This book was enriched by two trials, which I attended, one involving Raj Rajaratnam and the other Rajat Gupta, and two hearings that produced a huge volume of court testimony and documents including contemporaneous FBI interview notes of witnesses. While neither Rajaratnam nor Gupta took the stand in their defense at their trials, this gold mine of information combined with the wiretaps offered a penetrating portrait of both men. In addition, in the case of Gupta, my reporting was enhanced by two sources: a remarkably revealing three-hour taped talk Gupta gave to a class entitled Creativity and Personal Mastery taught by Srikumar Rao and a self-published history of McKinsey, A History of the Firm, by George David Smith, John T. Seaman Jr., and Morgen Witzel. Those two sources, along with more than eight hundred pages of letters that were submitted on Gupta’s behalf before his sentencing, helped pierce the veil of a deeply private man with a well-cultivated public persona. (The letters were made available under an order by Judge Rakoff in response to a request by the Wall Street Journal.)
I am grateful to my colleagues in business journalism for some stellar reporting on this case. A handful of stories stand out. On the investigation, Susan Pulliam of the Wall Street Journal led the way with her early story, “The Network: The Feds Close In: Fund Chief Snared by Taps, Turncoats—Prosecutors Stalk Galleon’s Rajaratnam After Finding a Revelatory Text Message.” George Packer of the New Yorker enriched the story with his piece “A Dirty Business: New York City’s Top Prosecutor Takes on Wall Street Crime.” By far the best reporting on Raj Rajaratnam came from a Wall Street Journal story on December 29, 2009, by Robert A. Guth and Justin Scheck, entitled “The Network: The Rise of Raj: The Man Who Wired Silicon Valley—Fund Boss Built Empire on Charm, Smarts and Information.” Peter Lattman, at the New York Times, who has a keen eye for everything from legal maneuvers to sartorial style, served up some of the most riveting reporting on the two trials.
David Glovin and Patricia Hurtado of Bloomberg News left no stone unturned in their coverage of the Gupta and Rajaratnam cases. And finally, as I delved into the life of Rajat Gupta, I found myself turning again and again to a story written nearly two decades ago about him by Sreenath Sreenivasan.
Although I am a member of the South Asian diaspora, this story was as hard to report as any in my twenty-four-year career as a journalist. The Galleon case was the first black mark on a community that had enjoyed unflinchingly positive press. Like any immigrant group thrust into the limelight, South Asians were reluctant to air their dirty laundry in public. A few were aghast at the actions of their friends and spoke on the record. But many more were bewildered and hesitated to speak for attribution. They were worried about jeopardizing the legal outcomes; even as this book was being finished, two of the central characters, Gupta and Rajaratnam, were appealing their cases. As a result, much of the storytelling in the latter part of the book relies on anonymous sources, mostly declared friends of some of the key players who followed the case both through publicly available press reports and through private exchanges with their embattled friends. Their insights, often different from the public declarations of support they offered, are reflected in the pages of this book.
Notes
Prologue: The Twice Blessed
It was Tuesday, November 24, 2009, and other details of the White House dinner for Dr. Singh: White House, “Expected Attendees at Tonight’s State Dinner,” press release, November 24, 2009, http://www.whitehouse.gov/the-press-office/expected-attendees-tonights-state-dinner; Robin Givhan and Roxanne Roberts, “Marking First State Dinner, Obama Welcomes Indian Prime Minister,” Washington Post, November 25, 2009; Bob Colacello, “The White House’s Dinner Theater,” Vanity Fair, June 1, 2010.
He sat on a handful of corporate boards: Duff McDonald, “Rajat Gupta: Touched by Scandal,” Fortune, October 1, 2010.
Jindal, whose given name is Piyush: Adam Nossiter, “A Son of Immigrants Rises in a Deeply Southern State,” New York Times, October 22, 2007.
Gupta’s advice to Katyal: Letter written by Jody Wadhwa, Rajat Gupta’s bridge partner, on Gupta’s behalf before his sentencing and interview with Wadhwa, November 1, 2012.
Katyal’s position: At the time of the dinner, Katyal was principal deputy solicitor general. He became acting solicitor general in 2010 and is now in private practice.
“As you looked around the room”: Interview with Timothy Roemer, November 3, 2012.
A generation dubbed the “twice blessed”: Interview with Vijay Prashad, October 13, 2010.
