Banker hits different note upon retirement
“Banks have gotten overleveraged. There should be nothing off the balance sheets.” Sandy Weill, Citigroup creator
After a 50-year career that culminated in building the world’s largest bank — Citigroup — Sandy Weill and his wife, Joan, decided to start a new, quieter chapter, far from Wall Street.
Two years ago, they bought a home on 360 acres in Sonoma County, settled in with their bichon frise named Angel, and began to focus on golden-years hobbies like making wine from their own Syrah grapes, savoring the heirloom tomatoes from their garden, and vacationing with the grandkids.
But it didn’t take long before Sandy Weill grew restless.
A few months after moving in, he and his wife got involved in what they call “the perfect startup,” an unfinished music hall at Sonoma State University. The Weills, philanthropists who have donated more than $1 billion of their personal fortune to institutions and nonprofits, are working to turn the Sonoma site into a worldclass music center.
To top it off, in late July, during a live, two-hour appearance on CNBC, Weill shocked his hosts and followers in finance by saying he believed it was time to break up the very superbanks he had championed, and to create new regulations
similar to ones he had lobbied Congress to end.
“What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail,” he said on CNBC.
Whether the reaction was applause, disbelief or cynicism, no one would argue that it was another jaw-dropping moment for Weill, 79, who, in the past decade, has risen to enviable highs and fallen to challenging lows. In 2002, Fortune magazine listed Weill as the most admired CEO in the country by his peers. But by 2009, Time magazine had named him one of the 25 people to blame for the financial crisis, describing him as the architect of swollen banks that became too big to fail and needed multibilliondollar bailouts.
“We have had our ups,” Joan Weill acknowledges, “and some downs.”
Exciting new influence
In early August, sitting in the living room of their Sonoma home, Sandy Weill explains why he’s been compelled to trade West Coast casual for his more familiar pinstripe suit and power tie.
“I’m not interested in sitting back and saying, ‘Geez, the world would have been different if this had happened,’ ” he says. “I find it much more exciting to think about how you might be of influence in some new areas.”
“Why do I care?” he asks, pondering the question of why he can’t leave banking behind and wants to help restore public trust in the financial markets. “I’ve always cared. This has been the land of opportunity, and it makes me sad to see the U.S. not taking leadership positions. I think if I was checked out, I’d be really checked out.”
The trim and tan Weill comes across as watchful and very much in charge, listening and assessing, and being measured in his own words. Yet he’s quick to smile and crack self-deprecating jokes.
Joan, 78, who has the coiffed elegance of Manhattan’s Upper East Side but none of the attitude, watched the CNBC interview from their New York apartment, and saw her husband’s statements as an evolution in thinking, not an aboutface.
“The industry was a major part of our lives, and it’s gotten so maligned,” she says, with Angel at her feet. “Sandy wants to see that the industry attracts the brightest people. He cares about the business, the people and the country.”
Saddened by how bankers have gone from revered to reviled, Joan says, “There are a lot of good people who have done a lot of good things, and now they’re all cast as bad. It’s class warfare.” She notes that an estimated 95 percent of the so-called 1 percent came from the 99 percent, “but you are now pilloried for getting to the 1 percent.”
From the 99 percent
Both Joan and Sandy came from the 99 percent, growing up in the Bensonhurst section of Brooklyn. Sandy’s father, who was born in Poland, struggled with various businesses, and his mother was a homemaker. He was a terrible student early on and flourished when he began attending the Peekskill Military Academy in Peekskill, N.Y. His Latin teacher and tennis coach became his mentor, motivating him in the classroom and on the courts. Joan’s father was a press agent, and her mother was a housewife.
Sandy met Joan Mosher on a blind date on April Fool’s Day, 1954. Her first impression was that he was shy and “short,” but easy to talk to. His first impression was that she was “energetic, beautiful and quick with a joke.” They were married in June 1955, after she proposed. They were broke and finishing college — he at Cornell, she at Brooklyn College— and her parents didn’t approve of their jobless new son-in-law. He tried his hand at selling New York City directory books but spent hours playing arcade games.
