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"I said to Dick at one point that I thought this move was going to make life even more

difficult for me, and I was tired and frustrated. And so I said that if he made Joe and me

co-presidents, I'd do it, because then I still had to battle it out with Joe but at least I could

turn around and tell the [executive committee] what to do. Dick basically said no, partly

because I think he was very skittish about what had happened with Chris--he didn't want

to be walled off from the organization again. He said no, and so I said, 'I quit.'"

Fuld acted as though this conversation had never happened. He kept appearing in Cecil's

office, even after Cecil's notice had been given in April 2000, to the point that Cecil

moved his office to a different floor in the building in June 2000. He hung around only at

Fuld 's request to make a smooth transition. David Goldfarb, the former controller, was

eventually made CFO. Unlike Cecil, Goldfarb talked often and loudly.

"Goldfarb rubbed a lot people the wrong way," says a colleague. "He was very vocal and

very critical of everyone else's divisions, which, of course, the division heads didn't like.

They viewed him as just an overopinionated accountant. He had never run a division."

Fuld, however, liked the fact that Goldfarb didn't care if he undermined division heads in

front of them. It was refreshing around that table to hear from someone not paralyzed

with a fear of saying the wrong thing.

Chapter 12

Lehman's Desperate Housewives

On Wall Street, they pay you so much that they own you. You know? So it's different.

They have your soul. You gave it to them for the money.

--Karin (Mrs. Bradley) Jack

Lehman senior executives were expected to have wives. And, if possible, they were

supposed to be happy with them--or at least pretend to be. One of the things that troubled

Dick Fuld--openly--about Scott Freidheim, the young banker who was appointed

managing director, office of the chairman, in 1996 and then became global head of

strategy in 2005, was that he waited until he was 42 to get married. Fuld wanted all his

executives to be as settled domestically as he was.

He hated to see signs of marital discord. During the annual Lehman retreat at the Fulds'

ranch in Sun Valley, it wasn't uncommon for Dick to pull one of his guests aside and ask

him numerous questions about his home life to make sure everything was all right.

"Are you all having trouble?" he asked Bradley Jack, after overhearing an argument

between Jack and his wife Karin. "He really wanted to know," recalls Karin. "He didn't

think Brad and I looked happy enough. It really worried him." (Brad Jack concurred with

Karin's recollection.)

No one ever heard the Fulds argue--although Karin Jack says she heard Dick berate

Kathy when she was 10 minutes late bringing the wives back from an expedition in Sun

Valley. This was a rare occurrence. Within his own family, Dick had a rule. He told his

children, "Disagree with me all you want in private. But never air your domestic

grievances in public." The Fulds were, publicly at least, one of the happiest couples on

the planet.

But, as the dramas played out in the Lehman offices, they also played out among the

wives. Many of them were as competitive as their husbands, and they ruthlessly criticized

or exploited any perceived weaknesses of their rivals.

The wives of executive committee members had to attend numerous Lehman functions,

such as the annual induction of managing directors. They were expected to contribute to

the numerous philanthropic causes Lehman supported (this number grew greatly once

those endeavors fell under the purview of Gregory). Each couple was expected to make

annual donations to the American Red Cross, Harlem's Children Zone, the American

Friends of London Business School, and various hospitals--all of which often totaled

more than $32 million each year in Lehman donations.

Over the years there were more and more corporate