Former Federal Regulator and Citi Employee Weighs In
As a former Federal regulator, a former Citibank employee and shareholder, and someone who has been involved in the financial services industry for some 40 years, I fully concur with your concerns and support your positions against the awarding of an honorary degree from Sonoma State to Sanford Weill and his wife.
What is even more concerning is the de facto placement of Mr. Weill as a shining example for your graduating students to emulate at the Sonoma State graduation ceremonies. Your President, Mr. Armanina, has obviously been dazzled by the size of Mr. Weill’s checkbook and this honorary degree is his form of payback.
Professor Bliss’ concerns were well described in today’s Press Democrat. Professor Phillips later wrote an excellent piece to be published in the PD. He did not, however, go far enough recounting some of Mr. Weill’s past transactions. For starters, Time Magazine was indeed correct in naming him as one of the 25 people most responsible for the recent financial debacle.
To cite some brief examples from the available media: the merger of Citicorp and Mr. Weill’s Travelers Insurance could not have happened while the Glass-Steagall Act of 1933 was in place. Mr. Weill convinced Robert Rubin, then Secretary of the Treasury to join with Lawrence Summers and Alan Greenspan to get Congress and the Clinton Administration repeal the act. The repealing of the act, many observers claim for a variety of reasons, was one of the major causes of the financial crisis, or as the media has come to call it, “The Great Recession.” In return, Mr. Rubin was hired by Mr. Weill’s Citicorp as a Vice Chairman and “Senior Advisor” for $10 million per year for 10 years.
Then there was the case of a Citibank analyst, Jack Grubman, who allegedly upgraded a 1999 equity rating on AT&T in exchange for the vote of Michael Armstrong, then AT&T’s chairman and a Citicorp Director, to depose John Reed. Mr. Reed, at the time, was co-head of Citicorp and Mr. Weill was not accustomed to sharing any of the spotlight. Mr. Grubman, coincidentally, was trying to get his twins into an exclusive school in New York, to which they were later admitted. To complete the circle, the school got a $1 million donation from Citicorp, Mr. Reed was gone, and Mr. Weill was now the singular head of Citicorp.
Lastly, turning to the Green Music Center, you may be interested to note that there is no longer any connection between the Music Center and the initial donors, the Green family. There is no representation on the advisory board or any of the other committees. Instead, Mr. Weill or his wife is running the show. So much for local involvement. Good practices and a sense of gratitude and decency would seem to dictate that the Green family, who worked so hard to make the Center a reality and a civic gem, should have at least a token representation on its future direction.
A friend has said that someone like Mr. Weill does not get to where he is without leaving many footprints. This is something to keep in mind when it comes time to award his honorary degree.