Fixers Page 2
Perhaps this is the place to deliver a short testimonial to the man who brought me up by himself (with a governess and housekeeper-cook), my mother having dumped us when I was eight and run off with one of those lockjaw-mouthed, inherited-money assholes who the next year killed them both when he flew his Learjet into a mountain outside Sun Valley.
My father, whom I called “Pop,” was a species now defunct; what in his day were called “gentlemen sportsmen,” a term that denoted not only how well you executed certain athletic maneuvers—drop shot off the back wall, twenty-foot curling downhill putt, fox-trot with an ungainly debutante or bride’s mother, wet fly under a salmon’s nose—but how you conducted yourself in business and in life in general.
Of course, Pop’s palmy days were back when Wall Street was different from the money- and people-grinding machine it is now. The phrase “24/7” hadn’t been coined. One finished one’s working day by 6:00 p.m. at the latest—the “day” including (if he didn’t take one of his clientele of widows and trustees to lunch) a midday or early afternoon game of squash or court tennis at the Racquet Club or at the River Club. After work, one looked in at one’s club for a drink, although Pop was an attentive father, unlike many WASP parents. He was always home in time for dinner with me at 7:00 p.m. (or, if he had a date, to sit with me and my governess while we ate). We spent time together. At least once or twice every autumn we’d drive up to New Haven for a Yale football game; I lived for those outings. On vacation Sunday nights, he’d take me to Rangers games. We saw a lot of plays together. My old man was a good sport and a good guy. Men and women liked him equally well. I like to think I resemble him.
The man I’d be meeting at Three Guys, Leon Simon Mankoff, is spun from different social cloth. I don’t think he’s ever played a round of golf. He lives for work and the harpsichord. In my view, and I’m certainly not alone, he’s an authentic Wall Street genius. I think my opinion’s worth something, even though I only worked (technically) on the Street for two years after I left the Agency, at a Washington-based hedge fund (hated it—but let’s get to that later), where I learned to talk the talk, even if I couldn’t make myself walk the walk. I know what CDOs are, and the rest of the derivatives stew that has become Wall Street’s favorite entrée, and because a significant portion of my consulting work is with Wall Street people, I’ve more or less kept up with the latest forms of witchcraft and financial prestidigitation. This isn’t to say that you could plunk me down at a trading slot at STST and I’d end the day with my book up $50 million, but I can hold up my end of the conversation with the people who do—although I now and then confuse “fiscal policy” and “monetary policy.”
More important, I’ve seen Wall Street up close, personal and plain, and I think I get the picture. The key to Wall Street is that these people really don’t give a damn about what anyone other than peers and competitors think and their accountants and lawyers tell them. They’ll claim that they do, for public consumption, or when they feel the hot breath of pending regulation, but take it from me: I’ve been around them for almost thirty years, watching them talking the talk and walking the walk, and apart from the 1 percent of the 1 percent, they don’t give a screw about the rest of mankind. That said, you also need to consider that they’ve managed to work things out so that what they do, overpaid though it may be, has become essential to the working of the world. Life runs on fossil fuels and credit. And Wall Street’s the guy at the credit pump, sporting $5,000 pinstripes instead of coveralls with a nametag.
I do confess to a casual interest in Wall Street history, mainly because it was kind of a hobby of my father’s. His generation appears to have been one of the last to whom times past really mattered, and he passed that perspective on to me: he and my teachers at Buckley, Groton, and Yale, not to mention the goings-on in the tomb. My old man left me a whole library on high finance that I dip into now and then: the biographies of famous financiers, mostly, or old books like Charles Francis and Henry Adams’s Chapters of Erie, about the fight for control of the Erie Railroad in the late 1860s. Read that and you’ll quickly conclude that the effect and influence of Big Bad Money has changed very little in the intervening century and a half. Some of it is actually funny: I’ll bet you don’t know that the author of one of the earliest treatises on American banking had the singularly appropriate name of “Gouge.”
