The Devil's Casino_ Friendship, Betrayal - Vicky Ward [23]
Pettit.
"He took such pride in LCPI," says Mary Anne. "To him they were family; it felt like he
was coaching a team; everyone had a part. They were going to be different, stand apart
from the other Wall Street players."
"He was a Marine; they were all a bunch of Marines," says Peter Cohen, the CEO of
Shearson, now the chairman and CEO of the securities firm, Cowen Group. Cohen admits
he loathed Pettit. "I can guarantee you that if you asked anyone in investment banking if
they liked Chris Pettit the answer would have been no. . . . He always wanted more
money, more independence for LCPI. They may have worshipped him--but it was like a
cult thing. They were soldiers and he was their captain."
Moncreiffe says, "Of course Cohen and Pettit didn't get on. Cohen understood Fuld's
motivation but couldn't deal with Chris's altruism."
Shearson had bought Lehman, and yet it was Lehman that seemed to be incubating its
power.
"The truth is, Chris understood that unless we retained independence we would lose
control of our business, our revenues, our accounting. We'd disappear," says Vinci. "By
hanging on to those, we eventually submerged Shearson into our culture."
Steve Carlson, then in the mortgage business, said that within LCPI the troops took to
snickering that the Shearson takeover ought better to be known as the "take-under," for it
was clear almost from the start that there was no quit in Lehman Brothers.
Chapter 5
Slamex
On our corporate videos we had music from Les Miserables. In
Chris's mind we were fighting tyranny--just like the French
Revolution."
--Ronald Gallatin, Lehman's "minister without portfolio" and chief bonus negotiator
The fight led by Chris Pettit and Perry Moncreiffe might have been over, but the war in
the offices of the newly fashioned Shearson Lehman Brothers was just beginning. It was
inevitable, really--here was the shotgun marriage of two of Wall Street's most culturally
diverse houses, a combined firm that, as Helyar and Burroughs note in Barbarians at the
Gate, "came to be marked by a peculiar blend of elegance and streetwise chutzpah: brass
knuckles in a velvet glove."
Shearson was a vast brokerage of 8,000 salespeople who made money purely on
commission. They neither cared about nor understood investment banking, whereas
Lehman had its deep roots in providing initial capital to firms like the Woolworth
Company, Sears, Roebuck & Company, the Studebaker Corporation, and RCA.
The Lehman executives thought that the Shearson brokers were self-centered idiots; the
Shearson brokers had little comprehension of what the Lehman guys were doing. As for
Lehman Commercial Paper Inc. (LCPI)? They thought they were the modern -day
equivalent of the Three Musketeers--"all for one, one for all."
"They were the only unit in the entire organization which had salaries and systems
entirely for themselves," says Peter Cohen. More than 20 years later he still sounded
irritated by that.
They proudly identified themselves as the working class of Wall Street, and in their
rarefied circles--and bank accounts--they were. They smirked at the extravagances of
Cohen, who at 38 was the CEO of Shearson Lehman. He was an easy target. At a yearend party hosted at the Greenbrier resort in White Sulfur Springs, West Virginia, Cohen
arrived atop an elephant.
"A circus had been provided as part of the entertainment, and someone said 'Why don't
you ride an elephant?' so I did," he explains.
But the moment became a running joke among the Lehman traders.
Cohen had worked his way up the operational side of Shearson, but had little experience
in investment banking and none in capital markets; he was resented.
Joe Gregory told people that Cohen's first meeting with the Lehman team was a disaster-Cohen had come to placate his new employees, but he only enraged them. He came
across as high -handed and was met not with obedience, but with derision.
"Basically he came in and told us that each January his brokers knew they would make a
million dollars