nassau otb where two casiers have been barred from working at the same time because two bllod relatives, one suoervising the ither, presumably .....the powers that be
A Top Goldman Banker Raised Ethics Concerns. Then He Was Gone. while years ago he endorsed the union leader at a union meeting at the church in carle place. see kevin mccaffrey republican suffolk county legislator who is president of teamsters local 707
Joseph CairoVictoralcorn.com
On the heels of pay-to-play corruption scandals that have tarnished the Long Island GOP, the Nassau County Republic Party has elected a one-time disbarred lawyer to be its new leader — and the retirement-age politico intends to collect fat paychecks from three different jobs simultaneously.
Joseph Cairo, 72, the new chairman of the Nassau County Republican Party, is also head of the Nassau County Off-Track Betting Corporation. He’s paid $198,000 at OTB.
The long-time No. 2 to former Nassau GOP boss Joe Mondello had his law license yanked in the 1990s for misusing client funds. His license was reinstated and the politically-connected lawyer now has an established law practice, GOP sources said.
He also has not ruled out collecting a third paycheck from the Nassau GOP.
Mondello, his predecessor, made more than $250,000 last year as GOP boss, and pulled in $1.5 million from his private law practice and real estate investments, records filed with the government show.
At one time, Mondello also simultaneously headed the Nassau GOP and OTB.
Cairo’s law office is in Valley Stream, his OTB’s corporate office is in Mineola and Nassau GOP headquarters is in Westbury.
A Post reporter found him at GOP headquarters.
Cairo said he was not relinquishing his OTB executive job or suspending his law practice after taking the reins of the GOP.
“I’ve been at OTB. This is a crucial time at OTB with possibly sports gambling coming so we’re deeply involved with that there now,” Cairo said.
“This is a political position. My attorneys tell me there is no conflict and I think having a position in a political party is such that it’s been done in the past by people on both sides of the aisle. And I think it’s currently done, too, in some other counties — their elected officials are also party chairmen,” he said.
But watchdogs have long complained that allowing people to simultaneously hold top positions in government and party leadership opens the door to conflicts of interests and potential corruption.
“It’s business as usual. This is an example of the rotten political system in Nassau County,” said George Marlin, who formerly served on the Nassau County Interim Finance Authority, a state agency set up to monitor the county’s shaky finances.
Marlin said the multiple paid gigs for Cairo is remarkable, especially after the Nassau Republicans lost the county executive’s race and the Town of Hempstead supervisor’s race last year amid concerns over corruption.
“They’ve learned nothing,” Marlin said. “They don’t care.”
Cairo chalked up the suspension of his law license to a mistake from the distant past.
“I think that’s something that happened — it was earlier than ‘95, that’s 25 years ago, and I think people who know me know the type of person I am,” he said.
With that, Cairo grabbed a suit jacket from a parked black Cadillac before jumping into the passenger seat of a Jaguar driven by a friend.
Cairo is right about one thing. On Long Island particularly, politicians simultaneously collecting hefty paychecks from top government and political party posts is a time-honored tradition.
The Post reported last week that Rich Schaffer is drawing down a combined $350,000 from three paychecks as head of the Suffolk County Democratic Party, as the full-time Town of Babylon Supervisor and from a law practice that includes representing plumbing contractors.
But Long Island Democrats have their scandals, too.
Gerard Terry, the former North Hempstead Democratic Party chairman, was convicted of tax evasion for failing to report his income that included payments from legal services provided to eight different local government agencies.
New Nassau County Executive Laura Curran, a Democrat who won the election on anti-corruption platform last year, passed executive orders barring county government officials from holding party positions or from accepting gifts.
New York City has a law that bars top government officials from serving as party bosses, following the municipal corruption scandals of the 1980s.
By the tight-lipped standards of Goldman Sachs, the phone call from one of the firm’s most senior investment bankers was explosive.
James C. Katzman, a Goldman partner and the leader of its West Coast mergers-and-acquisitions practice, dialed the bank’s whistle-blower hotline in 2014 to complain about what he regarded as a range of unethical practices, according to accounts by people close to Mr. Katzman, which a Goldman spokesman confirmed. His grievances included an effort by Goldman to hire a customer’s child and colleagues’ repeated attempts to obtain and then share confidential client information.
Mr. Katzman expected lawyers at the firm Fried, Frank, Harris, Shriver & Jacobson, which monitored the hotline, to investigate his allegations and share them with independent members of Goldman’s board of directors, the people close to Mr. Katzman said.