One of the things that fascinates me about the Street today is how little its high flyers seem to know about the history of their business. A guy I know at Lehman tells me that since the firm has been taken over by a bunch of lowlifes, not one in a hundred people there knows or cares who Robert Lehman was or how far back in American history the firm goes and where it began life (1857, Montgomery, Alabama). Come to think about it, why should they? That was then, and everybody knows that now is where the bucks are. Perhaps this is why the Street’s so prone to these boom-bust cycles when everyone seems to forget the past and make the same mistakes that crashed the markets a decade or so earlier (don’t worry, I’m not going to quote Santayana).
Now: Mankoff. How best to sum up the guy? There’s a place in Scott Fitzgerald’s unfinished novel The Last Tycoon, where he describes his protagonist, Monroe Stahr, as one of the few men in Hollywood capable of keeping “the whole equation of movies in his head.” Substitute “Wall Street” for “movies,” and that’s Leon Mankoff—at least as far I understand how Wall Street works. And I should add that with Mankoff, it’s his gut as well as his intellect that rules. His feel for the interactions of human nature helps him read markets as profitably as anything his computer jockeys’ algorithms tell him.
Mankoff’s a round dozen years older than I am. We’re both sons of Old Eli, which is where we first encountered each other, although not as undergraduates: Mankoff was Yale class of ’69 (graduated when he was twenty), summa cum laude in Mathematics and Economics, a dozen years before I graduated magna cum laude in English and Art History. What really links us is Skull & Bones.
I dare say I’m the sort you think of when people say “Skull & Bones”: a button-down, “white shoe” type right out of Stover at Yale, a fourth generation Skull & Bones legacy. To the tomb born, as it were. But Mankoff is also a well-recognized Bones type: the campus unknown of whom people remark year after year, when the Yale Daily News publishes the list of secret society acceptances the morning after Tap Day, “Who the hell is that guy and how the hell did he get tapped for Bones?” Take it from me: every Bones delegation includes one or more “that guy” (or today, “that girl”). It’s what gives the Russell Trust Association (Skull & Bones’ legal designation) its flair and energy year after year. It isn’t all legacies and connections.
At my Bones initiation in the spring of 1980 when my delegation formally took over from its predecessor, Mankoff was one of a selected group of alumni invited to be present to make sure all went off according to prescribed ritual and voodoo. What I didn’t know at the time was that he was talent-spotting for the CIA, where he’d been tasked to set up a section specializing in economic warfare and destabilization.
We hit it off immediately. Mainly, I guess because we’re both curious to the point of obsession. Everything interests us and prompts us to check it out: facts, rumors, news stories. We need to know the hows and whys of life. That way, we both figure, we have a leg up when it comes to controlling the whos and whens. We read, we listen, we notice; we chew things over, we continuously ask questions of others and ourselves, we do research, we value experience.
After I graduated from Yale (my old man would have killed me if I’d ever said “graduated Yale”), I spent a year at NYU’s Institute of Fine Arts working on a master’s in art history. I had a vague idea of making museum work my life’s calling, but I wasn’t committed. I attended a couple of the summer get-togethers Bones holds on this island it owns in Maine, and I ran into Mankoff there, and at reunion gatherings in the tomb on High Street. We found ourselves to be kindred spirits in a number of ways, and in the late spring of
1982 he recruited me to come to work at the CIA, just like in the movie The Good Shepherd.
The timing was propitious. The day on which I reported for duty at the agency was August 17, 1982, which was also the day a hundred-point pop in the stock market would mark the end of a decade that had subjected the country to Watergate, the Vietnam humiliation, and OPEC inflation, that saw a 17 percent prime rate and 11 percent unemployment, and signaled the beginning of the Age of Milken and all that has flowed therefrom for better or worse. A wealth manager I work with in Chicago, a trustee of that fair city’s splendid Lyric Opera, compares that glorious Thursday in August 1982 to the incredible moment in Fidelio when the prisoners emerge from Stygian gloom into sunlight and sing a hugely moving, uplifting chorus.
