I can't seem to get away from old associates in the news. Today's New York Times contains on the front page an extensive investigative piece on my old boss, Charles Millard (NYT story). Charlie was President of the New York City Economic Development Corporation (EDC) when I was an Executive Vice President during the Giuliani Administration. I've mentioned Charlie in passing for my post on Randy Levine. I have wanted to write a post on Charlie alone since he's deserving of one. I started to but didn't think it would be of general interest. Well a front page piece in the NYT makes the subject a subject of general interest by default.
As anyone who was around back then knows Charlie and I were like oil and water; we did not get along. It reached the point where it became so bad that for my last year at EDC he and I did not speak to each other, using my deputy to serve as go between. What were my issues with Charlie? Well, let me just say that if you had asked me before the NYT piece what, if anything, Charlie Millard would ever get into hot water over I would have said it would be as a result of his need to please those he viewed as big players, to demonstrate that he can deliver and simply to rub elbows with major financial movers and shakers. And that is precisely why he has a congressional committee, an inspector general and I suspect some prosecutors taking a look at his tenure as President of the Pension Benefit Guaranty Corporation (PBGC).
Charlie, as I have said before, is a bright guy. His problem is that he isn't self aware enough to know those things he knows and those he doesn't. Couple that with crippling insecurity and paranoia and you have a bad mix. Charlie had a stern, successful father who never saw him as a great success. Charlie's need to constantly ingratiate himself to "his betters", to impress them with his savvy, is what lead in measure to his current difficulties. I can totally see him calling Goldman and saying, as is recounted in the Times' piece, that he was going to revamp the PBGC and would they like to help. He knew precisely what he was doing. He wanted behemoth Goldman Sachs to look upon him as a benefactor of business. And then he could steer the permanent consulting contract to them. Not out of any criminal motive, I believe, but just so he could show Goldman that he could deliver. Wouldn't that have made his dad proud (his father passed away in 2003). Charlie's need to please and never disappoint his superiors was really a bad father complex at work. In all the time I knew him as a member of the city council, in private practice or as President of EDC I never knew him to take a stand on principle that might endanger his standing or put in jeopardy being well thought of by those to whom he reported.
I can't help but compare his tenure with my time at HDC. I sought out experts and processed their advice. Rather than suck up to the investment banks that were showering me with attention, I remained extremely wary at all times. I knew those people weren't friends, they wanted my business and I never lost sight of that. That is why, whatever my transgressions, not a single person has questioned my professional stewardship of HDC. Unlike Charlie, I knew I would not have and did not want, a future in the financial or housing industry. Therefore, I had no need or desire to impress or ingratiate myself with anyone I did business with for some future gain. My professional interests were HDC first, last and always while I ran the corporation.
Charlie Millard was a city councilman before becoming President of EDC . As such he managed a staff of 3-5 people and that represented the largest staff he had ever supervised. Here he was at EDC with 180 people to manage. He was regarded by nearly everyone at EDC as the worst boss you could hope to have: petty, insecure, thoughtless, pompous and vain. Partly it was not his fault, as contrary to popular belief, management is not something that happens naturally. You need the right personality and skills. In a few they are innate. In most they take years to develop. Charlie's skills were honed to please superiors not harness lasting excellence in a multi-billion dollar corporation. Charlie would, at the drop of a hat, throw out sound policy and business decisions in order to please Randy Levine or Cristyne Lategano, his immediate and nominal bosses. This was the major reason he received so little respect from those at EDC.
While he did much good for the city and the Giuliani Administration, he could never balance that with his hunger for publicity and praise. The best example any of us who worked there could give you centered around the Frank Zarb incident.
One day late in my tenure at EDC, the VP of Marketing, Abby Spilka, came to tell me that Charlie wanted us to present an award to Frank Zarb (at the time Chairman of NASDAQ and a Rudy supporter). "An award for what?" I asked. "He didn't say," she said. "I don't get it. He wants us to create the rationale for presenting Frank Zarb with an award or to create the physical statue?" I asked Abby. "No," she answered, "he will come up with the reason. He wants us to design and order a statue." "I'm still confused. Are we supposed to pretend that this is something we have handed out for generations and Zarb is the latest recipient or we're creating this for him?" I asked. "Well Charlie is going to pretend that Zarb is the latest winner of whatever this is," Abby explained. "This is nuts, you know," I said. Abby was always correct regarding her superiors and just smiled.
