The Trusted Advisor

The Trusted Advisor

I saw in the Washington Post today that Vernon E. Jordan, Jr. died at the age of 85. You may or may not remember the name Vernon Jordan, but I have the pleasure of having known him in very direct and somewhat intimate ways that I think deserve a reprise. I feel inclined to reflect on people at their demise if I have known them personally or they have had a generally big impact on the world at large, including me. Vernon’s obituary says that he was a civil rights leader, including the head of the National Urban League, a close confidante and advisor to President Bill Clinton, and a lawyer (most recently with Akin Gump Strauss) and board member of many, many big publicly listed companies including Bankers Trust Company, where I was raised and attained the rank of a member of the firm’s Management Committee. He was definitely a lion of Washington society and politics and a mover and shaker par excellence.

I met and got to know Vernon from his time serving on the Board of Directors at Bankers Trust Company. I do not think it would be unfair to say that Vernon was at the right place and time and had the right kind of credentials to take full advantage to the attempt by many public company boards during the 1980’s and 1990’s to expand the diversity of their membership with prominent men and women of color. His role as a civil rights activist culminated in an attempt on his life in 1980, when he was shot by a white supremacist in Fort Wayne, Indiana. He skyrocketed to national prominence by having President Jimmy Carter go to visit him in the hospital and having it be the very first story ever covered by the new CNN network. One might say that Vernon had a role in launching cable news as an important medium. This all made him very visible and very interesting to corporate boards since he was also a lawyer who comported himself with what I would characterize as grace and aplomb.

Back in 1988 I was running a Department of my own creation. At the end of 1985 I was asked to take over the bank’s $4 billion of LDC sovereign debt that was mostly to Latin American countries like Mexico, Brazil and Argentina (there was some to African, Eastern European, Middle East and Southeast Asian countries as well). My job was to form a unit to find a better path the cash to liquify our holdings with a minimum of value shrinkage. Our capital at the time, after eighty years in existence as one the country’s major Money Center banks, was a mere $1 billion, so anything more than a 25% haircut was a wipe-out of our capital base. This was the biggest existential issue faced by our and almost all other global banks at the time. There was a formal debt renegotiation process underway led by the biggest holder of sovereign debt, Citibank. The Chairman of Citibank at the time was Walter Wriston, who famously declared that “countries don’t go bankrupt.” What we were witnessing was a gradual bankruptcy by all the world’s lesser countries all at once. It was the biggest issue facing the finance world and it was certainly the biggest financial issue facing our bank, which at the time was the sixth largest bank in the U.S. and certainly a top-ten bank globally.

None of our senior leadership or directors had spent any time in Latin America, which was still somewhat of a financial backwater at the time. Half the continent was run by fascist juntas and the other half had strong leftist leanings that while not fully communist like Cuba, were philosophically close to that extreme. There were precious few longstanding democracies in the region. This environment did not hasten the management or board to rush to visit the region. I had lived six years of my life in the region and for one reason or another was not intimidated by it in the least, even though the anti-IMF and therefore, anti-bank sentiment was rather high. The topic of the debt and things that were happening externally and the things me and my team were doing on a tactical basis to improve our position were the topics of almost every weekly management committee meeting and monthly board meeting. Finally, our Chairman, a southerner from the right side of the tracks in Savannah, Georgia, asked me to take him on a trip to visit with the primary government leaders in Brazil and Mexico. Both countries were only accessible from Miami and very little air service existed between the two directly, but I planned a trip that went NYC to Rio/Brazilia (the then Amazonian capital of the country), back to Miami and then to Mexico City. It was a ten day extravaganza with meeting set up with all the movers and shakers in each country. We had the clout needed to accomplish this since we were owed $1.5 billion by Brazil and $1 billion by Mexico. Those meetings came off well and I think it was safe to say that he got an eyeful and an earful to help him understand what we were up against. What it actually did was convince him that no matter what we did that we were likely to have to pay what he called “the round-eye tax”, which was his slightly racist interpretation of how we would be disadvantaged. He had too little faith in our local content experts, but an abundance of general caution as well.

When he reported back to the board, Vernon Jordan expressed an interest in going on a similar trip with me to see what there was to see. No other director expressed that interest, but Vernon called and said he wanted me to book him with two first class seats for the whole trip. I asked if he planned to take Mrs. Jordan and he said he would be taking his assistant, a comely young lady who went everywhere with him as his aide de camp. I elevated the issue to our head of HR because it seemed a bit off-base from my tight-budgeted perspective. I could tell that the HR guy understood the delicacy of the situation and he took it on to discuss with Vernon. I never heard another word about it and Vernon never made the trip.

The next time I encountered Vernon was when I was assigned to handle the banks massive pension administration business. I organized an annual client conference for our biggest pension clients and got Vernon to agree to speak to them. This was in 1993, just after the first Clinton electoral victory and after Vernon had led the Clinton Transition Team. He came and spoke to our clients about how know one knew how powerful Hilary was and said that Hilary would have been the next Attorney General if anyone other than Bill had gotten the Democratic nomination. He also told us some inside stories from the White House to solidify his perception as an insider of the most senior proportions.

Following the Monica Lewinsky affair in the late 1990’s Vernon was in our inboxes along with the inboxes of the other sixteen boards he sat on at the time (a feat which cannot be repeated today with the Sarbanes-Oxley regulations) trying to find a good corporate position for Monica. Since I was running the Private Banking business, I was on the hit parade of places they wanted considered for employment. Luckily, thanks to an offer from Revlon, where Vernon had a seat and some sway, I never had to interview Ms. Lewinsky and make the call.

My final interaction with the great man came during a Partners Meeting in London which he attended. He sat next to me at a very large round table. What I learned about Vernon was that he had gotten so good at attending board meetings that he managed to sleep through the whole meeting while steadily holding a cigar in his teeth. that alone would have been impressive, but what really amazed me was that after apparently sleeping through an entire subject of discussion he awoke and asked one of the most insightful and unanswerable questions that anyone had posed. It made him look like he had heard every word and had a mind like a steel trap. I guess that and dealing with problem resolution like the Monica thing is what makes people like Vernon the trusted advisor that they are.