Sandy Weill and the Story Behind Citigroup Former chairman and CEO Sanford "Sandy" Weill describes his storied career, from his beginnings as a runner on Wall Street to building the world's largest financial empire: Citigroup.

Sandy Weill and the Story Behind Citigroup

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SUSAN STAMBERG, host:

This is MORNING EDITION from NPR News. I'm Susan Stamberg.

STEVE INSKEEP, host:

And I'm Steve Inskeep. We're about to meet a man who altered the business world.

Mr. ARTHUR LEVITT (Former Chairman of the Securities and Exchange Commission): Sandy was the master builder of world finance.

Unidentified Woman #1: And a dealmaker extraordinaire.

INSKEEP: Who built a gigantic financial services company.

Unidentified Woman #1: He was a master at pushing the envelope.

Unidentified Man #2: A legend, a visionary seeking to explain away things that happened on his watch.

INSKEEP: Things that happened at Citigroup, a banker for Enron and WorldCom.

Unidentified Woman #1: It was such a huge empire that even he could not control it.

INSKEEP: He is Sandy Weill. We've just heard people who know him, worked with him or opposed him. His self-portrait comes in his new book, The Real Deal.

Mr. SANDY WEILL (Founder, Citigroup): I'm not a nerd and I don't know how to use a computer. I don't have a BlackBerry. I don't send e-mail. I just speak to people. And it's amazing what you find out when you speak to a lot of people about what's going on in your company or what's going on in anything you do.

INSKEEP: Sandy Weill went from the streets of Brooklyn to the towers of Manhattan. Journalist Monica Langley wrote her own book about him.

Ms. MONICA LANGLEY (Reporter, The Wall Street Journal; Author): When you meet Sandy Weill, you're underwhelmed. He is short; his weight goes up and down. He is a little shy and insecure. But if you give him a page of numbers, watch his mind go to work.

INSKEEP: In 1955, after college, Weill found work as a runner. He was a kind of human e-mail carrying documents around Wall Street. Later, he started his own firm. His partners included Arthur Levitt, a future chairman of the Securities and Exchange Commission. He's the one who called Weill the master builder.

Mr. LEVITT: The Sandy Weill that I met in the ‘60s and the Sandy Weill that you see today in 2006 are probably two different people. The Sandy of the ‘60s was insecure, brash, shy and very intelligent. Today's Sandy Weill is far more sophisticated, far more worldly.

INSKEEP: What changed Sandy Weill?

Mr. LEVITT: Success, and lots and lots of money.

INSKEEP: Which he made in part while tracking his company's stock price minute by minute.

Have you been an addict over the years - an addict to your company's stock price, to your company's standing day by day?

Mr. WEILL: I guess so. I've always had a stock screen on my desk where I followed the prices of companies in the financial business to try and get a feel of what's happening. And through most of my life, if somebody would talk to me during market hours, my eyes would be looking at the machine and my voice would be answering their questions.

INSKEEP: In the 1970s, Weill's company absorbed old Wall Street firms that were not keeping up with changing times. He adopted their prestigious names, which he can rattle off now like an auctioneer.

Mr. WEILL: And we dropped the CBWL. Then Hayden Stone bought Shearson Hammill, and we changed the name to Shearson Hayden Stone. Later on, the company bought Loeb Rhoades Hornblower and we changed the name to Shearson Loeb Rhoades. Then we merged with American Express and changed the name to Shearson American Express. Then we bought Lehman Brothers and changed the name to Shearson Lehman Brothers. So you should have been in the sign business.

(Soundbite of laughter)

Mr. WEILL: Or bought our stock. Both did equally well.

INSKEEP: In the 1990s, Weill assembled even bigger companies. And even if you weren't among his millions of customers, you probably saw his companies' commercials.

(Soundbite of Travelers Insurance ad)

Unidentified Announcer #1: For more than 130 years, Travelers Insurance…

(Soundbite of Citibank ad)

Unidentified Announcer #2: Citicorp and Citibank…

(Soundbite of Diner's Club ad)

Unidentified Woman #2: …put it on Diner's.

(Soundbite of Smith Barney ad)

Unidentified Announcer #3: Smith Barney: They make money the old fashioned way, they earn it.

INSKEEP: Sandy Weill wanted to make them all one giant brand.

(Soundbite of Citigroup ad)

Unidentified Announcer #4: This is Citigroup.

INSKEEP: Which required a change in the law. He wanted to combine banks, insurance firms and brokerages in a way that had been forbidden since the Great Depression. Federal Reserve Chairman Alan Greenspan warned Weill that past efforts to change the law had failed.

