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.
22. “Gus carried it”: Rubin, p. 74.
23. The summary of the charges against Goldman in the Penn Central matter is from Securities and Exchange Commission, The Financial Collapse of the Penn Central Company, staff report to the Senate Special Subcommittee on Investigations, August 1972. Also helpful were trial transcripts from the Welch Foods Inc. v. Goldman, Sachs & Co. lawsuit.
24. “caused people to have a very positive feeling”: Author interview with Robert Rubin.
25. “They felt good”: Roy C. Smith, Paper Fortunes (New York: St. Martin’s Press, 2010), p. 85.
26. “This was hard on employees”: Ibid.
27. “Within hours”: NYT, May 3, 1974.
28. “I told him we would not do that”: Author interview with George Doty.
29. Information on the Fundamental settlement is from NYT, September 6, 1974.
30. “had had a bad harvest”: Charles D. Ellis, The Partnership (New York: Penguin Press, 2008), p. 104.
31. Pollack’s opening statement is from the Welch Foods Inc. v. Goldman, Sachs & Co. trial transcript, September 9, 1974.
32. “runs like a brook”: Ibid.
33. Piel’s opening statement is from ibid.
34. “When the company went under”: Pollack’s closing statement, October 7, 1974, ibid.
35. “landmark case”: NYT, October 10, 1974.
36. “epochal”: Author interview with Dan Pollack.
37. “This was not a minor event”: Ibid.
38. “The value of the paper”: Whitehead, p. 115.
39. “He said he felt great”: Author interview with Dan Pollack.
40. “L. Jay had had it”: Author interview with Peter Levy.
41. “He was trying to clear”: Rubin, p. 68.
42. “focusing intently”: Ibid., p. 81.
43. “Knowing of Levy’s habit”: Smith, p. 107.
44. “He couldn’t be seen”: Author interview with Peter Levy.
45. “I didn’t go down”: Ibid.
46. “After Gus died”: Rubin, p. 73.
Chapter 8: The Goldman Way
1. “As you’ve all heard”: Charles D. Ellis, The Partnership (New York: Penguin Press, 2008), p. 180.
2. “he’d been able to ignore”: Robert E. Rubin, In an Uncertain World (New York: Random House, 2003), p. 87.
3. “rummaging through his desk”: Roy C. Smith, Paper Fortunes (New York: St. Martin’s Press, 2010), p. 107.
4. “I’m not saying”: Author interview with Robert Rubin.
5. “never was aware”: Author interview with Peter Levy.
6. “Gus would never have retired”: Ellis, p. 180.
7. “Leaderless, the firm was left”: Lisa Endlich, Goldman Sachs: The Culture of Success (New York: Touchstone, 2000), p. 69.
8. “could tell he was”: John C. Whitehead, A Life in Leadership, from D-Day to Ground Zero: An Autobiography (New York: Basic Books, 2005), p. 115.
9. “We had a partners meeting”: Author interview with George Doty.
10. “We’d often have lunch together”: Whitehead, p. 116.
11. “John’s face fell”: Ibid., p. 117.
12. “My father was a very tough man”: Institutional Investor, January 1984.
13. “John and I were the logical choices”: Ibid.
14. “After we’d decided”: Whitehead, p. 118.
15. “I thought that John Whitehead”: Author interview with Alan Stein.
16. “a tremendous shock”: Author interview with Robert Rubin.
17. “To many people”: Whitehead, p. 85. Whitehead’s biographical details as well as a description of creating the Goldman business principles and Goldman’s new-business coverage model were taken from his memoir, A Life in Leadership, along with two author interviews with him.
18. “understatement that has become”: WSJ, March 20, 1979.
19. “There was a lot of debate”: Author interview with Robert Rubin.
20. “When we all first moved in”: New York Observer, December 8, 2009.
Chapter 9: A Formula That Works
1. “Ahh, I don’t want”: Robert E. Rubin, In an Uncertain World (New York: Random House, 2003), p. 79.
2. “Prices were not transparent”: Ibid.
3. “[O]pti
ons trading turned into”: Ibid., p. 81.
4. “Aron’s philosophy was”: Lisa Endlich, Goldman Sachs: The Culture of Success (New York: Touchstone, 2000), p. 92.
5. “I looked at it”: Author interview with Steve Friedman.
6. “Whitehead was somewhat annoyed”: Ibid.
7. “slightly more than $100 million”: NYT, October 31, 1981.
8. “While we prefer”: Ibid.
9. “I saw huge”: Author interview with John Whitehead.
10. “[I]t was something of a shock”: Endlich, p. 96.
11. “It was less than six months”: Author interview with Robert Rubin.
12. “You had the combination”: Endlich, p. 97.
