The Devil's Casino_ Friendship, Betrayal - Vicky Ward [57]
equity; Lessing was head of global sales and research. Fuld was still growing into his
role. He wanted people near him he could trust, but after the many power grabs that came
after Pettit was forced out, he didn't know if the friends he trusted today would be
enemies tomorrow.
By 1999, the front-runner to take over Fuld's throne was the young and popular Bradley
Jack. He was beloved by Fuld and by all those who worked for him, even though some
people thought that he was "in over his skis" running banking, because his background
was in capital markets. Like Gregory, Lessing, Tucker, Pettit, and Fuld, Jack had grown
up in Lehman Commercial Paper Inc. (LCPI). He was tall, blond, athletic, good-looking,
and very charismatic. Like Pettit, with whom he was often compared, Jack was a natural
speaker. But unlike the soulful, militaristic Pettit, he had a lightness about him.
Jack had met his wife, Karin, in the office. She worked for him, recruiting on the sales
desk. After they were married in 1991, she became a housewife, but one who understood
the ways of Lehman and never demanded anything of her husband that might interfere
with his work.
Fuld still hadn't filled the COO spot vacated by Pettit. He just couldn't trust anyone to get
that close to him--not even Jack. "The board wanted him to have a line of succession,"
recalls Karin Jack, "but it just wasn't ever planned."
This power vacuum was viewed as a weakness over at Goldman Sachs, Lehman's
archrival. Fuld may not have known it, but Goldman Sachs viewed Lehman as merely a
yappy terrier, snapping at its heels.
"Lehman always thought they were fighting Goldman Sachs, but we never thought they
were even in our league," says a former member of Goldman's executive committee. "We
didn't believe they had superior skill sets," he continues. "Risk taking was their way to
distinguish themselves. We were a bit resentful, because we thought that they were
overly risked, whereas we thought we were very management focused and very risk
management focused." The Goldman guys also thought (not incorrectly) that Fuld ruled
imperiously, that all the senior management people beneath him were mere court jesters
telling him what they thought he wanted to hear.
In 1999, of all the senior management, only Cecil was ever a dissenting or even
questioning voice; the rest were the equivalent of a sycophantic court, all jostling for
power--led by Gregory, technically the head of equities, but also Fuld's buffer, his field
general.
Sometimes, according to senior staff, Gregory would almost kneel in meetings to look up
at Fuld as he talked. When Fuld made speeches to New York managing directors,
Gregory could be seen sitting in the front row, almost falling off his chair to pay
attention. "It was both funny and sort of appalling to watch the degree to which Joe
sucked up to Dick," says one former senior executive.
Following the culling of both Pettit and the equities team, Gregory now had a reputation
as a dangerous henchman. No one wanted to antagonize either him or Fuld. Gregory was
notorious for being underhanded, for acting invisibly. "He'd stab you from the back, not
the front," says one person. One executive recalls that Gregory told him he was doing
fantastically well just two weeks before firing him.
From then on there was an in -house motto: "You never want to be told you are doing
well by Joe." It was code for "You' re fired."
Not surprisingly, Gregory's new role brought with it new nicknames. On top of "Joe the
Wedge," he was now also "Uncle Joe," after the mass murderer Joseph Stalin, and "Darth
Vader." Gregory never saw himself as anything like these caricatures. Even as he grew
rich and acquired a domestic staff of 30, a fleet of boats, multiple houses, and private
planes, he still saw himself as "ordinary Joe." "I' m a man of the people," he liked to say-and he told all incoming executives that Lehman men and women were not the sort of
people who needed to check their bank balances regularly, insinuating that he