Mr. WEILL: I said I know that was what happened then, but this is now. The world has changed; we have to be competitive and we're willing to take that chance.

INSKEEP: The executive became his own lobbyist, meeting Republican Senators and President Clinton. Biographer Monica Langley says that to assemble his company, Weill assembled unlikely allies.

Ms. LANGLEY: Sandy had developed in recent years a strong relationship with Jesse Jackson, for example. And Jesse Jackson came in to Washington and said I think this is a good thing.

INSKEEP: Why was this a good thing from the perspective of a civil rights leader?

Ms. LANGLEY: Well, Sandy and his companies had helped support Jesse Jackson's effort on Wall Street to try to bring discrimination down on Wall Street. So they had bonded and Sandy had scratched his back, so I think Jesse Jackson scratched his a little.

INSKEEP: Sandy Weill's many supporters overcame concerns that Citigroup would be too powerful.

Mr. SEAN COFFEY (Pension Fund Attorney): The concept made a lot of sense, which was to be able to offer customers or clients one-stop shopping for all sorts of financial services. But what we saw in WorldCom was how that synergy, if you will, could lead to corrupt results.

INSKEEP: Attorney Sean Coffey eventually sued Citigroup over its dealings with WorldCom and its chairman, Bernard Ebbers.

Mr. COFFEY: And so how do you get that investment banking business? Well, in WorldCom, you arrange for the traveler subsidiary to loan Bernie Ebbers a half a billion dollars to buy a hockey team, to buy a golf course, to buy a bigger yacht, because you want to make him happy so that he then turns around and makes sure that Citigroup gets the next lucrative deal. And it was that combination of being able to offer candy from different parts of the supermarket that was intended to get the investment banking business.

INSKEEP: As WorldCom and Enron collapsed, their bankers came under scrutiny. Analyst Jack Grubman of the Citigroup subsidiary was accused of promoting companies that were in trouble, and investigations ate away at Sandy Weill's image. He'd been known until then for telling employees to bring him problems early.

Mr. WEILL: Absolutely, because the best minds can work that problem out rather than putting it in your desk, hiding it and praying it's going to go away. Because usually what happens was when you do that, it gets worse and worse and worst and you dig a very big hole.

INSKEEP: Why do you think the problems did not surface quite early enough when it came to Enron and WorldCom?

Mr. WEILL: I think maybe those companies were pretty smart in how they hid what they did for a long time. I think it's pretty amazing that $11 billion of accounting could have been accounted for wrong in a company like WorldCom. I didn't know the company very well, but I was on the board of AT&T through that whole period and we would have to fire a whole bunch of people to try and get our numbers to be anything like WorldCom's.

INSKEEP: You also write that suddenly vigilant accountants started looking into these companies. Why do you think that your company was not more vigilant about who it was loaning money to and arranging financing for?

Mr. WEILL: You know, I think probably, you know - and this is not an excuse, because there are no excuses - but at the end of a 20-year bull market, a lot of things became much more lax than they should have.

INSKEEP: Do you think that you should have known more sooner?

Mr. WEILL: You know, I've never really, you know, dwelled on looking back. I think I've always thought about here's something that happened or didn't happen. And, you know, one has to think about what do you learn from that and how do you go forward.

INSKEEP: Sandy Weill's conglomerate did not go forward until it settled a lawsuit. Plaintiffs represented by Sean Coffey received $2.65 billion from Citigroup.

Mr. COFFEY: You know Sandy built it and it was quite something, but the idea that he was unaware of some of the conflicts to me is a bit of a stretch.

INSKEEP: Sandy Weill writes that he remained at Citigroup long enough to salvage his most important asset: his reputation. Then he retired, saying the business was changing so quickly that even he did not want to keep up.

Mr. WEILL: I'll never forget one day when Chuck Prince came in with two volumes of books on derivative and he was going to read it. I said boy, there's no way I would want to read this. Went home, slept, got up the next morning and said hmm, maybe this is the time.

INSKEEP: Maybe it's time for Chuck Prince to take over this company.

Mr. WEILL: Or somebody that can get through that.

INSKEEP: The man who brought in those books runs Citigroup today, and he sold off portions of the empire that Sandy Weill built.

(Soundbite of music)

INSKEEP: Sandy Weill's new book is called The Real Deal. There's an excerpt at npr.org, where Weill also describes his dealings with the analyst Jack Grubman.

(Soundbite of music)

INSKEEP: It's MORNING EDITION, from NPR News.

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