The complaints were an extraordinary example of a senior employee’s taking on what he perceived to be corporate wrongdoing at an elite Wall Street bank. But they were never independently investigated or fully relayed to the Goldman board.
ADVERTISEMENT
Instead, Goldman’s general counsel took over the inquiry. And senior investment-banking executives at the firm — including David M. Solomon, now Goldman’s incoming chief executive — urged Mr. Katzman to move past his complaints, according to several people familiar with the interactions.
Mr. Katzman refused. In 2015, he left Goldman and was required to sign a confidentiality agreement that he believed prevented him from sharing his concerns with board members or regulators, said the people close to Mr. Katzman, who were not bound by the same confidentiality agreement.
Mr. Katzman did not respond to requests for comment.
It is not clear whether any of Mr. Katzman’s colleagues shared his misgivings. He had a reputation within Goldman for being obsessed with following rules literally. Some Goldman officials, including Mr. Solomon, considered his complaints overblown and did not understand why Mr. Katzman was making such a fuss.
“The legal department conducted an exhaustive investigation of the matters Mr. Katzman raised in accordance with our whistle-blower policy,” Michael DuVally, the Goldman spokesman, said. “We did not find that confidential client information was shared with other clients.”
“Neither David Solomon nor any other member of the investment-banking division or anyone outside of the legal department had a role in conducting the investigation,” Mr. DuVally continued. “Mr. Katzman raised his concerns in an appropriate manner, and neither Mr. Solomon nor anybody else at the firm discouraged him from raising these concerns or any others he might have.”
ADVERTISEMENT
Mr. Solomon had tried to persuade Mr. Katzman not to leave Goldman, Mr. DuVally said. He added that anyone who departed while holding shares of restricted stock was required to sign a confidentiality agreement.
Mr. Solomon is to succeed Lloyd C. Blankfein as Goldman’s chief executive on Oct. 1. The firm has cultivated an image of its incoming leader as a new breed of banker, playing up Mr. Solomon’s disc-jockey hobby and his focus on work-life balance.
Goldman’s board will be briefed on his interactions with Mr. Katzman at its scheduled board meeting on Thursday, said two people who have been briefed on the plans.
For four years, Mr. Solomon’s role in the episode involving Mr. Katzman was known only to a small group of bankers in Mr. Solomon’s inner circle. Some of Goldman’s most senior executives, including the firm’s president and the chief financial officer at the time, were not briefed on the circumstances of Mr. Katzman’s departure, according to people close to Goldman.
Mr. Katzman had expressed various concerns about what he viewed as widespread unethical behavior and a corporate culture gone awry. Of the half-dozen specific issues he raised, the most troubling, from his perspective, were multiple instances when senior Goldman bankers tried to extract confidential client information from him that they intended to share with other Goldman customers or otherwise use for the bank’s benefit.
Executives at Goldman and other Wall Street firms said the conduct that Mr. Katzman described was inappropriate and was the type of behavior that had previously ignited intense criticism of the bank for mistreating clients.
Mr. Katzman’s complaints suggest that, a decade after Goldman’s actions during the financial crisis severely tarnished its reputation, the firm continues to struggle with cultural problems. In the past, Goldman has been accused by employees, clients and government authorities of trying to profit at the expense of customers. Goldman, like other big banks, has tried to repair its image by emphasizing employees’ ethical obligations and setting up new rules to discourage bad behavior.
ADVERTISEMENT
As a Goldman partner since 2004, Mr. Katzman was a member of one of the most exclusive clubs on Wall Street. Partners at the firm earn a base salary of $950,000, and their bonuses often stretch into many millions of dollars. It is an insular group, and acrimony among partners rarely spills into public view.
During his 17 years at Goldman, Mr. Katzman earned a reputation as a talented investment banker and a stickler for following rules. Friends and former colleagues, some of whom described him as a “boy scout,” said he viewed ethical issues in black-and-white terms.
“I’d rather be defeated in right than succeed in wrong,” Mr. Katzman said during a 2014 deposition related to a deal he had worked on, attributing the quote to President James A. Garfield.
Mr. Katzman built an impressive roster of clients at Goldman, including Clorox, Hershey and Allergan. In 2006, he moved to the San Francisco area and became the leader of the firm’s West Coast deals business.
By 2014, Mr. Katzman had relocated with his family to Arizona and was commuting to San Francisco.
He had grown upset by what he was seeing at Goldman and felt the bank needed outside scrutiny, according to one of the people close to him.
In one instance, he was dismayed by Goldman’s efforts to hire the child of a client, according to people close to Mr. Katzman and to the firm. He became especially troubled after, he believed, the candidate had been caught lying during the interview process. Mr. Katzman argued that should disqualify him, but some of his colleagues persisted in trying to hire the person. Ultimately, the candidate was rejected.