I called the staff together. I oversaw Marketing, Creative Services, Public Relations and a few other departments. I explained to them what Charlie wanted and what we needed to do. They just stared at me. "Yes," I said in response to their stares, "he is creating this award to ingratiate himself with Frank Zarb. For what purpose I have no idea, but you can be sure it has nothing to with EDC." It was then that I thought of something funny and started to laugh. Luke Cusack, my loyal number two, asked me what was funny. I turned to the V.P of Creative Services. "Sue, here's what I want. I want something over the top. I want something to rival the Heisman or the Stanley Cup. This whole thing is a joke so lets get some laughs out of it. I want this thing to be huge and gaudy."
So Sue researched some companies that made these types of awards and came back with a proposal. It was big alright. We nicknamed it The Zarb. I had Sue and Abby take it to Charlie for his final OK. I wasn't 100% sure he wouldn't figure out that this was a joke. I thought there might be a small chance he would see that we were mocking him with this huge, ridiculous statue. But, as I suspected, Charlie did not get the joke and was absolutely thrilled. He had no sense of irony so we were safe. He was so delighted with what I had done that for a short period of time thereafter we had a thaw in our relations.
Charlie planned an awards ceremony in order to present this thing. He tasked my department to set it up and create some press for it. I complied and my staff did their usual superb work. Charlie ended up calling this the EDC award for excellence in something. I now forget exactly what. I didn't attend the ceremony. I thought this whole thing was just too idiotic to participate in. But my staff reported back that Frank Zarb seemed a little bewildered by the whole affair. I saw Frank Zarb some years later on a plane headed to DC. I really wanted to ask him if he knew the whole thing was a Millard suck up. But I didn't.
What was the point? All this money spent on an award and ceremony to accomplish what? For a few minutes alone with Frank Zarb? To receive Zarb's gratitude and recognition in the future for honoring him? For God's sake, this man has a business school named after him. Did Charlie really think this mystifying award was going to make Zarb remember him after his tenure at EDC was over?
So why am I telling you this? It is either an amusing story or it isn't, but that's not the reason. To understand the man at the center of the New York Times' piece today you have to know what motivates him. What I am demonstrating is a psychological pattern of behavior.
Create a problem - or an opportunity, depending on how you look at it - and then take advantage of it. In the Zarb case the goal was to ingratiate himself to Frank Zarb, for whatever unknown reason. So create this phony award and seem as though after careful analysis Frank Zarb emerged the winner. Same thing at the Pension Benefit Guaranty Corporation. Goal: develop a close, beholden relationship with major investment palyers: Goldman, Black Rock, JP Morgan. Create a problem - the supposed diaster that was PBGC's investments - and lift your skirt, so to speak, so that they would begin salivating and jump all over the corporation's president.
I am also willing to bet my life, knowing Millard as I do, that at some point early on in this he found a way to speak to Treasury Secretary Hank Paulson. There can be no question that Charlie would have loved the sitting Secretary and the former Chairman of Goldman to know of his existence. So Charlie either called him directly or found a way to bump into him. He matter of factly asked Paulson's thoughts on Goldman doing this large amount of work for PBGC. What Paulson should have said was, "this is a completely improper conversation given my past association." But we now know that Hank Paulson, the man who bailed out AIG in order to save Goldman from the fate of Bear Stearns, has no ethics. So I am sure he said, "Oh they'll do a splendid job. What's your name, again? We should have lunch." Once a Goldman man always a Goldman man.
This was classic Charlie. On the Friday afternoon of Labor Day weekend he called to tell me that he wanted my staff to write him an op-ed piece for the Wall Street Journal. And he wanted to see a draft over the weekend. "Did the Journal ask for this?" I asked him. He knew where I was going and started to get mad. "No," he said, "but that doesn't matter." The only person left in the press office was leaving to go away with her boyfriend for the weekend to Cape Cod. I was absolutely not going to ask her to spend her holiday weekend writing spec pieces for Charlie. I told him we would be happy to have something for him sometime on Tuesday. He told me he needed something over the weekend. I told him I would not ask my staff to ruin their holiday for a spec piece. A Journal submission is serious, not something you rattle off in 20 minutes. He called the staff member directly and ordered her to do it. I told her not to, as her boss, and that it was me he was engaging with in a war. She was merely a pawn. She started to cry. Charlie had been pretty brutal on the phone. She said she would do it. It really pained me that he gave no consideration to anyone's needs but his own. My behavior towards him was totally unacceptable and insubordinate. I fully got that. I would have fired me. But I was the only person at EDC who could push back at Charlie's behavior. He could not fire me no matter what I did, so on behalf of everyone he could fire, I tried to fight the good fight. Staff at EDC really appreciated that.