For the next ten years, Mankoff and I flourished as a team. Basically our job was to sling economic and financial monkey wrenches into vulnerable central banks; to make the cold war markets hot for collectivist economies and hostile kleptocracies. We had a good, productive time together, and I learned all about the craft of moving large amounts of money around in ways that left no foot- or fingerprints. I also picked up a lot about human motivation and corruptibility.
During that time, I came to a significant conclusion about my native land. It’s this. The Pledge of Allegiance that I was made to memorize at grade school includes the phrase “one nation under God.” It was at Langley that I learned that, in practical terms, the deity meant isn’t the God of Moses or Jesus or Mohammed, it’s Mammon. That’s a theme I’ll be surprised if I don’t return to in the course of this account.
In 1992, our partnership, which I was beginning to think of as “legendary,” ended when Mankoff quit the Agency for STST, recruited by a former partner who was serving as a deputy secretary of defense in the Bush I administration. He offered me the chance to come along with him, but I declined. My old man was on Wall Street, and if I joined STST I’d be competing with him, at least remotely. I’d seen, from the example of certain school and college friends, what that could do to even the tightest father-son relationships, so I passed. I treasured my relationship with my father and was loath to take even the tiniest risk of screwing it up for money.
Agency life without Mankoff and his sharp instincts quickly palled, and in 1993, I put aside my finer feelings and allowed myself to be recruited by a Washington hedge fund that specialized in trading on overseas political intelligence. That’s where I learned the buzzwords and how the sexiest games were played. It’s also where, within the space of a year, I came to conclude that Wall Street work wasn’t for me. It wasn’t only that the work was boring—a deal is a deal is a deal, after all, and except for the sums and units of account, one trade pretty much resembles another—it was the people. My old man always said that if you don’t like what you’re doing, or who you’re doing it with, sooner or later you’re not going to be very good at it. I realized that to succeed, I would have to become like these people. I would have to partake of their greed, share their unconcern for the general welfare, adopt their lack of conscience—and that I couldn’t do.
Fortunately, relief/rescue was at hand. Through a museum connection I got a job in a family office in San Francisco, running its $50-million arts philanthropies. They were deep into the entire spectrum of San Francisco culture, from the Opera House to the de Young Museum, and often partnered with other big money, which let me widen my acquaintance in that world.
I turned out to be pretty adept at mediating between the people with the money and the people who wanted it, as long as the money was going to projects I believed in, and in 2004, emboldened by the urgings of a number of people I’d worked with, I decided to go out on my own as an independent operator in the broad field of art and cultural philanthropy. Thus, Maecenas Associates. I suppose my clients think of me as a consultant, but I think of myself as a cultural investment banker; I conjure up projects—lecture series, art exhibitions, a Shakespeare opera series I’m just starting to think through—and make them happen: find the right venue, the right participants and resources, the money. For which I get paid handsome but not exorbitant fees and retainers—unlike Wall Street.
When I started the business, I had Mankoff targeted as a client and he was among the first to sign on, not only because he liked and trusted me, but also—I reckoned—because he figured that it made sense to give STST’s cultural proxy to a guy who looks like he’s just stepped out of a Louis Auchincloss novel. A lot of people are turned off by STST’s public image as a sharp-elbowed, take-no-prisoners, rip-their-face-off, eat-what-you-kill outfit; I might help ameliorate that impression. Whatever his reasoning, there’s no doubt in my mind that without Mankoff’s initial sponsorship, I wouldn’t be where I fancy I am today.
And where that is consists of roughly fifty accounts, mainly family offices running between $250 million and $3 billion in assets, with a scattering of carefully winnowed hedge-fund types (none of these is private equity, of which—knowing what I know—I don’t wholly approve, but what is it they say about beggars’ freedom of choice?) and rich individuals, a Scandinavian sovereign fund’s U.S. arts-exchange offshoot, and—finally—Mankoff/STST, my only “true” Wall Street client. My work consists of vetting and authenticating proposals and pitches and negotiating the “buyers’ side” of the projects. I work with my clients’ financial advisers to make sure the funding fits their portfolio standards and that everyone has a clear understanding of their commitment. I try to avoid client conflicts. I’m famously closemouthed; in my business, you hear things, and my policy is to let it be someone else who spills the secrets of the pillow or the family dining table. I also take on the occasional pro bono job where I feel I owe a favor, or it will be especially good for my image.