Stumbled into finance
The newlyweds’ early financial goals were to save enough money to buy a deep fryer — Sandy loves deep fried shrimp — the oil to go with the fryer and eventually to cobble together $10,000 in savings.
Sandy stumbled into the world of finance when he passed by a brokerage firm that was bustling with energy. He asked his father about the business and got a lead on a job at Bear Stearns. He started in the back office, earning $150 a month, and spent his lunch break taking in the “large bullpen” where brokers worked. He was hooked, and soon took the next step and became a broker. In May 1960, he and a neighbor branched off and opened their own firm.
Within a year, Sandy, with his quick grasp of the markets, saw his firm take root. Over the next two decades, through relentless acquisitions, Sandy built the business into a powerhouse — Shearson Loeb Rhoades, the second biggest securities brokerage company next to Merrill Lynch. He sold Shearson to American Express for close to $1 billion in 1981 (he would later buy it back), and went on to acquire a troubled consumer finance company called Commercial Credit. He turned the company around, took it public, and eventually bought Travelers Corp., Aetna Life & Casualty, and Salomon Bros., the Wall Street investment bank.
Crowning achievement
On April 6, 1998, Sandy — with Joan at his side — announced the “greatest deal in the history of financial services, the crowning of my career” — the merger between his company, Travelers, and Citicorp, which became Citigroup.
Awave of consolidation followed, and on November 12, 1999 — in another victory for Weill, who had personally lobbied for new legislation — President Clinton signed into law the Gramm-Leach-Bliley Act, which overturned the Depression-era Glass-Steagall Act, preventing commercial and investment banks from merging.
“The only reason we needed Glass-Steagall to be reformed was that a bank could not be an underwriter of insurance products,” Weill explains. “They could sell insurance products but they couldn’t underwrite them. At Travelers, we were an insurance underwriter, and insurance had nothing to do with the recent financial problems.”
Weill has come to believe that new legislation is needed to govern — and even break apart — big banks, as the world has gotten “much more complicated. Derivatives have gotten to be much more widely used. There is a lack of transparency, and banks have gotten over-leveraged. There should be nothing off the balance sheets.”
He is thinking about drafting a more concise set of rules to do a better job than what he sees as the long and labyrinthine Dodd-FrankWall Street reforms under way.
At the same time Wall Street beckons, the Weills are dedicating much of their time to the Green Music Center at Sonoma State. They donated $12 million up front, and have done everything from selecting the 100- year-old olive trees for the center’s courtyard to booking the talent — calling on friends including pianist Lang Lang and cellist Yo-YoMa — for the inaugural season opening in September.
During lunch at their home, Sandy, who has been chairman of Carnegie Hall in New York for two decades, apologizes and says he needs to take a call. It is from soprano Renee Fleming, whom he was trying to book for the music center.
“God is going to kill me,” he says, sitting back down at the table on their terrace overlooking the tawny rolling hills of Sonoma. “Renee said she’d love to come and see the hall. There’s a chance she can do it Sept. 14, but that’s Yom Kippur.”
Joan jokes: “Maybe you can get permission from the rabbi.”
The Weills’ interest in the music center was sparked when their neighbor in Sonoma, Les Vadasz — he was the fourth employee at Intel and recently helped Sandy send his first e-mail — hosted a welcoming cocktail party for them when they arrived.
The Weills learned that the Green Music Center, a $110 million project modeled after Ozawa Hall at Tanglewood, was unfinished as funding had dried up.
Music connections
Sonoma State President Ruben Armiñana said the Weills visited the center and called him a week later. Armiñana recalled, “Sandy said, ‘I have a friend who’s going to be in San Francisco, and I’d like for him to come and see the hall and give me his opinion.’ Then he said, ‘Oh, I forgot to tell you he will be there around 11:30 — at night. And his name is Lang Lang.’ ”
Lang Lang, the superstar classical pianist, arrived at the Sonoma hall at around midnight, after giving a recital at Davies Symphony Hall.
