Former Merrill Lynch CEO John Thain has tried to explain his spending spree of more than a million dollars on antiques for his office, in December of 2007. He claims it was a “very different economic environment.” How different might that be?
He was brought in to replace Stanley O’Neal –who had just presided over a $2.3 billion third-quarter loss in 2007– at the time of the worst loss in the company’s history. Shortly after Mr. Thain took over, the company reported a staggering 9.8 billion loss for the fourth quarter, an even bigger record smasher. But these losses were apparently not enough to cause Mr. Thain to have any doubts about the “economic environment” –or the merit, much less optics, of spending $1.2 million on carpets, drapes, antique chairs, mahogany tables and the world’s most expensive waste paper basket at $1,400.
We said recently that Mr. Thain’s actions are an example of what we have seen too often on Wall Street: the patently over-praised engaging in the unmistakably despicable. From what we saw of Mr. Thain’s flimsy explanation, we must add to it the spectacle of the disingenuous fleeing to the indefensible. This appears to be a growing characteristic of those who occupy double digit million dollar luxury digs on Manhattan’s Upper East Side. Richard Fuld (of defunct Lehman Brothers), Jimmy Cayne (who once headed Bear Stearns) and Bernie Madoff (now confined mainly to house arrest while he awaits trial on charges of masterminding the largest Ponzi scheme in the world) jump to mind.
Some neighborhood. Penthouses and shiny Escalades on every corner, but seldom even the frailest silhouette of sound judgment ever encountered.