Mr. Katzman’s larger concern stemmed from what he was witnessing while working on corporate deals.
In 2014, he was the lead banker working to defend Allergan, the maker of Botox, against a hostile takeover by Valeant Pharmaceuticals and the hedge fund Pershing Square Capital. Mr. Katzman had sensitive information about Allergan’s strategy for fending off the suitors.
ADVERTISEMENT
As the battle unfolded, a Goldman partner approached Mr. Katzman and sought information about Allergan, saying he planned to share it with another Goldman client, the people close to Mr. Katzman said. Mr. Katzman considered the request a violation of bank rules meant to protect confidential client information, and he rebuffed his colleague.
A person close to Goldman said the internal investigation concluded that the request for information from Mr. Katzman was the result of a misunderstanding by his colleague.
It was not the first time that Mr. Katzman had been unsettled by a Goldman banker asking him for confidential information about a client, but he perceived it as the final straw, the people close to him said.
Mr. Katzman decided that he was obligated to lodge a formal complaint about the hiring issue and his colleagues’ requests for client information.
Goldman had long relied on Fried Frank to screen information provided over a phone line that Goldman employees could call to report allegations of misconduct without fear of retribution. The assignment was part of a large portfolio of Goldman business that Fried Frank, whose chairman was a Goldman alumnus, handled.
Goldman highlighted the whistle-blower line on its website, saying that a Fried Frank lawyer, Sheldon Raab, would refer complaints to Goldman’s independent board members or to bank employees for further investigation.
Mr. Katzman called Mr. Raab. Mr. Katzman assumed that, based on his seniority and what he considered the seriousness of his grievances, they would be shared with board members, according to the people close to him. Mr. Raab instead referred the complaints to Goldman’s general counsel, Gregory K. Palm, who asked a deputy to look into them.
ADVERTISEMENT
Mr. DuVally said Mr. Katzman’s complaints were mentioned in passing in a report that Fried Frank prepared for the Goldman board in 2014, but they were attributed only to an unidentified Goldman employee. Not all board members knew about the issues Mr. Katzman raised, according to a person familiar with the matter.
While the internal inquiry was underway, Mr. Katzman met on multiple occasions with Mr. Solomon, in group and in one-on-one settings, according to the people close to Mr. Katzman and at Goldman. At the time, Mr. Solomon was one of three executives running the firm’s investment-banking division.
During the meetings, Mr. Solomon repeatedly recommended that Mr. Katzman let go of his grievances and focus instead on his job, said the people close to Mr. Katzman. Mr. Solomon told Mr. Katzman that the concerns he had raised simply reflected the way Wall Street worked, these people said.
Mr. Katzman perceived Mr. Solomon as trying to silence him, the people said. A person at Goldman said that was not Mr. Solomon’s intent.
The interactions with Mr. Solomon and other Goldman executives left Mr. Katzman so disillusioned that he decided to leave, the people said.
Goldman executives told Mr. Katzman that he would have to sign a nondisclosure agreement if he wanted to receive up to $10 million in stock-based compensation, the people said. In public filings, Goldman has said its compensation agreements allow it to recoup funds from employees who do anything “which impairs, impugns, denigrates, disparages or negatively reflects upon the name, reputation or business interests” of the firm.
Mr. Katzman signed the agreement, which he believed prevented him from discussing his concerns with regulators or with the Goldman board.
ADVERTISEMENT
Since leaving Goldman in early 2015, Mr. Katzman, 51, has become a board member at Hershey and Brinker International, which owns restaurant chains. He has not spoken publicly about the circumstances surrounding his departure from Goldman. But he has written about his view of challenging institutions over wrongdoing.
In 2012, Mr. Katzman clashed with officials at the private Menlo School in Atherton, Calif., which his children attended. He raised concerns about cheating and what he regarded as the school’s efforts to cover it up. (A Menlo spokesman said the school had investigated and addressed Mr. Katzman’s contentions at the time.) The next year, he wrote a letter to a large group of Menlo parents to explain why he had pulled his children out of the school.
“What should one do when all internal channels are exhausted in a matter like this?” he wrote. He answered by quoting Justice Louis D. Brandeis: “Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants.”
A version of this article appears in print on , on Page B1 of the New York edition with the headline: Banker at Goldman Called Its Whistle-Blower Line. Here’s What Happened to Him.. Order Reprints | Today’s Paper | Subscribe
No comments:
Post a Comment