US immigration policies in the twentieth century and growth in Indian immigration: “The Passage from India,” Immigration Policy Center, June 2, 2002, says the Luce-Cellar bill of 1946 provided for the admission of one hundred Indians each year and allowed them to seek citizenship. See http://www.immigrationpolicy.org/sites/default/files/docs/Policy%20Report-24%20Indian%20Bkgrd.pdf.
“There is an immense, immense selectivity”: Interview with Professor Marcelo M. Suarez-Orozco, July 15, 2010.
Statistics on Indian achievement in the United States: “The Rise of Asian-Americans,” Pew Research Center, June 19, 2012. The Pew study says the median household income for the US population as a whole was $49,800 in 2010. http://www.pewsocialtrends.org/2012/06/19/the-rise-of-asian-americans/.
Some ran or were poised to run the nation’s biggest corporations—Citigroup and MasterCard: Vikram Pandit was Citigroup’s CEO at the time of the dinner but stepped down in October 2012; http://newsroom.mastercard.com/press-releases/mastercard-names-ajay-banga-president-and-chief-executive-officer-succeeding-robert-w-selander/.
Others were contenders for top jobs at all-American companies like Warren Buffett’s Berkshire Hathaway: Ajit Jain, who is the head of Berkshire Hathaway’s reinsurance group, has been widely mentioned as a successor to Buffett. Jason Zweig, “And Buffett’s Successor,” Wall Street Journal, April 23, 2012.
The absences—the most notable being Citigroup chief Vikram Pandit: John Shazar, “Noted Corporate Welfare Recipient Not Welcome at White House Dinner,” Dealbreaker.com, November 25, 2009.
Mukesh Ambani’s views of Gupta: Letter written by Mukesh Ambani, head of Reliance Industries, on behalf of Rajat Gupta before his sentencing.
Tata, whose holdings run the gamut from cars—Jaguar Land Rover—to hotels: See http://www.tata.com/company/index.aspx?sectid=21vxqwHGkoo= and http://www.tata.com/company/profile.aspx?sectid=QqiuFWVxL/g=.
Tata worked early on to help Gupta turn his dream of an Indian business school into a reality: Gupta spoke of Tata’s role in his graduation address to the Indian School of Business in April 2006, http://www.isb.edu/gradday2006/Transcript_Rajat.html.
Gupta’s most important relationship was with Dr. Manmohan Singh: Author interviews and letters written by Gupta’s friends before his sentencing confirm his relationship with Dr. Singh. Adil Zainulbhai, the chairman of McKinsey India, recalled being at a meeting with Dr. Singh where he said to Gupta, “I thank you for the efforts in helping many institutions in India—I know you don’t have to do it, but you do it for the love of your country.”
Dr. Singh ushered in economic reforms that dismantled the Red Tape Raj: In his profile on the government of India website, Dr. Singh is credited with “ushering in a comprehensive policy of economic reforms,” http://pmindia.gov.in/pmsprofile.php.
Building Offshore-istan: A number of firms, including General Electric, had a role in the growth of offshoring, but the author believes that McKinsey, because of its penetration of corporate America, had a more profound impact on its rise. As McKinsey’s former director Anil Kumar said in “Offshoring: Spreading the Gospel,” Business Week, by Manjeet Kriplani with Brian Grow, March 5, 2006: “We were the first to legitimize the early thinking.”
One of his dinner companions was labor leader Andy Stern: Interview with Andy Stern, November 15, 2012. Stern stepped down as the union head in 2010.
Stern, whose organization spent the most money supporting Obama: The Service Employees union legally can’t co
ntribute to candidates and the Obama campaign would not take Political Action Committee money, but the union did make substantial expenditures in urging people to vote and to vote for Obama and spent the most of any nonpolitical group for Obama. See http://www.opensecrets.org/pres12/indexp.php.
Over a dinner of green curry prawns: Menu of the White House dinner, http://www.whitehouse.gov/files/documents/2009/november/state-dinner-press-preview.pdf.
Since 2002, Goldman had awarded Palm stock and options worth $67.3 million: Based on calculation by executive compensation firm Equilar Inc.
Palm’s biographical details: Louise Story, “The Men Who Ended Goldman’s War,” New York Times, July 17, 2010.
Peikin worked for nearly a decade in the US attorney’s office: “Leading Federal Prosecutors Join Sullivan & Cromwell,” PRNewswire, November 10, 2004.
Chapter One: “Who Will Show Me the Way in the World?”
