Arthur Le­vitt’s life of rein­ven­tion: fi­nancier, reg­u­la­tor, techie.

The Washington Post Sunday - - BUSINESS - Value Added thomas.heath@wash­post.com

“Why do you want to come to the The Post?”

That was what an in­ter­viewer asked me when I first ap­plied to the news­pa­per three decades ago.

My an­swer was sim­ple: “I want to be part of my times.”

That kept pop­ping into my mind af­ter in­ter­view­ing Arthur Le­vitt Jr., the 86-year-old for­mer head of the Se­cu­ri­ties and Ex­change Com­mis­sion.

I have in­ter­viewed many in­ter­est­ing peo­ple over the years, but few match Le­vitt’s claim on be­ing rel­e­vant to his times. He is best known for his record longevity at the SEC, but — to bor­row a phrase from one of his pro­fes­sions — that short sells the en­tire arc of a ca­reer that is a les­son in rein­ven­tion. Cat­tle sales­man, jour­nal­ist, pub­lisher and card-car­ry­ing mem­ber of the fi­nan­cial es­tab­lish­ment. His “Take on the Street” busi­ness book sold 100,000 copies.

“It’s my per­son­al­ity,” the Air Force vet­eran said. “My mother used to say, ‘Go out for ev­ery­thing.’ ”

So he did. Track team. Honor so­ci­ety. School news­pa­per. And later, stock­bro­ker, busi­ness­man, po­lit­i­cal troubleshooter (he served on two base-clos­ing com­mis­sions), chair­man of the Amer­i­can Stock Ex­change, chair­man of the New York City Eco­nomic De­vel­op­ment Com­mis­sion, high-tech con­sul­tant.

A con­ver­sa­tion about his life is a turn through U.S. po­lit­i­cal and fi­nan­cial his­tory, in­clud­ing the Car­lyle Group, fi­nancier San­ford Weill, ac­tress Ethel Mer­man, bil­lion­aire and for­mer New York City mayor Michael Bloomberg, in­vest­ment bank Gold­man Sachs, Wall Street le­gend Mau­rice R. “Hank” Green­berg, and politi­cians in­clud­ing for­mer se­na­tor Phil Gramm (R-Tex., with whom he shares a love for Labrador re­triev­ers), and for­mer con­gress­men Wil­bur Mills (DArk.), John Din­gell (D-Mich.) and Charles B. Ran­gel (D-N.Y).

He has worked for Time-Life. He owned Roll Call, now a daily take on Capi­tol Hill. He oc­ca­sion­ally pens mis­sives on fi­nance for the Wall Street Jour­nal.

Le­vitt’s lat­est rein­ven­tion is serv­ing as a con­sul­tant to seven high-tech com­pa­nies. Those ven­tures bring him in con­tact with Sil­i­con Val­ley stars like Max Levchin, co-founder of PayPal, and Mike Cagney of So­cial Fi­nance Inc.

“I am in touch with some of the smartest minds in Amer­ica, and in a field with which I had very lit­tle ex­pe­ri­ence,” he said.

In ad­di­tion to the tech com­pa­nies, he sits on the board of pri­vately held Bloomberg L.P.

Le­vitt’s ex­pe­ri­ence in fi­nance, mar­kets and se­cu­ri­ties, not to men­tion his Rolodex and po­lit­i­cal clout, makes him a com­mod­ity.

“I can help those com­pa­nies in terms of man­age­ment,” he said, “choos­ing the right peo­ple, choos­ing and po­si­tion­ing the board of di­rec­tors, help­ing them fi­nance the com­pa­nies by in­tro­duc­ing them to po­ten­tial in­vestors.” He learns from them, too. “I have been ab­so­lutely fas­ci­nated by their abil­ity to make a new way, de­velop new strate­gies and uti­lize our cap­i­tal mar­kets more con­struc­tively than they have ever be­fore been used,” he said.

His in­ter­est in politics and fi­nance comes nat­u­rally. In his fam­ily, Le­vitt grew up in a fam­ily where “the con­ver­sa­tions around the kitchen ta­ble ev­ery night in­volved pen­sions and the sanc­tity of the pen­sion sys­tem.”

If his mother blessed him with as­sertive­ness, his fa­ther’s con­tri­bu­tion was in­de­pen­dence. Arthur Le­vitt Sr. was a politi­cian and good at it. He was elected New York state comptroller for six terms, span­ning 24 years.

“He was his own man,” Le­vitt says. But the son made an early de­ci­sion not to fol­low his fa­ther into politics.

“It was too un­cer­tain. Too cut­throat,” he said. “I didn’t want to go through the enor­mous stress of run­ning for of­fice, hav­ing seen my dad do it.”

He ma­jored in English at Wil­liams Col­lege, grad­u­at­ing in 1952. He was ac­cepted at Yale Law School, but his fa­ther ad­vised him to pass.

He in­stead would fol­low the path of an un­cle, Robert Le­vitt (one of ac­tress Ethel Mer­man’s four spouses) who was pub­lisher of the Amer­i­can Weekly, a Sun­day news­pa­per in­sert pop­u­lar in the early 20th cen­tury. Af­ter two years in the Air Force, he worked at Time Inc., first in Cincin­nati and then New York.