It’s not all blue skies and robin redbreast, though. The trouble with my work is that you have to be where the money is, and right now we’re going through an era where the really big money every museum and educational institution is chasing after belongs to a pretty sorry bunch of people: Arabs, Russians, twenty-year-old tech geniuses who were too busy coding to learn which fork to use, let alone what Socrates or Beethoven have meant to the world, or that it’s gauche to light a cigar with a 500-euro note, as I heard some Russians were doing a few years back in Saint-Tropez.
I occupy space at a sweetheart annual rent in a small office building on 63rd Street between Lexington and Third Avenues that came with an STST acquisition before Mankoff got there, and that the firm has never gotten around to using for its own purposes. The exception is a suite of grace-and-favor offices down the hall on my floor that STST makes available to a few retired partners. I’ve nicknamed this space “San Calisto” after the sixteenth-century palazzo in Rome where the Vatican houses its elderly cardinals. About this, more anon.
Although STST is technically my client, I work almost exclusively with Mankoff. I’m grateful for this, because it protects me from the perception that I’m readily available to advance the social aspirations of the wives of certain higher-ups and their clients, such as prestigious trustee boards, superior placement at a particularly desirable gala, even restaurant reservations. I know, for example, that Ludmilla Rosenweis, wife of Mankoff’s #2, Rich Rosenweis, is pushing her husband hard to take a bigger role in the firm’s arts benefactions, a role she clearly believes she can slipstream into a more prominent position in Manhattan society.
My work with STST can be varied. It isn’t all program underwriting and endowments. Right now, for instance, Mankoff has sought my advice concerning the artist to be commissioned to do a huge painting for the lobby of the STST Global Headquarters building that they’ll be moving into next year. Like its predecessors, the lobby murals at places like LaGuardia Airport and Rockefeller Center, it’s supposed to reflect wealth, technology, power, energy, soaring modernity—the blessings of capitalism. STST’s own Sistine Chapel ceiling, you might say. To my mind, the ideal artist to fulfill this commission in terms of sheer visual excitement would have been Jackson Pollock, a
nd I’d have loved to see what Basquiat would have done with that space, but they’re both dead. The competition is hot and heavy-handed, and the jury’s still out. At least three of Manhattan’s most prestigious art galleries—I’m not naming names, but if you know the art scene, you can make an educated guess—have offered me under-the-table bribes to swing the job to one of their house artists. They seemed surprised and chagrined to learn that I’m not in the “pay to play” business, as many in my line of work are.
While I would never say as much to Mankoff, I have to admit to a certain discomfort at the subsidy of nearly a half-billion dollars that Mankoff and Rich Rosenweis exacted from New York City by threatening to build STST’s new global headquarters across the Hudson in New Jersey. That is a lot of money, if you translate it into teachers’ salaries, or infrastructural improvements, or health-care assets, or poor kids’ school meals, or fixing up public housing.
I know from my Maecenas work that the rich always threaten to take their money elsewhere if they don’t get what they want. Frankly, I think it’s all a big bluff. What’s the point of having all that money if you can’t live where you want, do business where you want? Restaurants you want to eat in, where there are servitors and sycophants to bow and scrape, where there are the sort of people you think your money qualifies you to hang out with, where there’s what the immortal F. Scott calls the consoling proximity of other millionaires? But the bluff is never called. It’s other side that always folds, the side playing with taxpayers’ dollars. And why not? It isn’t their money; more importantly, when the time comes to leave public service, quote unquote, favors get returned in the form of lucrative Wall Street employment.