13. “I honestly don’t know”: Author interview with Robert Rubin.
14. “People thought we had made the sale”: Endlich, p. 95.
15. “The three senior people”: Author interview with Robert Rubin.
16. “With chest pains”: Charles D. Ellis, The Partnership (New York: Penguin Press, 2008), p. 263.
17. “I could have said”: Rubin, p. 88.
18. “extremely sophisticated”: Ibid., p. 89.
19. “which he deserved to be”: Author interview with George Doty.
20. “Mark, ten million dollars is not”: Ellis, p. 250.
21. “That meant taking risks”: Author interview with Robert Rubin.
22. “I took tar and feathers”: Author interview with George Doty.
23. “At first I thought”: Ellis, p. 264.
24. “most delicate undertaking”: Rubin, p. 90.
25. “There is incredible bitterness”: Institutional Investor, January 1984.
26. “The Pacifist: Goldman Sachs Avoids Bitter Takeover Fights but Leads in Mergers”: WSJ, December 3, 1982.
27. “Now at Oceanside High School”: Author interview with Steve Friedman. Biographical details for Steve Friedman’s early life and career are from numerous author interviews with Friedman.
28. “our client won”: Ellis, p. 275.
29. “energy of a tightly coiled spring”: Institutional Investor, January 1984.
30. “It was even harder”: John C. Whitehead, A Life in Leadership, from D-Day to Ground Zero: An Autobiography (New York: Basic Books, 2005), p. 129.
31. “maintained a remarkably low profile”: NYT, August 16, 1984.
32. “Can you be in my office”: Whitehead, p. 137.
Chapter 10: Goldman Sake
1. “If anything did”: Author interview with George Doty.
2. “talking to a guy”: Author interview with Steve Friedman.
3. “Our bond business”: Charles D. Ellis, The Partnership (New York: Penguin Press, 2008), p. 229.
4. “It was a shock”: Author interview with Steve Friedman.
5. “The top of that division”: Ellis, p. 229.
6. “The business was big”: Robert E. Rubin, In an Uncertain World (New York: Random House, 2003), p. 97.
7. “Today that wouldn’t mean much”: Ibid., p. 96.
8. “What happened to us”: Ibid., p. 97.
9. “They really got clobbered”: Author interview with Steve Friedman.
10. “absolute best year ever”: NYT, November 3, 1985.
11. “worked day and night”: NYT, April 13, 1986.
12. “a battered L. L. Bean bag”: Telegraph (U.K.), September 25, 2005.
13. “Implicit was always”: NYT, August 8, 1986.
14. “I had to tell him”: Ellis, p. 310.
15. “Goldman Sake”: Ibid., p. 312.
16. “The negotiations were long”: NYT, August 8, 1986.
17. “soul searching”: NYT, September 29, 1986.
18. “lead to Sumitomo influencing”: Copy of transcript of the October 10, 1986, hearing at the Federal Reserve.
19. “I may be old-fashioned”: Ibid.
20. “The presentation made”: Lisa Endlich, Goldman Sachs: The Culture of Success (New York: Touchstone, 2000), p. 7.
21. “I always felt there was a terrific risk”: Ibid., p. 11.
22. “had a real aversion”: Author interview with Peter Weinberg.
Chapter 11: Busted
1. Unless otherwise indicated, the information in this chapter comes from extensive interviews with Robert Freeman and many others involved in the case, plus an extensive review of documents prepared for litigation purposes by Freeman’s lawyers and by Goldman’s lawyers, as well as the documents filed in the case by the U.S. Attorney’s Office for the Southern District of New York.
2. “Bob, you gotta be kidding”: Author interview with Larry Pedowitz.
3. “Wall Street went into shock”: Fortune, May 25, 1987.
4. “I thought he was pulling my leg”: Author interview with Larry Pedowitz.
5. “Goldman was super sensitive”: Ibid.
6. “They screwed up the complaint”: Ibid.
7. “That triggered a truly dreadful period”: Author interview with Steve Friedman.
8. “We told the organization”: Ibid.
9. “I went to the lawyers”: Ibid.
10. “In my daily experience”: Author interview with Sandy Lewis.
11. “A number of lawyers”: NYT, April 10, 1987.
12. “of what it said were difficulties”: NYT, May 13, 1987.
13. “The tip of the iceberg”: NYT, May 19, 1987.
14. “Never well conceived to begin with”: New York, September 4, 1989.
15. “While there was clearly a phone relationship”: Author interview with Larry Pedowitz.
16. “They knew our view”: Ibid.
17. “As a matter of law”: Ibid.
18. “Can you remember any situation”: Author interview with Frank Brosens.