“I played a lot of things, from Bach to Chopin to Rachmaninoff to Beethoven,” Lang Lang recalled. “For me, the hall is very similar to Tanglewood. It’s really perfect. I love it that you can open it up as an outdoor hall.”
Lang Lang will open the season at the Green Music Center’s performance venue — now called the Joan and Sanford I. Weill Hall — on opening night, Sept. 29. Yo-Yo Ma also will perform there in January 2013. (Renee Fleming will open the center’s 2013-14 season.)
Ma, who met the Weills in the mid-1980s through violinist and conductor Isaac Stern, has come to admire Joan and Sandy for their generosity, and for their marriage.
“They are an incredibly devoted couple,” Ma said. “My wife and I met them when we were in our 20s. Their lives are complex, and yet they were always incredibly devoted to one another. Their marriage has been a role model for us.”
Devoted to each other
Joan, sitting at the outdoor table of her home, banters with her husband of 57 years. When the two were first married, she thought Sandy was headed into the Air Force and would make about $6,000 a year. “I thought that would be fine,” she says. But once he started in the markets, he couldn’t stop.
“I didn’t create a very calm life,” Sandy acknowledges.
She nods. “We were always on the move, not houses — though that, too — but you were always building and being the calculated risk taker.”
He says, “I made the decisions you were afraid to make.”
“I would never have thought of the decisions you made,” she says. “And I always had tremendous faith in your ability that it would be the right decision.”
With a wink, she confides, “When I met him, I was looking for the blond surfer from Hawaii. Every once in a while, to this day, I still say I should’ve gone for the blond surfer. I should have gone for brawn, not brains.”
Jokes aside, it is clear that Sandy would not be who he is without “Joanie,” and that she would not be who she is without Sandy. Joan navigated her corporate wife responsibilities, and the raising of their two children, Marc, a private investor, and Jessica, who is CEO of National Financial Partners in New York. But Joan found her niche through volunteering, first with Citymeals-on-Wheels, which helps the elderly, and later with Alvin Ailey, the American dance company. She was drawn to Ailey because of its camps for innercity children and outreach to public schools.
Judith Jamison, Ailey’s longtime artistic director who retired in 2011, credits Joan, who became chairman of the board in 2000, for the theater’s permanent home. ( Joan has donated $34 million to Alvin Ailey.)
Jamison developed a close friendship with the Weills: “They say, ‘We are two kids from Bensonhurst.’ It’s charming, and true.”
Those two kids from Bensonhurst have raised billions for charities and nonprofits, and given more than $500 million to the medical college at Cornell, Sandy’s alma mater. It is now the Weill Cornell Medical College in Manhattan.
“I hope what we’re doing now sets a good example,” Sandy said of their involvement with the Green Music Center.
The Weills’ daughter, Jessica Bibliowicz, admires her parents’ resilience.
“My mom and dad know there are highs and lows,” she said. “My dad gets hit, but he doesn’t go down. He always finds his way back. He is an incredibly constructive guy who likes to think out of the box. And he always acknowledges that he wouldn’t be anywhere without my mom.”
Restore Wall Street’s luster
Sandy checks his watch. Joan looks on knowingly. There is an afternoon meeting with their winemaker, and an upcoming visit by the grandkids. But what seems to energize the lifelong dealmaker is something that brings him full circle. He is back to thinking about how to restore luster to Wall Street.
“What I want is for the country I love to be a leader for the next 50 years,” Weill says. “We have the Dodd-Frank rules (for Wall Street reform), but in my mind, there has to be a better way to do it. I think it can be done in a few pages.”
Smiling, he adds, “I don’t know what those few pages are, but I’m thinking about it. I expect to get back to it after Labor Day.”