History of India under the British: A variety of sources including Larry Collins and Dominique Lapierre, Freedom at Midnight (New York: Simon & Schuster, 1975), 20–23; Ramachandra Guha, India After Gandhi: The History of the World’s Largest Democracy (London: Macmillan, 2007), 3–8.
Golf (a sport that arrived in Calcutta in 1829, some sixty years before it reached New York): Collins and Lapierre, Freedom at Midnight, 27.
“We must at present do our best”: Quoted from the text of “Minute on Indian Education” as given in M. Edwardes, British India, 1772–1947: A Survey on the Nature and Effects of Alien Rule (London: Sidgwick and Jackson, 1967), 381.
“What Bengal thinks today, India thinks tomorrow”: Gopal Krishna Ghokale as quoted in Sugata Bose and Ayesha Jalal, Modern South Asia: History, Culture, Political Economy, 2nd ed. (New York: Routledge, 2004), 95.
India’s English-educated elite was a rarefied group at the turn of the century, representing less than 0.1 percent of the total population: Judith E. Walsh, A Brief History of India, 2nd ed. (New York: Facts on File, 2011), 145, is derived from an estimate by Bruce McCully, English Education and the Origin of Indian Nationalism (New York: Columbia University Press, 1940), 177. McCully said that more than 48,000 Indians, or 0.03 percent of the population, had received English educations by 1887.
Ashwini Gupta’s roots in Goila, his education, and his life as a freedom fighter: “Aswini Gupta: A Life Sketch,” Hindusthan Standard, November 5, 1964.
Like all Bengalis at the time, he was a leftist: Interview with Inder Malhotra, February 17, 2011.
Ashwini Gupta’s arrest in 1930: Intelligence Branch Records, no. 409/1930, serial no. 176/1930, West Bengal State Archives, lists Aswini Gupta as among the boys found in the raid of the office of the All-Bengal Students’ Association on July 1, 1930. The file says he “appeared to have come there as delegate to attend the Students’ Convention at Calcutta.” An article the following day in Amrita Bazar Patrika says of the thirty men arrested at the All-Bengal Students’ Association office, all but one were released later.
Apurba Maitra’s encounter with Ashwini Gupta in 1932 and Maitra’s story: Apurba Maitra, We Cried Together (Calcutta: Firma KLM, 1982), 1–13.
The reputation of Calcutta’s police commissioner: Ibid.
Two years earlier, the Indian National Congress passed a resolution fixing January 26: Ramachandra Guha, India After Gandhi: The History of the World’s Largest Democracy (London: Macmillan, 2007), 3–4.
“What is wrong with Bengal?”: Michael Silvestri, “‘The Sinn Fein of India’: Irish Nationalism and the Policing of Revolutionary Terrorism in Bengal,” Journal of British Studies 39 (October 2000), 461, cites John W. Wheeler-Bennett, John Anderson, Viscount Waverly (London: St. Martin’s Press, 1962), 126.
Ashwini Gupta’s participation in the Quit India movement and his subsequent arrest: “Aswini Gupta: A Life Sketch.”
Ashwini Gupta’s encounter with Maitra at Presidency Jail: Maitra, We Cried Together, 3–15.
Ashwini Gupta had vowed not to marry: Letter written by Dr. Rajashree Sen on behalf of her younger brother before his sentencing.
The two belonged to different Hindu reform movements: According to author interviews and sentencing letters, the Guptas were followers of Brahmo Samaj, a Hindu reformist movement that eschewed Hinduism’s excessive focus on idolatry and placed emphasis on learning.
Ashwini Gupta’s death: Author interviews in Calcutta; Maitra, We Cried Together; “Aswini Gupta Dead,” Hindusthan Standard, November 5, 1964; “Aswini Gupta: The Last Rites,” Hindusthan Standard, November 6, 1964.
Details of Ashwini Gupta’s career after independence: Author interviews in Calcutta and New Delhi.
Rajat Gupta thinking his father was alive when he arrived at the hospital: Letter written on behalf of her father ahead of his sentencing by Megha Gupta (hereafter Megha Gupta sentencing letter).
At fifty-six, Ashwini Gupta was dead of kidney failure: “Aswini Gupta Dead.”
Rajat Gupta’s walks with his father and what he learned: Gupta’s taped remarks at Creativity and Personal Mastery class (hereafter Gupta’s remarks at Creativity and Personal Mastery class), taught by Srikumar Rao at Columbia Business School, April 2004.