He was mak­ing around $12,000 a year for Time when a friend named Wil­liam van­den Heu­vel, a con­tem­po­rary who is an at­tor­ney, busi­ness­man and for­mer diplo­mat, rec­om­mended that Le­vitt take a job with a rel­a­tive in the cat­tle busi­ness.

Never one to say no, Le­vitt moved to Kansas City and took the $25,000-a-year job. The cat­tle busi­ness was at­trac­tive to high­in­come in­di­vid­u­als seek­ing tax­ad­van­taged in­come. Plus, Le­vitt was good at it. Af­ter a year on the Plains, he re­turned to Man­hat­tan and opened an of­fice on 57th Street and Madi­son Av­enue, where he con­tin­ued to sell cat­tle. One of his cat­tle cus­tomers told him if he could sell cows, he could sell stock, and rec­om­mended that he join a stock bro­ker­age op­er­ated by the man’s son-in-law. The firm even­tu­ally be­came Co­gan, Ber­lind, Weill & Le­vitt.

Some com­peti­tors re­ferred to the firm as “Corned Beef With Let­tuce.” The firm changed its name nearly a dozen times be­cause of ac­qui­si­tions and ex­pan­sions. It was even­tu­ally ac­quired by Amer­i­can Ex­press.

Le­vitt had landed his first fortune. The fi­nan­cial in­de­pen­dence al­lowed him to pur­sue a se­ries of other jobs. From 1978 to 1989, he chaired the Amer­i­can Stock Ex­change. He bought Roll Call dur­ing that time, and turned it into a suc­cess­ful pub­li­ca­tion cov­er­ing Capi­tol Hill. (One con­gress­man helped im­mensely by slip­ping Le­vitt the home ad­dresses of ev­ery U.S. rep­re­sen­ta­tive, al­low­ing Roll Call to land on their front doorstep in­stead of their of­fices.)

He de­vel­oped a warm rap­port with many politi­cians, in­clud­ing Ran­gel, who be­came the pow­er­ful Ways and Means chair­man, for­mer con­gress­man Dan Rostenkowski (D-Ill.) and Ed­ward J. Markey, now the Demo­cratic se­na­tor from Mas­sachusetts.

“I like these guys,” he said of politi­cians. He liked schmooz­ing. He liked the rit­u­als.

Le­vitt sold Roll Call to the Econ­o­mist in 1993 for $15 mil­lion, fat­ten­ing his fortune.

Pres­i­dent Bill Clin­ton ap­pointed him to the SEC in 1993. The life­long Demo­crat said he has no idea why Clin­ton picked him.

It was an­other rein­ven­tion and an ideal match.

“My ex­pe­ri­ence on two base­clos­ing com­mis­sions and tes­ti­fy­ing be­fore Congress many times and own­ing the con­gres­sional news­pa­per — you couldn’t get bet­ter train­ing,” he says. “I was very com­fort­able with the po­lit­i­cal de­mands.”

Skep­tics at the time ques­tioned whether some­one who had made a fortune on Wall Street and had run the Amer­i­can Stock Ex­change could be the in­dus­try’s watch­dog. One big miss was the years-long Bernard Mad­off scam, which went on un­der the noses of the In­ter­nal Rev­enue Ser­vice and sev­eral reg­u­la­tors.

But Le­vitt’s SEC ten­ure was known for its ac­tivism.

“My over­whelm­ing fo­cus was on the im­por­tance of the in­di­vid­ual in­vestor over cor­po­ra­tions, over mar­ket struc­ture, over ev­ery­thing else,” said Le­vitt, adding that he knew what to look for. “I saw and prob­a­bly en­gaged in some of the prac­tices I had come to op­pose, such as sales com­mis­sions based on vol­ume, higher com­mis­sions.

“I trans­ferred mil­lions of dol­lars from the pock­ets of bro­kers to the pock­ets of in­vestors,” he said.

You would think he would have gen­tly headed into re­tire­ment af­ter his SEC term ended in 2001. He could spend time with his fam­ily, his beloved Labradors and the friends who join him on gru­el­ing wilder­ness trips.

It doesn’t seem like he’s slowed down even a step. He wrote a re­port on the fi­nances of the Na­tional Hockey League in 2004. His pas­sion for dogs keeps his 20year in­volve­ment with Guid­ing Eyes for the Blind, a non­profit or­ga­ni­za­tion that trains dogs.

He worked as an ad­viser to the Car­lyle Group for sev­eral years, and then there is the con­sult­ing with the tech com­pa­nies, which he cred­its for rein­vent­ing him once more. But mom de­serves most of the credit.

As he put it: “I fol­lowed my mother’s di­rec­tion to take on ev­ery­thing that comes my way and turn down noth­ing.”

AMANDA VOISARD FOR THE WASH­ING­TON POST

Arthur Le­vitt Jr. was the long­est-serv­ing chair­man of the Se­cu­ri­ties and Ex­change Com­mis­sion.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.