So today my phone has rung off the hook.
Why?
The Fairfield Patch, broke the news on Monday that Lehman Brothers’ former COO Bradley (Brad) Jack — who owns the most expensive home in Fairfield, CT, worth $34.6 million — had been arrested and was “charged with second-degree forgery and forgery of a prescription drug.”
The New York Times‘ Dealbook pointed out that if he is convicted, he faces jail time, which would make him the first Lehman senior executive to don a jump suit.
On one level this is a huge irony, since as I wrote in my 2010 book, The Devil’s Casino: Friendship, Betrayal and the High Stakes Inside Lehman Brothers (John F. Wiley & Sons) — despite massive unethical and irresponsible business practices, appalling management and board oversight, as well as highly questionable earnings results in 2008 — no one from the erstwhile Lehman Brothers is yet anywhere close to being headed to the Big House.
Bradley Jack could not be held responsible for any of the above since, as I wrote in my book, he was forced out of the firm in 2005 by the infamously Machiavellian man wanting to become the firm’s president (number two): Joe Gregory. (In my book I quote the in-house Lehman motto “You never want to be told you are doing well by Joe.” It’s code for “you are fired.” Hence his nicknames were “Uncle Joe” after Stalin and “Darth Vader”).
And if anyone wants to blame a single person for Lehman’s demise — well, in my view, after Fuld, it is Joe Gregory who promoted all the wrong people (loyalists to him, rather than competent financiers), punished dissent with backstabbing and was more interested in telling everyone about his lavish lifestyle than managing the firm.
In 2004 Gregory got rid of Jack who was his competitor for the job of president — unfilled since 1997. How did Gregory do this? I happen to know from several sources that he told Dick Fuld, the CEO that Jack was allegedly abusing prescription drugs and as I state in my book “not sufficiently focused on work”. This is of course a euphemism.
The truth is that Jack, by his own admission to me, had suffered cancer and had a scar right across his torso. I asked Jack about the drug addictionallegations at the time I was reporting the book and he denied them. But he did talk to me about Gregory’s very “unsympathetic” attitude towards his recuperation, which only made it harder for him to get better. Jack felt pressured to return to work far sooner than the doctors told him he should. But he felt he had no choice.
He felt he had to watch his back every second. He knew, he told me, that Gregory was out to “get” him — as did his then-wife Karin, who complained bitterly to me of what she saw as the conniving of Gregory’s wife, Nikki. Nikki, Karin claimed, deliberately left her out of an antiquing trip with Kathy Fuld at the Fuld’s home in Sun Valley (Nikki Gregory never commented on this but both Jacks corroborated the story — as did others).
So today’s news that Jack allegedly handed in a fake prescription for 12 Oxycontin pills and nine Ritalin pills at a CVS in Fairfield has not shocked me or the ex-Lehmanites. Some seem to be much more interested in this news than the the other story about Lehman: that the world’s largest bankruptcy is drawing to a conclusion.
But personally I feel sorry for Jack. I left him a sympathetic message along with his ex-wife Karin who provided some of the more blood-curdling material in my book about the tough Orwellian Lehman culture. It was Karin Jack who explained that Lehman wives were expected to give birth on their own, move house on their own — and in one especially grim scenario leave a very sick child’s bedside in order to get on a helicopter to visit a new mcMansion purchased by… Joe Gregory. The senior executives’ lives were subordinated — not for the business — but to pay lipservice to a vain greedy man. In my book — and in Vanity Fair — we ran a picture of Nikki Gregory’s vast shoe closet — the size of a room — and guests to the house in Huntingdon, Long Island were actually given tours. The screen version of Too Big To Fail opens with Gregory getting out of his beloved helicopter in which he commuted to work.
So there are two lessons here.
Had Brad Jack worked for a culture that supported rather than culled illness, maybe we would not be reading today’s headlines.
They are a brutal reminder of what a truly horrible place Lehman became, ruining the reputation of what had once been a place of dreams.
But more importantly they illustrate the importance of a firm’s culture. If Lehman’s culture had cultivated dissenting opinions, been more tolerant of illness in capable people, and less about men terrified of losing their corner suites — then they would not have fallen — and more broadly, of course, they would not have caused a worldwide catastrophe which doesn’t seem to be getting much better three years on. All Wall Street firms would be wise to think about this.
Vicky Ward is a Contributing Editor to Vanity Fair