He was intentionally exposed to TB: Megha Gupta sentencing letter.
“He never spoke ill about anybody”: Gupta’s remarks at Creativity and Personal Mastery class.
“Who will show me the way in the world”: Interview with Rajat Gupta’s cousin Damayanti Gupta-Wicklander, October 18, 2011.
Chapter Two: “I Respectfully Decline to Answer the Question”
It was three days before Christmas 2010: Rajat K. Gupta testimony before the Securities and Exchange Commission in the Matter of Sedna Capital Management, file no. NY 7665 (hereafter Gupta SEC testimony), December 22, 2010.
Sanjay Wadhwa, the deputy chief of the SEC’s Market Abuse Unit: The SEC in a press release on April 1, 2011, said that Wadhwa has been deputy chief of the Market Abuse Unit since it was created in 2010, http://www.sec.gov/news/press/2011/2011-80.htm.
Wadhwa’s life and career history: Devin Leonard, “Rajaratnam Case Shows Outmanned, Outgunned SEC on a Roll,” Bloomberg Businessweek, April 19, 2012.
The story of Sanjay Wadhwa’s father and mother and their family’s experience of Partition: Interview with Arjun and Rashmi Wadhwa, January 21, 2012.
Punjab Province, a collection of 17,932 towns and villages with 15 million Hindus, 16 million Muslims, and 5 million Sikhs: Larry Collins and Dominique Lapierre, Freedom at Midnight (New York: Simon & Schuster, 1975), 121.
Partition and the division of Punjab and Bengal: Ibid.
Partition triggered a mass migration of people, and 1 million lives were lost: Ibid. Ramachandra Guha, India After Gandhi: The History of the World’s Largest Democracy (London: Macmillan, 2007), 32.
Jawaharlal Nehru invited the country’s masses to fulfill their “tryst with destiny” and “awake to life and freedom”: As quoted in “A Tryst With Destiny,” guardian.co.uk., May 1, 2007.
It helped to secure a letter from a member of Parliament: Interview with N. Ram, former editor in chief of the Hindu, April 22, 2012.
Hundreds of thousands of files were destroyed: Michael Schroeder and Mitchell Pacelle, “Attack Destroyed SEC Enforcement Office; CFTC’s New York Offices Were Also Levelled,” Wall Street Journal, September 13, 2001.
David Markowitz introducing Wadhwa to his first case: A version of this story is reported in Leonard, “Rajaratnam Case Shows Outmanned, Outgunned SEC on a Roll.”
In April 2005, Wadhwa brought his first major insider trading case: Ibid.
Sanjay Wadhwa’s role in the discovery of the Reebok ring: Roger Lowenstein, “The War on Insider Trading: Market Beaters Beware,” New York Times Magazine, September 22, 2011.
The retired seamstress who netted $2 million in profits on Reebok: Jenny Anderson, “Seamstress Makes Millions and The Law Notices,” New York Times, April 12, 2006.
“The Zelig of the white-collar bar”: Ashby Jones and Peter Lattman
, “Heavy Lifters, Five Lawyers with High-Profile High-Stakes Cases in the Months Ahead,” WSJ.com, 2005.
Naftalis’s biography and clients: Kramer Levin Naftalis & Frankel LLP website, http://www.kramerlevin.com/gnaftalis/.
Exchange among Henderson, Gupta, and Friedman on December 22, 2010: Gupta SEC testimony.
“He got the brilliance of his father”: Interview with Udayan Bhattarcharyya, November 12, 2011.
When “he decided on something, it had to happen”: Interview with Damayanti Gupta-Wicklander, October 18, 2011.
Details of early family life: Author interviews in Calcutta and New Delhi; letters submitted on behalf of Rajat Gupta in connection with his sentencing; Sreenath Sreenivasan, “The Superboss: How Did McKinsey’s Rajat Gupta Become the First India-Born CEO of a $1.3 Billion US Transnational?” Business Today, April 22, 1994.
Modern School on Barakhamba Road was founded at the height of the British Raj: See http://www.modernschool.net/history-founder.asp for the history of Modern School and its location.
It was “‘the’ school”: Interview with Mukul Mudgal, February 2, 2011.
“Self-realization cannot be achieved by the weak-willed”: See http://www.modernschool.net/history-crest.asp for Modern’s motto. Other translations substitute “perfection” for “self-realization.”
Details of Rajat’s time in Modern: Author interviews in New Delhi; sentencing letters filed on Gupta’s behalf.
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