work. She actually did an all-nighter like right out of the gate. So, it was like that. You worked as hard as you sort of humanly could.… I’m sure you’re making less on an hourly basis as an analyst at Goldman than you would if you worked at McDonald’s.”

What did Goldman expect in return for providing these concierge services? “You, twenty-four seven,” explained another banker. “Conference calls, all day Saturday and Sunday. Voice mail constantly.… There were people that just sat in their house for hours and hours and hours and hours over the weekend. A lot of business there gets done over the weekend. That’s classic Goldman: all the big decisions are on Sunday and it was always that way. It was always like if anything was a rush job, you always had to do it on Sunday evening. Everything at Goldman was always getting initiated on Sunday: big deals, big capital commitments, big this thing, big that thing.… I think that those are the people that are going to be successful at Goldman, the folks that are willing to sort of just sacrifice all. All. Everything. To the greater glory.”

Then there were the seemingly inevitable problems that developed between Goldman’s male and female employees. In this regard, Goldman was no better or worse than other Wall Street firms, which for many years had a heinous track record of mistreating their women employees. Sometimes the abuse was physical, sexual, and humiliating, as in the case of Lew Eisenberg and Karen Abraham. Sometimes the abuse was subtler and psychological, but no less devastating.

The Eisenberg case may have been more sensational and headline grabbing, but it was hardly an isolated incident. For instance, in 1973,
Anne Brown Farrell, a graduate of Trinity College and the Wharton School of Business, joined Goldman as the first woman in its fixed-income group. She worked on the trading floor with “
masses of people, no privacy, food all over the place, and at the time … 
everyone smoked!!!
” she later observed. Once that fall, all the new associates at the firm were invited to the Yale Club for dinner with Gus Levy. When Farrell arrived at the door of the Yale Club, she was not allowed to go inside. She was told, “No women allowed—club policy.” Her male colleagues streamed by her to go have dinner with Levy. “No one even looked back,” she explained. “For over half an hour, I tried every way I could think of to slip in unnoticed. It was impossible. I didn’t know what to do and I was beginning to panic. I had to be at that dinner!”

She eventually slipped twenty dollars to a steward at the club who let her go up the service elevator. “
All eyes were on me when I finally entered the dining room,” she continued. “I was late, I was young, and I was in trouble.” Levy announced to everyone that she was “a disgrace” for showing up late and gave her no chance to explain. Her boss was not happy either. She tried to explain about the club’s policy but, she said, her boss didn’t care. Fortunately, Levy overheard the conversation. “He was infuriated and demanded to know which idiot had chosen the Yale Club,” she explained. “That person turned out to be my boss, but not for long!”

In July 1985,
Kristine Utley started working at Goldman Sachs as a sales trainee in the fixed-income department in New York. In February 1986, Goldman transferred her to its Boston office as a sales associate in the money market department. She was the only woman sales associate in the department. For the next twenty months or so, the men in the Boston office made her life hell. According to someone with knowledge of her circumstances, the men in the Boston office “viewed her as a foreign body to be expelled at the earliest possible moment” and “apparently, the story goes, she was invited to a meeting in the conference room
where the projector went on and a hardcore porn film was showing just to humiliate her.” In the fall of 1987,
Paul Gaul, who ran the Boston office, asked Utley to consider a transfer back to New York. She refused to move back to New York as she believed “she was singled out for transfer on the basis of her sex,” according to court documents. Goldman then fired her. On December 6, 1987, she filed an eight-count lawsuit against Goldman in Massachusetts, alleging sexual harassment and discrimination and that “
she was subjected to a hostile working environment in which women were demeaned.” On April 8, 1988, she filed a lawsuit claiming her civil rights had been violated. Goldman tried to get the lawsuit thrown out and to force the matter into arbitration, but an appeals court rejected the firm’s argument and said the matter could be tried in court.

She later testified that “office humor was a source of sexual harassment” and that memos at Goldman introducing new women employees “
were illustrated with nude
Playboy
pin-ups” and with phrases such as “beer is better than women because a beer always goes down easy.” Soon thereafter, Gaul was dismissed from Goldman. Utley received an unspecified settlement from Goldman.

Then there was case of Jacki
Hoffman-Zehner, who endured abuse from the rank and file but support from higher-ups. After graduating from the University of British Columbia, Hoffman-Zehner joined Goldman in 1988 as an analyst in the mortgage-backed securities department. By 1991, she was trading fifteen-year pass-through mortgage securities for Goldman’s institutional clients. One day that year,
Frank Coulson, known as “the Big Guy” because of the size of the trades he did for his clients, asked Hoffman-Zehner to execute a huge trade, worth more than a billion dollars. “Jacki, this is as big as it gets,” he told her. She knew it would be the trade of her career and Coulson had given her an important break by asking her to execute it. Time was of the essence and she focused intently on finding the right prices to quote for the client. “Call me when you have the prices, but don’t take too long,” the Big Guy told her.