Charlies arrogance would sometimes get the better of his good judgment. In interviewing Vinny LaPadula for the position of EDC Chief of Staff Charlie commented to him that he had heard Vinny had a reputation as "Vinny Bag-O-Donuts," and asked him to comment on it. Vinny was totally shocked. Vinny could be immature and a total goof at times but when it came to his professional work he was extremely good and dedicated. But in any case, how could one take that comment without inferring some ethnic Mafia slur? You couldn't. It was such an incredibly inappropriate thing to say to a candidate for a high level position based on no information whatever. But that was Charlie. He thought that comment was clever and more than that believed it was a great interview technique. Put the subject ill at ease with an out of left field question. He did it to me the first time he interviewed me. I told him to go fuck himself. Tony Carbonetti, whatever his thoughts on Millard before that Vinny interview, viewed Charlie as a WASP anti-Italian asshole afterward.
I learned more about management from watching Charlie Millard and how not to treat people then from any other source. He once awoken a Senior VP of EDC at 2AM to criticize his punctuation in a memo he had given Charlie. The interesting aspect of Millard's tenure at PBGC left out of the NYT piece was how he got the job. Knowing Charlie, I can only imagine the intense and unrelenting lobbying that must have gone on to get it for him. It was too bad the Times didn't cover that part.
Whenever I was close to getting the Mayor to fire Charlie, Millard would go into Rudy's office and turn it around. The last time I tried, shortly before I left EDC, it was a done deal. Rudy had called Millard in to fire him. No one, not Cristyne or Tony or Mastro, or Levine was going to stick up for him; although Charlie was feverishly trying to get one of them to make his case. But when the meeting took place -according to Rudy's recounting to Carbonetti - Millard literally begged the Mayor to give him a few months to find something else. Rudy told Tony that is was too pathetic - he just couldn't fire him after that display. After I failed that last time to get rid of him I decided it was him or me and he had won. I started to look for a new job in the private sector when I was offered HDC.
As I said, Millard is a bright guy. But there is no question that having become President of PBGC in 2007 serving under the most unpopular U.S. President in our lifetime that Charlie had his eye squarely fixed on an escape exit should the next President not be a Republican as seemed highly likely. That is what lead him to behave the way he did more so than usual. Black Rock and Goldman were the emergency exit should it be Hillary or Obama and not McCain or Giuliani. Venality and self preservation, not criminal intent are what lead him to hand over PBGC's billions.
ADDENDUM:
Everyone at EDC had a favorite Charlie Millard story. There were hundreds of them. Some thoughtless thing he did, a call he made to some extremely important person on a flimsy pretext in order to make that person aware of his existence, or just a bonehead thing. I think my favorite - and I had a lot of Millard stories back then - was our meeting with a consular official.
Charlie invited me to a meeting that had been requested by the economic attache at the Slovakian Consulate. He wanted to discuss Slovak investment in NY and American investment in Slovakia. Standard type meeting. Charlie and I sat on one side of the conference table and the Slovak gentleman on the other. This meeting occurred sometime in 1997.
Charlie asked the guest to proceed and he outlined his vision for investments of mutual interest. Charlie, I should mention, was not a great student of current affairs outside of New York City. He did not seem to have a particular world view other than mouthing general Republican platitudes. So when Charlie responded, he began by talking of his respect for Czechoslovakia. He must have said Czechoslovakia ten times in 5 minutes and Prague was mentioned even more.
I shook my head in disgust. Didn't he at the very least read the briefing materials I know he must have been given? Taking the pad of paper laid between us I wrote out in large block letters, "SLOVAKIA - CZECH REPUBLIC - NOT THE SAME THING." "NOT PRAGUE - IT'S BRATISLAVA," I wrote. He read what I wrote and waved his hand at me dismissively. He went on to mention how much he'd like to go to Prague and Budapest.
I am sure somewhere in the recesses of his mind he knew that Czechoslovakia broke in two back in 1993. He was not a lover of European History or had recent European ancestry, as I did. But still, you'd think he'd have recovered quickly after I pointed out the error instead of compounding it. I felt sorry for the gentleman from the Slovakian Consulate. The very least we could have done in the meeting is demonstrated that we knew his country existed.
Comments