Chapter 12: Money
1. “I understand you guys”: Charles D. Ellis, The Partnership (New York: Penguin Press, 2008), p. 476.
2. “I determined right then”: Author interview with Frank Brosens.
3. “On the day of the crash”: Author interview with Steve Friedman.
4. “We bought it and we own it”: Ellis, p. 366.
5. “It was over very quickly”: Author interview with David Schwartz.
6. “They’re both capable guys”: NYT, November 21, 1987.
7. “Think about it”: Author interview with David Schwartz.
8. The tale was nothing if not sordid: Dorothy Rabinowitz, “A Cautionary Tale,” New York, January 8, 1990. The author has also reviewed numerous documents related to the cases and interviewed Gary Moskowitz and Lew Eisenberg.
9. “This worked because”: Robert E. Rubin, In an Uncertain World (New York: Random House, 2003), p. 99.
10. “Over the years”: Ibid., p. 100.
11. “There was a lot”: Author interview with Steve Friedman.
12. “No mercy for the yuppies”: Anthony Scaramucci, Goodbye Gordon Gekko: How to Find Your Fortune Without Losing Your Soul (New York: Wiley, 2010), p. 141. The entire incident is described well in Scaramucci’s book.
13. “masses of people”: Janet Hanson, More Than 85 Broads: Women Making Career Choices, Taking Risks, and Defining Success on Their Own Terms (New York: McGraw-Hill, 2006), p. 24.
14. “All eyes were on me”: Ibid.
15. “she was subjected to a hostile”: Utley v. Goldman, Sachs & Co. et al., CA 87–6735, Massachusetts Supreme Court. Information about the case can also be found in Goldman’s appeal, Kristine Utley, Plaintiff, Appellee, v. Goldman Sachs & Company, et al., Defendants, Appellants, 883 F.2d 184, United States Court of Appeals, First Circuit. Heard July 31, 1989, decided August 23, 1989.
16. “were illustrated with nude”: Mary E. Crawford, Talking Difference: On Gender and Language (Thousand Oaks, Calif.: Sage Publications, 1995), p. 146.
17. The description of Hoffman-Zehner’s experience at Goldman is from Hanson, pp. 45–52.
18. The description of Charlotte Hanna’s experience at Goldman is from her lawsuit, filed March 2010: Hanna v. Goldman, Sachs & Co. et al.,
no. 10–02637, U.S. District Court, Southern District of New York.
19. The descriptions of the experiences of H. Cristina Chen-Oster and Shanna Orlich at Goldman is from their September 2010 lawsuit, Chen-Oster v. Goldman, Sachs & Co., 10-cv-6950, U.S. District Court, Southern District of New York.
20. “You’re doing everything wrong”: Author interview with Steve Friedman.
21. “I’m a huge believer in them”: Ibid.
22. “You say to another partner”: Ibid.
23. “We were in the chicken camp”: Ibid.
24. “led to concerns”: NYT, May 3, 1991.
25. “The intensity”: Ibid.
26. “No star shone brighter”: Lisa Endlich, Goldman Sachs: The Culture of Success (New York: Touchstone, 2000), p. 83.
Chapter 13: Power
1. “For what it was”: Author interview with Jacob Goldfield.
2. “ ‘Joe’ as everyone called Fowler”: Robert E. Rubin, In an Uncertain World (New York: Random House, 2003), p. 86.
3. “You know, you look good”: Ibid.
4. “Bob has a magnetism”: Ibid.
5. “Few notions”: Ibid., p. 87.
6. “who had made a lot of money”: Ibid., p. 91.
7. “Some people like opera”: Ibid., p. 94.
8. “first among equals”: Author interview with Gene Sperling.
9. “They were hungry”: Ibid.
10. “[M]any in the party”: Rubin, p. 102.
11. “It’s amazing how much”: Author interview with Gene Sperling.
12. “Planning for the Next Financial Crisis”: Lawrence Summers, in The Risk of Economic Crisis, edited by Martin Feldstein (Chicago and London: University of Chicago Press, 1991), pp. 135–58.
13. “Not because of me”: New York, April 22, 1996.
14. “The gist of it was”: Ibid.
15. “For more than three hours”: Rubin, p. 102.
16. “Doing that showed”: Ibid., p. 105.
17. “well equipped for the job”: Ibid., p. 107.
18. “If you don’t become”: Ibid.
19. “Without any further deliberation”: Ibid.
20. “My fascination with Washington”: Ibid., p. 106.
21. “How can a wealthy guy”: Ibid., p. 107.
22. “same pinstripe suit”: New York, April 22, 1996.
23. “It was very clear”: Author interview with Steve Friedman.
24. The account of Rubin’s farewell is from the video of the meeting obtained by the author.
Money and Power Page 88