There was no time for superfluous razzing from her, perhaps envious, male colleagues. But just as she was focusing on getting the prices for Coulson, one of the other traders on the desk—a mortgage-backed securities trader—wanted Hoffman-Zehner to help him work on a deal. “This guy was a self-described Wall Street Hitter: big paycheck, fast cars, huge apartment, and an ego to match,” she observed. “He was extremely talented and very charismatic and loved to be at the center of attention.” When she didn’t respond by dropping whatever she was doing and helping
him, the Hitter took to the internal squawk box and announced: “Excuse me, everyone, but our fifteen-year [mortgage] trader cannot do two things at once, so I cannot work on pricing a CMO”—collateralized mortgage obligation—“for you currently. My opinion is that she might well be in the wrong profession.” Other traders started piling on, like lions “circling,” she explained.

But she could not afford to be distracted by the juvenile, narcissistic behavior. She continued to figure out the prices to give to Coulson so the trade of her career could be executed successfully. Ten minutes later, she had the prices and had conveyed them to Coulson. Having completed the higher-priority task, she then walked over to her “attacker” to see what he wanted and to be helpful to him, if she could. “He could tell I was upset by his teasing and chose to acknowledge it by laughing at me as if to say, ‘What’s the matter girl, can’t you take it?’ ” she recalled. She was pissed but tried to remain calm. “You respect me, I respect you,” she said. “[T]hat is what we as professionals of this firm are called to do. Don’t you ever treat me like that again.” Just as she finished her reply, and was walking back to her desk, the Big Guy announced over the intercom: “Jacki, the trade is done.” She spent the rest of the day managing the risk related to the trade. “Never before had I felt so completely and professionally exhilarated,” she later wrote. “It was the trade of a lifetime, entrusted to me by one of the most talented and respected fixed-income salespeople ever on The Street.”

But it had been a trying day. She retreated to the ladies’ room—her “office,” she called it—went into the last stall, sat on the toilet seat, and cried for ten minutes uninterrupted. “I had to release the stress of executing the largest trade of my career, while at the same moment experiencing undeserved humiliation,” she said. “It wasn’t until I had patted my last tear dry that the smile crept onto my face.” Eight years later, age thirty-two, she was the youngest woman and first woman trader to become a partner.

But despite some notable exceptions, the road is still hard for the women who work at Goldman.
In March 2010,
Charlotte Hanna, a former Goldman Sachs vice president, sued the firm in federal court in Manhattan, claiming she was fired because she chose to work part-time and then took maternity leave during and after her two pregnancies. She also said that when she returned to work after the birth of her first child, her responsibilities were much diminished, her reporting lines had changed, and even her office had been taken from her. One week before she was to return to Goldman from her second maternity leave, Hanna was told her position had been eliminated. Sadly, Hanna’s lawsuit reads
like many recently filed gender-related discrimination claims against Wall Street firms. “When Ms. Hanna decided to take the ‘off-ramp’ provided by the firm to devote time to her children, there was no ‘on-ramp’ that enabled her to return to full-time employment,” her complaint claimed. (Goldman and Hanna settled the suit in November 2010.)

In September 2010, three former women employees of Goldman Sachs—a former vice president, a managing director, and an associate—filed a class-action lawsuit in federal court in the Southern District of New York against the firm claiming that it systematically discriminates against women in both pay and promotions. In the complaint, one of the women—H. Cristina
Chen-Oster, who spent eight years at the firm and became a vice president before leaving in March 2005—told the story of how, in the fall of 1997, her department went to Scores, a topless dance club in Manhattan, to celebrate the promotion of a colleague. Afterward, a married male associate insisted on walking Chen-Oster to her boyfriend’s apartment building a few blocks away. But, once there, the male associate ended up “pinning her against a wall, kissing and groping her, and attempting to engage in a sexual act with her.” She wrote that she did not “invite or welcome the attempt and had to physically defend herself.” The next morning, he “apologized profusely” and asked her to keep quiet about the incident. Yet that same morning, the associate told his supervisor about what happened. The supervisor was supposedly his friend and was also Chen-Oster’s supervisor.

Eventually, in May 1999—some eighteen months later—Chen-Oster reported the incident to her supervisor. Then, she alleged, her career at Goldman started a slow decline into oblivion. In keeping with an ongoing pattern of behavior, both her account responsibilities and her compensation were reduced over time, especially when compared with those of her male colleagues. In 1999, for instance, the male associate who had accosted her got paid 50 percent more than Chen-Oster, despite the fact the she had been promoted to vice president one year earlier. He did generate more revenue than she did, she conceded, but only because the more lucrative accounts had been taken from her and given to him. In 2000, her supervisor moved her to the opposite end of the convertible-bond trading floor from him—a sure sign of diminished status—and did not allow her to write performance evaluations for some of the people with whom she worked. In 2001, she also told her supervisor that the women on the convertible-bond desk felt that Goldman “did not treat them equally” and “felt uncomfortable with the sexual banter that regularly occurred on the trading floor.”